/raid1/www/Hosts/bankrupt/TCR_Public/210820.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, August 20, 2021, Vol. 25, No. 231
Headlines
17062 COMUNIDAD: Seeks to Hire Blanchard Law as Legal Counsel
2500 WEST LOOP: Resolves Capital One's Disputes; Plan Confirmed
37 VENTURES: Alignment Debt Holdings Says Plan Not Feasible
37 VENTURES: Knight and Bishop Says Disclosure Materially Deficient
4YL DEVELOPMENT: May Use Cash Collateral Until October 31
AARNA HOTELS: Aug 24 Hearing on Continued Cash Collateral Access
ABBEY RESOURCES: Gets Bankruptcy Protection Under CCAA
ABRAXAS PETROLEUM: Incurs $14 Million Net Loss in Second Quarter
AGILON ENERGY: Committee Taps Conway MacKenzie as Financial Advisor
ALTRA INDUSTRIAL: S&P Upgrades ICR to 'BB', Outlook Stable
AMARIN PHARMA: Faces Welfare Fund Suit Over Vascepa Drug Monopoly
AMERICAN TIRE: S&P Ups ICR to 'B-' on Improved Cash Flows
AMERICANN INC: Incurs $99K Net Loss in Third Quarter
ANTECO PHARMA: Seeks to Hire Boardman & Clark as Special Counsel
AUTO RECYCLERS: Seeks to Employ Brian Murray as Appraiser
AVADIM HEALTH: SSG Acted as Investment Banker in Asset Sale
BARENZ INVESTMENTS: Seeks to Hire Accounting & Business Partners
BASIC ENERGY: Hits Chapter 11 Bankruptcy for 2nd Time
BELVIEU BRIDGE: Seeks Cash Collateral Access
BLUE DOLPHIN: Incurs $4.1 Million Net Loss in Second Quarter
BOART LONGYEAR: Seeks US Recognition of Australian Restructuring
BOY SCOUTS OF AMERICA: Catholic & Methodist Committees Oppose Plan
BOY SCOUTS OF AMERICA: Evanston Says Plan Provisions Inefficient
BOY SCOUTS OF AMERICA: Hartford Says Amended Plan Defective
BOY SCOUTS OF AMERICA: Insurers Seek Disclosure on Effect of SIRs
BOY SCOUTS OF AMERICA: Judge Mulls Key Bankruptcy Rulings
BOY SCOUTS OF AMERICA: Lujan Claimants Say Plan Still Unconfirmable
BOY SCOUTS OF AMERICA: Sullivan Claimants Say Plan Unconfirmable
BROWNIE'S MARINE: Incurs $90K Net Loss in Second Quarter
BUHLER-FREEMAN: Seeks to Hire Lefkovitz & Lefkovitz as Counsel
BULLDOG DUMPSTERS: Unsec. Creditors to Recover 81.88% over 5 Years
BURN FITNESS: Gets OK to Hire Kessler & Associates as Accountant
CALIFORNIA NEVADA METHODIST: BH Properties Provides DIP Financing
CAN B CORP: Closes Acquisition of Assets From TWS Pharma
CANOPY GROWTH: Fitch Assigns FirstTime 'B-' IDR, Outlook Stable
CANOPY GROWTH: S&P Assigns 'B-' ICR, Outlook Stable
CHICAGOAN LOGISTIC: Seeks to Hire Daniel Greenman as Accountant
CHICAGOAN LOGISTIC: Seeks to Hire Romano Law as Special Counsel
CLEAN ENERGY: Incurs $232K Net Loss in Second Quarter
CMG CAPITAL: Taps Trusty Realty to Market Miami Property
COCRYSTAL PHARMA: Incurs $3.8 Million Net Loss in Second Quarter
COUNCIL FOR AID: Seeks to Hire Rabinowitz as Conflicts Counsel
COUNCIL FOR AID: Wins Access to Citibank's Cash Collateral
DIGIPATH INC: Stone Douglass Appointed as CFO
DIOCESE OF NORWICH: Taps Brown Jacobson as Corporate Counsel
ENVIVA PARTNERS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
FLAVA WORKS: Gets OK to Hire Robert J. Adams as Legal Counsel
G&G HOLDINGS: Seeks Approval to Hire Latham as Legal Counsel
GENESIS INVESTMENT: Castle Seeks Consistency on Arrearage Treatment
GIRARDI & KEESE: Erika Prepares Defense for $25 Million Lawsuit
GLENOIT LLC: Will Liquidate Under Chapter 7 Bankruptcy
GREENSILL CAPITAL (UK): Files Chapter 15 to Stop U.S. Suits
GRUPO AEROMEXICO: Seeks to Employ KPMG Cardenas as Auditor
GULFSLOPE ENERGY: Incurs $364K Net Loss in Third Quarter
HERTZ CORP: Board Okays Exec Bonuses Weeks After Bankruptcy Exit
HH ACQUISITION: U.S. Trustee Unable to Appoint Committee
HIGH RIDGE BRANDS: Moves to Westport After Bought Out of Bankruptcy
IDEANOMICS INC: Incurs $10 Million Net Loss in Second Quarter
JANA LLC: Case Summary & 6 Unsecured Creditors
KANSAS CITY UNITED: Kingswood Senior Living Files Chapter 11
LEWISBERRY PARTNERS: May Use Cash Collateral Thru September 15
LIMETREE BAY: Committee Taps Conway MacKenzie as Financial Advisor
LORENZ CORPORATION: Unsec. Creditors to Get 5% of Net Excess Funds
LTC HOLDINGS: U.S. Waiver Dooms Insurer's Right to Tax Refund
MANITOWOC CO: S&P Alters Outlook to Stable, Affirms 'B' ICR
MAPLE LEAF: Liquidation Proceeds to Fund Plan Payments
MAUNESHA RIVER: Seeks Continued Cash Collateral Access Thru Nov 21
MOBITV INC: BEAR Cloud Steps Down as Committee Member
MUSCLEPHARM CORP: Incurs $2.3 Million Net Loss in Second Quarter
NAHAUL INC: Seeks to Employ Daniel Greenman as Accountant
NAHAUL INC: Seeks to Employ Romano Law as Special Counsel
NATIONAL RIFLE : NYAG James Pushes for Dissolution Anew
NEUBASE THERAPEUTICS: Incurs $8.7-Mil. Net Loss in Third Quarter
OZOP ENERGY: Incurs $212K Net Loss in Second Quarter
PILGRIM'S PRIDE: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
PRIME ECO: Seeks Court Nod on Postpetition Financing from AFS
PUERTO RICO AQUEDUCT AND SEWER: Gets Lower Refunding Yields
PURDUE PHARMA: David Sackler Testifies, Defends Releases
PURDUE PHARMA: Reaches Final Stage of Opioid Settlement
R.A. BORRUSO: Unsecureds to Get Share of Income for 5 Years
RAMJAY INC: May Use Newtek's Cash Collateral Until Sept. 30
RAMJAY INC: Newtek Small Business Says Plan Unconfirmable
REED 1860: Unsecured Creditors Will Get 100% of Claims in 48 Months
SANAM ATHENS: Seeks to Hire Paul Reece Marr as Bankruptcy Counsel
SAVI TECHNOLOGY: Hits Chapter 11 Bankruptcy Protection
SCM DALLAS: Seeks Approval to Hire Clark Hill as Legal Counsel
SKW LOGISTICS: Taps Woodall & Woodall as Bankruptcy Counsel
SOTO'S AUTO & TRUCK: Wins Cash Collateral Access Thru Aug 25
SPANISH HEIGHTS: 5148 Spanish Heights Says Disclosures Inadequate
SRI VARI: Aug 24 Hearing on Continued Cash Collateral Access
STEM HOLDINGS: Posts $2.6 Million Net Income in Third Quarter
TERMINIX GLOBAL: S&P Affirms 'BB-' ICR on Steady Performance
TOWN & COUNTRY: Taps Benjamin Legal Services as Counsel
UNITED AIRLINES: Fitch Rates Special Facility Revenue Bonds 'B-'
VALLEY FARM: Unsecured Creditors Will Get 4% of Claims in Plan
VAREX IMAGING: S&P Ups ICR to 'B+' on Improved Credit Metrics
VENOCO LLC: Tells Supreme Court to Scrap CA Takings Suit Challenge
VERITAS NL: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable
W.F. GRACE: Unsecured Creditors to Recover 38% in 3 Years
W133 OWNER: Carve-Out from Sale Plan to Fund Plan
WIRTA HOTELS: Wins Cash Collateral Access
WNJ24K LLC: Gets OK to Hire May Potenza as Legal Counsel
[*] Texas Corporate Bankruptcies Decreased But Danger Signs Ahead
[^] BOOK REVIEW: The First Junk Bond
*********
17062 COMUNIDAD: Seeks to Hire Blanchard Law as Legal Counsel
-------------------------------------------------------------
17062 Comunidad De Avila Trust seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ
Blanchard Law, P.A. to serve as legal counsel in its Chapter 11
case.
The firm's services include:
a. advising the Debtor with respect to its powers and duties
in the continued operation of its business and management of its
property;
b. preparing legal papers; and
c. performing other legal services necessary to administer the
Debtor's case.
The firm's hourly rates are as follows:
Attorneys $300 per hour
Associates $250 per hour
Paralegals $90 per hour
Blanchard Law will also be reimbursed for out-of-pocket expenses
incurred.
The retainer fee is $10,000.
Jake Blanchard, Esq., a partner at Blanchard Law, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jake C. Blanchard, Esq.
Blanchard Law, P.A.
1501 Belcher Road South Unit 6B
Largo, FL 33771
Tel: (727) 531-7068
Fax: (727) 535-2086
Email: jake@jakeblanchardlaw.com
About 17062 Comunidad De Avila Trust
17062 Comunidad De Avila Trust filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 21-04130) on Aug. 6, 2021, listing up to $500,000 in
assets and up to $1 million in liabilities. Jake C. Blanchard,
Esq., at Blanchard Law, P.A. represents the Debtor as legal
counsel.
2500 WEST LOOP: Resolves Capital One's Disputes; Plan Confirmed
---------------------------------------------------------------
Judge David R. Jones has entered an order confirming the Combined
Disclosure Statement and Plan of Reorganization filed by the
chapter 11 trustee Allison Byman of debtor 2500 West Loop, Inc.
Based on representations made by counsel for the Trustee and
Capital One, National Association ("Capital One") at the Plan
Confirmation Hearing and the lack of any opposition, the Combined
Disclosure Statement and Plan of Reorganization is amended as
follows:
* Notwithstanding anything to the contrary in the Plan, the
Trustee and Capital One have resolved all disputes regarding
Capital One's Claim No. 5, as amended (the "Capital One Claim"),
and the Trustee shall pay $194,336.49 to Capital One in full
satisfaction of the Capital One Claim.
A copy of Plan Confirmation Order dated August 16, 2021, is
available at https://bit.ly/2W01ilk from PacerMonitor.com at no
charge.
About 2500 West Loop
2500 West Loop, Inc., is a privately-held company whose principal
assets are located at Suite 422, 2429 Bissonnet St., Houston
Texas.
2500 West Loop sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Tex. Case No. 18-20459) on Oct. 12, 2018. At the
time of the filing, the Debtor estimated assets of $10 million to
$50 million and liabilities of less than $500,000. The case is
assigned to Judge David R. Jones. The Debtor tapped Johnie J.
Patterson, Esq., at Walker & Patterson, P.C., as its legal counsel.
37 VENTURES: Alignment Debt Holdings Says Plan Not Feasible
-----------------------------------------------------------
Alignment Debt Holdings 1, LLC, as Agent for Atmedia Investor II,
LLC, objects to the Disclosure Statement to Accompany Joint Chapter
11 Plan of Reorganization of 37 Ventures, LLC and Larada Sciences,
Inc.
Alignment Debt points out that the Disclosure Statement falls far
short of providing adequate information because it lacks the key
financial data necessary even to make a guess as to the likelihood
of either Debtor's ability to actually satisfy their obligations
under the Plan, and is otherwise misleading and insufficient.
Alignment Debt claims that the Disclosure Statement fails to
provide adequate information regarding the historical performance
of the Portfolio Companies, the projected future performance of the
Portfolio Companies, or the expected timing and amount of the
future Company Liquidity Events, without which the Plan just
doesn't work.
Alignment Debt states that the Disclosure Statement provides no
information about alternatives to the Debtors' proposed Plan,
including a potential sale of all or some of 37 Ventures' interests
in the Portfolio Companies, appointment of a new, independent
manager over 37 Ventures' investments, appointment of a trustee, or
establishment of a creditor-managed trust to oversee the orderly
liquidation of 37 Ventures' assets.
Alignment Debt says that the Debtors' own projections for Larada
only suggest, in what seems to be an absolutely best-case scenario,
that Larada might generate as much as $3.7 million to fund Larada
Quarterly Payments through 2026 – far less than what is needed to
pay 37 Ventures' creditors (even assuming an initial payment of $3
to $4 million on the effective date). If Alignment's secured claim
against Larada is not repaid, Alignment will have the right to
foreclose on Larada's assets, leaving millions of dollars of
general unsecured claims against Larada without hope of repayment.
Alignment Debt asserts that the Plan's proposed treatment of
Alignment's claims demonstrates the feasibility deficiency
demonstrated by the Debtors' own projections. Even if the Court
were to assume that Larada is able to meet all of its lofty
projections, the Debtors still would owe Alignment over $2 million
on December 31, 2028, the deadline under the Plan for Larada to
repay Alignment in full.
Alignment Debt further asserts that the Disclosure Statement also
fails to provide adequate information about the proposed
bifurcation of Alignment's secured claim. For example, the
Disclosure Statement contains no information regarding how
Alignment's secured claims are going to be valued, and/or why a
70/30 split of the Larada Quarterly Payments with Larada's
unsecured creditors is appropriate. These issues may significantly
impact feasibility and thus how a creditor might decide to vote on
the Plan.
A full-text copy of Alignment Debt's objection dated August 17,
2021, is available at https://bit.ly/2UBUb2g from PacerMonitor.com
at no charge.
Attorneys for Alignment Debt Holdings:
Eric Goldberg (SBN 157544)
DLA PIPER LLP (US)
2000 Avenue of the Stars
Suite 400 North Tower
Los Angeles, California 90067-4704
Tel: 310.595.3000
Fax: 310.595.3300
Email: eric.goldberg@us.dlapiper.com
Craig Tighe, Esq.
DLA PIPER LLP (US)
2000 University Avenue
East Palo Alto, CA 94303-2214
Tel: 650.833.2000
Fax: 650.833.2001
craig.tighe@us.dlapiper.com
About 37 Ventures
37 Ventures, LLC, a company based in Thousand Oaks, Calif., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 21-10261) on March 18, 2021. Its affiliate, Larada
Sciences, Inc., a Utah-based company that owns and operates clinics
dedicated to head lice prevention and treatment, filed a Chapter 11
petition (Bankr. C.D. Calif. Case No. 21-10269) on March 19, 2021.
The cases are jointly administered under Case No. 21-10261. Judge
Deborah J. Saltzman oversees the cases.
In their petitions, 37 Ventures and Larada Sciences disclosed
assets of between $1 million and $10 million and liabilities of
between $10 million and $50 million.
Levene Neale Bender Yoo & Brill, LLP serves as 37 Ventures' legal
counsel. Larada Sciences tapped Cohne Kinghorn, PC as bankruptcy
counsel, Zolkin Talerico LLP as local counsel, and Rocky Mountain
Advisory, LLC as financial advisor.
37 VENTURES: Knight and Bishop Says Disclosure Materially Deficient
-------------------------------------------------------------------
Knight and Bishop, L.P. ("KB"), creditor and party in interest,
objects to the Disclosure Statement to Accompany Joint Chapter 11
Plan of Reorganization of 37 Ventures, LLC and Larada Sciences,
Inc.
Knight and Bishop asserts that the Disclosure Statement fails to
provide "adequate information" required by the Bankruptcy Code:
* First, what exactly constitutes the assets of the estate of
debtor 37 Ventures, LLC remains opaque, even more so given the
positions taken by the Debtors in the Disclosure Statement. This is
a central issue in determining ultimate creditor recoveries.
* Second, the Disclosure Statement gives a distinctly one
sided view of Mr. Yuri Pikover's managerial ability, conspicuously
excluding a number of material facts, including his demonstrated
history of violating court orders, the imposition of significant
sanctions against him, mismanagement of business ventures under his
control, and the personal benefits that he stands to receive under
the Plan. The absence of these facts result in the Disclosure
Statement giving a highly sanitized view of Mr. Pikover's history
and ability.
* Third, the Disclosure Statement fails to give the historical
track record for the portfolio that the Debtors propose to have Mr.
Pikover manage post-confirmation. Indeed, the Debtors attempt to
make much of Mr. Pikover's historical investment experience.
* Fourth, how much compensation has Mr. Pikover personally
been paid by the Portfolio Companies (including Caldera) as a
result of being 37 Ventures' designee on boards? Creditors are
entitled to know what he has been paid for his being 37 Ventures'
representative on the boards of its investments.
* Fifth, the Disclosure Statement must also be amended to
address the treatment of potential claims against Mr. Pikover. As
detailed in prior pleadings filed with the Court, the Creditors are
in the process of investigating potential claims against Mr.
Pikover.
* Sixth, with respect to the treatment of the KB Claim, the
Disclosure Statement also contains little information concerning
certain material elements of the proposed treatment to be afforded
KB in Class 2, particularly the status of the proposed "Hawk
Contribution" of $2 million that may be used to partially satisfy
the KB Claim. The Disclosure Statement also omits information
related to the KB Claims, and should be amended to correct this
omission.
* Accordingly, the Disclosure Statement is materially
deficient in the criteria required pursuant to section 1125 of
title 11 of the United States Code, 11 U S C §§ 101-1532. These
and other deficiencies render the Plan unconfirmable. Accordingly,
KB respectfully requests that the Disclosure Statement not be
approved in its present form.
A full-text copy of Knight and Bishop's objection dated August 17,
2021, is available at https://bit.ly/380jOgd from PacerMonitor.com
at no charge.
Attorneys for Knight and Bishop:
STEVE WARREN (S.B. #136895)
MARC FEINSTEIN (S.B. #158901)
JACOB T. BEISWENGER (S.B. #321012)
O'MELVENY & MYERS LLP
400 South Hope Street
Los Angeles, California 90071
Telephone: (213) 430-6000
Facsimile: (213) 430-6407
E-mail: swarren@omm.com
mfeinstein@omm.com
jbeiswenger@omm.com
About 37 Ventures
37 Ventures, LLC, a company based in Thousand Oaks, Calif., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 21-10261) on March 18, 2021. Its affiliate, Larada
Sciences, Inc., a Utah-based company that owns and operates clinics
dedicated to head lice prevention and treatment, filed a Chapter 11
petition (Bankr. C.D. Calif. Case No. 21-10269) on March 19, 2021.
The cases are jointly administered under Case No. 21-10261. Judge
Deborah J. Saltzman oversees the cases.
In their petitions, 37 Ventures and Larada Sciences disclosed
assets of between $1 million and $10 million and liabilities of
between $10 million and $50 million.
Levene Neale Bender Yoo & Brill, LLP serves as 37 Ventures' legal
counsel. Larada Sciences tapped Cohne Kinghorn, PC as bankruptcy
counsel, Zolkin Talerico LLP as local counsel, and Rocky Mountain
Advisory, LLC as financial advisor.
4YL DEVELOPMENT: May Use Cash Collateral Until October 31
---------------------------------------------------------
Judge H. Christopher Mott of the U.S. Bankruptcy Court for the
Western District of Texas authorized 4YL Development, Inc. to use
the rents and other proceeds paid to the Debtor by its tenants and
which constitute the cash collateral of the so-called "Surrender
Creditors" consisting of (i) RASK Holdings, LLC; (ii) Zia Trust,
Inc., as Custodian for Robert A. Snow IRA; (iii) Louis O. Garcia;
(iv) Zia Trust, Inc., as Custodian for Hojin Kim, IRA and MY
Ventures, LLC; and (v) Angelina Corona.
The Debtor operates 10 multi-family real properties located in El
Paso County, Texas. The Debtor has surrendered six of its
properties (Surrender Property), which secured the claims of the
Surrender Creditors. The Debtor intends to retain four of its
properties, which secured the claims of so-called "Remaining
Creditors" consisting of (i) PTTN Investments, LLC; (ii) SM VER
Enterprises, LLC; (iii) Zia Trust, Inc., as Custodian for Teren D.
Klein, IRA; and (iv) AJPMM Investments, LLC.
The Court authorized the use of the cash collateral of the
Surrender Creditors to the extent necessary to pay actual and
necessary expenses for maintaining the Surrender Property in the
ordinary course; and until foreclosure of such Surrender Property.
This authorization terminates on the earlier of (i) the date of
default by the Debtor of any term of the Final Order, or (ii)
October 31, 2021. All cash collateral received by the Debtor shall
be deposited into a DIP account.
The Court further authorized the Debtor to use the rents and other
proceeds paid to the Debtor by its tenants and which constitute
cash collateral of the Remaining Creditors, pursuant to the budget,
until the earlier to occur of (i) the date of default by the Debtor
of any term of the Final Order, or (ii) October 31, 2021.
In addition, the Court ruled that:
* the Surrender Creditors, as well as the Remaining Creditors,
are granted, as adequate protection for the use of their cash
collateral, replacement lens on all leases, rental agreements,
rents, proceeds and all other assets generated or acquired by the
Debtor postpetition from their respective collateral, provided that
no such replacement liens shall prime the ad valorem tax liens;
* the Debtor shall use each Surrender Creditor's cash collateral
and each Remaining Creditor's cash collateral, for expenses
relating to the collateral which secures the Surrender
Creditor/Remaining Creditor, and to pay for quarterly U.S. Fees;
the Debtor shall separately account to each Surrender
Creditor/Remaining Creditor for the use of their respective cash
collateral;
* the Debtor shall reserve funds on a monthly basis sufficient
to pay the pro-rated estimated taxes and insurance on the Remaining
Creditors' collateral; and
* the Debtor shall provide rent rolls and copies of any new
leases and lease amendments to the Remaining Creditors on a monthly
basis within 15 days after and as of the end of each month.
As additional adequate protection, the Debtor shall pay to the
Remaining Creditors designated amounts of monthly payments, which
shall be due on August 15, 2021 and thereafter on the 15th of each
consecutive month until such time as payments commence under a
confirmed plan or further Court order.
A copy of the final order is available for free at
https://bit.ly/2VRGFYu from PacerMonitor.com.
Counsel for the Surrender Creditors and Remaining Creditors:
James W. Brewer, Esq.
Kemp Smith LLP
P.O. Drawer 2800
El Paso, TX 79999-2800
Telephone: (915) 533-4424
About 4YL Development
4YL Development, Inc., is an owner-operator of multi-family
residential real estate in El Paso, Texas renting apartment units
within its properties. 4YL Development sought Chapter 11
protection (Bankr W.D. Tex. Case No. 21-30157) on March 1, 2021.
At the time of the filing, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Judge H. Christopher Mott oversees the case. Miranda & Maldonaldo,
PC, led by Carlos Miranda, Esq., is the Debtor's legal counsel.
AARNA HOTELS: Aug 24 Hearing on Continued Cash Collateral Access
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina, Charlotte Division, has authorized Aarna Hotels, LLC to
use cash collateral on an interim basis in accordance with the
budget through 11:59 on August 24, 2021, the date of the continued
hearing.
The Debtor and its secured lender, M2 Charlotte Airport, LLC, have
agreed that the Debtor may continue using cash collateral through
and including the date of the continued hearing on the conditions
set forth in the First Interim Order.
The August 24 hearing will be held at 9:30 a.m. in the United
States Bankruptcy Court, Charles Jonas Federal Building, JCW
Courtroom 2B, 401 West Trade Street, Charlotte, North Carolina.
About Aarna Hotels
Aarna Hotels, LLC is a limited liability company formed in 2017
under the laws of the State of North Carolina. It owns and operates
an Aloft branded hotel located at 3928 Memorial Parkway in
Charlotte, North Carolina.
Aarna Hotels sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. N.C. Case No. 21-30249) on April 29,
2021. In the petition signed by Anuj N. Mittal, manager, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge Laura T. Beyer presided over the case before Judge J. Craig
Whitley took over. Richard S. Wright, Esq., at Moon Wright &
Houston, PLLC, is the Debtor's legal counsel.
ABBEY RESOURCES: Gets Bankruptcy Protection Under CCAA
------------------------------------------------------
Abbey Resources Corp. obtained protection under the Companies'
Creditors Agreement Act on Aug. 13, listing approximately $15.3
million in liabilities, including $5.2 million for municipal taxes,
$6.5 million owed to surface rights holders, and $1.6 million owed
under leases with mineral rights holders.
MNP was appointed monitor. Counsel is DLA Piper for the company,
McDougall Gauley for the monitor, Robertson Stromberg for the
Minister, Miller Thomson for the Rural Municipality of Lacadena No.
28, Kanuka Thuringer for the Rural Municipality of Miry Creek No.
229 and MLT Aikins for Carry the Kettle Nakoda Nation Band No. 76.
Since the company acquired the wells via three transactions in 2016
and 2017, the price the company has been able to sell its
production from those wells has not been sufficient to pay its
debts. While the company has been able to cover its day-to-day
operating costs, it cannot consistently pay land taxes to the
municipalities and one First Nation where the wells are located.
Opponents to the CCAA application alleged, among other things, that
the company was not acting in good faith. In particular, they
suggested that the company knew from the outset that the operations
it established in the three asset acquisitions would not generate
sufficient cash flow to pay its debts as they become due.
Moreover, the opponents stated that they have lost confidence in
the company's management. Despite strong opposition by the
regulator, the Saskatchewan Minister of Energy ("Minister"), the
Queen's Bench of Saskatchewan also approved the inclusion of a
provision in the initial order staying administrative action by the
Minister for the company's failure to pay certain funds.
Monitor can be reached at:
MNP LTD.
119 4th Ave. South
Suite 800
Saskatoon, SK, S7K 5X2
Tel: (306) 664-8334
Victor Kroeger
Email: vic.kroeger@mnp.ca
Rick Anderson
Email: rick.anderson@mnp.ca
Counsel for the Monitor:
McDougall Gauley LLP
500 - 616 Main Street
Saskatoon, SK S7H 0J6
Ian Sutherland
Tel: (306) 665-5417
Fax: (306) 664-4431
Email: isutherland@mcdougallgauley.com
Craig Frith
Tel: (306) 665-5432
Fax: (306) 652-1323
Email: cfrith@mcdougallgauley.com
Counsel for Abbey Resources:
DLA Piper (Canada) LLP
Suite 2700
10220 - 103rd Avenue N.W.
Edmonton, AB T5J 0K4
Tel: (780) 426-5330
Jerritt R. Pawlyk
Tel: (780) 429-6835
Fax: (780) 670-4329
Email: jerritt.pawlyk@dlapiper.com
Kevin N. Hoy
Tel: (403) 698-8738
Fax: (403) 776-8861
Email: kevin.hoy@dlapiper.com
G. Brian Davison, Q.C.
Tel: (403) 294-3590
Fax: (403) 776-8864
Email: brian.davison@dlapiper.com
Carole Hunter
Tel: (403) 698-8782
Fax: (403) 697-6600
Email: carole.hunter@dlapiper.com
Anderson & Company
51 - 1st Avenue NW
Swift Current, SK S9H 0M5
Jean Jordaan
Email: jjordaan@andlaw.ca
All court documents and material related to the CCAA proceeding is
available at
https://mnpdebt.ca/en/corporate/corporate-engagements/abbey-resources-corporation.
Abbey Resources Corp. owns and operates over 2,000 shallow gas
wells in Swift Current, Saskatchewan.
ABRAXAS PETROLEUM: Incurs $14 Million Net Loss in Second Quarter
----------------------------------------------------------------
Abraxas Petroleum Corporation filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $14.01 million on $18.44 million of total revenue for
the three months ended June 30, 2021, compared to a net loss of
$83.26 million on $1.99 million of total revenue for the three
months ended June 30, 2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $37.70 million on $35.11 million of total revenue compared
to a net loss of $41.81 million on $17.72 million of total revenue
for the six months ended June 30, 2020.
As of June 30, 2021, the Company had $135.68 million in total
assets, $245.84 million in total liabilities, and a total
stockholders' deficit of $110.16 million.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/867665/000143774921020104/axas20210630_10q.htm
About Abraxas
San Antonio, TX-based Abraxas Petroleum Corporation --
www.abraxaspetroleum.com -- is an independent energy company
primarily engaged in the acquisition, exploration, development and
production of oil and gas.
Abraxas reported a net loss of $184.52 million for the year ended
Dec. 31, 2020, compared to a net loss of $65 million for the year
ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $157.76
million in total assets, $230.73 million in total liabilities, and
a total stockholders' deficit of $72.97 million. As of March 31,
2021, the Company had $138.30 million in total assets, $234.65
million in total liabilities, and a total stockholders' deficit of
$96.35 million.
San Antonio, Texas-based ADKF, P.C., the Company's auditor since
2020, issued a "going concern" qualification in its report dated
May 6, 2021, citing that the Company has not satisfied certain
covenants under its first lien credit facility as of Dec. 31, 2020
which represents an event of default. Additionally, the company
does not anticipate maintaining compliance with all of its credit
facilities over the next twelve months. These matters raise
substantial doubt about the Company's ability to continue as a
"going concern".
AGILON ENERGY: Committee Taps Conway MacKenzie as Financial Advisor
-------------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Agilon Energy Holdings II, LLC and its
affiliates seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to hire Conway MacKenzie, LLC as its
financial advisor.
The firm's services include:
(a) assisting the committee in the analysis, review and
monitoring of the restructuring process, including, but not limited
to, an assessment of potential recoveries for general unsecured
creditors;
(b) assisting in the review of financial information prepared
by the Debtors, including, but not limited to, cash flow
projections and budgets, business plans, cash receipts and
disbursement analysis, asset and liability analysis, and the
economic analysis of proposed transactions for which court approval
is sought;
(c) assisting in the review of the debtor-in-possession
facility, including, but not limited to, evaluating liquidity needs
and DIP sizing;
(d) assisting in the review of any tax issues associated with,
but not limited to, preservation of net operating losses, refunds
due to the Debtors, plans of reorganization, and asset sales;
(e) assisting in the review of the Debtors' analysis of
business assets, the potential disposition or liquidation of those
assets, and the review and assessment of any sales process;
(f) attending meetings and assisting the committee in
discussions with the Debtors, potential investors, banks, secured
lenders, other official committees organized in the Debtors'
Chapter 11 proceedings, the U.S. trustee and other parties in
interest;
(g) assisting in the review of financial-related disclosures
required by the court, including schedules of assets and
liabilities, statement of financial affairs and monthly operating
reports;
(h) assisting in the review of various executory contracts;
(i) assisting in the review and evaluation of the Debtors'
employee retention and compensation plans;
(j) assisting in the evaluation, analysis and forensic
investigation of avoidance actions, including fraudulent
conveyances and preferential transfers and certain transactions
between the Debtors and affiliated entities;
(k) assisting in the prosecution of committee responses or
objections to the Debtors' motions;
(l) assisting and supporting the evaluation of restructuring,
sale and liquidation alternatives; and
(m) rendering other general business consulting services.
The firm's hourly rates are as follows:
Senior Managing Directors $955 - $1,350 per hour
Managing Directors $825 - $1,095 per hour
Directors $640 - $790 per hour
Senior Associates $490 - $625 per hour
Analysts $235 - $490 per hour
John Young, Jr., senior managing director at Conway MacKenzie,
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:
John T. Young, Jr.
Conway MacKenzie, LLC
909 Fannin Street, Suite 4000
Houston, TX 77010
Tel.: 713.650.0500
Email: john.young@conwaymackenzie.com
About Agilon Energy Holdings
Texas-based power producer Agilon Energy Holdings II, LLC and its
affiliates, Victoria Port Power LLC and Victoria City Power LLC,
sought Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 21
32156) on June 27, 2021. At the time of the filing, Agilon had
between $100 million and $500 million in both assets and
liabilities.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Locke Lord, LLP as legal counsel, Grant
Thornton, LLP as financial advisor and Hugh Smith Advisors, LLC as
restructuring advisor. Hugh Smith of Hugh Smith Advisors serves as
the Debtors' chief restructuring officer. Stretto 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 July 30,
2021. Pachulski Stang Ziehl & Jones, LLP and Conway MacKenzie, LLC
serve as the committee's legal counsel and financial advisor,
respectively.
ALTRA INDUSTRIAL: S&P Upgrades ICR to 'BB', Outlook Stable
-----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Altra
Industrial Motion Corp. to 'BB' from 'BB-' and its issue-level
rating on its senior secured credit facilities to 'BB+' from 'BB-'.
S&P revised its recovery rating on this debt to '2' from '3'
because the company has paid down a significant portion of its term
loan.
S&P also raised its issue-level rating on Altra's subsidiary's
unsecured notes to 'BB-' from 'B+' in line with the ICR upgrade.
The recovery rating on this debt remains '5.'
The stable outlook on Altra reflects S&P's expectation for
continued end market recovery and solid free cash flow generation.
This should allow the company to maintain S&P Global
Ratings-adjusted leverage of about 3x or lower over the next 12
months.
A broad-based end market recovery in 2021 should result in revenue
and profit growth for Altra and allow for further modest debt
leverage reduction. Altra's performance through the recessionary
environment of 2020 was more resilient than S&P had forecast, with
a revenue decline of only 6% and margin accretion because of
cost-cutting actions. With support from its good free cash flow
generation of more than $200 million, the company reduced its S&P
Global Ratings'-adjusted leverage to 3.3x at the end of 2020. S&P
said, "Though we consider the company's scope of operations (mainly
providing components for factories and heavy equipment) as
relatively narrow, it serves a diverse set of end markets, and we
expect most markets will continue to improve over the next 12
months as the economy ramps up. Still, in the event of a potential
downturn, we believe the company's current leverage of about 3x
provides about one turn of cushion to absorb the impact of end
market weakness."
S&P said, "We expect some margin compression in 2021 because of
cost inflation, supply chain disruptions, and the return of some
discretionary costs. Despite expected solid volume growth, we
expect an increasing cost environment could compress Altra's EBITDA
margins by up to 100 basis points this year, in comparison to
strong margin performance of 2020. To combat the impact of rising
costs, the company is increasing its prices, but there is a lag in
passing it on to customers. In addition, like other industrial
manufacturers, Altra is contending with supply chain disruptions.
In all, we forecast Altra's EBITDA margins will decline toward 21%
from 22% in 2021, which remains above average for industrial
manufacturers.
"Altra's debt leverage is now within its target range and we expect
the company will increase its focus on acquisitions. Altra finished
the second fiscal quarter of 2021 with company-adjusted leverage of
2.8x (and S&P Global Ratings'-adjusted leverage of 3.1x), within
its target net leverage of less than 3x. We expect the company will
use its free cash flow to repay $50 million or more of debt in the
second half of 2021. Thereafter, we believe Altra will prioritize
inorganic growth, largely in the form of bolt-on acquisitions,
while remaining within their target leverage range.
"The stable outlook on Altra reflects our expectation for continued
end market recovery and solid free cash flow generation. This
should allow the company to maintain S&P Global Ratings'-adjusted
leverage of about 3x or lower over the next 12 months.
"We could lower our ratings on the company if its S&P Global
Ratings'-adjusted debt leverage deteriorates to above 3.5x on a
sustained basis or it pursues significant debt-funded acquisitions
or share repurchases that similarly stretch credit metrics."
S&P could upgrade Altra if:
-- The company meaningfully expands its business scale and scope
of operations; or
-- The company continues to reduce its debt leverage and adopts a
more conservative financial policy such that S&P expects the
company's S&P Global Ratings-adjusted debt to EBITDA will remain
below 2x in normal market conditions.
AMARIN PHARMA: Faces Welfare Fund Suit Over Vascepa Drug Monopoly
-----------------------------------------------------------------
BOARD OF TRUSTEES OF HEAVY AND GENERAL LABORERS' LOCAL UNIONS 472
AND 172 OF NJ WELFARE FUND, individually and on behalf of all
others similarly situated, Plaintiff v. AMARIN PHARMA, INC.; AMARIN
PHARMACEUTICALS IRELAND LIMITED; and AMARIN CORPORATION PLC,
Defendants, Case No. 1:21-cv-14639 (D.N.J., Aug. 5, 2021) is an
action arising from the Defendants' illegal scheme to delay
competition in the marketing and sale of Vascepa in the United
States.
According to the complaint, Vascepa is a prescription medication
approved by the U.S. Food and Drug Administration ("FDA") to treat
hypertriglyceridemia in adults. The key ingredient in Vascepa is
icosapent ethyl ("IPE"), made from eicosapentaenoic acid ("EPA"),
an omega-3 fatty acid found in fish oil. Vascepa has been shown
both to lower triglycerides and to reduce the risk of
cardiovascular events in patients who have high triglycerides (150
mg/dL or higher).
As a result of Amarin's sham patent litigation against generic drug
manufacturers, which delayed the regulatory approval and launch of
generic versions of Vascepa and from Amarin's unlawful prevention
of generic competition for Vascepa by precluding access to the
world's supply of the active pharmaceutical ingredient needed to
make the drug, the Plaintiff and the Classes it represents have
been harmed in their business and property, says the suit.
Through the use of sham patent litigation, Amarin was allegedly
able to delay and limit Hikma and DRL's launches of generic
Vascepa, as well as to prevent the approval and launches of other
generic manufacturers. Further, by purposely contracting with at
least four different Active Pharmaceutical Ingredient ("API")
suppliers - one or two is standard in the pharmaceutical industry -
Amarin prevented these suppliers from selling IPE to any other
generic manufacturer. Amarin prevented, delayed, and limited
generic competition in the marketing and sale of Vascepa. There was
no legitimate procompetitive reason for Amarin to pursue its sham
patent litigation or for entering into exclusive supply agreements
with the four IPE suppliers.
Amarin Pharma, Inc. was founded in 2008. The company's line of
business includes providing commercial physical and biological
research and development.
The Plaintiff is represented by:
Joseph DePalma, Esq.
LITE DEPALMA GREENBERG & AFANADOR, LLC
570 Broad Street, Suite 1201
Newark, NJ 07102
Telephone: (973) 623-3000
Facsimile: (973) 623-0858
E-mail: jdepalma@litedepalma.com
AMERICAN TIRE: S&P Ups ICR to 'B-' on Improved Cash Flows
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on American Tire
Distributors Inc. to 'B-' from 'CCC+'. At the same time, S&P raised
its issue-level rating on its $150 million term loan maturing in
2023 to 'B+' from 'B'. S&P also raised its issue-level rating on
its $795 million term loan maturing in 2024 to 'B-' from 'CCC+'.
The positive outlook reflects the at least one-in-three chance S&P
will raise itsratings on the company over the next 12 months as its
debt leverage, incorporating S&P Global Ratings' adjustments,
continues to decline and it generates positive free operating cash
flow (FOCF).
American Tire's sales, earnings, and cash flow continue to improve,
and S&P believes management's ongoing operating expense reductions
will help it sustain lower debt leverage. The recovery in
replacement tires continues to gather momentum, as reflected in the
higher demand for light-truck tires and commercial tires and wheels
in the latter half of 2020. Despite the effects of the COVID-19
pandemic, the company's net sales for fiscal 2020 were $4.79
billion, which reflects a 1.7% year-over-year increase relative to
fiscal 2019. The company also expanded its EBITDA margins and
generated over $70 million of FOCF while navigating the steep drops
in its sales in March and April 2020.
The company has been restructuring its U.S. operations over the
past two years by reducing its headcount, closing distribution
centers, and standardizing its business processes. The company has
also been investing in technology to increase the productivity of
its workforce by developing its expertise in aggregating data and
generating predictive results for its customers and its own
business. S&P expects the company to reduce its operating expenses
by about $50 million over the next few years while continuing to
boost its EBITDA margins.
S&P said, "Consequently, we now expect material growth in sales and
earnings in 2021 to support solid free cash flow (FOCF to debt over
5%) and debt to EBITDA below 7x, with further improvements into
2022 and 2023.
"The positive rating outlook on American Tire reflects the at least
one-in-three chance we will raise our ratings on the company over
the next 12 months if the improved demand environment for
replacement tires and the company's cost control helps improve its
cash flow adequacy metrics further.
"We could raise our ratings on American Tire if we believed it
would continue to execute efficiently, increase its market share,
and maintain EBITDA margins over 6%. Before raising our ratings, we
would also expect the company to be on a path to reducing its debt
to EBITDA below 6x and sustaining FOCF to debt of 5%-10%.
"We could revise our outlook on American Tire to stable if its
profitability softened due to rising costs and lower-than-expected
demand for replacement tires, which would make it unlikely that it
could improve its debt to EBITDA below 6x or generate solid FOCF on
a sustained basis."
AMERICANN INC: Incurs $99K Net Loss in Third Quarter
----------------------------------------------------
Americann, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $98,955
on $584,546 of total revenues for the three months ended June 30,
2021, compared to a net loss of $489,479 on $146,569 of total
revenues for the three months ended June 30, 2020.
