/raid1/www/Hosts/bankrupt/TCR_Public/210930.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, September 30, 2021, Vol. 25, No. 272
Headlines
12 UNIVERSITY: Nov. 16 Disclosure Statement Hearing Set
A&E ADVENTURE: Seeks Cash Collateral Access
A&E ADVENTURES: Seeks Chapter 11 Bankruptcy; Sites Remain Open
ADVANCED SAWMILL: Seeks to Hire Bruner Wright as Legal Counsel
ADVANTAGE HOLDCO: Unsecureds to Recover 1% to 2% in Plan
ALEX AND ANI: Lion Boosts Stake to 65% in Approved Plan
AMERICAN SLEEP: Seeks to Hire Lefkovitz & Lefkovitz as Counsel
AMERICAN TIRE: Moody's Rates New Sr. First Lien Term Loan 'Caa1'
ASP BLADE: Moody's Assigns First Time 'B2' Corporate Family Rating
ASTRO INTERMEDIATE: S&P Assigns 'B-' ICR, Outlook Stable
ASTRO ONE: Moody's Gives 'B3' CFR & Rates 1st Lien Term Loan 'B3'
AYTU BIOPHARMA: Incurs $58.3-Mil. Net Loss in FY Ended June 30
BABCOCK & WILCOX: Signs Agreement to Acquire VODA A/S
BEAR VALLEY RANCH: Seeks to Hire J. Luke Hendrix as Legal Counsel
BODYTEK FITNESS: U.S. Trustee Unable to Appoint Committee
BOY SCOUTS OF AMERICA: Court Sets Plan Hearing for Jan. 24
BRIGHT MOUNTAIN: Starts Trading on Expert Market
BYRNA TECHNOLOGIES: To Release Third Quarter Results on Oct. 8
CAITHNESS SHEPHERDS: Fitch Affirms BB on $105MM Certs Due 2032
CARBON AND CLAY: November 3 Plan Confirmation Hearing Set
CASTLELAKE AVIATION: Fitch Assigns 'BB(EXP)' IDR, Outlook Stable
CBAK ENERGY: Guosheng Wang Quits as Director
CHAR PHAR: Parties Postpone Disclosures Hearing to Oct. 26
CHARTER COMMUNICATIONS: Moody's Rates New Sr. Secured Notes 'Ba1'
CHINA FISHERY: Unsecured Creditors to Recover 8.75% in PAIH Plan
COALSON ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
COBRA ACQUISITIONCO: Moody's Assigns First Time 'B2' CFR
COVIA CORP: Taps Lillian Etzkorn as New CFO After Bankruptcy Exit
CSL CAPITAL: S&P Rates New $700MM Senior Unsecured Notes 'CCC'
CYTODYN INC: Comments on Rosenbaum/Patterson Activist Group 'Plan'
CYTODYN INC: Gets $9.9M Proceeds From Private Placement
DALLAS REAL ESTATE: Nov. 3 Disclosure Statement Hearing Set
DAME CONTRACTING: Wins Cash Collateral Access Thru Oct 17
DIAMONDHEAD CASINO: Incurs $418,692 Net Loss in First Quarter
DIAMONDHEAD CASINO: Incurs $434,552 Net Loss in Second Quarter
DUNBAR PLAZA: Seeks to Hire Caldwell & Riffee as Legal Counsel
DUTCHINTS DEVELOPMENT: Voluntary Chapter 11 Case Summary
ELITE AEROSPACE: Seeks to Hire Levene as Bankruptcy Counsel
EMERALD SQUARE: Value of Collateral Slashed
ENTRUST ENERGY: Creditors to Get Proceeds From Liquidation
ESCAPE VELOCITY: Moody's Assigns First Time B3 Corp. Family Rating
EVOKE PHARMA: Wins Sales Aid Silver Award for GIMOTI
EXPRESS GRAIN: Voluntary Chapter 11 Case Summary
FLEXIBLE FUNDING: Oct. 1 Deadline for Panel Questionnaires
FLOAT HORIZEN: Further Fine-Tunes Plan Documents
FLORIDA FOOD: Moody's Assigns First Time 'B3' Corp. Family Rating
GATEWAY KENSINGTON: Court Directs Appointment of Examiner
GBT TECHNOLOGIES: Issues $244,500 Convertible Note to Redstart
GFL ENVIRONMENTAL: S&P Retains 'B+' Issuer Credit Rating
GREATER WORKS: Sale Plan to Pay Creditors in Full by June
GULF FINANCE: S&P Hikes ICR to 'B-' on Refinancing, Outlook Stable
GULFPORT ENERGY: Court OKs Settlement With TC Energy Entities
HEALTHEQUITY INC: S&P Assigned 'BB-' Rating, Outlook Stable
HH ACQUISITION: U.S. Trustee Unable to Appoint Committee
IBIO INC: Incurs $23.2 Million Net Loss in FY Ended June 30
ICAN BENEFIT: Principal Allegedly Involved in Causes of Action
IMA FINANCIAL: S&P Assigns 'B' ICR, Outlook Stable
INNOVATION PHARMACEUTICALS: Incurs $13.9M Loss in FY Ended June 30
INNOVATIVE DESIGNS: Posts $13K Net Income in Third Quarter
INTELSAT SA: Closer to Exiting Chapter 11 Bankruptcy
JACK COUNTY HOSPITAL: PCO Says Data Metrics Stable
JAMCO SERVICES: Citizens State Bank Says Plan Not Feasible
JET REAL ESTATE: Claims to Get 100% with Interest After Plan Sale
JIM'S DISPOSAL: Unsecureds' Recovery Hiked to $1.075M in Plan
JOHNSON & JOHNSON: Wins Multiplaintiff Trial After SC Setback
K & W CAFETERIA: Court Closes Bankruptcy Case
KATERRA INC: Greensill and Two Others File Plan Objections
KATERRA INC: Sureties, Subcontractor Oppose Plan Confirmation
KATERRA INC: Texas Counties Want Interest on Claim Paid in Plan
KINTARA THERAPEUTICS: Widens Net Loss to $38.3M in FY Ended June 30
KRIESEL RENTALS: Claims Will be Paid from Continued Operations
KRYSTAL RESTAURANTS: Returns With Big Growth Plans After Bankruptcy
LAMAR ADVERTISING: Moody's Ups CFR to Ba2, Outlook Remains Stable
LECLAIRRYAN PLLC: Founder Fires Back at Trustee's Conspiracy Claims
LOYALTY VENTURES: S&P Assigns 'B+' ICR, Outlook Stable
LRGHEALTHCARE: To Seek Bankruptcy Plan Votes From Creditors
LRGHEALTHCARE: Unsecureds to Get 11.5% of Net Distributable Assets
LSB INDUSTRIES: Moody's Rates New $500MM Senior Secured Notes 'B3'
LSB INDUSTRIES: Proposes Private Offering of $500M Senior Notes
LSF11 A5 HOLDCO: Moody's Rates New $350MM Unsecured Notes 'Caa1'
MIDAS INTERMEDIATE II: Moody's Cuts CFR to Caa3, Outlook Negative
MOUNTAIN PROVINCE: Extends Maturity of $25M Loan to March 31
NESV ICE: Wins Cash Collateral Access
NEW ENTERPRISE: S&P Rates New $575MM Senior Secured Notes 'B+'
NEWPORT CENTRE: $161MM Loan Extended Thru May 2023
NICHOLAS H. NOYES: S&P Affirms 'BB-' LT Rating on Revenue Debt
NIDA ALSHAIKH DDS: Taunt Law's Erika Hart Named PC Ombudsman
NORTHWEST BAY: Oct. 27 Hearing on Disclosure Statement
OLCAN III PROPERTIES: Unsecured to Recover 100% in 5 Years
OMNIQ CORP: License Plate Recognition Systems to be Deployed at MIA
PATH MEDICAL: U.S. Trustee Appoints Creditors' Committee
PHI GROUP: Delays Filing of Form 10-K
PINECREST ACADEMY: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
PROMENADE SHOPS: CMBS Trust Forecloses on Shopping Center
PROSPECT-WOODWARD: Wins Cash Collateral Access
PURDUE PHARMA: California, Connecticut, Appeal Confirmation Order
R. INVESTMENTS: U.S. Trustee Unable to Appoint Committee
RM BAKERY: Files Debt-for-Equity Plan; Unsecured Get Profit Share
ROCHELLE HOLDINGS: HMG/PMS Say Amended Plan Not Confirmable
SAMARCO MINERACAO: Renews Talks With Bondholders on Restructuring
SEMILEDS CORP: All Proposals Passed at Annual Meeting
SEP SOFTWARE: Case Summary & 6 Unsecured Creditors
SOUND HOUSING: Stuart Heath Appointed as Chapter 11 Trustee
SPECIALTY BUILDING: Moody's Rates New Term Loan Due 2028 'B2'
STONEMOR INC: Receives Invitation for Strategic Alternative Talks
SUMMIT FAMILY: South Park Creators Buy Casa Bonita for $3.1M
SUMMIT FINANCIAL: Gets Access to Cash Collateral Thru Oct 20
TANGO DELTA: Lowe & Warren Trustees Agree on Liquidating Plan
TNT CRANE: Moody's Withdraws B3 CFR Following Debt Repayment
TOPBUILD CORP: S&P Rates New $500MM Senior Unsecured Notes 'BB+'
TRAXIUM LLC: Schmutz Disputes Carpenter's Claim as Equity Holder
TRINET GROUP: Moody's Ups CFR to Ba1 & Sr. Unsecured Notes to Ba2
UNITI GROUP: To Sell Bonds to Cut Debt, Windstream Burden
UPLAND POINT: Ombudsman to File Report Every 6 Months
USA GYMNASTICS: 6 Insurers Back $425M Settlement Plan
WADSWORTH ESTATES: Files Disclosures Reflecting Approved Changes
WADSWORTH ESTATES: In-Person Hearing on Plan on Oct. 28
WOODBRIDGE HOSPITALITY: $17.5-Million Sale to Fund Plan
WRENCH GROUP: S&P Cuts ICR to 'B-' On Aggressive Financial Policy
YIELD10 BIOSCIENCE: Adds Forum Selection Provision to Bylaws
ZOHAR FUNDS: MBIA Renews $1 Bil. Ch.11 Suit vs. Tilton, Affiliates
ZOHAR FUNDS: Tilton-Led MD Helicopter Faces $36.2Mil. Fraud Verdict
[*] Dallas Court Seeks to Attract Large, Complex Cases
[*] New York Bankruptcy Judge Robert Drain to Retire
[*] SBA Loans Saved Firms Before Covid -- Now They Could Ruin Them
[*] Supreme Court Urged to Review Equitable Mootness in Plan Appeal
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
12 UNIVERSITY: Nov. 16 Disclosure Statement Hearing Set
-------------------------------------------------------
12 University, LLC, filed with the U.S. Bankruptcy Court for the
District of Arizona a disclosure statement and plan of
reorganization. On September 27, 2021, Judge Brenda Moody Whinery
ordered that:
* Nov. 16, 2021, at 10:00 a.m. via videoconference is the
hearing to consider approval of the Disclosure Statement.
* Nov. 9, 2021 is fixed as the last day for any party desiring
to object to approval of the Disclosure Statement to file a written
objection.
* Nov. 9, 2021 is the deadline for non-governmental creditors
to file proof of claims.
A copy of the order dated September 27, 2021, is available at
https://bit.ly/3odNLTk from PacerMonitor.com at no charge.
Attorneys for the Debtor
Pernell W. McGuire
M. Preston Gardner
40 E. Rio Salado Pkwy., Suite 425
Tempe, AZ 85281
Telephone: (480) 733-6800
Fax: (480) 733-3748
E-mail: efile.dockets@davismiles.com
About 12 University LLC
12 University, LLC, filed its voluntary petition for Chapter 11
protection (Bankr. D. Ariz. Case No. 20-11567) on Oct. 19, 2020,
listing as much as $1 million in both assets and liabilities. Judge
Brenda Moody Whinery oversees the case.
Davis Miles McGuire Gardner, PLLC, and Nathanson Law Firm serve as
the Debtor's bankruptcy counsel and special counsel, respectively.
The Debtor also tapped FORSarchitecture, LLC, a Tucson, Ariz. based
full-service architecture and interior design firm.
A&E ADVENTURE: Seeks Cash Collateral Access
-------------------------------------------
A&E Adventures LLC asks the U.S. Bankruptcy Court for the Southern
District of Florida, Miami Division, for authority to use cash
collateral and provide adequate protection.
The Debtor seeks to continue to operate its business in the
ordinary course, preserve jobs, the value of its estate, and
maintain operations. Without immediate authorization to use cash
collateral, the Debtor will not be able to meet payroll, rent, tax,
insurance and other obligations necessary for its day-to-day
operations.
The Debtor says its assets are subject to liens on the Debtor's
accounts receivable, cash and cash equivalents in the amount of
$8,439,351.28 plus interest in favor of Live Oak Banking Company:
-- On July 28, 2014, the Debtor and non-debtor M&A Group, LLC
executed and delivered to the order of Secured Lender a promissory
note (Note 1) which evidences a loan in the original principal
amount of $1,900,000 (Loan 1). Loan 1 is guaranteed by the Small
Business Administration. As of the Petition Date, the Debtor owes
the Secured Lender $1,182,901.44 plus interest.
-- On June 26, 2015, the Borrower executed and delivered to
the order of the Secured Lender a promissory note (Note 2) which
evidences a loan in the original principal amount of $2,060,000
(Loan 2). Loan 2 is guaranteed by the SBA. As of the Petition Date,
the Debtor owes the Secured Lender approximately $1,440,350.62 plus
interest.
-- On March 15, 2016, the Borrower executed and delivered to
the order of the Secured Lender a promissory note (Note 3) which
evidences a loan in the original principal amount of $350,000 (Loan
3). Loan 3 is guaranteed by the SBA. As of the Petition Date, the
Debtor owes the Secured Lender approximately $215,479.05 plus
interest.
-- On March 28, 2018, the Borrower executed and delivered to
the order of the Secured Lender a promissory note (Note 4) which
evidences a loan in the original principal amount of $2,250,000
(Loan 4). Loan 4 is guaranteed by the SBA. As of the Petition
Date, the Debtor owes the Lender approximately $1,851,700.74 plus
interest.
-- On July 26, 2019, the Borrower executed and delivered to
the order of Secured Lender a promissory note (Note 5) which
evidences a loan in the original principal amount of $4,542,201
(Loan 5). Loan 5 is not guaranteed by the SBA. As of the Petition
Date, the Debtor owes the Lender approximately $3,748,919.43 plus
interest.
The Debtor's assets are further subject to a lien in favor of the
SBA. On June 4, 2020, the Debtor executed and delivered to the
order of the SBA a promissory note (SBA Note) which evidences a
loan in the original principal amount of $150,000 (SBA Loan). The
SBA Loan is guaranteed by the Debtor's principal, Michael Abecassis
and his wife Kelley Abecassis. As of the Petition Date, the Debtor
owes the SBA approximately $500,000 plus interest.
The Debtor's assets which include, inter alia, cash on hand and on
deposit in bank accounts, accounts receivable, equipment, supplies
and furniture, is valued at approximately $29,850,000.00, subject
to appraisal.
As adequate protection for the Debtor's use of cash collateral, the
Debtor proposes to provide the Secured Lender a valid, binding,
continuing, enforceable, fully-perfected, non-avoidable first
priority liens and/or replacement liens on the Collateral to the
same extent that such liens and security interests existed
pre-petition.
The Debtor proposes to provide the SBA a valid, binding,
continuing, enforceable, fully-perfected, non-avoidable liens
and/or replacement liens on the Collateral to the same extent that
such liens and security interests existed pre-petition.
A copy of the motion and the Debtor's budget for the period from
October 3 to 24, 2021 is available at https://bit.ly/3CWVgSP from
PacerMonitor.com.
The Debtor projects $311,657 in total receipt and $551,517 in total
disbursements for the week ending October 1.
The Debtor projects $310,914 in total receipt and $317,542 in total
disbursements for the week ending October 10.
The Debtor projects $336,803 in total receipt and 383,603 in total
disbursements for the week ending October 17.
The Debtor projects $354,732 in total receipt and $231,506 in total
disbursements for the week ending October 24.
About A&E Adventures LLC
A&E Adventures LLC, operating as GameTime, is a family
entertainment destination with fun indoor amusements offering a
full-service dining experience and full liquor sports bar in Miami,
Fort Myers, Daytona, Ocoee, Tampa and Kissimmee where customers can
play over 100 interactive games in the Mega Arcade. Customers can
enjoy a delicious lunch or dinner and watch any game on over 60
HDTVs. GameTime can also host large gatherings with full banquet
services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-19272) on September
24, 2021. In the petition signed by Michael Abecassis, managing
member, the Debtor disclosed up to $50 million in both assets and
liabilities.
James C. Moon, Esq. at Meland Budwick, P.A. is the Debtor's
counsel.
Counsel for the Secured Lender, Live Oak Banking Company:
William B. Schiller, Esq.
Schiller, Knapp, Lefkowitz & Hertzel, LLP
15 Cornell Road
Latham, NY 12110
A&E ADVENTURES: Seeks Chapter 11 Bankruptcy; Sites Remain Open
--------------------------------------------------------------
Austin Fuller of Orlando Sentinel reports that A&E Adventures LLC,
which does business as GameTime, filed for Chapter 11 bankruptcy on
Friday in U.S. Bankruptcy Court in the Southern District of
Florida. The South Florida-based company has locations in Ocoee,
Kissimmee and Daytona Beach, all of which were open when reached by
phone Tuesday. The bankruptcy documents indicate the company has
an estimated 50 to 99 creditors, $10 million to $50 million in
liabilities, and $10 million to $50 million in assets.
About A&E Adventures
A&E Adventures LLC, which does business as GameTime, is a family
entertainment destination with indoor amusements offering a
full-service dining experience and full liquor sports bar in
Daytona, Fort Myers, Miami, Ocoee, Tampa and Kissimmee.
A&E Adventures LLC sought Chapter 11 protection (Bankr. S.D. Fla.
Case No. 21- 19272) on Sept. 24, 2021. In the petition signed by
Michael Abecassis as managing member, A&E Adventures LLC estimated
assets of between $10 million and $50 million and liabilities of
the same range. James C. Moon, Esq., of MELAND BUDWICK, P.A., is
the Debtor's counsel.
ADVANCED SAWMILL: Seeks to Hire Bruner Wright as Legal Counsel
--------------------------------------------------------------
Advanced Sawmill Machinery, Inc., seeks approval from the U.S.
Bankruptcy Court for the Northern District of Florida to hire
Bruner Wright, P.A. to serve as legal counsel in its Chapter 11
case.
The firm's hourly rates are as follows:
Robert C. Bruner, Esq. $400 per hour
Byron Wright III, Esq. $400 per hour
Paralegal $150 per hour
Bruner Wright was paid a retainer of $11,738, of which $4,340 was
used to pay the firm's pre-bankruptcy services while $1,738 was
used to pay the filing fee.
Byron Wright III, Esq., the firm's attorney who will be providing
the services, disclosed in a court filing that he does not
represent any interests directly adverse to the Debtor.
The firm can be reached through:
Byron Wright III, Esq.
Bruner Wright, P.A.
2810 Remington Green Circle
Tallahassee, FL 32308
Office: (850) 385-0342
Email: twright@brunerwright.com
About Advanced Sawmill Machinery
Advanced Sawmill Machinery, Inc., is a Holt, Fla.-based company
that owns and operates a precision machine shop.
Advanced Sawmill filed a petition for Chapter 11 protection (Bankr.
N.D. Fla. Case No. 21-30612) on Sept. 20, 2021, listing up to $1
million in assets and up to $10 million in liabilities. Brenda W.
Steffens, executive vice president, signed the petition. Byron
Wright III, Esq., at Bruner Wright, P.A. is the Debtor's legal
counsel.
ADVANTAGE HOLDCO: Unsecureds to Recover 1% to 2% in Plan
--------------------------------------------------------
Advantage Holdco Inc., et al., which has sold its Advantage Rent A
Car business, has filed a Combined Plan and Disclosure Statement.
Pursuant to a settlement between the Creditors' Committee and the
DIP Lender, the Debtors will contribute cash and certain other
assets of their estates to a Liquidating Trust to be used to
satisfy the claims of the Debtors' general unsecured creditors.
Standing to pursue claims and causes of action transferred to the
Liquidating Trust will vest with the Liquidating Trust and the
Liquidating Trustee.
The Creditors' Committee has selected CBIZ Accounting, Tax and
Advisory of New York, LLC to serve as the Liquidating Trustee for
the Liquidating Trust.
The Liquidating Trust's assets will consist of (a) $350,000 of cash
contributed by the Debtors or the DIP Lender on the Effective Date;
(b) if the Bankruptcy Court enters a VM Settlement Order, Cash
equal to the VM Settlement Proceeds plus the VM Settlement True-Up
Amount (provided that any payment provided to the Liquidating Trust
pursuant to this subsection (b) will be excluded from the
calculation of Residual Proceeds); (c) the Residual Proceeds; (d)
the Swipe Fee Sharing Proceeds; and (e) all Liquidating Trust
Causes of Action. The Debtors anticipate that on or shortly after
the Effective Date, the Liquidation Trust will receive an
incremental $495,463 on account of the aforementioned Residual
Proceeds and $225,500 on account of Swipe Fee Sharing Proceeds,
which amounts shall be in addition to the $350,000 cash
contribution.
Under the Plan, holders of DIP claims owed $10.078 million will
have a 1% to 48% recovery in the form of receipt of the residual
assets of the Debtor. Holders of Sponsor Debt Claims totaling
$398.3 million will recover 0%. The Class 5 Texas Taxing Authority
Secured claims totaling $2.886 million will recover 15% in cash.
Holders of general unsecured claims in Class 6 will recover 1% to
2%. There will be no distribution on account of Holdco equity
interests.
The Debtors in June 2020 conducted an auction for their assets.
Sixt and Orlando Rentco emerged as the successful bidders. The
Court entered the sale orders on July 1, 2020.
A copy of the Plan dated Sept. 24, 2021, obtained from claims agent
Epiq is available at https://bit.ly/2XQXJPi
About Advantage Rent a Car
Orlando, Florida-based Advantage Rent A Car --
http://www.advantage.com/-- was a car rental company with 50
locations in the U.S. and 130 international affiliate locations.
The parent entity, Advantage Holdco, was owned by Toronto-based
Catalyst Capital Group. According to its Web site, the company had
locations in 27 markets, including New York, Los Angeles, Orlando,
Las Vegas, and Hawaii.
Advantage Holdco, Inc., doing business as Advantage Rent a Car,
sought Chapter 11 protection (Bankr. D. Del. Case No. 20-11259) on
May 26, 2020. Six related entities also sought bankruptcy
protection.
Advantage Holdco was estimated to have $100 million to $500 million
in assets and $500 million to $1 billion in liabilities as of the
bankruptcy filing.
Judge Craig T. Goldblatt replaced Judge John T. Dorsey as the case
judge. The Debtors tapped COLE SCHOTZ P.C. as counsel; and
MACKINAC PARTNERS, LLC, as restructuring advisor.
ALEX AND ANI: Lion Boosts Stake to 65% in Approved Plan
-------------------------------------------------------
Rob Bates of JCK Online reports that on Sept. 22, 2021, a Delaware
judge okayed Alex and Ani's Chapter 11 reorganization, wiping out
much of the company;s prior debt.
The plan called for Lion Capital to purchase debt formerly owed to
a consortium of banks -- so going forward, the London-based
investment fund will own 65% of the company, a boost from its
pre-bankruptcy 59% stake.
The other 35% -- formerly controlled by the company's founder,
Carolyn Rafaelian -- has been sold to the Bathing Club LLC, which
is owned by celebrity attorney and cable TV mainstay Mark Geragos,
who has previously served as company counsel for Alex and Ani.
The top-selling charm company first filed for Chapter 11 in June
2021, citing the pivot away from brick-and-mortar retail and
organizational upheaval. The bankruptcy plan called for Alex and
Ani to put itself up for sale, but an auction scheduled for Sept.
7, 2021 was canceled when no qualified bids were received.
The company's initial board will include five people. Three will be
Lion Capital appointees -- fund partners Lyndon Lea and Sherif
Guirgis, as well as former Pandora exec Scott Burger, who has
chaired Alex and Ani's board since last year. Also serving on the
board will be Geragos and Lawrence Meyer, the board's sole
independent director. Meyer is the former CEO of casual wear
company Uniqlo and has also served as a board member of Charming
Charlie, another jewelry company that filed for Chapter 11.
The restructuring plan includes settlements of litigation with
Rafaelian and former senior vice president of operations David
Medeiros. The settlement says that Rafaelian will resign from the
company's board but that she is now free to start a new jewelry
company.
The restructuring plan "[will] equitize 100% of the debtors' funded
debt obligations, provide meaningful cash recoveries to go-forward
trade vendors, and secure $4.5 million of new capital to fund
distributions under the plan and go-forward capital needs," said
chief restructuring officer and interim CEO Robert Trabucco in a
filing.
Trabucco, a former chief financial officer for Signet, took over
the company last year after Rafaelian stepped down. It is not
clear if he will stay with the company.
About Alex and Ani LLC
Founded in 2004 by Carolyn Rafaelian, Alex and Ani has become a
premier jewelry brand, quickly gaining popularity because of the
novel and customizable nature of its signature expandable wire
bracelet. Alex and Ani has been headquartered in East Greenwich,
Rhode Island since 2014. Since opening its first retail store in
Newport, Rhode Island in 2009, Alex and Ani has expanded to over
100 retail store locations across the United States, Canada, and
Puerto Rico. On the Web: HTTP://www.alexandani.com/
Alex and Ani LLC and its affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-10918) on June 9, 2021. In its
petition, Alex and Ani listed assets and liabilities of $100
million to $500 million each.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Klehr Harrison Harvey Branzburg LLP as local bankruptcy
counsel; and Portage Point Partners, LLC, as financial advisors and
investment bankers. Kurtzman Carson Consultants LLC is the notice
and claims agent.
AMERICAN SLEEP: Seeks to Hire Lefkovitz & Lefkovitz as Counsel
--------------------------------------------------------------
American Sleep Products, LLC, seeks approval from the U.S.
Bankruptcy Court for the Middle District of Tennessee to hire
Lefkovitz & Lefkovitz, PLLC to serve as legal counsel in its
Chapter 11 case.
The firm's services include:
1. advising the Debtor of its rights, duties and powers under
the Bankruptcy Code;
2. preparing and filing statements of financial affairs and
bankruptcy schedules, Chapter 11 plan and other documents; and
3. representing the Debtor at all hearings, meetings of
creditors, trials and other proceedings related to its bankruptcy
case.
Lefkovitz received a $10,000 retainer from the Debtor.
The firm's hourly rates are as follows:
Steven Lefkovitz, Esq. $555 per hour
Associate Attorneys $350 per hour
Paralegals $125 per hour
Steven Lefkovitz, Esq., at Lefkovitz & Lefkovitz, disclosed in a
court filing that his firm neither holds nor represents an interest
adverse to the Debtor's bankruptcy estate.
The firm can be reached through:
Steven L. Lefkovitz, Esq.
Lefkovitz & Lefkovitz, PLLC
618 Church Street, Suite 410
Nashville, TN 37219
Phone: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About American Sleep Products
Jacksonville, Fla.-based American Sleep Products, LLC, filed a
petition for Chapter 11 protection (Bankr. M.D. Tenn. Case No.
21-02850) on Sept. 17, 2021, listing up to $50,000 in assets and up
to $1 million in liabilities. Judge Charles M. Walker oversees the
case. Lefkovitz & Lefkovitz, PLLC is the Debtor's legal counsel.
AMERICAN TIRE: Moody's Rates New Sr. First Lien Term Loan 'Caa1'
----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to American Tire
Distributors, Inc.'s proposed senior secured first lien term loan.
All other ratings for American Tire are unchanged at this time,
including the B3 corporate family rating. The outlook is stable.
The new $1 billion senior secured first lien term loan due 2028
will be used to repay American Tire's existing term loans ($150
million due 2023 and $778 million due 2024) as well as pay down a
portion of the company's outstanding asset-based lending facility
(ABL). As part of this transaction, American Tire will also replace
its existing ABL facilities with a new $1.1 billion US ABL facility
and a new $100 million ABL FILO tranche both due in 2026.
Moody's views the debt-neutral refinancing as credit positive. The
transaction improves American Tire's liquidity by decreasing
interest expense and increasing availability under its ABL
facilities. In addition, the transaction extends American Tire's
debt maturity schedule, with no significant debt coming due until
2026.
Assignments:
Issuer: American Tire Distributors, Inc.
Senior Secured Bank Credit Facility, Assigned Caa1 (LGD4)
RATINGS RATIONALE
American Tire's ratings reflect the company's strong market
position as a distributor of consumer replacement tires with a
large national footprint and considerable scale. The ratings
incorporate the company's elevated, albeit improving, financial
leverage, competitive industry dynamics and modest operating margin
profile.
Moody's expects American Tire's LTM debt/EBITDA, which was 5.8x at
July 3, 2021, to continue to trend toward the mid-5x level in 2022.
This is supported by Moody's expectation for American Tire's EBITDA
margin to remain stable given the favorable demand environment for
replacement tires as vehicle miles traveled continue to increase.
American Tire has initiated several productivity initiatives over
the past year, including optimizing its network routes and
improving its sourcing and procurement capabilities. These measures
should help offset higher freight and labor costs in the
near-term.
The stable outlook reflects Moody's expectations for American Tire
to maintain debt/EBITDA below 6x and generate moderately positive
free cash flow of about 4% of total debt over the next twelve
months.
Moody's expects American Tire's liquidity to be adequate through
2022 with good free cash flow. The company has made substantial
improvement over the past twelve months in managing its working
capital efficiently, and Moody's expects free cash flow of at least
$80 million in 2021 before improving to over $100 million in 2022.
A significant component of American Tire's liquidity is
availability under its ABL, which is to be increased to $1.2
billion inclusive of the FILO tranche. Moody's expects the company
to maintain more than adequate availability through 2022, with the
highest period of borrowing during the first quarter of the year as
the company typically burns cash to build up inventory.
The Caa1 rating on the new $1 billion senior secured first lien
term loan is one notch below the company's CFR, reflecting its
second-priority claim on current assets securing the sizeable ABL
facility.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if American Tire demonstrates
earnings growth that supports Moody's-adjusted EBITDA margins
maintained near 7% and debt/EBITDA sustained below 5.5x.
Expectations for American Tire to maintain prudent working capital
management to generate free cash flow to debt near 5% could also
result in an upgrade.
The rating could be downgraded if cost pressures not offset by
productivity initiatives lead to weaker earnings such that
debt/EBITDA is expected to approach 7x or EBITA/interest expense is
below 1.0x. A deterioration in liquidity, including negative free
cash flow or reduced availability under the company's revolver,
could pressure the ratings.
The principal methodology used in this rating was Distribution &
Supply Chain Services Industry published in June 2018.
Headquartered in Huntersville, North Carolina, American Tire
Distributors, Inc. is a wholesale distributor of tires, custom
wheels, and related tools. It operates more than 130 distribution
centers in the US and Canada and generated about $5.3 billion of
revenue for the twelve month period ending July 3, 2021. The
company is owned by a large consortium of investors, including
prior creditors.
ASP BLADE: Moody's Assigns First Time 'B2' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned a first time B2 Corporate Family
Rating and B2-PD Probability of Default Rating to ASP Blade
Holdings, Inc. operating as Oregon Tool, Inc. (Oregon Tool) and
formerly known as Blount International, Inc. Moody's also assigned
a B1 rating to Oregon Tool's proposed senior secured bank credit
facility and a Caa1 rating to the proposed senior unsecured notes.
The outlook is stable.
Platinum Equity, through its affiliates, is acquiring Oregon Tool
for about $1.57 billion from affiliates of American Securities and
P2 Capital. Oregon Tools' capital structure will consist of a $150
million asset based revolving credit facility expiring in 2026
(unrated), a senior secured bank credit facility, consisting of a
$50 million revolving credit facility expiring 2026 and $800
million term loan maturing 2028, and $350 million in senior
unsecured notes due 2029. Proceeds from the proposed term loan,
notes and an equity contribution from Platinum Equity will be used
to acquire Oregon Tool. The B2 CFR and B2-PD PDR for Blount
International, Inc., including the B2 rating on its senior secured
bank credit facility and stable outlook, will be withdrawn upon
closing.
"Oregon Tool's robust operating performance provides a significant
offset to Platinum Equity's aggressive financial policy by using
the company's balance sheet to facilitate its acquisition of Oregon
Tool," said Peter Doyle, Vice President at Moody's.
The following ratings are affected by the action:
Assignments:
Issuer: ASP Blade Holdings, Inc.
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Senior Secured Revolving Credit Facility, Assigned B1 (LGD3)
Senior Secured Term Loan B, Assigned B1 (LGD3)
Senior Unsecured Notes, Assigned Caa1 (LGD5)
Outlook Actions:
Issuer: ASP Blade Holdings, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
Oregon Tool's B2 CFR reflects Moody's expectation that the company
will retain a leveraged capital structure over the next eighteen
months more than 7x debt/EBITDA versus 5.2x for the last twelve
months ending June 2021. High leverage is due to the increase in
debt to fund the leveraged buyout. Fixed charges, including cash
interest, term loan amortization and operating lease payments, will
approach $85 million per year, significantly reducing the company's
ability to generate cash. Moody's forward view for leverage
includes no revolver borrowings at year end and only term loan
amortization. Moody's projects adjusted free cash flow-to-debt
remaining around 5% through 2022. Platinum Equity indicated that
free cash flow will be used for discretionary debt reduction, which
is a key driver for management's deleveraging plan for 2022.
Providing significant offset to Oregon Tool's very high leverage is
robust profitability. Moody's forecasts adjusted EBITDA margin in
the range of 17% - 20% through 2022, which is the company's
greatest credit strength. Moody's projects revenue will approach
$850 million by year end 2022 from $840 million for the last twelve
months ending June 2021. Interest coverage, measured as
EBITA-to-interest expense, will be 2x by late 2022, which is
reasonable given the company's considerable interest expense.
Oregon Tool's forestry business (55% of total revenue) should
benefit from good growth over the next 18 months in the US
Homebuilding sector. Moody's projects 1.63 million new housing
starts in 2022, a 6% increase from Moody's forecast of 1.54 million
in 2021. The company also has recurring revenue streams from a high
percentage of sales of consumables, a dominant global market share
along with strong brand recognition, and a wide array of products.
Also, Moody's Global Macro Outlook projects that the US GDP will
grow by 6.5% in 2021 and by 4.5% for 2022 and Canada's GDP
improving by 4.4% in 2022, which should benefit all end markets
including agriculture (20% of total revenue), which is another
driver of Oregon Tool's revenue.
Moody's also forecasts that Oregon Tool will have good liquidity
over the next twelve to 18 months. Cash flow, ample revolver
availability and no near-term maturities provide some financial
flexibility for Oregon Tool to contend with a more leveraged
capital structure than in previous years.
The B1 rating on Oregon Tool's senior secured bank credit facility
maturing 2028, one notch above the Corporate Family Rating, results
from its priority of payment relative to the company's senior
unsecured notes but subordination to the company's asset based
revolving credit facility. The Caa1 ratings on the company's senior
unsecured notes due 2029, two notches below the Corporate Family
Rating, results from their subordination to the company's
considerable amount of secured debt.
The senior secured term loan is expected to contain certain
covenant flexibility for transactions that can adversely affect
creditors. Notable terms include incremental first lien debt
capacity up to the greater of $200 million and 100% of LTM
Consolidated EBITDA, plus additional amounts subject to 3.9x first
lien net leverage ratio. Amounts up to $100 million may be incurred
with an earlier maturity date than the initial term loan.
Collateral leakage is permitted through the transfer of assets to
unrestricted subsidiaries, subject to carve-out capacity; there are
no express "blocker" protections restricting such transfers.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors that could jeopardize guarantees; however,
there are protective provisions limiting such guarantee releases.
There are no express protective provisions prohibiting an
up-tiering transaction. The proposed terms and the final terms of
the credit agreement may be materially different.
Governance characteristics Moody's considers in Oregon Tool's
credit profile include an aggressive financial policy, evidenced by
its high leverage resulting from Platinum Equity's leveraged buyout
of Oregon Tool. Total adjusted debt is increasing by 45% to $1.2
billion from $825 million at June 30, 2021. Additional debt for
acquisitions and future dividends to shareholders are an ongoing
possibility. However, Platinum Equity has conveyed to Moody's that
cash flow will be used for discretionary debt reduction, resulting
in better leverage characteristics and is an important driver for
the assigned CFR.
The stable outlook reflects Moody's expectation that Oregon Tool's
leverage will not worsen over the next 18 months. Good liquidity,
no near term maturities and end market dynamics that support growth
further support the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of Oregon Tool's ratings would depend on how quickly the
company delevers such that adjusted debt-to-EBITDA remains below
5.25x and EBITA-to-interest expense stays above 3.25x, while
preserving good liquidity. The CFR could be downgraded if Oregon
Tool's adjusted debt-to-EBITDA fails to trend towards 6.0x by year
end 2022, which is management's financial plan 2022, or
EBITA-to-interest expense trends towards 1.5x.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Oregon Tool, Inc., headquartered in Portland, Oregon, is a global
manufacturer and distributor of professional-grade, consumable
parts and attachments for use in forestry, agriculture, lawn and
garden and other cutting applications. Platinum Equity, through its
affiliates, will be the owner of Oregon Tool.
ASTRO INTERMEDIATE: S&P Assigns 'B-' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
U.S.-based pet suppliers under a newly formed holding company,
Astro Intermediate Holding II Corp. S&P also assigned its 'B-' and
'CCC' issue-level ratings to the proposed first-lien term loan and
second-lien term loan, respectively. The '3' recovery rating on the
first-lien term loan indicates its expectation of meaningful
(50%-70%; rounded estimate: 55%) recovery for first-lien creditors
in the event of a payment default. The '6' recovery rating on the
second-lien term loan indicates its expectation of negligible
(0%-10%; rounded estimate: 0%) recovery in the event of a payment
default.
S&P said, "The stable outlook reflects our expectation that healthy
organic revenue and moderate cost savings will drive gradual credit
metric improvement, though leverage will remain above 7.5x over the
next year.
"We expect to withdraw our ratings on Fetch Holdco LLC once the
transaction is completed and Fetch's existing debt has been
repaid."
Financial sponsor Platinum Equity is acquiring Fetch Holdco LLC
(parent of Petmate Holdings Co.), and has separately agreed to
acquire an unnamed competitor. Platinum plans to merge the two
U.S.-based pet suppliers under a newly formed holding company,
Astro Intermediate Holding II Corp.
Platinum will fund the transactions, in part, with a $525 million
senior secured first-lien term loan and $155 million senior secured
second-lien term loan. Astro will also establish a $80 million
asset-based lending (ABL) facility that will be undrawn at close.
S&P said, "Our rating reflects Astro's very weak credit metrics,
aggressive financial policies, and a deleveraging plan that hinges
on successful merger execution. We estimate leverage at transaction
close (excluding cost savings and the costs to achieve synergies)
will be in the high-8x area. While there are likely significant
synergies to be achieved between Petmate and the unnamed pet
supplier, the sponsor's deleveraging strategy also incorporates
plans to significantly reduce costs in various areas of their
stand-alone businesses incremental to those synergies. We believe
managing a large number of operational initiatives will create a
high degree of complexity, and it will likely take at least several
years to fully deliver on the expected savings. Furthermore, while
both legacy companies have been active pursuing tuck-in
acquisitions in recent years, we view execution risk on this
transaction as much higher given it is substantially larger than
their prior acquisitions. Integration missteps could cause delays
in fully achieving synergies or even lead to profit erosion.
"Even if Astro does execute on these initiatives ahead of our
expectations, we believe the sponsor will continue to dictate
aggressive financial policies that will cause leverage to remain
high. Like the legacy companies, we expect Astro will be a platform
for tuck-in acquisitions in a highly fragmented market. We believe
Astro will actively seek targets in categories where it does not
have a large presence, particularly those with shorter
replenishment cycles such as dog treats and chews."
The merger should strengthen the combined company's market
position, diversify its customer base, and solidify its e-commerce
business. The combined company will offer a wider portfolio of
branded and private label products, which will likely strengthen
its position with retailers looking to consolidate vendor
relationships. Crucially, Astro will also increase its position in
the e-commerce channel, which continues to outpace other segments.
Both legacy companies have expanded their e-commerce businesses
significantly over the past several years as pet owners have
increasingly shifted to online purchasing. The increased scale and
wider product offering should enhance Astro's relationship with the
leading online retailers and could further accelerate its growth.
The combined entity will also sell products across a more diverse
group of customers than each individual legacy company. For
example, the unnamed pet supplier has been growing rapidly in the
dollar channel, a market in which Petmate has not historically
participated.
Notwithstanding these benefits, Astro is still a small and narrowly
focused pet supply company that is susceptible to the purchasing
decisions of its largest customers, which will continue to comprise
a significant portion of sales. S&P said, "While the broader
portfolio offering will improve the company's market position, we
believe most of its products have only modest brand equity and are
subject to intense private label competition. Astro partly
mitigates this with its own private label portfolio, but we believe
these products are less profitable to the company and easier for
retailers to source from other suppliers. We also recognize the
company will likely face more intense competition in the e-commerce
channel from smaller players, given it is easier for upstart brands
to reach consumers online."
S&P expects improved supply chain capabilities under the combined
company. An important benefit of the merger will be the potential
for Astro to leverage the supply chain competencies of each legacy
company. The legacy Petmate business is a vertically integrated
manufacturer of its hard goods products with a recycled resin
processing plant in Texas. S&P believes Petmate has partly
mitigated resin price volatility in the past by using recycled
material and selling engineered resin pellets. Its vertically
integrated operations have also provided a competitive advantage
over foreign suppliers in categories such as carriers and crates,
especially due to the high transportation costs and tariffs imposed
on certain imported products.
The unnamed pet supplier utilizes an outsourced manufacturing model
and has a dedicated Hong Kong office that oversees third-party
manufacturing operations in Asia. S&P believes Astro can leverage
Petmate's vertically integrated operations for some of the unnamed
pet supplier's hard goods products, while leveraging the unnamed
pet supplier's more sophisticated offshore capabilities to drive
savings for Petmate's imported soft goods products.
S&P said, "Nevertheless, we believe Astro is vulnerable to supply
chain disruptions as it tries to execute a merger integration in a
difficult global supply chain environment. Underpinning this risk
is that legacy Petmate has had difficulties managing warehousing
and distribution processes in the past. While we believe Petmate
has operated without major disruption since moving into a new
fulfillment center in 2019, we believe integration processes
elevate the risk of disruption. The combined company will also
still be sensitive to volatility of resin and other input costs.
Petmate has been able to partly offset rising resin, labor, and
transportation costs over the past year with price increases.
However, we believe it would be difficult to further raise prices
on its largest customers given its heavy private label exposure and
modest brand equity."
Favorable industry dynamics should continue to support steady
organic revenue growth. Pet adoption has surged since the onset of
the COVID-19 pandemic, with an estimated 20 million new pets in
2020. This has fueled strong demand for pet supplies, helping
Petmate deliver revenue growth exceeding 20% in fiscal 2021. S&P
said, "We expect still high levels of pet adoption in 2021 will
support high single-digit organic revenue for Astro in fiscal 2022.
Furthermore, we believe consumer behavior trends (i.e., pet owners
spending more on their pets as they are increasingly viewed as
members of the family) combined with the large number of new pets
in the U.S. market will help support ongoing healthy demand for
Astro's products. At the same time, we believe growth will moderate
significantly after fiscal 2022 given pet supply spending is higher
in the first year of ownership." This is because upfront purchases
on certain items such as crates and kennels have longer
replenishment cycles compared to categories such as treats and
chews, in which the company has only a modest presence.
The stable outlook reflects our expectation that credit metrics
will remain very weak despite still positive industry momentum and
healthy organic revenue growth. S&P believes the company will
gradually achieve forecasted synergies and cost savings over the
next several years but expect leverage will remain above 7.5x over
the next year.
S&P could lower the rating if profitability deteriorates such that
free cash flow weakens to breakeven levels or it no longer views
the capital structure as sustainable.
This could occur if the company:
-- Experiences operational missteps in integrating Petmate and the
unnamed pet supplier.
-- Is unable to manage greater-than-expected input cost
volatility.
-- Loses key customer relationships, particularly in the growing
e-commerce space.
S&P could raise the rating if the company improves and sustains
leverage below 7x, while also generating annual free cash flow of
at least $20 million.
This could occur if the company:
-- Successfully merges Petmate with the unnamed pet supplier and
executes on cost-savings initiatives ahead of S&P's expectations.
-- Sustains positive topline momentum.
-- Defers additional acquisition activity until it has made
significant inroads achieving cost savings from the merger.
ASTRO ONE: Moody's Gives 'B3' CFR & Rates 1st Lien Term Loan 'B3'
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
a B3-PD Probability of Default Rating to Astro One Acquisition
Corporation. Moody's also assigned a B3 rating to the company's
proposed first lien term loan and also assigned a Caa2 rating to
the second lien term loan. The outlook is stable.
Platinum Equity is acquiring Fetch Holdco LLC, and has separately
agreed to acquire another to-be-announced pet supplies asset (code
name "Brody"). Platinum plans to merge the two companies under a
newly formed holding company, Astro One Acquisition Corporation.
The combined transaction will be financed with a $525 million first
lien 7-year term loan and a $155 million second lien 8-year term
loan. Platinum is financing the remainder of the purchase price
with equity. The company also plans to put in place an $80 million
asset-based revolver (ABL) that will not be rated and will be
undrawn at close. Fetch Holdco LLC is the parent company of Fetch
Acquisition LLC (CFR B2 stable) and debt rated under this entity
will be repaid and ratings will be withdrawn upon closing of the
acquisition.
Moody's expects that Astro's operating performance will remain good
over the next 12 to 18 months as strong growth in pet ownership in
the US continues to drive higher demand for pet related products.
The global pandemic has created a surge in pet ownership as
households adopted more pets during this period. The combination of
Fetch and Brody will create a larger player and will allow the
combined company to expand its products within its existing
customer base. Moody's expects Astro's sales to grow by 2% to 3%
over the next 12-18 months, in line with industry growth, after
experiencing 17% growth in 2020. Moody's also expects Astro's
EBITDA margin to range around 18% to 19% during the same period.
Additionally, the company will generate modest free cash flow,
which Moody's projects will be used for debt repayment (given
required term loan amortization and a 50% cash flow sweep
requirement) and additional investment in the business including
tuck-in acquisitions. Liquidity will remain good given the
company's access to the $80 million ABL and positive free cash flow
generation. Moody's further expects Debt to EBITDA to be around
7.0x over the next 12-18 months. However, most of Astro's products
are discretionary and a weaker economic environment, although not
expected by Moody's, could negatively impact the company's
performance if the coronavirus continues to cause disruptions.
However, it should be noted that the onset of the pandemic and
shift to a work-from-home centric environment has benefited the
company and the industry from a demand perspective.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Astro One Acquisition Corporation
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
GTD Senior Secured 1st Lien Term Loan, Assigned B3 (LGD3)
GTD Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: Astro One Acquisition Corporation
Outlook, Assigned Stable
RATINGS RATIONALE
Astro's B3 CFR reflects the company's aggressive financial policy
with high leverage and private equity ownership. Also, Astro's
products are discretionary in nature and would normally be
negatively impacted by weakness in the U.S. economy. However,
during the coronavirus-induced recession, higher pet ownership
resulting from more consumers staying at home and this has resulted
in higher demand than otherwise would be experienced during a
recession. A return to more away-from-home activities could slow
the rate of pet adoptions and weaken sales of products such as
kennels, shelters and food storage that are typically purchased
when pets are initially acquired. The rating also reflects Astro's
solid market position within the durable pet products market and
its domestic manufacturing and vertical integration, and internal
resin production capabilities, which the company believe gives it a
cost advantage relative to its competitors. Growing pet ownership
will drive continued demand for pet products, particularly for more
consumable items such as toys and treats, and Moody's projects this
will contribute to earnings growth and positive free cash flow.
Earnings growth will reduce debt-to-EBITDA from an estimated 7.8x
as of June 2021 (pro forma for the LBO) to around 7.0x by the end
of 2022.
The coronavirus outbreak and the government measures put in place
to contain it continue to disrupt economies and credit markets
across sectors and regions. Although an economic recovery is
underway, it is tenuous, and its continuation will be closely tied
to containment of the virus. As a result, there is uncertainty
around Moody's forecasts. Moody's regards the coronavirus outbreak
as a social risk under its ESG framework, given the substantial
implications for public health and safety. The consumer durables
industry is one of the sectors most meaningfully affected by the
coronavirus because of exposure to discretionary spending.
Moody's considers increasing pet ownership and humanization of pets
as a social trend. The coronavirus outbreak accelerated these
trends as consumer purchased pets for companionship during social
distancing requirements. Such trends have positively impacted Astro
despite recent economic weakness creating a higher customer base
for its products.
Governance factors take into account an aggressive financial policy
and high leverage with private equity ownership. Astro's very high
closing financial debt-to-EBITDA leverage of 7.8x (Moody's
calculated); Ownership by a private equity such as Platinum Equity
increases risk of activities such as debt-funded acquisitions and
shareholder distributions.
The B3 first lien debt instrument rating reflects Moody's
expectation that seasonal working capital needs and bolt-on
acquisitions could lead to revolver borrowings and utilization of
the incremental term loan capacity in the proposed credit
agreement.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that the pet
industry fundamentals will remain good because high pet ownership
will continue to drive demand for pet-related products. The outlook
also reflects that the company will generate positive free cash
flow and any acquisitions will be modest in size and will not
materially increase leverage.
The ratings could be upgraded if the company sustains positive
organic revenue growth with a stable to higher EBITDA margin and
demonstrates a financial policy that sustains debt to EBITDA below
6.0x. Astro would also need to generate free cash flow relative to
debt in a mid-single digit percentage range.
The ratings could be downgraded if the company's operating
performance deteriorates, industry conditions or liquidity weakens,
or if the company peruses debt financed acquisitions or cash
distributions to shareholders resulting in increased financial
leverage.
As proposed, the new $525 million first term loan and the $155
million second lien term loan are expected to provide covenant
flexibility that if utilized could negatively impact creditors.
Notable terms include the following: Incremental first lien debt
capacity up to the greater of 100% of consolidated EBITDA and $110
million, plus unlimited amounts subject to the Consolidated First
Lien Net Leverage Ratio as of the effective date. Amounts up to
$110 million may be incurred with an earlier maturity date than the
initial term loans. The credit agreement permits the transfer of
assets to unrestricted subsidiaries, up to the carve-out
capacities, subject to "blocker" provisions which prohibits the
transfer of material intellectual property to unrestricted
subsidiaries. Non-wholly-owned subsidiaries are not required to
provide guarantees; dividends or transfers resulting in partial
ownership of subsidiary guarantors could jeopardize guarantees,
with no explicit protective provisions limiting such guarantee
releases. The credit agreement provides some limitations on
up-tiering transactions, including the requirement that each lender
directly affected consents to changes that subordinate or have the
effect of subordinating the obligations or the liens on the
collateral securing the senior secured credit facilities. The
proposed terms and the final terms of the credit agreement may be
materially different.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Astro One Acquisition Corporation is a newly created entity that
will own the legacy businesses of Fetch Holdco LLC (Petmate) and
Brody. Astro produces and sells various durable pet products in the
United States including kennels, shelters, chews, feeding &
watering products, cat waste management products, toys, and more.
Astro is indirectly owned by private equity firm Platinum Equity
with annual revenues of approximately $480 million.
AYTU BIOPHARMA: Incurs $58.3-Mil. Net Loss in FY Ended June 30
--------------------------------------------------------------
Aytu Biopharma, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$58.29 million on $65.63 million of net product revenue for the
year ended June 30, 2021, compared to a net loss of $13.62 million
on $27.63 million of net product revenue for the year ended June
30, 2020.
As of June 30, 2021, the Company had $265.67 million in total
assets, $128.10 million in total liabilities, and $137.57 million
in total stockholders' equity.
"This was our first quarter operating as a fully integrated,
pediatric-focused, specialty pharmaceutical company, having closed
the merger with Neos Therapeutics in March and acquiring the global
license to pediatric-onset rare disease pipeline asset AR101 in
April. We moved quickly into our post-merger plan, integrating the
Aytu and Neos sales forces and consolidating the RxConnect patient
access program. We have already begun to realize significant
synergies from that consolidation, which we expect to support the
continued growth of our commercial business," commented Josh
Disbrow, chief executive officer of Aytu BioPharma. "Going
forward, we have many value creating milestones on the horizon.
For AR101, we expect to begin our pivotal study in early 2022, are
seeking Orphan Drug Designation from the FDA and EMA and will
collaborate with our newly formed scientific advisory board. We
are also seeking to maximize our Aytu-Neos merger synergy plan
including removing redundant expenses, divesting and monetizing
certain non-core products and outsourcing manufacturing of the Neos
heritage products to significantly improve the financial
performance of those brands. We expect fiscal 2022 to be a year of
substantial progress as we begin to realize the economic benefits
of this plan, grow our commercial prescription and consumer health
product revenues and advance our late-stage development pipeline."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1385818/000155837021012825/aytu-20210630x10k.htm
About Aytu BioPharma
Englewood, Colorado-based Aytu BioPharma, Inc., formerly known as
Aytu BioScience, Inc. -- http://www.aytubio.com-- is a specialty
pharmaceutical company with a growing commercial portfolio of
prescription therapeutics and consumer health products. The
company's primary prescription products treat attention deficit
hyperactivity disorder (ADHD) and other common pediatric
conditions. Aytu markets ADHD products Adzenys XR-ODT (amphetamine)
extended-release orally disintegrating tablets, Cotempla XR-ODT
(methylphenidate) extended-release orally disintegrating tablets,
and Adzenys-ER (amphetamine) extended-release oral suspension.
BABCOCK & WILCOX: Signs Agreement to Acquire VODA A/S
-----------------------------------------------------
Babcock & Wilcox Enterprises, Inc. has signed a definitive
agreement to acquire VODA A/S, a multi-brand aftermarket parts and
service provider for the waste-to-energy and biomass-to-energy
markets based in Vejen, Denmark. The transaction is targeted to
close at the end of October 2021, following the satisfaction of
customary closing conditions, including regulatory review in
Denmark.
B&W will form B&W Renewable Service to integrate the VODA A/S and
B&W Volund aftermarket services businesses. This will serve as
B&W's platform for its renewable service business in Europe,
significantly strengthening and expanding its ability to serve
existing and new customers throughout this market, including for
B&W-supplied and competitors' technology. B&W Renewable Service
will be led by VODA's Chief Executive Officer, Christopher Nysted
Sørensen.
"This strategic acquisition brings together B&W's and VODA's
strengths and creates a solid foundation to further expand our
service business in Europe's fast-growing renewable energy market,"
said Kenneth Young, B&W Chairman and chief executive officer.
"Combining B&W's financial strength, engineering capabilities and
proven experience as an original equipment provider and service
company with the capabilities and expertise of VODA creates a
dynamic team ready to work together to serve our customers."
"VODA has used a flexible and scalable business model to grow
rapidly and efficiently, and we see many additional opportunities
for our combined operations to grow synergistically," Young said.
"VODA employees are capable, responsive and experienced, and we're
pleased to welcome them to B&W."
VODA CEO Christopher Nysted Sorensen said, "VODA has grown
substantially over the last three years and has built a reputation
for providing customer-focused, market-driven service and
solutions. This transaction will set the foundation for future
growth and new possibilities for customers and our employees. We
are excited and proud to be given this opportunity to expand
further and to work together as part of B&W Renewable Service."
About Babcock & Wilcox
Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises is a
growing, globally-focused renewable, environmental and thermal
technologies provider with decades of experience providing
diversified energy and emissions control solutions to a broad
range
of industrial, electrical utility, municipal and other customers.
B&W's innovative products and services are organized into three
market-facing segments which changed in the third quarter of 2020
as part of the Company's strategic, market-focused organizational
and re-branding initiative to accelerate growth and provide
stakeholders improved visibility into its renewable and
environmental growth platforms.
Babcock & Wilcox reported net losses of $10.30 million in 2020,
$129.04 million in 2019, $724.86 million in 2018, $379.01 million
in 2017, and $115.08 million in 2016. As of June 30, 2021, the
Company had $665.14 million in total assets, $680.86 million in
total liabilities, and a total stockholders' deficit of $15.72
million.
BEAR VALLEY RANCH: Seeks to Hire J. Luke Hendrix as Legal Counsel
-----------------------------------------------------------------
Bear Valley Ranch Market & Liquor, Inc., seeks approval from the
U.S. Bankruptcy Court for the Central District of California to
hire the Law Offices of J. Luke Hendrix to serve as legal counsel
in its Chapter 11 case.
The firm's services include:
1. advising the Debtor regarding matters of bankruptcy law and
the requirements of the Bankruptcy Code and Bankruptcy Rules;
2. assisting the Debtor in the administration of the estate's
assets and liabilities;
3. preparing a Chapter 11 plan and supporting documents;
4. advising the Debtor regarding creditor claims; and
5. providing other necessary legal services.
J. Luke Hendrix, Esq., the firm's attorney who will be providing
the services, will be paid at the rate of $375 per hour.
The firm received payment in the amount of $16,738 from the Debtor
prior to the filing of the case.
Mr. Hendrix disclosed in a court filing that he and his firm are
"disinterested persons" within the meaning of Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Luke J. Hendrix, Esq.
Law Offices of J. Luke Hendrix
28465 Old Town Front St, Suite 212
Temecula, CA 92590
Phone: (951) 221-3721
Email: luke@jlhlawoffices.com
About Bear Valley Ranch Market & Liquor
Bear Valley Ranch Market & Liquor Inc. owns and operates a single
market and liquor store located at 32475 Clinton Keith Road, Suite
111-112, Wildomar, Calif.
Bear Valley Ranch filed a petition for Chapter 11 protection
(Bankr. C.D. Cal. Case No. 21-14536) on Aug. 24, 2021, listing as
much as $500,000 in both assets and liabilities. Salam Haddad,
president of Bear Valley Ranch, signed the petition. Judge Mark
Houle oversees the case. The Law Offices of J. Luke Hendrix serves
as the Debtor's legal counsel.
BODYTEK FITNESS: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Bodytek Fitness Pembroke Pines, LLC, according to court
dockets.
About Bodytek Fitness Pembroke Pines
Bodytek Fitness Pembroke Pines, LLC filed its voluntary petition
for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-17687) on
Aug. 5, 2021, listing up to $100,000 in assets and up to $500,000
in liabilities. Cecelia Facey, managing member, signed the
petition. Judge Peter D. Russin oversees the case. Susan D.
Lasky, Esq., serves as the Debtor's legal counsel.