For the nine months ended June 30, 2021, the Company reported a net
loss of $905,331 on $1.29 million of total revenues compared to net
income of $108,422 on $215,950 of total revenues for the same
period during the prior year.
As of June 30, 2021, the Company had $15.35 million in total
assets, $9.88 million in total liabilities, and $5.47 million in
total stockholders' equity.
"The Company believes that the COVID-19 pandemic has had certain
impacts on its business, but management does not believe there has
been a material long-term impact from the effects of the pandemic
on the Company's business and operations, results of operations,
financial condition, cash flows, liquidity or capital and financial
resources," Americann said.
"The Company has established policies to monitor the pandemic and
has taken a number of actions to protect its employees, including
restricting travel, encouraging quarantine and isolation when
warranted, and directing most of its employees to work from home,"
the Company said.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1508348/000143774921020152/acan20210630_10q.htm
About Americann
Headquartered in Denver, AmeriCann is a specialized cannabis
company that is developing cultivation, processing and
manufacturing facilities.
Americann reported a net loss of $709,343 for the year ended Sept.
30, 2020, compared to a net loss of $4.90 million for the year
ended Sept. 30, 2019. As of March 31, 2021, the Company had $14.82
million in total assets, $9.75 million in total liabilities, and
$5.07 million in total stockholders' equity.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
Dec. 21, 2020, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
ANTECO PHARMA: Seeks to Hire Boardman & Clark as Special Counsel
----------------------------------------------------------------
Anteco Pharma, LLC seeks approval from the U.S. Bankruptcy Court
for the Western District of Wisconsin to hire Boardman & Clark, LLP
as its special counsel.
The Debtor needs the firm's legal services in connection with the
patent infringement claims and related claims asserted by Galderma
Laboratories, L.P.
The firm's hourly rates are as follows:
Richard L. Bolton, Esq., Shareholder $330 per hour
Storm B. Larson, Esq., Associate $275 per hour
Kim Cowell, Paralegal $110 per hour
Richard Bolton, Esq., a shareholder of Boardman & Clark, 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:
Richard L. Bolton, Esq.
Boardman & Clark LLP
1 S Pinckney St.
P.O. Box 927
Madison, WI 53703
Phone: (608) 257-9521
Direct: (608) 283-1789
Email: rbolton@boardmanclark.com
About Anteco Pharma
Anteco Pharma, LLC is a Waunakee, Wis.-based company specializing
in freeze drying and related processing of pharmaceutical
intermediates, medical devices, specialty food and nutritional
ingredients.
Anteco Pharma filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 221-11012) on
May 7, 2021, disclosing total assets of up to $10 million and total
liabilities of up to $1 million. Howard R. Teeter, authorized
member, signed the petition.
Judge Catherine J. Furay oversees the case.
Krekeler Strother, S.C. and Boardman & Clark, LLP serve as the
Debtor's bankruptcy counsel and special counsel, respectively.
AUTO RECYCLERS: Seeks to Employ Brian Murray as Appraiser
---------------------------------------------------------
Auto Recyclers, LLC seeks approval from the U.S. Bankruptcy Court
for the Western District of Virginia to hire Murray Appraisal
Group, Inc. to appraise its real estate holdings.
The firm will receive the sum of $13,500 for its appraisal services
and will be paid at the rate of $200 per hour for any court
testimony and expert witness work.
The Debtor paid $6,750 to the firm as a retainer fee.
Brian Murray, the firm's appraiser who will be providing the
services, 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:
Brian N. Murray
Murray Appraisal Group, Inc.
4519 Brambleton Ave., SW, Suite 200
Roanoke, VA 24018-0000
Tel: (540) 366-8060
Email: Brian@murray‐appraisal.com
About Auto Recyclers
Auto Recyclers, LLC, doing business as Used to New --
http://www.autorecyclersllc.com-- is a recycler of metals,
automobile cores, batteries, paper, cardboard, computers fiber,
books, and plastic. It holds office at 1400 Sycamore Ave., Buena
Vista, Va.
Auto Recyclers filed a petition for Chapter 11 protection (Bankr.
W.D. Va. Case No. 21-50158) on March 26, 2021, listing as much as
$10 million in both assets and liabilities. Judge Paul M. Black
oversees the case. Woods Rogers, PLC represents the Debtor as
legal counsel.
Bank of Fincastle, as lender, is represented by Peter M. Pearl,
Esq., at Spilman Thomas & Battle, PLLC.
AVADIM HEALTH: SSG Acted as Investment Banker in Asset Sale
-----------------------------------------------------------
SSG Advisors, LLC ("SSG") acted as the investment banker to Avadim
Health, Inc., ("Avadim" or the "Company") in the sale of
substantially all of its assets to an affiliate of Hayfin Capital
Management.The sale was effectuated through a Chapter 11 Section
363 process in the U.S. Bankruptcy Court for the District of
Delaware.The transaction closed in August 2021.
Avadim is a leading healthcare and wellness company that develops,
manufactures, and markets topical products for immune, muscular and
skin health to institutional and consumer markets. Based in
Asheville, NC, Avadim is vertically integrated and has
commercialized several products through its two primary brand
families: Theraworx Protect and Theraworx Relief.Avadim's products
are used by over 1,000 leading hospitals and long-term care
facilities and can be found in over 50,000 retail locations.
As an emerging consumer products company, Avadim experienced
liquidity constraints preventing it from effectively bringing new
products to market and executing its growth strategy. Avadim filed
for Chapter 11 in May 2021 to recapitalize its balance sheet and
provide additional liquidity and resources to drive product
development, enhance retail awareness, and capture additional share
in the robust self-care market.
SSG was retained in May 2021 with a short timeline to conduct a
comprehensive sale process. Hayfin Capital Management successfully
negotiated a Stalking Horse Agreement to preserve the business as a
going concern. A comprehensive sale process attracted interest from
multiple strategic and financial acquirers, but ultimately the
Stalking Horse's bid proved to be the highest and best offer for
the Company's assets. SSG's special situations expertise,
significant experience in the healthcare and consumer products
industries, and proven ability to close transactions quickly
enabled Avadim to complete an expedited transaction that maximized
value for all stakeholders.
Hayfin Capital Management is a European-based private credit
alternative asset manager. Hayfin manages four complementary and
cohesive debt investment strategies focused on delivering strong
risk-adjusted returns: direct lending, special opportunities,
tactical credit, and high yield and syndicated loans.
Other professionals who worked on the transaction include:
* Keith Daniels, Chief Restructuring Officer, Mark Claster,
Jonathan Killion, Scott Pasquith, and Aidan Black of Carl Marks
Advisors, financial advisor to Avadim Health, Inc.;
* Larry G. Halperin, Joon P. Hong, and Eric R. Manor of Chapman
and Cutler LLP, bankruptcy counsel to Avadim Health, Inc.;
* Laura Davis Jones, David M. Bertenthal, and Timothy P. Cairns
of Pachulski Stang Ziehl & Jones, bankruptcy counsel to Avadim
Health, Inc.;
* David N. Griffiths, Gavin Westerman, Peter Feist, Bryan R.
Podzius, Rachael L. Foust, Joseph Maurantonio, and Yugank Sunny
Sikka of Weil, Gotshal & Manges LLP and Zachary I. Shapiro, Paul N.
Heath, and David T. Queroli of Richards, Layton & Finger, PA,
counsel to Hayfin Capital Management.;
* Eric S. Chafetz, Jeffrey Cohen, and Robert M. Hirsh of
Lowenstein Sandler LLP and Michael A. Sweet, Gordon E. Gouveia,
Robert W. Glantz, and Jeffrey L. Widman of Fox Rothschild LLP,
counsel to the Unsecured Creditors Committee; and
* Sanjuro Kietlinski, Harry Foard, David Dunn, and Elise Shen
of Province, LLC, financial advisor to the Unsecured Creditors
Committee.
About Avadim Health
Avadim Health, Inc. is a Asheville, N.C.-based healthcare and
wellness company that develops, manufactures and markets topical
products for the institutional care and consumer markets. It was
formerly known as Avadim Technologies Inc.
Avadim and its affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 21-10883) on June 1, 2021. In the petition
signed by CRO Keith Daniels, Avadim disclosed total assets of
between $10 million and $50 million and total liabilities of
between $100 million and $500 million.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Pachulski Stang Ziehl & Jones LLP and Chapman
and Cutler LLP as legal counsel, SSG Capital Advisors LLC as
investment banker, and Carl Marks Advisory Group LLC as
restructuring advisor. Keith Daniels, a partner at Carl Marks,
serves as the Debtors' chief restructuring officer. Omni Agent
Solutions is the claims and noticing agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases on June 9, 2021. The committee tapped Fox Rothschild, LLP
and Lowenstein Sandler, LLP as its legal counsel and Province, LLC
as its financial advisor.
BARENZ INVESTMENTS: Seeks to Hire Accounting & Business Partners
----------------------------------------------------------------
Barenz Investments, LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Accounting &
Business Partners, LLC as its accountant.
The firm's services include:
a. preparing and filing tax returns and conducting tax
research;
b. performing normal accounting services as required by the
Debtor;
c. assisting the Debtor in preparing court-ordered reports,
including the United States Trustee Reports and any documents
necessary for the Debtor's disclosure statement; and
d. assisting and consulting with the Debtor to present and
sustain a feasible plan of reorganization.
The firm's compensation is as follows:
(i) an hourly rate of $225 for services rendered by the firm's
accountant, Andrea Bone;
(ii) an hourly rate of $105 for tax planning;
(iii) a range of $70 to $100 per hour for services rendered by
accounting staff;
(iv) reimbursement of out-of-pocket costs; and
(v) $675 monthly flat fee for monthly bookkeeping services.
The firm received a $2,500 retainer.
Ms. Bone 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 through:
Andrea Bone, CPA
Accounting & Business Partners, LLC
10730 102nd Ave N.
Seminole, FL 33778
Tel: (727) 828-9945
Email: AndreaBone@YourPartners.com
About Barenz Investments LLC
Barenz Investments, LLC, a Treasure Island, Fla.-based company that
operates a boutique beach guest house and a hotel, filed a Chapter
11 petition (Bankr. M.D. Fla. Case No. 21-02682) on May 24, 2021,
listing $3,009,800 in total assets and $1,427,953 in total
liabilities. David Alan Barenz, manager, signed the petition.
Judge Caryl E. Delano oversees the case.
Debt Relief Legal Group, LLC and Accounting & Business Partners,
LLC serve as the Debtor's legal counsel and accountant,
respectively.
BASIC ENERGY: Hits Chapter 11 Bankruptcy for 2nd Time
-----------------------------------------------------
Alexander Gladstone of The Wall Street Journal reports that
Fracking contractor Basic Energy Services Inc. filed for bankruptcy
Tuesday, August 17, 2021, for the second time in five years,
planning to sell itself in parts and setting up a $47.5 million
conflict with its controlling shareholder, Ascribe Capital.
The Fort Worth-based company, which services oil and gas wells
across nine states, said in court papers that three buyers have
offered a combined $72 million for three business lines, a sum that
would cover a fraction of Basic Energy's $387.5 million in secured
debt.
Bsic Energy Services Inc. filed for bankruptcy a second time with
an agreement to sell its assets to Axis Energy Services Holdings
LLC, Berry Corp. and Select Energy Services Inc. The shares
tumbled.
The oil and gas services company, which filed for Chapter 11 in the
Southern District of Texas, has been negotiating with creditors to
clean up its debt-plagued balance sheet. It listed at least $100
million of assets and at least $500 million of liabilities,
according to the bankruptcy petition.
About Basic Energy Services
Basic Energy Services -- http://www.basices.com/-- provides
wellsite services essential to maintaining production from the oil
and gas wells within its operating areas. The Company's operations
are managed regionally and are concentrated in major United States
onshore oil-producing regions located in Texas, California, New
Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota,
Colorado and Montana. Specifically, the Company has a significant
presence in the Permian Basin, Bakken, Los Angeles and San Joaquin
Basins, Eagle Ford, Haynesville and Powder River Basin.
Basic Energy Services, Inc., and 12 affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 21-90002) on Aug. 17,
2021. The Company disclosed total assets of $331 million and debt
of $549 million as of March 31, 2021.
The Hon. David R. Jones is the case judge.
The Debtors tapped WEIL, GOTSHAL & MANGES LLP as counsel;
ALIXPARTNERS LLP as restructuring advisor; and LAZARD FRERES &
COMPANY as financial advisor. PRIME CLERK is the claims agent.
BELVIEU BRIDGE: Seeks Cash Collateral Access
--------------------------------------------
Belvieu Bridge Properties Group, LLC asks the U.S. Bankruptcy Court
for the District of Maryland for authority to use cash collateral
on an interim basis.
The Debtor requires the use of cash collateral to pay necessary
expenses for the continued operation of its Property and for the
protection and preservation of assets of the bankruptcy estate.
Cash Collateral in the case consists of income generated in the
regular course of business from the post-petition operation of
Debtor's business, two residential apartment buildings located at
3915 - 3921 Belvieu Avenue and 4610-4614 Wellington Avenue,
Baltimore, Maryland 21215 and 2427-2431 Lakeview Avenue, Baltimore,
Maryland 21217.
The income generated from the operations of Debtor is to be used
for payment of necessary and appropriate operating expenses of the
Debtor and administrative expenses in the case. With respect to
such administrative expenses, the Debtor requests authorization to
pay administrative expenses (such as professional and appraisal
fees) after approval by the Court.
The Debtor operates two apartment complexes at the Belvieu Property
and the Lakeview Property. The Properties are residential
apartments.
The purchase of the Properties was funded by loans from Velocity
Commercial Capital, LLC, as to the Belvieu Property in the amount
of $1,500,000 and as to the Lakeview Property in the amount of
$1,176,000. It is alleged that the Loans were subsequently assigned
to U.S. Bank National Association, as Trustee for Velocity
Commercial Capital Loan Trust 2017-2. Although Velocity has
actively participated in the case, it has not filed Proofs of
Claim.
The approximate balance owed on the Loans on the Petition Date:
Belvieu Loan: $1,437,918.34
Lakeview Loan: $1,227,258.30
No other parties, apart from governmental liens for utilities
and/or property taxes, assets liens as to the Properties. On the
Petition Date, the Belvieu Property was scheduled as having a value
of $731,900 and the Lakeview Property was scheduled as having a
value of $1,627,800.
The impact of the Covid-19 pandemic on the Debtor's business has
been devastating. Many of its tenants lost their jobs or had
significant cutbacks in their hours and thus their income.
Non-payment of rent soared. As noted on the Schedule A/B, the
Debtor, on the Petition Date, was owed approximately $93,000 in
unpaid rent. The eviction moratorium imposed by Governor Hogan on
March 16, 2020 prevented the Debtor from evicting non-paying
tenants, with the result that there were a significant number of
tenants residing in rental units who were not paying rent and could
not be evicted.
The eviction moratorium is scheduled to expire on Sunday, August
15, 2021. Currently, 19 units at the Properties contain tenants who
are not paying rent, 11 at the Belvieu Property and 8 at the
Lakeview Property. The Debtor will, upon the expiration of the
moratorium, move to evict these tenants. While it is anticipated
that it will take some time for this process, once they are out of
the Properties and the units are re-rented, this will result in
additional monthly income to the Debtor of approximately $19,000,
$11,000 on Belvieu and $8,000 on Lakeview.
Currently, there are nine unrented units at the Properties, three
at the Belvieu Property and six at the Lakeview Property. Four
should be rented in September to self-pay tenants. The remaining
five will be rented to Section VIII tenants, also in September.
When all are rented, this will result in additional monthly income
to the Debtor of approximately $7,312.50, $2,437.50 on Belvieu and
$4,875 on Lakeview.
The Debtor also proposes to use Cash Collateral to pay
administrative expenses; however, other than a $10,000 retainer to
be paid to Daniel Staeven and Frost Law as Special Counsel and to
be placed in escrow, it proposes to pay administrative expenses
such as professional fees (including those of Mr. Staeven and Frost
Law from escrow) only after approval by the Court of each such
administrative expense.
The Debtor has prepared a budget for its operations since the
Petition Date and extending through October 1, 2021, for each of
the Properties.
For the Belvieu Property and the Lakeview Property, the Debtor
anticipates having $4,527.15 in net income from Belvieu in
September 2021 and $6,964.65 in October 2021, and $0.00 in net
income from Lakeview in September 2021 and $3,034.78 in October
2021. As it is hoped that by mid-October the evictions and
re-rentals will increase the net income, and that an appraisal of
the Properties can be obtained, it is requested that any Cash
Collateral Order be reexamined at that time to determine if an
adjustment in the Adequate Protection Payments is warranted.
As adequate protection for the use of Cash Collateral, Velocity
will retain its liens and be paid as follows (which sums represent
all of Debtor's net income from the Properties for the period
stated):
Belvieu Loan: On September 1, 2021, $4,527.15
On October 1, 2021, $6,964.65
Lakeview Loan: On September 1, 2021, $3,034.78
On October 1, 2021, $3,034.78
Additionally, on the Lakeview Loan, the Debtor will pay the
additional sum of $2,000 per month from the Cash Collateral already
received and retained.
A copy of the motion is available at https://bit.ly/3yOyhHF from
PacerMonitor.com.
About Belvieu Bridge Properties Group
Baltimore, Md.-based Belvieu Bridge Properties Group, LLC is the
owner of multi-unit residential apartment buildings located at 3915
Belvieu Avenue & 4610 Wallington Avenue, Baltimore, MD 21215; and
2427-2429 & 2431-2433 Lakeview Avenue, Baltimore, MD 21217. The
company is the owner of fee simple title to the properties, having
a current value of $2.93 million.
Belvieu Bridge Properties Group filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case
No. 21-11452) on March 9, 2021. Zenebe Shewayene, managing member,
signed the petition. At the time of the filing, the Debtor
disclosed total assets of $3,115,322 and total liabilities of
$3,108,307.
Judge David E. Rice oversees the case. The Weiss Law Group, LLC
serves as the Debtor's legal counsel.
BLUE DOLPHIN: Incurs $4.1 Million Net Loss in Second Quarter
------------------------------------------------------------
Blue Dolphin Energy Company filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $4.10 million on $69.44 million of total revenue from operations
for the three months ended June 30, 2021, compared to a net loss of
$4.24 million on $18.47 million of total revenue from operations
for the three months ended June 30, 2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $7.27 million on $128.85 million of total revenue from
operations compared to a net loss of $7.58 million on $80.47
million of total revenue from operations for the same period during
the prior year.
As of June 30, 2021, the Company had $65.09 million in total
assets, $83.14 million in total liabilities, and a total
stockholders' deficit of $18.06 million.
Going Concern
"Management has determined that certain factors raise substantial
doubt about our ability to continue as a going concern. These
factors include inadequate liquidity to sustain operations due to
defaults under our secured loan agreements, margin deterioration
and volatility, and historic net losses and working capital
deficits. Our consolidated financial statements assume we will
continue as a going concern and do not include any adjustments that
might result from the outcome of this uncertainty. Our ability to
continue as a going concern depends on sustained positive operating
margins and having working capital for, amongst other requirements,
purchasing crude oil and condensate and making payments on
long-term debt. Without positive operating margins and working
capital, our business will be jeopardized, and we may not be able
to continue. If we are unable to make required debt payments, we
would likely have to consider other options, such as selling
assets, raising additional debt or equity capital, cutting costs or
otherwise reducing our cash requirements, or negotiating with our
creditors to restructure our applicable obligations, including a
potential bankruptcy filing," the Company said in the filing.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/793306/000165495421009146/bdco_10q.htm
About Blue Dolphin
Headquartered in Houston, Texas, Blue Dolphin --
http://www.blue-dolphin-energy.com-- is an independent downstream
energy company operating in the Gulf Coast region of the United
States. The Company's subsidiaries operate a light sweet-crude,
15,000-bpd crude distillation tower with approximately 1.2 million
bbls of petroleum storage tank capacity in Nixon, Texas. Blue
Dolphin was formed in 1986 as a Delaware corporation and is traded
on the OTCQX under the ticker symbol "BDCO".
Blue Dolphin reported a net loss of $14.46 million for the 12
months ended Dec. 31, 2020, compared to net income of $7.36 million
for the 12 months ended Dec. 31, 2019. As of March 31, 2021, the
Company had $65.55 million in total assets, $79.51 million in total
liabilities, and a total stockholders' deficit of $13.96 million.
Sterling Heights, Michigan-based UHY LLP, the Company's auditor
since 2002, issued a "going concern" qualification in its report
dated March 31, 2021, citing that the Company is in default under
secured and related party loan agreements and has a net working
capital deficiency. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
BOART LONGYEAR: Seeks US Recognition of Australian Restructuring
----------------------------------------------------------------
Boart Longyear Limited and four of its affiliates filed Chapter 15
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 21-11466) on
Aug. 17, 2021, to seek U.S. recognition of its restructuring
proceedings in Australia.
Boart Longyear is among the world's leading providers of drilling
services, drilling equipment, and performance tooling for mining
and drilling companies. Boart Longyear also has a significant
presence in aftermarket parts and services, energy, mine
de-watering, oil sands exploration, and production drilling. Boart
Longyear was founded in 1890. Its predecessor, Longyear Company,
grew to become an important player in many well-known projects,
including determining the strength of the rock foundation for the
Golden Gate Bridge in San Francisco.
Boart International, founded in 1936 as a subsidiary of De Beers,
the global diamond mining concern, engaged in developing industrial
applications for diamonds. Boart International became well known
for its innovations in diamond drilling, such as patenting the
world's first wireline core retrieval system, which both increased
global production and made extraction safer and more reliable.
Longyear Company was acquired by Boart International in 1974 and
formally merged into Boart Longyear in 1994. In 2006, Australia's
Macquarie Bank purchased Boart Longyear and took it public the
following year. Its initial public offering in 2007 was the
second-largest in Australian history at approximately AU$2.3
billion.
Boart Longyear employs approximately 5,168 people and generated
$657 million in revenue in 2020. It conducts operations across
North America, Latin America, Australasia and South East Asia, the
Middle East, and Africa. Nearly all of Boart Longyear's revenue
derives from the following two business units: (a) drilling
services within the mining and minerals industry ("Global Drilling
Services") and (b) the manufacture, distribution, and sale of
equipment for the mining and mineral industry ("Global Products").
Prepetition Capital Structure
As of December 31, 2020, Boart Longyear's unaudited balance sheets
reflected total assets of approximately $609 million and total
liabilities of approximately $1 billion.
The Debtors' secured indebtedness consists of (a) $348,492,360
outstanding under 12.00%/10.00% senior secured PIK toggle notes due
2022; (b) $160,336,984.87 owing under a Term Loan A Securities
Agreement dated as of December 31, 2018; (c) $193,285,306.60 owing
under a Term Loan B Securities Agreement dated as of December 31,
2018; (d)e$6 million (principal amount) was owing under an Amended
and Restated Revolving Credit and Security Agreement, dated as of
July 23, 2017 (the Existing ABL); (e) approximately $62.4 million
(principal amount) in principal amount was outstanding under a Term
Loan Securities Agreement dated as of July 23, 2017 (the Backstop
ABL); and (f) $50.3 million in principal amount outstanding under a
Term Loan Securities Agreement, dated as of June 1, 2021 (the
Incremental Financing).
As of the Petition Date, $93,944,523 was outstanding under an
indenture, dated as of March 28, 2011 providing for Unsecured
Notes.
As of the Petition Date, the Debtors estimate that they have
approximately $59 million of unsecured trade debt outstanding,
including accounts payable to vendors that provide key components
for the construction of Boart Longyear's drilling capital equipment
and specialized steel tubing critical to the construction of drill
rods.
As of May 12, 2021, 88,511,800 shares of BLY's common stock were
outstanding. BLY's common stock trades on the Australian
Securities Exchange under the ticker symbol "BLY." There were also
2,012,403 quoted warrants, 43,158 options, and 427,816 unquoted
warrants outstanding.
Australian Restructuring
Although Boart Longyear's operations, on the whole, remain strong,
a combination of adverse macroeconomic conditions that affected the
commodities market for much of the past few years, and a balance
sheet weighed down by the debt incurred to make investments in
equipment and other working assets when market conditions were more
favorable have compelled the Debtors to seek: (a) the Australian
Court's approval of the two Schemes under the Corporations Act, one
to restructure the majority of their secured debt (the "Secured
Creditor Scheme"), and the other to restructure the majority of
their unsecured debt (the "Unsecured Creditor Scheme"); and (b)
relief from the U.S. Bankruptcy Court under chapter 15 of the
Bankruptcy Code to prevent dissenting creditors from frustrating
the purposes of Boart Longyear's restructuring, the foremost of
which is to maximize value for all creditors.
On January 7, 2021, Boart Longyear announced the engagement of
Rothschild & Co. to advise it in connection with evaluation of its
options in connection with the upcoming maturities of its debt
facilities in the second half of 2022. After months of
negotiations between Boart Longyear and its major stakeholders, on
May 13, 2021, Boart Longyear announced that it reached an
agreement, memorialized in a restructuring support agreement (the
"RSA").
The completion of the transactions contemplated by the RSA will
substantially reduce Boart Longyear's debt, strengthen its balance
sheet, lower interest expenses, and provide enhanced liquidity to
support operations and future growth. The RSA was supported by the
overwhelming majority of Boart Longyear's lenders, such initial
"Supporting Creditors" including certain funds and accounts managed
or advised by Centerbridge, represented by Kirkland & Ellis LLP,
and an ad hoc group of creditors represented by Paul, Weiss,
Rifkind, Wharton & Garrison LLP (the "AHG").
More specifically, Boart Longyear's total debt would decrease to
less than $200 million, with approximately $795 million,
approximately 85%, being converted to equity interests in
reorganized BLY. BLY's existing shareholders will be given an
opportunity to purchase additional equity in reorganized BLY
alongside BLY's creditors. Among other things, the parties to the
RSA have agreed to distribute the New Common Equity based upon the
following stipulated amounts and allocations:
* For claims arising out of Term Loan A (the "Term Loan A
Claims"): pro rata shares of New Common Equity, calculated based on
(i) 100% of the secured portion of the Term Loan A Claims of
$85,000,000 (the "TLA Secured Equity Entitlement") and (ii) 25% of
the unsecured portion of the Term Loan A Claims of $75,336,984.87
(the "TLA Unsecured Equity Entitlement");
* For claims arising out of Term Loan B (the "Term Loan B
Claims"): pro rata shares of New Common Equity, calculated based on
(i) 100% of the secured portion of the Term Loan B Claims of
$105,000,000 (the "TLB Secured Equity Entitlement") and (ii) 25% of
the unsecured portion of the Term Loan B Claims of $88,285,306.60
(the "TLB Unsecured Equity Entitlement");
* For claims arising out of the Secured Notes (the "Secured
Notes Claims"): pro rata shares of New Common Equity, calculated
based on (i) 100% of the secured portion of the Secured Notes
Claims of $303,567,773.87 (the "SSN Secured Equity Entitlement")
and (ii) 25% of the unsecured portion of the Secured Notes Claims
of $44,924,586.44 (the "SSN Unsecured Equity Entitlement"); and
* For claims arising out of the Unsecured Notes ("Unsecured
Notes Claims"): pro rata shares of New Common Equity, calculated
based on 22.5% of the Unsecured Notes Claims of $93,944,522.71 (the
"SUN Equity Entitlement").
On 22 July, 2021, the Debtors filed an application (the
"Application") in the Supreme Court of New South Wales in Sydney,
Australia, being an Australian court of competent jurisdiction for
purposes of Part 5.1 of the Corporations Act, seeking orders: (a)
convening meetings to consider the two schemes of arrangement
proposed by the Debtors to be made with certain of their secured
(the "Secured Creditors' Scheme") and unsecured creditors (the
"Unsecured Creditors' Scheme"); and (b) approving the Schemes.
The first hearing took place before the Australian Court (before
the Honourable Justice Black), on 27 and 29 July, 2021. The second
hearing of the proceeding will be held on 16 September, 2021 at
9.15 a.m. (Australian Eastern Standard Time).
The Schemes reflect the agreements memorialized in the RSA.
When the restructuring is consummated, it is anticipated that the
Debtors' amended debt profile and the injection of additional
capital will reduce their financial burden and enable them to
operate profitably.
BOY SCOUTS OF AMERICA: Catholic & Methodist Committees Oppose Plan
------------------------------------------------------------------
The Roman Catholic and United Methodist Ad Hoc Committees (the
"Catholic and Methodist Committees") object to the Amended
Disclosure Statement for the Fourth Amended Chapter 11 Plan of
Reorganization of Boy Scouts of America and Delaware BSA, LLC.
The Catholic and Methodist Committees believe a confirmable plan of
reorganization must ensure that abuse victims are fairly
compensated, but cannot accept the current proposal that unfairly
shifts significant litigation risk to the Chartered Organizations
while depriving them of recourse to insurance coverage.
As it concerns Chartered Organizations (like the members of the
Catholic and United Methodist Ad Hoc Committees), Debtors' Amended
Disclosure Statement is facially inadequate. While the Disclosure
Statement reiterates the importance of Chartered Organizations to
the future of Scouting, it describes a Plan that improperly
modifies the pre-existing, admitted insurance and contractual
rights of Chartered Organizations (to the point of effective
obliteration) and leaves Chartered Organizations to fend for
themselves.
The Catholic and Methodist Committees states that the disclosures
themselves shroud the treatment of Chartered Organizations with
opacity: while Debtors have admitted in open court and the Court
has acknowledged that Chartered Organizations' rights to insurance
proceeds would be subordinated to paying tort claimants, that
treatment — for 41,000 Chartered Organizations — is relegated
to a footnote on page 22 of the Disclosure Statement and then does
not appear again until page 194.
The Catholic and Methodist Committees assert that the Disclosure
Statement provides no detail about the protocol or the expected
level of contribution to become a Contributing Chartered
Organization. Indeed, there is not even sufficient information
about the number and nature of claims against the Chartered
Organizations for them to individually evaluate their potential
exposure and to determine whether to become Contributing Chartered
Organizations.
The Catholic and Methodist Committees further assert that the
patent unfairness of the Plan to the Chartered Organizations is
remarkable: Debtors agree that Chartered Organizations' rights will
be subordinated without their consent.
While the Catholic and Methodist Committees would like to see
Debtors emerge from bankruptcy, undermining Chartered
Organizations' contractual rights is not a proper path forward.
Seeking approval of a Disclosure Statement that undermines those
contractual rights while simultaneously contending that this is not
what Debtors are really aiming for is needless wordplay.
The Catholic and Methodist Committees point out that the Disclosure
Statement as currently proposed. The Disclosure Statement does not
provide adequate information and the proposed Plan is patently (and
apparently admittedly) unconfirmable. Because nothing would be
served by soliciting votes for an unconfirmable plan, Debtors
should be directed to try again.
Counsel for the United Methodist:
BRADLEY ARANT BOULT CUMMINGS LLP
Edwin G. Rice, Esq.
100 N. Tampa Street
Suite 2200
Tampa, FL 33602
Telephone: (813) 559-5500
Facsimile: (813) 229-5946
Primary email: erice@bradley.com
Secondary emails: ddecker@bradley.com
ebrusa@bradley.com
Counsel for the Roman Catholic:
SCHIFF HARDIN LLP
Everett Cygal
David Spector
J. Mark Fisher
Neil Lloyd
Daniel Schufreider
Jin Yan
233 South Wacker Drive, Suite 7100
Chicago, IL 60606
Telephone: (312) 258-5500
Facsimile: (312) 258-5600
E-mail: ecygal@schiffhardin.com
dspector@schiffhardin.com
mfisher@schiffhardin.com
nlloyd@schiffhardin.com
dschufreider@schiffhardin.com
jyan@schiffhardin.com
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BOY SCOUTS OF AMERICA: Evanston Says Plan Provisions Inefficient
----------------------------------------------------------------
Markel Service, Incorporated, Claim Service Manager for Evanston
Insurance Company, objects to the Amended Disclosure Statement for
the Fourth Amended Chapter 11 Plan of Reorganization of Boy Scouts
of America and Delaware BSA, LLC.
Evanston submits this objection to call out an issue with treatment
of Non-Abuse Litigation Claims in the Fourth Amended Chapter 11
Plan of Reorganization for Boy Scouts of America and Delaware BSA,
LLC. The issue impacts Evanston and other carriers that issued
policies effective 2013 and after, which are treated as Specified
Insurance Policies pursuant to the Plan.
Evanston recognizes that Plan objections are not typically resolved
at the Disclosure Statement stage. However, inasmuch as the issue
raised directly addresses Plan provisions for treatment of claims,
Evanston believes it in the best interest of all parties to address
this before any voting occurs.
Evanston claims that the Plan imposes an inappropriate impediment
to prompt processing and payment of non-abuse claims –
essentially making the agreed order's stopgap provisions permanent
and more burdensome. The Plan provision potentially puts Evanston,
as insurer, at odds with applicable statutory, regulatory and legal
claims handling requirements regarding timing.
Moreover, the provision is detrimental to non-abuse litigation
claimants as it will impose unreasonable and unnecessary hurdles in
resolving valid nonabuse claims in a timely and efficient manner.
The Settlement Trustee is a stranger to the insurance policies; the
Settlement Trust is established for the benefit of abuse claimant,
not others such as non-abuse claimants.
Evanston points out that the Plan appears to propose an explicit
rewrite of an express policy provision, in the process proposing an
explicit violation of insurance neutrality. No provision in
Bankruptcy Code section 1123, governing plan provisions, or section
1129, governing plan confirmation standards, authorizes
modification of an insurance contract like those.
Because the provision in question is impermissible, unnecessary,
inefficient and potentially unfair, Evanston requests that the
Court withhold approval of the Disclosure Statement pending
modification of the Plan to address the concerns raised in this
Objection.
Attorneys for Markel Service:
BROWNSTEIN HYATT FARBER SCHRECK, LLP
Michael J. Pankow, #21212
410 17th Street, Suite 2200
Denver, Colorado 80202
Telephone: (303) 223-1100
Facsimile: (303) 223-1111
E-mail: mpankow@bhfs.com
- and -
GREENBERG TRAURIG, LLP
Dennis A. Meloro, #4435
1007 North Orange Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 661-7395
Facsimile: (302) 661-7165
E-mail: melorod@gtlaw.com
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BOY SCOUTS OF AMERICA: Hartford Says Amended Plan Defective
-----------------------------------------------------------
Hartford Accident and Indemnity Company, First State Insurance
Company, Twin City Fire Insurance Company, and Navigators Specialty
Insurance Company (collectively, "Hartford") objects to the Amended
Disclosure Statement for the Fourth Amended Chapter 11 Plan of
Reorganization of Boy Scouts of America and Delaware BSA, LLC.
Hartford points out that the Plan described in the Disclosure
Statement centers on an improper scheme to inflate BSA's liability
for Abuse Claims far beyond what it would be in the tort system and
force BSA's insurers to foot the resulting bill. In return, the
Plan grants BSA and its Local Councils permanent absolution from
Abuse Claims for a fraction of their ultimate liability, assuming
(which Hartford, of course, does not concede) that the plaintiffs'
lawyers succeed in their efforts to shield the claims from any
meaningful scrutiny.
Hartford claims that the Plan is patently unconfirmable, and the
Disclosure Statement thus should not be approved. The Court should
make clear now that it will not confirm a plan centered on
manufacturing liability that would not exist in the tort system and
foisting that liability on insurers. Only then will BSA and the
plaintiffs' lawyers do what is necessary to resolve this case work
with all parties in interest to craft a plan that is lawful and
fair to all concerned.
Hartford asserts that the the Plan and its accompanying Trust
Distribution Procedures ("TDP") unabashedly provide for the payment
of Abuse Claims that are invalid and for payment of claims in
inflated amounts with little or no scrutiny. They permit any
claimant to elect a payment of $3,500 with no inquiry at all into
the merits of the Abuse Claim, even if the claim is time-barred or
fails to allege basic requirements for liability such as
involvement in scouting.
Moreover, the Plan and TDP deprive insurers of their fundamental
rights under the policies to control the defense and settlement of
claims by eliminating any role for insurers in the claims allowance
process. The Plan thus not only shuts insurers out of the process
of evaluating and determining whether to allow claims that will be
paid with the insurers' money, it also attempts to preempt the
insurers from asserting any defenses to coverage based on the
Plan's prejudicial terms.
In addition to its scheme to foist liability on BSA's insurers, the
Plan contains other key provisions that render it patently
unconfirmable. Although Hartford will not raise all of the reasons
why the Plan is unlawful, another key defect is that the injunctive
relief the Plan would provide BSA and its Local Councils is
unlawful.
Finally, even if the Court approves the Disclosure Statement, it
should not approve the unrealistically compressed confirmation
schedule BSA has proposed. Instead, the Court should set a schedule
that affords the insurers a reasonable period to develop the record
before such a consequential hearing on confirmation of a plan that
is unabashedly not insurance neutral and that would require this
Court to make the sorts of extraordinary findings demanded by the
plaintiffs' lawyers.
Attorneys for Hartford Accident:
BAYARD, P.A.
Erin R. Fay
Gregory J. Flasser
600 North King Street, Suite 400
Wilmington, DE 19801
Telephone: (302) 655-5000
Facsimile: (302) 658-6395
Email: efay@bayardlaw.com
gflasser@bayardlaw.com
SHIPMAN & GOODWIN LLP
James P. Ruggeri (admitted pro hac vice)
Joshua D. Weinberg (admitted pro hac vice)
1875 K Street, N.W., Suite 600
Washington, D.C. 20003
Tel: (202) 469-7750
Fax: (202) 469-7751
WILMER CUTLER PICKERING HALE AND DORR LLP
Philip D. Anker
7 World Trade Center
250 Greenwich Street
New York, N.Y. 10007
Tel: (212) 230-8890
Fax: (212) 230-8888
Danielle Spinelli (admitted pro hac vice)
Joel Millar (admitted pro hac vice)
1875 Pennsylvania Avenue N.W.
Washington, D.C. 20006
Tel: (202) 663-6000
Fax: (202) 663-6363
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BOY SCOUTS OF AMERICA: Insurers Seek Disclosure on Effect of SIRs
-----------------------------------------------------------------
American Zurich Insurance Company, American Guarantee and Liability
Insurance Company, Steadfast Insurance Company, The Continental
Insurance Company, Columbia Casualty Company, Allianz Global Risks
US Insurance Company, National Surety Corporation, Interstate Fire
& Casualty Company, Clarendon America Insurance Company, General
Star Indemnity Company, and Arrowood Indemnity Company
(collectively, the "Insurers") object to the Amended Disclosure
Statement for the Fourth Amended Chapter 11 Plan of Reorganization
of Boy Scouts of America and Delaware BSA, LLC.
This objection supersedes the objection filed by certain of the
Insurers, to address differences between the Disclosure Statement
and the previous disclosure statement for the Second Amended Plan.
Insurers claim that the Court should decline to approve the
Disclosure Statement because, instead of providing adequate
information it provides misleading, incorrect, and incomplete
information concerning the effect of uncapped, per-occurrence
self-insured retentions ("SIRs") applicable to the excess policies
issued by the Insurers to the Boy Scouts of America (the
"Policies") and most other policies issued to BSA in 1986 and
later.
A fulsome and accurate disclosure of the effect of the SIRs is
necessary to inform Abuse Claimants and other parties in interest
of the likelihood that insurance coverage for Abuse Claims could be
completely barred, or significantly restricted, under such
policies.
Insurers asserts that the Disclosure Statement attempts to
mischaracterize the SIRs as deductibles, which Debtors misleadingly
assert insurers must pay rather than providing accurate
information. However, the actual terms of the SIRs applicable to
the Policies defy that misinterpretation. Because payment of SIRs
is the insured's responsibility, even if the insured is a debtor in
bankruptcy, the Disclosure Statement should not be approved,
because it fails to adequately disclose that SIRs of at least $1
million per occurrence must be satisfied by the insured before any
coverage could be accessed under the Policies.
Insurers further assert that the Disclosure Statement also fails to
inform that solvent non-debtors who claim coverage under the
Policies, such as Local Councils and Contributing Chartered
Organizations, must fully satisfy applicable SIRs before they could
be entitled to any coverage. That would remain true even if Local
Councils and Contributing Chartered Organizations became Protected
Parties under the Plan.
In addition, the Disclosure Statement cannot be approved because it
fails to provide adequate information regarding how the SIRs will
be treated. Although the Disclosure Statement suggests that excess
insurers will have to pay SIR amounts and then assert Indirect
Abuse Claims against the Settlement Trust to recover their SIR
payments, that statement is contrary to law, and should be
corrected.
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BOY SCOUTS OF AMERICA: Judge Mulls Key Bankruptcy Rulings
---------------------------------------------------------
Randall Chase of The Associated Press reports a year and a half
after the Boy Scouts of America sought bankruptcy protection amid
an onslaught of child sex abuse lawsuits, a Delaware judge is
poised to issue a ruling that could determine whether the
organization might emerge from bankruptcy later this 2021.