BOY SCOUTS OF AMERICA: Court Sets Plan Hearing for Jan. 24
----------------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge
Tuesday, Sept. 28, 2021, set the hearing to approve the Boy Scouts
of America's Chapter 11 plan for the end of January 2022, saying
while the timeline is tighter than some creditors wanted, the case
needs to get moving to keep the organization afloat.
During an eight-hour virtual hearing, U.S. Bankruptcy Judge Laurie
Selber Silverstein rejected calls to hold the hearing up to two
months later to allow more time to litigate plan provisions and set
Jan. 24, 2022, as the start of the confirmation hearing, saying the
case needs to have an "end point."
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.
BRIGHT MOUNTAIN: Starts Trading on Expert Market
------------------------------------------------
Bright Mountain Media, Inc. shares of common stock began trading on
the Expert Market from the OTC Pink Sheets on Sept. 28, 2021.
The company's common stock will continue to be on the Expert Market
until such time as the company has become current in its filings
with the Securities and Exchange Commission at which point it will
seek to have its shares restored to the OTC markets.
About Bright Mountain
Based in Boca Raton, Fla., Bright Mountain Media, Inc. --
www.brightmountainmedia.com -- is an end-to-end digital media and
advertising services platform, efficiently connecting brands with
targeted consumer demographics. In addition to its corporate
website, the Company owns and/or manages 24 websites which are
customized to provide its niche users, including active, reserve
and retired military, law enforcement, first responders and other
public safety employees with products, information and news that
the Company believes may be of interest to them. The Company also
owns an ad network which was acquired in September 2017.
Bright Mountain reported a net loss of $3.40 million for the year
ended Dec. 31, 2019, compared to a net loss of $5.22 million for
the year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company
had $42.77 million in total assets, $29.92 million in total
liabilities, and $12.85 million in total shareholders' equity.
EisnerAmper LLP, in Iselin, New Jersey, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
May 14, 2020, citing that the Company has experienced recurring net
losses, cash outflows from operating activities, and has an
accumulated deficit that raise substantial doubt about its ability
to continue as a going concern.
BYRNA TECHNOLOGIES: To Release Third Quarter Results on Oct. 8
--------------------------------------------------------------
Byrna Technologies Inc. will issue its financial results for its
fiscal third quarter ended Aug. 31, 2021 on Friday, Oct. 8, 2021,
before the financial markets open. Management will conduct a
conference call that day at 9:00 am ET to review these results.
Interested parties may listen to the call by dialing (201) 493-6744
or (877) 445-9755. Please call in 10 minutes before the conference
call is scheduled to begin and ask for the Byrna Technologies call.
The question and answer portion of the call will be open to
industry research analysts.
To listen to a simultaneous webcast of the call, please visit
ir.byrna.com 10 minutes prior to the start of the call and click on
the Investors section to download and install any necessary audio
software. If you are unable to listen live, the conference call
webcast will be archived on Byrna Technologies' website for 30
days.
About Byrna Technologies
Headquartered in Byrna Technologies Inc. -- www.byrna.com --
develops, manufactures, and sells non-lethal ammunition and
security devices. These products are used by the military,
correctional services, police agencies, private security and
consumers.
Byrna Technologies reported a net loss of $12.55 million for the
year ended Nov. 30, 2020, a net loss of $4.41 million for the
fiscal year ended Nov. 30, 2019, a net loss of $2.15 million for
the fiscal year ended Nov. 30, 2018, and a net loss of $2.8 million
for the fiscal year ended Nov. 30, 2017. As of May 31, 2021, the
Company had $22.03 million in total assets, $8.88 million in total
liabilities, and $13.15 million in total stockholders' equity.
CAITHNESS SHEPHERDS: Fitch Affirms BB on $105MM Certs Due 2032
--------------------------------------------------------------
Fitch Ratings has affirmed Caithness Shepherds Flat LLC's (CSF)
senior secured non-guaranteed debt as follows:
-- Shepherds Flat Funding Trust I's $105 million series ($105
million outstanding) A-1-NG senior secured fixed-rate trust
certificates due 2032 at 'BB';
-- Shepherds Flat Funding Trust II's $135 million series ($37
million outstanding) A-2-NG senior secured floating rate loan
due 2024 at 'BB'.
The Rating Outlook on non-guaranteed debt has been revised to
Positive from Stable.
Fitch has affirmed CSF's senior secured guaranteed debt as
follows:
-- Shepherds Flat Funding Trust I's $420 million series ($420
million outstanding) A-1-G senior secured fixed-rate trust
certificates due 2032 at 'AAA';
-- Shepherds Flat Funding Trust II's $540 million ($148 million
outstanding) A-2-G senior secured floating rate loan due 2024
at 'AAA'.
The Rating Outlook for the A-1-G and A-2-G tranches is Negative.
RATING RATIONALE
The 'BB' rating on the non-guaranteed debt reflects a U.S. wind
power project that earns all revenue from power purchase agreements
(PPA) with an investment grade offtaker that eliminate price risk,
use of proven technology, O&M by a highly experienced contractor
that is required to achieve high availability targets, and exposure
to a volatile wind regime. The Positive Outlook reflects the
likelihood of a rating upgrade based on a planned repowering of
nearly all of the project's wind turbines with new turbine
components that is expected to increase output materially from
Fitch's previous expectations without any additional debt. If the
repowering program is successful, Fitch forecasts that rating case
annual debt service coverage ratios (DSCR) that average 1.38x would
support a low investment grade rating. Rating case assumptions
include one-year P90 wind production based on a new independent
wind study that factor in the repower impact, a moderate haircut to
production to reflect a volatile wind regime, and a 10% increase in
non-fixed O&M costs.
The 'AAA' rating of the guaranteed notes reflects the U.S.
Department of Energy's (DOE) guarantee for timely debt service
payments. The Negative Outlook on these ratings reflects the
Negative outlook on the United States.
KEY RATING DRIVERS
Infrastructure Development and Renewal
The planned repowering of the project will involve relatively low
risk activities of replacing significant portions of existing wind
turbine generators with newer equipment, including longer blades.
General Electric International (GEI) will supply, install, and
commission the turbines under fixed-price, date-certain supply and
services contracts that have significant financial penalties for
failure to meet schedule and performance requirements. There is a
contract for each of the three project phases that make up CSF. GEI
plans to initiate installation in late 2021 and complete it by late
2022. General Electric Co (GE) guarantees GEI's contractual
obligations.
Fully Contracted Revenues (Revenue Risk- Price: Stronger)
CSF earns revenue from three fixed-price PPAs with regulated
utility offtaker Southern California Edison (SCE; BBB-/Stable) that
effectively mitigate price and demand risk for the project's output
through debt maturity. CSF's exposure to curtailment risk is
largely mitigated under PPA amendments signed in 2017.
Strong Operating Agreement (Operation Risk: Midrange)
CSF benefits from refreshed full service O&M agreements (FSA) with
GEI, whose expiration coincides with PPA maturity. The agreements
allocate most O&M risk to GEI and apply to existing and repower
equipment, and include all planned and unplanned maintenance. FSA
terms provide fixed pricing for most technical O&M efforts which
significantly mitigates cost risk.
Variable Wind Resource (Revenue Risk- Volume: Midrange)
Wind projections are based on an updated assessment by one of the
project's independent technical experts, DNV-GL, as reported in
April 2020 for the current turbines and as reported in April 2021
for the repowered turbines. The wind resource continues to exhibit
significant volatility. The difference between P50 and P90
(one-year) wind resource is nearly 15.8%, among the highest in
Fitch's rated portfolio.
DOE Guarantee for 80% of Project Debt (Debt Structure (Guaranteed):
Stronger):
The 'AAA' rating for the guaranteed A-1-G certificates and A-2-G
loans reflects the certainty of timely debt service payments from
the DOE loan guarantee for 100% of principal and interest on the
guaranteed debt.
Typical Debt Structure (Debt Structure (Non-Guaranteed):
Midrange):
The portion of non-guaranteed debt benefits from a typical debt
structure for a contracted wind project financing, including
six-month reserves for debt service and O&M, and a 1.20x, 12-month
backward-looking distribution test. All the notes have fixed
interest rates for the life of the debt, including the A-2 loan,
which has a floating to fixed rate hedge.
FINANCIAL PROFILE
Fitch assesses the financial profile during and after completion of
the repower program. CSF expects GEI to initiate on-site turbine
replacements in late 2021 and achieve completion by YE 2022. Under
rating case conditions, the annual DSCR is 0.98x in 2021 and 1.36x
in 2022. The annual DSCR from 2023 to 2032 averages 1.38x, with a
minimum of 1.33x in 2030. Rating case assumptions during and after
the repower program include P90 (one-year) wind production levels,
a 7% haircut to the production forecast to reflect significant wind
regime volatility, and a 10% increase in non-fixed O&M costs, and a
three month delay in completing the repower project. An additional
rating case assumption during the repower program period is an
additional 4% reduction in availability to reflect expectations
that several wind turbines will be offline at any given time to
replace blades and other repower equipment.
PEER GROUP
CSF shares similar attributes to many rated U.S. wind projects, but
its weaker financial performance has separated it from all other US
wind projects in Fitch's rated portfolio. Once the repower effort
is complete, CSF should compare well to peers. In most respects,
CSF is similar to Alta Wind 2010 Pass-Through Trust (Alta Wind;
BBB-/Stable) which has PPA-driven revenues from a single site
project using proven technology. Alta Wind has experienced much
lower than expected wind resources from time-to-time which has
consistently been below initial P90 (one-year) production
estimates. Alta Wind partially mitigates this wind volatility with
financial performance, reflected by rating case DSCRs of about
3.64x average and 1.40x minimum.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A downgrade is unlikely over the next 18 to 24 months based on
the likelihood that the repowering program when completed will
lead to significant increase in production and thus a much
greater DSCR cushion above downgrade metrics of below 1.15x.
-- Any rating action on the U.S. sovereign rating would trigger
the same rating action on the guaranteed debt.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Demonstrated progress on the repowering project providing a
high level of confidence that the financial performance will
improve materially from current levels by early 2023. DSCRs
above 1.3x would support an investment grade profile under
current rating case assumptions. The rating potential is
capped at 'BBB-', the rating of SCE.
-- Any rating action on the U.S. sovereign rating would trigger
the same rating action on the guaranteed debt.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure 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 three 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.
TRANSACTION SUMMARY
CSF is comprised of three wind-powered generation projects with
aggregate capacity of 845-megawatts located along the Columbia
River Gorge in Gilliam and Morrow Counties, Oregon. Brookfield
Renewable Partners, L.P. (BRP) purchased CSF from Caithness Energy,
Inc. (Caithness) in early 2021. CSF is undertaking a repowering of
the project with new and larger wind turbine components to
materially increase energy production.
CREDIT UPDATE
Wind production in 2020 at times rose well above and fell below
expectations during various periods of the year. Overall, CSF
experienced a very favorable wind regime for the year and
materially exceeded energy production expectations. Production was
8% and 37% above Fitch's base case and rating cases forecasts,
respectively. Fitch lowered its production forecast for CSF
materially in 2020 following an April 2020 wind resource update
from the project's independent expert DNV-GL. The very favorable
performance of 2020 to the updated forecast continues to reflect
the highly volatile nature of the CSF wind regime.
The favorable wind performance extended into the first quarter of
2021, when production was 27% above the project's own forecast.
Over the first and second quarter of 2021, production was 5% above
the projects forecast.
Cost for the year of 2020 were slightly above Fitch's rating case
but due generally to higher royalties from higher than expected
production. Most costs at CSF are fixed by contract which helps to
mitigate cost risk.
Availability for the year of 2020 for the project as a whole was
about 97.6%, just shy of the 98% unadjusted requirement in the
FSAs.
Revenue, performance, and costs in 2020 result in a strong DSCR for
the year of 1.67x, well above the Fitch rating case expectation of
1.12x. Similarly, the DSCR for the 12 month period ended in July
2021 was 1.56x.
BRP purchased the equity interest in CSF from Caithness in early
2021 and now manages CSF. Fitch views BRP as experienced with
owning and managing wind projects, and so, the change in ownership
is neutral to credit.
In June 2021, CSF entered into supply and services contracts with
GEI to undertake a repowering of essentially all of the wind
turbines for three project phases in order to materially increase
energy production. The program involves replacing major components
and control systems of the current wind turbines with new and
proven equipment. The key upgrades are longer blades and associated
equipment. The towers and foundations will remain essentially
unchanged.
GEI will supply and install the repower and bring them to full
completion under contract terms that involve a fixed-price and date
certain features, with technical and schedule underperformance
resulting in meaningful liquidated damages (LD). CSF expects that
GEI will begin the installation process late in 2021 and complete
it by YE 2022. The project's independent technical expert, UL
Services Group, LLC (UL), considers the planned rate of turbine
completions to be appropriate based on the expected approach. UL
notes the schedule includes the 2021 holiday period, cushion of
high wind days (when crane work is unsafe), and cushion of several
weeks at the end of 2022 to accommodate schedule slippage.
UL notes that a delay in completing the repower work could result
in CSF incurring performance penalties under the PPA, since a
number of turbines will be out at any given time and the wind
resource is quite volatile. UL notes that penalties depend on
market rates and cannot be easily compared to the LD rates for
delay in the repower supply agreements.
BRP secured tax-equity and debt funding at new CSF holdcos to fund
the repower effort. BRP reports that that the holdco entities are
paying GEI directly for the repower works at CSF. CSF is not
raising any debt or providing any equity to fund the repower
effort. Fitch was not provided with any detailed information
regarding the structural features of the holdco financings
including how those funds are to be managed and disbursed through
the repower program.
UL considers the repower budget on the low end of the industry
range but adequate. Most of the cost is supplied equipment. The
budget contingency is about 1% of total costs, but UL considers
this amount equal to about 5% to 10% of costs most subject to
potential escalation.
FINANCIAL ANALYSIS
Key assumptions in Fitch's base case are electricity production at
the P50 level with a 7% haircut to reflect wind resource
volatility, project availability in line with the recent forecast
from the independent technical expert DNV-GL (DNV) but with an
additional haircut during the repower program to reflect turbine
downtime, and O&M costs in line with current performance and
budget. The wind resource data reflects DNV's updated forecast from
April 2021 which factor in the repower configuration. Based on
these attributes, the DSCR average is 1.69x and minimum is 1.64x
(in 2030) post-repower.
Key assumptions in Fitch's rating case are electricity production
at the P90 (one-year) level with a 7% reduction and a 10% increase
in O&M costs not fixed by contracts. In this scenario, the DSCR
average is 1.38x and minimum in 1.33x (in 2030) post-repower.
CARBON AND CLAY: November 3 Plan Confirmation Hearing Set
---------------------------------------------------------
On Aug. 11, 2021, debtor Carbon and Clay Company filed with the
U.S. Bankruptcy Court for the Western District of Texas a
Disclosure Statement for Plan of Reorganization.
On Sept. 27, 2021, Judge Craig A. Gargotta approved the Disclosure
Statement and ordered that:
* Oct. 25, 2021 is fixed as the last day for filing written
acceptances or rejections to the Plan of Reorganization.
* Nov. 3, 2021 at 9:00 a.m. in the U.S. Bankruptcy Court, Old
U.S. Post Office Bldg., 615 E. Houston St., Courtroom No. 3, 5th
Floor, San Antonio, Texas is fixed for the hearing on confirmation
of the Plan.
* Oct. 25, 2021 is fixed as the last day for filing and
serving written objections to confirmation of the Chapter 11 Plan
of Reorganization.
* Oct. 25, 2021 is fixed as the last day to submit all ballots
to be counted as votes.
A copy of the order dated September 27, 2021, is available at
https://bit.ly/3kMPEnW from PacerMonitor.com at no charge.
About Carbon and Clay Company
Carbon and Clay Company is a manufacturer of beauty and oral care
products based in New Braunfels, Texas. Carbon and Clay owns no
real property -- it leases its business location in New Braunfels.
Carbon and Clay filed a voluntary petition for relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 21 50242)
on March 4, 2021. In the petition signed by CEO Jessica Arman, the
Debtor disclosed $2,850,486 in assets and $1,434,965 in
liabilities. Langley & Banack, Inc., led by William R. Davis, Jr.,
is serving as the Debtor's counsel.
CASTLELAKE AVIATION: Fitch Assigns 'BB(EXP)' IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned an expected Issuer Default Rating (IDR)
of 'BB(EXP)' to Castlelake Aviation Limited (CA) and its wholly
owned subsidiaries, Castlelake Aviation Finance DAC (CAF) and
Castlelake Aviation One DAC (CAO). Fitch has also assigned an
expected rating of 'BB+(EXP)' to CAO's announced senior secured
term loan B and an expected rating of 'BB+(EXP)' to CAF's announced
senior secured revolving credit facility. The Rating Outlook is
Stable.
The rated entities are de novo institutions currently being
established. Fitch expects that concurrent with the debt issuances,
proceeds will be used to fund the purchase and transfer of aircraft
assets from funds and entities managed by Castlelake L.P.
KEY RATING DRIVERS
IDRs and Senior Debt
CA's expected ratings are supported by its young fleet with one of
the longest weighted average (WA) remaining lease terms amongst
peers, adequate targeted leverage, the absence of order book
purchase commitments, lack of near-term debt maturities and strong
expected liquidity metrics. The ratings also consider the company's
affiliation with Castlelake L.P., which has an established position
as a lessor of midlife and older commercial aircraft, management
experience and a track record in underwriting, servicing and
managing a sizable global aircraft portfolio.
The primary rating constraints relate to execution risks associated
with the company's aggressive, albeit potentially attainable,
growth targets and accompanying financing objectives. Additional
rating constraints include a largely secured expected funding
profile, a smaller and significantly concentrated portfolio by
customer and geography at inception relative to other aircraft
lessors, lower than peer exposure to narrowbody aircraft, higher
than average exposure to weaker credit airlines, and weaker
projected profitability over the next two years. Fitch also notes
potential governance and conflict of interest risks associated with
CA's externally-managed business model, limited number of
independent board members and ownership by a fixed-life private
fund structure.
Rating constraints applicable to the aircraft leasing industry more
broadly include the monoline nature of the business; vulnerability
to exogenous shocks including the ongoing challenges facing the
aviation sector as a result of the coronavirus pandemic; potential
exposure to residual value risk; sensitivity to oil prices;
reliance on wholesale funding sources; and increased competition.
Fitch's sensitivity analysis for CA incorporated quantitative
credit metrics for the company under the agency's base case and
downside case assumptions. These include slower than projected
growth, the default of up to 33% of lessees and up to 45%
impairment of the net book value of the defaulted fleet. Fitch
believes CA will have sufficient liquidity and capitalization
headroom to withstand near-term reductions in lease cash flows in
both scenarios without breaching Fitch's liquidity coverage and
leverage thresholds of 1.0x and 3.5x, respectively.
At inception, CA's fleet will consist of 71 aircraft with a WA age
of 5.7 years and a WA remaining lease term of 10.3 years, which
represents a young portfolio with one of the longest WA remaining
lease terms amongst Fitch rated peers. The company's portfolio is
expected to have a net book value of $2.4 billion at inception
(including Maintenance Right Assets and Lease Premiums).
Fitch anticipates that CA's aggressive growth strategy and focus on
sale leaseback transactions will have a negative effect on
near-term profitability. Fitch expects the company will generate
annual pre-tax returns on average assets of approximately 2% in
2022 and 2023, which is commensurate with Fitch's 'bb' category
earnings and profitability benchmark range of 1% to 4% for balance
sheet heavy leasing companies with an operating environment factor
score in the 'bbb' category.
The company has articulated a leverage target on a net debt to
equity basis in the range of 2.5x-3.0x, which should translate to
2.7x-3.2x on a gross debt to tangible equity basis. Fitch believes
CA's leverage target is appropriate in the context of the liquidity
of the fleet profile, as 58% of the initial portfolio is expected
to be Tier 1.
CA will rely predominantly on secured borrowing to fund its
operations, as the majority of the firm's total debt is expected to
be secured at inception. Fitch expects the company will seek to
issue unsecured debt to improve its funding diversification and
flexibility. Failure to issue unsecured debt, such that it
represents at least 20% of total debt by YE21 could result in a one
notch rating downgrade of the expected rating.
Fitch anticipates that CA will have solid near-term liquidity,
including $100 million of cash on hand and $750 million of
committed funding available under the senior secured revolving
credit facility. Fitch projects the company will generate operating
cash flows in the range of $200 million to $250 million depending
on expansion, deferrals and collections in 2022.
The Stable Rating Outlook reflects Fitch's expectation that CA will
manage its balance sheet growth in order to maintain sufficient
headroom relative to its targeted leverage range and Fitch's
negative rating sensitivities over the Rating Outlook horizon. The
Stable Rating Outlook also reflects expectations for the
maintenance of a strong liquidity position, given the lack of order
book purchase commitments with aircraft manufacturers.
The expected senior secured debt ratings are one-notch above CA's
expected Long-Term IDR and reflect the expected aircraft collateral
backing the obligations, which suggest good recovery prospects.
Subsidiary Ratings
The expected Long-Term IDRs assigned to CAF and CAO are equalized
with that of CA given they are wholly-owned subsidiaries of the
company.
RATING SENSITIVITIES
Upon establishment of the aircraft portfolio, execution of the term
loan B and execution of an unsecured debt issuance, Fitch would
expect to convert CA's expected IDRs to final IDRs. Failure to
execute on the aircraft asset transfer, secured funding and
unsecured debt issuance could result in the expected ratings being
withdrawn or revised down.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Assuming the aircraft asset transfer is completed, the secured
term loan B is closed and CA accesses the unsecured debt
market by YE21, CA's ratings could be, over time, positively
influenced by solid execution with respect to planned growth
targets and outlined long-term strategic financial objectives,
including maintenance of leverage within the targeted range.
Ratings could also benefit from enhanced scale and improved
risk profile of the portfolio, as exhibited by stronger lessee
diversification, reduced exposure to weaker airlines,
maintenance of the impairment ratio below 1%, and increases in
the proportions of Tier 1 aircraft and narrowbody aircraft.
-- An upgrade would be also conditioned upon achieving a
sustained return on average assets in excess of 2.5% and
unsecured debt approaching or in excess of 35% of total debt,
while achieving and maintaining unencumbered assets coverage
of unsecured debt in excess of 1.0x. Any potential upward
rating momentum would also be evaluated in the context of
potential governance and conflict of interest risks associated
with CA's externally managed business model, limited number of
independent board members and ownership by a fixed-life
private fund structure.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- CA's expected IDR could be downgraded by one notch should the
company not access the unsecured debt market by YE21, such
that unsecured debt accounts for at least 20% of total debt,
as this would imply a fully secured funding profile with
limited financial flexibility and unencumbered assets. Beyond
this, the ratings are also sensitive to renewed pandemic
driven lockdowns and travel restrictions as this would further
pressure the airline industry and could lead to lease
restructurings, lessee defaults and increased losses. A
weakening of the company's projected long-term cash flow
generation, profitability and liquidity position and/or a
sustained increase in leverage above 4x would also be viewed
negatively.
-- The expected senior secured debt ratings are primarily
sensitive to changes in CA's expected IDR and secondarily to
the relative recovery prospects of the instruments. In the
event CA does not issue unsecured debt, the expected ratings
on the secured debt facilities would likely be equalized with
the expected IDR, reflecting average recovery prospects.
Subsidiary Ratings
The expected Long-Term IDRs of CAF and CAO are linked to the
expected IDR of CA and expected to move in tandem.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ESG CONSIDERATIONS
CA has an ESG Relevance Score of '4' for Management Strategy due to
execution risk associated with the operational implementation of
the company's outlined strategy. This has a negative impact on the
credit profile and is relevant to the ratings in conjunction with
other factors.
CA has an ESG Relevance Score of '4' for Governance Structure due
to potential governance and conflict of interest risks associated
with CA's externally-managed business model, limited number of
independent board members and ownership by a fixed-life private
fund structure. This has a negative impact on the credit profile
and is relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CBAK ENERGY: Guosheng Wang Quits as Director
--------------------------------------------
Guosheng Wang resigned as a member of the Board of Directors of
CBAK Energy Technology, Inc., effective Sept. 24, 2021.
CBAK said Mr. Wang's decision to resign was due to personal reasons
and not because of any disagreement with the company on any matter
relating to its operations, policies or practices.
On Sept. 24, 2021, the Board elected Ms. Xiangyu Pei as a new
director of the company, effective immediately. Ms. Pei will be
subject to reelection at the company's next annual meeting of
stockholders.
Ms. Pei has served as the interim chief financial officer of CBAK
since August 2019.
Like other employee directors of CBAK, Ms. Pei will not receive
compensation for serving as a director of the company, but she is
entitled to reimbursements for reasonable expenses incurred in
connection with attending the company's board meetings.
There is no family relationship that exists between Ms. Pei and any
directors or executive officers of the company.
Also on Sept. 24, 2021, Mr. Wang resigned as a manager of Dalian
CBAK Power Battery Co., Ltd., a wholly owned PRC subsidiary of
CBAK. Mr. Wang has agreed to act as a consultant to CBAK. Mr.
Wang's resignation is not the result of any disagreement with
management, the company or its operations, policies or practices.
About CBAK Energy
Liaoning Province, People's Republic of China-based CBAK Energy --
www.cbak.com.cn -- is a manufacturer of new energy high power
lithium batteries that are mainly used in light electric vehicles,
electric vehicles, electric tools, energy storage including but not
limited to uninterruptible power supply (UPS) application, and
other high-power applications. Its primary product offering
consists of new energy high power lithium batteries, but it is also
seeking to expand into the production and sale of light electric
vehicles.
CBAK Energy reported a net loss of $7.85 million for the year ended
Dec. 31, 2020, compared to a net loss of $10.85 million for the
year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$192.17 million in total assets, $90.34 million in total
liabilities, and $101.84 million in total equity.
Hong Kong, China-based Centurion ZD CPA & Co., the Company's
auditor since 2016, issued a "going concern" qualification in its
report dated April 13, 2021, citing that the Company has a working
capital deficiency, accumulated deficit from recurring net losses
and significant short-term debt obligations maturing in less than
one year as of Dec. 31, 2020. All these factors raise substantial
doubt about its ability to continue as a going concern.
CHAR PHAR: Parties Postpone Disclosures Hearing to Oct. 26
----------------------------------------------------------
Judge Rene Lastretto II of the U.S. Bankruptcy Court for the
Eastern District of California approved the stipulation between
Char Phar Investments, LLC and Secured Creditors, State Bank of
India (California) and Fresno Truck Center to continue the hearing
on the Debtor's Disclosure Statement to October 26, 2021 at 9:30
a.m.
A copy of the order is available for free at https://bit.ly/3zHhsy8
from PacerMonitor.com.
About Char Phar
Char Phar Investments, LLC is a California limited liability
company and Ravinderpaul S. Tut is the sole member/manager and owns
100% of the Debtor. The Debtor is a family farmer that owns 352
acres consisting of 196 acres of Rubired wine grapes and 54 acres
of buildings, plus 100 acres of open ground.
Char Phar Investments LLC filed a Chapter 12 bankruptcy case
(Bankr. E.D. Cal. Case No. 20-11992) on June 12, 2020. The case
was converted to a Chapter 11 case on Aug. 11, 2020.
The Law Offices of William L. Cowin is the Debtor's counsel.
CHARTER COMMUNICATIONS: Moody's Rates New Sr. Secured Notes 'Ba1'
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to three new Senior
Secured Notes due 2029, 2042, and 2062 (the Transaction), to be
issued at Charter Communications Operating, LLC and Charter
Communications Operating Capital Corp, (indirectly wholly owned by
Charter Communications, Inc. -- "Charter" or the Company).
Charter's Ba2 Corporate Family Rating, Ba2-PD Probability of
Default Rating, and all instrument ratings including the Ba1 senior
secured 1st lien credit facilities and senior secured 1st lien
notes at Charter Communications Operating, LLC, Time Warner Cable
LLC, and Time Warner Cable Enterprises LLC are unaffected by the
proposed Transaction. The stable outlook and SGL-1 speculative
grade liquidity are unchanged.
Assignments:
Issuer: Charter Communications Operating, LLC
Senior Secured Notes, Assigned Ba1 (LGD3)
Moody's views the Transaction as credit neutral. Moody's expects
the terms and conditions of the newly issued obligations to be
materially the same as existing obligations of the same class.
Charter intends to use the net proceeds from the financing for
general corporate purposes, share repurchases, to repay certain
indebtedness, and to pay related fees and expenses. Moody's believe
any incremental leverage (net of repayment) will not materially
change the credit profile or the proportional mix of secured and
unsecured debt, or the resultant creditor claim priorities in the
capital structure.
RATINGS RATIONALE
Charter Communications, Inc.'s (Charter) credit profile is
supported by the Company's substantial scale and share of the US
pay-TV market which is protected by a superior, high-speed network
with limited competitive overlap. Charter is the second largest
cable company in the United States, serving approximately 31.8
million residential and commercial customers across 41 states,
generating approximately $50 billion in revenue (June 2021 LTM).
Strong and sustained broadband demand drives growth and
profitability, providing an operating hedge to the secular decline
in video and voice services. The business model is also highly
predictable, with a largely recurring revenue base. Liquidity is
also very good, including free cash flows of close to $7.1 billion
(Moody's adjusted, June 2021 LTM) which provides significant
financial flexibility.
The credit profile is constrained by governance risk, including a
financial policy that targets a net leverage ratio of 4.0-4.5x,
with the ratio near the top end of the range for a sustained period
on a Moody's-adjusted basis. High absolute debt levels (over $89.7
billion, Moody's adjusted at Q2 2021 and excluding completed and
pending transactions subsequent) can also represent a refinancing
risk when maturities are larger than internal sources of repayment,
but maturities will be balanced and insignificant relative to free
cash flows for at least the next 12-18 months. During this time,
and absent acquisitions, Moody's expects most all free cash flow
will be used for share repurchases rather than debt repayment.
Charter is also exposed to secular pressure in its voice and video
services due to intense competition and changes in media
consumption, driving penetration rates lower, despite recent
growth. Over the medium term, 5G wireless services offered by
competing carriers could be a threat to compete with its wireline
internet growth engine. In response, Charter is ramping mobile
wireless services using a mobile virtual network operator (MVNO)
model. Scaling the business will drive revenue growth and diversity
in the business and allow Charter to participate in growth of
high-speed wireless broadband while improving customer retention
rates. However, it is currently producing negative cash flows, and
Moody's expect steady-state economics that are less favorable than
its existing cable model.
The SGL-1 liquidity rating reflects very good liquidity with
positive free cash flow, a fully undrawn $4.75 billion revolver
facility, and only incurrence-based financial covenants. Alternate
liquidity is limited with a largely secured capital structure.
Moody's rates the senior secured 1st lien credit facilities and
senior secured 1st lien notes at Charter Communications Operating,
LLC, Time Warner Cable LLC, and Time Warner Cable Enterprises LLC
Ba1 (LGD3), one notch above the Ba2 CFR. Secured lenders benefit
from junior capital provided by the senior unsecured notes at CCO
Holdings, LLC (which have no guarantees), the most junior claims,
that are rated B1 (LGD5), with contractual and structural
subordination to all other obligations. Instrument ratings reflect
the Ba2-PD PDR with a mix of secured and unsecured debt, which
Moody's expect will result in an average rate of recovery of
approximately 50% in a distressed scenario.
The stable outlook reflects Moody's expectation that debt,
revenues, and EBITDA will rise over $90 billion, $52.5 billion, and
$20.5 billion, respectively by the end of 2022. Moody's project
EBITDA margins near 40%, producing free cash flows averaging $7
billion. Key assumptions include capex to revenue averaging
15%-16%, and average borrowing costs of approximately 5%. Moody's
expect video subscribers to fall by low to mid-single digit percent
on a long-term secular basis, and data subscribers to rise by
mid-single digit percent. Moody's expect leverage to remain below
the top end of Moody's leverage tolerance of 4.75x and free cash
flow to debt to be sustained in the high single digit percent
range. Moody's expect liquidity to remain very good.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could consider an upgrade if:
Leverage (Moody's adjusted debt/EBITDA) is sustained below 4.25x,
and
Free cash flow-to-debt (Moody's adjusted) is sustained above 5%
An upgrade could also be conditional on maintaining very good
liquidity, a more conservative financial policy, and stable
operating performance.
Moody's could consider a downgrade if:
Leverage (Moody's adjusted debt/EBITDA) is sustained above 4.75x,
or
Free cash flow-to-debt (Moody's adjusted) is sustained below low
single digit percent
Moody's could also consider a negative rating action if liquidity
deteriorated, financial policy implied higher credit risk, or there
were unfavorable and sustained trends in operating performance or
the business model.
Charter Communications, Inc., headquartered in Stamford,
Connecticut, serves an estimated 53.9 million passings. Across its
footprint, which spans 41 states, Charter has 29.6 million internet
customers, 16 million video, 10.3 voice, and 2.9 million mobile
lines. With 31.8 million total customers, it is the second largest
U.S. cable operator. Revenue for the last twelve months ended June
30, 2021 was approximately $50 billion.
The principal methodology used in these ratings was Pay-TV
published in December 2018.
CHINA FISHERY: Unsecured Creditors to Recover 8.75% in PAIH Plan
----------------------------------------------------------------
Pacific Andes International Holdings Limited (Bermuda) and Certain
of its Affiliated Debtors submitted a Disclosure Statement in
connection with the First Amended Chapter 11 Plan of Reorganization
(the "PAIH Plan") dated September 27, 2021.
The Plan Debtors include Pacific Andes International Holdings
Limited (Bermuda) ("PAIH"), Pacific Andes International Holdings
(BVI) Limited ("PAIH BVI"), Nouvelle Foods International Ltd. (BVI)
("Nouvelle"), N.S. Hong Investment (BVI) Limited ("N.S. Hong"),
Clamford Holding Limited (BVI) ("Clamford"), and Pacific Andes
Enterprises (Hong Kong) Limited ("PAE (HK)").
The Debtors' chapter 11 cases have been consolidated for procedural
purposes only and are being administered under the caption China
Fishery Group Limited (Cayman), Case No. 16-11895 (JLG).
On September [27], 2021, certain members of the PAIH Group entered
into those certain Sale Transactions SAs, subject to Bankruptcy
Court approval.
Due to the corporate structure, the business organization and the
companies' operations, the restructuring of the Debtors will be
implemented through three separate chapter 11 Plans—(i) the CFG
Peru Plan, which was proposed by the Creditor Plan Proponents and
previously confirmed by the Bankruptcy Court by the CFG Peru
Confirmation Order dated June 10, 2021, through which, inter alia,
the interests in CFGI were or will be distributed to holders of the
Club Facility Claims and Senior Note Claims in full satisfaction
and payment of the funded debt of the CFG Debtors; (ii) a Joint
Debtor Plan, which addresses and satisfies the claims of the
certain Debtors within the CFGL Group and PARD Group; and (iii) the
PAIH Plan which addresses and satisfies the claims of the creditors
within the PAIH Group.
The PAIH Plan authorizes and approves the sale of certain non
Debtor subsidiaries' real estate holdings and/or Interests in such
entities in exchange for the Sale Transactions Proceeds pursuant
to, inter alia, Bankruptcy Code Sections 1123(a)(5) and 1141.
Specifically, the PAIH Plan provides for the sale of Interests in 6
Property Owning Companies, which hold Real Property in Hong Kong
and Japan, and the sale of Real Property held by PAE (HK).
The Sale Transactions Proceeds, along with all other residual
assets inclusive of the proceeds of the release of the Maybank
Share Pledge, shall be distributed (i) to satisfy and pay the
Allowed Administrative Expense Claims (including those of certain
related parties that advanced sums to fund operations and
professional expenses during the course of the Chapter 11 cases)
and other priority claims; (ii) to satisfy and pay the Maybank
Secured Facility Claim through an aggregate payment of $4.0
million; (iii) to satisfy and pay allowed unsecured claims of the
creditors of PAIH and PAIH (BVI) an amount equal to approximately
8.75% of their Allowed General Unsecured Claims; (vi) to satisfy
and pay the Allowed PAE HK Loan Claim in an amount equal to 60% of
the Allowed claim amount; and (v) to satisfy and pay allowed
unsecured claims of Teh Hong Eng from any Residual Assets.
All Intercompany Claims (except for Intercompany Claims that become
Allowed Administrative Claims or Allowed general unsecured claims),
shall be deemed satisfied and extinguished under the PAIH Plan.
Further, the Qingdao Related-Plant Facilities Claims, which consist
of claims arising from guarantees or expired guarantees of loans
secured by property in the People's Republic of China (excluding
Hong Kong SAR), shall be satisfied in full through their secured
interests in the Qingdao Related-Plant and through actions
previously taken by these creditors in the PRC.
The PAIH Plan contemplates the appointment of a Plan Administrator
to administer the wind down of the Plan Debtors and their non
Debtor affiliates in the PAIH Group. Upon confirmation of the PAIH
Plan, the Plan Administrator shall be authorized to take all
corporate actions necessary consistent with applicable non-United
States law to wind down and liquidate the Plan Debtors.
The PAIH Plan intends to satisfy the claims of the creditors of the
Plan Debtors through, among other things, (i) payment of cash from
the Sale Transactions Proceeds and liquidation of other residual
assets (including any preserved claims and causes of action),
and/or (ii) distribution of property interests held to secure
certain claims.
Attorneys for Plan Debtors:
KLESTADT WINTERS JURELLER SOUTHARD & STEVENS, LLP
Tracy L. Klestadt
John E. Jureller
Brendan M. Scott
200 West 41st Street, 17th Floor
New York, New York 10036
Telephone: (212) 972-3000
Facsimile: (212) 972-2245
About China Fishery Group
China Fishery Group Limited (Cayman) and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 16-11895) on June 30, 2016.
In the petition signed by CEO Ng Puay Yee, China Fishery Group was
estimated to have assets at $500 million to $1 billion and debt at
$10 million to $50 million.
The cases are assigned to Judge James L. Garrity Jr. Weil, Gotshal
& Manges LLP has been tapped to serve as lead bankruptcy counsel
for China Fishery and its affiliates other than CFG Peru
Investments Pte. Limited (Singapore). Weil Gotshal replaces Meyer,
Suozzi, English & Klein, P.C., the law firm initially hired by the
Debtors. The Debtors have also tapped Klestadt Winters Jureller
Southard & Stevens, LLP, as conflict counsel; Goldin Associates,
LLC, as financial advisor; RSR Consulting LLC as restructuring
consultant; and Epiq Bankruptcy Solutions, LLC, as administrative
agent. Kwok Yih & Chan serves as special counsel.
On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11
trustee for CFG Peru Investments Pte. Limited (Singapore), one of
the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as
the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as
special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves
as special litigation counsel.
COALSON ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Coalson Enterprises Corporation
10286 Staples Mill Road #608
Glen Allen, VA 23060
Business Description: Coalson Enterprises Corporation is a
privately held company in the residential
building construction industry.
Chapter 11 Petition Date: September 28, 2021
Court: United States Bankruptcy Court
Eastern District of Virginia
Case No.: 21-32920
Debtor's Counsel: Nisha R. Patel, Esq.
DUNLAP LAW PLC
211 Rocketts Way Suite 100
Henrico, VA 23231
Tel: (804) 931-1158
Email: npatel@dunlaplawplc.com
Total Assets: $1,523,415
Total Liabilities: $3,709,029
The petition was signed by John J. Coalson, Jr., as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/5A4OJVQ/Coalson_Enterprises_Corporation__vaebke-21-32920__0001.0.pdf?mcid=tGE4TAMA
COBRA ACQUISITIONCO: Moody's Assigns First Time 'B2' CFR
--------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating and a B2 long-term senior unsecured rating to Cobra
AcquisitionCo LLC, a holding company of Exeter Finance LLC
(together referred to as 'Exeter'), a US non-prime auto lender with
$6 billion in total assets as of June 30, 2021. The outlook of
Cobra AcquisitionCo LLC is stable.
Assignments:
Issuer: Cobra AcquisitionCo LLC
Corporate Family Rating, Assigned B2
Senior Unsecured Regular Bond/Debenture, Assigned B2
Outlook Actions:
Issuer: Cobra AcquisitionCo LLC
Outlook, Assigned Stable
RATINGS RATIONALE
Cobra AcquisitionCo LLC is a holding company of Exeter and its B2
CFR is derived from its b2 standalone assessment, which reflects
Moody's assessment of Exeter including the risks to creditors from
the firm's subprime lending focus, high refinancing risk from
reliance on confidence-sensitive secured funding and modest
capitalization, resulting in limited capacity to absorb unexpected
losses. These credit challenges are somewhat mitigated by the
company's credit loss absorption capacity and strong earnings
profile supported by its solid loan origination model through its
technology-enabled platform as well as the firm's demonstrated
access to funding. Moody's said the stable outlook reflects its
views that Exeter will maintain earnings, leverage and liquidity
consistent with its rating level in the next 12-18 months.
Moody's said Exeter's ratings reflect the high credit risk
associated with lending to consumers with non-prime and subprime
credit profiles, particularly in auto finance where competition has
been elevated. Despite the low barriers to entry in the US auto
finance market because of abundant investment capital, Exeter
benefits from established origination channels that have shifted
towards digital for loan underwriting, decisioning, pricing and
origination. Furthermore, Exeter has expanded its origination
channels through an increase in loans via strategic partnerships
that have demonstrated stronger credit performance than its dealer
network originations. As a result, Exeter's business model benefits
from a multitude of loan origination channels reducing its reliance
on any one source, supporting its earnings generation capacity and
market position in the competitive US auto lending market.
Exeter's capitalization significantly declined following the
adoption of the Current Expected Credit Losses (CECL) accounting
standard. However, the company's total loss absorption capacity has
improved as measured by its tangible common equity plus allowance
for loan losses relative to total managed assets. Moody's believes
that the high-risk characteristics of Exeter's earning assets
require the company to maintain a strong cushion from capital and
reserves. Exeter's pullback on loan originations at the onset of
the coronavirus pandemic demonstrated some level of conservatism in
its risk appetite. Its improved credit performance in 2020,
evidenced by a reduction in its net charge off rate to 6.8% down
from 8.8% in 2019, is largely a function of massive fiscal stimulus
which has supported consumers through the pandemic as well as
elevated used car prices supporting higher recoveries.
Exeter has demonstrated an ability to fund its growing loan
originations through its very high reliance on confidence-sensitive
secured sources of funding, which accounted for 79% of gross
tangible assets of as of December 31, 2020. Exeter's high reliance
on securitizations to fund its receivables results in a high
percentage of encumbered assets reducing its ability to access
alternate funding sources, as well as the strength and quality of
asset coverage of unsecured debt.
The B2 long-term senior unsecured rating reflects the application
of Moody's Loss Given Default (LGD) model and methodology, which
consider the volume and priority of unsecured notes with respect to
other debt and non-debt obligations in Exeter's liability
structure, and the notes' asset coverage.
The assignment of Exeter's ratings also takes into account its
governance as part of Moody's environmental, social and governance
(ESG) considerations. Governance is very relevant for financial
companies. Despite the firm's ownership change, Moody's does not
have any particular concerns with respect to Exeter's governance
practices.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Exeter's ratings could be upgraded if it diversifies its sources of
funding, improving access to backup liquidity, reduces its reliance
on secured debt and improves its capitalization as measured by
tangible common equity to tangible managed assets (TCE/TMA) without
increasing asset risk.
Exeter's ratings could be downgraded if Moody's expects its
financial performance to deteriorate, financial leverage to
increase or funding and liquidity to weaken. Unexpected operational
issues, regulatory fines, or a significant deterioration in credit
quality resulting high in credit losses would also be negative for
the ratings.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
COVIA CORP: Taps Lillian Etzkorn as New CFO After Bankruptcy Exit
-----------------------------------------------------------------
Mary Vanac of Cleveland Business Journal reports that Covia Corp.,
hired Lillian Etzkorn as its new chief financial officer.
Lillian Etzkorn, who takes office on Oct. 11, also will be an
executive vice president for the company, which emerged from
Chapter 11 bankruptcy protection in January.
Etzkorn most recently was senior vice president and CFO at Shiloh
Industries in Valley City, Ohio, Covia said in a press release.
She succeeds Andrew Eich, who was promoted to president on June 1,
2021, Covia said.
Covia Holdings Corporation
Covia Holdings Corporation and its affiliates --
http://www.coviacorp.com/-- provide diversified mineral-based and
material solutions for the energy and industrial markets. They
produce a specialized range of industrial materials for use in the
glass, ceramics, coatings, foundry, polymers, construction, water
filtration, sports and recreation, and oil and gas markets.
Covia Holdings Corporation, based in Independence, Ohio, and its
affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case
No. 20-33295) on June 29, 2020. In its petition, Covia disclosed
$2.505 billion in assets and $1.904 billion in liabilities.
The Hon. Marvin Isgur presided over the case.
The Debtors tapped KIRKLAND & ELLIS LLP, and KIRKLAND & ELLIS
INTERNATIONAL LLP, as counsel; JACKSON WALKER L.L.P., as
co-counsel; KOBRE & KIM LLP, as special litigation counsel; PJT
PARTNERS LP, as investment banker; ALIXPARTNERS, LLP, as financial
advisor; and PRIME CLERK LLC, as claims and noticing agent.
CSL CAPITAL: S&P Rates New $700MM Senior Unsecured Notes 'CCC'
--------------------------------------------------------------
S&P Global Ratings assigned its 'CCC' issue-level rating and '6'
recovery rating to CSL Capital LLC's proposed $700 million senior
unsecured notes due 2030. CSL Capital LLC is a wholly owned
subsidiary of Little Rock, Ark.-based telecom REIT Uniti Group Inc.
The '6' recovery rating indicates S&P's expectation for negligible
(0%-10%; rounded estimate: 0%) recovery in the event of a payment
default.
The company will use the proceeds from these notes to redeem its
$600 million 7.125% senior unsecured notes due 2024 and repay about
$78 million of its remaining $349 million cash settlement
obligation to Windstream Holdings Inc., and pay related fees and
expenses.
S&P said, "Because the transaction does not materially affect
Uniti's S&P Global Ratings-adjusted credit metrics, which
incorporate the Windstream cash settlement liability, our 'B-'
issuer credit rating and stable outlook are unchanged. Furthermore,
we view the transaction favorably because it reduces the company's
interest costs and extends its debt maturity profile.
"Our ratings continue to reflect the tight linkage between Uniti's
credit profile and that of Windstream (its largest tenant), which
contributes about 80% of its EBITDA through an annual lease
payment. While Windstream has opportunities related to the
deployment of fiber-to-the-home (FTTH), it continues to face
revenue declines stemming from secular industry pressures. In
addition, following Windstream's restructuring, Uniti is committed
to providing $1.75 billion of growth capital investment to fund
Windstream's multi-year FTTH upgrade plan. Over the longer term, we
believe Uniti has solid prospects to diversify its leasing segment
if it can accelerate the lease-up of the fiber it acquired as part
of its settlement with Windstream. For 2021 and 2022, we expect
EBITDA growth in the low- to mid-single digit percent range and S&P
Global Ratings-adjusted debt to EBITDA in the high-5x to low-6x
area, down from 6.3x in 2020."
Ratings List
UNITI GROUP INC.
Issuer Credit Rating B-/Stable/--
NEW RATING
CSL CAPITAL, LLC
UNITI FIBER HOLDINGS INC.
Senior Unsecured
US$700 mil sr notes due 2030 CCC
Recovery Rating 6(0%)
CYTODYN INC: Comments on Rosenbaum/Patterson Activist Group 'Plan'
------------------------------------------------------------------
CytoDyn Inc. responded to the "plan" put forward by an activist
group led by Paul Rosenbaum and Bruce Patterson:
CytoDyn is highly focused on the expeditious development of
leronlimab to help patients with critical needs. Clinical
development of any product is a multi-year endeavor. Within this
context, the Company has acted as quickly as possible - bringing
leronlimab from the Phase 2b stage to successfully completing a
pivotal Phase 3 (p=0.0032) in seven years, which was significantly
faster than leronlimab's progress with its prior owner. CytoDyn is
exploring several different indications for leronlimab. These
include COVID-19 critical and severe hospitalized patients as well
as long-haulers, HIV and 22 different cancer types. The Company
strongly believes in the drug's potential - especially given that
it is variant agnostic when it comes to treating COVID-19.
The Activist Group's missive is not a "plan"; it appears to be a
misguided and misleading attempt to discredit the significant
efforts of CytoDyn to bring leronlimab's lifesaving potential to
market to help patients and drive value for shareholders. The
success of these efforts is clearly demonstrated by the
increasingly long list of positive developments that CytoDyn has
announced recently, including the clearance from Brazil's
regulatory authority, ANVISA (Agencia Nacional de Vigilância
Sanitaria), to begin an additional Phase 3 CD16 clinical trial of
leronlimab with IV treatment, which the Company believes will have
an enormous advantage over treatment via subcutaneous (SQ)
injections. CytoDyn will continue to work tirelessly towards
approvals for leronlimab and are laser focused on doing what is
best for all shareholders.
Readers of the Activist Group's "plan" should consider the
following:
The Activist Group Offers No New Compelling Strategic Direction
with Respect to Cancer Therapy Approval
* CytoDyn is currently working with some of the top oncological
opinion leaders in the world from well-respected academic
institutions. These experts will assist CytoDyn in determining the
appropriate targets and the most efficient path to Breakthrough
Therapy designation and approval of leronlimab.
* CytoDyn has already stated publicly that it believes
leronlimab has a potential synergistic effect with PD-L1/PD-1
inhibitors, PARP inhibitors, antibody-drug conjugates, and
chemotherapy. However, since the first cancer indication with
mTNBC has shown what the Company believes to be very strong
results, CytoDyn will focus obtaining Breakthrough Therapy
designation as the fastest path to approval. Approval of
leronlimab in combination with other therapies will take at least
another two to three years –- but if the Company receives
approval for mTNBC, then label expansion would be much faster for
any additional cancer indication.
* CytoDyn recently signed a contract with a top oncology
academic institution to evaluate the anti-tumor effect of
leronlimab and checkpoint inhibitors.
* The Company has already publicly discussed the potential value
of leronlimab with combination therapy. Further, current
management has first-hand experience with the potential of
leronlimab in monotherapy for patients who respond to leronlimab
single agent therapy and in combination therapy when other
treatments have failed – or when a patient is intolerant of
certain standard of care regimens and therefore their background
therapy is their last recourse.
* Regarding pharmaceutical partners, CytoDyn has been in contact
with potential partners both domestically and internationally. The
main catalyst for partnerships is data, which CytoDyn did not have
previously. The Company now has that data and is evaluating
options including partnerships with academic institutions and major
pharmaceutical companies.
The Activist Group's Continued Attempts to Link CytoDyn to IncellDx
Are Troubling
Patient safety and data accuracy will always remain CytoDyn's main
concern. Based on its first-hand experience in working with
IncellDx, CytoDyn sees any relationship between IncellDx and the
Company as a liability for shareholders rather than an asset. That
is why the Activist Group's suggestion to define cancer targets
using the IncellDx H-Scoring system is misguided - particularly
since the Group proposes that CytoDyn license this system from
IncellDx. Consider the following:
* It is clearly a direct conflict of interest for Dr. Bruce
Patterson to continuously seek to force a relationship between
IncellDx and CytoDyn while trying to gain a seat on the Board of
Directors of CytoDyn.
* Together with his wife, Dr. Patterson owns approximately 34%
of IncellDx and Jeff Beaty, another member of the Activist Group,
owns about 2.3% of IncellDx. They previously failed to disclose
the frequent requests for CytoDyn to purchase IncellDx for as much
as $350 million. They clearly have a financial interest in
licensing the IncellDx H-scoring system. While the Activist
Group's proposed slate of directors recently tried to distance
themselves from any relationship between IncellDx and CytoDyn, we
believe it is evident this is not truly the case.
* To add insult to injury, the Activist Group not only choose
Dr. Patterson to be on its slate, it also supports the use of Dr.
Patterson's unproven test, which would allow Dr. Patterson to
profit from CytoDyn.
The Activist Group's Plan Includes Numerous Mistakes
These mistakes include the following:
* The Activist Group's implication that CytoDyn would use Amarex
as its clinical research organization (CRO) for its current
oncology studies is incorrect. CytoDyn has already announced
publicly that it will not be using Amarex for current oncology
studies going forward and the Company is identifying and
interviewing Oncology-focused CRO's with the input of the executive
team, KOL's, and Scientific Advisory Board.
* CytoDyn's current oncology program is not dependent on the
success of the potential approval of the long hauler's indication,
as the Activist Group implies. Dr. Nader Pourhassan has a proven
track record of raising capital of over $420 million to support the
various indications of leronlimab. By contrast, the Activist
Group's proposed slate of directors does not have a proven track
record of raising capital, putting the Company potentially at
financial risk. We believe the Activist Group's financing proposal
is a clear indication of their lack of experience.
* The Activist Group's depiction of the timing for CytoDyn's
cancer trial is incorrect. The Company's executive team is in
final stage of completion of the protocol for submission of its
basket trial for 22 cancers with the advice of top oncologists with
clinical experience (not pathologists, such as Dr. Bruce
Patterson). Current FDA guidelines estimate an approval process
for a drug to be 12 years, yet CytoDyn has come close to potential
approval for multiple indications in just seven years.
* * *
Shareholders should not be fooled by the Activist Group's
misleading "plan". The bottom line is that this Group has motives
and incentives that differ greatly from those of all other
shareholders –- while misleading shareholders about their
intentions, conflicts of interest, legal transgressions and
professional competencies.
Litigation/Proxy Process Update
Shareholders do not need to take any action at this time. CytoDyn
urges shareholders to ignore any calls, emails or mailings from the
Activist Group. As a reminder, CytoDyn believes that the Activist
Group's notice of director nominations was invalid because it
failed to comply with the Company's by-laws. The Activist Group
has sued the Company in the Delaware Court of Chancery, seeking
declaratory judgment that their nomination notice was valid. This
case remains pending, and the Court has scheduled a hearing for
Oct. 6, 2021. Unless the Court disagrees with CytoDyn, the Activist
Group's director nominations will be disregarded, and no proxies or
votes in favor of its nominees will be recognized or tabulated at
the 2021 Annual Meeting.
The Company has filed its preliminary proxy materials with the SEC.
Shareholders will be receiving the Company's definitive proxy
materials once they have been reviewed by the SEC. To the extent
shareholders have voted on the Activist Group's proxy card, they
can vote on the Company's proxy card once it becomes available to
revoke their vote on the Activist Group's card. Only the
latest-dated proxy card counts.
CytoDyn will continue to update shareholders on further
developments as appropriate.
About CytoDyn Inc.
Headquartered in Vancouver, Washington, CytoDyn Inc. --
http://www.cytodyn.com-- is a late-stage biotechnology company
focused on the clinical development and potential commercialization
of leronlimab (PRO 140), a CCR5 antagonist to treat HIV infection,
with the potential for multiple therapeutic indications.
Cytodyn reported a net loss of $154.67 million for the year ended
May 31, 2021, compared to a net loss of $124.40 million for the
year ended May 31, 2020. As of May 31, 2021, the Company had
$132.08 million in total assets, $153.10 million in total
liabilities, and a total stockholder's deficit of $21.02 million.
Birmingham, Alabama-based Warren Averett, LLC, the Company's
auditor since 2007, issued a "going concern" qualification in its
report dated July 30, 2021, citing that the Company incurred a net
loss of approximately $154,674,000 for the year ended May 31, 2021
and has an accumulated deficit of approximately $511,294,000
through May 31, 2021, which raises substantial doubt about its
ability to continue as a going concern.
CYTODYN INC: Gets $9.9M Proceeds From Private Placement
-------------------------------------------------------
CytoDyn Inc. filed a Form 8-K with the Securities and Exchange
Commission disclosing that as of Sept. 23, 2021, its unregistered
sales of equity securities, in the aggregate, since Sept. 7, 2021,
exceeded 1% of the shares of common stock outstanding as of May 31,
2021.
From September 21 through Sept. 29, 2021, the Company issued in a
private placement to accredited investors a total of 8,368,544
shares of its common stock, par value $0.001 per share, together
with warrants to purchase a total of 2,092,134 shares of Common
Stock at exercise prices ranging from $1.10 to $1.80 per share.
The securities were issued with a combined purchase price ranging
from $1.10 to $1.80 per fixed combination of one share of Common
Stock and one quarter of one warrant to purchase one share of
Common Stock, for total gross proceeds to the Company of
$9,902,700. The warrants have a five-year term and are immediately
exercisable.
The representations, warranties and covenants contained in the
subscription agreements were made solely for the benefit of the
parties to the subscription agreements. In addition, such
representations, warranties and covenants (i) are intended as a way
of allocating the risk between the parties to the subscription
agreements and not as statements of fact, and (ii) may apply
standards of materiality that are different from what may be viewed
as material by stockholders of, or other investors in, the Company.
Accordingly, the subscription agreements only provide information
to investors regarding the terms of the private placement, and do
not provide investors with any other factual information regarding
the Company. Stockholders should not rely on the representations,
warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts regarding or
condition of the Company or any of its subsidiaries or affiliates.
Moreover, information concerning the subject matter of the
representations and warranties may change after the date of each
subscription agreement, which subsequent information may or may not
be fully reflected in public disclosures.
On Sept. 21, 2021, the Company entered into a privately negotiated
warrant exchange agreement with an accredited investor, pursuant to
which the investor purchased shares of common stock at $3.00 per
share in exchange for a warrant with an exercise price of $1.00 per
share. The Company issued 500,000 shares of common stock, as well
as 1,500,000 additional shares as an inducement to exercise their
warrant, for a total of 2,000,000 million shares of common stock.
Gross proceeds from the privately negotiated warrant exchange were
$1,500,000.
Also, from September 21 through Sept. 23, 2021, the Company entered
into Exercise Inducement Agreements with accredited investors,
pursuant to which the investors purchased shares of common stock at
prices ranging from $0.90 to $2.00 per share in exchange for
warrants with exercise prices ranging from $0.45 to $1.00 per
share. The Company issued 1,433,333 shares of common stock, as well
as 1,433,333 additional shares as an inducement to exercise their
warrants, for a total of 2,866,666 million shares of common stock.
Gross proceeds from these private warrant exchanges were
$1,900,000.
The shares issued pursuant to the Exercise Agreements were sold to
accredited investors in reliance upon the exemption provided by
Rule 506 of Regulation D and Section 4(a)(2) of the Securities
Act.
About CytoDyn Inc.
Headquartered in Vancouver, Washington, CytoDyn Inc. --
http://www.cytodyn.com-- is a late-stage biotechnology company
focused on the clinical development and potential commercialization
of leronlimab (PRO 140), a CCR5 antagonist to treat HIV infection,
with the potential for multiple therapeutic indications.
Cytodyn reported a net loss of $154.67 million for the year ended
May 31, 2021, compared to a net loss of $124.40 million for the
year ended May 31, 2020. As of May 31, 2021, the Company had
$132.08 million in total assets, $153.10 million in total
liabilities, and a total stockholder's deficit of $21.02 million.