Following a three-day hearing that ended Monday, August 16, 2021,
the judge is mulling whether the Boy Scouts can pursue an $850
million agreement with attorneys representing a majority of the
82,500 abuse claimants in the case. Failure to win approval of the
agreement could throw the case into chaos.
The agreement involves the national Boy Scouts organization, the
roughly 250 local Boy Scout councils, the official victims
committee, and law firms representing some 70,000 men who say they
were molested as youngsters by Scoutmasters and others.
The Texas-based Boy Scouts have proposed contributing up to $250
million in cash and property to a fund for abuse victims. Local
councils, which run day-to-day operations for Boy Scout troops,
would contribute $600 million. The national organization and
councils also would transfer their rights to Boy Scout insurance
policies to the victims fund. In return, they would be released
from further liability for abuse claims.
The agreement is opposed by insurers that issued policies to the
Boy Scouts and local councils, other law firms representing
thousands of abuse victims, and various church denominations that
have sponsored Boy Scouts troops.
Here is a look at some of the key issues that Judge Laura Selber
Silverstein must address:
BUSINESS JUDGMENT
The overarching issue is whether the Boy Scouts of America
exercised proper business judgment in entering into the agreement.
Under Delaware's business judgment rule, courts presume that
directors are acting in the best interests of the corporation
unless there is evidence that they shirked their duties, had
conflicts or acted in bad faith.
"This board worked very hard, informed itself and used due care in
rendering its business decision," Jessica Lauria, lead bankruptcy
attorney for the Boy Scouts, said Monday, August 16, 2021.
Insurers and other opponents of the proposed agreement argued that
the BSA board never adopted a resolution approving the agreement
and delegated decision-making authority to subcommittees. They also
said the Boy Scouts CEO and board chairman acknowledged not
reviewing key elements of the agreement before approving it.
Opponents also contend that Boy Scout officials did not consider
the agreement's impact on the sponsoring organizations, which
remain vulnerable under the agreement to lawsuits by abuse
claimants.
HARTFORD SETTLEMENT
In the proposed agreement, the Boy Scouts are seeking permission to
back out of a settlement they reached in April 2021 with one of
their insurers, The Hartford. The Hartford agreed to pay $650
million into the victims fund in exchange for being released from
any further obligations.
The Boy Scouts have described the settlement as reasonable but now
want to back out because of opposition by attorneys for abuse
claimants, who say their clients would never support a plan that
includes it.
Lauria argued that all of the conditions needed for the Hartford
settlement to take effect have not been met, and the Boy Scouts
should therefore be allowed to withdraw.
Attorneys for the Hartford say the settlement, which was signed in
April, is binding and requires the Boy Scouts to cooperate in good
faith and seek its approval. Allowing the Boy Scouts to walk away
would set a dangerous precedent and would disincentivize settlement
negotiations in future cases, they said.
Shouldn’t parties be bound in some fashion by agreements they
enter?" Silverstein asked Monday, adding that the issue presented
was "challenging."
PROFESSIONAL FEES
Supporters of the agreement include 27 law firms affiliated with an
ad hoc group called the Coalition of Abused Scouts for Justice,
which has dominated the flow of the case despite the presence of an
official victims committee. Those firms represent about 63,000
abuse claimants.
Under the agreement, the Boy Scouts would reimburse up to $10.5
million in fees and expenses incurred since July 2020 by law firms
representing the coalition, and $950,000 a month going forward
until a reorganization plan takes effect.
Critics of the fee arrangement say it raises both ethical and legal
issues, and that the proposed payments to the law firms are the
real impetus behind the agreement.
David Buchbinder, an attorney representing the U.S. bankruptcy
trustee, argued the law firms representing the coalition haven't
proven they have made the required "substantial contribution" to
the bankruptcy case that would merit fee reimbursement, or even
provided documentation to support the proposed fees.
"The amazing testimony was that the debtor (the Boy Scouts) didn't
even look at the underlying fees. They weren't produced,"
Buchbinder said.
TIMELINE
If Silverstein approves the agreement, the next step will be a
hearing starting Aug. 25, 2021 to decide whether to approve a
disclosure statement that explains the reorganization plan to
creditors. Approval of the disclosure statement is required before
ballots can be sent to abuse claimants to vote on a plan.
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BOY SCOUTS OF AMERICA: Lujan Claimants Say Plan Still Unconfirmable
-------------------------------------------------------------------
The Tort Claimants represented by Lujan & Wolff LLP ("Lujan
Claimants") object to the Amended Disclosure Statement for the
Fourth Amended Chapter 11 Plan of Reorganization of Boy Scouts of
America and Delaware BSA, LLC.
Lujan Claimants object to the Disclosure Statement because it fails
to provide adequate information to allow a creditor to make an
informed judgment about the Plan and the Plan is inherently or
patently unconfirmable. Debtors have either failed to address
sufficiently or failed to address at all Lujan Claimants' previous
objections.
Lujan Claimants reassert their previous objections and supplement
their objections to the adequacy of the Disclosure Statement for
the following reasons:
* The Disclosure Statement fails to provide sufficient
information to support classification of claims in the Plan,
including the failure to provide adequate information concerning
the similarities and dissimilarities of claims and rights of tort
claimant creditors. The Disclosure Statement continues to ignore
the uniqueness of Guam survivor claims.
* The Disclosure Statement fails to disclose and explain the
authority by which survivors' statutory direct action rights
against insurers can be disposed of under Debtors' proposed
settlement with Hartford Accident and Indemnity Company, First
State Insurance Company, Twin City Fire Insurance Company, and
Navigators Specialty Insurance Company (collectively "Hartford");
and the "Insurance Entity Injunction" provision and Trust
Distribution Procedures of the Plan.
* The Disclosure Statement fails to explain why direct action
claimants who are losing statutory rights of direct action are
treated the same way as survivors who do not have statutory direct
action rights against insurers. This is unfair and unequal
treatment of direct action survivors, including Lujan Claimants.
* The Disclosure Statement fails to disclose adequate
information concerning the BSA Toggle Plan (a BSA-only Plan which
provided no channeling injunctions for local councils, chartered
organizations, or insurers) which Debtors previously proposed in
earlier Plans. Debtors need to disclose their position that they
can successfully reorganize under the BSA Toggle Plan.
* The Disclosure Statement lacks adequate information
regarding the First Encounter Agreement (FEA) reached in 1996
between BSA and Century. There is no explanation or discussion
regarding whether the FEA can be enforced as to non-parties to the
agreement, such as direct action claimants (including Lujan
Claimants), named insureds (e.g., local councils), and additional
insureds (e.g., chartered organizations).
* The Disclosure Statement continues to lack adequate
information regarding claims against Debtors' estate to allow
creditors to have notice and meaningful opportunity to be heard
with respect to rights under Federal Rule of Bankruptcy Procedure
3007.
Attorneys for Lujan Claimants:
Christopher D. Loizides
LOIZIDES, P.A.
1225 North King Street, Suite 800
Wilmington, DE 19801
Phone: 302.654.0248
Email: Loizides@loizides.com
- and -
LUJAN & WOLFF LLP
Delia Lujan Wolff
Suite 300, DNA Bldg.
238 Archbishop Flores St.
Hagatna, Guam 96910
Phone: (671) 477-8064/5
Facsimile: (671) 477-5297
Email: dslwolff@lawguam.com
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BOY SCOUTS OF AMERICA: Sullivan Claimants Say Plan Unconfirmable
----------------------------------------------------------------
The Claimants represented by Sullivan Papain Block McGrath Coffinas
& Cannavo, P.C., who are survivors of childhood sexual abuse and
each filed a Sexual Abuse Survivor Proof of Claim, object to the
Amended Disclosure Statement for the Fourth Amended Chapter 11 Plan
of Reorganization of Boy Scouts of America and Delaware BSA, LLC.
The Claimants filed this Objection to point out additional critical
flaws that, if unremedied, will render it impossible to confirm the
Plan because the solicitation and vote tabulation will have been
conducted in an unlawful manner. In particular, there are five
crucial points made here:
* vote tabulation procedures must reflect the enormous
differences between the values of claims to prevent the
overwhelming number of very low value claims (including claims that
are time-barred under applicable non-bankruptcy law for whom the
Plan and the TDP are a windfall) from swamping the votes of abuse
survivors presently holding large claims enforceable under state
law who will bear the burden of that windfall;
* vote tabulation procedures and the TDP itself must
distinguish among claimants based on which Local Council is alleged
to be co-liable with the Debtors, to avoid those holding claims
against financially weak and underinsured Local Councils from
swamping the votes of abuse survivors with viable claims against
financially strong or well-insured Local Councils, otherwise the
burden of extending the Channeling Injunction to all Local Councils
will fall entirely on the subset of claimants with valid claims
against more asset-rich Local Councils;
* the Disclosure Statement must incorporate adequate
information about the liquidation value of direct abuse claims
against non-debtors released by the Plan so individual claimants
may assess the Debtors' compliance with the best interests of the
creditors' test;
* the identity of any third party non-debtor Chartered
Organization designated a Protected Party under the Plan, its
potential liability to claimants, and the contribution being made
to obtain the protection of this Court's Channeling Injunction,
must be disclosed and the votes of affected creditors separately
tabulated, before the Channeling Injunction is issued by the
Court.
* the Disclosure Statement must incorporate adequate
information about the material risks arising from coverage
positions asserted by liability insurers for the Debtors and
non-debtors that, if successful, in whole or in part, could
substantially limit or eliminate insurer contributions and
significantly reduce amounts claimants could recover from the
Trust.
Unless these five issues are appropriately dealt with prior to
solicitation, the defective solicitation will result in a
nonconfirmable Plan regardless of the extent of abuse survivor
support manifested through the defective voting procedures.
Counsel to Claimant:
Elaina L. Holmes, Esquire (No. 6552)
Law Offices of Doroshow, Pasquale, Krawitz
and Bhaya
1202 Kirkwood Highway
Wilmington, DE 19805
Phone: (302) 998-0100
Email: ElainaHolmes@dplaw.com
And
Frank V. Floriani, Esquire
Sullivan Papain Block McGrath Coffinas &
Cannavo, P.C.
120 Broadway, 27th Floor
Phone: (212) 732-9000
Facsimile: (212) 266-4156
E-mail: ffloriani@triallaw1.com
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BROWNIE'S MARINE: Incurs $90K Net Loss in Second Quarter
--------------------------------------------------------
Brownie's Marine Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $89,805 on $1.71 million of total net revenues for the three
months ended June 30, 2021, compared to a net loss of $414,042 on
$1.32 million of total net revenues for the three months ended June
30, 2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $530,786 on $2.66 million of total net revenues compared to
a net loss of $710,735 on $1.96 million of total net revenues for
the same period during the prior year.
As of June 30, 2021, the Company had $2.51 million in total assets,
$1.50 million in total liabilities, and $1 million in total
stockholders' equity.
Chris Constable, CEO of Brownie's Marine Group, Inc. stated,
"Brownie's Marine Group continues to grow our core platform
businesses every quarter. We are working towards consistent
profitability at the adjusted net income level and to the net
income level over the next 4 quarters. Second quarter total net
revenue increased 29.7% YoY and 36.2% for the six months as it
compares to the same period in the prior year. I am very proud of
the effort our team has put forth thus far in 2021 and we remain
excited about our growth prospects for the second half of this
year, especially with the launch of our new product, Nomad, by
BLU3."
Chris Constable, CEO of Brownie's Marine Group, added, "We remain
committed to the strategic mindset towards acquisitions and believe
our initiations on this front will come to life soon. Both myself
and our Chairman, Robert Carmichael, have several innovative
companies in the pipeline that we believe could be a strategic fit
for us going forward. We hope to have news to communicate with our
shareholders very soon on this matter."
Robert M. Carmichael, president and Chairman of the Board added,
"In addition to our overall strong operating performance, we are
also thrilled with the initial pre-sale campaign results of the
Nomad, by BLU3. The Nomad is our next-generation portable, battery
powered dive system that will take divers down to 30 ft., for 45-60
minutes on one charge. The Nomad will change the industry
landscape for those who want to explore the next atmosphere. Blake
and his team are prepared to meet their third quarter, 2021 launch
deadline, and through the pre-sale to both consumers and dealers
have pre-booked the initial production runs through October. Nomad
has been designed to ease the manufacturing process and will allow
BLU3 to scale production to meet the demand of an industry that
needs a game changing product like Nomad."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1166708/000149315221019945/form10-q.htm
About Brownie's Marine
Headquartered in Pompano Beach, Florida, Brownie's Marine Group,
Inc., is the parent company to a family of innovative brands with a
unique concentration in the industrial, and recreational diving
industry. The Company, together with its subsidiaries, designs,
tests, manufactures, and distributes recreational hookah diving,
yacht-based scuba air compressors and nitrox generation systems,
and scuba and water safety products in the United States and
internationally. The Company has three subsidiaries: Trebor
Industries, Inc., founded in 1981, dba as "Brownie's Third Lung";
BLU3, Inc.; and Brownie's High-Pressure Services, Inc., dba LW
Americas. The Company is headquartered in Pompano Beach, Florida.
Brownie's Marine reported a net loss of $1.35 million for the year
ended Dec. 31, 2020, compared to a net loss of $1.42 million for
the year ended Dec. 31, 2019. As of March 31, 2021, the Company
had $2.28 million in total assets, $1.50 million in total
liabilities, and $776,105 in total stockholders' equity.
Boynton Beach, Florida-based Liggett & Webb, P.A., the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated March 31, 2021, citing that the Company has
experienced net losses and has an accumulated deficit. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
BUHLER-FREEMAN: Seeks to Hire Lefkovitz & Lefkovitz as Counsel
--------------------------------------------------------------
Buhler-Freeman Management, LLC seeks approval from the U.S.
Bankruptcy Court for the Middle District of Tennessee to employ
Lefkovitz & Lefkovitz, PLLC to serve as legal counsel in its
Chapter 11 case.
The firm's services include:
(a) advising the Debtor as to its rights, duties, and powers;
(b) preparing and filing legal papers;
(c) representing the Debtor at all hearings, meetings of
creditors, conferences, trials, and any other proceedings in this
Chapter 11 case; and
(d) other necessary legal services.
The hourly rates of the firm's attorneys and staff are as follows:
Steven L. Lefkovitz $550 per hour
Associate Attorneys $350 per hour
Paralegals $125 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received an initial retainer of $10,000 from the Debtor.
Steven Lefkovitz, Esq., a member of Lefkovitz & Lefkovitz,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Steven L. Lefkovitz, Esq.
Lefkovitz & Lefkovitz, PLLC
618 Church Street, Suite 410
Nashville, TN 37219
Telephone: (615) 256-8300
Facsimile: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About Buhler-Freeman Management
Nashville, Tenn.-based Buhler-Freeman Management, LLC filed a
Chapter 11 petition (Bankr. M.D. Tenn. Case No. 21-02410) on Aug.
8, 2021, listing as much as $10 million in both assets and
liabilities. Judge Marian F. Harrison oversees the case. Steven
L. Lefkovitz, Esq., at Lefkovitz & Lefkovitz, PLLC, is the Debtor's
legal counsel.
BULLDOG DUMPSTERS: Unsec. Creditors to Recover 81.88% over 5 Years
------------------------------------------------------------------
Bulldog Dumpsters, LLC, submitted an Amended Subhaptr V Small
Business Plan of Reorganization dated August 16, 2021.
The Amended Plan of Reorganization Combined with Disclosure
Information proposes to pay creditors of the Debtor from cash flow
from operations of its solid waste disposal business and/or any
other future income.
The Amended Plan provides for 6 classes of secured claims; 2
classes of priority claims, 2 classes of general, non-priority
unsecured claims, and 1 class of the equity security holder
interests. Unsecured creditors holding allowed claims will be paid
from a dividend pool that is not less than the projected disposable
income of the Debtor to be received during the 3 year period
beginning on the date that the first payment is due under the
Amended Plan, or during the period for which the Amended Plan
provides payments, whichever is longer.
Debtor estimates that there will be a dividend pool of
approximately $863,524.00 for unsecured creditor claims over the 5
year term of this Amended Plan and, therefore, Debtor will pay a
dividend of approximately 81.88% to allowed general unsecured
creditors.
The Plan will treat claims as follows:
* Class 1 consists of the disputed secured claim filed by Li
Zhang in the amount of $839,419.21. Debtor believes that this claim
is not a secured claim and filed an Objection to Proof of Claim #12
on July 1, 2021, pursuant to the provisions included within this
Amended Plan. This claim shall be treated in Class 7, General
Unsecured Claims, and said claim, if allowed, in full or in part,
shall receive its pro-rata distribution the same as all other
allowed unsecured claims.
* Class 2(a) consists of the allowed secured claim filed by
HomeBank of Arkansas in the amount of $665,990.99. Debtor will
maintain the current contractual monthly payment of $4,664.81,
including interest at 5.45%, and continuing to cure the
post-petition arrearage of $9,329.62 by the additional payment of
$777.47 for the balance of 12 months, which began on January 15,
2021. The monthly payment shall be $4,664.81 with an additional
monthly arrearage cure payment of $777.47. The payment shall reduce
to the $4,664.81 amount after the post petition arrearages are paid
and shall continue monthly until the claim matures.
* Class 2(b) consists of the allowed secured claim filed by
HomeBank of Arkansas in the amount: of $172,270.77. This claim will
be treated as a debt which will be paid in full within the term of
the Amended Plan, including interest at 8%, and continuing to cure
the post-petition arrearage by the payment of $738.53 for the
balance of 12 months, beginning January 15, 2021. The monthly
payment shall be $4,431.18 with an additional arrearage payment of
$738.53. The payment shall remain the $4,431.18 amount after the
post-petition arrearages are paid. The Debtor shall execute a
Modified Agreement/Loan Documents with HomeBank under § 11.07, if
requested.
* Class 2(c) consists of the allowed secured claim filed by
HomeBank of Arkansas in the amount of $72,315.69. This loan was
originated under the CARES Act, SBA/PPP program on May 1, 2020.
This loan was forgiven under the CARES Act, SBA/PPP loan provisions
on January 25, 2021 and a payoff of $72,465.56 fully liquidated
this claim, postpetition, and therefore, this claim that will not
receive any treatment under this Amended Plan.
* Class 3 consists of the secured claim filed by Mack
Financial Services in the amount of $101,799.48. This claim will be
paid in full in the amount of $101,799.48 over the life of the
Amended Plan at the contract rate of eleven and 99/100's (11.99%)
percent interest. The monthly payment shall be $3,158.48 as a
regular payment and $789.62 to cure the post petition arrearage of
$9,475.44. The payment shall remain the $3,158.48 amount after the
post-petition arrearages are paid and continue until the claim is
paid in full. Payments shall continue to be paid on the 15th of
each month until this claim is paid in full.
* Class 4 consists of the secured claim filed by Gregory
Container, Inc., in the amount of $450,682.41. This claim will be
paid the value of the collateral, specifically the 94 dumpsters,
and the 4 properly secured vehicles, for a total value of
$413,050.00 over 5 years at the rate of four and one half (5.00%)
percent interest. The payment shall be $ $7,794.76 as a regular
monthly payment until paid in full. Payments shall continue to be
paid on the 15th of each month and shall be made by electronic
transfer of funds from Debtor to Gregory.
* Class 5 consists of the allowed priority claim filed by the
Internal Revenue Service (IRS) in the amount of $7,707.14. This
claim shall be paid in full over 60 months at no interest (0.0%)
with monthly payments of $128.45.
* Class 6 consists of the allowed secured priority claim filed
by the Ark. D.F.&A. in the amount of $227,884.85. This claim is
secured by a filed lien on the business personal property of the
Debtor. This claim shall be paid in full over 60 months with no
interest with a monthly payment of $3,798.08.
* Class 7 consists solely of Debtor's allowed general
unsecured, non-priority claims in the approximate amount of
$1,054,674.52. Debtor estimates that the total dividend pool
available for unsecured creditors over the 5 years of the Amended
Plan will be approximately $863,524.00. Each allowed claim in this
class shall receive a pro-rata distribution of an annual amount to
be paid quarterly for the previous quarter on April 15th, July
15th, October 15th and January 15th following the end of each
calendar quarter during the term of the Amended Plan. Each
unsecured creditor will receive an estimated total distribution on
their claims under this Amended Plan of approximately 81.88%.
* Class 9 consists of Equity Interest Holder Joseph Todd
Raines. The sole equity interest holder shall retain his full
equity interest in the reorganized Debtor.
Debtor will continue to operate the current business of the Debtor,
and the payments called for in this Amended Plan will be made from
cash flow from such business income and/or any other future income.
Debtor may maintain bank accounts under the confirmed Amended Plan
in the ordinary course of business. Debtor may also pay ordinary
and necessary expenses of the administration of the Amended Plan in
due course.
A full-text copy of the Amended Plan dated August 16, 2021, is
available at https://bit.ly/3D0jhsP from PacerMonitor.com at no
charge.
Attorney for Debtor:
O.C. Sparks, Esq.
Caddell Reynolds Law Firm
5515 JFK Blvd. N.
Little Rock, AR 72116
Telephone: (501) 214-0814
Facsimile: (501) 222-8824
Email: rsparks@justicetoday.com
About Bulldog Dumpsters
Bulldog Dumpsters, LLC, is a Little Rock, Ark.-based company that
offers waste collection services.
Bulldog Dumpsters sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Ark. Case No. 20-14072) on Oct. 29,
2020. At the time of the filing, the Debtor had estimated assets
of less than $50,000 and liabilities of between $1 million and $10
million.
Judge Richard D Taylor oversees the case.
The Debtor tapped Caddell Reynolds Law Firm as its legal counsel
and Lori S. Mayes, CPA PLLC as its accountant.
BURN FITNESS: Gets OK to Hire Kessler & Associates as Accountant
----------------------------------------------------------------
Burn Fitness, LLC received approval from the U.S. Bankruptcy Court
for the Eastern District of Michigan to hire Kessler & Associates,
P.C. as its accountant.
The firm's services include the preparation and filing of the
Debtors' 2020 federal and state income tax returns and related
documents, and doing the work necessary to apply for Employee
Retention Credit under COVID relief.
The firm's hourly rates are as follows:
Charles P. Kessler $350 per hour
Irina Myts $250 per hour
Charles Kessler, president of Kessler & Associates, disclosed in a
court filing that his firm is a disinterested person within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Charles P. Kessler, CPA, CGMA
Kessler & Associates P.C.
31800 Northwestern Highway, Suite 110
Farmington Hills, MIn 48334
Phone: 248-855-4224
Fax: 248-855-4405
Email: ckessler@kesslercpa.com
About Burn Fitness
Burn Fitness, LLC operates health and fitness centers in three
separate locations in Michigan -- Rochester, Clawson and Livonia.
It focuses on personal service and a high-quality experience.
Burn Fitness and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Mich. Lead Case No. 21-43828)
on April 30, 2021. In the petition signed by Alyssa Tushman,
manager and authorized agent, each of the Debtors disclosed up to
$1 million in assets and up to $10 million in liabilities.
Judge Mark A. Randon oversees the cases.
The Debtors tapped Maddin, Hauser, Roth & Heller P.C. as legal
counsel, B2B CFO Partners LLC as financial advisor, and Kessler &
Associates, P.C. as accountant.
CALIFORNIA NEVADA METHODIST: BH Properties Provides DIP Financing
-----------------------------------------------------------------
Property Funds World reports that BH Properties has provided
continuing care, senior living housing owner and operator
California Nevada Methodist Homes (CNMH) with USD5 million in
debtor-in-possession (DIP) financing to fund day-to-day operations
until regulatory approvals are obtained to sell two Northern
California retirement living communities to the highest bidder in
the bankruptcy sale.
CNMH filed for Chapter 11 protection in the Northern District of
California in March 2021 due to financial challenges created by the
Covid-19 pandemic. The non-profit, founded it 1954, currently owns
and operates communities in Oakland and Pacific Grove totaling 351
units. The properties collectively were 64 percent leased at the
time of the filing.
The 13-month facility, originated out of BH Properties USD200
million DIP Platform, provides CNMH with sufficient liquidity
during the Chapter 11 Case to fund working capital and general
corporate requirements for essential, day-to-day operations
ensuring the continued operation of the two facilities. Funds will
be used to maintain the quality of resident care, pay employees and
vendors on a timely basis and to preserve and maintain the value of
the Debtor's assets until they can be sold, according to BH
Properties' Senior Director of Investments, Andrew Van Tuyle.
"The DIP loan market for large corporations requiring more than
USD100 million in financial assistance is very efficient," says Van
Tuyle. "However, smaller operators facing bankruptcy protection
find it very difficult, very expensive, or both to get DIP
financing. Because our process is very efficient, fast, and we
understand the underlying real estate, we can provide DIP financing
significantly below generally accepted DIP rates in a shorter
amount of time."
According to court documents, the terms of the BH Properties DIP
financing were more favourable than eight other financial
institutions.
Earlier this 2021, BH Properties provided the bankruptcy trustee
for Neopharma, Inc with DIP financing to maintain the penicillin
manufacturing facility in Bristol, TN after filing for bankruptcy
protection in December 2020. The company was sold as part of the
bankruptcy process and BH Properties’ loan was critical to
maintaining the value of the company during the sale process.
About California Nevada Methodist Homes
California Nevada Methodist Homes is a senior living housing
operator.
California Nevada Methodist Homes sought Chapter 11 protection
(Bankr. N.D. Ca. Case No. 21- 40363) on March 16, 2021. In the
petition signed by CRO Steven A. Nerger, California Nevada
Methodist Homes estimated assets between $10 million and $50
million and estimated liabilities between $50 million and $100
million. The case is handled by Honorable Judge Charles Novack.
Hanson Bridgett LLP, led by Neal L. Wolf, is the Debtor's counsel.
CAN B CORP: Closes Acquisition of Assets From TWS Pharma
--------------------------------------------------------
Can B Corp. had closed its acquisition of assets from TWS Pharma,
based in Mead, Colorado.
The transaction is valued at over $5 million for hemp processing
and extraction assets located in three buildings totaling 50,000
square feet in northeast CO.
Marco Alfonsi, Can B's chief executive officer, commented, "This is
a significant move for our Company that we strongly believe will
add value for our shareholders. It enables us to process biomass
into isolate which is the core ingredient for hemp isomers, such as
CBN, CBG, Delta-8 and Delta-10. It is strategic to our existing
Lacey, Washington facility and expected to add significantly to
revenue from now through the end of 2021. By securing our own
processing and extraction facilities we for the first time control
our supply chain from biomass through end products for both retail
and wholesale customers."
The 15,000-square-foot facility located in Mead, Colorado is a
state-of-the-art extraction operation which converts hemp biomass
and unwinterized crude to winterized crude and high-quality CBD
crude oil. The 18,000 square foot operation in Fort Morgan,
Colorado, a former Budweiser facility, will be used to convert
winterized crude to CBD distillate. The ICS facility located in a
30,000 sq. ft. building also located in Fort Morgan CO and will be
used to convert distillate to isolate. The Company has yet to
execute the leases for these facilities but has negotiated and
agreed on the terms with each landlord. This processing of hemp
biomass to CBD consumer products gives us supply chain control and
chain-of custody for purity, analysis, and certification of our
products. The startup costs to have all the equipment fully
functional and in full operation will require approximately
$250,000 and 30 days.
All of these newly acquired assets will feed the Company's
Nutraceutical lab in Lacey, Washington facility and the two isomer
(Delta-8- CBD- CBG) operations in Miami Florida and Mcminville
Tennessee. No Delta-8 will be produced in CO where it is illegal
to do so.
In regard to biomass, the Company is in final negotiations to
acquire several million pounds of biomass that is already
harvested, bagged and partially dried. Historically, a million
pounds of biomass converts to approximately 16,000 kilos of isolate
that when fully processed to an isomer, converts into approximately
15,000 liters of Delta-8 or other isomers. At today's isomer
market price this equates to a $10 million top line revenue per
million pounds of biomass. At start-up production levels the
existing CO operation is targeting an annual throughput of 1.5
million pounds of biomass processed.
Dave Stock, TWS Pharma majority owner, stated, "After weeks of
detailed due diligence and planning, I believe Can B has a solid
plan to utilize and monetize these assets. Coupled with their
existing facility in Lacey, Washington gives them a feedstock to
supplier to processor model that will allow them to compete at
substantial volume of quality product at competitive pricing.
Additionally, this transaction will award the local communities by
welcoming back up to 30 returning local employees."
About Can B Corp
Headquartered in Hicksville New York, Canbiola, Inc. (now known as
Can B Corp) -- http://www.canbiola.com-- develops, produces, and
sells products and delivery devices containing CBD. Cannabidiol
("CBD") is one of nearly 85 naturally occurring compounds
(cannabinoids) found in industrial hemp (it is also contained in
marijuana). The Company's products contain CBD derived from Hemp
and include products such as oils, creams, moisturizers, isolate,
and gel caps. In addition to offering white labeled products,
Canbiola has developed its own line of proprietary products, as
well as seeking synergistic value through acquisitions of products
and brands in the Hemp industry.
Can B Corp. reported a loss and comprehensive loss of $5.72 million
for the year ended Dec. 31, 2020, compared to a loss and
comprehensive loss of $5.90 million for the year ended Dec. 31,
2019. As of March 31, 2021, the Company had $6.87 million in total
assets, $2.19 million in total liabilities, and $4.68 million in
total stockholders' equity.
Hauppauge, NY-based BMKR, LLP, the Company's auditor since 2014,
issued a "going concern" qualification in its report dated April
12, 2021, citing that the Company incurred a net loss of $5,851,512
during the year ended December 31, 2020 and as of that date, had an
accumulated deficit of $30,521,025. Due to recurring losses from
operations and the accumulated deficit, the Company stated that
substantial doubt exists about its ability to continue as a going
concern.
CANOPY GROWTH: Fitch Assigns FirstTime 'B-' IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has assigned a 'B-' First-Time Issuer Default Rating
(IDR) to Canopy Growth Corporation and 11065220 Canada, Inc. Fitch
has also assigned a 'BB-'/'RR1' rating to the USD750 million senior
secured term loan facility at Canopy Growth Corporation and the
co-issuer, 11065220 Canada, Inc. The Rating Outlook is Stable.
Canopy's 'B-' rating reflects the uncertain path to profitability
given the rapidly shifting dynamics in the cannabis industry, and
Fitch's expectation for operating cash flow and FCF to remain
negative over the next 36 months. The ratings also reflect
potential impacts to capital structure, liquidity and profitability
that could result from Canopy choosing to build out a U.S.
footprint, including additional investments, M&A and type of
financing.
Canopy's rating recognizes its first-mover advantage compared with
other Canadian cannabis licensed producers on a number of fronts,
with leading Canadian medical and recreational market shares,
extensive licensed cultivation operations, a growing portfolio of
related consumer packaged goods (CPG) brands, and multiple pathways
to a potentially much larger U.S. CBD (cannabidiol) and THC
(tetrahydrocannabinol) market. The company's liquidity is supported
by a large cash balance, and Constellation Brands Inc.'s
(Constellation) equity stake and strategic partnership meaningfully
expands Canopy's capabilities while also presenting another
potential source of capital. Canopy's ratings receive a one-notch
uplift from its 'CCC+' Standalone Credit Profile (SCP) due to
Constellation's minority interest in the company.
KEY RATING DRIVERS
Nascent Industry Gains Traction: The North American cannabis
industry is in the early days of scaling up, following legalization
in Canada and classification of hemp-derived CBD as an agricultural
product by the U.S. federal government in 2018. In Canada,
post-legalization growth was primarily driven from converting
illicit trade to legal trade, with legal sales representing around
50% during fiscal 2021 (March 31, 2021). Canopy believes the legal
market could account for 85% of sales by 2023.
The company expects new customers to grow the market, partly led by
the availability of new products, such as THC and CBD, including
edibles, oils and beverages. Canopy expects the total Canadian
legal cannabis market to grow to about CAD7 billion by calendar
year (CY) 2023, up from around CAD3.2 billion in CY 2020. Market
and profitability growth may not materialize as envisioned; for
example, Canadian cannabis has already been through one cycle of
production overexpansion and consolidation.
Ongoing Pivot to CPG-style Strategy: Canopy is a leading global
cannabis player with a core Canadian operation that generates
roughly 60% of sales, and meaningful contributions from Storz &
Bickel vaporizer products and the C3 medical cannabis business.
Given the excess production capacity in Canada, Canopy like other
players in the market has been focused on shedding surplus
production capacity over the past 12 months, and is transitioning
to a CPG-led strategy that leverages the strength and support of
Constellation. Canopy built a portfolio of established recreational
cannabis brands in Canada (Tweed, Tokyo Smoke, Ace Valley, Twd. and
7ACRES), and its emerging U.S. portfolio features brands in several
non-THC categories.
Canopy's large cash reserves and access to Constellation's
distribution and product development capabilities position the
company ahead of its peers in terms of overall capabilities and
access to markets. The company's ability to leverage these
strengths to develop and/or acquire brands that resonate with
consumers and increase product premiumization will be a key driver
of revenue and profitability over the next 2-3 years.
Profitability Improvements Underway: Canopy is implementing several
operational initiatives that are expected to lead to materially
improved profitability following EBITDA losses, based on Fitch
adjustments, of around CAD450 million in fiscal 2020 and CAD350
million in fiscal 2021 as the company ramped up operations in a
nascent industry. Actions taken are leveraging insights and
innovation to drive improved sales execution, fill rates and
product quality combined with cost initiatives that are expected to
result in CAD150 million-CAD200 million in savings during the next
12-18 months.
The growing Canadian retail footprint experienced some
pandemic-related underperformance, which Fitch expects to abate as
restrictions ease in 2H21, although price deflation pressures,
growth in value priced offerings and supply chain challenges also
remain a weight on profitability. The ongoing retail distribution
ramp and continued growth of the legal market provides visibility
for improving Canadian profitability, given the majority of
investments in this market are behind them. Over the next 12-24
months, Fitch expects Canopy to also leverage Constellation's
distribution network in the U.S., as well as athletic partnerships,
to build the BioSteel sports nutrition brand, which could become
its second largest profit generator in time.
In the absence of U.S. legalization, Canopy expects positive
adjusted EBITDA by end of fiscal 2022, positive operating cash flow
for full-year fiscal 2023 and positive FCF for the full year fiscal
2024. Fitch projects an EBITDA deficit of around CAD125 million in
fiscal 2022 on revenue of about CAD900 million, and for EBITDA to
turn modestly positive in fiscal 2023 on revenue of around CAD1.25
billion. The ability for Canopy to turn EBITDA positive and
materially increase EBITDA will depend on the sources of revenue
growth (level of premiumization, Canadian THC versus various
products, such as BioSteel, Storz & Bickel, C3 and U.S. CBD
products), gross margin improvement and the resulting EBITDA mix.
Fitch expects around CAD150 million in EBITDA for fiscal 2024 and
positive operating cash flow around fiscal 2025.
Federal legalization of THC products in the U.S., which Fitch has
not modeled in its projections, could weigh on profitability and
cash flow given additional investments to build out its U.S.
footprint.
Beneficial Constellation Relationship: Fitch views Constellation's
relationship with Canopy as a significant credit positive, with
Canopy's ratings receiving a one-notch uplift from its SCP. Fitch
believes a moderate linkage exists between the two companies, given
Canopy's strategic importance to Constellation due to strong
long-term growth prospects and the reasonably material financial
value to future group profile. Canopy has successfully leveraged
some of Constellation's capabilities in support of its strategic
initiatives with market research, product development,
manufacturing, government relations and distribution capabilities
benefiting from this partnership. Constellation holds four of seven
board seats at Canopy, and a number of senior Canopy executives
previously held key positions at Constellation.
Constellation's investment totals CAD5.8 billion to date in the
form of equity and convertible debentures. Fitch believes the
company could make further investments to support Canopy's business
development and/or increase ownership from its approximate 36.19%
stake at June 30, 2021 through the exercise of warrants, which if
fully exercised, would take Constellation's stake to 53.29% as of
June 30, 2021.
Pathways to U.S. Growth: Canopy's delayed acquisition agreement
with multistate operator Acreage Holdings, Inc. for a 70% interest
in Acreage will position it well to enter the U.S. THC market
following U.S. federal legalization, given Acreage's 10-state
footprint and Canopy's stable of brands. Canopy also conditionally
owns an approximate 20% interest in TerrAscend Corp. that is
exercisable upon U.S. federal legalization of THC that provides
access to an additional five states.
U.S. federal Legalization timing is highly uncertain, with
significant hurdles, including political uncertainty and
restorative justice. Should legalization proceed, Fitch expects
Canopy would make additional investments to further develop its
U.S. footprint. In the meantime, the company's CBD (Quatreau,
Martha Stewart, First & Free) and CPG (BioSteel sports nutrition,
This Works and Storz & Bickel) brands give it routes to growth in
the U.S., as well as a means of developing a distribution network.
Large Cash Balance Supports Liquidity: Following the USD750 million
term loan issuance, Canopy's cash and short-term investments stands
at CAD2.1 billion at June 30, 2021. This level is around 4.0x LTM
revenue. Fitch expects the company's ongoing cash burn and M&A
strategy will deplete cash over the rating horizon, necessitating
further capital raises. Funding options include Canopy's USD500
million term loan accordion, an equity issuance or a further
investment from Constellation. Additional M&A activity or capital
investments, which Fitch expects the company could take to bolster
its U.S. footprint post THC legalization, may also require
additional capital raises.
DERIVATION SUMMARY
Canopy's rating reflects its significant first-mover advantages
compared with other Canadian cannabis LPs, with leading Canadian
medical and recreational market shares, extensive licensed
cultivation and production operations, growing portfolio of related
CPG brands, and multiple pathways to a potentially much larger U.S.
CBD and THC market. The company has a strong liquidity position,
and Constellation's equity stake and strategic partnership
meaningfully expands Canopy's capabilities while also presenting
another potential source of capital.
Ratings are constrained by its relatively short operating track
record, degree of uncertainty and change in the cannabis industry,
and Fitch's expectation for FCF and operating cash flow to remain
negative over the next 36 months. The ratings also reflect the
uncertain level of investments, M&A and type of financing that
Canopy could choose to undertake to build a U.S. footprint, which
could have a meaningful impact on its future capital structure,
liquidity and profitability.
Canopy is similarly rated to Legends Hospitality Holding Company,
LLC (B-/Stable); Knowlton Development Corporation Inc. (KDC,
B-/Stable); and WeWork Companies LLC (CCC).
Legends' 'B-' ratings reflects the severe disruption the
coronavirus has had on the company's business, including venue
closures and capacity restrictions, and the tremendous amount of
uncertainty as to the pace at which the live event industry will
recover. While FCF is expected to remain negative through 2022,
Fitch expects Legends' liquidity to be sufficient to manage through
the crisis, and Fitch forecasts the company's leverage could return
to the low-6x range by 2022, with potential for further
deleveraging. However, a slower than expected ramp up in the
business that leads to a higher than expected cash burn would be a
rating concern. The ratings also reflect Legends' strong earnings
and cash flow prospects over the medium term, given long-term
client contracts in the sports, entertainment and attractions
industries.
KDC's 'B-' rating reflects its position as a global leader in
custom formulation, packaging and manufacturing solutions for
beauty, personal care and home care brands, supported by a diverse
product portfolio and a customer base ranging from blue-chip names
to indie brands, with whom the company typically maintains
long-term relationships. Fitch expects KDC's broadening platform
and investment in R&D will enable the company to sustain modest
organic revenue growth over the long term. KDC's near-term ratings
are constrained by its elevated leverage and expected negative FCF,
as the company recently funded a USD325 million shareholder
dividend distribution during a period when it is dramatically
increasing its capex spend to fund growth initiatives.
WeWork's 'CCC' rating reflects Fitch's concern over the viability
of WeWork's business model in light of a potential lasting shift by
companies to a hybrid office model that leads to permanently lower
office space demand. While WeWork has made material progress to
reduce its cash burn rate, in a scenario where demand is
structurally lower, Fitch sees WeWork as potentially requiring
additional liquidity sources inclusive of and beyond the full
SoftBank financing commitment. Fitch will continue to assess
WeWork's progress toward achieving operational metrics consistent
with the company's stated goal to achieve positive FCF in
conjunction with the overall office demand environment and update
its credit assessment accordingly.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Revenue increase of 65% in fiscal 2022 to around CAD900
million, reflecting growth in the Canadian recreational market
supported by growth in the legal recreational market, retail
expansion and cannabis 2.0 products (beverages, edibles and
vapes). Other key revenue drivers include the Supreme Cannabis
Company acquisition, growth in U.S. CBD and BioSteel products
leveraging Constellation's distribution network, and volume
growth in Storz & Bickel products. Revenue growth of close to
40% in fiscal 2023 to around CAD1.25 billion driven by similar
factors.
-- EBITDA deficit of approximately CAD125 million in fiscal 2022,
compared with negative CAD344 million in fiscal 2021,
reflecting improved operating leverage supported by strong
top-line growth and benefits from cost savings initiatives. In
fiscal 2023, EBITDA becomes modestly positive and around
CAD150 million in fiscal 2024.
-- Capital spending of CAD260 million in fiscal 2022, declining
to CAD90 million in fiscal 2023.