Birmingham, Alabama-based Warren Averett, LLC, the Company's
auditor since 2007, issued a "going concern" qualification in its
report dated July 30, 2021, citing that the Company incurred a net
loss of approximately $154,674,000 for the year ended May 31, 2021
and has an accumulated deficit of approximately $511,294,000
through May 31, 2021, which raises substantial doubt about its
ability to continue as a going concern.
DALLAS REAL ESTATE: Nov. 3 Disclosure Statement Hearing Set
-----------------------------------------------------------
Dallas Real Estate Investors, LLC, filed with the U.S. Bankruptcy
Court for the Northern District of Texas a Disclosure Statement and
Plan of Reorganization. On Sept. 27, 2021, Judge Edward L. Morris
ordered that:
* Nov. 3, 2021, at 9:30 a.m. in the United States Bankruptcy
Court, 501 W. 10th Street, Fort Worth, Texas 76102 is the hearing
to consider the approval of the disclosure statement.
* Oct. 27, 2021, is fixed as the last day for filing and
serving written objections to the disclosure statement.
A copy of the order dated Sept. 27, 2021, is available at
https://bit.ly/39GeCyQ from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Kerry S. Alleyne
Guy H. Holman
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Email: joyce@joycelindauer.com
About Dallas Real Estate Investors
Dallas Real Estate Investors, LLC, filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas
Case No. 21-41488) on June 22, 2021. Timothy Barton, president,
signed the petition. As of the time of the filing, the Debtor
disclosed $1 million to $10 million in both assets and liabilities.
Judge Edward L. Morris oversees the case. Joyce W. Lindauer, Esq.,
serves as the Debtor's legal counsel.
DAME CONTRACTING: Wins Cash Collateral Access Thru Oct 17
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York has
authorized Dame Contracting, Inc. for authority to use cash
collateral in accordance with the budget, except with respect to
the payment of compensation to the Debtor's principals.
The Debtor and the Office of the U.S. Trustee are directed to and
will confer prior to October 5, 2021 regarding the post-petition
compensation to be paid to James Connolly and Lara McNeil, the
Debtor's Principals. In the event the U.S. Trustee has no objection
to the post-petition compensation to be paid to the Principals,
then the Debtor will file a letter on the court docket indicating
that the payment thereof has been resolved, and in such event, then
the Debtor may pay such compensation of the Debtor's Principals in
connection with the use of Cash Collateral through October 17,
2021.
A telephonic hearing on the matter is scheduled for October 20 at
11 a.m.
A copy of the order is available at https://bit.ly/3kMqzt5 from
PacerMonitor.com.
About Dame Contracting, Inc.
Dame Contracting, Inc. is a New York corporation founded in 1996 as
a small family-owned construction business. The Company has been
operated and managed by James Connolly and Lara McNeil. Mr.
Connolly is the sole shareholder and the President. Ms. McNeil is
the Vice President and Secretary. Dame Contracting is engaged in
carpentry construction for private and municipal jobs, ranging from
retain stores and restaurants to schools and other municipal
structures.
Dame Contracting sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 21-71627) on September
13, 2021. In the petition signed by James Connolly, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Alan S. Trust oversees the case.
Adam P. Wofse, Esq., at Lamonica Herbest & Maniscalco, LLP, is the
Debtor's counsel.
DIAMONDHEAD CASINO: Incurs $418,692 Net Loss in First Quarter
-------------------------------------------------------------
DiamondHead Casino Corporation filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing
a net loss of $418,692 for the three months ended March 31, 2021,
compared to a net loss of $413,435 for the three months ended
March 31, 2020.
As of March 31, 2021, the Company had $5.56 million in total
assets, $14.69 million in total liabilities, and a total
stockholders' deficit of $9.13 million.
The Company has incurred losses over the past several years, has no
operations, generates no operating revenues, and as reflected in
the accompanying unaudited condensed consolidated financial
statements, incurred a net loss applicable to common stockholders
of $444,092 for the three months ended March 31, 2021. In
addition, the Company had an accumulated deficit of $42,217,456 at
March 31, 2021. Due to its lack of financial resources and certain
lawsuits filed against it, the Company has been forced to explore
other alternatives, including a sale of part or all of the
Property, according to the SEC filing.
The Company has had no operations since it ended its gambling
cruise ship operations in 2000. Since that time, the Company has
concentrated its efforts on the development of its Diamondhead,
Mississippi property. That development is dependent upon the
Company obtaining the necessary capital, through either equity
and/or debt financing, unilaterally or in conjunction with one or
more partners, to master plan, design, obtain permits for,
construct, open, and operate a casino resort.
In the past, in order to raise capital to continue to pay on-going
costs and expenses, the Company has borrowed funds, through Private
Placements of convertible instruments as well as through other
secured notes. The Company is in default with respect to payment
of both principal and interest under the terms of most of these
instruments. In addition, at March 31, 2021, the Company had
$9,935,080 of accounts payable and accrued expenses and $82,499 in
cash on hand.
The above conditions raise substantial doubt as to the Company's
ability to continue as a going concern, according to the SEC
filing.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/844887/000149315221023814/form10-q.htm
About DiamondHead
Headquartered in Alexandria, Virginia, DiamondHead Casino
Corporation owns, through its wholly-owned subsidiary, Mississippi
Gaming Corporation, an approximate 400-acre undeveloped property
located at 7051 Interstate 10, Diamondhead, Mississippi 39525. The
Company's intent was and is to construct a casino resort and other
amenities on the Property unilaterally or in conjunction with one
or more joint venture partners.
Diamondhead reported a net loss of $2.22 million for the year ended
Dec. 31, 2020, compared to a net loss of $1.28 million for the year
ended Dec. 31, 2019.
Marlton, New Jersey-based Friedman LLP, the Company's auditor since
2004, issued a "going concern" qualification in its report dated
Sept. 3, 2021, citing that the Company has incurred significant
recurring net losses over the past several years. In addition, the
Company has no operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
The Company's continued existence is dependent upon its ability to
raise the necessary capital with which to satisfy liabilities, fund
future costs and expenses and develop the Diamondhead, Mississippi
property.
DIAMONDHEAD CASINO: Incurs $434,552 Net Loss in Second Quarter
--------------------------------------------------------------
DiamondHead Casino Corporation filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing
a net loss of $434,552 for the three months ended June 30, 2021,
compared to a net loss of $319,114 for the three months ended June
30, 2020.
For the six months ended June 30, 2021, the Company reported a net
loss of $853,244 compared to a net loss of $732,549 for the six
months ended June 30, 2020.
As of June 30, 2021, the Company had $5.67 million in total assets,
$15.26 million in total liabilities, and a total stockholders'
deficit of $9.59 million.
The Company has incurred losses over the past several years, has no
operations, generates no operating revenues, and as reflected in
the accompanying unaudited condensed consolidated financial
statements, incurred a net loss applicable to common stockholders
of $904,044 for the six months ended June 30, 2021. In addition,
the Company had an accumulated deficit of $42,677,408 at June 30,
2021. Due to its lack of financial resources and certain lawsuits
filed against it, the Company has been forced to explore other
alternatives, including a sale of part or all of the Property,
according to the SEC filing.
The Company has had no operations since it ended its gambling
cruise ship operations in 2000. Since that time, the Company has
concentrated its efforts on the development of its Diamondhead,
Mississippi property. That development is dependent upon the
Company obtaining the necessary capital, through either equity
and/or debt financing, unilaterally or in conjunction with one or
more partners, to master plan, design, obtain permits for,
construct, open, and operate a casino resort.
In the past, in order to raise capital to continue to pay on-going
costs and expenses, the Company has borrowed funds, through Private
Placements of convertible instruments as well as through other
secured notes. The Company is in default with respect to payment
of both principal and interest under the terms of most of these
instruments. In addition, at June 30, 2021, the Company had
$10,190,085 of accounts payable and accrued expenses and $194,023
in cash on hand.
The above conditions raise substantial doubt as to the Company's
ability to continue as a going concern, according to the SEC
filing.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/844887/000149315221023816/form10-q.htm
About DiamondHead
Headquartered in Alexandria, Virginia, DiamondHead Casino
Corporation owns, through its wholly-owned subsidiary, Mississippi
Gaming Corporation, an approximate 400-acre undeveloped property
located at 7051 Interstate 10, Diamondhead, Mississippi 39525. The
Company's intent was and is to construct a casino resort and other
amenities on the Property unilaterally or in conjunction with one
or more joint venture partners.
Diamondhead reported a net loss of $2.22 million for the year ended
Dec. 31, 2020, compared to a net loss of $1.28 million for the year
ended Dec. 31, 2019.
Marlton, New Jersey-based Friedman LLP, the Company's auditor since
2004, issued a "going concern" qualification in its report dated
Sept. 3, 2021, citing that the Company has incurred significant
recurring net losses over the past several years. In addition, the
Company has no operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
The Company's continued existence is dependent upon its ability to
raise the necessary capital with which to satisfy liabilities, fund
future costs and expenses and develop the Diamondhead, Mississippi
property.
DUNBAR PLAZA: Seeks to Hire Caldwell & Riffee as Legal Counsel
--------------------------------------------------------------
Dunbar Plaza, Inc., seeks approval from the U.S. Bankruptcy Court
for the Southern District of West Virginia to hire Caldwell &
Riffee, PLLC to serve as legal counsel in its Chapter 11 case.
The firm's services include:
1. providing the Debtor with legal advice regarding its powers
and duties under the Bankruptcy Code;
2. assisting the Debtor in the sale of the bankruptcy estate's
property;
3. assisting the Debtor in negotiating adequate protection
payments with its secured creditor;
4. preparing a disclosure statement and Chapter 11 plan;
5. performing other necessary legal services.
Joseph Caldwell, Esq., and Matthew Johnson, Esq., the firm's
attorneys who will be providing the services, will charge $375 per
hour and $215 per hour, respectively.
As disclosed in court filings, Caldwell & Riffee does not represent
any creditor or party in interest and does not have an adverse
interest to any creditor in the Debtor's bankruptcy case.
Caldwell & Riffee can be reached through:
Joseph W. Caldwell, Esq.
Matthew M. Johnson, Esq.
Caldwell & Riffee, PLLC
3818 MacCorkle Ave. S.E. Suite 101
P.O. Box 4427
Charleston, WV 25364-4427
Tel: (304) 925-2100
Email: joecaldwell@frontier.com
mjohnson@caldwellandriffee.com
About Dunbar Plaza Inc.
Dunbar, W.Va.-based Dunbar Plaza, Inc. filed a petition for Chapter
11 protection (Bankr. S.D. W.Va. Case No. 21-20221) on Sept. 23,
2021, listing as much as $10 million in both assets and
liabilities. Carl Higginbotham, president of Dunbar Plaza, signed
the petition. Judge B. Mckay Mignault oversees the case. Caldwell
& Riffee, PLLC, serves as the Debtor's legal counsel.
DUTCHINTS DEVELOPMENT: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Dutchints Development LLC
5150 El Camino Real E20
Los Altos, CA 94022
Business Description: Dutchints Development LLC is engaged in
activities related to real estate.
Chapter 11 Petition Date: September 29, 2021
Court: United States Bankruptcy Court
Northern District of California
Case No.: 21-51255
Judge: Hon. Elaine M. Hammond
Debtor's Counsel: Geoffrey E. Wiggs, Esq.
LAW OFFICES OF GEOFF WIGGS
1900 S. Norfolk St, Suite 350
San Mateo, CA 94403-1171
Tel: 650-577-5952
Fax: 650-577-5953
E-mail: Geoff@wiggslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Vahe Tashjian as managing member.
The Debtor stated it has no unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/AISOA2I/Dutchints_Development_LLC__canbke-21-51255__0001.0.pdf?mcid=tGE4TAMA
ELITE AEROSPACE: Seeks to Hire Levene as Bankruptcy Counsel
-----------------------------------------------------------
Elite Aerospace Group, Inc., seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Levene, Neale, Bender, Yoo & Brill, LLP to serve as legal counsel
in its Chapter 11 case.
The firm's services include:
1. advising the Debtor regarding the requirements of the
Bankruptcy Code, Bankruptcy Rules and the Office of the U.S.
Trustee as they pertain to the Debtor;
2. advising the Debtor regarding certain rights and remedies
of its bankruptcy estate and the rights, claims and interests of
creditors;
3. representing the Debtor in any proceeding or hearing in the
bankruptcy court involving its estate unless the Debtor is
represented in such proceeding or hearing by special counsel;
4. conducting examinations of witnesses, claimants or adverse
parties and
representing the Debtor in any adversary proceeding except to the
extent that such proceeding is in an area outside of Levene's
expertise or which is beyond the firm's staffing capabilities;
5. preparing legal papers;
6. assisting in seeking approval to obtain
debtor-in-possession financing or to use cash collateral;
7. assisting the Debtor in any asset sale process;
8. assisting the Debtor in the negotiation, formulation,
preparation and confirmation of a plan of reorganization; and
9. performing other necessary legal services.
The Debtor paid the sum of $6,300 to Levene, which constituted a
pre-bankruptcy retainer of $4,562. Following its Chapter 11
filing, the Debtor paid the additional sum of $45,417 as
post-petition retainer.
The hourly rates for the firm's attorneys are as follows:
David L. Neale, Esq. $635 per hour
Richard P. Steelman, Jr., Esq. $620 per hour
Juliet Y. Oh, Esq. $605 per hour
Juliet Oh, Esq., a partner at Levene, disclosed in a court filing
that her firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
David B. Neale, Esq.
Juliet Y. Oh, Esq.
Richard P. Steelman, Jr., Esq.
Levene, Neale, Bender, Yoo & Brill, LLP
2818 La Cienega Avenue
Los Angeles, CA 90034
Telephone: (310) 229-1234
Facsimile: (310) 229-1244
Email: dln@lnbyb.com
jyo@lnbyb.com
rps@lnbyb.com
About Elite Aerospace Group
Elite Aerospace Group, Inc., is an Irvine, Calif.-based company
that designs and manufactures aerospace components.
Elite Aerospace Group filed a petition for Chapter 11 protection
(Bankr. C.D. Cal. Case No. 21-12231) on Sept. 13, 2021, listing as
much as $50 million in both assets and liabilities. Zeeshawn Zia,
president of Elite Aerospace Group, signed the petition.
Levene, Neale, Bender, Yoo & Brill, LLP, serves as the Debtor's
legal counsel.
EMERALD SQUARE: Value of Collateral Slashed
-------------------------------------------
Julianne Cavaliere, writing for Trepp, reports that the value of
the collateral behind the $96.3 million Emerald Square Mall (North
Attleboro, MA) loan has been cut for a second time. The loan is
backed by almost 565,000 square feet of retail space. The
collateral was valued at $167 million in 2012, then in February,
the value was lowered to $72.5 million. In September, the value
was reduced to $42 million.
The report says the loan is split across two CMBS deals, both of
which are part of CMBX 6. There is a $62.6 million slice that makes
up 6.58% of COMM 2012-CR3 and a $33.5 million piece that represents
4.27% of COMM 2012-CR4.
For 2020, the loan posted a DSCR (NCF) of 0.21x when occupancy was
85%. Those numbers were 0.71x and 82%, respectively, for Q1 2021.
The last payment on the loan was made about a year ago.
As reported by the Troubled Company Reporter in July, Fitch Ratings
has downgraded five classes of Deutsche Bank Securities, Inc.'s
COMM 2012-CCRE4 com-mercial mortgage pass-through certificates,
series 2012-CCRE4 and affirmed five classes. Seven classes were
removed from Rating Watch Negative.
Fitch said Emerald Square Mall (4.3% of the pool) is a Fitch Loans
of Concern (FLOC) and is in special servicing. The asset is an
enclosed regional mall an-chored by JCPenney, Macy's, Macy's Men's
and Home Store and Sears. The collat-eral for this loan consists of
the JCPenney anchor (188,950 sf, 33.5% NRA through Aug. 2024) and
the in-line retail space (375,551 sf).
This is a FLOC due to declining sales and occupancy. Occupancy was
75% as of September 2020, down from 90% at YE2019. JCPenney
recently exercised a five-year extension option. Macy's is not on
any of the retailer's store closure lists, but Sears closed in
April 2021. Leases representing 19.6% of the NRA are scheduled to
roll by YE2021, according to the Sept. 2020 rent roll and 4.5% in
2022. Inline sales were $325 psf as of YE2019, down from $331 psf
the year prior.
The loan, which is sponsored by Simon Property Group, transferred
to the spe-cial servicer in June 2020 for payment default and the
workout strategy is foreclosure. JLL is the appointed receiver. The
Fitch projected base case loss of 68% is based on a stressed value
which implies a cap rate of 20%.
The base case treatment for these loans was a primary driver for
the downgrades to classes B and C.
ENTRUST ENERGY: Creditors to Get Proceeds From Liquidation
----------------------------------------------------------
Entrust Energy, Inc., f/k/a Retail OPCO of Texas, Inc., and its
affiliates who are also Debtors in these jointly administered cases
(collectively, the "Debtors") submitted a Disclosure Statement for
Chapter 11 Plan of Liquidation dated September 27, 2021.
The overall purpose of the Plan is to liquidate the Debtors' assets
and liabilities in a manner designed to maximize recoveries to all
creditors.
Entrust Energy Inc., ("Entrust") is a Texas corporation formed in
or around August 2010. Entrust, together with its affiliates,
operated as a retail energy company that delivered electricity and
natural gas to homes and businesses in deregulated markets
throughout the United States before ceasing operations in March of
2021.
The consequences of Winter Storm Uri and a Termination Notice
eliminated the Debtors' ability to continue as a going concern.
After receiving the Termination Notice and confirming discussions
with Shell regarding its decision to terminate, the Debtors
immediately sought to expedite the sale of their remaining
customers to other retail energy providers ("REPs") in order to
maximize value to creditors and limit the number of customers that
would be involuntarily transitioned within days to a provider of
last resort ("POLR") a program under the ERCOT rules and
regulations.
As a result of the Debtors efforts, on March 10, 2021, the Debtors
closed on a sale of approximately 91,000 commercial and residential
RCEs and other assets, including certain systems and intellectual
property to Rhythm Ops, LLC, which resulted in $3.160 million of
sale proceeds ("Rhythm Sale").
Requests by the Debtors for ERCOT to reconsider were dismissed,
which effectively terminated the Debtors' ability to consummate a
sale of its last remaining customers under the JP Resources LOI.
Shortly thereafter, the Debtors filed these Chapter 11 Bankruptcy
Cases on March 30, 2021.
Following the sales of the RECs, the FF&E, and the Vehicles, the
Debtors only material assets are Cash on hand, outstanding
receivables (including intercompany receivables), and the Causes of
Action.
The Debtors anticipate total administrative claims and priority
claims as of the Effective Date to be between approximately
$8,000,000 and $13,000,000 which is largely dependent upon the
resolution of outstanding sales and use and general receipts taxes
following collections of outstanding customer receivables. These
claims could fluctuate considerably depending primarily on the
priority tax claims related to collections on receivables.
Currently a significant share of the filed tax claims is based on
collection of the undiscounted face amount of the Debtors'
outstanding receivables, which in certain instances, for index or
variable-rate customers, were over 20 times higher than their
monthly bills were prior to Winter Storm Uri. The Debtors'
receivables are still being collected, but the Debtors do not
anticipate receiving 100% of the face value of the outstanding
receivables and, as a result, expect the amount of Allowed Priority
Tax Claims to be greatly reduced. Total outstanding filed and
scheduled third-party unsecured claims against the Debtors total
approximately $410,000,000.
All Claims against the Debtors are classified and treated pursuant
to the terms of the Plan. The Plan contains 64 Classes of Claims
and Interests. There are 26 Classes of Secured Claims, 2 Classes of
Priority NonTax Claims, 21 Classes of Unsecured Claims, and
fourteen (15) Classes of Interests.
The purpose of the Plan is to provide for the equitable
distribution of the Debtors' Cash as well as any proceeds received
in connection with the prosecution and/or settlement of the Causes
of Action. The Debtors have no assets of any material value other
than the Cash, outstanding accounts receivables (including
intercompany receivables), and the Causes of Action, as all of the
Debtors' other assets have already been liquidated.
The Plan is being proposed as a joint plan of liquidation of the
Debtors for administrative purposes only and constitutes a separate
chapter 11 plan of liquidation for each Debtor. The Plan is not
premised upon the substantive consolidation of the Debtors with
respect to the Classes of Claims or Equity Interests set forth in
the Plan.
The Liquidating Trustee shall be responsible for segregating each
Debtors' portion the Liquidating Trust Assets. For the avoidance of
doubt, any provision of the Plan or Disclosure Statement
referencing payments from the Liquidating Trust Assets shall refer
to payment to a Holder of an Allowed Claim solely from the
Liquidating Trust Assets attributable to the indebted Debtor.
A full-text copy of the Disclosure Statement dated September 27,
2021, is available at https://bit.ly/3kKBGmd from PacerMonitor.com
at no charge.
Attorney to the Debtors:
Elizabeth A. Green, Esq.
Fed ID No. 903144
Email: egreen@bakerlaw.com
Jimmy D. Parrish, Esq.
Fed. ID No. 2687598
Email: jparrish@bakerlaw.com
Suite 2300
200 South Orange Avenue
Orlando, FL 32801-3432
Telephone: (407) 649-4000
Facsimile: (407) 841-0168
-and-
Jorian L. Rose, Esq
(admitted pro hac vice )
Email: jrose@bakerlaw.com
45 Rockefeller Plaza
New York, New York
Telephone: (212) 589-4200
Facsimile: (212) 589-4201
About Entrust Energy
Houston, Texas-based Entrust Energy, Inc. generates, transmits and
distributes electrical energy to homes and businesses.
Entrust Energy and 14 of its affiliates sought Chapter 11
bankruptcy protection (Bankr. S.D. Texas Lead Case No. 21-31070) on
March 30, 2021. At the time of the filing, Entrust Energy
disclosed total assets of between $100 million and $500 million and
total liabilities of between $50 million and $100 million.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Baker & Hostetler, LLP and Alvarez & Marsal
North America, LLC as their legal counsel and financial advisor,
respectively. BMC Group, Inc. is the claims noticing and
solicitation agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on April 28,
2021. McDermott Will & Emery, LLP and FTI Consulting, Inc. serve
as the committee's legal counsel and financial advisor,
respectively.
ESCAPE VELOCITY: Moody's Assigns First Time B3 Corp. Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Escape
Velocity Holdings, Inc. (dba Trace3), including a B3 Corporate
Family Rating, B3-PD Probability of Default Rating, and B3 rating
on the proposed $415 million first lien term loan due 2028. The
outlook is stable.
Net proceeds from the aforementioned first lien term loan, a
proposed issuance of an unrated $135 million second lien term loan
due 2029 and an unrated $150 million ABL revolver (expected to be
undrawn at close) due 2026 will be used along with new sponsor
equity to fund American Securities LLC's ("American Securities" or
"Sponsor") acquisition of Trace3.
Assignments:
Issuer: Escape Velocity Holdings, Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Gtd Senior Secured 1st Lien Term Loan, Assigned B3 (LGD3)
Outlook Actions:
Issuer: Escape Velocity Holdings, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
Trace3's B3 CFR reflects the company's high closing debt/EBITDA of
7.0x (as calculated by Moody's, excluding pro forma cost synergies
and COVID related disruptions) and smaller scale compared to
competing IT value-added resellers and managed services firms. In
addition, the rating considers the challenges of evolving
requirements of IT deployments for enterprises including the
ongoing transition to cloud platforms. Trace3's private equity
ownership and expectation for an aggressive financial policy also
constrain the rating.
At the same time, Trace3 benefits from its diversified OEM vendor
supplier list, specialization in emerging technology and
software-focused IT solutions in higher growth areas such as hybrid
cloud, security and network, and data intelligence, and customer
base of large Fortune 1,000 clients. The company is relatively
vendor agnostic with no single vendor accounting for more than 15%
of gross profit and its top 10 vendors accounting for 50% of gross
profit. Moody's expects Trace3's focus on software-IT solutions in
digital transformation areas coupled with ample wallet share
opportunities within its existing customer base will drive LTM Q2
2021 revenue of $1.1 billion towards $1.4 billion by the end of
fiscal year 2022.
The stable outlook reflects Moody's expectation for Trace3 to
rebound from the COVID pressures of fiscal year 2020 such that
organic revenue and EBITDA achieve a grow rate of at least 20%
through the last six months of fiscal year 2021. Moody's projects
the company will sustain the positive momentum through fiscal year
2022, resulting in revenue and EBITDA growth of at least 6% and 8%,
respectively, above the prior year. Moody's expects debt/EBITDA
declining towards 5.6x from 7.0x and free cash flow ("FCF")-to-debt
approaching 4.5% by the end of 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Trace3 continues to add scale,
sustains organic revenue growth of at least 5% in a normalized
operating environment, debt/EBITDA is sustained below 6x, and
FCF/debt remains above 5%.
Ratings could be downgraded if a decline in profitability or cash
flow lead to adjusted debt/EBITDA being sustained above 7x or
EBITDA margins erode. There would be downward pressure on ratings
if liquidity were to weaken resulting in FCF/debt falling to 0% or
reduced revolver availability. A deteriorating relationship with
key suppliers could also pressure the ratings.
Trace3's liquidity profile is adequate with internal cash
generation somewhat volatile due to seasonal FFO generation
(approximately 65% of gross profit is generated in H2) and exposure
to working capital swings. However, Moody's projects that Trace3
will generate positive free cash flow over a twelve month period
and can accumulate a cash balance to offset short-term swings.
Trace 3's capital structure also contains a $150 million ABL
revolving credit facility, of which it can borrow up to $100
million for general corporate purposes and up to $150 million for
channel financing capacity. The company has historically relied on
channel financing to fund seasonal working capital needs, and
Moody's views the small size of the combined ABL and channel
financing commitments within the same agreement as a credit
negative. Access to the ABL revolver is governed by a springing
1.0x FCCR ratio that tests only when Total Liquidity falls below
the greater of i) $10 million and ii) 10% of the Line Cap for at
least three consecutive days. Moody's expects that Trace3 will have
full access to the borrowing base over the next 12-18 months. Other
cash obligations maturing over the next 24 months are limited to
approximately $10 million of earn-out payments (paid over two
installments in FY 2022 and FY 2023) and mandatory term loan
amortization payments of $4.15 million per annum.
Trace3 is exposed to governance risks typical of private-equity
ownership, given that financial sponsors, including American
Securities, often look to enhance equity returns through
distributions or debt financed acquisitions. Accordingly, Moody's
views Trace3's financial policy to be somewhat aggressive given the
potential for debt funded acquisitions and shareholder returns.
Lack of public financial disclosure and the absence of board
independence are also governance risks.
Preliminary terms in the first lien credit facility contain
provisions for incremental facility capacity up to the sum of: (1)
the greater of (A) $91.6 million and (B) 100% of Consolidated
EBITDA calculated on a pro forma basis for the most recently
completed four consecutive quarters; plus (2) an unlimited amount
so long as (A) if secured on a first lien basis, the First Lien
Leverage Ratio does not exceed the greater of (i) 4.5x and (ii) the
First Lien Leverage Ratio as of the end of the most recent test
period, (B) if secured on a junior lien basis, at the election of
the Borrower, either (i) the Secured Leverage Ratio does not exceed
the greater of (a) a level set 0.25x outside the Closing Date
Secured Leverage Ratio of 6.0x and (b) the Secured Leverage Ratio
as of the end of the most recently ended Test Period, or (ii) the
Interest Coverage Ratio is not less than the lesser of (a) 2.0x (or
to the extent such First Lien Incremental Facility is incurred in
connection with an acquisition or other investment, 1.75x) and (b)
the Interest Coverage Ratio as of the last day of the most recently
ended Test Period, (C) if unsecured, at the election of the
borrower, either (i) the Total Leverage Ratio does not exceed the
greater of (a) a level set 0.5x outside the Closing Date Total
Leverage Ratio of 6.5x and (b) the Total Leverage Ratio as of the
last day of the most recently ended Test Period, or (ii) the
Interest Coverage Ratio is not less than the lesser of (a) 2.0x
(or, to the extent such First Lien Incremental Facility is incurred
in connection with an acquisition or other investment, 1.75x) and
(b) the Interest Coverage Ratio as of the last day of the most
recently ended Test Period. Additional preliminary terms include
leverage-based step-downs in the asset sale prepayment requirement
to 50% and 0% if the First Lien Net Leverage Ratio is within 0.25x
and 0.75x, respectively, of the Closing Date First Lien Leverage
Ratio of 4.5x.
The proposed terms and the final terms of the credit agreement can
be materially different.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Trace3, headquartered in Irvine, CA, is a provider of end-to-end IT
technology products, solutions and services for enterprise and
mid-sized companies across the western, mid-eastern, and
south-eastern regions of the US. The company specializes in
providing solutions on emerging technologies in the areas of
security, data intelligence, cloud, DevOps, and data center
solutions. Trace3 generated pro forma revenue of approximately $1.1
billion for the last twelve months ending June 2021.
EVOKE PHARMA: Wins Sales Aid Silver Award for GIMOTI
----------------------------------------------------
Evoke Pharma, Inc. and EVERSANA, the company's commercialization
partner, announced that PM360, a publication for marketing decision
makers in the pharmaceutical, biotech, and medical device
industries named both companies as the Sales Aid Silver Award
Winner for GIMOTI under the Trailblazer Initiative Awards during
PM360's annual awards ceremony on Sept. 23, 2021.