-- FCF deficit of around CAD600 million in fiscal 2022,
decreasing to around CAD300 million in fiscal 2023.
-- Bolt-on M&A targeting the U.S. market utilizing structured
investments prior to federal permissibility.
-- Maintenance of at least CAD700 million in cash over the rating
horizon, which assumes Canopy pursues further debt and equity
raises to support ongoing cash needs and M&A opportunities.
Fitch assumes the convertible notes are refinanced and the
USD500 million accordion feature is used on the term loan.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action (upgrading standalone IDR to 'B-')
would be considered if Canopy's operating trajectory exceeds
Fitch's expectations leading to better than expected EBITDA
growth, FCF approaching break-even and total debt/EBITDA
sustained under 7.5x.
-- Canopy currently benefits from a one-notch uplift from its SCP
due to Constellation's minority ownership. Fitch could
consider a two-notch uplift if strategic or operational ties
strengthen between the two companies.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Profitability improvement that is materially lower than
Fitch's expectations of Canopy turning EBITDA positive in
fiscal 2023 and operating cash flow break-even in 2025 that
raises concerns about the sustainability of its capital
structure;
-- Acceleration of the company's acquisition strategy that causes
greater than expected cash burn and debt funding;
-- Adverse changes in the regulatory environment;
-- A material adverse change in the strategic relationship with
Constellation.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity, Expected Cash Burn: At the end of the first
quarter fiscal 2022, Canopy had about CAD2.1 billion of liquidity
consisting of around CAD2.1 billion of cash and short-term
investments, and full availability on its CAD40 million Farm Credit
Canada revolving credit facility. Canopy's liquidity was
supplemented in March 2021 with a USD750 million five-year senior
secured term loan facility. The company also has a USD500 million
accordion feature on the term loan facility.
Fitch expects the company's ongoing cash burn, which is expected to
narrow over the forecast period but remain material, and M&A
strategy will deplete Canopy's ample cash position over the next
2-3 years, necessitating further capital raises. Fitch expects
Canopy will use a mix of balance sheet cash, equity issuances and
incremental debt to support capital allocation for the operating
deficit and M&A opportunities. Fitch's forecast assumes Canopy
maintains at least CAD700 million in balance sheet cash as the
company funds a portion of M&A with equity, exercises the USD500
million accordion feature under its term loan facility and
refinances the CAD600 million convertible notes due 2023.
Recovery Considerations
The recovery analysis assumes Canopy would be reorganized as a
going concern in bankruptcy rather than liquidated. Fitch projects
the going concern value at CAD1.8 billion, including approximately
CAD400 million from the value of its equity interests in Acreage
Holdings and TerrAscend Corporation.
A restructuring could occur under a scenario where the company
makes outsized M&A investments over the next 24-36 months that do
not generate cash flow, which in combination with ongoing cash
burn, depletes liquidity and leads to a default. A going concern
value is primarily derived from the ongoing operations of the
Canadian cannabis business and investments in brands (such as
thisworks, Storz & Bickel, BioSteel and C3) that could be
attractive on a standalone basis to both cannabis and CPG buyers.
Fitch's GC EBITDA assumption of CAD200 million reflects a 14%
EBITDA margin based on estimated normalized post-restructuring
revenue of CAD1.4 billion, which currently aligns with the midpoint
of Fitch's fiscal 2023 and 2024 forecasts. Half of revenue and
EBITDA is projected to come from core Canadian operations, and the
other half from U.S. CPG brands (including thisworks, Storz &
Bickel, and BioSteel) and C3.
An enterprise value multiple of 7.0x is used to calculate a
post-reorganization valuation. The historical bankruptcy exit
multiple for CPG companies ranged from 4.0x to 10.0x, with a median
reorganization multiple of 6.3x. The 7.0x for Canopy considers
Canopy's brands, which are some of the strongest in the industry
and Constellation's current operational and financial support.
Fitch also considers the value accorded to the agreements to
purchase interests Acreage Holdings and TerrAscend Corporation.
Value has been estimated using a proportional share of the market
capitalization, which has been stressed from current levels.
Fitch assumes the USD750 million Term Loan and the USD500 million
accordion is drawn under the recovery scenario, to fund ongoing
cash burn and M&A transactions. Total term loan borrowings of
CAD1.57 billion at default reflect a USD1.25 billion draw at
current CAD/USD exchange rates.
Given a CAD1.8 billion going concern value and a 10% reduction for
administrative claims, the term loan would be expected to have
outstanding recovery prospects (91%-100%) and are thus rated
'BB-'/'RR1'.
ISSUER PROFILE
Canopy is a leading global diversified cannabis and hemp company
based in Canada that primarily produces, distributes and sells
recreational and medical cannabis and hemp-based products. Canopy
offers a large portfolio of branded cannabis and CBD product
offerings, cannabis vaporizers and non-cannabis consumer packaged
goods.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fair value of debt adjusted to reflect debt amount payable on
maturity, stock-based compensation, transactions expenses and
restructuring costs.
ESG CONSIDERATIONS
Canopy has an ESG Relevance Score of '4' [+] for Exposure to Social
Impacts. Canopy's core business focusing on a portfolio of cannabis
and CBD product offerings benefits from shifting consumer
preferences toward recreational, medicinal and health/wellness
usage, and ongoing legalization that is in various stages in
Canada, the U.S. and Germany. This has a positive impact on the
credit profile, and is relevant to the rating in conjunction with
other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CANOPY GROWTH: S&P Assigns 'B-' ICR, Outlook Stable
---------------------------------------------------
On August 18, 2021, S&P Global Ratings assigned its 'B-' issuer
credit rating to Canopy Growth Corp. At the same time, S&P assigned
its 'B' issue-level rating and '2' recovery rating to the company's
senior secured credit facilities, indicating an expectation for
substantial (70%-90%, rounded estimate: 70%) recovery in a default
scenario.
The stable outlook reflects Canopy's favorable liquidity and its
expectation of moderate support from Constellation Brands Inc.
(CBI; BBB/Stable/--; which owns 36.19% of Canopy) that should allow
the company to scale its operations, sustain its leadership, and
narrow its cash burn within the next couple of years.
S&P's forecast of weak EBITDA and negative free cash flow for the
next 24 months suggests an unsustainable stand-alone credit
profile.
Canopy operates in the highly competitive Cannabis market amid
restrictive regulations (in Canada) or regulatory uncertainty (in
the U.S.); in addition, the cannabis market is nascent and customer
tastes are evolving. To reflect the emerging and changing industry
landscape, Canopy has embarked on a new brand-focused and
customer-centric strategy. A key component of its strategy is a
significant marketing and promotion spend to establish its brands,
while also strategically investing in capital expenditure (capex).
S&P said, "As a result, while we forecast healthy top-line growth,
we don't expect the company will generate breakeven-to-positive
EBITDA until fiscal 2023, with a low expectation of positive free
cash flow for the next 36 months. Therefore, our 'ccc+' stand-alone
credit profile (SACP) reflects the credit risks from negative free
cash flow and lower-than-expected (S&P Global Ratings' forecast)
revenue growth or unexpected underperformance in operations, which
could accelerate cash burn and further pressure Canopy's already
weak credit profile."
Operational and financial support from the strategic relationship
with CBI is a credit positive.
S&P said, "We view CBI's significant financial and operational
support to Canopy as credit enhancing and, in our view, CBI will
continue to support Canopy for strategic investments. We assess
Canopy as "moderately strategic" to CBI and therefore provide a
one-notch uplift from the SACP." CBI views Canopy as its growth
vehicle to enter the U.S. cannabis market (when it is federally
legal) and is investing in the company to position itself to enter
the U.S. market with significant competitive advantages. CBI has
invested more than C$5.8 billion in Canopy and currently owns
36.19% (as of June 30, 2021) of the company. CBI also owns
warrants, which if exercised, could inject more than C$7 billion.
In addition, Canopy has ongoing access to CBI's management and
resources, and has a close synergistic relationship, as evident by
its distribution agreements with Reyes Beer Division, Manhattan
Beer Distributors, and other partners in CBI's gold network. In
addition, various executives at Canopy's management, including its
current CEO and chief financial officer, are CBI alumnus and are
driving the company's brand-focused and consumer-centric strategy;
CBI also has four out of seven seats on Canopy's board of
directors.
Canopy operates in a highly fragmented, competitive, and regulated
cannabis market, where pricing power is limited by the illicit
portion of the market.
Cannabis is either highly regulated or restricted in the
jurisdictions in which Canopy operates. In Canada, cannabis is
legal on a federal level, but companies navigate different
regulations on a provincial basis. Recreational products are
predominantly sold to provincial and territorial agencies, which
distribute the products for retail; in addition, when manufacturing
and selling cannabis, companies must follow Health Canada
regulations. At present, the Canadian cannabis market is
competitive and fragmented, with more than 700 licenses outstanding
(same producer can hold multiple licenses) and almost 68% of the
market share held by the top 10 producers.
In the U.S., cannabis and hemp regulations are extremely diverse
and complex. Cannabis or THC (tetrahydrocannabinol) is illegal at
the federal level (and cannot cross state borders) but as of May
2021, 18 states have enacted legislation to regulate cannabis for
adult use. Regulatory rules on hemp-derived cannabidiol (CBD)
products are not uniform across U.S. states. Regulations from the
U.S. Food and Drug Administration and regulatory delays in some
states also hinder the growth of the U.S. medical cannabis market.
As a result, instead of a nationwide marketing campaign, companies
operate at the state level, with few synergies across states.
Similar to Canada, the industry is very fragmented, with the
leading multistate operator having less than 5% of the U.S. legal
market.
In addition to the regulatory patchwork, legal cannabis operators
also face significant obstacles from the illicit cannabis market,
which has more than 50% of total Canadian market share. Lower
prices and ease of availability at the illicit level are other
impediments that inhibit customers from switching to the legal
market. To curtail illicit market share in Canada, new retail
stores have increased ease of access and have reduced prices on
value products. As a result, the legal market has been successful
in targeting price-sensitive bargain hunters and heavy users. In
addition, S&P believes that Canada's more constructive regulatory
environment should enhance legal market penetration and support
longer-term growth prospects.
Global cannabis markets are at various stages of maturity,
requiring a flexible and adaptive marketing strategy for Canopy to
achieve revenue goals.
The legal cannabis market is growing at a significant pace but is
still highly fragmented. Nevertheless, in the C$2.8 billion
Canadian market, Canopy holds a robust 16% market share in the
recreational space and 26% market share in the medical space. In
Germany, where cannabis is only legal for medical purposes, Canopy
is a market leader in the dried flower category. In the U.S., which
is the largest cannabis market globally and estimated to increase
to US$65 billion by 2025, Canopy operates directly in the legal
hemp-derived CBD and non-cannabis consumer brands (Storz & Bickel,
BioSteel, and This Works) space. The company is planning expansion
into this space through various CBD infused products, for example,
Martha Stewart CBD gummies and CBD-infused Quatreau drinks.
In anticipation of THC being legalized at the U.S. federal level,
Canopy has laid out its strategic groundwork to access the U.S.
market, its arrangement with multi-state operator (MSO) Acreage,
and its conditional investment in MSO TerrAscend. In the meantime,
to build brand recognition in the U.S. THC space without violating
U.S. federal laws, Canopy has licensed its many brands
(non-exclusive) to Acreage on a no-fee basis for a period of time.
Using this strategy to introduce and establish brands in the U.S.
THC market should provide Canopy with an immediate path to market
when THC is federally legalized in the U.S. However, the risk
remains that customer preferences will continue to evolve and
Canopy could be hard-pressed to establish a brand identity within
this fragmented industry.
The company's brand-focused growth strategy on premium products
should improve margins.
Canopy differentiates itself from its peers, with a diverse product
portfolio backed by strong brand awareness; a very different
strategy following significant restructuring in fiscal years 2020
and 2021. The portfolio not only consists of combustible products
but also Cannabis 2.0 products (vapes, edibles, drinks, animal
health, and topicals). Historically, combustibles were the more
popular products, but new customers generally prefer consuming
cannabis through gummies, craft chocolates, ready-to-drink
beverages, and vapes, as opposed to traditional methods of smoking.
As part of its growth strategies, Canopy is also focused on
building scalable, consumer-centric, and differentiated brands in
the Canadian and U.S. markets. New customer growth, product
innovation, and a declining illicit market would be the key drivers
for long-term industry growth. Canopy recently increased its focus
with the launch of new CBD-infused products and a branded strategy
that we expect could assist it in gaining market share. In
addition, Canopy has a portfolio of established branded consumables
(such as BioSteel) that can eventually provide cross-selling
opportunities in the cannabis market. S&P said, "We believe that a
sales shift toward these premium-priced products, accompanied by
the cost-saving measures such as stock keeping unit (SKU)
rationalization, would improve Canopy's margins in the next 12-18
months. As the company scales up, we believe economies of scale
should also support margin expansion."
S&P said, "The stable outlook reflects our expectation that Canopy
would execute its growth strategy and improve operations in the
next 12-18 months spurred by the growth in the U.S. hemp CBD market
and Canadian recreational cannabis market, increasing market share
through a brand-focused strategy with streamlined operations.
Although there could be some regulatory uncertainty and executional
risks during this transition, we believe the company's substantial
cash on hand will provide support during this period.
"We could lower the ratings on Canopy if the company fails to
achieve expected EBITDA growth and profitability. This could occur
if its operating performance deteriorates meaningfully due to
unfavorable regulatory developments, intensifying competition, or
steeper-than-expected revenue decline in its CBD-infused products
segment.
"Although highly unlikely in the next 12 months, we could raise our
ratings if Canopy achieves its growth strategy at a faster pace. A
positive rating action would also be predicated on our view that
the evolving regulatory and competitive environment will continue
to improve for Canopy."
CHICAGOAN LOGISTIC: Seeks to Hire Daniel Greenman as Accountant
---------------------------------------------------------------
Chicagoan Logistic Company seeks approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to hire Daniel Greenman
& Co. to prepare and file the required tax returns and provide
general accounting services.
The firm's hourly rates are as follows:
Daniel Greenman $250 per hour
Senior Accountant $150 per hour
Junior Accountant $100 per hour
Daniel Greenman, the firm's accountant who will be providing the
services, 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:
Daniel Greenman, CPA
Daniel Greenman & Co.
18W100 22nd St, Ste 114
Oakbrook Terrace, IL 60181
Tel: (312) 656-8031
About Chicagoan Logistic Company
Chicagoan Logistic Company, an affiliate of NAHAUL, Inc., is a
Chicago-based company in the general freight trucking industry.
Chicagoan Logistic Company and NAHAUL filed Chapter 11 petitions
(Bankr. N.D. Ill. Case Nos. 21-07154 and 21-07152) on June 5, 2021.
The two cases are not jointly administered.
In the petition signed by Serkan B. Kaputluoglu, president,
Chicagoan Logistic Company disclosed total assets of up to $1
million and total liabilities of up to $10 million.
Judge Carol A. Doyle oversees Chicagoan Logistic Company's Chapter
11 case.
Chicagoan Logistic Company tapped David Herzog, Esq., at Herzog &
Schwartz, P.C. and Laxmi P. Sarathy, Esq., as bankruptcy counsel;
Romano Law, PLLC as special counsel; and Daniel Greenman & Co. as
accountant.
Buchalter, A Professional Corporation represents creditor, Partners
Funding. Vadim Serebro, Esq., serves as counsel to creditor, World
Global Capital LLC, doing business as Funderslink. ATX MCA Fund I,
LLC, also a creditor, is represented by The Magnozzi Law Firm, P.C.
Creditor BMO Harris is represented by Howard & Howard.
CHICAGOAN LOGISTIC: Seeks to Hire Romano Law as Special Counsel
---------------------------------------------------------------
Chicagoan Logistic Company seeks approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to hire Romano Law,
PLLC as special counsel.
The firm's services include:
(a) investigating the possibility of vacating default
judgments obtained by Libertas Funding against each of the Debtors
or of clawing back or recovering monies paid in satisfaction of
such judgments;
(b) taking steps to try to vacate the judgments or recover all
or part of such monies; and
(c) working with the Debtor's bankruptcy counsel where
appropriate towards the recovery of the funds.
The firm's hourly rates are as follows:
Law Clerk $149 per hour
Law Clerk Level II/Paralegal $191 per hour
Senior Law Clerk $234 per hour
Associate Attorney Level I $276 per hour
Associate Attorney Level II $298 per hour
Associate Attorney Level III $319 per hour
Associate Attorney Level IV $340 per hour
Special Counsel $425 per hour
Partner $552 per hour
Senior Partner $637 per hour
The Debtor paid $1,500 to the law firm as a retainer fee.
Siddhartha Roa, Esq., a partner at Romano Law, 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:
Siddhartha Roa, Esq.
Romano Law PLLC
55 Broad Street, 18th FL.
New York, NY 10004
Tel: 646.762.7488
About Chicagoan Logistic Company
Chicagoan Logistic Company, an affiliate of NAHAUL, Inc., is a
Chicago-based company in the general freight trucking industry.
Chicagoan Logistic Company and NAHAUL filed Chapter 11 petitions
(Bankr. N.D. Ill. Case Nos. 21-07154 and 21-07152) on June 5, 2021.
The two cases are not jointly administered.
In the petition signed by Serkan B. Kaputluoglu, president,
Chicagoan Logistic Company disclosed total assets of up to $1
million and total liabilities of up to $10 million.
Judge Carol A. Doyle oversees Chicagoan Logistic Company's Chapter
11 case.
Chicagoan Logistic Company tapped David Herzog, Esq., at Herzog &
Schwartz, P.C. and Laxmi P. Sarathy, Esq., as bankruptcy counsel;
Romano Law, PLLC as special counsel; and Daniel Greenman & Co. as
accountant.
Buchalter, A Professional Corporation represents creditor, Partners
Funding. Vadim Serebro, Esq., serves as counsel to creditor, World
Global Capital LLC, doing business as Funderslink. ATX MCA Fund I,
LLC, also a creditor, is represented by The Magnozzi Law Firm, P.C.
Creditor BMO Harris is represented by Howard & Howard.
CLEAN ENERGY: Incurs $232K Net Loss in Second Quarter
-----------------------------------------------------
Clean Energy Technologies, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $231,856 on $155,884 of sales for the three months
ended June 30, 2021, compared to a net loss of $229,502 on $155,997
of sales for the three months ended June 30, 2020.
For the six months ended June 30, 2021, the Company reported net
profit of $836,728 on $291,158 of sales compared to a net loss of
$543,077 on $1.01 million of sales for the same period during the
prior year.
As of June 30, 2021, the Company had $5.84 million in total assets,
$8.23 million in total liabilities, and a total stockholders'
deficit of $2.39 million.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1329606/000149315221020085/form10-q.htm
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com-- designs, produces and markets
clean energy products and integrated solutions focused on energy
efficiency and renewables.
Clean Energy reported a net loss of $3.44 million for the year
ended Dec. 31, 2020, compared to a net loss of $2.56 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$4.12 million in total assets, $11.36 million in total liabilities,
and a total stockholders' deficit of $7.24 million.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2015, issued a "going concern"
qualification in its report dated April 15, 2021, citing that the
Company has an accumulated deficit, net losses, negative working
capital, and has utilized significant net cash in operations.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
CMG CAPITAL: Taps Trusty Realty to Market Miami Property
--------------------------------------------------------
CMG Capital, LLC seeks approval from the U.S. Bankruptcy Court for
the Southern District of Florida to hire Trustee Realty Inc. to
market its residential property at 1431 NW 37th Ave., Miami, Fla.
The Debtor will pay the firm a total brokerage fee at the closing
of the sale equal to 5 percent of the gross purchase price, with
2.5 percent payable to any buyer's broker, or 3 percent to the firm
if there is no buyer's broker.
Jason Welt, the firm's real estate broker who will be providing the
services, 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:
Jason A. Welt
Trustee Realty Inc.
401 East Las Olas Blvd., Suite 1400
Ft. Lauderdale, FL 33301
Tel.: 954-803-0790
Email: jw@jweltpa.com
About CMG Capital
Miami, Fla.-based CMG Capital, LLC filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla.
Case No. 21-12013) on Feb. 27, 2021, listing $1 million to $10
million in both assets and liabilities. Steven Suh, member, signed
the petition.
Judge Jay A. Cristol oversees the case.
The Debtor tapped Nathan G. Mancuso, Esq., at Mancuso Law, PA, as
legal counsel and Kang & Company Financial Solutions, LLC as
accountant.
COCRYSTAL PHARMA: Incurs $3.8 Million Net Loss in Second Quarter
----------------------------------------------------------------
Cocrystal Pharma, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.82 million on $0 of revenues for the three months ended June
30, 2021, compared to a net loss of $3.50 million on $554,000 of
revenues for the three months ended June 30, 2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $6.56 million on $0 of revenues compared to a net loss of
$5.49 million on $1.02 million of revenues for the same period
during the prior year.
As of June 30, 2021, the Company had $87.42 million in total
assets, $2.67 million in total liabilities, and $84.75 million in
total stockholders' equity.
Net cash used by operating activities was $4,394,000 for the six
months ended June 30, 2021 compared with net cash used by operating
activities of $4,388,000 for the same period in 2020. This was
primarily due to reduction of expenditures related to the
Collaboration Agreement with Merck during the six months ended
June 30, 2021 as the program transitioned expenditures to Merck.
Net cash used for investing activities was approximately $40,000
for the six months ended June 30, 2021 compared with $220,000 net
cash used for the same period in 2020. For the six months ended
June 30, 2021 the level of investments decreased compared to June
30, 2020 due to finalization of laboratory expansion.
Net cash provided by financing activities totaled $38,486,000 for
the six months ended June 30, 2021 compared with $16,505,000 for
the same period in 2020. This decrease was primarily due to
sufficient capital needs during the six months ended June 30, 2021,
which resulted in reduced equity offerings as compared to the six
months ended June 30, 2020.
The Company has not yet established an ongoing source of revenue
sufficient to cover its operating costs. The Company had
$67,112,000 cash on June 30, 2021 and believes this is sufficient
to maintain planned operations for at least the next 36 months.
"We have focused our efforts on research and development
activities, including through collaborations with suitable
partners. We have been profitable on a quarterly basis, but have
never been profitable on an annual basis. We have no products
approved for sale and have incurred operating losses and negative
operating cash flows on an annual basis since inception," Cocrystal
stated in the regulatory filing.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1412486/000149315221019926/form10-q.htm
About Cocrystal Pharma
Headquartered in Creek Parkway Bothell, WA, Cocrystal Pharma, Inc.
-- http://www.cocrystalpharma.com-- is a clinical stage
biotechnology company discovering and developing novel antiviral
therapeutics that target the replication machinery of influenza
viruses, hepatitis C viruses, noroviruses, and coronaviruses.
Cocrystal Pharma reported a net loss of $9.65 million for the year
ended Dec. 31, 2020, compared to a net loss of $48.17 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$54.24 million in total assets, $1.74 million in total liabilities,
and $52.50 million in total stockholders' equity.
COUNCIL FOR AID: Seeks to Hire Rabinowitz as Conflicts Counsel
--------------------------------------------------------------
Council For Aid To Education, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Rabinowitz, Lubetkin & Tully, LLC as its conflicts counsel.
The firm will represent the Debtor's interest involving creditors
with which Seyfarth Shaw, LLP, the Debtor's general bankruptcy
counsel, has a conflict.
The firm's hourly rates are as follows:
Jonathan I. Rabinowitz, Esq. $575 per hour
Jay L. Lubetkin, Esq. $525 per hour
Jeffrey A. Cooper, Esq. $500 per hour
Henry M. Karwowski, Esq. $475 per hour
Barry J. Roy, Esq. $425 per hour
John J. Harmon, Esq. $325 per hour
Paralegal $150 per hour
Jeffrey Cooper, Esq. at Rabinowitz, disclosed in a court filing
that his firm does not hold interests adverse to the Debtor or any
other party in interest.
The firm can be reached through:
Jeffrey A. Cooper, Esq.
Rabinowitz, Lubetkin & Tully, LLC
293 Eisenhower Parkway, Suite 100
Telephone: 973-597-9100
Email: jcooper@rltlawfirm.com
About Council For Aid To Education
Council For Aid To Education, Inc. is a Delaware not-for-profit
corporation, which develops performance-based and custom
assessments that measure students' essential college and career
readiness skills and identify opportunities for student growth.
Council For Aid To Education sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-11221) on June 30,
2021. In the petition signed by Robert J. Yayac, chief executive
officer and president, the Debtor disclosed up to $10 million in
both assets and liabilities.
Judge James L. Garrity, Jr. presides over the Debtor's Chapter 11
case. Heidi J. Sorvino serves as the Debtor's Subchapter V trustee
in the case.
Seyfarth Shaw, LLP and Rabinowitz, Lubetkin & Tully LLC represent
the Debtor as bankruptcy counsel. Rabinowitz, Lubetkin & Tully,
LLC serves as conflicts counsel.
COUNCIL FOR AID: Wins Access to Citibank's Cash Collateral
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York has
authorized Council for Aid to Education, Inc. to use cash
collateral on a final basis in accordance with the budget, with a
10% variance.
The Debtor has requested authorization to use Cash Collateral to
pay for expenses incurred by it in the ordinary course of its
business.
The Debtor and Citibank N.A. are parties to a prepetition
Relationship Ready Line of Credit in the original principal amount
of $500,000, secured by a duly perfected security interest in
substantially all of the Debtor's assets. As of the Petition Date,
the Debtor owed Citibank $478,098 in principal and $1,196 in
interest, plus accrued and incurred fees and expenses, under the
Line of Credit.
As adequate protection for, and to the extent of any decrease in
the value of Citibank's secured interest in the Debtor's assets
arising from the Debtor's use of Cash Collateral, Citibank is
granted (a) a valid, perfected, and enforceable, post-petition
security interest in (i) all fixtures and personal property and
(ii) all proceeds and products of each of those assets, in each
case junior to any prior perfected and enforceable pre-petition
lien or security interest, and (b) a valid, perfected, and
enforceable, postpetition replacement lien on and security interest
in all of the assets of the Debtor constituting Citibank's
prepetition collateral and the proceeds thereof. The Adequate
Protection Lien will be subject to all other validly and properly
perfected pre-petition liens and security interests in favor of
third parties that were senior to, and had priority over,
Citibank's security interest and lien as of the Petition Date.
As additional adequate protection, the Debtor will make timely
interest payments in respect of the Citi Obligations and reimburse
Citi for its out-of-pocket fees and expenses, including but not
limited to, the pre- and post-petition fees and expenses of its
counsel within five business days of the presentment of summary
invoices in respect thereof.
The adequate protection lien is deemed perfected, without the
necessity of filing any documents or otherwise complying with
nonbankruptcy law in order to perfect security interests and record
liens, with such perfection being binding upon all parties.
As additional adequate protection, Citibank is granted a
superpriority administrative expense claim with respect to the Citi
Obligations that exceeds the value of its collateral.
The Adequate Protection Lien and the Super-Priority Claim will be
subordinate only to the fees and expenses of the Clerk of the
Bankruptcy Court and the fees of the Office of the United States
Trustee pursuant to 28 U.S.C. section 1930(a) plus applicable
interest on any such fees, and also to the allowed fees and
expenses of the Debtor's professionals and the Subchapter V Trustee
which have been awarded by an Order of the Court in an aggregate
amount not to exceed $100,000, such amount to be allocated $75,000
to the Debtor's professionals and $25,000 on account of Fees and
fees and expenses of the Subchapter V Trustee.
These events constitute a "Termination Event":
a. Entry of any order dismissing the Case or converting the
Case to a case under Chapter 7 of the Bankruptcy Code;
b. Entry of an order authorizing the appointment of an
examiner with expanded powers in the Case;
c. Failure of the Debtor to cure any default under the Order,
after five days' written notice (whether by e-mail or overnight
delivery) to the Debtor's counsel, the Office of the United States
Trustee, the Subchapter V Trustee, and the top twenty unsecured
creditors; and
d. At the conclusion of the Final Hearing, unless further
extended by consent of Citi or by order of the Court.
About Council For Aid To Education, Inc.
Council For Aid To Education, Inc. is a Delaware not-for-profit
corporation which develops performance-based and custom assessments
that measure students' essential college and career readiness
skills and identify opportunities for student growth. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D.N.Y. Case No. 21-11221) on June 30, 2021. In the
petition signed by Robert J. Yayac, chief executive officer and
president, the Debtor disclosed up to $10 million in both assets
and liabilities.
Judge James L. Garrity, Jr. presides over the case.
James B. Sowka, Esq., at Seyfarth Shaw LLP is the Debtor's counsel.
Jeffrey A. Cooper, Esq., at Rabinowitz, Lubetkin & Tully LLC
represents the Debtor as co-counsel. Heidi J. Sorvino serves as
the Debtor's Subchapter V Trustee.
DIGIPATH INC: Stone Douglass Appointed as CFO
---------------------------------------------
Stone Douglass, 74, who has served as a member of the Board of
Directors of Digipath, Inc. since July 1, 2021, was appointed to
serve as the Company's chief financial officer. Prior to his
appointment as a director, Mr. Douglass had been serving as a
consultant to the Company.
In addition, Mr. Douglass has been: the chief executive officer of
GeoSolar Technologies, Inc., a company planning to install natural
energy systems, since December 2020; the chief financial officer of
David Kind, Inc., a Venice, California based online eyewear brand,
since June 2013; the chairman and chief executive officer of
Sealand Natural Resources, Inc., a manufacturer and purveyor of
Sealand Birk birch water and other alternative beverages, since
March 2016; the Chief Financial Officer of P5 Systems, Inc., a San
Diego based technology platform known as the Craig's List of
cannabis, servicing the legal cannabis value chain, since March
2018; the chief executive officer and director of Empire Global
Gaming, Inc., a publicly traded Long Island, NY based owner of
gambling games and gaming applications, since December 2018; and
the principal owner of Ducks Nest Investments Inc, a private
investment company, since September 1990. Between September 2014
and May 2017 Mr. Douglass was the manager of HL Brands, LLC, a
private firm manufacturing and selling apparel under the POPaganda
brand, and watches and bags under the Flud brand, and between
September 2014 and May 2017, Mr. Douglass was the Chairman of Artec
Global Media, Inc., a publicly traded media company.
In connection with his engagement as a consultant, on June 2, 2021
Mr. Douglass was awarded an option to purchase 1,000,000 shares of
the Company's common stock with an exercise price of $0.06. There
are currently no other agreements between Mr. Douglass and the
Company.
About DigiPath
Headquartered in Las Vegas, Nevada, Digipath, Inc. --
http://www.digipath.com-- offers full-service testing lab for
cannabis, hemp and ancillary cannabis and hemp infused products
serving growers, dispensaries, caregivers, producers, patients and
eventually all end users of cannabis and botanical products.
DigiPath reported a net loss of $2.31 million for the year ended
Sept. 30, 2020, compared to a net loss of $1.80 million for the
year ended Sept. 30, 2019. As of June 30, 2021, the Company had
$1.50 million in total assets, $2.68 million in total liabilities,
and $1.18 million in total stockholders' deficit.
M&K CPAS, PLLC, in Houston, Texas, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
Jan. 29, 2021, citing that the Company has recurring losses from
operations and insufficient working capital, which raises
substantial doubt about its ability to continue as a going concern.
DIOCESE OF NORWICH: Taps Brown Jacobson as Corporate Counsel
------------------------------------------------------------
The Norwich Roman Catholic Diocesan Corporation seeks approval from
the U.S. Bankruptcy Court for the District of Connecticut to hire
Brown Jacobson, PC as special corporate counsel to give legal
advice on corporate, real estate, litigation and other matters.
The firm's hourly rates are as follows:
Partners and Counsel $110 - $155 per hour
Associates $145 per hour
Paralegals and Legal Assistants $85 per hour
The Debtor paid $1,250 to the law firm as a retainer fee.
Michael Driscoll, Esq., the firm's attorney who will be providing
the services, 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:
Michael E. Driscoll, Esq.
Brown Jacobson PC
22 Courthouse Square
Norwich, CT 06360
Phone: 860.889.3321
Toll Free: 800.281.9307
Fax: 860.886.0673
About The Norwich Roman Catholic
Diocesan Corporation
The Norwich Roman Catholic Diocesan Corporation is a nonprofit
corporation that gives endowments to parishes, schools, and other
organizations in the Diocese of Norwich, a Latin Church
ecclesiastical territory or diocese of the Catholic Church in
Connecticut and a small part of New York.
The Norwich Roman Catholic Diocesan Corporation sought Chapter 11
protection (Bankr. D. Conn. 2:21-bk-20687) on July 15, 2021. The
Debtor estimated $10 million to $50 million in assets against
liabilities of more than $50 million. Judge James J. Tancredi
oversees the case.
The Debtor tapped Ice Miller LLP as bankruptcy counsel, Robinson &
Cole LLP as Connecticut counsel, and Brown Jacobson PC as special
corporate counsel. Epiq Corporate Restructuring, LLC is the claims
and noticing agent.
ENVIVA PARTNERS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
----------------------------------------------------------------
On August 18, 2021, S&P Global Ratings revised its outlook on
Enviva Partners L.P. to stable from positive. At the same time, S&P
affirmed its 'BB-' issuer credit rating and its 'B+' issue-level
rating on the partnership's senior unsecured notes.
The recovery rating is unchanged at '5' and indicates modest
(10%-30%, rounded estimate: 20%) recovery in the event of default.
The stable outlook indicates that S&P expects that Enviva's
adjusted debt to EBITDA will be about 4.8x in 2021 and 4.4x in
2022.
S&P said, "Credit metrics are weaker than what we were projecting,
due to growing debt-financed capital spending. We no longer think
Enviva will maintain its debt-to-EBITDA below 4x on a sustained
basis, as the partnership is looking to partially finance with debt
its growing capital expenditure (capex) program and acquisitions.
Enviva's leverage ratio was higher than our previous expectation at
above 5.5x at the end of 2020, largely due to higher debt. We are
now projecting its metrics will be about 4.8x by 2021 and 4.4x by
2022. This improvement from 2020 metrics will largely be spurred by
the full-year contribution to EBITDA from the dropped-down assets.
We expect that the partnership to continue to increase its overall
debt level to fund growth, with equity funding as well."
Under S&P's base-case scenario, it expects annual capex spending to
reflect growth capex and expansion projects. Having larger projects
at the partnership level could increase operational and
construction risks. Historically, Enviva's practice of acquiring
fully built and operational plants from its sponsor has mitigated
those risks.
Enviva is investing in those new projects because the demand for
wood pellets remains very robust. As a recent example, the European
Commission proposed in July 2021 an increase in its renewable
energy target to about 38%-40% by 2030, from the current 32%.
Biomass-fueled energy production is expected to be part of the
strategy in meeting these goals.
The partnership remains small and with limited diversity, compared
with peers. Despite its projected growth, Enviva is smaller than
midstream peers in terms of scale and has limited diversity. S&P
expects that EBITDA will range from $250 million-$350 million over
its outlook horizon. Furthermore, the partnership has limited asset
diversity or integration with other business lines, given its focus
on producing and distributing wood pellets.
Partially mitigating those factors, Enviva's business risk is
improving in terms of geographic diversity and counterparty credit
profile, as the contracts signed with high-quality Japanese
off-takers are starting to contribute more meaningfully to cash
flows. As a result, the exposure to Drax Group Holdings (Drax;
BB+/Stable/--), Enviva's largest counterparty, will decline over
our outlook horizon.
S&P said, "The stable outlook indicates that we expect debt to
EBITDA of about 4.8x in 2021 and 4.4x in 2022. Higher contributions
from dropped-down assets are projected to spur this progress, as
the debt level likely will increase to finance future acquisitions
and capex. In addition, we expect Enviva's contract profile will
develop further as the partnership continues to diversify and
counterparties' credit quality improves.
"We could take a negative rating action if Enviva's leverage
metrics increase such that the weighted-average debt to EBITDA is
above 5x on a sustained basis. This could occur if the partnership
modifies its financial policy with higher-than-expected
debt-financed capex or meaningfully increases its dividends. In
addition, we could take a negative rating action if Enviva has
difficulties in acquiring or replacing counterparties for offtake
volume.
"We could take a positive rating action if Enviva continues to
increase in size and diversifies and improves in terms of
counterparties' credit quality, while maintaining conservative
financial policies, with S&P Global Ratings-adjusted debt-to-EBITDA
leverage below 4.5x on a sustained basis."
FLAVA WORKS: Gets OK to Hire Robert J. Adams as Legal Counsel
-------------------------------------------------------------
Flava Works, Inc. received approval from the U.S. Bankruptcy Court
for the Northern District of Illinois to hire the Law Office of
Robert J. Adams & Associates to serve as legal counsel in its
Chapter 11 case.
The firm's services include legal advice regarding the Debtor's
powers and duties under the Bankruptcy Code, the preparation of
court papers and all legal work necessary to obtain approval of the
Debtor's Chapter 11 plan.
Robert J. Adams & Associates will charge its normal hourly rates.
The firm received a retainer in the amount of $10,000.
As disclosed in court filings, Robert J. Adams & Associates does
not represent any interest adverse to the Debtor and its estate.
The firm can be reached through:
Christine B. Adams, Esq.
The Law Office of Robert J. Adams & Associates Inc.
540 W 35th St Fl 1
Chicago, IL 60616
Phone: +1 312-804-1944
Email: tinaadams.rja@gmail.com
About Flava Works Inc.
Flava Works, Inc. filed a petition for Chapter 11 protection
(Bankr. N.D. Ill. Case No. 21-08585) on July 17, 2021, listing up
to $50,000 in assets and up to $1 million in liabilities. Judge
Donald R. Cassling oversees the case. The Law Office of Robert J.
Adams & Associates Inc. serves as the Debtor's legal counsel.
G&G HOLDINGS: Seeks Approval to Hire Latham as Legal Counsel
------------------------------------------------------------
G&G Holdings, LLC seeks approval from the U.S. Bankruptcy Court for
the Middle District of Florida to hire Latham, Luna, Eden &
Beaudine, LLP to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor as to its rights and duties in its
bankruptcy case;
(b) preparing pleadings, including a plan of reorganization;
and
(c) other necessary actions incident to the proper
preservation and administration of the Debtor's estate.
The firm's hourly rates are as follows:
Daniel Velasquez $350 per hour
Justin Luna $450 per hour
Experienced attorneys $575 per hour
Junior paraprofessionals $105 per hour
As disclosed in court filings, Latham does not represent interests
adverse to the Debtor or to the estate in the matters upon which it
is to be engaged.
The firm can be reached through:
Justin M. Luna, Esq.
Latham, Luna, Eden & Beaudine, LLP
111 N. Magnolia Avenue, Suite 1400
P.O. Box 3353 (32802-3353)
Orlando, FL 32801
Telephone: (407) 481-5800
Facsimile: (407) 481-5801
Email: jluna@lathlamluna.com
About G&G Holdings LLC
Rockledge, Fla.-based G&G Holdings, LLC filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 21-03551) on Aug. 3, 2021, listing up to $10
million in assets and up to $1 million in liabilities. Gisela
Pennington, managing member, signed the petition. Justin M. Luna,
Esq., at Latham, Luna, Eden & Beaudine, LLP, represents the Debtor
as legal counsel.
GENESIS INVESTMENT: Castle Seeks Consistency on Arrearage Treatment
-------------------------------------------------------------------
Castle Realty II LLC objects to the Disclosure Statement and to
Confirmation of Plan of Reorganization of Genesis Investment, LLC.
Castle Realty, the holder of a mortgage secured by property owned
by the Debtor, claims that the Debtor's Third Amended Disclosure
Statement, filed June 22, 2021, states on page 10 of 14 and 11 of
14 that the Debtor will cure any defaults on the Effective Date of
the Plan. Specifically, on page 10 of 14, the Disclosure Statement
contains the following: "The maturity of the Castle Realty II LLC
note and mortgage shall be reinstated as such maturity existed
before any default. All terms of the note and mortgage shall be
reinstated as if any default has not occurred."
Castle Realty filed a proof of claim, asserting that the Debtor is
in arrears in paying Castle Realty's Mortgage by $3,958.80, which
the Debtor has acknowledged.
The Debtor also filed a Plan of Reorganization on June 22, 2021,
which also provides, on page 5 of 18 (using the pagination on the
Court's imprint at the bottom of the pages acknowledging filing),
that the Debtor will cure all defaults to Castle upon the Mortgage,
"in cash upon the Effective Date or no later than six (6) months
after confirmation of the Plan", but provides on page 6 of 18 that
the arrearage owed to Castle is "to be paid immediately from
Debtor's checking account ... " Castle requests that the Debtor
resolve this inconsistency and clarify that it will pay the arrears
on the Effective date, as a condition of confirmation of the Plan.
Castle Realty II LLC requests that the Plan not be confirmed unless
it is revised to clarify and provide that defaults exist under the
Mortgage, as to which payments totaling $3,958.80 must be made to
Castle Realty II LLC to cure them, shall be cured by payment to
Castle Realty II LLC in that amount upon the Effective Date of the
Plan, together with such other and further relief as the Court
deems just and proper.
A full-text copy of Castle Realty's objection dated August 16,
2021, is available at https://bit.ly/3AYcoGP from PacerMonitor.com
at no charge.
Attorneys for Castle Realty:
ZDARSKY, SAWICKI & AGOSTINELLI LLP
Mark J. Schlant
1600 Main Place Tower
350 Main Street
Buffalo, New York 14202
Tel: (716) 855-3200
About Genesis Investment
Genesis Investment, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 18-11907) on Sept. 25,
2018. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $1 million. Judge
Michael J. Kaplan presides oversees the case. RJ Friedman
Attorneys represents the Debtor as bankruptcy attorney.
GIRARDI & KEESE: Erika Prepares Defense for $25 Million Lawsuit
---------------------------------------------------------------
Ryan Naumann of Radar Online reports that 'Real Housewives Of
Beverly Hills' Star Erika Jayne is preparing defense to $25 million
lawsuit demanding she pay back loans from husband Thomas Girardi.
Erika Jayne is working overtime to fight off a lawyer demanding she
repays loans from her ex-Thomas Girardi.
According to court documents obtained by Radar, Jayne's attorney
asked for an extension on responding to the $25 million lawsuit
filed against the Bravo star and her company EJ Global.
Evan Borges, the attorney representing the reality star, informed
the court he needed 14 additional days to work with Jayne on her
defense.
As we first reported, Jayne's husband was forced into Chapter 7
bankruptcy earlier this 2021. His former clients accuse him of
diverting money they were awarded in settlements to help fund his
lavish lifestyle with Jayne.
In one federal suit, a group of orphans who lost their parents in a
plane crash claim Girardi failed to pay them $2 million owed. Their
lawyer added Jayne as a defendant claiming she helped her husband
embezzle the money.
Last July 2021, the trustee presiding over the bankruptcy sued
Jayne. He accused her of receiving tens of millions from the
once-respected lawyer.
In court, Girardi is accused of transferring the money to Jayne to
hide it from creditors. Along with money, the trustee says the
RHOBH star has luxury items including expensive jewelry in her
possession.
Thus far, she has refused to return a dime claiming it was all
gifts from her husband.
Jayne has not responded to the federal lawsuit brought by the
orphans and has dragged her feet on turning over financial
information in the bankruptcy.
On Real Housewives of Beverly Hills, Jayne denies knowing anything
about her husband's finances or legal troubles. His creditors feel
otherwise.
As Girardi started facing legal issues, Jayne rushed to court to
file for divorce after 21 years of marriage. She is demanding
spousal support but has yet to be paid out due to the pending
bankruptcy.
One creditor called the divorce a "sham" claiming it was another
tactic to hide assets. The former lawyer is currently under a
court-ordered conservatorship. His brother Robert said doctors
diagnosed Giardi with dementia.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee.
The Chapter 7 trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
GLENOIT LLC: Will Liquidate Under Chapter 7 Bankruptcy
------------------------------------------------------
Home Textiles Today reports that two legacy supplier operations
appear to have reached the end of the line.
Glenoit LLC is seeking to liquidate its Glenoit and Excell
businesses through a Chapter 7 bankruptcy proceeding. Both were
acquired by Glenoit.
According to the Aug. 11, 2021 filing in the Delaware bankruptcy
court, the business has fewer than 50 creditors. The filing also
states that there will be no funds available to unsecured creditors
after the payment of administrative fees.
The company's creditor matrix is due to be submitted by the end of
today, August 17, 2021, with a statement of its financial affairs
due by Aug. 26, 2021.
Ex-Cell Home Fashions Inc was acquired by Glenoit LLC in 1999 as
part of private equity firm Patriarch Partners' holdings. The firm
added Croscill Home Fashions to the portfolio in 2008. The three
supplier operations have shared a joint showroom and office space
in New York. The Croscill business is not included in the Chapter 7
filing.
The Glenoit operation has been among the businesses at issue in a
long-running dispute between Patriarch founder Lynn Tilton and the
Zohar funds investment group, which Tilton also founded.
About Glenoit LLC
New York-based Glenoit, LLC and Ex-cell Home Fashions sought
Chapter 7 protection (Bankr. D. Del. Lead Case No. 21- 11137 and
21-11138) on August 11, 2021. The cases are handled by Honorable
Judge Mary F. Walrath. William E. Chipman, Jr., of Chipman Brown
Cicero & Cole, LLP, is the Debtors' counsel.
GREENSILL CAPITAL (UK): Files Chapter 15 to Stop U.S. Suits
-----------------------------------------------------------
Greensill Capital (UK) Limited filed a Chapter 15 bankruptcy
petition in New York (Bankr. S.D.N.Y. Case No. 21-11473) on Aug.
18, 2021, to seek U.S. recognition of its insolvency proceedings in
the United Kingdom.
GCUK was the main trading entity for the Greensill group, a global
financial services firm consisting of Greensill Capital Pty Limited
(Greensill Pty) and its various subsidiaries (the Group). GCUK was
principally in the business of arranging supply chain and other
working capital financing solutions for its customers by acquiring
receivables, with related rights, and onselling such assets to
investors either directly or in the form of receivables-backed
notes issued by bankruptcy remote special purpose vehicles. These
transactions were largely automated through the use of bespoke
technology platforms developed by GCUK, either by itself or in
partnership with third parties, that enabled high daily transaction
volume and the completion of transactions within periods as brief
as 24 hours. GCUK also served as the treasury company for, and
provided financial support, management, and a range of other
services to, the wider Group.
Greensill Capital Management Company (UK) Limited (GCMC), GCUK's
sister company in the UK, provided certain management services for
GCUK and employed the vast majority of the employees involved in
GCUK's business. GCMC is also the principal intermediate holding
company within the Group and the parent company for twelve
subsidiaries incorporated in the UK and elsewhere. The subsidiaries
include special purpose vehicles set up to originate transactions
for GCUK, as well as certain operating companies in the UK and the
US.
The Group began experiencing liquidity pressure in 2020 and,
towards the end of that year and continuing through early 2021,
explored various recapitalization options in order to avoid the
need for formal insolvency processes. These included, among other
things, seeking to implement a restructuring and refinancing plan;
mandating investment banks in relation to an equity raise; seeking
bridge financing and/or equity injections from existing
shareholders; engaging an investment bank in relation to a
structured finance facility backed by insured supply chain
receivables; and exploring a sale of all or part of GCUK's
business. These efforts were unsuccessful due to a number of
factors, including, most significantly, the failure to renew
insurance coverage critical to GCUK's origination of new working
capital finance business, ultimately leading to the Group's
insolvency and the commencement of formal insolvency proceedings
for Group entities in multiple jurisdictions.
In the UK, the directors of GCUK and GCMC applied to the English
Court for the appointment of administrators in early March 2021,
and the Foreign Representatives were appointed as joint
administrators of both companies on March 8, 2021.
The Foreign Representatives seek chapter 15 recognition of the
English Proceeding as to GCUK in order to protect GCUK's assets and
operations in the United States and stay the commencement or
continuation of US litigation against GCUK while the Foreign
Representatives continue to manage the affairs, business, and
property of the company and devote their efforts to determining the
best course for the administration. The Foreign Representatives
have determined that it is not necessary at this juncture to seek
such relief for GCMC.
Litigation in the United States
On March 15, 2021, Bluestone Resources Inc. and certain of its
affiliates and principals filed a complaint in the United States
District Court for the Southern District of New York against GCUK
and two of GCUK's former officers, Alexander David Greensill and
Roland Hartley-Urquhart. The case is pending before Judge Furman
and is captioned Bluestone Resources Inc. et al v. Greensill
Capital (UK) Limited et al, 1:21-cv-02253-JMF (S.D.N.Y. 2021).
The Bluestone Plaintiffs are Obligors in relation to working
capital financing provided by GCUK to various entities in the
Bluestone group, and the complaint alleges claims for breach of
contract, fraud, various breaches of fiduciary duties, and related
issues arising out of GCUK's business relationship with the
Bluestone Plaintiffs. The defendants' answer to the complaint is
currently due on September 13, 2021, but the Foreign
Representatives seek to have the Chapter 15 Petition heard before
that date.
About Greensill Capital
Greensill is an independent financial services firm and principal
investor group based in the United Kingdom and Australia. It
offers structures trade finance, working capital optimization,
specialty financing and contract monetization. Greensill Capital
Pty is the parent company for the Greensill Group.
Greensill began to unravel in March 2021 when its main insurer
stopped providing credit insurance on US$4.1 billion of debt in
portfolios it had created for clients including Swiss bank Credit
Suisse.
Greensill Capital (UK) Limited and Greensill Capital Management
Company (UK) Limited filed for insolvency in Britain on March 8,
2021. Matthew James Byrnes, Philip Campbell-Wilson and Michael
McCann of Grant Thornton were appointed as administrators.
Greensill Capital Pty Ltd. filed insolvency proceedings in
Australia. Matt Byrnes, Phil Campbell-Wilson, and Michael McCann of
Grant Thornton Australia Ltd, were appointed as voluntary
administrators in Australia.
Greensill Capital Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case No. 21-10561) on March 25, 2021. Jill M. Frizzley,
director, signed the petition. In the petition, the Debtor listed
assets of between $10 million and $50 million and liabilities of
between $50 million and $100 million. The case is handled by Judge
Michael E. Wiles.
In the Chapter 11 case, the Debtor tapped Segal & Segal LLP as
bankruptcy counsel, Mayer Brown LLP as special counsel, and GLC
Advisors & Co., LLC and GLCA Securities, LLC as investment bankers
and financial advisors. Matthew Tocks is the chief restructuring
officer of the Debtor. The official committee of unsecured
creditors is represented by Arent Fox LLP.
Greensill Capital (UK) Limited filed a Chapter 15 petition (Bankr.
S.D.N.Y. Case No. 21-11473) to seek U.S. recognition of its UK
proceedings on Aug. 18, 2021. ALLEN & OVERY LLP, led by Laura R.
Hall, is the Debtor's counsel in the Chapter 15 case.
GRUPO AEROMEXICO: Seeks to Employ KPMG Cardenas as Auditor
----------------------------------------------------------
Grupo Aeromexico, S.A.B. de C.V. and its affiliates seek approval
from the U.S. Bankruptcy Court for the Southern District of New
York to hire KPMG Cardenas Dosal, S.C. as auditor.
The firm's services include:
(a) auditing of the financial statements in accordance with
International Standards on Auditing (ISA) issued by the
International Federation of Accountants (IFAC);
(b) auditing of the specific-purpose financial statements to
express an opinion on whether those statements and their exhibits
have been prepared by the management of Grupo Aeromexico, S.A.B. de
C.V. and its subsidiaries pursuant to Articles 32-A and 52 of the
Mexican Federal Tax Code (Código Fiscal Federal) and 57 and 58 of
the Mexican Federal Tax Code Regulations (Reglamento del Código
Fiscal de la Federación) and to the guidelines and instructions
for the integration and characteristics for the presentation of the
financial statements for tax purposes;
(c) in connection with planning and performing the firm's
audit of the consolidated financial statements, conducting an
examination and evaluation of Grupo Aeromexico's internal control,
as necessary, to determine the nature, extent, and timing of KPMG's
audit procedures for the purpose of expressing an opinion on the
consolidated financial statements but not for the purpose of
expressing an opinion on the effectiveness of Grupo Aeromexico's
internal control;
(d) in connection with the planning and performance of the
firm's audit of the specific-purpose financial statements,
considering and evaluating Grupo Aeromexico's internal control over
financial reporting to the extent necessary to determine the
nature, scope, and timing of KPMG's audit procedures for the
purpose of expressing an opinion on the specific-purpose financial
statements, but not for the purpose of expressing an opinion on the
effectiveness of Grupo Aeromexico's internal control;
(e) in the event that, at some future date, Grupo Aeromexico
intends to publish, or reproduce the consolidated financial
statements and KPMG's opinion, including incorporation by reference
in an application for registration with any regulatory agency (or
otherwise refer to the firm), in a document containing other
information, at such date evaluating the advisability of giving the
firm's consent for the required effects, for which Grupo Aeromexico
and its subsidiaries agree to: (i) provide the firm with a draft of
the document for its perusal and (ii) obtain the firm written
consent prior to printing and distributing it;
(f) issuing as a result of the firm's audit of the
consolidated financial statements of Grupo Aeromexico and its
subsidiaries as of December 31, 2020, and 2019, the following
reports: (i) an opinion on the financial statements, in Spanish and
English, prepared in accordance with IFRS, and ii. if applicable,
letter of recommendations to management (in Spanish);
(g) as a result of the firm's examination of the specific
purpose financial statements of Grupo Aeromexico and its
subsidiaries as of December 31, 2020, delivering to Grupo
Aeromexico, in SIPRED's electronic files, for its submission to the
General Administration of Federal Tax Auditing (Administracion
General de Auditoria Fiscal Federal) (AGAFF), the following
information:
i. Independent auditors' report, which shall include the
firm's opinion on the specific-purpose financial statements as of
and for the year ended on December 31, 2020. The firm's report will
describe the purpose for which the specific-purpose financial
statements have been prepared and indicate that they may not,
therefore, be useful for other purposes.
ii. Report on the Review of the Tax Situation of the Taxpayer
(the Tax Report), in which the firm must include, under oath, the
information required by the Federal Tax Code Regulations
(Reglamento del Codigo Fiscal de la Federacion).
iii. Records prepared by Grupo Aeromexico, which include the
specific purpose financial statements, the notes thereto and the
schedules established by the tax authorities, reviewed by the firm.
The firm's hourly rates are as follows:
Partners/Managing Directors $212.00 per hour
Senior Managers/Directors $104.80 - $78.20 per hour
Managers $48.20 per hour
Senior Associates $42.00 - $30.40 per hour
Associates $24.20 - $15.40 per hour
Mario Fernandez Davalos, a partner at KPMG, 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:
Mario Fernández Davalos
KPMG Cardenas Dosal, S.C.
Blvd Manuel Avila Camacho No 1
Miguel Hidalgo Mexico City, DF 11650, Mexico
About Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. -- https://www.aeromexico.com/ --
is a holding company whose subsidiaries are engaged in commercial
aviation in Mexico and the promotion of passenger loyalty
programs.
Aeromexico, Mexico's global airline, has its main hub at Terminal 2
at the Mexico City International Airport. Its destinations network
features the United States, Canada, Central America, South America,
Asia and Europe.
Grupo Aeromexico and three of its subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30,
2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker,
the Debtors reported consolidated assets and liabilities of $1
billion to $10 billion.
The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy
counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co
US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial
advisor and investment banker. White & Case LLP, Cervantes Sainz
S.C. and De la Vega & Martinez Rojas, S.C. serve as the Debtors'
special counsel. Epiq Corporate Restructuring, LLC is the claims
and administrative agent.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors on July 13, 2020. The committee is represented
by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP.
GULFSLOPE ENERGY: Incurs $364K Net Loss in Third Quarter
--------------------------------------------------------
Gulfslope Energy, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $364,313 on zero revenues for the three months ended June 30,
2021, compared to a net loss of $2.71 million on zero revenues for
the three months ended June 30, 2020.
For the nine months ended June 30, 2021, the Company reported a net
loss of $1.72 million on zero revenues compared to a net loss of
$3.49 million on zero revenues for the same period during the prior
year.
As of June 30, 2021, the Company had $14.49 million in total
assets, $13.96 million in total liabilities, and $530,557 in total
stockholders' equity.
The Company has incurred accumulated losses as of June 30, 2021 of
$59.7 million, has negative working capital of $12.0 million and
for the nine months ended June 30, 2021 generated losses of $1.7
million.
GulfSlope said, "Further losses are anticipated in developing our
business. As a result, there exists substantial doubt about our
ability to continue as a going concern. As of June 30, 2021, the
Company had $1.8 million of unrestricted cash on hand. The Company
estimates that it will need to raise a minimum of $10.0 million to
meet its obligations and planned expenditures. The $10.0 million
is comprised primarily of capital project expenditures as well as
general and administrative expenses. It does not include any
amounts due under outstanding debt obligations, which amounted to
$11.9 million of current principal and accrued interest as of June
30, 2021. The Company plans to finance operations and planned
expenditures through the issuance of equity securities, debt
financings and farm-out agreements, asset sales or mergers. The
Company also plans to extend the agreements associated with all
loans, the accrued interest payable on these loans, as well as the
Company's accrued liabilities. There are no assurances that
financing will be available with acceptable terms, if at all, or
that obligations can be extended. If the Company is not successful
in obtaining financing or extending obligations, operations would
need to be curtailed or ceased, or the Company would need to sell
assets or consider alternative plans up to and including
restructuring. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1341726/000158069521000228/gspe-10q_063021.htm
About GulfSlope
Headquartered in Houston, Texas, GulfSlope Energy, Inc. --
http://www.gulfslope.com-- is an independent crude oil and natural
gas exploration and production company whose interests are
concentrated in the United States Gulf of Mexico federal waters.
GulfSlope Energy commenced commercial operations in March 2013.
GulfSlope Energy was originally organized as a Utah corporation in
2004 and became a Delaware corporation in 2012.
Gulfslope reported a net loss of $2.42 million for the year ended
Sept. 30, 2020, compared to a net loss of $13.72 million for the
year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had
$16.07 million in total assets, $13.97 million in total
liabilities, and $2.10 million in total stockholders' equity.
Pannell Kerr Forster of Texas, P.C., in Houston, Texas, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated Dec. 29, 2020, citing that the
Company has accumulated losses, and further losses are anticipated
in developing the Company's business, which raise substantial doubt
about its ability to continue as a going concern.
HERTZ CORP: Board Okays Exec Bonuses Weeks After Bankruptcy Exit
----------------------------------------------------------------
Louis Llovio of Tampa Bay Journal reports that nearly 45 days after
The Hertz Corp. emerged from bankruptcy, the company's board
approved more than $3 million in retention bonuses for four senior
executives.
The bonuses, approved by the board Aug. 16, 2021, are being paid
after the company spent a year in bankruptcy, a process that saw
almost $5 billion in debt wiped away, and after cutting 14,400 jobs
-- 1,046 jobs in Florida -- in 2020.
According to a filing with the U.S. Securities & Exchange
Commission Aug. 17, 2021 the bonuses will be split among four
executives, with almost half, $1.4 million, going to Hertz
President and CEO Paul Stone. The bonuses, according to a copy of
the agreement included in the SEC filing, guarantee senior
executives will remain with Hertz through Jan. 1, 2022.
The money will be issued within three days after the agreement is
signed and includes a clawback agreement should the executive leave
voluntarily or be fired for cause before Jan. 1, 2022.
In addition to Stone, the bonuses will be paid to:
* Kenny Cheung, executive vice president and chief financial
officer, who'll get $660,000
* M. David Galainena, executive vice president, general counsel
and secretary, who'll get $605,000
* Opal Perry, executive vice president and chief information
officer, who'll get $500,000
Stone was named CEO of Hertz just days before the company filed for
Chapter 11 bankruptcy May 22, 2020. He replaced then president and
CEO Kathryn Marinello on May 18. At the time, Stone was vice
president and chief retail operations officer at Hertz.
Hertz, in court papers, blamed the sudden shutdown of tourism and
global travel caused by the COVID-19 pandemic as what forced it to
seek protection. This despite no other major rental car chain,
which faced identical headwinds, filing for bankruptcy.
According to its initial Chapter 11 filing, Hertz had $25.8 billion
in assets and $24.3 billion in debt on March 31.
Court records show that from March 21 through the day the company
filed for bankruptcy, May 22, 2020, daily reservations fell 90% as
sales at its retail lots nearly vanished and millions debt payments
came due.
To help offset the downturn, the company consolidated leases at
off-airport sites in the U.S. and Europe, cut back on the purchase
of new vehicles and cut employees.
According to court records, the "workforce cost management" began
in March 2020 with furloughs. The hope was that they'd be
temporary, but by April it had become clear to Hertz that the
shutdown "would not be a transient interruption in its business."
By May 22, 2021, the day the company filed for bankruptcy, 21,000
employees had been affected by the moves with about 14,400
permanently losing their jobs.
Hertz exited bankruptcy Wednesday June 30 with $5.9 billion in
capital, its debt load reduced, a new ticker symbol and a new board
of directors that included the former president and CEO of the Ford
Motor Co.
It left the protection of the bankruptcy court with about $5
billion in debt gone, including all of its European debt, and with
a $2.8 billion credit line and $7 billion in financing for its
vehicle inventory.
Investment firms Knighthead Capital Management, Certares
Opportunities and Apollo Capital Management are among those
providing capital to fund the exit plan.
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com/--
operate a worldwide vehicle rental business under the Hertz,
Dollar, and Thrifty brands, with car rental locations in North
America, Europe, Latin America, Africa, Asia, Australia, the
Caribbean, the Middle East, and New Zealand. They also operate a
vehicle leasing and fleet management solutions business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases.
The Debtors have tapped White & Case LLP as their bankruptcy
counsel, Richards, Layton & Finger, P.A., as local counsel, Moelis
& Co. as investment banker, and FTI Consulting as financial
advisor. The Debtors also retained the services of Boston
Consulting Group to assist the Debtors in the development of their
business plan. Prime Clerk LLC is the claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a Committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
Committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC, as financial advisor. Ernst & Young
LLP provides audit and tax services to the Committee.
HH ACQUISITION: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee for Region 14 on Aug. 18 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of HH Acquisition CS, LLC.
About HH Acquisition CS
HH Acquisition CS, LLC, a company based in Colorado Springs, Colo.,
sought protection under Chapter 11 of the 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 $10
million to $50 million in both assets and liabilities.
The Debtor tapped Cross Law Firm, P.L.C. to handle its Chapter 11
case and Hostmark Hospitality Group, LLC to manage its Hyatt House
hotel in Colorado Springs, Colo.
HIGH RIDGE BRANDS: Moves to Westport After Bought Out of Bankruptcy
-------------------------------------------------------------------
Alexander Soule of The Hour reports the Connecticut seller of Zest
soap, Sure deodorant and a number of other brands found in bathroom
cabinets has relocated its headquarters to Westport from Stamford,
a year after it was acquired out of bankruptcy by a private equity
investor.
High Ridge Brands sells several well-known personal care products
including Zest and Coast soaps, Alberto VO5 and Pert shampoos, and
Brut and Sure deodorants. The company acquired the latter three
products only this past June from Helen of Troy, along with other
products in a $45 million transaction.
About High Ridge Brands
High Ridge Brands -- http://www.highridgebrands.com/-- is one of
the largest independent branded personal care companies in the
United States by unit volume, with a mission to craft extraordinary
experiences for savvy consumers. Today, High Ridge Brands has a
portfolio of over thirteen trusted brands, serving primarily North
American skin cleansing, hair care and oral care markets, including
Zest(R), Alberto VO5(R), REACH(R), Firefly(R), Dr. Fresh(R),
Coast(R), White Rain(R), LA Looks(R), Zero Frizz(R), Rave(R), Salon
Grafix(R), Binaca(R) and Thicker Fuller Hair(R). In addition, the
Company has relationships with leading entertainment properties
through which it has a portfolio of licenses such as Star Wars,
Batman, Spiderman, Hello Kitty, and Transformers. The Company
operates an asset-light model, outsourcing its manufacturing needs,
and has approximately 140 employees.
The Debtors sought Chapter 11 protection (Bankr. D. Del. Case No.
19-12689) on Dec. 18, 2019. The Debtor affiliates include High
Ridge Brands Holdings, Inc., HRB Midco, Inc., HRB Buyer, Inc., High
Ridge Brands Co., Golden Sun, Inc., Continental Fragrances, Ltd.,
Freshcorp, Inc., Children Oral Care, LLC, and Dr. Fresh, LLC.
Judge Brendan Linehan Shannon is assigned to the cases.
Young Conaway Stargatt & Taylor, LLP, is the Debtors' counsel.
Debevoise & Plimpton LLP is corporate, finance and litigation
counsel to the Debtors. PJT Partners LP is the Debtors' investment
banker.
IDEANOMICS INC: Incurs $10 Million Net Loss in Second Quarter
-------------------------------------------------------------
Ideanomics, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $9.99
million on $33.22 million of total revenue for the three months
ended June 30, 2021, compared to a net loss of $26.42 million on
$4.69 million of total revenue for the three months ended June 30,
2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $10.73 million on $65.93 million of total revenue compared
to a net loss of $39.04 million on $5.07 million of total revenue
for the same period during the prior year.
As of June 30, 2021, the Company had $698.05 million in total
assets, $145.39 million in total liabilities, $1.26 million in
convertible redeemable preferred stock, $7.72 million in redeemable
non-controlling interest, and $543.68 million in total equity.
As of June 30, 2021, the Company had cash of $395.6 million.
Approximately $39.3 million was held in accounts outside of the
United States, primarily in Hong Kong and the PRC.
Cash used in operating activities was $(10.4) million for the six
months ended June 30, 2021 as compared to cash used in operating
activities of $(10.4) million in the same period in 2020. This was
primarily due to: (1) a reduction in net loss to $(10.7) million in
the current period as compared to a net loss of $(39.0) million in
the same period of 2020, (2) total non-cash adjustments increase
(decrease) to net loss was $(2.8) million and $28.5 million for the
six months ended June 30, 2021 and 2020, respectively; and (3)
total changes in operating assets and liabilities resulted in an
increase of $3.2 million and of $0.2 million in cash used in
operating activities for the six months ended June 30, 2021 and
2020, respectively.
Cash used in investing activities was $(142.8) million, primarily
due to expenditures incurred for the acquisitions of Timios, WAVE,
Solectrac and US Hybrid, the investments in Energica and FNL and
the acquisition of the convertible note with Silk EV.
The Company received $383.0 million from financing activities in
the current quarter versus $45.7 million in the same period in the
prior year. The issuance of convertible notes generated $220.0
million in the current period as compared to $2.0 million in the
same period of 2020. The exercise of warrants and issuance of
common stock generated $163.0 million as compared to $39.1 million
in the same period of 2020. In the period ended June 30, 2020 the
Company received $7.1 million from a non-controlling shareholders
contribution and made a repayment of $3.0 million to a related
party.
The Company expects to continue to raise both equity and debt
finance to support the Company's investment plans and operations.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/837852/000162828021017110/idex-20210630.htm
About Ideanomics
Ideanomics is a global company focused on the convergence of
financial services and industries experiencing technological
disruption. Its Mobile Energy Global (MEG) division is a service
provider which facilitates the adoption of electric vehicles by
commercial fleet operators through offering vehicle procurement,
finance and leasing, and energy management solutions under its
innovative sales to financing to charging (S2F2C) business model.
Ideanomics Capital is focused on disruptive fintech solutions and
services across the financial services industry. Together, MEG and
Ideanomics Capital provide their global customers and partners
with
leading technologies and services designed to improve transparency,
efficiency, and accountability, and its shareholders with the
opportunity to participate in high-potential, growth industries.
The Company is headquartered in New York, NY, with operations in
the U.S., China, Ukraine, and Malaysia.
Ideanomics reported a net loss of $106.04 million for the year
ended Dec. 31, 2020, compared to a net loss of $96.83 million for
the year ended Dec. 31, 2019. As of March 31, 2021, the Company
had $569.90 million in total assets, $140.37 million in total
liabilities, $1.26 million in convertible preferred stock, $7.6
million in redeemable non-controlling interest, and $420.67 million
in total equity.
JANA LLC: Case Summary & 6 Unsecured Creditors
----------------------------------------------
Debtor: Jana, LLC
19528 Ventura Blvd., Suite 661
Tarzana, CA 91356
Business Description: Jana, LLC is the fee simple owner of a real
property located in Bell Canyon, California
having an appraised value of $510,000.
Chapter 11 Petition Date: August 19, 2021
Court: United States Bankruptcy Court
Central District of California
Case No.: 21-11407
Judge: Hon. Victoria S. Kaufman
Debtor's Counsel: Matthew Abbasi, Esq.
ABBASI LAW CORPORATION
6320 Canoga Ave.
Suite 220
Woodland Hills, CA 91367
Tel: (310) 358-9341
Fax: (888) 709-5448
E-mail: matthew@malawgroup.com
Total Assets: $560,050
Total Liabilities: $1,602,180
The petition was signed by Shahram Shan Hashemizadeh as managing
member.
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/RDX26OQ/JANA_LLC__cacbke-21-11407__0001.0.pdf?mcid=tGE4TAMA
KANSAS CITY UNITED: Kingswood Senior Living Files Chapter 11
------------------------------------------------------------
Kansas City United Methodist Retirement Home, Inc., doing business
as Kingswood Senior Living Community, filed a bare-bones Chapter 11
bankruptcy petition (Bankr. W.D. Mo. Case No. 21-41049) on Aug. 18,
2021.
The Debtor estimated assets of $10 million to $50 million and debt
of $50 million to $100 million as of the bankruptcy filing.
UMB Bank N.A. has filed a notice of appearance in the case.
Established in 1982, Kingswood offers retirement living in Kansas
City, Missouri. Kingswood is a not-for-profit Life Plan Community
(also known as a Continuing Care Retirement Community) providing a
full continuum of care on-site, ranging from Independent Living,
Assisted Living, Memory Support, Short-term Rehabilitation to
Long-term Care. On the Web:
https://www.kingswoodretirementliving.com/
McDowell, Rice, Smith & Buchanan, PC, led by Jonathan A. Margolies,
is serving as counsel to the Debtor.
LEWISBERRY PARTNERS: May Use Cash Collateral Thru September 15
--------------------------------------------------------------
Judge Eric L. Frank of the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania authorized Lewisberry Partners, LLC to use
cash collateral pursuant to the approved budget, with a 10%
variance allowed to the Debtor over and above those amounts, until
September 15, 2021.
Prior to the Petition Date, the Debtor entered into a Secured Note
and Security Agreement pursuant to which Loan Funder LLC, Series
7693 was granted a first priority mortgage on the properties of the
Debtor. The Debtor granted an assignment of rents to Loan Funder
as security for the obligations under the Note. At some point in
April 2021, after the Petition Date, the Lewisberry Mortgage was
assigned by Loan Funder to U.S. Bank National Association, as
Trustee of the HOF Grantor Trust I (Lender). Fay Servicing LLC, is
the servicer to U.S. Bank, as Trustee of the HOF Grantor Trust I.
The Court ruled that, as adequate protection for use of the
Lender's Cash Collateral from the Petition Date forward, the Lender
is granted Replacement Liens to the same extent and priority
existing on the Petition Date, including with respect to the net
proceeds of sale of the three properties which have been sold by
the Debtor pursuant to a Court order dated February 19, 2021.
Replacement security interests, to the extent the cash collateral
of the Lender is used by the Debtors, shall be to the extent of,
and with the same priority in the Debtor's post-petition collateral
and proceeds thereof, that the Lender held in the Debtor's
pre-petition collateral.
A copy of the 7th Interim Order is available for free at
https://bit.ly/3CMn7pz from PacerMonitor.com.
The Court will convene a hearing on the Debtor's use of cash
collateral on September 15, 2021 at 11 a.m. Objections must be
filed and served on or before September 8.
About Lewisberry Partners, LLC
Lewisberry Partners, LLC is primarily engaged in renting and
leasing real estate properties. It sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 21-10327)
on February 9, 2021. In the petition signed by Richard J. Puleo,
managing member, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Eric L. Frank oversees the case.
Edmond M. George, Esq., at Obermayer Rebmann Maxwell & Hippel LLP
is the Debtor's counsel.
LIMETREE BAY: Committee Taps Conway MacKenzie as Financial Advisor
------------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Limetree Bay Services, LLC and its affiliates
seeks approval from the U.S. Bankruptcy Court for the Southern
District of Texas to hire Conway MacKenzie, LLC as its financial
advisor.
The firm's services include:
(a) assisting the committee in the analysis, review and
monitoring of the restructuring process, including, but not limited
to, an assessment of potential recoveries for general unsecured
creditors;
(b) assisting in the review of financial information prepared
by the Debtors, including, but not limited to, cash flow
projections and budgets, business plans, cash receipts and
disbursement analysis, asset and liability analysis, and the
economic analysis of proposed transactions for which court approval
is sought;
(c) assisting in the review of the debtor-in-possession
facility, including, but not limited to, evaluating liquidity needs
and DIP sizing;
(d) assisting in the review of any tax issues associated with,
but not limited to, preservation of net operating losses, refunds
due to the Debtors, plans of reorganization, and asset sales;
(e) assisting in the review of the Debtors' analysis of
business assets, the potential disposition or liquidation of those
assets, and the review and assessment of any sales process;
(f) attending meetings and assisting the committee in
discussions with the Debtors, potential investors, banks, secured
lenders, other official committees organized in the Debtors'
Chapter 11 proceedings, the U.S. trustee and other parties in
interest;
(g) assisting in the review of financial-related disclosures
required by the court, including schedules of assets and
liabilities, statement of financial affairs and monthly operating
reports;
(h) assisting in the review of various executory contracts;
(i) assisting in the review and evaluation of the Debtors'
employee retention and compensation plans;
(j) assisting in the evaluation, analysis and forensic
investigation of avoidance actions, including fraudulent
conveyances and preferential transfers and certain transactions
between the Debtors and affiliated entities;
(k) assisting in the prosecution of committee responses or
objections to the Debtors' motions;
(l) assisting and supporting the evaluation of restructuring,
sale and liquidation alternatives; and
(m) rendering other general business consulting services.
The firm's hourly rates are as follows:
Senior Managing Directors $955 – $1,350 per hour
Managing Directors $825 – $1,095 per hour
Directors $640 – $790 per hour
Senior Associates $490 – $625 per hour
Analysts $235 – $490 per hour
John Young, Jr., senior managing director at Conway MacKenzie,
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:
John T. Young, Jr.
Conway MacKenzie, LLC
909 Fannin Street, Suite 4000
Houston, TX 77010
Tel: 713.650.0500
Email: john.young@conwaymackenzie.com
About Limetree Bay
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. Texas Case No. 21-32351).
Limetree Bay Terminals, LLC did not file for bankruptcy.
In the petitions signed by Mark Shapiro, chief restructuring
officer, Limetree Bay Services disclosed up to $10 million in
assets and up to $50,000 in liabilities. Limetree Bay Refining,
LLC, estimated up to $10 billion in assets and up to $1 billion in
liabilities.
The Debtors tapped Baker Hostetler as legal counsel and B. Riley
Financial Inc. as restructuring advisor.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' cases on July 26, 2021. The
committee is represented by Pachulski Stang Ziehl & Jones, LLP.
405 Sentinel, LLC serves as administrative and collateral agent for
the DIP lenders.
LORENZ CORPORATION: Unsec. Creditors to Get 5% of Net Excess Funds
------------------------------------------------------------------
The Lorenz Corporation submitted a Second Amended Subchapter V Plan
of Reorganization dated August 17, 2021.
In February, 2020, The Lorenz Corporation was doing well for the
year with sales to date up by 4.1% over the prior year. However,
beginning in March, 2020, due to the COVID-19 pandemic, The Lorenz
Corporation started to see a downfall in revenue. As of the end of
July, 2020, sales were down 62% year over year and 27% to a revised
budget made in late March 2020 around early assessments of the
pandemic's impact. The bankruptcy filing was made to stabilize the
company's financial situation.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations. The Plan provides for a
distribution to creditors in accordance with the terms of the Plan
from the Debtor over the course of the Term. Classes 1 and 2, which
consist of Allowed Administrative Expense Claims and Allowed
Priority Tax Claims, shall be paid in full or provided with other
treatment.
Class 3 consists of the Allowed Secured Claim of Peoples Bank.
Pursuant to the Valuation Decision, the total present value of the
Debtor's property and assets securing the Bank Allowed Secured
Claim, as of the Plan's Effective Date, is greater than the unpaid
balance of the Bank Allowed Secured Claim. The Bank Allowed Secured
Claim shall be paid as follows:
* On the Confirmation Date, the Debtor (or Reorganized Debtor)
shall pay $325,000.00 to Peoples Bank, in Cash, from funds on
deposit in the Debtor's (or Reorganized Debtor's) debtor-in
possession accounts;
* Commencing on September 1, 2021, and continuing on the first
day of each month thereafter for a total of thirty-six months
(through and including August 1, 2024), the Debtor (or Reorganized
Debtor) shall pay $39,590.00 to Peoples Bank, in Cash;
* Commencing on September 1, 2024, and continuing on the first
day of each month thereafter through and including August 1, 2025,
the Debtor (or Reorganized Debtor) shall pay $58,292.00 to Peoples
Bank, in Cash; and
* On August 1, 2028, the Debtor (or Reorganized Debtor) shall
pay to Peoples Bank, in Cash, the entire unpaid balance of the Bank
Allowed Secured Claim.
Class 4 consists of General Unsecured Claims. Allowed Class 4
Claims shall be paid the pro rata Net Excess Funds. Debtor
estimates a yearly distribution of approximately 5% beginning on
the First Class 4 Distribution Date and continually on each
Subsequent Class 4 Distribution Date until the Last Class 4
Distribution Date. Class 4 is impaired under the Plan and,
accordingly, is entitled to vote to accept or reject the Plan.
Class 5 consists of certain claims of the principal of the Debtor,
Reiff Lorenz. Class 5 shall not participate in a distribution under
the Plan.
Class 6 consists of the ownership interest of Reiff Lorenz, as
Trustee. Class 6 shall retain its ownership interest in the Debtor.
The salary of the Class 6 equity owner shall be capped at
$180,000.00 per year for the Term of the Plan.
The Debtor anticipates the continued operations of the business to
fund the Plan. The ongoing operation of the business has been
scaled to meet the size and scope of the current and forecasted
music market. Early indications are that the pandemic has
accelerated the market's demand for downloadable sheet music.
Lorenz has the intellectual property to be competitive in this
market and is making an aggressive shift in resources to meet it.
Industry indicators point to the digital market capping at less
than 30% of sales, so a shift to this area exclusively will not
allow Lorenz to meet the Plan requirement.
The financial projections for September, 2020 to August, 2021
reflect disposable income of $109,212.00, which is sufficient to
fund the Plan during the first year. Additionally, the financial
projections for the Term, the 7 year period from the Effective
Date, show its ability to fund the Plan over the Term. With the
assumption that the business operations of the Debtor will remain
consistent; the Debtor will be able to fund the Plan for the Term.
A full-text copy of the Second Amended Subchapter V Plan dated
August 17, 2021, is available at https://bit.ly/3AT0ptZ from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Walter Reynolds, Esq.
Tami Hart Kirby, Esq.
PORTER WRIGHT MORRIS & ARTHUR LLP
One South Main Street, Suite 1600
Dayton, OH 45402
Telephone: (937) 449-6721
Facsimile: (937) 449-6820
E-mail: tkirby@porterwright.com
E-mail: wreynolds@porterwight.com
About The Lorenz Corporation
The Lorenz Corporation -- https://www.lorenz.com/ -- previously
known as Lorenz Publishing Company, is a music publisher located in
Dayton, Ohio. It is best known for its publication of church music
for smaller congregations served by amateur musicians. Founded by
the Lorenz family in 1890, the Company publishes choral, keyboard,
handbell, and instrumental music in support of many worship
traditions and choral music and general music teaching resources.
The Lorenz Corporation, based in Dayton, OH, filed a Chapter 11
petition (Bankr. S.D. Ohio Case No. 20-31952) on Aug. 19, 2020.
In the petition signed by CEO Reiff Lorenz, the Debtor disclosed
$1,397,950 in assets and $7,078,205 in liabilities.
PORTER WRIGHT MORRIS & ARTHUR LLP serves as bankruptcy counsel to
the Debtor.
LTC HOLDINGS: U.S. Waiver Dooms Insurer's Right to Tax Refund
-------------------------------------------------------------
Daniel Gill of Bloomberg Law reports that the U.S. government's
settlement with the Chapter 7 trustee for a bankrupt construction
company effectively blocked an insurer's attempt to tap into the
company's tax refund to reclaim what it's owed, the Third Circuit
ruled.
The U.S. was entitled under bankruptcy law to keep the $5.5 million
tax refund it owed Lakeshore Toltest Co. to offset the $222 million
that LTC owed the government. However, the settlement waived that
offset in exchange for the U.S. accepting an unsecured claim of
$170 million and the trustee's agreement to release the government
from ongoing litigation.
About LTC Holdings Inc.
LTC Holdings Inc. is a construction engineering company founded in
1994 that provided professional engineering services.
LTC Holdings sought Chapter 7 bankruptcy protection (Bankr. D. Del.
Case No. 14-11111)on May 2, 2014. Prior to the chapter 7 filing,
the Debtors provided general contracting services for large
construction projects, both domestic and international, with a
primary focus on constructing facilities for various branches of
the United States military, with arms of the United States
government acting as the owner/contracting party.
MANITOWOC CO: S&P Alters Outlook to Stable, Affirms 'B' ICR
-----------------------------------------------------------
S&P Global Ratings affirmed all its ratings on U.S.-based crane
manufacturer Manitowoc Co. Inc. (MTW), including the 'B' issuer
credit rating, and revised the outlook to stable from negative.
The stable outlook reflects S&P's expectation that Manitowoc's
sales and manufacturing volumes will increase over the next 12
months, driven by improving demand, which should allow the company
to maintain leverage below 6.5x.