Received as a result of the "Spray Away Campaign" developed by
Evoke Pharma and EVERSANA ENGAGE, the Sales Aid Award is in
recognition of the creative execution of the overall campaign and
clarity of message emphasizing the "spray" component of the
solution which is the novel element of GIMOTI, especially since
these patients typically have compromised absorption of oral
medications. This campaign reflects the insight gained from
patient market research and listening to patients with diabetic
gastroparesis on social media which are filled with posts of
patients seeking relief of symptoms and chronicle their
difficulties in taking oral medicines. The companies' winning
application for the 2021 PM360 Trailblazer Award in the Sales Aid
Category titled, "Engaging Sales Collateral to Bring New Hope and
Treatment for Patients with Diabetic Gastroparesis" described the
use of visuals to reinforce the merits of GIMOTI's route of
administration and prominently showcases the GIMOTI nasal spray
system and container and mist underscoring the point of
differentiation for GIMOTI.
About Evoke Pharma
Headquartered in Solana Beach, California, Evoke --
http://www.evokepharma.com-- is a specialty pharmaceutical company
focused primarily on the development of drugs to treat GI disorders
and diseases. The Company is developing Gimoti, a nasal spray
formulation of metoclopramide, for the relief of symptoms
associated with acute and recurrent diabetic gastroparesis in adult
women.
Evoke Pharma reported a net loss of $13.15 million for the year
ended Dec. 31, 2020, compared to a net loss of $7.12 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$17.56 million in total assets, $11.59 million in total
liabilities, and $5.97 million in total stockholders' equity.
BDO USA, LLP, in San Diego, California, the Company's auditor since
2014, issued a "going concern" qualification in its report dated
March 11, 2021, citing that the Company has suffered recurring
losses from operations and has not generated significant revenues
or positive cash flows from operations. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
EXPRESS GRAIN: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Express Grain Terminals, LLC
2015 River Road Extd
Greenwood, MS 38930
Chapter 11 Petition Date: September 29, 2021
Court: United States Bankruptcy Court
Northern District of Mississippi
Case No.: 21-11832
Debtor's Counsel: Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: 601-427-0048
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by John Coleman as member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HDCSBEI/Express_Grain_Terminals_LLC__msnbke-21-11832__0001.0.pdf?mcid=tGE4TAMA
FLEXIBLE FUNDING: Oct. 1 Deadline for Panel Questionnaires
----------------------------------------------------------
The United States Trustee is soliciting members for an unsecured
creditors committee in the bankruptcy cases of Flexible Funding,
Ltd.. Liability Co., et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://bit.ly/2XYILH1 and return it to Elizabeth
Young by email at elizabeth.a.young@usdoj.gov no later than 4:00
p.m. Central Standard Time on Friday, October 1, 2021.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Flexible Funding
Flexible Funding has been providing payroll funding for staffing
agencies nationally since 1992. Flexible Funding is the go-to
payroll-financing choice for staffing agencies -- from startups to
established companies with over $1,000,000 per week in sales.
Flexible Funding Ltd. sought Chapter 11 protection (Bankr. N.D.
Tex. Case No. 21-42215) on Sept. 19, 2021. In its petition,
Flexible estimated assets of between $100 million and $500 million
and estimated liabilities between $100 million and $500 million.
Affiliate Instapay Flexible LLC also sought Chapter 11 bankruptcy
(Case No. 21-42214).
The Debtors' counsel are Jeff P. Prostok and Lynda L. Lankford of
Forshey & Prostok, LLP.
FLOAT HORIZEN: Further Fine-Tunes Plan Documents
------------------------------------------------
Float Horizen, LLC, submitted a Chapter 11 Third Amended and
Restated Disclosure Statement and Plan of Reorganization dated
September 27, 2021.
This is a reorganization plan. In other words, the Proponent seeks
to accomplish payments under the Plan by using Debtor's income.
The Effective Date of the proposed Plan is 45 days after
confirmation.
The Debtor managed its own affairs prior to the bankruptcy and will
continue to manage its affairs after the bankruptcy. The Debtor is
managed by Seth and Robin Ritter and their son, Zane, who hold a
combined 100% interest in the company. Seth and Robin Ritter own
81% of the Debtor and Zane owns 19% of the Debtor. The Ritters
handle the day to day operation of the business and is paid by the
company, through owner draws, for full time work.
The Plan will treat claims as follows:
* Class 3-A consists of the Secured Claim of Pinnacle Bank.
This Class has $369,544 total claim amount. This claimant shall
receive its contractual payment of $2,895 which shall bear interest
at the contractual rate. The payments herein shall continue until
this claim is paid in full.
* Class 4 consists of General Unsecured Claims. The Debtor
shall pay $250 per month for a period of no less than 60 months.
Creditors in this class shall receive their pro rata distribution
under the plan and no less than 22% of the allowed amount of their
claim.
* Class 5 consists of Interest Holders. All assets will be
reinstated.
The Plan will be funded from income of the Debtor as a float spa.
The Plan proposes to pay $1,500 each quarter. Debtor's financial
projections demonstrate that Debtor will lose approximately $720
per month in net income after necessary operating expenses and
post-confirmation taxes have been paid. While the last 5 months
have shown an operating loss, the Debtor feels that the plan
payments are feasible in light of the Covid-19 and stay at home
orders being issued. The final Plan payment is expected to be paid
in the Spring of 2025. The Debtor shows a monthly net loss but the
Debtor can overcome it. The Plan Proponent contends that Debtor's
financial projections are feasible. The principals of the Debtor,
Seth and Robin Ritter, will cover any plan payment shortfall from
their personal assets. They were able to clear up the deficiency
with HPH1 regarding the assumption of the lease and are prepared to
do the same regarding plan payments.
A full-text copy of the Third Amended Disclosure Statement dated
September 27, 2021, is available at https://bit.ly/3ifTlRn from
PacerMonitor.com at no charge.
Counsel to the Debtor:
STEVEN L. LEFKOVITZ
618 Church Street, Suite 410
Nashville, TN 37219
Phone: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About Float Horizen
Float Horizen, LLC, filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case no. 20
04478) on Oct. 6, 2020. In the petition signed by Robin Ritter,
chief manager. the Debtor estimated $50,000 in assets and $1
million to $10 million in liabilities.
Judge Randal S. Mashburn oversees the case.
Lefkovitz & Lefkovitz, PLLC, is the Debtor's counsel.
Pinnacle Bank, as Lender, is represented by:
Matthew R. Murphy, Esq.
David M. Smythe, Esq.
Smythe Huff & Hayden, PC
1222 16th Avenue South, Suite 301
Nashville, TN 37212
E-mail: mmurphy@smythehuff.com
FLORIDA FOOD: Moody's Assigns First Time 'B3' Corp. Family Rating
-----------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Florida
Food Products, LLC ("FFP") including a B3 Corporate Family Rating,
a B3-PD Probability of Default Rating, a B2 rating for its first
lien credit facilities (consisting of a $50 million revolver due
2026 and a $350 million term loan due 2028) and a Caa2 rating for
the $100 million second lien term loan. The outlook is stable.
Proceeds from the first lien term loan and the second lien term
loan along with a common equity contribution from private equity
firm Ardian US LLC and rollover equity from MidOcean Partners will
be used to repay existing borrowings and finance the acquisition by
Ardian.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Florida Food Products, LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
GTD Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
GTD Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD3)
GTD Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: Florida Food Products, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
FFP's B3 CFR broadly reflects its very small scale as measured by
revenue and competition in the fragmented clean label ingredients
market it serves. Limited geographic diversification, concentration
of production in one facility, and utilization of one main supplier
for its key raw material are also credit constraints. The rating
also reflects FFP's high leverage with Moody's lease adjusted
debt-to-EBITDA in the high 7.0x for the trailing twelve months
ended June 30, 2021 pro forma for the leveraged buyout. Barring
additional borrowings, Moody's expects debt-to-EBITDA leverage will
decline to about 6.5x by the end of FY22 with earnings growth and
some debt paydown. Additionally, private equity ownership and the
expected aggressive financial policy also weaken the credit
profile. However, the rating is supported by the company's
established market position in the very niche vegetable and fruit
based clean label ingredients market with a market leading position
in the clean label cures segment. The rating benefits from strong
margins, lack of customer concentration, as well as solid growth
prospects driven by favorable market tailwinds with growing
consumer demand for healthier food. The company's solid free cash
flow generation and good liquidity also supports the rating.
Moody's views the company's governance risk as high given its
private equity ownership. As such, Moody's expect financial policy
to be aggressive (evidenced by the high pro forma leverage) and
favor the shareholders. In addition, as a private company,
financial disclosure is expected to be more limited than for public
companies.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Although an economic recovery is underway, it is
tenuous, and its continuation will be closely tied to containment
of the virus. As a result, there is uncertainty around Moody's
forecasts. Moody's view FFP and packaged goods companies as
generally more resilient than companies in other sectors.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that the company
will be able to de-lever to about 6.5x debt-to-EBITDA by the end of
FY22 with earnings growth and some debt paydown. However, given the
company's private equity ownership, Moody's expects re-leveraging
transactions to keep leverage elevated and range bound over the
longer term. The stable outlook also reflects Moody's expectation
for good liquidity over the next year.
The ratings could be downgraded if operating performance weakens,
Moody's adjusted debt-to-EBTIDA is sustained above 7.0x, free cash
flow is weak or negative, or liquidity otherwise deteriorates. The
rating could also come under pressure if credit metrics weaken
materially due to an aggressive financial policy.
The ratings could be upgraded if the company delivers continued
organic revenue and earnings growth with Moody's adjusted
debt-to-EBITDA sustained below 5.0x as well as strong free cash
flow generation and liquidity.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms: 1) Incremental first lien debt capacity
in an aggregate amount up to the sum of the greater of $67 million
and 100% of the Consolidated EBITDA, plus any unused amounts under
the general debt basket, plus additional amounts subject to a 5.25x
first lien net debt-to-EBITDA leverage ratio and the ratio
immediately prior to the incurrence. Incremental second lien
capacity subject to either (i) 7.5x senior secured net leverage
ratio or (ii) interest coverage ratio of 2.0x or 1.75x for an
acquisition or investment). Amounts up to the greater of $67
million and 100% of the Consolidated EBITDA may be incurred with an
earlier maturity than the initial term loans. 2) Only wholly owned
subsidiaries must provide guarantees; partial dividends or
transfers of ownership interest resulting in partial ownership of
subsidiary guarantors could jeopardize guarantees, subject to
protective provisions which only permit guarantee releases if such
transfer is a good faith disposition to a bona fide unaffiliated
third party for fair market value and for a bona fide business
purpose. 3) There are no expressed "blocker" provisions which
prohibit the transfer of specified assets to unrestricted
subsidiaries; such transfers are permitted subject to covenant
carve-out capacity and other conditions. 4) There are no expressed
protective provisions prohibiting an up-tiering transaction.
The proposed terms and the final terms of the credit agreement can
be materially different.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
Headquartered in Eustis, Florida, Florida Food Products, LLC is a
producer of vegetable and fruit based clean label ingredients.
After the proposed transaction, the company will be owned by Ardian
and MidOcean Partners. Florida Food Products generated revenue of
about $117 million for the trailing twelve months ended June 30,
2021.
GATEWAY KENSINGTON: Court Directs Appointment of Examiner
---------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern
District of New York directed the United States Trustee to appoint
an examiner for Gateway Kensington LLC, pursuant to an agreement
reached among (i) the Debtor; (ii) the party seeking the
appointment, James Carnicelli Jr.; and (iii) Howard Magaliff,
Chapter 7 Trustee for the estate of creditor, The Gateway
Development Group, Inc.
The Examiner is directed to investigate:
* the existence of any Debtor claims against any of its insiders
or affiliates; and
* the transfer of tax credits under the New York State
Brownfield Clean Up Program and other programs obtained in
connection with the development of the Debtor's real property
located at 15 Kensington Road, Bronxville, New York from the Debtor
to John Fareri personally, and whether the Debtor's estate has any
related claims.
Carnicelli, a creditor of the Debtor, filed a motion seeking the
appointment of a Chapter 11 Trustee, or an examiner, or in the
alternative, leave to prosecute actions on behalf of the Kensington
estate.
A copy of the order is available for free at https://bit.ly/39PYD1q
from PacerMonitor.com.
About Gateway Kensington
Gateway Kensington LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y. Case No.
21-22274) on May 14, 2021. At the time of the filing, the Debtor
disclosed total assets of up to $10 million and total liabilities
of up to $50 million.
Judge Robert D. Drain presides over the case.
Kirby Aisner & Curley LLP represents the Debtor as legal counsel.
GBT TECHNOLOGIES: Issues $244,500 Convertible Note to Redstart
--------------------------------------------------------------
GBT Technologies Inc. entered into a securities purchase agreement
with Redstart Holdings Corp., an accredited investor, pursuant to
which the Company issued to Redstart a Convertible Promissory Note
in the aggregate principal amount of $244,500 for a purchase price
of $203,750.
The Redstart Note has a maturity date of Dec. 22, 2022 and the
Company has agreed to pay interest on the unpaid principal balance
of the Redstart Note at the rate of 2.5% per annum from the date on
which the Redstart Note is issued until the same becomes due and
payable, whether at maturity or upon acceleration or by prepayment
or otherwise. The Company shall have the right to prepay the
Redstart Note, provided it makes a payment including a prepayment
to Redstart as set forth in the Redstart Note. The transactions
closed on Sept. 28, 2021.
The outstanding principal amount of the Redstart Note may not be
converted prior to the period beginning on the date that is 180
days following the Issue Date. Following the 180th day, Redstart
may convert the Redstart Note into shares of the Company's common
stock at a conversion price equal to 85% of the lowest trading
price with a 20-day look back immediately preceding the date of
conversion. In addition, upon the occurrence and during the
continuation of an Event of Default (as defined in the Redstart
Note), the Redstart Note shall become immediately due and payable
and the Company shall pay to Redstart, in full satisfaction of its
obligations hereunder, additional amounts as set forth in the
Redstart Note. In no event shall Redstart be allowed to effect a
conversion if such conversion, along with all other shares of
Company common stock beneficially owned by Redstart and its
affiliates would exceed 4.99% of the outstanding shares of the
common stock of the Company.
The issuances of the Redstart Note was made in reliance upon the
exemption from the registration requirements of the Securities Act
of 1933, as amended, pursuant to Section 4(a)(2) of the Act.
On Feb. 27, 2019, the Company issued Iliad Research and Trading,
L.P. a Promissory Note in the principal amount of $2,325,000, due
in one year, which subsequently was extended until Dec. 31, 2021.
On or about Sept. 23, 2021, Iliad converted the Iliad Note in full
and there is no further amounts owed by the Company under the Iliad
Note.
About GBT
Headquartered in Santa Monica, CA, GBT Technologies, Inc. is
targeting growing markets such as development of Internet of Things
(IoT) and Artificial Intelligence (AI) enabled networking and
tracking technologies, including wireless mesh network technology
platform and fixed solutions, development of an intelligent human
body vitals device, asset-tracking IoT, and wireless mesh networks.
The Company derived revenues from the provision of IT services.
The Company is seeking to generate revenue from the licensing of
its technology.
GBT Technologies reported a net loss of $17.99 for the year ended
Dec. 31, 2020, compared to a net loss of $186.51 for the year ended
Dec. 31, 2019. As of June 30, 2021, the Company had $3 million in
total assets, $34.15 million in total liabilities, and a total
stockholders' deficit of $31.15 million.
Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
March 31, 2021, citing that the Company's significant operating
losses raise substantial doubt about its ability to continue as a
going concern.
GFL ENVIRONMENTAL: S&P Retains 'B+' Issuer Credit Rating
--------------------------------------------------------
S&P Global Ratings updated its recovery analysis on GFL
Environmental Inc. (B+/Stable/--) following GFL's announcement that
it will obtain a new C$500 million senior secured term loan A (TLA)
for the purpose of funding acquisitions. The company also intends
to increase the capacity of its senior secured revolving credit
facility to C$1 billion from C$800 million, which will be used for
general corporate purposes. S&P's 'B+' issuer credit rating on GFL
and 'B-' issue-level rating on the company's debt are unchanged.
S&P said, "We continue to expect GFL will maintain credit ratios
commensurate with our ratings, including a pro forma adjusted
debt-to-EBITDA ratio below 6.5x and EBITDA interest coverage above
2x. The TLA will lead to gross debt levels above our previous
estimates for GFL, but the company's operating results are also
trending higher. We now expect the company's adjusted EBITDA will
be about US$1.4 billion this year, just above our previous
estimates, and this mitigates the effect of higher debt on GFL's
credit ratios."
Price increases in the company's solid waste business, meaningful
volume improvements, and acquisitions--notably Terrapure--are
assumed to be key drivers of the improvement this year. S&P said,
"We assume GFL will remain acquisitive and have incorporated this
into our estimates for higher earnings and cash flow in 2022.
However, we also assume the company will manage its use of debt
financing for acquisitions to an extent that maintains pro forma
leverage within the threshold for our rating on the company."
Issue Ratings—Recovery Analysis
Key analytical factors
-- S&P has updated its recovery analysis on GFL to incorporate the
new TLA and increase in revolver capacity, and its issue-level
rating is unchanged.
-- The '2' recovery rating on GFL's senior secured debt indicates
S&P's expectation for substantial (70%-90%; rounded estimate: 75%)
recovery in the event of default, which corresponds with a 'BB-'
issue-level rating (one notch above the issuer credit rating on the
company).
-- The '6' recovery rating on the company's senior unsecured debt
indicates its expectation for negligible (0%-10%; rounded estimate:
0%) recovery in default (issue-level rating of 'B-', or two notches
lower).
-- S&P's simulated default scenario contemplates a default in
2025, stemming from a loss of customer contracts, heightened
competition, and margin erosion caused by an unexpected increase in
costs related to acquisition integration issues.
-- In this scenario, GFL is unable to service its financial
obligations, prompting the need for its restructuring as a going
concern.
-- S&P's recovery analysis assumes a reorganization value for the
company of about C$4.9 billion, reflecting emergence EBITDA of
about C$815 million and a 6x multiple.
-- S&P has updated our EBITDA proxy to incorporate the company's
acquisition activity and updated debt structure (including higher
interest expenses that are incorporated in our estimate of GFL's
fixed charges in our simulated default scenario)
-- S&P assumes $1.00 U.S. dollar is valued at $1.24 Canadian
dollars at the time of default.
Simulated default assumptions
-- Simulated year of default: 2025
-- Revolver to be 85% drawn at default
-- LIBOR at 2.5% in our assumed default year
-- Emergence EBITDA: About C$815 million
-- Multiple: 6x
-- Gross recovery value: About C$4.9 billion
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): C$4.6
billion
-- Total value available to secured first-lien debt claims: C$4.6
billion
-- Secured first-lien debt claims: C$6.1 billion
--Recovery expectations: 70%-90% (rounded estimate: 75%)
-- Total value available to unsecured claims: 0
-- Senior unsecured debt and pari passu claims: C$4.1 billion
--Recovery expectations: 0%-10% (rounded estimate: 0%)
All debt amounts include six months of prepetition interest.
GREATER WORKS: Sale Plan to Pay Creditors in Full by June
---------------------------------------------------------
Greater Works Childcare and Community Development Inc. filed a Plan
of Liquidation and a Disclosure Statement.
The Debtor, formed in 2004 to operate a day-care facility, owns
1.09 acres in Gwinnett County, Georgia, improved with a 7,256
square foot day-care building having a local address of 917 Killian
Hill Road, SW, Lilburn, Georgia 30047.
Under the Plan, the Debtor shall pay all claims from the Debtor's
cash reserves from post-petition income, and from proceeds
generated from the sale of the Property. The Plan contemplates
that the Debtors will sell the Property on or before June 19, 2022,
and pay all creditors in full.
Secured creditor U.S. Bank, N.A., will continue to be paid $8,000
per month with the outstanding balance of the note to be paid in
full on or before June 19, 2022. Non insider general unsecured
claims -- comprised of IRS's $18,147 claim and Georgia Power
Company's $1,092 claim -- will be paid in full on or before June
19.
A copy of the Disclosure Statement dated Sept. 24, 2021 is
available at PacerMonitor.com at https://bit.ly/3EXTR08
About Greater Works Childcare
and Community Development
Greater Works Childcare and Community Development Inc., owner of a
day-care facility in Lilburn, Georgia, filed a voluntary petition
for Chapter 11 protection (Bankr. N.D. Ga. Case No. 20-72185) on
Nov. 30, 2020, listing as much as $1 million in both assets and
liabilities. Judge James R. Sacca oversees the case. Paul Reece
Marr, P.C., serves as the Debtor's legal counsel.
GULF FINANCE: S&P Hikes ICR to 'B-' on Refinancing, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Gulf Finance
LLC to 'B-' from 'CCC+'. The outlook is stable. At the same time,
S&P assigned its 'B' issue-level rating and '2' recovery rating to
the company's proposed $723 million term loan B. The '2' recovery
rating indicates its expectation of substantial (70%-90%; rounded
estimate: 80%) recovery in the event of a payment default.
The stable outlook reflects S&P's expectation of adjusted debt to
EBITDA of 8.8x in 2021, falling to 7.3x in 2022 as the company
reduces total leverage year over year through the excess cash flow
sweep.
Improvements in Gulf's forecast leverage lead S&P to no longer
consider the capital structure to be unsustainable and to view the
transaction as eliminating refinancing risk.
Gulf Finance has launched a refinancing of its $1.048 billion term
loan B due in 2023. As part of this transaction, Arclight plans to
contribute approximately $330 million of equity. The equity
contribution represents a 3x reduction in forecast adjusted debt to
EBITDA. S&P said, "We previously expected adjusted debt to EBITDA
to be greater than 10x through 2022. We now expect leverage of
approximately 8.8x in 2021 and 7.3x in 2022. The year-over-year
improvement in adjusted leveraged reflects our expectation that
excess cash will reduce total debt in addition to modestly
improving EBITDA."
The improvement of Gulf's maturity profile is credit positive.
S&P said, "Pro forma for the proposed capital structure, we expect
the weighted average maturity of debt to be extended to
approximately 5 years. We expect the refinanced term loan B to
mature in 2026. In addition, we expect Gulf to extend its
asset-based lending (ABL) facility due December 2021 in conjunction
with the term loan close."
The sponsor equity infusion is a catalyst that will improve credit
ratios.
S&P said, "We view this equity infusion as unique compared with
other Arclight-owned portfolio midstream energy companies. Gulf
Finance has operated with an unsustainable capital structure these
past few years, and we view the infusion supporting credit quality.
We do not expect any additional sponsor support through maturity.
"The stable outlook reflects Gulf's improved capital structure,
which has reduced leverage and extended its maturity profile. We
now expect debt to EBITDA leverage of approximately 8.8x in 2021,
dropping below 7.5x in 2022. We assume that the ABL maturity will
be extended in conjunction with the closing of the term loan
refinancing.
"We could take a negative rating action on Gulf if we viewed the
capital structure as unsustainable resulting from leverage
remaining above 8x over the long-term or if it could not maintain
compliance with its 1.1x debt service coverage ratio covenant test.
In addition, if liquidity becomes constrained we could take a
negative rating action.
"While unlikely in the near term, we could take a positive rating
action on Gulf if there were a material improvement in its EBITDA
generation such that leverage fell below 6.5x."
GULFPORT ENERGY: Court OKs Settlement With TC Energy Entities
-------------------------------------------------------------
Subsidiaries of Gulfport Energy Corp. who have exited bankruptcy
protection have sought and obtained approval from the Bankruptcy
Court of a settlement with Columbia Gas Transmission, LLC ("TCO"),
Columbia Gulf Transmission, LLC ("CGT"), and
ANR Pipeline Company ("ANR").
Prior to the rejection of the applicable contracts, the Debtors
shipped natural gas on certain pipelines owned by ANR, TCO, and CGT
-- all of which are members of the TC Energy family of companies.
While under Chapter 11 protection, the Debtors filed three
rejection motions seeking to reject certain agreements with five
counterparties that totaled more than $2 billion in firm
transportation commitments over the remaining terms of the
agreements. Although the Debtors emerged from bankruptcy in May,
the rejection motions are still pending before the District Court
with respect to the Settling Pipeline Companies and Rover Pipeline,
LLC ("Rover").
After months of good-faith, arm's-length negotiations, the
Reorganized Debtors have reached a settlement with the Settling
Pipeline Companies that consensually resolves the rejection of the
Settling Pipeline Companies' contracts
The Reorganized Debtors will make a one-time cash payment of $43.75
million to the Settling Pipeline Companies and assume the Assumed
Agreements, and the Settling Pipeline Companies will consent to the
rejection of the remaining Pipeline Agreements and assign their
damages claims to the Reorganized Debtors. Thus, over time,
Gulfport will receive distributions from the Unsecured Claims
Distribution Trustee on account of these assigned claims.
Based on current projections (including the assumption that
Stingray Pressure Pumping, LLC ("Stingray") does not have a
material Allowed General Unsecured Claim against Gulfport
Appalachia, LLC) these distributions are expected to, over time,
result in Gulfport receiving all, or nearly all, $43.75 million
paid to the Settling Pipeline Companies pursuant to the Settlement
Agreement. In other words, the Reorganized Debtors are essentially
accelerating payments to the Settling Pipeline Companies that the
Reorganized Debtors will then recover over time from the Unsecured
Claims Distribution Trust.
About Gulfport Energy
Gulfport Energy Corporation (NYSE:GPOR) --
http://www.gulfportenergy.com/-- is an independent natural gas and
oil company focused on the exploration and development of natural
gas and oil properties in North America and a producer of natural
gas in the contiguous United States. Headquartered in Oklahoma
City, Gulfport holds significant acreage positions in the Utica
Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer
plays in Oklahoma. In addition, Gulfport holds non-core assets that
include an approximately 22% equity interest in Mammoth Energy
Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil
Sands in Canada through its 25% interest in Grizzly Oil Sands ULC.
Gulfport and its subsidiaries sought Chapter 11 protection (Bankr.
S.D. Tex. Lead Case No. 20-35562) on Nov. 13, 2020. As of Sept. 30,
2020, Gulfport had $2,375,559,000 in assets and $2,520,336,000 in
liabilities.
The Honorable David R. Jones is the case judge.
The Debtors tapped Kirkland & Ellis LLP as their bankruptcy
counsel; Jackson Walker L.L.P. as local bankruptcy counsel; Alvarez
& Marsal North America, LLC as restructuring advisor; and Perella
Weinberg Partners L.P. and Tudor, Pickering, Holt & Co. as
financial advisor; and PricewaterhouseCoopers LLP as tax services
provider. Epiq Corporate Restructuring LLC was the claims agent.
Wachtell, Lipton, Rosen & Katz was counsel for the special
committee of Gulfport's Board of Directors while Chilmark Partners
is the financial advisor.
Katten Muchin Rosenman LLP was counsel for the special committee of
the governing body of each Debtor other than Gulfport while M III
Partners, LP, is the financial advisor.
The official committee of unsecured creditors in the Debtors'
Chapter 11 cases tapped Norton Rose Fulbright US LLP and Kramer
Levin Naftalis & Frankel, LLP, as counsel; and Jefferies LLC as its
investment banker.
* * *
Gulfport Energy Corp. (NYSE: GPOR) announced May 18, 2021, that it
has successfully completed its restructuring process and emerged
from chapter 11 protection. Gulfport's Plan of Reorganization was
confirmed by the U.S. Bankruptcy Court for the Southern District of
Texas on April 28, 2021. Gulfport has exited bankruptcy with a new
Board of Directors; a strengthened balance sheet, with $853 million
of total debt representing more than $1.2 billion of deleveraging
through the Chapter 11 process; and approximately $135 million of
liquidity.
HEALTHEQUITY INC: S&P Assigned 'BB-' Rating, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issuer credit rating to
HealthEquity Inc. and its 'BB' issue-level and '2' recovery ratings
to the proposed revolving credit facility and term loan A. S&P
assigned its 'B' issue-level and '6' recovery ratings to the
proposed senior unsecured notes.
The stable outlook reflects S&P's expectation that the company will
follow conservative financial policies and, with steady operating
growth from the successful integration of recent acquisitions,
realize synergies that result in leverage steadily declining below
4.0x over the next 12 to 24 months.
HealthEquity Inc., a Draper, Utah-based custodian of tax-advantaged
health savings accounts (HSA) and administrator of other
consumer-directed benefits (CDB) for employers and individuals, is
refinancing and issuing a $1 billion revolving credit facility ($95
million balance at close), a $350 million term loan A, and $500
million senior unsecured notes to refinance its debt
capitalization.
The company will also finance the $561 million for the acquisitions
of Further and Fifth Third Bank's HSA portfolio with existing cash
on hand.
S&P said, "Strong industry tailwinds, HSA growth prospects, and
HealthEquity's leading market position support our business
assessment. We estimate the company holds a 19% market share by HSA
accounts and a 16.5% market share by HSA assets. Pro forma for the
Further and Fifth Third Bank acquisitions, which we expect to close
in the fourth and third quarter of fiscal 2022, respectively, the
company's market share jumps to about 21.3% and 19.0%,
respectively. However, the company competes with Optum Bank,
Fidelity and HSA Bank, which also have a sizable market share and
represent more than half of the market. Nevertheless, the industry
is fragmented, and we expect the company to continue consolidating
the industry. We expect the company to make additional portfolio
acquisitions or gain share from smaller market participants with
limited health care and benefits expertise, specialized technology,
or solutions.
"Supporting our organic revenue growth expectations is our view
that its WageWorks CDB accounts provide meaningful cross-selling
and joint marketing opportunities. WageWorks was acquired in August
2019 for about $2 billion. It resulted in the number of CDB
accounts jumping to 12.5 million total accounts (including HSAs and
CDBs) from 4.8 million, many of the employers associated with which
do not have HealthEquity HSA accounts. It allows the company to
position itself as a single source and direct distribution provider
to employers and benefits advisors of leading HSA and complementary
CDB solutions, including flexible spending accounts. Furthermore,
human resources (HR) departments are often overburdened and
outsource health benefits management. Over time, we expect HR to
consolidate its HSA and benefits vendors to limit administration
burdens, better manage heavy year-end enrollment volumes, and
improve its employees' experience."