Improving operating performance and higher EBITDA generation will
lower Manitowoc's financial leverage over the next 12 months. S&P
said, "We believe EBITDA growth will be the primary means of
deleveraging, underpinned by our forecast of about $121 million of
S&P Global Ratings-adjusted EBITDA plus any contribution from
completed acquisitions in 2021. We expect Manitowoc's S&P Global
Ratings-adjusted leverage will decline from the high-5x area at
year-end fiscal 2020 to about 5x in 2021 and to below 4x in 2022 as
EBITDA improves, assuming successful acquisition integration. Risks
to our forecast include weaker-than-expected demand in Manitowoc's
energy and industrial end markets, particularly in North America
(which commands more than a third of total segment operating
income), or broader supply chain inefficiencies and further spikes
in raw material inflation over the second half of the year. Still,
we believe infrastructure investment and higher capital spending in
the U.S. should improve customer sentiment and support a growing
backlog of orders over the next 12-18 months. MTW posted 24% sales
growth in the first half ended June 2021 as it lapped its
hardest-hit quarter from the pandemic, driven by improving demand
across all its geographic segments and we expect positive revenue
trends to continue into the second half of fiscal 2021."
Manitowoc will likely deploy cash flow generated from its
operations toward growth-oriented capital expenditures investments
(capex) and M&A activity. With the expectation of a stabilizing
demand environment in 2021 and 2022, MTW's priorities include both
organic and inorganic growth. MTW generated good free operating
cash flow (FOCF) of about $34 million through the first half of
2021 and increased its cash balance. S&P said, "We expect the
company will focus on key capex initiatives such as the expansion
of its European tower crane rental fleet, rent to purchase options
on Tower and Mobile cranes, scaling up of its Chinese tower crane
business, and new product development. We also expect MTW to
continue pursuing opportunistic M&A with a focus on growing the
aftermarket business, which should somewhat dampen cyclicality.
Although the recent acquisitions will use up some of the company's
cash and ABL borrowing capacity, we expect MTW will maintain
adequate liquidity and keep S&P Global Ratings-adjusted debt to
EBITDA below 6.5x."
Manitowoc's operating and financial performance will remain
volatile over the business cycle. S&P said, "We expect that
cyclicality of end-market demand, significant concentration in
energy-related markets that are sensitive to oil price changes, and
a relatively high fixed-cost structure will continue to drive
earnings volatility over the business cycle. As Manitowoc grows its
EBITDA base, sensitivity of its S&P Global Ratings EBITDA margins
will be less pronounced. However, we continue to expect that during
the next downturn, EBITDA could fall 50% or more, increasing
leverage at least two turns, as during 2020."
The stable outlook reflects S&P's expectation that Manitowoc's
sales and manufacturing volumes will improve over the next 12
months, largely driven by acquisitions and improving demand, which
will further increase its cushion of debt leverage compared to its
6.5x downside trigger.
S&P could lower our rating on MTW over the next 12 months if:
-- The company's operating performance is worse than we expect,
causing S&P Global Ratings-adjusted leverage to rise above 6.5x;
-- FOCF generation is consistently negative, eroding the company's
cash position and/or pressuring liquidity; or
-- The company pursues debt-funded acquisitions or shareholder
rewards that materially weaken credit metrics on a sustained
basis.
S&P could raise its rating on MTW if:
-- The company improves its credit metrics and sustains S&P Global
Ratings-adjusted leverage below 3x in favorable market conditions,
which would provide it with sufficient cushion for credit measures
to deteriorate during a cyclical downturn; or
-- The company meaningfully improves its business risk, through
further global diversification into less cyclical end markets and
products.
MAPLE LEAF: Liquidation Proceeds to Fund Plan Payments
------------------------------------------------------
Maple Leaf Cheese Cooperative filed with the U.S. Bankruptcy Court
for the Western District of Wisconsin a Plan of Reorganization
dated August 17, 2021.
The Debtor is a Wisconsin Cooperative which was founded in 1910. As
of the Petition Date, the Debtor was owned by 25 dairy farmer
patrons. The Debtor owns the real property having an address of
N890 Twin Grove Road, Monroe, Wisconsin, which consists of
approximately 35 total acres of land and a dairy production plant
(together, the "Plant").
On October 8, 2020, the Cheesemakers terminated its contract with
the Cooperative. The winddown of the partnership and agreement
between the parties provides that final milk deliveries from the
Debtor's patrons ended on or about December 9, 2020. The Debtor
filed this Chapter 11 case on December 9, 2020. All cheese
production at the Plant ceased on or about December 11, 2020.
The Debtor has secured debt of $1,991,824.90, and general unsecured
debts that total approximately $230,000. The amounts that would be
made available to creditors in a liquidation scenario is unknown;
however, pursuant to this Plan, all assets of the Debtor (which are
encapsulated within the Liquidation Proceeds) are being made
available for the benefit of the Estate as set forth herein. The
Plan provides more to creditors than what they would receive in a
hypothetical Chapter 7 proceeding for the following reasons:
* The Liquidation Proceeds represents all Cash that could be
derived from the liquidation of all property of the Debtor for the
benefit of the Estate.
* The Plan provides for an efficient and orderly liquidation
of the Plant and Equipment at a time when the Estate can no longer
support payments for ongoing maintenance and holding costs
associated with the Plant.
* The Estate is provided an additional benefit through the
agreement with New Glarus for the payment of certain Administrative
Expenses pursuant to the Plan; without such agreement, the funds
would remain cash collateral of New Glarus.
* The Estate shall retain any proceeds derived from the
prosecution of the MLC Claims free and clear of the security
interests of New Glarus as set forth in the Plan; without such
agreement, the MLC Claims would remain subject to the security
interests of New Glarus.
All net liquidated value of the Debtor's assets will be available
for Creditors and Claimholders.
After payment of Administrative Expenses and Allowed Priority
Claims, other Classes of Claims shall be treated as follows:
* Class 1 consists of Allowed Secured Claim of New Glarus. The
New Glarus Claim is allowed in the amount of $1,991,824.90. To the
extent that the proceeds derived from New Glarus' Collateral
exceeds $1,991,824.90, New Glarus shall be entitled to recover
interest (to the extent not already paid by the Debtor during the
Case) and reasonable costs of collection as allowed under the Pre
Petition Loan Documents. The New Glarus Claim shall be fully
satisfied as follows:
-- The Plant and Equipment shall be listed and marketed for
sale by the Debtor at New Glarus' reasonable discretion and
direction for a period of 60 days from the Effective Date (the
"Sale Period"). During the Sale Period, the Debtor will allow New
Glarus reasonable access to the Plant to advance any prospective
sale, which could be for the Plant and Equipment together as a
package, or sold separately, in New Glarus' reasonable discretion.
-- Any and all proceeds derived from the sale of the Plant
and Equipment shall first be paid to New Glarus against the balance
of its Allowed Secured Claim, until paid in full, with any
remaining balance of sale proceeds to be paid to the Estate. The
sale of the Plant and Equipment shall be pursuant to this Plan
without transfer taxes, and free and clear of all liens, claims,
and encumbrances, with the liens to attach to the proceeds of such
sale.
-- In the event that the Sale Period ends without an
executed purchase agreement, the Plant and Equipment shall be
transferred by the Debtor to New Glarus (or its assigns), free and
clear of all liens, claims, and encumbrances, via a quitclaim deed
(Plant) and Bill of Sale (Equipment), with such transfers to occur
no later than 5 days after the expiration of the Sale Period.
* Class 2 consists of Allowed Unsecured Claims. Allowed
Unsecured Claims in Class 2 are impaired and shall receive
payments, on a Pro Rata Basis, of any Liquidation Proceeds until
such Class 2 Claims are paid in full.
* Creditors holding Allowed Class 3 Equity Interests shall
retain all of the rights they had as of the Petition Date. Such
rights are unaffected and unimpaired by this Plan.
Cash necessary to fund payments shall be from the Liquidation
Proceeds and Cash on hand as of the Effective Date.
The Debtor shall manage its financial and business affairs as a
Reorganized Debtor after the Effective Date. The existing patrons
of the Debtor shall continue to be the patrons of the Reorganized
Debtor, in such level and amount as consistent with the terms and
provisions of the Debtor's articles, bylaws, and other corporate
documents.
A full-text copy of the Plan of Reorganization dated August 17,
2021, is available at https://bit.ly/3suvOQo from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Justin M. Mertz, Esq.
Michael Best & Friedrich LLP
790 N. Water Street, Suite 2500
Milwaukee, WI 53202-4108
Telephone: (414) 271-6560
Facsimile: (414) 277-0656
Email: jmmertz@michaelbest.com
About Maple Leaf Cheese Cooperative
Maple Leaf Cheese Cooperative, a dairy product manufacturing
business based in Monroe, Wis., sought Chapter 11 protection
(Bankr. W.D. Wis. Case No. 20-13006) on Dec. 9, 2020. The petition
was signed by Jeremy Mayer, president of the Company.
At the time of filing, the Debtor disclosed $1 million to $10
million in both assets and liabilities.
Judge Catherine J. Furay oversees the case.
The Debtor tapped Michael Best & Friedrich LLP as its bankruptcy
counsel, Peters & Peters, CPA as accountant, and WPower L.L.C. as
consultant.
MAUNESHA RIVER: Seeks Continued Cash Collateral Access Thru Nov 21
------------------------------------------------------------------
Maunesha River Dairy, LLC asks the U.S. Bankruptcy Court for the
Western District of Wisconsin for authority to use cash collateral
through November 21, 2021, and provide adequate protection to BMO
Harris Bank, N.A., Farmers & Merchants Union Bank and Agri-Max
Financial Services, LP.
The Debtor requires the use of cash collateral to pay reasonable
and necessary costs of operating Maunesha's dairy farm, including
paying wages, rent, utilities, farming expenses, including the
continued purchase of replacement heifers, providing BMO, FMUB and
AGRI-MAX adequate protection (BMO and FMUB will receive
interest-only payments based upon the principal balance owed to
each and AGRI-MAX will receive contractual payments), and
professional fees and other administrative costs of the case.
As adequate protection for the Debtor's use of cash collateral,
BMO, FMUB and AGRI-MAX will receive replacement liens in
post-petition collateral in the same character, priority and extent
of each party's pre-petition liens; interest payments based upon
the value of its collateral; and Maunesha will maintain insurance
on all collateral, all as set forth in the Budget.
A copy of the motion is available at https://bit.ly/3yOnSfl from
PacerMonitor.com.
About Maunesha River Dairy, LLC
Maunesha River Dairy, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Wis. Case. No. 21-11157) on May
27, 2021. In the petition signed by Dennis E. Ballweg, the member,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Catherine J. Furay oversees the case.
Jane F. Zimmerman, Esq., at Murphy Desmond S.C. is the Debtor's
counsel.
MOBITV INC: BEAR Cloud Steps Down as Committee Member
-----------------------------------------------------
BEAR Cloud Technologies Inc. resigned from the official committee
of unsecured creditors in the Chapter 11 cases of MobiTV Inc. and
its affiliates effective Aug. 11, according to a notice filed by
the U.S. Trustee for Regions 3 and 9.
The remaining members of the committee as of Aug. 17 are:
1. ATEME, Inc.
Attn: Ray Fitzgerald
750 W. Hampden Ave. Suite 290
Englewood, CO 80110
E-mail: r.fitzgerald@ateme.com
2. Loma Alta Holdings, Inc.
Attn: Mark McGourty
2000 Crow Canyon Place, Suite 250
San Ramon, CA 94583
Phone: (510) 928-4421
E-mail: mmcgourty@kovarus.com
About MobiTV Inc.
Founded in 2000, MobiTV is the first company to bring live and on
demand television to mobile devices and is a leader in
application-based television and video delivery solutions. MobiTV
provides end-to-end internet protocol streaming television services
via a proprietary cloud-based, white-label application.
On March 1, 2021, MobiTV Inc. and MobiTV Service Corporation filed
for Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-10457).
MobiTV Inc. estimated at least $10 million in assets and $50
million to $100 million in liabilities as of the filing.
FTI Consulting, Inc. and FTI Capital Advisors LLC have been
retained as the Debtors' financial advisor and investment banker to
assist in negotiation of strategic options. Pachulski Stang Ziehl &
Jones LLP and Fenwick & West LLP serve as the Debtors' legal
counsel. Stretto is the claims agent, maintaining the page
https://cases.stretto.com/MobiTV.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors on March 15, 2021. The committee
tapped Fox Rothschild, LLP and PricewaterhouseCoopers, LLP as its
legal counsel and financial advisor, respectively.
MUSCLEPHARM CORP: Incurs $2.3 Million Net Loss in Second Quarter
----------------------------------------------------------------
MusclePharm Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.25 million on $14.91 million of net revenue for the three
months ended June 30, 2021, compared to a net loss of $253,000 on
$16.99 million of net revenue for the three months ended June 30,
2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $2.16 million on $28.03 million of net revenue compared to
a net loss of $313,000 on $33.22 million of net revenue for the
same period during the prior year.
As of June 30, 2021, the Company had $10.94 million in total
assets, $37.21 million in total liabilities, and a total
stockholders' deficit of $26.27 million.
Mr. Ryan Drexler, the chairman of the Board of Directors and chief
executive officer, stated, "I'm encouraged despite the headwinds
affecting our industry, we were able to finish the second quarter
with a 14% increase in net revenue over the first quarter of 2021.
In the second quarter we experienced significant increases in
protein prices affecting our industry which reduced our gross
margins, however this was partially offset by a 15% reduction in
operating expenses. With the strength of our brand and the
restructuring we undertook two years ago, we are well positioned to
return to profitability when the protein market normalizes."
Mr. Ryan continued, "We are excited to officially rollout MP
Performance Energy drink later this month with our eight signed
distributors. Initial reaction to this new line is very strong and
we believe we have the leadership, network and brand name to
achieve $30 million of MP and FitMiss Energy product sales in 2023
by expanding our leading brand into the energy beverage market.
This is only the beginning for our Company's expansion as we
continue to unlock the long-term opportunity for MusclePharm."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1415684/000149315221020219/form10-q.htm
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTCQB:MSLP) -- http://www.musclepharm.comand
http://www.musclepharmcorp.com-- is a lifestyle company that
develops, manufactures, markets and distributes branded nutritional
supplements. The Company offers a broad range of performance
powders, capsules, tablets, gels and on-the-go ready to eat snacks
that satisfy the needs of enthusiasts and professionals alike.
MusclePharm reported net income of $3.18 million for the year ended
Dec. 31, 2020, compared to a net loss of $18.93 million for the
year ended Dec. 31, 2019. As of March 31, 2021, the Company had
$9.95 million in total assets, $34.27 million in total liabilities,
and a total stockholders' deficit of $24.32 million.
Los Angeles, California-based SingerLewak LLP issued a "going
concern" qualification in its report dated March 29, 2021, citing
that the Company has suffered recurring losses from operations, has
an accumulated deficit and its total liabilities exceed its total
assets. This raises substantial doubt about the Company's ability
to continue as a going concern.
NAHAUL INC: Seeks to Employ Daniel Greenman as Accountant
---------------------------------------------------------
NAHAUL, Inc. seeks approval from the U.S. Bankruptcy Court for the
Northern District of Illinois to hire Daniel Greenman & Co. to
prepare and file the required tax returns and provide general
accounting services.
The firm's hourly rates are as follows:
Daniel Greenman $250 per hour
Senior Accountant $150 per hour
Junior Accountant $100 per hour
Daniel Greenman, the firm's accountant who will be providing the
services, 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:
Daniel Greenman, CPA
Daniel Greenman & Co.
18W100 22nd St, Ste 114
Oakbrook Terrace, IL 60181
Tel: (312) 656-8031
About NAHAUL Inc.
NAHAUL, Inc., an affiliate of Chicagoan Logistic Company, is a
privately held company in the general freight trucking industry.
The company is based in Columbus, Ohio.
NAHAUL and Chicagoan Logistic Company filed Chapter 11 petitions
(Bankr. N.D. Ill. Case Nos. 21-07152 and 21-07154) on June 5, 2021.
The two cases are not jointly administered.
In the petition signed by Serkan B. Kaputluoglu, president, NAHAUL
disclosed between $100,000 and $500,000 in assets and between $1
million and $10 million in liabilities.
Judge Carol A. Doyle oversees NAHAUL's Chapter 11 case.
David Herzog, Esq., of Herzog & Schwartz, P.C. and Laxmi P.
Sarathy, Esq., serve as NAHAUL's legal counsel, while Romano Law,
PLLC serves as special counsel. NAHAUL tapped Daniel Greenman &
Co. as its accountant.
NAHAUL INC: Seeks to Employ Romano Law as Special Counsel
---------------------------------------------------------
NAHAUL, Inc. seeks approval from the U.S. Bankruptcy Court for the
Northern District of Illinois to hire Romano Law, PLLC as special
counsel.
The firm's services include:
(a) investigating the possibility of vacating default
judgments obtained by Libertas Funding against each of the Debtors
or of clawing back or recovering monies paid in satisfaction of
such judgments;
(b) taking steps to try to vacate the judgments or recover all
or part of such monies; and
(c) working with the Debtor's bankruptcy counsel where
appropriate towards the recovery of the funds.
The firm's hourly rates are as follows:
Law Clerk $149 per hour
Law Clerk Level II/Paralegal $191 per hour
Senior Law Clerk $234 per hour
Associate Attorney Level I $276 per hour
Associate Attorney Level II $298 per hour
Associate Attorney Level III $319 per hour
Associate Attorney Level IV $340 per hour
Special Counsel $425 per hour
Partner $552 per hour
Senior Partner $637 per hour
The Debtor paid $5,000 to the law firm as a retainer fee.
Siddhartha Roa, Esq., a partner at Romano Law and the attorney who
will be providing the services, 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:
Siddhartha Roa, Esq.
Romano Law PLLC
55 Broad Street, 18th FL.
New York, NY 10004
Tel: 646.762.7488
About NAHAUL Inc.
NAHAUL, Inc., an affiliate of Chicagoan Logistic Company, is a
privately held company in the general freight trucking industry.
The company is based in Columbus, Ohio.
NAHAUL and Chicagoan Logistic Company filed Chapter 11 petitions
(Bankr. N.D. Ill. Case Nos. 21-07152 and 21-07154) on June 5, 2021.
The two cases are not jointly administered.
In the petition signed by Serkan B. Kaputluoglu, president, NAHAUL
disclosed between $100,000 and $500,000 in assets and between $1
million and $10 million in liabilities.
Judge Carol A. Doyle oversees NAHAUL's Chapter 11 case.
David Herzog, Esq., of Herzog & Schwartz, P.C. and Laxmi P.
Sarathy, Esq., serve as NAHAUL's legal counsel, while Romano Law,
PLLC serves as special counsel. NAHAUL tapped Daniel Greenman &
Co. as its accountant.
NATIONAL RIFLE : NYAG James Pushes for Dissolution Anew
-------------------------------------------------------
Neil Weinberg and David Voreacos of Bloomberg News report that the
National Rifle Association hasn't cleaned up rampant financial and
managerial misconduct as it claimed over the past 2020,
illustrating the need for the gun-rights group to be dissolved, New
York Attorney General Letitia James said in a court filing.
A failed bid for bankruptcy protection earlier this 2021 exposed
the hollowness of the organization's claim to have corrected the
mismanagement, which included lavish spending by its longtime
leader Wayne LaPierre and other serious lapses, James said in an
amended lawsuit in New York state court.
About National Rifle Association
Founded in 1871 in New York, the National Rifle Association of
America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, the National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Texas Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. Norton Rose Fulbright US, LLP
and AlixPartners, LLP serve as the committee's legal counsel and
financial advisor, respectively.
NEUBASE THERAPEUTICS: Incurs $8.7-Mil. Net Loss in Third Quarter
----------------------------------------------------------------
NeuBase Therapeutics, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $8.66 million for the three months ended June 30, 2021, compared
to a net loss of $3.80 million for the three months ended June 30,
2020.
For the nine months ended June 30, 2021, the Company reported a net
loss of $18.25 million compared to a net loss of $12.68 million for
the same period during the prior year.
As of June 30, 2021, the Company had $69.32 million in total
assets, $9.04 million in total liabilities, and $60.28 million in
total stockholders' equity.
Neubase said, "The Company expects to continue to incur significant
operating losses for the foreseeable future and may never become
profitable. As a result, the Company will likely need to raise
additional capital through one or more of the following: issuance
of additional debt or equity or complete a licensing transaction
for one or more of the Company's pipeline assets. With the closing
of the common stock offering, management believes that it has
sufficient working capital on hand to fund operations through at
least the next twelve months from the date these unaudited
condensed consolidated financial statements were available to be
issued. There can be no assurance that the Company will be
successful in acquiring additional funding, that the Company's
projections of its future working capital needs will prove
accurate, or that any additional funding would be sufficient to
continue operations in future years."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1173281/000110465921105085/tmb-20210630x10q.htm
About NeuBase Therapeutics
NeuBase Therapeutics, Inc. -- http://www.neubasetherapeutics.com--
is a biotechnology company focused on developing next generation
therapies to treat rare genetic diseases and cancers caused by
mutant genes. Given that perhaps every human disease has a genetic
component, the Company believes that its differentiated platform
technology has the potential for broad impact.
Neubase Therapeutics reported a net loss of $17.38 million for the
year ended Sept. 30, 2020, compared to a net loss of $26.13 million
for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the
Company had $34.44 million in total assets, $3.15 million in total
liabilities, and $31.29 million in total stockholders' equity.
OZOP ENERGY: Incurs $212K Net Loss in Second Quarter
----------------------------------------------------
Ozop Energy Solutions, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $211,952 on $1.27 million of revenue for the three months ended
June 30, 2021, compared to a net loss of $368,833 on $354,051 of
revenue for the three months ended June 30, 2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $209.70 million on $2.07 million of revenue compared to a
net loss of $299,415 on $1.25 million of revenue for the same
period during the prior year.
As of June 30, 2021, the Company had $9.42 million in total assets,
$54.07 million in total liabilities, and a total stockholders'
deficit of $44.65 million.
Ozop stated, "Currently, our current capital and our other existing
resources will be sufficient to provide the working capital needed
for our current business, however, additional capital will be
required to meet our debt obligations, and to further expand our
business. We may be unable to obtain the additional capital
required. If we are unable to generate capital or raise additional
funds when required it will have a negative impact on our business
development and financial results. These conditions raise
substantial doubt about our ability to continue as a going concern
as well as our recurring losses from operations, deficit in equity,
and the need to raise additional capital to fund operations. This
'going concern' could impair our ability to finance our operations
through the sale of debt or equity securities."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1679817/000149315221020444/form10-q.htm
About Ozop Energy Solutions
Ozop Energy Solutions (http://ozopenergy.com)invents, designs,
develops, manufactures, and distributes ultra-high-power chargers,
inverters, and power supplies for a wide variety of applications in
the defense, heavy industrial, aircraft ground support, maritime
and other sectors. The Company's strategy focuses on capturing a
significant share of the rapidly growing renewable energy market as
a provider of assets and infrastructure needed to store energy.
OZOP Energy reported a net loss of $20.48 million for the year
ended Dec. 31, 2020, compared to a net loss of $571,595 for the
year ended Dec. 31, 2019. As of March 31, 2021, the Company had
$11.44 million in total assets, $71.72 million in total
liabilities, and a total stockholders' deficit of $60.28 million.
Hackensack, New Jersey-based Prager Metis CPA's LLC, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 15, 2021, citing that as of Dec. 31, 2020, the
Company had an accumulated deficit of $21,793,375 and a working
capital deficit of $4,604,189. In addition, the Company has
generated losses since inception. These factors, among others,
raise substantial doubt regarding the Company's ability to continue
as a going concern.
PILGRIM'S PRIDE: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
------------------------------------------------------------------
S&P Global Ratings revised the outlook on Pilgrim's Pride Corp.
(PPC) to positive from stable reflecting the same ratings outcome
on Brazil-based protein processor JBS S.A. As a core subsidiary PPC
would benefit from ratings upgrade to its parent company. S&P
affirmed the 'BB+' issuer credit rating.
S&P said, "We affirmed the 'BBB-' issue-level rating and '1'
recovery rating (90%-100%; rounded estimate: 95%) on the company's
senior secured debt and 'BB+' issue-level rating and '3' recovery
rating (50%-70%; rounded estimate: 65%) on the company's senior
unsecured notes.
Brazil-based protein processor JBS S.A. (JBS) recently announced
its intention to acquire the remaining public shares in Pilgrim's
Pride Corp. (PPC). As a result, S&P now view PPC as a core
subsidiary of JBS S.A, the parent company of PPC.
"The positive outlook on PPC reflects our positive outlook on JBS.
The positive outlook reflects that we can upgrade JBS in the next
12 to 18 months if the company shows commitment to maintain low
leverage despite its growing appetite for acquisitions and larger
shareholders' remuneration, along with a longer track of its
improved governance standards.
"JBS' announcement to acquire the remaining 20% of PPC's public
shares strengthens PPC strategic importance to JBS. The planned
acquisition has strengthened our view of the strategic relationship
between JBS and PPC and supports our view that PPC is important to
JBS' long-term growth strategy and PPC is highly unlikely to be
sold. PPC accounts for about 20% of JBS' fiscal 2020 EBITDA and
gives JBS further protein and geographic diversity. Given the size
of the incremental investment of over $1 billion and the
acquisitions executed by PPC over the last several years we believe
it is strategically aligned with JBS and therefore consider it core
to the group. We also believe PPC is a core entity within the group
because of its participation in product categories that are similar
or adjacent to other JBS subsidiaries. Moreover, JBS financially
supported PPC about a decade ago when it experienced cycle-related
challenges. Given its core status, this means our rating on PPC
will be equal to our rating on JBS, even if its stand-alone credit
profile (SACP) is lower. Currently, the 'bb+' SACP on PPC is the
same as our issuer credit rating on JBS, but that may change,
particularly in a scenario where JBS is possibly upgraded.
"The outlook revision to positive from stable reflects the change
in outlook for parent company, JBS S.A., a Brazil-based protein
processor. The positive outlook reflects JBS' strong cash flows and
our expectation that JBS will continue to maintain low leverage.
JBS has also increased compliance and control positions at senior
levels and increased focus on preventing money laundering. Also, it
has closed all class actions or lawsuits from the leniency
agreement at JBS. In July 2021, PPC settled with the End-User
Consumer Indirect Purchase Plaintiff Class and the Commercial and
Institutional Indirect Purchaser Plaintiff Class for an aggregate
amount of $120.5 million. PPC also settled with the direct
purchaser's lawsuit class action for $75 million in early 2021. The
company recognized $251.4 million of expense in the first half of
2021 to cover settlements entered into, and additional potential
settlements, with parties that have opted out of such class
settlements. But history of litigations at JBS is a negative, and
it still has dual positions at the executive and board levels that
brings into question control effectiveness.
PPC's operating performance is in line with expectations as the
company benefits from strong chicken pricing and robust demand.
PPC's adjusted EBITDA increased by about 200% in the first half of
2021 compared with the year-ago period because of a strong first
half as the industry experienced strong poultry pricing due to a
tightening chicken supply (as hatch rates remain low and freezer
inventory decreases year over year) coupled with strong demand. The
company's solid performance is also supported by a strong rebound
from food service sales in the U.S. and strong demand in Mexico.
S&P said, "Furthermore, we expect second-half EBITDA to be in line
with, if not better than, a year ago as better year-over year
chicken pricing should offset higher feed costs, which could remain
above $5 a bushel depending on the size of this year's U.S. corn
harvest. PPC's food service segment (about 50% of revenues) is
skewed toward quick-service restaurant (QSR) outlets, which has
continued to outperform expectations. Demand at supermarkets and
other retail channels also remains strong with more dining at home.
We believe these trends will continue to support strong chicken
pricing, enabling the company to continue to offset higher feed
costs.
"We also expect PPC to benefit from its $952 million acquisition of
the Meats and Meals carve-out from Kerry Group that will provide
PPC with additional geographic (largely in the U.K.) and product
diversity into value-added products given its product offerings in
branded and private-label meats, meat snacks, food-to-go, and
prepared ethnic meals. This will further support PPC's
customer-centric strategy, creating unique offerings for key
customers and stability in the higher-margin branded and prepared
foods segments (16% of revenues). As a result, we expect around $14
billion to $14.5 billion in pro forma 2021 sales and around $1.1
billion in pro forma adjusted EBITDA."
PPC generates good free operating cash flow (FOCF) and should
continue to sustain leverage in the low-2x area. FOCF was over $350
million in fiscal 2020 given the better working capital management.
S&P said, "We project FOCF will likely be closer to about $300
million to $350 million as result of higher earnings while higher
working capital inflows do not repeat. Although we expect capex to
total $350 million to $370 million in 2021 and 2022 for a
combination of maintenance projects and investments in operating
efficiencies including automation, annual FOCF should remain above
$300 million in 2021 and increased over $500 million as the
earnings outlook remains positive and litigation payments do not
repeat. Our cash flow projection support our expectation for debt
to EBITDA to decline to around 2.1x-2.3x over the next year, even
as the company temporarily increases debt to fund the Meats and
Meals acquisition."
S&P said, "The positive outlook reflects that we could upgrade JBS
in the next 12 to 18 months if the company shows commitment to
keeping leverage low despite its growing appetite for acquisitions
and larger shareholders' remuneration, amid continued improvements
in governance.
"We could raise our rating PPC if we raise the ratings on JBS and
PPC remains a core JBS subsidiary.
"We could upgrade JBS if it shows flexibility in strategic
decisions to continue pursuing growth but also keeping liquidity
robust and leverage controlled at the same time. We would also need
to see improving risk controls and governance structure oversight."
An upgrade would also involve:
-- A longer track record of a de-risking strategy, improved risk
control oversight and structure, and better mitigation of
reputational risk factors involving the founding family and its
executives. If JBS has improved ability to map, mitigate, and
control risks to which it's exposed, we could revise the management
and governance (M&G) score while the company keeps debt to EBITDA
below 3x and funds from operations (FFO) to debt above 30%; or
-- JBS maintains debt to EBITDA below 2x and FFO to debt above 45%
on a consistent basis even amid acquisitions and large payouts,
considering that expansion capex, share buybacks, and acquisitions
are discretionary, with no changes to our governance view.
S&P could revise the outlook to stable on PPC if it revised the
outlook to stable for JBS.
This could result if there are reoccurring acquisitions and share
buybacks that weigh on the company's (which company?) leverage,
especially if industry fundamentals worsen, with declining margins
from the U.S. beef operations due to lower cattle availability and
lower meat prices. This would push debt to EBITDA closer to 3x and
FFO to debt to 20%. Although S&P hasn't fully incorporated the pro
forma EBITDA from recently acquired assets, if JBS' U.S. beef
operations' margins decline by half without Seara, Friboi, and
PPC's margins improving, JBS could reach our downside triggers.
PRIME ECO: Seeks Court Nod on Postpetition Financing from AFS
-------------------------------------------------------------
Prime Eco Group, Inc. sought permission from the U.S. Bankruptcy
Court for the Southern District of Texas to enter into a
postpetition financing agreement with Austin Financial Services,
Inc.
"The financing to be provided is the advancing against eligible
accounts receivable and inventory," the Debtor said. The financing
agreement consists of an amendment to the prepetition loan and
security agreement, dated as of August 12, 2021, between the
Debtor, together with its affiliate, Prime Eco Supply, LLC and
AFS.
Specifically, the Debtor is seeking to:
(a) execute, deliver and perform under the Financing Documents;
(b) obtain post-petition financing from AFS according to the
terms and conditions of the Financing Documents;
(c) grant to AFS a superpriority administrative expense claim
pursuant to Section 364(c)(1) of the Bankruptcy Code in respect of
all existing and future debts and obligations under the Financing
Agreement; and
(d) grant to AFS a first priority security interest in and lien
on the Debtor's post-petition assets, including post-petition
accounts receivable and proceeds of inventory, and a security
interest and lien (subordinate only to the prepetition security
interest and lien of the U.S. Small Business Administration and
Fairview Investment Fund V, LP in prepetition assets of Debtor and
its bankruptcy estate, if any, to the extent such liens are valid
and existing and were senior in priority to the security interest,
lien, and claims in favor of AFS as of the Petition Date) in all
other prepetition assets and properties of Debtor as security for
all such Obligations.
The Debtor contended that without the funding from AFS, the Debtor
is unable to pay its ordinary postpetition operating expenses, fund
larger projects, and succeed with its plan of reorganization.
The agreement provides for an Initial Maturity Date of the later of
(a) March 31, 2022, and (b) any further date agreed to in writing
between the Lender and the Debtor.
A copy of the motion is available for free at
https://bit.ly/3iOOrLR from PacerMonitor.com.
About Prime Eco Group and Prime Eco Supply
Prime Eco Group, Inc. and Prime Eco Supply, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case Nos.
21-32560 and 21-32561) on July 30, 2021. At the time of the filing,
Prime Eco Group disclosed $3,057,685 in assets and $3,587,476 in
liabilities while Prime Eco Supply disclosed $107,969 in assets and
$527,681 in liabilities. The Law Office of Margaret M. McClure is
the Debtor's legal counsel.
PUERTO RICO AQUEDUCT AND SEWER: Gets Lower Refunding Yields
-----------------------------------------------------------
Michelle Kaske of Bloomberg News reports that Puerto Rico's
Aqueduct and Sewer Authority (Prasa), its water utility, sold $1.7
billion of unrated refunding debt as demand for riskier municipal
securities helped the island's main supplier of water pay lower
interest rates than its last refunding in December 2020.
Investors have been buying up junk-rated and unrated municipal debt
for their higher relative yields. That helped Prasa lower its
borrowing costs, saving $570 million in debt-service through 2047,
according to Puerto Rico's Fiscal Agency and Financial Advisory
Authority, called AAFAF.
This is the second time since December 2020 that Prasa has borrowed
from the capital markets.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
PURDUE PHARMA: David Sackler Testifies, Defends Releases
--------------------------------------------------------
As widely reported, a member of the Sackler family has appeared,
for the first time, at a hearing in federal bankruptcy court in
White Plains, New York, in connection with the bankruptcy plan of
Purdue Pharma LP that would release the family from opioid claims.
The grandson of the late Purdue co-owner Raymond Sackler fielded
questions from lawyers by video conference over the course of
several hours on Tuesday, August 17. 2021.
Members of the billionaire family that own Purdue Pharma LP have a
"moral responsibility" to fight the opioid crisis but didn't break
the law in overseeing sales of the company's addictive painkiller
OxyContin, former board member David Sackler said during
questioning in bankruptcy court.
Members of the family that owns OxyContin maker Purdue Pharma won't
contribute billions of dollars to a legal settlement unless they
get off the hook for all current and future lawsuits over the
company's activities, Raymond Sackler also said in bankruptcy
court, according to the Hartford Courant.
The Courant reported that David Sackler, grandson of one of the
brothers who nearly 70 years ago bought the company that later
became Purdue, testified at a hearing in federal bankruptcy court
in White Plains, New York, that without those protections, "I
believe we would litigate the claims to their final outcomes."
"We need a release that's sufficient to get our goals
accomplished," Sackler said in response to questions from a lawyer
for the U.S. bankruptcy trustee. "If the release fails to do that,
we will not support it."
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: Reaches Final Stage of Opioid Settlement
-------------------------------------------------------
The Crime Report reports that the final checkpoint for Purdue
Pharma's proposed $10 billion opioid crisis settlement deal, nearly
half of which to be funded by members of the Sackler family, has
continued in federal bankruptcy court, reports the Courthouse News
Service. The Connecticut-based business faces a lengthy
confirmation hearing to secure approval from the federal bankruptcy
court of its restructuring plan and settlement with individuals,
states, municipalities, hospitals and others. Purdue, which
pleaded guilty last November for its role in contributing to the
nation's opioid epidemic, is seeking Chapter 11 bankruptcy
protection, but the inclusion of legal immunity for members of the
Sackler family under nonconsensual third-party releases, is being
challenged in the bankruptcy case by federal and state
authorities.
If the Bankruptcy Court confirms the deal, the Sackler family would
be released from individual accountability from future
opioid-related civil litigation after contributing more than $4
billion in installments over nine years. Since filing for
bankruptcy, the company has struck deals in criminal litigations
with the Justice Department and agreed to pay $225 million toward a
$2 billion criminal forfeiture. No member of the Sackler family has
ever been criminally charged.
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.
R.A. BORRUSO: Unsecureds to Get Share of Income for 5 Years
-----------------------------------------------------------
R.A. Borruso, Inc. submitted a Second Amended Plan of
Reorganization for Small Business under Chapter 11 dated August 17,
2021.
R.A. Borruso operates an insurance agency. The Debtor guaranteed a
loan in favor of AJRANC Insurance Agency, Inc. and Nine Family
Circle Holdings, Inc. in favor of Ameris Bank. Borruso's case had
been jointly administered with the AJRANC and Nine Family
bankruptcy cases, although the Bankruptcy Court has entered an
order providing for the separate administration of the Borruso
case.
The Debtor's financial projections show that the Debtor will be
able to make the plan payments to administrative, secured, and
priority claimants and distribute projected disposable income to
unsecured creditors. The Debtor anticipates that the Plan will be
confirmed in September 2021, the Plan will be effective on or about
October 1, 2021, the first quarterly distribution to unsecured
creditors will be made on January 1, 2022, and the final quarterly
distribution to unsecured creditors will be made on January 1,
2027. The distributions under the Plan will be derived from (i)
existing cash on hand on the Effective Date, and (ii) revenues
generated by continued business operations.
Class 1 consists of Priority claims. Class 1 Claims are unimpaired
by the Plan, and each holder of a Class 1 Priority Claim will be
paid in full, in cash, on the later of the Effective Date of the
Plan and the date on which such claim is allowed by a final
non-appealable order, or on such other terms as may be agreed on by
the holder of the claim and the Debtor.
Class 2 consists Secured Claims of Ameris Bank. Ameris Bank was
scheduled as holding a secured claim in the amount of
$1,226,877.77. Ameris Bank's Class 4 Claims shall be allowed in the
amount of $180,000 or such other amount as fixed by the Court,
amortized, over 9 years payable in monthly installments of
principal and interest at the rate of 5%. The Class 4 Claims shall
mature and become due and payable in full five years from the
anniversary of the first plan payment.
Class 3 consists of non-priority unsecured claims. Every holder of
a non-priority unsecured claim against Borruso shall receive its
pro-rata share of the Debtor's projected disposable income.
Payments shall be made on a quarterly basis over a period of 5
years, commencing 3 months after the Effective Date.
Holders of equity interests shall retain their interests.
Payments required under the Plan will be funded from (i) existing
cash on hand on the Effective Date, and (ii) revenues generated by
continued operations.
A full-text copy of the Second Amended Plan of Reorganization dated
August 17, 2021, is available at https://bit.ly/2W5HehB from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Scott A. Stichter(FBN0710679)
Stichter Riedel Blain & Postler, P.A.
110 East Madison Street, Suite 200
Tampa, Florida 33602
(813)229-0144– Phone
Email:sstichter@srbp.com
About R.A. Borruso, Inc.
R.A. Borruso, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06495) on August 27,
2020. The Debtor's case is jointly administered with that of
affiliated companies, Nine Family Circle Holdings, Inc. and AJRANC
Insurance Agency, Inc. (Bankr. M.D. Fla. Lead Case No. 20-06493).
AJRANC Insurance Agency's case is the lead case.
In the petition signed by Ryan A. Borruso, president, the Debtor
R.A. Borruso disclosed up to $50,000 in assets and $10 million in
liabilities.
Judge Caryl E. Delano oversees all three cases.
Scott A. Stichter, Esq. at Stichter, Riedel, Blain and Postler,
P.A. is the Debtors' counsel.
RAMJAY INC: May Use Newtek's Cash Collateral Until Sept. 30
-----------------------------------------------------------
Judge Brian F. Kenney of the U.S. Bankruptcy Court for the Eastern
District of Virginia authorized Ramjay, Inc. to use the cash
collateral of Newtek Small Business Finance, LLC in the ordinary
course of business in accordance with the budget. The budget
provided for $149,911 in total disbursements for the period from
August 4 to September 3, 2021, and $84,911 in total disbursements
for the period from September 4 to September 2021.
The Debtor's authority to use Newtek's Cash Collateral shall cease
on the earlier to occur of:
a. September 30, 2021;
b. the entry of an order authorizing the Debtor to incur
post-petition debt;
c. non-compliance by the Debtor with any term, covenant or
provision in the Budget or this Order, after having received
written notice of the non-compliance and given 10 days to cure such
non-compliance;
d. the appointment of a trustee or of an examiner for the
Debtor or the property of the estates of the Debtor (other than the
continued appointment of the Subchapter V Trustee);
e. the entry of a final order authorizing the Debtor's use of
cash collateral that is not identical with respect to material
terms, conditions and provisions contained in the final Order;
f. the entry of an order staying, vacating, amending,
supplementing or modifying the final order or otherwise affecting
the validity, priority, extent, or enforceability of any of the
liens or claims granted in the final order; and/or
g. conversion or dismissal of the Debtor's Chapter 11 Case.