Finally, the company also benefits from operating in the
fast-growing HSA market. An increased employer focus on health care
expense management and government support for health care savings
accounts provide solid tailwinds. The industry experienced 26%
growth in HSA assets in the first half of 2021, and expected annual
4.1% growth of out-of-pocket health care costs through 2023 will
likely result in greater utilization of HSAs. Moreover, the average
yearly patient's financial responsibility will likely increase to
$1,650 by 2021. Since health care cost increases will continue to
outpace salary growth, S&P believes employers will enhance benefit
programs with HSAs to reduce rising premium costs as well as save
on payroll taxes for certain employee contributions. HSA
contributions are pre-tax, interest or earnings on the assets are
not taxed, and distributions are tax-free if used for qualified
expenses.
EBITDA margins should improve as the company realizes the benefits
of its strategic but high-priced acquisition of WageWorks. Profit
margins have remained under pressure as the company invests in its
business and technology platform for customers to benefit from an
integrated health and wealth benefits technology platform. S&P
said, "While we anticipate S&P adjusted EBITDA margins to remain
depressed in the low-to-mid-20% area over the next 12 months,
improved customer experience and workflow management could result
in improved operating efficiency and higher switching costs. We
expect $65 million to $80 million of permanent run rate synergies
by the end of fiscal year 2022, resulting in EBITDA margins
improving to the mid-to-high 20% area by fiscal 2024."
In accordance with S&P's criteria, S&P Global Ratings treats
capitalized software development costs as operating expenses when
calculating EBITDA. These costs totalled $48.7 million in fiscal
2021 and $31.2 million in the year-to-date period ended July 2021.
S&P's capitalized software and other adjustments often result in
its adjusted leverage to be about 1.2-1.5x higher than those of
management.
A significant portion of the company's profit is generated from the
custodial revenue that is subject to interest rate risk.
HealthEquity has three primary revenue streams:
-- Service (58% of total revenue in the trailing 12 months (TTM)
ended July 2021), a fee paid by network partners, employers'
clients, and individual members on a per account, per month basis;
-- Custodial (26%), an interest spread on account balances between
the deposit rate from custodial partners and deposit rate payable
to account holders on HSA assets; and
-- Interchange (16%), fees on transactions with account-linked
cards.
Although S&P has a favorable view of the company's revenue mix, the
highly profitable custodial business accounts for the majority of
the company's EBITDA in fiscal 2021. HealthEquity recently
announced an average annualized yield of 1.77% for the three months
ended July 31, 2021, compared to 2.10% for the three months ended
July 31, 2020. While the company experienced 1.4% revenue growth in
the July 2021 TTM period, the company could experience some
pressure if interest rates unexpectedly decline.
With that said, the company's ability to manage its portfolio with
laddered maturities and the growing investment balances from
Further's $1.7 billion in HSA assets and Fifth Third Bank's $477
million will offset some of this pressure. Moreover, the company's
extensive network of depository and insurance company partners with
cash and enhanced yield investments will provide some offset as
illustrated by the company's relatively resilient operating
performance during COVID-19. As total accounts grew to 13.1 million
in the July 2021 TTM period from 4.8 million in the July 2019 TTM
period (pre-WageWorks acquisition), S&P also finds the subsequent
dilution in the custodial revenue base, which now represents 26% of
total revenue, down from 48%, as a credit positive.
S&P said, "We view HealthEquity's financial policy as supportive of
our ratings, but leverage could temporarily rise as the company
pursues additional acquisitions. We expect the company to sustain
its leverage at its target gross leverage of less than 3x. S&P
Global Ratings' adjustments typically result in our adjusted
leverage calculation being about 1.7x-2.2x higher than management's
(as we do not net accessible cash against debt for companies with
weaker business characteristics). We believe the new capital
structure and the largely undrawn $1 billion revolving credit
facility allow the company to pursue potential acquisition."
Although leverage can temporarily rise above management's target,
the company has shown a good track record of debt repayment and
financial discipline. For example, the company has repaid about 21%
of its $1.25 billion debt raised to fund the August 2019
acquisition of WageWorks. In addition, the company has used equity
to fund acquisitions. For example, it raised $458.5 million to fund
the WageWorks acquisition and $287 million in July 2020 to repay
debt. More recently, the company raised $456.6 million in March
2021 to finance the $50.2 million acquisition of Luum and help
finance the $500 million acquisition of Further and $60 million
acquisition of the HSA portfolio from Fifth Third Bank. Therefore,
S&P believes the company may use equity to maintain its less than
3x leverage financial policy.
S&P said, "Under our base case, we expect the company to generate
over $100 million of S&P adjusted free operating cash flow (FOCF)
over the next 12 months due to modest working capital and moderate
capital expenditure requirements, which will enable flexibility to
make modest tuck-in acquisitions without diminishing overall credit
quality.
"The stable outlook reflects our expectation that the company will
follow conservative financial policies and, with steady operating
growth from the successful integration of recent acquisitions,
realize synergies that result in leverage steadily declining below
4.0x over the next 12 to 24 months.
"We could lower the rating if weaker-than-expected operating
performance resulted in the adjusted debt to EBITDA ratio sustained
above 4x with limited prospects of improvement."
This could occur if:
-- Intense competition resulted in meaningful customer losses or
margin contraction;
-- Operational setbacks associated with integration missteps
resulted in a significant decline in earnings and cash flows; or
-- The company pursued a more aggressive financial policy, such as
debt-financed acquisitions or shareholder returns.
An upgrade could result from significant increases in the company's
revenue scale and operating breadth, possibly from new businesses,
business wins, or acquisitions. Alternatively, S&P would also
expect the company to maintain its conservative financial policies
and sustain its leverage below 3x.
HH ACQUISITION: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee for Region 14 on Sept. 28 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.,
filed a petition for Chapter 11 protection (Bankr. D. Ariz. Case
No. 21-05211) on July 6, 2021, listing as much as $50 million in
both assets and liabilities. Ian Clifton, the Debtor's authorized
representative, signed the petition.
Judge Daniel P. Collins oversees the case.
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.
IBIO INC: Incurs $23.2 Million Net Loss in FY Ended June 30
-----------------------------------------------------------
iBio, Inc. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K disclosing a net loss attributable to
the company of $23.21 million on $2.37 million of revenues for the
year ended June 30, 2021, compared to a net loss attributable to
the company of $16.44 million on $1.64 million of revenues for the
year ended June 30, 2020.
As of June 30, 2021, the Company had $146.97 million in total
assets, $38.40 million in total liabilities, and $108.57 million in
total equity.
iBio had $97.0 million in cash, marketable securities, and
investments in debt securities as of June 30, 2021. iBio used
$30.1 million in net cash for operating activities in fiscal 2021
versus net cash used in operating activities of $13.3 million in
2020. Based on current plans, iBio believes the current cash
position is sufficient to fund operations through the first
calendar quarter of 2023.
In the past, the history of significant losses, the negative cash
flow from operations, the limited cash resources on hand and the
dependence by the Company on its ability – about which there was
uncertainty - to obtain additional financing to fund its operations
after the current cash resources are exhausted raised substantial
doubt about the Company's ability to continue as a going concern.
Based on the total cash and cash equivalents plus investments in
debt securities of approximately $97 million as of June 30, 2021,
the Company believes it has adequate cash on hand to support the
Company's activities through March 31, 2023.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1420720/000155837021012819/ibio-20210630x10k.htm
About iBio Inc.
iBio, Inc. -- http://www.ibioinc.com-- is a plant-based biologics
manufacturing company. Its FastPharming System combines vertical
farming, automated hydroponics, and novel glycosylation
technologies to rapidly deliver high-quality monoclonal antibodies,
vaccines, bioinks and other proteins. iBio is developing
proprietary products which include biopharmaceuticals for the
treatment of cancers, as well as fibrotic and infectious diseases.
The Company's subsidiary, iBio CDMO LLC, provides FastPharming
Contract Development and Manufacturing Services along with
Glycaneering Development Services for advanced recombinant protein
design.
ICAN BENEFIT: Principal Allegedly Involved in Causes of Action
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of iCan Benefit
Group, LLC objected to the Disclosure Statement filed by the Debtor
and its affiliated debtor, iCan Holdings, LLC.
Bradley S. Shraiberg, Esq. of Shraiberg, Landau & Page, P.A. said
the Debtors' attempt to downplay potential causes of action (such
as breaches of fiduciary duty and FDUPTA claims) against Southern
Guaranty Insurance Company and various affiliates by saying that
prosecuting such claims would be expensive, time consuming and with
highly uncertain chances for success. Mr. Shraiberg disclosed that
many of the claims at issue directly implicate the Debtors'
principal, Stephen Tucker, in his individual capacity.
The Committee believes that the claims against the SGIC Parties
hold substantially more value than as represented in the Disclosure
Statement. Chapter 5 actions, he said, could avoid millions of
dollars in debt held by the SGIC Parties. Prepetition payments to
or for the benefit of the SGIC Parties could be avoided and
recovered, and the equitable subordination of the SGIC Parties'
claims could result in a full recovery to other creditors of the
estates, he added.
In light of these, the Committee believes that the Disclosure
Statement does not provide adequate information to creditors in its
current form.
A copy of the objection is available for free at
https://bit.ly/3zKnSMP from PacerMonitor.com.
Counsel for the Official Committee of Unsecured Creditors:
Bradley S. Shraiberg, Esq.
Patrick Dorsey, Esq.
Shraiberg, Landau & Page, P.A.
2385 NW Executive Center Drive, #300
Boca Raton, FL 33431
Telephone: (561) 443-0800
Facsimile: (561) 998-0047
Email: bss@slp.law
pdorsey@slp.law
About iCan Benefit Group
iCan Benefit Group, LLC -- https://icanbenefit.com/ -- is a
licensed insurance agency offering a variety of benefit programs
and insurance products from a number of licensed insurance
companies.
iCan Benefit Group and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No.
21-12567) on March 18, 2021. Stephen M. Tucker, manager, signed
the petitions. In its petition, iCan Benefit Group disclosed $10
million to $50 million in both assets and liabilities.
Judge Mindy A. Mora oversees the cases.
Agentis PLLC serves as the Debtors' legal counsel.
IMA FINANCIAL: S&P Assigns 'B' ICR, Outlook Stable
--------------------------------------------------
S&P Global Ratings assigned Denver-based insurance services broker
IMA Financial Group, Inc. (IMA) its 'B' issuer credit rating. The
outlook is stable. At the same time, S&P assigned its 'B' debt
rating with a '3' recovery rating to the company's first-lien
credit facilities, indicating its expectation for a meaningful
recovery (50%-70%; rounded estimate: 50%) in the event of a payment
default to its $100 million revolver due 2026 and $530 million
first-lien term loan due 2028.
The rating reflects the company's weak business risk profile and
highly leveraged financial risk profile. Established in 1974, IMA
is a privately-owned/employee-controlled insurance broker that
operates through five business units: retail property/casualty
(P/C), retail employee benefits, small commercial and personal,
wealth management/retirement advisory, and wholesale brokerage.
IMA has grown organically and inorganically to become a top 30 U.S.
broker and top 10 privately owned U.S. broker, according to 2020
Business Insurance rankings. S&P said, "But with expected pro forma
revenue of $400 million for 2021, the company is among the smallest
of our rated brokers. It has a revenue base concentrated in P/C,
most specifically in the retail commercial P/C unit (which
generates nearly 60% of revenue, followed by employee benefits with
nearly 25%). We believe IMA operates in a highly competitive,
fragmented, and cyclical middle-market industry. Given its small
revenue base, we view it as more susceptible to macroeconomic
conditions and competitive industry pressures than larger peers."
S&P said, "The company realized strong to good organic growth for
2019-2020 and we expect it to achieve 7%-8% organic growth this
year. But top-line development will be most dramatically impacted
by acquisition activity, which will effectively double the
company's size on a pro forma basis. Thereafter, we expect growth
to moderate to 10%-15% as the pace of deal activity slows. We
forecast S&PGR adjusted EBITDA margins to be near 25% for 2021 and
2022, respectively.
"Our assessment of IMA's financial risk profile as highly leveraged
arises from the amount of debt in its capital structure relative to
EBITDA. In connection with its recently proposed transactions, pro
forma S&PGR-adjusted debt to EBITDA is 6.8x and pro forma EBITDA
coverage is 3.4x. In our debt calculations, we do not net cash,
given the business risk profile assessment and since we believe IMA
will use its free cash flow mostly to fund its operations
(including deferred acquisition payments) rather than pay down debt
beyond required amortization. We expect leverage to diminish to
about 5.5x within 12 months, with coverage sustaining above 3.0x as
IMA benefits from stronger absolute cash flow generation supported
by its increased scale and EBITDA margin stability.
"Based on our criteria, the combination of a weak business risk
profile and highly leveraged financial risk profile results in a
split anchor of 'b'/'b-'. We chose the higher anchor of 'b' based
on IMA's stronger cash flow/leverage ratios relative to 'B-' rated
peers. Due in part to the company's employee-controlled ownership
structure, we think it will manage debt to EBITDA conservatively
compared to similarly rated peers.
"We assume real U.S. GDP to grow 5.7% in 2021 and 4.1% in 2022, the
company will see organic growth of 7% for 2021 and 2022, reported
revenue of around $310 million for 2021 and around $450 million for
2022, and EBITDA margins of 24%-25% through 2022. Based on these
assumptions, we forecast pro forma financial leverage of 5.5x-6.5x
through 2022 and EBITDA interest coverage above 3.0x.
"We assess IMA's liquidity as adequate based on our expectation
that sources will exceed uses of cash by at least 1.2x over the
next 12 months and for this ratio to be sustained even with a 15%
decline in EBITDA. The company's sound banking relationships and
generally prudent risk management also underpin our assessment.
"We expect IMA to be subject to a springing financial covenant
governing revolver access and for it to reflect about a 35% cushion
at the close of the transaction."
Principal liquidity sources include:
-- New term loan debt ($530 million),
-- $100 million revolver (undrawn),
-- Unrestricted cash balance of $25 million as of June 30, 2021,
and
-- Cash funds from operation of $60 million-$70 million annually.
Principal liquidity uses include:
-- Refinance existing debt ($247 million as of June 30, 2021),
-- Required mandatory amortization of debt ($5.3 million
annually),
-- Required cash funding for completed and contracted
acquisitions
-- Capital expenditure of about $5 million-$10 million per year
through 2022.
The stable outlook on IMA reflects our expectation for the company
to display robust top-line growth in excess of 50% on a reported
basis for 2021 in connection with high single-digit organic growth
and material acquisition activity. S&P said, "We forecast the
S&P-adjusted EBITDA margin to be 24%-25% over the next 12 months.
Additionally, we expect pro forma adjusted debt to EBITDA of
5.5x-6.5x and pro forma adjusted EBITDA interest coverage above
3.0x over the next 12 months."
S&P said, "We could lower our rating in the next 12 months if IMA's
credit quality measures worsen, including leverage above 7.0x or
EBITDA interest coverage falling below 2x, through more aggressive
financial policies or a deterioration in organic growth, operating
margins, or cash flow generation.
"Although an upgrade is unlikely within the next 12 months, we
could raise the rating if cash flow generation were to improve
financial leverage and EBITDA coverage to a more conservative level
(financial leverage of less than 5x and EBITDA coverage above 3x)
that we would expect the company to sustain, combined with a track
record of profitable growth and enhanced scale and
diversification."
-- S&P is assigning its 'B' issue-level rating with a '3' (50%)
recovery rating to IMA's $100 million revolver and $530 million
first-lien term loan.
-- S&P has valued IMA on a going-concern basis using a 5.5x
multiple over its projected emergence EBITDA.
-- S&P is applying a 15% operational adjustment because the
company only has first-lien debt, a relatively high EBITDA decline,
and lower leverage relative to peers.
-- S&P's simulated default scenario contemplates a default in 2024
stemming from intense competition in the brokerage marketplace
leading to significantly lower commissions.
-- S&P believes lenders would achieve the greatest recovery value
through reorganization rather than liquidation of the business.
-- Year of default: 2024
-- EBITDA at emergence after recovery adjustment: $61.3 million
-- Implied enterprise value multiple: 5.5x
-- Emergence EBITDA: $61.3 million
-- Multiple: 5.5x
-- Obligor/non-obligor valuation split: 100%/0%
-- Gross recovery value: $336.9 million
-- Net recovery value for waterfall after 5% administrative
expenses: $320.0 million
-- Collateral value available for first-lien claims: $320.0
million
-- Estimated first-lien claims: $623.8 million
-- Total first-lien recovery: 50%
INNOVATION PHARMACEUTICALS: Incurs $13.9M Loss in FY Ended June 30
------------------------------------------------------------------
Innovation Pharmaceuticals Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $13.87 million on zero revenues for the year ended June 30,
2021, compared to a net loss of $6.65 million on $423,000 of
revenues for the year ended June 30, 2020.
As of June 30, 2021, the Company had $14.30 million in total
assets, $6.79 million in total liabilities, and $7.51 million in
total stockholders' equity.
As of June 30, 2021, the Company had approximately $10.2 million in
cash compared to $6.0 million of cash as of June 30, 2020, and as
of Sept. 27, 2021 (the date of this filing), the Company has
approximately $11.3 million in cash. The Company currently
anticipates that future budget expenditures will be approximately
$10.2 million for the next 12 months, including approximately $8.2
million for clinical activities, supportive research, and drug
product.
The Company stated, "Alternatively, if we decide to pursue a more
aggressive plan with our clinical trials, we will require
additional sources of capital during the fiscal year 2022 to meet
our working capital requirements for our planned clinical trials.
Potential sources for capital include grant funding for COVID-19
research and equity financings. There can be no assurances that we
will be successful in receiving any grant funding for our
programs."
Management believes that the amounts available from Aspire Capital
and under the Company's effective shelf registration statement will
be sufficient to fund the Company’s operations for the next 12
months.
"If we are unable to generate enough working capital from our
current or future financing agreements with Aspire Capital when
needed or secure additional sources of funding, it may be necessary
to significantly reduce our current rate of spending through
reductions in staff and delaying, scaling back or stopping certain
research and development programs, including more costly Phase 2
and Phase 3 clinical trials on our wholly-owned development
programs as these programs progress into later stage development.
Insufficient liquidity may also require us to relinquish greater
rights to product candidates at an earlier stage of development or
on less favorable terms to us and our stockholders than we would
otherwise choose in order to obtain up-front license fees needed to
fund operations. These events could prevent us from successfully
executing our operating plan," the Company said in the filing.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1355250/000147793221006717/ipix_10k.htm
About Innovation Pharmaceuticals
Innovation Pharmaceuticals Inc. (IPIX) -- http://www.IPharmInc.com
-- is a clinical stage biopharmaceutical company developing a
portfolio of innovative therapies addressing multiple areas of
unmet medical need, including inflammatory diseases, cancer,
infectious disease, and dermatologic diseases.
INNOVATIVE DESIGNS: Posts $13K Net Income in Third Quarter
----------------------------------------------------------
Innovative Designs, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $13,153 on $110,475 of net revenues for the three months ended
July 31, 2021, compared to a net loss of $54,005 on $90,814 of net
revenues for the three months ended July 31, 2020.
For the nine months ended July 31, 2021, the Company reported a net
loss of $146,297 on $176,388 of net revenues compared to a net loss
of $185,289 on $174,048 of net revenues for the same period in
2020.
As of July 31, 2021, the Company had $1.64 million in total assets,
$716,543 in total liabilities, and $922,626 in total stockholders'
equity.
During the three month period ended July 31, 2021, the Company
funded its operations from revenues from sales, and the sale of its
common stock totaling $60,000.
The Company stated, "We will continue to fund our operations from
sales and the sale of our securities. We continue to pay our
creditors when payments are due. We will require more funds to be
able to order the material for our INSULTEX products and to
purchase equipment needed for the manufacture of the INSULTEX
product. The Company reached an agreement with the manufacturer of
the INSULTEX material to purchase a machine capable of producing
the INSULTEX material. Also included in the proposed agreement
will be the propriety formula that creates INSULTEX. The Company
took delivery of the equipment in December 2015. The Company will
have to have the machine installed and ensure that it can be
operated in compliance with all environmental rules and
regulations. It is the Company intentions to have the equipment
operational but cannot currently provide a time estimate. Among
the factors affecting the time estimate are financial resources
available to the Company, finding a suitable facility and bringing
technical personal from abroad to install the equipment. The
Company has currently made deposits of $600,000 on the equipment.
The Company has incurred $17,000 of additional expenses related to
shipping. The Company will produce INSULTEX under its own brand
name.
The Company will continue to fund its operations from revenues,
borrowings from private parties and the possible sale of our
securities. Should we not be able to rely on the private sources
for borrowing and /or increased sales, our operations would be
severely affected as we would not be able to fund our purchase
orders to our suppliers for finished goods and our efforts to
produce our own INSULTEX would be delayed."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1190370/000173112221001572/e3116_10-q.htm
About Innovative Designs
Headquartered in Pittsburgh, Pennsylvania, Innovative Designs, Inc.
operates in two separate business segments: cold weather clothing
and a house wrap for the building construction industry. Both of
its segment lines use products made from INSULTEX, which is a
low-density foamed polyethylene with buoyancy, scent block, and
thermal resistant properties. The Company has a license agreement
directly with the owner of the INSULTEX Technology.
Innovative Designs recorded a net loss of $280,743 for the year
ended Oct. 31, 2020, compared to a net loss of $520,591 for the
year ended Oct. 31, 2019.
Bayville, NJ-based Boyle CPA, LLC, the Company's auditor since
2020, issued a "going concern" qualification in its report dated
Aug. 4, 2021, citing that the Company had net losses and negative
cash flows for the years ended Oct. 31, 2020 and an accumulated
deficit at Oct. 31, 2020. These factors raise substantial doubt
about its ability to continue as a going concern for one year from
the issuance of these financial statements.
INTELSAT SA: Closer to Exiting Chapter 11 Bankruptcy
----------------------------------------------------
Advanced Television reports that Intelsat SA is closer to exiting
bankruptcy.
Back on Sept. 7, 2021, the bankruptcy court handling Intelsat's
affairs issued an order that the Confirmation Hearing on Intelsat's
'Disclosure Statement' and latest 'Plan of Reorganisation' from
bankruptcy will commence on November 8th.
A large set of documents have been sent to all parties involved in
the Chapter 11 bankruptcy reconstruction of Intelsat. The
documents are contained in a USB flash drive sent to interested
parties. The Plan calls for a reduction of Intelsat's debt burden
from some $15 billion to about $7 billion. Some 75 percent of
Intelsat's debt-holders have already agreed to the debt reduction.
The main thrust of the documentation calls on all holders of
financial claims to enter their ballot votes, accepting or
objecting to the exit plan. Votes have to be filed by Oct. 29,
2021.
Meanwhile, on Sept. 29, the bankruptcy court will hear a Motion for
the appointment of an Examiner (along with objections to the
appointment). Intelsat says, in essence, the request is a
last-ditch attempt to gain some leverage by equity holders who are
expected to see little to nothing under the Plan.
The sponsors of the Motion -- who hold a modest 2 percent of
Intelsat's equity -- say Intelsat has completely ignored valuable
net operating losses and potential causes of action that it
believes could provide some recoveries to shareholders.
An examiner is necessary to probe the full value of the company's
assets because it has so far been "ignored or devalued without
explanation" in the plan, the group said in documents filed to the
court.
About Intelsat S.A.
Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held
operator of satellite services businesses, which provides a diverse
array of communications services to a wide variety of clients,
including media companies, telecommunication operators, internet
service providers, and data networking service providers. It is
also a provider of commercial satellite communication services to
the U.S. government and other select military organizations and
their contractors. The company's administrative headquarters are
in McLean, Virginia, and the Company has extensive operations
spanning across the United States, Europe, South America, Africa,
the Middle East, and Asia.
Intelsat S.A. and its debtor-affiliates concurrently filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The
petitions were signed by David Tolley, executive vice president,
chief financial officer, and co-chief restructuring officer. At the
time of the filing, the Debtors disclosed total assets of
$11,651,558,000 and total liabilities of $16,805,844,000 as of
April 1, 2020.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal
counsel; Alvarez & Marsal North America, LLC as restructuring
advisor; PJT Partners LP as financial advisor & investment banker;
Deloitte LLP as tax advisor; and Deloitte Financial Advisory
Services LLP as fresh start accounting services provider. Stretto
is the claims and noticing agent.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on May 27, 2020. The committee tapped Milbank
LLP and Hunton Andrews Kurth LLP as legal counsel; FTI Consulting,
Inc., as financial advisor; Moelis & Company LLC as investment
banker; Bonn Steichen & Partners as special counsel; and Prime
Clerk LLC as information agent.
JACK COUNTY HOSPITAL: PCO Says Data Metrics Stable
--------------------------------------------------
Susan N. Goodman, the appointed Patient Care Ombudsman for Jack
County Hospital District, related in a report for the period from
July 26 through September 26, 2021, that she has remained remotely
engaged with the Debtor's operation given the stability noted over
the previous reporting period. The Debtor's data metrics appear
stable, according to the PCO, who said she has not received any
information suggesting patient care decline. The PCO, however,
reported about the facility's continuing staffing challenge
although hiring was reported by the clinical laboratory and the
medical/surgical inpatient unit. During the latest COVID-19 surge,
the hospital, she said, halted elective surgical procedures to be
able to use the pre- and post-anesthesia care unit for patients
needing advanced care, such as ventilator support.
PCO related that she will remain engaged, mainly with clinical and
department managers, regarding staff attrition and hiring, quality
data follow-up, and/or operational challenges. She said she plans
to visit the facility within the next month, consistent with the
timing observed in the Sixth Report. Otherwise, she will continue
to visit the location every 90 days while reporting every 60 days
(as required under Section 333 of the Bankruptcy Code) until the
Debtor's exit from bankruptcy.
A copy of the Seventh Ombudsman Report is available for free at
https://bit.ly/3kOXCgi from PacerMonitor.com.
About Jack County Hospital District
Jack County Hospital District sought protection under Chapter 9 of
the Bankruptcy Code (Bankr. D. Tex. Case No. 20-40858) on Feb. 29,
2020. At the time of the filing, the Debtor estimated assets of
between $10 million to $50 million and liabilities of between $10
million to $50 million. The petition was signed by Frank L.
Beaman, chief executive officer.
On May 26, 2020, the Bankruptcy Court dismissed the Debtor's case
without prejudice.
On June 11, 2020, the Debtor re-filed a Chapter 9 bankruptcy
petition.
On July 16, 2020, Susan N. Goodman was appointed Patient Care
Ombudsman for the Debtor.
On November 23, 2020, the Debtor filed a Chapter 9 Plan and
Disclosure Statement, and an Amended Chapter 9 Plan and related
Disclosure Statement on December 15. On January 6, 2021, the
Debtor filed a notice of its filing of Plan Documents supplementing
the Amended Plan.
Judge Mark X. Mullin is assigned to the case.
J. Robert Forshey, Esq., at Forshey & Prostok LLP is the Debtors'
counsel.
JAMCO SERVICES: Citizens State Bank Says Plan Not Feasible
----------------------------------------------------------
Citizens State Bank ("CSB"), a secured creditor, objects to
approval of the Disclosure Statement regarding Plan of
Reorganization of Jamco Services, LLC, d/b/a Jam Construction.
CSB objects to the Disclosure Statement because it contains
misleading, incomplete or inaccurate information. Specifically, the
Plan is predicated upon a sale of the Debtor's Real Property, and
it is from the proceeds of this sale that the Class 2A Secured
Claim of CSB and the Class 2B Secured Claim of Warren Power to be
paid. No mention is made of the Debtor's default under the Adequate
Protection Order, CSB's filing of the certificate of default or the
termination of the automatic stay with respect to CSB.
Even more misleading, incomplete and inaccurate is the Disclosure
Statement's claim that the Debtor has filed a motion to sell the
Debtor's Real Property. This is simply not accurate as no motion to
sell the Debtor's Real Property has been filed. In fact, upon
information and belief, the Debtor does not have a purchaser for
the Debtor's Real Property and has not yet obtained approval to
employ a real estate broker to market the property.
Mirroring defects in the Disclosure Statement, the Plan of
Reorganization is not feasible and is therefore unconfirmable
because it is predicated on a sale of the Debtor's Real Property,
which is now scheduled for an October 5, 2021 foreclosure sale.
Article X of the Disclosure Statement purports to address risk
factors associated with the Plan. While the Plan is clearly
predicated upon a sale of the Debtor's Real Property, the Debtor
does not address the risk associated with the scheduled foreclosure
sale of the Debtor's Real Property by CSB and the effect that this
would have upon implementation and feasibility of the Plan.
A full-text copy of CSB's objection September 27, 2021, is
available at https://bit.ly/3iindMU from PacerMonitor.com at no
charge.
Attorneys for Citizens State Bank:
KELLY, MORGAN, DENNIS, CORZINE & HANSEN, P.C.
P.O. Box 1311
Odessa, Texas 79760-1311
Telephone No. 432/367-7271
Telefax No. 432/363-9121
Email:mkelly@kmdfirm.com
MICHAEL G. KELLY
About Jamco Services
Jamco Services, LLC -- https://www.jamcoservices.com/ -- is a
full-service heavy equipment construction company in Midland,
Texas. Its services include drilling construction, frac pit
construction, site remediation, oilfield construction, game
fencing, pit lining and oilfield construction. Jamco Services
conducts business under the name Jam Construction.