Newtek asserts that the Debtor was indebted to Newtek for at least
$1,839,183 as of May 7, 2021, plus additional expenses and fees,
including attorneys' fees, with respect to a loan made by Newtek.
The Debtor executed a Promissory Note in favor of Newtek for
$1,740,000 before the Petition Date. The Note and the obligations
are secured by a Security Agreement dated January 13, 2017,
pursuant to which the Debtor granted Newtek a first-priority
blanket lien on all of the Debtor's personal property.
As adequate protection for the Debtor's use and consumption of the
Newtek Prepetition Collateral and Newtek Cash Collateral from and
after the Petition Date:
* all pre-petition liens and security interests of Newtek are
reaffirmed to the same extent and priority as such liens and
security interests existed immediately prior to the Petition Date;
* the Debtor grants and conveys a fully perfected security
interest in and lien on all avoidance, recovery or similar remedies
that may be brought by or on behalf of the Debtor or its estate,
including causes of action or defenses arising under Chapter 5 of
the Bankruptcy Code or applicable non-bankruptcy law, with respect
to any transfers made by the Debtor to Shasthra USA Inc.;
* all of the Debtor's vehicles, which security interest and lien
shall constitute a first priority security interest and lien on the
Unencumbered Collateral Liens, except to the extent it is
determined that the City of Alexandria possesses a superior lien
with respect to the vehicles;
* Newtek is granted a super priority claim in the Debtor's
chapter 11 case as provided for in Section 507(b) of the Bankruptcy
Code with priority over all other administrative expenses in the
Debtor's bankruptcy case;
* the Debtor shall make monthly payments to Newtek for $7,500
until substantial consummation of any chapter 11 plan has occurred.
The Adequate Protection Payments for the period from August 4 to
September 3, 2021 must be paid by August 31, 2021; and adequate
protection payments for the period of September 4 to October 3,
2021 must be paid by September 30, 2021, regardless of whether the
final order has yet to be entered.
To the extent final order may remain in effect after October 3,
2021, for each successive month, the Adequate Protection Payment
shall be made no later than the fourth day of each applicable
month, thereby making October 4, 2021 the due date for any payment
due for October, 2021, and any successive payments due on the
fourth day of each month thereafter. $2,230 of the Adequate
Protection Payment shall be on account of the continued use of the
Newtek Vehicles retained by the Debtor. $5,270 of the Adequate
Protection Payment shall be on account of the use of Newtek Cash
Collateral and applied to the principal of the secured portion of
Newtek's claim attributable to the collateral consisting of cash
and accounts receivable.
A copy of the final order is available for free at
https://bit.ly/3g89xTH from PacerMonitor.com.
Counsel to Newtek Small Business Finance, LLC:
Michael A. Condyles, Esq.
Brian H. Richardson, Esq.
Kutak Rock LLP
901 East Byrd Street, Suite 1000
Richmond, VA 23219-4071
Telephone: (804) 644-1700
Facsimile: (804) 783-6192
About Ramjay Inc.
Ramjay, Inc., an Alexandria, Va.-based company that operates in
taxi and limousine service industry, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No.
21-10809) on May 4, 2021. Jayasekar Jayaraman, president, signed
the petition. At the time of filing, the Debtor disclosed $500,000
to $1 million in assets and $1 million to $10 million in
liabilities.
Judge Brian F. Kenney oversees the case.
The Debtor tapped the Law Office of John P. Forest, II as legal
counsel and Miara Rasamoelina of Miara CPA Inc. as accountant.
Kutak Rock LLP represents Newtek Small Business Finance, LLC,
creditor.
RAMJAY INC: Newtek Small Business Says Plan Unconfirmable
---------------------------------------------------------
Newtek Small Business Finance, LLC objects to the confirmation of
the Plan of Reorganization of debtor Ramjay Inc.
Plan of Reorganization
Ramjay Inc. submitted a reorganizing Plan to be funded by the
operations of the Debtor.
Class 3 consists of the Allowed Secured Claim of Newtek. This Class
in unimpaired. The amount of the Class 3 Allowed Secured Claim is
$420,631.25 and is calculated by taking the value of the Debtor's
cash on hand of $11,451.98, the value of the Debtor's accounts
receivable of $239,909.27, and the value of the Retained Vehicles,
from which the sum of $5,270 per installment of the cash collateral
payments is subtracted. Newtek will receive a monthly dividend as
set forth in the Budget (representing the amortized value of this
claim at the Applicable Rate).
The holders of any Class 2 Priority Claims shall receive a monthly
dividend in the amount of the Proposed Monthly Dividend to be
shared, pro-rata, by the holders of all Class 2 claims commencing
on first business day of the first month after the Effective Date
and continuing until each holder of a Class 2 Claim shall have
received payment of the amount of its claim.
Beginning upon the first day of the first month after the Debtor
shall have made all payments to the holders of Class 2 claims, the
holders of Class 10-15 claims shall receive the Proposed Monthly
Dividend to be shared, pro-rata, by the holders of all the Class
10-15 claims. Any lien in favor of the holder of a Class 10 claim
is extinguished and terminated.
Class 18 Equity Interest Holder will receive no Plan distribution.
This Class is impaired. The holders of the Equity Interests will
retain their Equity Interests.
Newtek's Objection to Plan
Newtek asserts that the Debtor's Plan is not confirmable for the
following reasons:
* The Plan fails to properly determine the amount of Newtek's
allowed secured claim in accordance with 11 U.S.C. §§1191(c)(1)
and 1129(b)(2)(A) in that the Plan does not provide Newtek will
retain its pre- and post-petition liens with respect to the Newtek
Collateral and the Plan does not provide Newtek shall receive
deferred cash payments totaling the allowed amount of such claim,
of a value, as of the effective date of the Plan.
* The Plan fails to address Newtek's Collateral Diminution
Adequate Protection giving rise to a potential super priority claim
under 11 U.S.C. §507(b) and with respect to the Unencumbered
Collateral Liens regarding any diminution in the value of the
Newtek Pre-Petition Collateral, including the Newtek Cash
Collateral.
* The Plan provides multiple classes of general unsecured
creditors and it cannot be determined which class Newtek's under
secured claim is classified among.
* The Plan fails to state with certainty how much the monthly
payments will be to the general unsecured claims and priority
claims.
* The Plan fails to provide adequate remedies pursuant to 11
U.S.C. § 1191(c)(3)(B) in the event payments are not made under
the Plan.
Accordingly, Newtek seeks the Court to deny confirmation of the
Plan unless and until the Plan is amended to adequately address the
objections raised.
A full-text copy of the Plan of Reorganization dated August 2,
2021, is available at https://bit.ly/3mhpYky from PacerMonitor.com
at no charge.
A full-text copy of Newtek's objection dated August 17, 2021, is
available at https://bit.ly/3y4etyS from PacerMonitor.com at no
charge.
Counsel to Newtek Small Business:
Michael A. Condyles (VSB No. 27807)
Brian H. Richardson
KUTAK ROCK LLP
901 East Byrd Street, Suite 1000
Richmond, Virginia 23219-4071
Telephone: (804) 644-1700
Facsimile: (804) 783-6192
About Ramjay Inc.
Ramjay, Inc., an Alexandria, Va.-based company that operates in
taxi and limousine service industry, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No.
21-10809) on May 4, 2021. Jayasekar Jayaraman, president, signed
the petition. At the time of filing, the Debtor disclosed $500,000
to $1 million in assets and $1 million to $10 million in
liabilities.
Judge Brian F. Kenney oversees the case.
The Debtor tapped the Law Office of John P. Forest, II as legal
counsel and Miara Rasamoelina of Miara CPA Inc. as accountant.
REED 1860: Unsecured Creditors Will Get 100% of Claims in 48 Months
-------------------------------------------------------------------
Reed 1860, LLC submitted a Plan of Reorganization under Subchapter
V which proposes to pay creditors from cash flow of operations and
future income.
Non-priority unsecured creditors holding allowed claims will
receive full (100%) distributions on their claims. Plan payments to
non-priority unsecured creditors shall commence 2 months from the
Plan confirmation date due to uncertainty with the COVID-19
pandemic. This Plan also provides for the payment of
administrative, secured, and priority claims. The Plan is
consensual Plan.
With the COVID-19 pandemic, many of the tenants were unable to work
and in turn, unable to pay their rental obligations. Now that the
pandemic restrictions have been lifted in Pennsylvania, Debtor's
business is beginning to get back to pre-pandemic levels and is
becoming viable again. Debtor believes that its business is
sustainable, and excepting a relapse of the pandemic restrictions
on business closures, should be able to effectively reorganize.
Historical revenues are solely from the rental operations which
generate $3,150.00 - $3,800.00/mo. Debtor is actively monitoring
the situation and is reducing variable costs wherever possible to
generate profits to fund the Plan. Debtor has been waiting on a
Stipulation from BELCO Federal Credit Union to address the mortgage
arrearage.
Class 2 consists of the BELCO Claim. BELCO has an allowed, secured
claim as of May 20, 2021 in the approximate amount of $304,000.00.
The BELCO Claim is unimpaired. Upon the effective date of the Plan,
the BELCO Claim shall be allowed in full, without the need for
BELCO to file a proof of claim. On the effective date of the Plan,
the Debtor shall make a payment directly to BELCO in the amount of
the Stipulation Payment. In total, the Debtor shall pay a total of
60 Monthly Payments directly to BELCO.
Class 3 consists of Non-Priority Unsecured Creditors. The
non-priority, unsecured creditors shall be paid a distribution
amount of 100% of its total outstanding claim over a 48 month
period. The monthly payment to be distributed shall be $50.00.
Class 3 is unimpaired.
Thomas Varish is the 100% owner of the Debtor. He shall retain his
ownership structure in the Debtor pending its reorganization.
A full-text copy of the Subchapter V Plan dated August 17, 2021, is
available at https://bit.ly/3sssmG4 from PacerMonitor.com at no
charge.
Attorney for Debtor:
Craig A. Diehl, Esquire, CPA
Law Offices of Craig A. Diehl
3464 Trindle Rd.
Camp Hill, PA 17011
Tel: (717) 763-7613
Fax: 717-763-8293
About Reed 1860 LLC
Reed 1860, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No.
21-01148) on May 20, 2021. At the time of the filing, the Debtor
disclosed between $500,001 and $1 million in assets and between
$100,001 and $500,000 in liabilities. Judge Henry W. Van Eck
presides over the case. The Law Offices of Craig A. Diehl
represents the Debtor as legal counsel.
SANAM ATHENS: Seeks to Hire Paul Reece Marr as Bankruptcy Counsel
-----------------------------------------------------------------
Sanam Athens Lodging Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Georgia to hire the law firm of
Paul Reece Marr, P.C. as its bankruptcy counsel.
The firm's services include:
(a) providing the Debtor with legal advice regarding its
powers and duties as debtor in possession in the continued
operation and management of its affairs;
(b) preparing on behalf of the Debtor the necessary
applications, statements, schedules, lists, answers, orders and
other legal papers pursuant to the Bankruptcy Code; and
(c) performing all other legal services in the Chapter 11
bankruptcy proceeding for the Debtor which may be reasonably
necessary.
The firm will be paid at these rates:
Paul Reece Marr, Esq. $375 per hour
Paralegal $175 per hour
Clerical $50 per hour
Paul Marr, Esq., a partner at Paul Reece Marr, P.C. 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 Reece Marr, Esq.
Paul Reece Marr, P.C.
1640 Powers Ferry Road
Marietta, GA 30067
Tel: (770) 984-2255
Email: paul.marr@marrlegal.com
About Sanam Athens Lodging Inc.
Sanam Athens Lodging Inc. is part of the traveler accommodation
industry. Sanam Athens Lodging filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 21-55769) on August 3, 2021. In the petition signed by
Sunita Patel, managing member, the Debtor estimated $1 million to
$10 million in both assets and liabilities. Paul Reece Marr, Esq.
at Paul Reece Marr, P.C. serves as the Debtor's counsel.
SAVI TECHNOLOGY: Hits Chapter 11 Bankruptcy Protection
------------------------------------------------------
Carten Cordell of Washington Business Journal reports an Alexandria
software and supply chain analytics company that was spun out of
Lockheed Martin Corp. (NYSE: LMT) nearly a decade ago has filed for
Chapter 11 bankruptcy protection.
Executives from Savi Technology Inc. filed Aug. 4, 2021 for Chapter
11 in the Bankruptcy Court for Eastern District of Virginia,
according to court documents. The company listed between $1 million
and $10 million in assets against $10 million to $50 million in
liabilities, with nearly $2.5 million disclosed in the filing as
owed to the company's 20 largest unsecured creditors.
We've reached out to the company, as well as its bankruptcy
attorney, Benjamin Smith of Shulman, Rogers, Gandal, Pordy & Ecker,
P.A, and will update this story when we hear back.
The company's biggest debts, totaling $1.6 million, are owed to
Philippine manufacturers Wyntron Inc., listed as a supplier, and
Elecsys Mfg Corp., listed as a contract manufacturer, according to
the bankruptcy filing. Other top creditors include companies such
as Amazon Web Services, the cloud subsidiary of Amazon.com Inc.
(NASDAQ: AMZN), and Oracle Corp. (NYSE: ORCL) for technology
services adding up to more than $80,000 and First Source
Electronics LLC, an Elkridge, Maryland, supplier owed $63,462.24,
per the filing. Law firms Cooley LLP, Weiner Brodsy Kider PC and
Wrobel Markham LLP are also owed a combined $499,156.63 for legal
services, the document showed.
Savi Technology, in its filings, said it intends to continue
operating and asked the courts to expedite its ability to release
and redirect its funds from its former bank, Silicon Valley Bank,
to a new United Bank account on an approved list by the bankruptcy
court trustee — a motion that the court OK'd Tuesday morning.
The filing follows the July 28. 2021 resignation of Savi's former
president and CEO, Richard Carlson, who took over the company in
March 2017. In his stead, Savi’s senior vice president of
operations, Rosemary Johnston, is currently serving as the
company’s acting president and CEO and was authorized by the
company's board to file for Chapter 11 bankruptcy reorganization,
per the company's filings.
Edward How also resigned July 28 as corporate secretary, per the
filings, leaving Jeannette Recio, Savi Technology's vice president
of finance and assistant secretary, to serve in the acting role and
take over its finances.
The company, which provided radio frequency identification (RFID)
sensors and sensor analytics software to help manage supply chain
logistics, ventured out as a private stand-alone company after
spinning off from Bethesda-based Lockheed in 2012. In 2014, it won
a five-year, $102 million contract for active radio frequency
identification sensors for the Department of Defense. That helped
Savi raise $15 million in capital in 2015 through an investment by
Switzerland-based inspection, verification and certification
company SGS, which took a 17.65% stake in the firm as a result of
the investment.
"We have proven that we have the products, teams and initial
customers to grow market share in the internet of things [market].
Now it's about scaling up and adding new customers," Savi's
then-CEO Bill Clark said in 2015 of the SGS investment, which he
said he intended to use to help expand the business into commercial
and industrial markets.
Shortly afterward, in 2018, Savi Technology received $7.5 million
in additional financing led by Eastward Capital Partners, which
remains one of its primary lenders today.
In June 2020, Savi reported a 221-unit order of its first
responders logistics technology, dubbed its Portable Deployment
Kit, to the Army National Guard, amounting to $3.2 million in
business in response to the Covid pandemic. That order followed a
$5.1 million order for 354 units from the Army Reserve.
Clark left the company in 2016 and was succeeded by Carlson,
formerly president of Neon Dolphin Technology Group who had been
touted for his ability to grow companies centered in internet of
things technology — the moniker for the expansion of devices that
are internet-enabled.
About Savi Technology
Savi Technology, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Pa. Case No. 21-11369) on August 4,
2021. Rosemary Johnston, acting president and chief executive
officer, signed the petition. At the time of the filing, the Debtor
disclosed $1 million to $10 million in assets and $10 million to
$50 million in liabilities.
Judge Ashely M. Chan oversees the case.
The Debtor tapped Benjamin P. Smith of Shulman, Rogers, Gandal,
Pordy & Ecker, P.A. as legal counsel.
SCM DALLAS: Seeks Approval to Hire Clark Hill as Legal Counsel
--------------------------------------------------------------
SCM Dallas, LLC seeks approval from the U.S. Bankruptcy Court for
Northern District of Texas to employ Clark Hill, PLC to serve as
legal counsel in its Chapter 11 case.
The firm will render these services:
a. advise the Debtor of its rights, obligations, and powers in
this case;
b. attend meetings and negotiate with representatives of
creditors and other parties in interest;
c. assist the Debtor in the preparation of administrative and
legal documents;
d. take the necessary action to preserve and protect the
Debtor's assets and interests, including pursuing and prosecuting
actions on the Debtor's behalf, defending any action brought
against the Debtor and representing the Debtor's interest in
negotiations concerning all litigation in which it is involved;
e. advise the Debtor in connection with any potential sale of
assets or other disposition of the estate's assets;
f. assist the Debtor in the formulation, confirmation and
consummation of a plan of liquidation or reorganization;
g. appear before the bankruptcy court, any appellate courts
and the Office of the United States Trustee;
h. consult with the Debtor regarding tax matters; and
i. perform other necessary legal services.
The firm received an initial retainer in the amount of $25,000 from
Smart City Media, LLC, the Debtor's sole member.
The firm's hourly rates are as follows:
Stephen A. Roberts $655 per hour
Attorneys $375 - $700 per hour
Paralegals $275 - $325 per hour
Clark Hill is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court papers
filed by the firm.
The firm can be reached through:
Stephen A. Roberts, Esq.
Clark Hill PLC
720 Brazos St, Suite 700
Austin, TX 79701
Email: sroberts@clarkhill.com
About SCM Dallas LLC
SCM Dallas, LLC filed a petition for Chapter 11 protection (Bankr.
N.D. Texas Case No. 21-31271) on July 12, 2021, listing up to
$50,000 in assets and up to $1 million in liabilities. Judge
Michelle V. Larson oversees the case. Stephen A. Roberts, Esq., at
Clark Hill, PLC, represents the Debtor as legal counsel.
SKW LOGISTICS: Taps Woodall & Woodall as Bankruptcy Counsel
-----------------------------------------------------------
SKW Logistics, Inc. seeks approval from the U.S. Bankruptcy Court
for the Middle District of Georgia to hire Woodall & Woodall to
serve as legal counsel in its Chapter 11 case.
Woodall & Woodall will bill $200 per hour for attorney's time. The
firm received a retainer in the amount of $8,637.
As disclosed in court filings, Woodall & Woodall does not hold
interests adverse to the Debtor and its bankruptcy estate.
The firm can be reached through:
William Orson Woodall, Esq.
Woodall And Woodall
1003 N Patterson St.
Valdosta, GA 31601
Phone: +1 229-247-1211
About SKW Logistics Inc.
SKW Logistics, Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No.
21-70514) on Aug. 2, 2021, listing as much as $1 million in both
assets and liabilities. William Orson Woodall, Esq., at Woodall and
Woodall, represents the Debtor as legal counsel.
SOTO'S AUTO & TRUCK: Wins Cash Collateral Access Thru Aug 25
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, has authorized Soto's Auto & Truck Repairs Service, Inc.
to use cash collateral to fund its operating expenses and the costs
of administering the Chapter 11 case in accordance with the budget,
pending a further hearing scheduled for August 25, 2021 at 2 p.m.
The Debtor is authorized to use Cash Collateral including, without
limitation, cash, deposit accounts, accounts receivable, and
proceeds from its business operations in accordance with the
budget, so long as the aggregate of all expenses for each week do
not exceed the amount in the Budget by more than 10% for any such
week on a cumulative basis.
As previously reported by the Troubled Company Reporter, the
Debtor's secured obligations are comprised of: (a) merchant cash
advances, (b) equipment and tool financing owed to Snap-On Credit,
LLC in the approximate amount of $30,000, and (c) SBA loans in the
approximate amount of 150,000. The Debtor believes merchant cash
lenders Funding Metrics, LLC, Nanoflex Capital, Radium2 Capital,
LLC, and On Deck Capital, Inc. may assert liens on and security
interests in the Debtor's assets, including accounts receivable.
As adequate protection for the Debtor's use of cash collateral, the
Lenders are granted a replacement lien in and upon all of the
categories and types of collateral in which they held a security
interest and lien as of the Petition Date to the same extent,
validity and priority that they held as of the Petition Date.
The Debtor will maintain insurance coverage for the Collateral in
accordance with the obligations under the loan and security
documents.
A copy of the order is available at https://bit.ly/3k7zu77 from
PacerMonitor.com.
About Soto's Auto & Truck Repairs Service, Inc.
Soto's Auto & Truck Repairs Service, Inc. is a family-owned diesel
truck repair company founded in March 2004. The Company provides
heavy-duty truck repair and maintenance services, including engine
repairs, overhauls, and replacements, as well as mobile truck
repair and maintenance services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-04131) on August 6,
2021. In the petition filed by John Soto, president, the Debtor
disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Emily S. Clendenon, Esq., at Stichter, Riedel, Blain & Postler,
P.A. is the Debtor's counsel.
SPANISH HEIGHTS: 5148 Spanish Heights Says Disclosures Inadequate
-----------------------------------------------------------------
5148 Spanish Heights, LLC, a Nevada limited liability company,
successor-in-interest to CBC Partners I, LLC, a Washington limited
liability company ("Lender"), objects to the Disclosure Statement
for the Chapter 11 Plan of Reorganization of Spanish Heights
Acquisition Company, LLC.
5148 Spanish Heights claims that the liquidation analysis is still
incomplete as it still does not contain any information regarding
the managing member's assets, liabilities, and financial condition.
SJC Ventures, LLC alleges that it is the sole remaining member of
Debtor and SJCV's financial information is necessary for an
appropriate liquidation analysis.
5148 Spanish Heights points out that the Disclosure Statement
continues to fail to provide adequate information regarding the
Debtor's operating losses. Debtor presents no discussion of the
past, present or future operating losses and how they intend to
become profitable in the future. Debtor does not even include
financial projections through confirmation, much less for the life
of their Plan.
5148 Spanish Heights asserts that the Disclosure Statement fails to
adequately describe the proposed cash infusions. The DS
contemplates a cash infusion by SJCV and a New Lease of the
Property for $45,000.00 with SJCV as tenant. The DS does not attach
the New Lease or contain any discussion of SJCV's financial
stability, its ability to make the cash infusion, and pay the
$45,000.00 per month rental amount.
5148 Spanish Heights further asserts that the Disclosure Statement
fails to provide adequate information on Claim Objections. The DS
fails to clearly explain to all creditors to which claims Debtors
may seek to object. Creditors are being asked to consider and vote
on the Plan without knowing whether their claim will ultimately be
an "Allowed" claim.
A full-text copy of 5148 Spanish Heights' objection dated August
17, 2021, is available at https://bit.ly/3xZ0UAY from
PacerMonitor.com at no charge.
Attorneys for 5148 Spanish Heights:
Michael R. Mushkin, Esq
Nevada Bar No. 2421
L. Joe Coppedge, Esq.
Nevada Bar No. 4954
MUSHKIN & COPPEDGE
6070 South Eastern Ave, Suite 270
Las Vegas, NV 89119
Telephone: 702-454-3333
Facsimile: 702-386-4979
Michael@mccnvlaw.com
jcoppedge@mccnvlaw.com
About SHAC
Spanish Heights Acquisition Company, LLC filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D. Nev. Case No. 21-10501) on Feb. 3, 2021. Jay Bloom, manager and
owner of SJC Ventures Holdings, LLC, signed the petition.
At the time of the filing, the Debtor had estimated assets of
between $1 million and $10 million and liabilities of less than
$50,000.
Greene Infuso, LLP and Maier Gutierrez & Associates serve as the
Debtor's bankruptcy counsel and special counsel, respectively.
SRI VARI: Aug 24 Hearing on Continued Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina, Charlotte Division, has authorized Sri Vari CRE
Development, LLC to continue using the cash collateral through
11:59 p.m. on August 24, 2021, the date of the continued hearing
consistent with the terms of the First Interim Order and the
Budget.
The Debtor and its secured lender, M2 Charlotte Airport, LLC, have
agreed that the Debtor may continue using cash collateral through
and including the date of the continued hearing on the conditions
set forth in the First Interim Order.
The August 24 hearing will be held at 9:30 a.m. in the U.S.
Bankruptcy Court, Charles Jonas Federal Building, JCW Courtroom 2B,
401 West Trade Street, in Charlotte, North Carolina.
A copy of the order is available for free at https://bit.ly/37P8V0F
from PacerMonitor.com.
About Sri Vari CRE Development
Sri Vari CRE Development, LLC is a limited liability company formed
in 2017 under the laws of the State of North Carolina. The company
owns and operates the Courtyard by Marriott branded hotel located
at 8536 Outlets Boulevard in Charlotte, N.C.
Sri Vari CRE Development sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. N.C. Case. No. 21-30250) on April 29,
2021. In the petition signed by Anuj N. Mittal, manager, the
Debtor disclosed up to $50 million in assets and up to $10 million
in liabilities. Judge Laura T. Beyer presided over the case before
Judge J. Craig Whitley took over. The Debtor tapped Richard S.
Wright, Esq., at Moon Wright & Houston, PLLC, as legal counsel and
Greerwalker, LLP as financial advisor.
STEM HOLDINGS: Posts $2.6 Million Net Income in Third Quarter
-------------------------------------------------------------
Stem Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $2.59 million on $10.59 million of revenues for the three months
ended June 30, 2021, compared to a net loss of $947,000 on $5.20
million of revenues for the three months ended June 30, 2020.
For the nine months ended June 30, 2021, the Company reported a net
loss of $9.32 million on $26.57 million of revenues compared to a
net loss of $9.03 million on $8.82 million of revenues for the same
period in 2020.
As of June 30, 2021, the Company had $118.31 million in total
assets, $28.05 million in total liabilities, and $90.26 million in
total shareholders' equity.
The Company had cash of $9,106,000 as of June 30, 2021. The
following trends are reasonably likely to result in changes in the
Company's liquidity over the near to long term:
* An increase in working capital requirements to finance its
entry
into the cultivation, production, and sale of cannabis;
* Acquisition and buildout of rental properties;
* Addition of administrative and sales personnel as the business
grows and
* The cost of being a public company.
"Subsequent to June 30, 2021, the Company has not raised any
additional funds in its private placements. Our efforts to raise
additional capital are ongoing and the Company expects to continue
its efforts in the following quarters," Stem Holdings said.
With respect to Stem Holdings' investments in the projects
pertaining to the equity method investee's and affiliates, the
Company has committed that it needs to spend an estimated $2
million in expansion, buildout and improvements potentially in the
near term. These capital expenditures are contingent upon several
factors including the Company obtaining financing for the
development of the properties and the construction of the tenant
improvements in such amount and on such terms and provisions as are
acceptable to the Company.
"We have used our available funds to fund our operating expenses,
pay our obligations, acquire and develop rental properties, and
grow our company. We need to raise significant additional capital
or debt financing to acquire new properties, to develop existing
properties, and to assure we have sufficient working capital for
our ongoing operations and debt obligations. There is no guarantee
that such funding will be available to the Company at a viable
cost, if at all," Stem Holdings said.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1697834/000149315221020132/form10-q.htm
About Stem Holdings
Headquartered in Boca Raton, Florida, Stem Holdings, Inc. --
http://www.stemholdings.com-- is a multi-state, vertically
integrated, cannabis company that, through its subsidiaries and its
investments, is engaged in the manufacture, possession, use, sale,
distribution or branding of cannabis, and holds licenses in the
adult use and medical cannabis marketplace in the states of Oregon,
Nevada, California, Oklahoma and Massachusetts.
Stem Holdings reported a net loss of $11.49 million for the year
ended Sept. 30, 2020, compared to a net loss of $28.98 million for
the year ended Sept. 30, 2019. At March 31, 2021, the Company had
approximate balances of cash and cash equivalents of $4.6 million,
negative working capital of approximately $17 million, and an
accumulated deficit of $63 million.
LJ Soldinger Associates, LLC, in Deer Park, IL, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated Dec. 24, 2020, citing that the Company and its
affiliates, had net losses of $11.5 million and $28.985 million,
negative working capital of $9.235 million and $2.635 million and
accumulated deficits of $51.386 million and $40.384 million as of
and for the year ended Sept. 30, 2020 and 2019, respectively. In
addition, the Company has commenced operations in the production
and sale of cannabis and related products, an activity that is
illegal under United States Federal law for any purpose, by way of
Title II of the Comprehensive Drug Abuse Prevention and Control Act
of 1970, otherwise known as the Controlled Substances Act of 1970.
These facts raises substantial doubt as to the Company's ability to
continue as a going concern.
TERMINIX GLOBAL: S&P Affirms 'BB-' ICR on Steady Performance
------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
Terminix Global Holdings Inc., 'BB+' issue-level rating on its
senior secured debt, and 'B+' issue-level rating on its senior
unsecured debt. The outlook remains stable.
The stable outlook reflects S&P's expectation that the company will
maintain leverage in the low-3x area over the next 12-24 months as
it invests in operating efficiency initiatives to enhance service
quality and undertakes tuck-in acquisitions and/or modest share
repurchases.
S&P said, "Terminix managed well through the COVID-19 pandemic, and
we forecast it will further expand revenue in 2021. We forecast a
3%-4% increase in total revenues over the next 12-24 months because
of higher customer retention rates, driven by initiatives to
improve customer experience, price increases, and incremental
contribution from bolt-on acquisitions. Terminix's core pest
control services were designated essential in the U.S., which
minimized the disruption to operations from measures imposed to
curb the spread of COVID-19. The company increased consolidated
revenues 8% in 2020. While incremental contribution from
acquisitions added 7% to total growth, organic revenues also
increased 1%, driven by higher demand, better customer retention,
and increased price realization in its residential pest management
and termite and home services segments. Furthermore, operating
performance within the commercial pest management segment--which
faced declines due to service postponements and cancellations amid
business closures from COVID-19--rebounded in the first six months
of 2021 with reduced service postponements and double-digit
percentage growth in international markets.
"We forecast continued improvements in Terminix's EBITDA margin.
S&P Global Ratings-adjusted EBITDA margin improved about 150 basis
points (bps) to 15.2% in 2020 from 2019, benefitting from improved
labor, vehicle, and back-office cost productivity, employee
retention, and lower travel expenses. Most of these cost benefits
were a result of several operating improvement projects over the
last several quarters. The company launched a growth and efficiency
improvement program, Terminix Way to build key operational
capabilities through enhanced standard operating procedures
intended to improve customer service consistency across the
organization. Terminix also undertook several other projects
focused on improving customer acquisition, optimizing digital
marketing processes, improving sales close rates in the commercial
segment, and increasing customer online engagement.
"We expect margin to rise an additional 150 bps in 2021 as Terminix
realizes a full year of these initiatives. Higher labor costs,
travel expenses, and further investments in initiatives to improve
operational capabilities will partially offset these gains.
"Leverage improved to the mid-2x area, but we view releveraging
from potential acquisitions and share repurchases as a potential
risk factor. Terminix improved leverage to about 2x at the end of
fiscal 2020, then increased it to 2.4x for the trailing 12 months
ended June 2021 after several years of leverage at or modestly
higher than 4x. The company used proceeds from the ServiceMaster
brands franchise business sale to repay about $800 million in debt.
In addition, the group exceeded our expectations in 2020, with S&P
Global Ratings-adjusted EBITDA margins of about 15% and funds from
operations (FFO) to debt of about 37%. Terminix achieved this
through better than expected performance in its commercial pest
management business, tight cost-control measures, reduced capital
expenditure (capex), and fewer acquisitions. We forecast the
company to maintain leverage below 4x during the next several years
and will increase to and remain in the low-3x area over the next
twelve months as it invests in its operating efficiency initiatives
and marketing programs to support its organic growth and focuses on
integrating recent acquisitions. We expect the company to remain
committed to a target of 2.5x (which equates to S&P Global
Ratings-adjusted leverage of about 3.5x).
"However, we believe Terminix will opportunistically look for
acquisitions that improve scale and diversity. We also believe the
company will prioritize shareholder returns in the near term. It
already utilized cash balances to make $350 million in share
repurchases in the first six months of 2021, which ticked net
leverage about 0.5x higher. We forecast Terminix will make
incremental share repurchases in 2021 and 2022, which shouldn't
raise leverage above our 4x expectation to maintain ratings.
Although unlikely in the near term, the rating could be at risk if
the company pursues larger targets that materially increase
leverage, especially if we do not believe it will deleverage
quickly thereafter because it continues to prioritize M&A and
shareholder returns over debt reduction.
"The stable outlook reflects our expectation that Terminix will
sustain leverage well below 4x during the next 12 months. Although
its operations are not immune to disruptions across the U.S.
economy, we believe its predominately consumer-facing residential
business will be stable and the commercial business will return to
organic growth, resulting in low- to mid-single-digit percent
increased revenue in fiscal 2021."
S&P could lower its rating on Terminix if it believes leverage will
exceed 4x. This could occur if:
-- The company implements more aggressive financial policies, such
that it continues to fund large acquisitions with debt;
-- Its operating performance suffers from higher-than-expected
customer attrition, resulting a sharp decline in services; or
-- A reputationally damaging event to its brands, incremental
claims costs, and unexpected litigation lowers profitability and
cash flow generation.
S&P could raise its rating on Terminix if:
-- The company demonstrates its commitment to its stated leverage
target by funding future acquisitions with internally generated
discretionary cash flow instead of incremental debt and operates
with adjusted leverage sustained below 3x; or
-- It significantly improves business scale and geographic
diversification over time while sustaining leverage in line with
S&P's base-case expectations of below 4x and improving EBITDA and
free cash flow generation from ongoing operating efficiencies.
TOWN & COUNTRY: Taps Benjamin Legal Services as Counsel
-------------------------------------------------------
Town & Country Partners, LLC received approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
Benjamin Legal Services PLC as its legal counsel.
The firm's services include:
a) assisting and advising the Debtor with respect to Debtor's
legal status as a debtor and the powers, duties, rights and
obligations as debtor in possession in the continued management and
operation business and of its property and affairs relative to the
administration of this proceeding;
b) representing the Debtor before bankruptcy court and
advising the Debtor on all pending litigations, hearings, motions,
and of the decisions of the bankruptcy court;
c) reviewing and analyzing all applications, orders, and
motions filed with the bankruptcy court by third parties in this
proceeding and advising the Debtor thereon;
d) attending all meetings conducted pursuant to section 341(a)
of the bankruptcy code and representing the Debtor at all
examinations and Debtor interviews;
e) communicating and negotiating with representatives of
creditors and other parties in interest;
f) preparing all necessary applications, reports, complaints,
motions, orders, and other legal papers and documents as may be
necessary and to appear before the court regarding such legal
matters and to seek relief in accordance with said court documents
together with the preparation of the necessary orders thereto;
g) defend the Estate against actions that may be instituted
against Debtor's Estate in these proceedings, and to litigate
matters relating to said proceedings in accordance with the
attorney client retainer agreement executed between the Parties;
h) examine and take all actions necessary to protect and
preserve the Estate, including prosecution of such claims or
actions and litigation as may be necessary or appropriate on behalf
of the Estate and to support positions taken by the Debtor, and
preparing witnesses and reviewing documents in this regard, when
applicable;
i) examine and resolve claims filed against the estate and to
advise and consult with Debtor regarding claims that may be
inappropriately or in error filed and to prepare and litigate
objections thereto when appropriate;
j) conferring with all other professionals, including any
accountants and consultants retained by the Debtor and by any other
party in interest;
k) assisting the Debtor in its negotiations with creditors
(and any creditor committees) or third parties concerning the terms
of any proposed plan of reorganization;
l) assisting the Debtor in the formulation, preparation,
implementation, and consummation of a plan of reorganization and
disclosure statement, if necessary or appropriate, and all related
agreements and documents, and to take any actions necessary to
achieve confirmation of such plan and disclosure statement;
m) performing all other legal services required of the Debtor,
be in the interest of the Debtor and the estate, or incident to
these proceedings and to provide such legal advice to the Debtor as
is necessary and in connection with this chapter 11 Case; and
n) advising the Debtor in connection with any potential sale
of assets or representation of the Debtor in connection with
obtaining post-petition financing if required or needed.
The firm's hourly rates are as follows:
J. Kevin Benjamin, Esq. $450 per hour
Theresa Benjamin, Esq. $395 per hour
Paraprofessional $125 per hour
The Debtor paid $25,000 to the law firm as a retainer and $1,738 as
the Chapter 11 filing fee.
J. Kevin Benjamin, Esq., and Theresa Benjamin, Esq., the firm's
attorneys who will be handling the case, disclosed in a court
filing that they are "disinterested persons" as the term is defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kevin Benjamin, Esq.
Theresa Benjamin, Esq.
Benjamin Legal Services PLC
1016 W. Jackson Blvd.
Chicago, IL 60607-2914
Tel: (312) 853-3100
Fax: (312) 577-1707
Email: attorneys@benjaminlaw.com
About Town & Country Partners LLC
Town & Country Partners, LLC filed a petition for Chapter 11
protection (Bankr. N.D. Ill. Case No. 21-08430) on July 14, 2021,
listing up to $50 million in assets and up to $10 million in
liabilities. Judge Jacqueline P. Cox oversees the case. Benjamin
Legal Services, PLC, led by Kevin Benjamin, Esq., is the Debtor's
legal counsel.
UNITED AIRLINES: Fitch Rates Special Facility Revenue Bonds 'B-'
----------------------------------------------------------------
Fitch Ratings has assigned 'B-'/'RR6' ratings to two series of
special facility revenue bonds to be issued by the City of Houston
and Guaranteed by United Airlines Holdings, Inc. The city intends
to issue two series of airport special facility revenue bonds to
finance new multi-terminal baggage handling systems and other
upgrades and improvements, with United unconditionally guaranteeing
the payment of the bonds. The bonds do not constitute indebtedness
to the city of Houston or the airport and neither are liable for
any payments. The bonds are secured by a pledge of certain
revenues, consisting primarily of net rentals to be paid by United
pursuant to a lease between Houston and United.
The series 2021-A bonds will finance the construction of a
multi-terminal baggage handling system, tenant and other
improvements at International passenger terminal (Terminal E) and
related airport facilities for use by United (formerly Continental
Airlines) at George H. Bush International Airport/Houston. All of
the Terminal E project is owned by the city and has been leased by
the city to United. Under the terms of the lease, United has the
exclusive use of Terminal E (23 gates) and of other components of
the Terminal E project.
The 2021B-1 bonds will finance the construction of a multi-terminal
baggage handling system, tenant and other improvements at
International passenger terminal (Terminal C) and related airport
facilities for use by United (formerly Continental Airlines) at
George H. Bush International Airport/Houston.
KEY RATING DRIVERS
Ratings in Line With United's Unsecured Debt: Although the revenue
bonds benefit from a security interest in United's lease payments,
Fitch views the risk profile of these revenue bonds as closer to
United's unsecured issuances. United does not have a master lease
at Houston International Airport. Instead, United has multiple
leases in place tied to various terminals and facilities. In a
bankruptcy scenario, it is possible select leases could take
priority and leave other leases to be rejected or consolidated. In
certain circumstances, Fitch provides ratings uplift for airport
revenue bonds. For instance, American Airlines' JFK bonds are rated
above the Issuer Default Rating as the bonds benefit from a single
master lease, which Fitch views as having a lower risk of being
rejected in a bankruptcy scenario.
The risks of potential lease rejections are mitigated by the
strategic importance of United's Houston hub. The airport
represents United's second largest domestic hub, accounting for 10%
of United's system-wide passenger enplanements. The airport has
five terminals with 131 gates. United has 100 total gates including
its exclusive and preferential gates. Prior to the onset of the
coronavirus, United had prioritized growth at its mid-continent
hubs like Houston, growing its regional connections to better
compete with other network carriers.
United's mid-continent hub strategy had proven successful, and
Fitch expects that Houston will remain a key part of that strategy
as the airline works to recover from the coronavirus downturn. The
bonds are also supported by potential cash flows from replacement
lessors should United reject the leases in a bankruptcy. The City
of Houston has an obligation to make commercially reasonable
efforts to find a replacement lessee for the benefit of the
facility bonds should United default on the leases. However, the
value to bondholders of a replacement lessee is difficult to
ascertain particularly in the current environment.
Recovery Ratings: Fitch uses a bespoke approach to recovery ratings
for issuers rated in the 'B' category as opposed to a generic
uplift approach for 'BB' category issuers. Fitch's recovery
analysis assumes that United would be reorganized as a going
concern (GC) in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim. The GC EBITDA estimate reflects
Fitch's view of a sustainable, post-reorganization EBITDA level
upon which the agency bases the enterprise valuation.
Fitch uses a GC EBITDA estimate of $5.5 billion and a 5.5x
multiple, generating an estimated GC enterprise value (EV) of $27.3
billion after an estimated 10% in administrative claims. This
analysis yields a recovery rating of 'RR2' for senior secured
creditors, reflecting the possibility that recovery for secured
parties could be diluted given the amount of senior debt raised
through the downturn. Likewise, United's unsecured recovery rating
of 'RR6' reflects the large amount of secured debt in United's
capital structure.
Delta Variant Risks Domestic Recovery: The rollout of effective
COVID vaccines and loosening pandemic-era restrictions across the
U.S. has driven a robust rebound in domestic leisure travel, while
business and international travel remain weak. The rise of new
COVID cases in recent weeks increases the risk that the recovery in
traffic may slow or temporarily reverse, though Fitch has not yet
seen a material decline in travel. TSA data show that passenger
counts are now only around 20% below 2019 levels on a seven-day
rolling average basis, about a 20 percentage point improvement
compared to when Fitch last reviewed United's ratings in April.
Fitch believes that widespread vaccine coverage should prevent a
material decline in leisure travel from current levels, though
future developments regarding the Delta and other potential
variants could change Fitch's outlook.
Positive Second Half Outlook: The company saw second quarter
revenues reach $5.5 billion, down 52% compared to 2019 levels, an
improvement from the first quarter when revenues were down 66%
compared to 2019 levels. Fitch expects traffic in the second half
to show continued improvement based on strong leisure demand.
United has guided to positive adjusted pre-tax income in the second
half of 2021. Fitch believes that there is a potential for a delay
in United's return to profitability based on rising COVID cases,
but 2H21 is nonetheless poised to represent a material improvement
from pandemic lows.
DERIVATION SUMMARY
United's 'B+' rating remains two notches above American and three
notches below Delta. The rating differential is driven, in part, by
Fitch's expectation that United's leverage metrics post-pandemic
will remain favorable compared to American's, but still too high to
support a rating in the 'BB' category. Fitch believes that United
managed the crisis effectively especially considering its network
has more exposure to international markets that were heavily
impacted by the virus. Fitch views the downside risks to United's
rating as decreasing, driving the Stable Outlook.
KEY ASSUMPTIONS
-- Airline traffic (RPMs) remains 45% or more below 2019 levels
in 2021, only fully recovering to 2019 levels by 2024.
Domestic and leisure travel are likely to rebound more
quickly. Fitch believes that leisure travel could be back to
2019 levels on a run rate basis some time in 2023;
-- Fitch's models assume jet fuel prices of approximately
$1.60/gallon in 2021, rising to $1.80/gallon in 2023. Actual
jet fuel prices have risen above these levels in recent weeks,
with spot prices hovering around $1.75. Into-plane prices,
including taxes, are modestly higher. Incorporating higher
fuel prices into Fitch's models would drive modestly lower
margins and greater cash burn in 2021 and 2022, but Fitch
believes that the impact by the end of the forecast period
would be less minimal as demand normalizes and the airlines
are able to raise ticket prices;
-- Fitch expects revenue per available seat mile for the industry
to remain below 2019 levels through the forecast period driven
by intense competition.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Increasing evidence of a sustainable recovery in air travel;
-- Adjusted debt/EBITDAR trending towards 4.0x;
-- FFO fixed-charge towards 2.5x;
-- Neutral to positive sustained FCF.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Prolonged downturn in air traffic persisting through 2021;
-- Adjusted debt/EBITDAR sustained above 5.0x;
-- FFO fixed charge coverage sustained below 1.5x;
-- EBITDAR margins deteriorating into the low double-digit range;
-- Persistently negative or negligible FCF.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: Risks for United are mitigated by a solid
liquidity balance. Fitch believes that United may be able to end
the year with $18 billion in liquidity. The company raised roughly
$27 billion in 2020 through a combination of debt, equity, and
government grants, ending the year with $12.7 billion in available
liquidity excluding $7 billion in available loans under the CARES
Act.
Subsequent to the end of 2020, the company completed a $600 million
subordinated EETC tranche issuance and issued $9 billion in secured
notes and term loans and $1.75 billion revolver secured by all of
United's slots gates and routes. A portion of the secured notes and
term loan proceeds repaid United's existing $1.4 billion term loan
due in 2024, its $1 billion revolver due in 2022 and the $520
Million CARES Act loan due in 2025, with the remainder going to
bolster liquidity. United received another $5.8 billion in funds
through the second and third round of the government's Payroll
Support Program.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
ISSUER PROFILE
Based on capacity, UAL is the second largest airline in the U.S.
The company maintains hubs at Newark Liberty International Airport,
Chicago O'Hare International Airport, Denver International Airport,
George Bush Intercontinental Airport in Houston, Los Angeles
International Airport, A.B. Won Pat International Airport (Guam),
San Francisco International Airport and Washington Dulles
International Airport, and commands the top position and market
share at each hub. It is part of the StarAlliance, one of three
major alliance networks of global airlines.
VALLEY FARM: Unsecured Creditors Will Get 4% of Claims in Plan
--------------------------------------------------------------
Valley Farm Supply, Inc., filed with the U.S. Bankruptcy Court for
the Central District of California a Disclosure Statement
describing Chapter 11 Plan dated August 17, 2021.
The case was filed due to a combination of factors. The president
of the Debtor had a marital dissolution, a process that was both
expensive and distracting. The pandemic has led to a loss of
business. The Debtor's two largest suppliers sued the Debtor, first
Simplot AB Retail, which obtained a stipulation that provided it
security and provided for periodic payments. When the second large
supplier, Nutrien AG filed suit, the Debtor realized its cash flow,
already significantly compromised by the Simplot settlement would
be insufficient to finance another similar settlement, and it had
to resort to Chapter 11.
The Debtor sought permission to use cash collateral, and
successfully negotiated with its secured creditors to use cash
collateral. In order to grow the business to the level necessary to
fund the Plan, the Debtor needed post-petition funding. The Debtor
negotiated a post-petition financing arrangement with Community
Bank of Santa Maria, and obtained approval of that agreement
despite opposition.
Class 12 consists of General Unsecured Claims. General unsecured
creditors will receive 4% of their allowed claims under the Plan.
Members of Class 12 will receive 1% of their allowed claims on each
of the second, third, fourth, and fifth anniversaries of the
effective date.
Class 13 consists of General Unsecured Claims – Administrative
Convenience Class. General unsecured creditors with claims of
$50,000 or less, or who by election on their Plan Ballot
voluntarily elect to reduce their claims to $50,000, will receive
4% of their claims on the first anniversary of the effective date.
If any distribution under the Plan is for a payment less than
$10,000, the Debtor shall not be required to make such a payment,
either accruing the amount until the next payment, if applicable,
or omitting it if it is the last payment on a Claim.
Holders of Class 14 Interests will receive nothing under the Plan,
Peter Compton, current holder of the Class 14 Interest will make a
contribution of $25,000.00 to the Debtor, and in return for that
contribution will receive 100% of the Interests in the Reorganized
Debtor.
The Debtor will operate its current business to earn the funds to
make the proposed plan payments.
As Debtor's financial projections demonstrate, Debtor will have a
sufficient average cash flow, after paying operating expenses and
post-confirmation taxes, to fund the necessary payments for the
life of the Plan. The final Plan payment is expected to be paid on
the fifth anniversary of the effective date. The Plan Proponent
contends that Debtor's financial projections are feasible. They
were prepared by the Debtor's professionals, working with the
Debtor's employees and management.
A full-text copy of the Disclosure Statement dated August 17, 2021,
is available at https://bit.ly/3k76QCX from PacerMonitor.com at no
charge.
Attorneys for Debtor:
William C. Beall, Esq.
Eric W. Burkhardt, Esq.
Carissa Horowitz, Esq.
BEALL & BURKHARDT, APC
1114 State Street
La Arcada Building, Suite 200
Santa Barbara, CA 93101
Telephone: (805) 966-6774
Facsimile: (805) 963-5988
About Valley Farm Supply
Valley Farm Supply, Inc., a wholesaler of farm product raw
materials based in Nipomo, California, filed its voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 20-11072) on Sept. 2, 2020. The petition was signed
by Peter Compton, president. At the time of filing, the Debtor
disclosed total assets of $3,711,542 and total liabilities of
$8,460,250.
Judge Deborah J. Saltzman oversees the case.
The Debtor tapped Beall & Burkhardt, APC, as counsel; Terence J.
Long as restructuring consultant; and McDermott & Apkarian, LLP as
accountant.
Community Bank of Santa Maria, as secured creditor, is represented
by Sandra K. McBeth, Esq., at McBeth Legal.
Simplot AB Retail, Inc., as secured creditor, is represented by
Hagop T. Bedoyan, Esq. -- hagop.bedoyan@mccormickbarstow.com – at
McCormick Barstow.
VAREX IMAGING: S&P Ups ICR to 'B+' on Improved Credit Metrics
-------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Varex Imaging
Corp. to 'B+' from 'B' and its issue-level rating on its senior
secured notes to 'B+' from 'B'. The '3' recovery rating is
unchanged.
The stable outlook reflects S&P's expectation that the company will
sustain leverage below 4x over the next 12 months driven by stable
margins, mid-single-digit percentage revenue growth, and solid
annual cash flow generation of at least $40 million.
The upgrade follows a material leverage reduction over the past six
months and reflects our expectation that continued recovery in
product volumes will result in strong operating performance and
solid cash flow generation in 2021-2022. Prior to the pandemic,
Varex had maintained adjusted leverage below 4x. After temporarily
climbing to 10.1x for fiscal 2020, leverage has fallen to 5.1x
reflecting recovering demand and product volumes in the medical
devices industry. S&P said, "We expect Varex's leverage to approach
its historic norms by fiscal year-end. Given that quarterly sales
and profitability metrics have returned to pre-pandemic levels, we
expect the company's leverage will return to and be sustained below
4x going forward."
S&P said, "We expect Varex will sustain its improved operating
efficiency as a result of improving sales volumes and the closure
of its Santa Clara facility. These improvements have more than
offset margin pressures resulting from a product mix that has
shifted to a higher percentage of revenues coming from sales in
China and a lower percentage of revenues coming from higher-margin
industrial sales over the last 12 months. We expect industrial
sales to begin accelerating once capital spending recovers at
airports and seaports.
"We believe the company will fund growth primarily through R&D
spending above acquisitions over the coming years. We believe the
company's product pipeline and investments in new technologies
including nanotubes and photon counting insulate it from near-term
pressures to fund inorganic growth. We also expect free cash flow,
which we project will exceed $40 million annually, to continue to
be directed toward debt reduction until the company has achieved
its stated target of below 3x net leverage.
The ratings on Varex reflect its narrow focus on x-ray
technologies, dependence on original equipment manufacturers
(OEMS), and relatively inflexible capital structure. S&P views
OEMs, in particular Varex's top customer Canon Inc. (20.5% of 2020
revenues) as having significant negotiating and pricing leverage
over Varex. These risks are somewhat offset by a diverse set of
product offerings across multiple imaging modalities for medical
and industrial clients, long-term sticky relationships and
significant switching costs with OEMs. Outside of its top customer,
Varex's customer base is diverse and balanced, in terms of industry
and geographic markets with the U.S., Europe, Middle East, and
Africa (EMEA), and Asia-Pacific (APAC) each comprising over 30% of
Varex's 2020 revenues.
S&P said, "The stable outlook reflects our expectation for leverage
to be sustained below 4x over the next 12 months driven by stable
margins, mid-single-digit percentage revenue growth, and solid
annual cash flow generation of at least $40 million.
"We could lower the rating if we expect the company to maintain
gross leverage above 5x and to generate free operating cash flow
below 6% of debt (about $30 million at current capital structure).
"Although unlikely over the next 12 months, we could raise the
rating to 'BB-' if we expect the company to maintain leverage below
3.5x and free operating cash flow (FOCF)-to-debt ratio of at least
12%."
VENOCO LLC: Tells Supreme Court to Scrap CA Takings Suit Challenge
------------------------------------------------------------------
Law360 reports that a trustee for bankrupt oil driller Venoco LLC
urged the U.S. Supreme Court on Wednesday, August 18, 2021, to
reject an appeal bid from a California state agency challenging a
decision that it could not rely on sovereign immunity to avoid
claims in Chapter 11 proceedings to recoup seized assets.
The California State Lands Commission told the justices last July
2021 that the Third Circuit had impermissibly expanded high court
precedent regarding the unavailability of sovereign immunity in
bankruptcy proceedings to essentially any claim regarding property
in a post-confirmation liquidating trust.
About Venoco LLC
Venoco, LLC, is a California-based and privately owned independent
energy company primarily focused on the acquisition, exploration,
production and development of oil and gas properties. As of April
2017, Venoco held interests in approximately 57,859 net acres, of
which approximately 40,945 are developed.
In the midst of a historic collapse in the oil and gas industry,
Venoco, Inc., the predecessor in interest to Venoco, LLC, and six
of Venoco, Inc.'s affiliates commenced voluntary Chapter 11 cases
(Bankr. D. Del. Lead Case No. 16-10655) on March 18, 2016, in
Delaware to address their overleveraged capital structure. In under
four months, the 2016 Debtors confirmed a plan eliminating more
than $1 billion in funded debt and other liabilities.
On April 17, 2017, each of Venoco, LLC, and six of its subsidiaries
filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-10828). As of the bankruptcy filing, the Debtors estimated
assets in the range of $10 million to $50 million and liabilities
of up to $100 million.
Judge Kevin Gross presides over the 2017 cases.
The Debtors have hired Morris, Nichols, Arsht & Tunnell LLP and
Bracewell LLP as counsel; Zolfo Cooper LLC as restructuring and
turnaround advisor; Seaport Global Securities LLC as financial
advisor; and Prime Clerk LLC as claims, noticing and balloting
agent.
VERITAS NL: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
Veritas NL Intermediate Holdings B.V. (f.k.a Veritas Bermuda Ltd.)
and withdrew all its ratings on Veritas Bermuda Ltd.
The stable outlook reflects S&P's expectation for stabilizing
revenue trends, operating expense normalization to support margins
in the low- to mid-30% range, and maintenance of sizable cash
balances over the next 12 months.
Veritas Holdings Ltd's indirect wholly-owned subsidiary Veritas NL
Intermediate Holdings B.V. assumed all of Veritas Bermuda Ltd.'s
debt obligations and is a co-borrower under the credit agreement
and bond indentures.
S&P said, "Our 'B-' issuer credit rating on Veritas reflects
persistent revenue declines over the past several years and
challenging growth prospects in the mature backup and recovery
software and appliance markets. Growth is unlikely over the near
term, but we believe Veritas maintains a good presence in data
protection markets and its meaningful recurring maintenance
revenues at 65% of total revenues provide somewhat predictable cash
flow generation. The company's strong cost reduction efforts over
the past couple of years have led to steady margin improvements and
deleveraging to about 7x at June 30, 2021.
"The stable outlook reflects our expectation that declines will
stabilize, and steady enterprise demand for backup and recovery
services will lead to flat revenue growth over the next year. The
company's cost-reduction efforts should support EBITDA margins in
the mid-30% area and good FOCF of about $235 million in fiscal
2022. The outlook also reflects Veritas' sizable cash balances that
provide flexibility to reinvest in the business and make tuck-in
acquisitions while maintaining adjusted leverage of about 7x."
S&P could lower the rating if:
-- Revenue erosion accelerates because of more intense competition
in data protection markets or worsening macroeconomic factors that
hurt demand, and profitability declines such that FOCF is
break-even after debt service; and
-- Veritas' liquidity position is diminished with weak interest
coverage of 1x.
An upgrade is unlikely over the next 12 months because of the
company's high leverage and revenue growth challenges. S&P could
consider an upgrade over time if Veritas:
-- Is on a trajectory to achieve modest revenue growth over the
next couple of years;
-- Maintains EBITDA margins above 30% while reinvesting the
business; and
-- Reduces adjusted leverage and keeps it in the low-7x area and
maintains FOCF to debt above 5%.
W.F. GRACE: Unsecured Creditors to Recover 38% in 3 Years
---------------------------------------------------------
W.F. Grace Construction, LLC filed with the U.S. Bankruptcy Court
for the District of New Hampshire a Plan of Reorganization for
Small Business dated August 17, 2021.
This Plan of reorganization proposes to pay creditors of W.F. Grace
Construction, LLC, from (1) disposable income earned during the 3
years following the effective date of the Plan, and (2) the net
proceeds of Retained Actions.
The Financial Projections assume gross revenues that are
substantially less than the Debtor's historical experience based on
the decision to downsize the business given the uncertainty in the
economy as a whole. Although the business will always be seasonal,
the Financial Projections show that this Plan is feasible. The Plan
Proponent's financial projections show that the Debtor will have
projected disposable income of $171,792.96.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 38 cents on the dollar. The final Plan payment to
unsecured creditors is expected to be paid during the last month of
the 3-year plan term. This Plan also provides for the payment of
administrative and priority claims in full.
Claims and interests shall be treated as follows under this Plan:
* Class 1 consists of Stipulated Equipment Order Claim. Each
creditor holding an allowed claim in this class shall be paid in
full, with interest at the rate of 4.25% (except in the case of BMO
which must be paid 4.75%) in 60 consecutive, monthly installments
of principal and interest and otherwise treated in accordance with
the Stipulated Equipment Order.
* Class 2 consists of Equipment Only Secured Claims. On the
effective date, the following creditor shall be allowed a non
recourse secured claim: Balboa Capital. The allowed secured claim
held by Balboa shall be paid in full, with interest at the rate of
4.25% in 60 consecutive, monthly installments of principal and
interest and otherwise treated in accordance with the Stipulated
Equipment Order.
* Class 3 consists of the TBK Secured Claims. On the effective
date of this Plan, the Allowed TBK Secured Claim shall be divided
into i) the Senior Allowed TBK Secured Claim in the amount of
$187,500, less the amount of the adequate protection payments made
after the first 2 payments, and ii) the Junior Allowed TBK Secured
Claim in an amount equal to the amount of the Allowed TBK Secured
Claim, less the amount of the Senior Allowed TBK Secured Claim on
the Effective Date. Each of the Senior and Junior Allowed TBK
Secured Claims shall be paid in full, with interest at a fixed rate
equal to the Prime Rate on the effective date, plus 1% per annum,
in 60, consecutive, equal monthly installments of principal and
interest, less the number of adequate protection payments made
after the first 2 payments for the Senior Allowed TBK Secured
Claim, beginning on the 30th day following the effective date and
on the same date of each month thereafter until paid in full.
* Class 4 consists of the TDB Secured Claims. On the effective
date, TDB shall be allowed a secured claim against the Debtor in
the amount of $77,494.12. The allowed TDB secured claim shall be
paid in full, with interest at a fixed rate equal to the Prime Rate
on the effective date, plus 1% per annum, in 60, consecutive, equal
monthly installments of principal and interest, less the number of
adequate protection payments made by the Debtor, beginning on the
30th day following the effective date and on the same date of each
month thereafter until paid in full.
* Class 5 consists of the CCG-Trustee Secured Claims. On the
effective date, the Trustee, as assignee of CCG shall be allowed an
unsecured claim against the Debtor in the amount of $203,000, which
may be referred to as the Allowed CCG Claim in this Plan. The
allowed secured claim in this class shall be paid in full, without
interest in 60, consecutive, equal monthly installments of
principal and interest.
* Class 6 consists of General Unsecured Claims. The Debtor
shall pay each creditor holding an allowed claim in this class a
pro rata or fractional portion of $12,500 as a cash confirmation
dividend, the numerator of which shall be the allowed or allowable
amount of a claim in this class and the denominator of which shall
be the total amount of allowed or allowable claims in this class.
The Debtor shall pay to each holder of an allowed claim in this
class annually a pro rata or fractional portion of such available
disposable income earned by the Debtor during the preceding 12
month period, beginning on May 15, 2021 and on the same date of
each of the next 2 years thereafter.
* Class 7 consists of Equity Interests. William F. Grace, Jr.
shall retain his equity interests in the Debtor.
A full-text copy of the Plan of Reorganization dated August 17,
2021, is available at https://bit.ly/3CZTv7Y from PacerMonitor.com
at no charge.
Counsel for the Plan Proponent:
William S. Gannon, Esq.
WILLIAM S. GANNON PLLC
889 Elm Street, 4th Floor
Manchester, NH 03101
Tel: 603-621-0833
Email: bgannon@gannonlawfirm.com
About W.F. Grace Construction
W.F. Grace Construction, LLC, is part of the residential
construction contractors industry.
W.F. Grace Construction filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.N.H. Case No.
20-10844) on Sept. 28, 2020. The petition was signed by William F.
Grace, Jr., sole member. At the time of filing, the Debtor
estimated $1 million to $10 million in both assets and
liabilities.
Judge Bruce A. Harwood oversees the case.
William S. Gannon, Esq., at William S. Gannon PLLC represents the
Debtor as counsel.
W133 OWNER: Carve-Out from Sale Plan to Fund Plan
-------------------------------------------------
Lori Lapin Jones, Esq. as Chapter 11 Trustee of debtor W133 Owner
LLC submitted a First Amended Disclosure Statement for the Second
Amended Plan of Liquidation dated August 17, 2021.
The centerpiece of the Plan is the post-confirmation closing on the
Sec. 363 Sale of the Debtor's real property and improvements
located at 308-310 West 133rd Street, New York, New York 10030
("Property"). The 363 Sale of the Property was conducted on July
15, 2021 pursuant to the Sale Stipulation approved by the
Bankruptcy Court and the Terms and Conditions of Sale approved by
the Bankruptcy Court.
Harlem 133 Lender, having credit bid the sum of $22,000,000 for the
Property, was the successful bidder at the 363 Sale. In accordance
with the stipulation between the Trustee and Harlem 133 Lender, LLC
that was previously approved by the Bankruptcy Court, Harlem 133
Lender shall pay an amount equal to the Carve-Out to fund the Plan.
The Plan shall also be funded from any and all recoveries made or
obtained by the Trustee and/or Plan Administrator from the
liquidation of all of the Debtor's other assets, including any
litigation or avoidance claims held by the Debtor or the Estate.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Class 5 shall consist of all Allowed Unsecured Claims, which
include any allowed Deficiency Claims. Class 5 is impaired.
Consistent with the Sale Stipulation, Allowed General Unsecured
Claims, which shall include all Allowed Deficiency Claims, except
any Deficiency Claim of Harlem 133 Lender, will be paid their Pro
Rata share of no less than the Allowed General Unsecured Claim
Reserve. In addition, Allowed General Unsecured Claims, including
Allowed Deficiency Claims, may be paid their Pro Rata share of any
additional proceeds up to the amounts of the Allowed General
Unsecured Claims from: (a) any recoveries from Causes of Action;
and/or (b) any other source of recovery.
* Class 6 shall consist of all Allowed Equity Interests. Class
6 is impaired. Allowed Equity Interests are not anticipated to
receive any Distribution from the Estate given that the Holders of
Allowed Class 2, 3 and 5 Claims will not be made whole. Holders of
Class 6 Equity Interests are deemed to have rejected the Plan.
The Plan shall be funded with the Carve-Out pursuant to the Sale
Stipulation together with the proceeds, if any, from the
prosecution of Causes of Action and any other source of recovery.
All Distributions shall be made by the Trustee or the Plan
Administrator in accordance with Article IX of the Plan, except
that to the extent that a Claim is a Disputed Claim, within 14 days
after the order allowing such Claim becomes a Final Order.
The 363 Sale was conducted on July 15, 2021. Harlem 133 Lender,
having credit bid the sum of $22,000,000 for the Property, was the
highest and best bidder. By the Sale Confirmation Order, the
Bankruptcy Court confirmed the results of the 363 Sale. Pursuant to
the Terms and Conditions of Sale, Harlem 133 Lender must close
title to the Property on or before the later of 30 days from the
entry of the Confirmation Order or an order confirming the results
of the 363 Sale, TIME BEING OF THE ESSENCE as to Harlem 133 Lender,
although such date may be extended solely by the Trustee.
The Amended Plan has blanks with respect to dates and deadlines,
including the voting deadline and combined hearing on Final
Disclosure Statement Approval and Plan Confirmation.
A full-text copy of Trustee's Amended Disclosure Statement dated
August 17, 2021, is available at https://bit.ly/3ssWdyd from
PacerMonitor.com at no charge.
Counsel to Lori Lapin Jones, Esq.:
Holly R. Holecek, Esq.
LaMonica Herbst & Maniscalco, LLP
3305 Jerusalem Avenue
Wantagh, NY 11793
Telephone: (516) 826-6500
Email: hrh@lhmlawfirm.com
About W133 Owner
W133 Owner, LLC, a Brooklyn, N.Y.-based company engaged in renting
and leasing real estate properties, sought protection under Chapter
11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20 42637) on
July 16, 2020. Levi Balkany, sole member, signed the petition. At
the time of the filing, the Debtor had estimated assets of less
than $50,000 and liabilities of between $10 million and $50
million.
Rosenberg Musso & Weiner, LLP is the Debtor's legal counsel.
On Sept. 14, 2020, the court approved the appointment of Lori Lapin
Jones, Esq., as the Debtor's Chapter 11 trustee. The trustee
tapped LaMonica Herbst & Maniscalco, LLP as bankruptcy counsel and
Joseph A. Broderick, P.C. as accountant. Wenig Saltiel LLP,
Jeffrey Golkin Partners and Nixon Peabody LLP serve as the
trustee's special counsel.
WIRTA HOTELS: Wins Cash Collateral Access
-----------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington at
Seattle has authorized Wirta Hotels, LLC to use cash collateral on
an interim basis through September 28, 2021, the date of the final
hearing.
The Debtor requires the use of Cash Collateral to continue its
ongoing operations in the ordinary course of business and to avoid
disruption of such operations.
The Debtor is permitted to use cash collateral to fund the
reasonable, necessary, and ordinary costs and expenses of its
business in accordance with the budget.
The Debtor is authorized to use Cash Collateral to pay these costs,
fees, and expenses: (a) the unpaid fees due and payable to the
Clerk of the Court pursuant to 28 U.S.C. section 1930; and (b) any
other costs, fees, and expenses imposed by the Court (or by law) in
connection with the chapter 11 case.
Wilmington Trust, National Association, as Trustee, on Behalf of
the Registered Holders of Wells Fargo Commercial Mortgage Trust
2016-C35, Commercial Mortgage Pass-Through Certificates, Series
2016-C35 is granted Adequate Protection Liens, which will have the
same extent, priority, validity, and status as Wilmington's
prepetition liens, and which are binding and perfected
automatically upon the entry of the Interim Order.
The Debtor is directed to provide Wilmington and the United States
Trustee these reports during the Interim Period: (1) monthly budget
to actual cash collateral report, by no later than the tenth day of
the subsequent calendar month (or such next business day); (2)
monthly "STR" reports as soon as such reports are made available to
the Debtor; and (3) monthly balance sheet and cash-based income
tatements, by no later than the 20th day of the subsequent calendar
month (or such next business day), starting with such reports for
the month of August 2021, which are due on September 20, 2021.
Additionally, the Debtor will provide to Wilmington and the United
States Trustee financial statements for the months of May, June,
and July 2021 consistent with financial statements provided by the
Debtor to Wilmington for prior months as soon as such reporting is
available.
The Debtor owns and operates a hotel commonly known as the "Quality
Inn & Suites at Olympic National Park," located at 134 River Road,
Sequim, Washington 98382. The Hotel was recently honored with its
fifth consecutive Platinum Award, which places it in the top 3% of
hotels in its franchise based on guest satisfaction. The Hotel also
completed a property improvement plan approximately three years
ago. The ultimate owners of the Debtor and the Hotel are Bret and
Patricia Wirta, who opened the Hotel in 2005 and have operated it
successfully ever since (including through the Great Recession and
the COVID-19 pandemic). Mr. Wirta is extensively involved in the
Sequim community.
Like virtually every facet of the hospitality industry across the
world, the Hotel has suffered as a result of the COVID-19 pandemic
and other exogenous factors. As a result of these extraordinary
circumstances, the Debtor missed six months of payments to
Wilmington, but has made monthly payments from October 2020 through
the date hereof that have been accepted by Wilmington and that have
established a course of dealing consistent with a proposal made by
the Debtor to Wilmington which Wilmington never rejected. Although
the Hotel is performing much better in 2021 than in 2020 and the
Debtor has been making regular payments of principal and interest
to Wilmington, the Debtor cannot comply with Wilmington's unclear
and unreasonable request for a massive immediate "cure" payment.
The Debtor is the borrower under a Loan Agreement, dated as of June
17, 2016 between the Debtor and Wirta 2-H, LLC and UBS Real Estate
Securities Inc. Under the Loan Agreement, the Original Lender made
a loan to the Debtor in the original principal sum of $4,600,000.
The Debtor obtained the Loan to refinance its prior loan, on which
the Debtor always made timely and full payments notwithstanding the
Great Recession. The Loan is evidenced by a promissory note that
the Debtor made, executed, and delivered to the Original Lender in
the original principal sum of $4,600,000.
The Note is secured by, among other things, a Fee and Leasehold
Deed of Trust, Assignment of Leases and Rents and Security
Agreement, dated as of June 17, 2016 executed by the Debtor as
grantor, in favor of First American Title Insurance Company, as
trustee, for the benefit of the Original Lender as beneficiary,
which was recorded June 20, 2016 as Instrument No. 2016-1335913 in
Clallam County, Washington. Through a series of assignments and
allonges, Wilmington asserts that it is now the owner and holder of
the Note, the beneficiary under the Deed of Trust, and the secured
party and assignee under all of the other Loan Documents.
The Debtor asserts that Wilmington has a substantial equity cushion
well in excess of what is necessary for Wilmington to be adequately
protected.
With respect to the value of the Hotel, the Debtor is in the
process of ordering a new appraisal, which will be ready in time
for the Final Hearing. For purposes of the Interim Order, however,
the Debtor has provided the Younge Appraisal attached to the Wirta
Declaration as Exhibit C, which was completed on June 10, 2016, in
connection with the closing of the Loan. The Younge Appraisal
states that the value of the Hotel as of May 4, 2016 was $7,400,000
and projected that the value of the Hotel upon stabilization (then
forecasted for May 4, 2018) would be $8,100,000. Additionally,
Cushman and Wakefield provided an updated appraisal in September
2020 -- at the nadir of the hospitality industry -- which valued
the Hotel at $6,900,000. Since then, consistent with the
performance of the Holiday Inn in Sequim, the Hotel's finances and
operations have dramatically improved, as the Debtor's upcoming
appraisal will likely reflect. But for now, at any of the $6.9
million, $7.4 million, or $8.1 million valuation figures,
Wilmington has an equity cushion between approximately 33% and 43%,
in any case well above the 20% threshold.
A copy of the motion is available for free at
https://bit.ly/3m7FYFt from PacerMonitor.com.
A copy of the order is available at https://bit.ly/3mgds4I from
PacerMonitor.com.
About Wirta Hotels
Wirta Hotels LLC owns and operates a hotel commonly known as the
"Quality Inn & Suites at Olympic National Park," located at 134
River Road, Sequim, Washington 98382. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash.
Case No. 21-11556) on August 13, 2021. In the petition signed by
Bret Wirta, principal, The Debtor disclosed $3,136,280 in assets
and $5,193,377 in liabilities.
Judge Christopher M. Alston oversees the case.
Tara J. Schleicher, Esq. at Foster Garvey PC is the Debtor's
counsel
WNJ24K LLC: Gets OK to Hire May Potenza as Legal Counsel
--------------------------------------------------------
WNJ24K, LLC received approval from the U.S. Bankruptcy Court for
the District of Arizona to employ May Potenza Baran & Gillespie,
P.C. to serve as legal counsel in its Chapter 11 case.
The firm will render these services:
a. advise the Debtor with respect to its powers and duties
under the Bankruptcy Code;
b. represent the Debtor in connection with all court
appearances;
c. prepare legal documents;
d. prepare a Chapter 11 plan and disclosure statement and
handle all matters and court hearings related thereto;
e. represent the Debtor in discussions with the United States
Trustee’s office;
f. represent the Debtor in negotiations with creditors,
parties-in-interest and potential purchasers; and
g. provide all other necessary legal services.
The firm's hourly rates are as follows:
Grant L. Cartwright $435 per hour
Andrew A. Harnisch $435 per hour
Michelle Giordano $235 per hour
The retainer fee is $50,000.
May Potenza is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court papers
filed by the firm.
The firm can be reached through:
Andrew A. Harnish, Esq.
May Potenza Baran & Gillespie, P.C.
201 North Central Avenue 22nd Floor
Phoenix, AZ 85004-0608
Tel: 602-252-1900
Email: aharnisch@maypotenza.com
About WNJ24K LLC
WNJ24K, LLC, a company based in Scottsdale, Ariz., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case No. 21-05257) on July 8, 2021, listing as much as $10 million
in both assets and liabilities. Judge Madeleine C. Wanslee
oversees the case. May, Potenza, Baran & Gillespie, P.C. is the
Debtor's legal counsel.
[*] Texas Corporate Bankruptcies Decreased But Danger Signs Ahead
-----------------------------------------------------------------
Mark Curriden of Texas Lawbook reports that business bankruptcies
in Texas this 2021 are down significantly from last year's record
number of court-supervised restructurings, but they remain much
higher than the pre-COVID-19 filings and far exceed the number seen
in any other state in the U.S.
The Southern District of Texas saw fewer than half the number of
new bankruptcy filings during the first six months of 2021 compared
to the second half of 2020 and 40% fewer than during the first six
months of 2020, according to new federal court data provided to The
Texas Lawbook by Androvett Legal Media Research.
While corporate bankruptcy lawyers are not working at the fevered
pitch of 2020, the new cases filed this 2021 are incredibly complex
and are keeping attorneys busy.
"The volume of new cases coming in is certainly down and we are not
as busy as last year," U.S. Bankruptcy Chief Judge David Jones told
The Texas Lawbook. "But the cases now are much more difficult and
more problematic than in 2020."
Chief Judge Jones said most of the restructurings last year
involved companies with strong asset bases.
"Restacking the capital structure made sense," he said. "The cases
now are much harder because the pie is much smaller. We are no
longer talking 60 or 70 cents on the dollar. There's not enough
potential in the businesses to make all sides happy."
There were 546 businesses that filed for protection under Chapter
11 of the U.S. Bankruptcy Code in Texas from Jan. 1 through June
30, 2021 – down from 815 during the same period last 2020 and
down from an all-time high of 967 filings in the second half of
2020, the Androvett data shows.
By contrast, there were 373 companies that filed for bankruptcy in
Delaware.
"Last 2020 was breathtaking – just so many cases," said Joe
Coleman, a bankruptcy partner at Kane Russell Coleman Logan in
Dallas. "I never want to bill as much as I did in 2020 ever again.
That being said, we’ve been super busy this 2020, too."
The companies that filed this year include the Irving-based CiCis
Pizza chain, Houston-headquartered Castex Energy, Alamo Drafthouse
of Austin, Carrolton-based Katerra and Houston-based Agilon Energy
Holdings. London-headquartered Seadrill Ltd. and Sundance Energy of
Denver also filed for bankruptcy in Houston.
But the biggest bankruptcies were filed as a result of Winter Storm
Uri, including Brazos Electric Cooperative and power retailer
Griddy Energy. Both filed in the Southern District of Texas.
"We filed 30 bankruptcies last year – up from six during most
years," said Jackson Walker partner Matt Cavenaugh. Bankers look at
distressed debt. In May 2020, there was about $350 billion in
distressed debt. This May 2021, it was $30 billion. There is so
much liquidity and access to capital that there is so much M&A.
"Energy is a completely different story," Cavenaugh said. "The
difference is between zero or negative $37 and $70 a barrel –
what a difference a year makes."
Two-thirds of all Texas bankruptcies during the first six months of
2020 were filed in the Southern District, which has become a
national hotbed of corporate restructurings since Chief Judge Jones
reformed the procedures to make business bankruptcies more
predictable and the system more user-friendly.
The 360 corporate bankruptcies filed in the Southern District,
which includes Houston, during the first six months of 2021 were
52% less than the second half of 2020 and 40% less than in H1 2020.
But those 360 filings were the third-highest ever lodged in the
Southern District, according to the Androvett data.
"The Southern District will continue to be an attractive forum for
debtors," said Sidley Austin partner Duston McFaul. "The judges are
super smart with business backgrounds. There is not a tighter ship.
From the practitioner's perspective, it has been impressive how
Judge Jones and Judge Isgur have handled it."
Coleman agrees. "The Southern District has been put through the
ringer and came out with superlative grades," he said.
The Northern District of Texas, which includes Dallas and Fort
Worth, recorded 113 new business bankruptcies filed during the
first six months of 2021, which is eight more filings than during
the same period year-over-year but 26% fewer than in the last six
months of 2020.
There were 49 bankruptcies filed during H1 2021 in the Western
District, which includes Austin and San Antonio. That was a
decrease of 32% from H1 2020 but five more than during the second
half of 2020.
The Eastern District of Texas, which includes Plano, Sherman and
Tyler, recorded 24 business bankruptcies filed during the first
half of 2021, which is the lowest of any six-month period since
2014.
But all the bankruptcy experts believe this downturn in Chapter 11
filings will only be temporary.
"The truth is, people don't know what the hell is coming," said
Munsch Hardt shareholder John Cornwell. "We've had a tremendous
amount of stimulus poured into the economy and that has extended
runways."
Fellow Munsch Hardt shareholder Jay Ong said 2021 has seen "a lot
more out-of-court restructurings" and that the eviction moratorium
has had an impact because "landlords have their own lenders to deal
with."
"The businesses that are nimble enough to see the winds blowing and
make the adjustments will be the winners, and those that don't will
be the losers," Ong said.
Coleman said the "consequences of the chip shortage" could still
"wreak havoc."
"There will be a ripple effect that may not be seen for another two
years or so," he said.
McFaul said much of the credit for the decline in corporate
bankruptcies is because "the capital markets have been on steroids"
and parts of the stock market are overvalued.
"It is simply unsustainable," he said. "When things turn, it is
going to be ugly, and it will be business-sector agnostic. On the
macro, things are going to pivot when the capital markets cool, and
what starts as a minor correction could become a major correction,
which would spur a lot more bankruptcy filings."
Chief Judge Jones agrees there are dangers lurking.
"Money has been so cheap and so easy to get, which has caused
filings to go down," the judge said. "And we are very worried about
the consumer side of things. When the stimulus and moratoriums
expire, we fear it is going to get very bad."
[^] BOOK REVIEW: The First Junk Bond
------------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
http://www.beardbooks.com/beardbooks/the_first_junk_bond.html
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion. This engrossing book follows the extraordinary journey
of Texas International, Inc (known by its New York Stock
Exchange stock symbol, TEI), through its corporate growth and
decline, debt exchange offers, and corporate renaissance as
Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI
"flourished for a brief luminous moment but then crashed to
earth and was consumed." TEI's story features attention-grabbing
characters, petroleum exploration innovations, financial
innovations, and lots of risk taking.
The First Junk Bond was originally published in 1994 and
received solidly favorable reviews. The then-managing director
of High Yield Securities Research and Economics for Merrill
Lynch said that the book "is a richly detailed case study. Platt
integrates corporate history, industry fundamentals, financial
analysis and bankruptcy law on a scale that has rarely, if ever,
been attempted." A retired U.S. Bankruptcy Court judge noted,
"(i)t should appeal as supplementary reading to students in both
business schools and law schools. Even those who practice.in the
areas of business law, accounting and investments can obtain a
greater understanding and perspective of their professional
expertise."
"TEI's saga is noteworthy because of the company's resilience
and ingenuity in coping with the changing environment of the
1980s, its execution of innovative corporate strategies that
were widely imitated and its extraordinary trading history,"
says the author. TEI issued the first junk bond. In 1986 it
achieved the largest percentage gain on the NYSE, and in 1987
suffered the largest percentage loss. It issued one of the first
bonds secured by a physical commodity and then later issued one
of the first PIK (payment in kind) bonds. It was one of the
first vulture investors, to be targeted by vulture investors
later on. Its president was involved in an insider trading
scandal. It innovated strip financing. It engaged in several
workouts to sell off operations and raise cash to reduce debt.
It completed three exchange offers that converted debt in to
equity.
In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever
junk bond. The fresh capital had allowed TEI to acquire a
controlling interest of Phoenix Resources Company, a part of
King Resources Company. TEI purchased creditors' claims against
King that were subsequently converted into stock under the terms
of King's reorganization plan. Only two years later, cash
deficiencies forced Phoenix to sell off its nonenergy
businesses. Vulture investors tried to buy up outstanding TEI
stock. TEI sold off its own nonenergy businesses, and focused on
oil and gas exploration. An enormous oil discovery in Egypt made
the future look grand. The value of TEI stock soared. Somehow,
however, less than two years later, TEI was in bankruptcy. What
a ride!
All told, the book has 63 tables and 32 figures on all aspects
of TEI's rise, fall, and renaissance. Businesspeople will find
especially absorbing the details of how the company's bankruptcy
filing affected various stakeholders, the bankruptcy negotiation
process, and the alternative post-bankruptcy financial
structures that were considered. Those interested in the oil and
gas industry will find the book a primer on the subject, with an
appendix devoted to exploration and drilling, and another on oil
and gas accounting.
Harlan Platt is professor of Finance at Northeastern University.
He is president of 911RISK, Inc., which specializes in
developing analytical models to predict corporate distress.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
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firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***