Jamco Services filed a petition for Chapter 11 protection (Bankr.
W.D. Texas Case No. 20-70142) on Nov. 25, 2020, disclosing as much
as $10 million in both assets and liabilities. Judge Tony M. Davis
oversees the case.
The Debtor tapped Condon Tobin Sladek Thornton, PLLC as its legal
counsel and EGK Financial, LLC as its accountant.
JET REAL ESTATE: Claims to Get 100% with Interest After Plan Sale
-----------------------------------------------------------------
Jet Real Estate Group, LLC, filed with the U.S. Bankruptcy Court
for the Southern District of California a Disclosure Statement and
Chapter 11 Plan dated September 27, 2021.
The Debtor's primary asset is the Property, whose value is
bolstered by approved coastal, grading, and building permits.
Debtor is in the process of closing the sale of the Property to
Buyer for the net price of $1,615,000.00 (the "Cash Proceeds").
Post-sale, the Property's value will be in the form of cash for
this amount. Debtor will use the Cash Proceeds to implement both
the Sale Order and the Plan.
The Debtor filed a motion to sell the Property, outside the
ordinary course of business, and free and clear of liens under
Bankruptcy Code Section 363(f), on March 22, 2021. On May 11, 2021,
the Court approved the sale of the Property to Brent Zambon
("Buyer") for the net price of $1,615,000.00.
On April 22, 2021, Debtor filed its objection to Trust's proof of
claim, and on April 29, 2021, it initiated its adversary proceeding
against Trust and Del Toro. As of the submission of this disclosure
statement, both matters remain pending.
On August 4, 2021, Debtor moved, under Bankruptcy Code Section
1129, to extend the time for filing and confirming its small
business plan of reorganization. On September 1, 2021, the Court
ordered the Plan to be filed no later than September 27, 2021.
The Plan provides for distributing cash to creditors in full
exchange for their Allowed Claims. The Plan provides for paying all
non-insider claimants and creditors 100% of the principal amount of
their Allowed Claims and any Allowed Interest incurred, in Cash, on
the Effective Date, which is five business days after the Plan
Confirmation Date. Secured Creditors are provided for by the Sale
Order and do not receive treatment under the Plan.
The Plan will treat claims as follows:
* Class 1 consists of those claims held by Secured Creditors,
including the secured claim held by Mike Hall, Trustee of the Hall
Family Trust, Dated June 14, 1989, the secured claim held by Tom
Farley, and the secured claim held by the San Diego County
Treasurer-Tax Collector. Class 1 Claim shall be paid according to
the Sale Order. The rights and obligations of Class 1 Claimants
shall be in administered in accordance with the terms of the Sale
Order. Class 1 is unimpaired.
* Class 2 consists of all Unsecured Claims. The holder of a
Class 4 Allowed Claim shall receive payment, in cash and with
Allowed Interest, on the Effective Date, or on the date specified
by the Court in a Final Order, whichever is later. This cash
payment shall be equivalent to the full principal amount of the
Allowed Claim with Allowed Interest. Class 2 is unimpaired.
* Class 3 consists of all Equity Interests in the Debtor or
the Petition Date. Equity Interests shall receive the remaining
Cash Proceeds, if any, after the Sale Order is administered and
Allowed Claims from Classes 1 through 2 are paid. Class 3 is
impaired.
The Plan generally provides that the Reorganized Debtor will use
the Cash Proceeds to pay fully the allowed Administrative Expense
Claims and Unsecured Claims, with Allowed Interest as specified, on
the Effective Date or upon the entry of a Final Order, whichever is
later. The Sale Order provides for the treatment of the Secured
Claims.
The Reorganized Debtor will pay 100% of all Allowed Claims with
Allowed Interest, in full and in cash, on the Effective Date or on
the date specified by the Court in a Final Order. The Sales
Proceeds will be used to effectuate implementation.
A full-text copy of the Disclosure Statement dated September 27,
2021, is available at https://bit.ly/3CRsItJ from PacerMonitor.com
at no charge.
Attorney for the Debtor:
BENJAMIN M. CARSON
LAW OFFICES OF BENJAMIN M. CARSON, P.C.
8861 Villa La Jolla Drive #13105
La Jolla, CA 92038
TEL: 858.255.4529
About Jet Real Estate Group
Jet Real Estate Group, LLC's primary asset is its property located
at 12994 Via Esperia, Del Mar, CA, 92014.
Jet Real Estate Group sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 20-05584) on Nov.
11, 2020, listing under $1 million in both assets and liabilities.
Benjamin Carson at Benjamin Carson Law Office serves as the
Debtor's counsel.
JIM'S DISPOSAL: Unsecureds' Recovery Hiked to $1.075M in Plan
-------------------------------------------------------------
Substantively consolidated debtors Jim's Disposal Service, LLC
("JDS") and Byrdland Properties, LLC ("Byrdland" and, collectively
with JDS, "Debtor") submitted a Second Amended Disclosure Statement
and Second Amended Plan of Reorganization dated September 27,
2021.
The purpose of this Second Amended Disclosure Statement is
twofold:
* First, to provide holders of claims against the Debtor
information regarding differences in the First Amended Plan of and
this Plan. The differences are as follows:
-- The Class 5 claim of Bank of Weston has been amended to
provide for a single secured claim of $374,772.55, secured by a
first-priority security interest in the commercial vehicles
corresponding to Bank of Weston. This Allowed Secured Claim will
accrue interest at the contract rate of 6.50% per annum, amortized
over five years. The full amount of the first year's amortized
payments will be made up front on the Starting Date. The remaining
amortized payments will be paid over the next four years, in equal
monthly installments of, with the first payment due on the Starting
Date of this Allowed Secured Claim will accrue 5% interest per
annum, amortized over five years, with the first payment of
$7,332.86 made on the Starting Date, and the remaining payments of
the same will be paid over the next five years;
-- The total amount Debtor will pay to the Class 8 General
Unsecured Creditors had been increased from $1,000,000 to
$1,075,000, and the additional $75,000 will be made on the First
Distribution Date;
-- Exhibit A to the Plan has been amended to remove trucks
that were erroneously listed as being owned by the Debtor and
secured by Bank of Weston; and
-- Exhibit B-1 of this Disclosure Statement has been updated
to properly reflect the additional payments to Class 5 and Class 8
creditors.
* Second, to provide holders of claims against Debtor with
adequate information about the Debtor and the Plan in order to
enable holders of such claims to arrive at a reasonable, informed
decision in exercising the right to vote for acceptance or
rejection of the Plan.
Class 8 consists of the Allowed Unsecured Claims of General
Unsecured Creditors not classified in any other class. Debtors
estimate that Class 8 claims equal approximately $4,818,251.68. No
payment will be made on PBGC's claims unless the Debtor's Standard
Termination is unsuccessful. If the Standard Termination is
successful, then there will only be approximately $3,811,358.68 in
general unsecured claims. Debtor will pay $1,075,000 to Class 8
creditors, representing a return of approximately 26% on their
claims.
The $300,000 to be paid to unsecured creditors on the First
Distribution Date will be placed in an account separate from the
Debtor's operating or payroll accounts on or before the Starting
Date (the "Segregated Account"). Debtor shall make periodic
deposits to the Segregated Account throughout the duration of the
Plan to ensure the availability of funds on the distribution
dates.
Debtor will execute the Plan through a continuation of their
operations as contemplated under the Plan. Debtor has made great
strides in selling assets, reducing costs, streamlining operations,
and increasing revenues. The Debtor has added and continues to add
additional contracts with the City of Kansas City to further
increase revenues. Debtor's business has increased such that the
Debtor had to purchase additional trucks (consistent with past
practices) to service new routes. Debtor was able to fund the
purchase of these trucks with current revenues in excess of the
money set aside for payments to creditors under the Plan.
A full-text copy of the Second Amended Disclosure Statement dated
September 27, 2021, is available at https://bit.ly/2ZtEZpM from
PacerMonitor.com at no charge.
Counsel for Debtor:
Robert S. Baran, Esq.
Ryan E. Shaw
CONROY BARAN
1316 Saint Louis Ave., 2nd FL
Kansas City, MO 64101
Tel: (816) 210-9680 / (816) 616-5009
Fax: (816) 817-6023
E-mail: rbaran@conroybaran.com
lpittman@conroybaran.com
rshaw@conroybaran.com
About Jim's Disposal Service
Jim's Disposal Service, LLC, a company that specializes in
residential waste solutions, filed a Chapter 11 petition (Bankr.
W.D. Mo. Case No. 20-40050) on Jan. 6, 2020. At the time of the
filing, the Debtor was estimated to have less than $50,000 in
assets and $1 million to $10 million in liabilities.
Judge Brian T. Fenimore oversees the case.
The Debtor tapped Mann Conroy, LLC, as its legal counsel and
Cochran Head Vick & Co., P.A. as its accountant.
JOHNSON & JOHNSON: Wins Multiplaintiff Trial After SC Setback
-------------------------------------------------------------
Rachel Scharf, writing for Law360, reports that a Missouri state
jury on Monday, September 27, 2021, rejected claims that Johnson &
Johnson's flagship talcum powder caused the ovarian cancer in three
women, the state's first multiplaintiff talc verdict since the U.S.
Supreme Court passed on the company's challenge to such trials.
The decision follows a win Friday for J&J in Philadelphia's first
trial over the safety of J&J's baby powder products, and comes amid
reports that the company is considering a plan to move its talc
liabilities into a separate entity destined for Chapter 11. During
the two-week trial in Missouri's 22nd Judicial Circuit Court in St.
Louis.
About Johnson & Johnson
Johnson & Johnson (J&J) is an American multinational corporation
founded in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. J&J is the world's largest and most
broadly based healthcare company.
Johnson & Johnson is headquartered in New Brunswick, New Jersey,
the consumer division being located in Skillman, New Jersey. The
corporation includes some 250 subsidiary companies with operations
in 60 countries and products sold in over 175 countries.
Johnson & Johnson had worldwide sales of $82.6 billion during
calendar year 2020.
* * *
Johnson & Johnson has chosen law firm Jones Day to advise it as it
explores placing a subsidiary in bankruptcy to settle thousands of
personal injury claims linking talcum-based baby powder to cancer,
Dow Jones reported.
Faced with more than 34,000 ovarian cancer lawsuits, J&J has told
attorneys for the victims that the company is actively exploring
options to transfer its potential talc-related liabilities --
valued at approximately $24 billion -- to a stand-alone subsidiary
and seek bankruptcy protection for that business entity.
Under a scheme known in legal circles as the "Texas Two-Step,"
economically viable companies can incorporate in Texas and then
transfer liabilities to another entity with limited assets.
Attorneys for ovarian cancer claimants have sought a TRO, arguing
that the bankruptcy strategy violates fraudulent conveyance laws in
New Jersey and most other states.
K & W CAFETERIA: Court Closes Bankruptcy Case
---------------------------------------------
Richard Craver of Winston-Salem Journal reports that a federal
Bankruptcy Court judge closed Sept. 20, 2021 the Chapter 11 filing
by K&W Cafeteria Inc.
K&W, a Winston-Salem-based purveyor of Southern comfort foods for
84 years, filed for Chapter 11 protection on Sept. 2, 2020, as a
step in corporate downsizing that began before the COVID-19
pandemic.
K&W submitted its reorganization plan on March 31. Judge Benjamin
Kahn for the federal Middle District of N.C. approved the plan on
June 22.
The plan called for keeping 14 stores open while paying off largest
creditor Truist Financial Corp. by July 1, 2022.
After K&W failed to attract what it considered to be an adequate
bid for the company's assets in December, its owners and management
changed course with the approved reorganization plan.
K&W had 18 restaurants open at the time of the bankruptcy filing,
including three in Winston-Salem and 14 in North Carolina. It now
has 14 locations, including those on Healy Drive and on Hanes Mill
Road in Winston-Salem.
About K&W Cafeterias
K&W Cafeterias, Inc., a company based in Winston Salem, N.C., filed
a Chapter 11 petition (Bankr. M.D.N.C. Case No. 20-50674) on Sept.
2, 2020. In the petition signed by Dax C. Allred, president, the
Debtor disclosed $30,085,274 in assets and $22,189,229 in
liabilities.
Judge Benjamin A. Kahn presided over the case.
The Debtor tapped Northen Blue, LLP, as its bankruptcy counsel,
Bell Davis & Pitt P.A. and Constangy Brooks Smith & Prophete LLP as
its special counsel, and Leonard, Call at Kingston Inc. as its
broker.
The committee of unsecured creditors in Debtor's Chapter 11 case
retained Waldrep Wall Babcock & Bailey, PLLC, as counsel.
KATERRA INC: Greensill and Two Others File Plan Objections
----------------------------------------------------------
Greensill Limited (in liquidation); Morgan Point Hotel, LLC; and
Earthly Matters Contracting, Inc.; filed objections to confirmation
of the Amended Joint Chapter 11 Plan of Katerra Inc. and its debtor
subsidiaries.
Defunct Greensill Limited, through its joint liquidators,
complained that the Plan has fatal flaws that render it
unconfirmable, citing, among other things, "preferential treatment"
for certain creditors within Class 3 General Unsecured Claims.
A copy of Greensill's objection is available for free at
https://bit.ly/3zMOm0g from Prime Clerk, claims agent.
Morgan Point, asserting $1,832,401 in damages against the Debtors,
said that the Debtors' classification of its claim in Class 3 as an
unsecured claim violates Section 1122(a) of the Bankruptcy Code.
Morgan Point asserts that it is a secured creditor to the extent
its rights to netting, setoff and recoupment are applied.
A copy of objection is available for free at https://bit.ly/3uguZLU
from Prime Clerk, claims agent.
Earthly Matters Contracting, Inc., a party to a painting
subcontract with the Debtors, said that the Plan violates of
Section 1129(b)(2)(A) of the Bankruptcy Code, citing that the Plan
does not expressly provide that Earthly Matters will retain its
lien on the retainage, nor does not provide deferred payments to
Earthly Matters equal to the value of its interest in the Retention
Amount. Earthly Matters asserts that it is entitled to the amount
of the retainage as the "indubitable equivalent" of its lien.
A copy of objection is available for free at https://bit.ly/3F06TKz
from Prime Clerk, claims agent.
Counsel for Greensill Limited (in liquidation), by its Joint
Liquidators, Andrew Charters and Sarah O'Toole of Grant Thornton UK
LLP:
Ryan C. Wooten
Orrick, Herrington & Sutcliffe LLP
609 Main, 40th Floor
Houston, TX 77002
Telephone: (713) 658-6400
Facsimile: (713) 658-6401
Email: Katerranotice@orrick.com
- and -
Raniero D'Aversa, Esq.
Evan C. Hollander, Esq.
Orrick, Herrington & Sutcliffe LLP
51 West 52nd Street
New York, NY 10019-6142
Telephone: (212) 506-5000
Facsimile: (212) 506-5151
Email: Katerranotice@orrick.com
Counsel for Morgan Point Hotel, LLC:
David N. Crapo, Esq.
Mark B. Conlan, Esq.
Gibbons P.C.
One Gateway Center
Newark, NJ 07102
Telephone: (973) 596-4500
Facsimile: (973) 596-0545
Email: mconlan@gibbonslaw.com
Counsel for Earthly Matters Contracting, Inc.:
Lisa A. Powell, Esq.
FisherBroyles, LLP
2925 Richmond, Ave., Suite 1200
Houston, TX 77098
Telephone: (713) 955-3302
Facsimile: (713) 488-9412
Email: lisa.powell@fisherbroyles.com
About Katerra Inc.
Based in Menlo Park, Calif., Katerra Inc. is a Japanese-funded,
American technology-driven offsite construction company. Katerra
was founded in 2015 by Michael Marks, former chief executive
officer of Flextronics and former Tesla interim CEO, along with
Fritz Wolff, the executive chairman of The Wolff Co. It offers
technology-driven design, manufacturing, and assembly solution for
bathroom pods, door and window, furniture, and modular utility
systems.
Katerra and its affiliates sought Chapter 11 protection (Bankr.
S.D. Tex. Lead Case No. 21-31861) on June 6, 2021. In its petition,
Katerra disclosed assets of between $500 million and $1 billion and
liabilities of between $1 billion and $10 billion.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as
bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment
banker; Alvarez & Marsal North America, LLC as financial and
restructuring advisor; and KPMG, LLP as a tax consultant. Prime
Clerk LLC is the claims and noticing agent.
The official committee of unsecured creditors tapped Fox
Rothschild, LLP, as counsel; and FTI Consulting, Inc., as financial
advisor.
Weil, Gotshal & Manges LLP is counsel for SB Investment Advisers
(UK) Limited, DIP lender.
* * *
Katerra in early August 2021 won court approval to sell factories
in Washington State and California for a total of $71 million. Blue
Varsity LLC, a wholly-owned subsidiary of Mercer International
Inc., purchased Katerra's cross-laminated timber factory in
Spokane, Wash. Volumetric Building Companies, a Philadelphia-based
construction company, agreed to buy Katerra's two-year-old factory
in Tracy, Calif.
KATERRA INC: Sureties, Subcontractor Oppose Plan Confirmation
-------------------------------------------------------------
Certain surety companies and a concrete work subcontractor filed
limited objections to confirmation of the Amended Joint Chapter 11
Plan of Katerra, Inc. and its debtor subsidiaries, in separate
Court filings with the U.S. Bankruptcy Court for the Southern
District of Texas.
Zurich American Insurance Company, together with Fidelity and
Deposit Company of Maryland (F&D), and (ii) Atlantic Specialty
Insurance Company disclosed that, as of the objections deadline,
they are currently in talks with the Debtors to incorporate into
the Plan the objections raised regarding the Plan. The surety
companies said they each reserve the right to present further
grounds for their objection, if necessary.
A copy of Zurich, et al.'s objection is available for free at
https://bit.ly/3kMwCxL from Prime Clerk, claims agent.
A copy of Atlantic's objection is available for free at
https://bit.ly/3EWCJYs from Prime Clerk, claims agent.
J.E. Dunn Construction Company is a party with the Debtors to a
subcontract agreement for concrete work on the expansion at the
Swedish Medical Center, in Englewood, Colorado. J.E. Dunn
disclosed that it is in the process of negotiating a potential
settlement of the claims relating to the Project, together with the
Debtors and Atlantic Specialty Insurance Company. Atlantic has
issued issued payment and performance bonds, on behalf of the
Debtors, to guarantee performance and payment of obligations on the
Project for of $3,917,691.
A copy of objection is available for free at https://bit.ly/39Gl9JQ
from Prime Clerk, claims agent.
Counsel for Zurich American Insurance Company and Fidelity and
Deposit Company of Maryland:
Jennifer L. Kneeland, Esq.
Marguerite Lee DeVoll, Esq.
Watt, Tieder, Hoffar & Fitzgerald, LLP
1765 Greensboro Station Place, Suite 1000
McLean, VA 22102
Telephone: (703) 749-1026
Facsimile: (703) 893-8029
Email: jkneeland@watttieder.com
Mdevoll@watttieder.com
Counsel for Atlantic Specialty Insurance Company:
John E. Sebastian, Esq.
Lauren E. Rankins, Esq.
Joanna Kopczyk, Esq.
Watt, Tieder, Hoffar & Fitzgerald, LLP
10 S. Wacker Drive, Suite 1100
Chicago, IL 60602
Telephone: (312) 219-6900
Email: jsebastian@watttieder.com
lrankins@watttieder.com
jkopczyk@wattieder.com
Counsel for J.E. Dunn Construction Company:
John J. Cruciani, Esq.
Husch Blackwell LLP
4801 Main Street, Suite 1000
Kansas City, MO 64112
Telephone: 816-983-8000
Facsimile: 816-983-8080
Email: john.cruciani@huschblackwell.com
- and -
Timothy A. Million, Esq.
Husch Blackwell LLP
600 Travis Street, Suite 2350
Houston, TX 77002
Telephone: (713) 647-6800
Facsimile: (713) 647-6884
Email: tim.million@huschblackwell.com
About Katerra Inc.
Based in Menlo Park, Calif., Katerra Inc. is a Japanese-funded,
American technology-driven offsite construction company. Katerra
was founded in 2015 by Michael Marks, former chief executive
officer of Flextronics and former Tesla interim CEO, along with
Fritz Wolff, the executive chairman of The Wolff Co. It offers
technology-driven design, manufacturing, and assembly solution for
bathroom pods, door and window, furniture, and modular utility
systems.
Katerra and its affiliates sought Chapter 11 protection (Bankr.
S.D. Tex. Lead Case No. 21-31861) on June 6, 2021. In its petition,
Katerra disclosed assets of between $500 million and $1 billion and
liabilities of between $1 billion and $10 billion.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as
bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment
banker; Alvarez & Marsal North America, LLC as financial and
restructuring advisor; and KPMG, LLP as a tax consultant. Prime
Clerk LLC is the claims and noticing agent.
The official committee of unsecured creditors tapped Fox
Rothschild, LLP, as counsel; and FTI Consulting, Inc., as financial
advisor.
Weil, Gotshal & Manges LLP is counsel for SB Investment Advisers
(UK) Limited, DIP lender.
* * *
Katerra in early August 2021 won court approval to sell factories
in Washington State and California for a total of $71 million. Blue
Varsity LLC, a wholly-owned subsidiary of Mercer International
Inc., purchased Katerra's cross-laminated timber factory in
Spokane, Wash. Volumetric Building Companies, a Philadelphia-based
construction company, agreed to buy Katerra's two-year-old factory
in Tracy, Calif.
KATERRA INC: Texas Counties Want Interest on Claim Paid in Plan
---------------------------------------------------------------
In separate filings, Dallas County and Denton County, Texas,
objected to the Amended Joint Chapter 11 Plan of Katerra Inc. and
its debtor subsidiaries.
Dallas County and Denton County complained that the Plan fails to
properly provide for the payment of interest on their secured claim
for unpaid ad valorem taxes. Dallas County asserts that it is
entitled to interest on its claims should the taxes become
delinquent after January 1, 2022, at the statutory rate of 12% per
annum, continuing until the claims are paid in full.
Denton County, in addition, objects to confirmation of the Plan to
the extent that the Plan fails to provide for the retention of
liens that secure all base tax, penalties and interest that may
accrue on its Secured claims.
A copy of Dallas County's objection is available for free at
https://bit.ly/3i9Z3E3 from Prime Clerk, claims agent.
A copy of Denton County's objection is available for free at
https://bit.ly/2WnVVwY from Prime Clerk, claims agent.
Counsel for Dallas County:
John P. Dillman, Esq.
Tara L. Grundemeier, Esq.
Linebarger Goggan Blair & Sampson, LLP
Post Office Box 3064
Houston, TX 77253-3064
Telephone: (713) 844-3478
Facsimile: (713) 844-3503
Email: john.dillman@lgbs.com
tara.grundemeier@lgbs.com
Counsel for Denton County:
Tara LeDay, Esq.
McCreary, Veselka, Bragg & Allen, P.C.
P. O. Box 1269
Round Rock, TX 78680-1269
Telephone: (512) 323-3200
Facsimile: (512) 323-3500
Email: tleday@mvbalaw.com
About Katerra Inc.
Based in Menlo Park, Calif., Katerra Inc. is a Japanese-funded,
American technology-driven offsite construction company. Katerra
was founded in 2015 by Michael Marks, former chief executive
officer of Flextronics and former Tesla interim CEO, along with
Fritz Wolff, the executive chairman of The Wolff Co. It offers
technology-driven design, manufacturing, and assembly solution for
bathroom pods, door and window, furniture, and modular utility
systems.
Katerra and its affiliates sought Chapter 11 protection (Bankr.
S.D. Tex. Lead Case No. 21-31861) on June 6, 2021. In its petition,
Katerra disclosed assets of between $500 million and $1 billion and
liabilities of between $1 billion and $10 billion.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as
bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment
banker; Alvarez & Marsal North America, LLC as financial and
restructuring advisor; and KPMG, LLP as a tax consultant. Prime
Clerk LLC is the claims and noticing agent.
The official committee of unsecured creditors tapped Fox
Rothschild, LLP, as counsel; and FTI Consulting, Inc., as financial
advisor.
Weil, Gotshal & Manges LLP is counsel for SB Investment Advisers
(UK) Limited, DIP lender.
* * *
Katerra in early August 2021 won court approval to sell factories
in Washington State and California for a total of $71 million. Blue
Varsity LLC, a wholly-owned subsidiary of Mercer International
Inc., purchased Katerra's cross-laminated timber factory in
Spokane, Wash. Volumetric Building Companies, a Philadelphia-based
construction company, agreed to buy Katerra's two-year-old factory
in Tracy, Calif.
KINTARA THERAPEUTICS: Widens Net Loss to $38.3M in FY Ended June 30
-------------------------------------------------------------------
Kintara Therapeutics, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$38.30 million for the year ended June 30, 2021, compared to a net
loss of $9.13 million for the year ended June 30, 2020.
As of June 30, 2021, the Company had $13.54 million in total
assets, $2.96 million in total liabilities, and $10.58 million in
total stockholders' equity.
San Francisco, CA-based Marcum LLP, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
Sept. 28, 2021, citing that the Company has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
M
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1498382/000156459021049235/ktra-10k_20210630.htm
About Kintara
Located in San Diego, California, Kintara (formerly DelMar
Pharmaceuticals) is dedicated to the development of novel cancer
therapies for patients with unmet medical needs. Kintara is
developing two late-stage, Phase 3-ready therapeutics for clear
unmet medical needs with reduced risk development programs. The
two programs are VAL-083 for GBM and REM-001 for CMBC.
KRIESEL RENTALS: Claims Will be Paid from Continued Operations
--------------------------------------------------------------
Kriesel Rentals, LLC, filed with the U.S. Bankrupcty Court for the
Western District of Wisconsin a Disclosure Statement in connection
with the Plan of Reorganization dated September 27, 2021.
In 2018 Debtor Kriesel Rentals, LLC was established, and the
previous owner sold the building at 131 Lake Almena Drive, Almena,
Wisconsin from an entity related to Mattoon Rentals, LLC to Kriesel
Rentals, LLC. Kriesel Rentals, LLC continued renting the building
to Stampede of Treasures. This building and its rental is the only
business of Kriesel Rentals, LLC.
Prior to the filing of this case, a foreclosure against Debtor was
filed by Mattoon Rentals, LLC. Debtor disputes the factual
allegations of the foreclosure, and believes this Chapter 11
reorganization is in its and its creditor's best interest.
The Debtor's goals in this restructuring is to continue operating
and pay its debts in an orderly way.
Under this plan, Debtor will continue operating. Debtor owns real
estate, and rents that to its long-term and stable tenant, Stampede
of Treasures. Its rent received is regular and consistent.
Likewise, its payments and expenses are regular and consistent. The
Cash Flow Projections are expected to remain consistent. In the
event that the current expenses rise unexpectedly, Debtor's tenant
will increase its rent payment under its triple-net lease to
compensate and ensure Debtor has a positive cash flow each month.
Debtor's debts are paid as a result of this plan. Each claim,
excepting that of the primary creditor Mattoon Rentals, LLC, is
paid in full within three years. The plan also provides for a
regular principal and interest payment to Mattoon Rentals, LLC, but
over a longer amortization period. Mattoon Rentals, LLC retains its
first-position security interest in Debtor's real estate until the
full payment of its allowed secured claim.
The plan provides for payment of general unsecured and all claims
in full. In a Chapter 7 case, Debtor asserts there would be nothing
available for payment to general unsecured creditors or Coe &
Cusky, S.C., who hold a third-position judgment lien.
The Plan is keyed to the distribution date which is the later of
(a) the date fourteen days after the confirmation date or (b) the
first day of the first full month of the first full calendar
quarter after the Court enters an Order confirming the Plan.
If the Plan is not confirmed, the most likely alternative is a
dismissal followed by state court foreclosure. In a foreclosure,
Debtor non-exempt assets would likely be applied to pay, in order,
(1) allowed secured claims, (2) priority claims, including certain
tax obligations of the Debtor which arose before the bankruptcy
began, (3) costs of representation and professional fees incurred
by the Debtor during the foreclosure proceeding, if any, and (4)
allowed unsecured claims. Debtor believes that the proposed Plan
provides for payments equal to or greater than any payment which
can be expected in a foreclosure.
A full-text copy of the Disclosure Statement dated September 27,
2021, is available at https://bit.ly/3ietNEa from PacerMonitor.com
at no charge.
Attorney for Debtor:
Joshua D. Christianson, Esq.
Christianson & Freund, LLC
920 So. Farwell St., Ste. 1800
P.O. Box 222
Eau Claire, WI 54702-0222
Telephone: (715) 832-1800
Email: lawfirm@cf.legal
About Kriesel Rentals
Kriesel Rentals, LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No.
21-10265 on Feb. 12, 2021, listing under $1 million in both assets
and liabilities. Judge Catherine J. Furay oversees the case.
Christianson & Freund, LLC serves as the Debtor's counsel.
KRYSTAL RESTAURANTS: Returns With Big Growth Plans After Bankruptcy
-------------------------------------------------------------------
Mura Dominko of Eat This, Not That, reports that the recently
bankrupt burger chain Krystal Restaurant returns with major growth
plans.
The nearly 90-year-old southeastern staple is back with major
growth plans and new fries.
Old-school burger chain serving square-shaped sliders across the
southeastern United States is back on the up and up after its
recent bankruptcy filing.
Krystal, which has been around since 1932, filed for Chapter 11
bankruptcy protection in 2020 and seemed to be outdated in several
crucial areas: delivery, digital platforms, and menu. Now, the
chain is back on an upward trajectory with a new store design and
better food—and has even announced its first new franchisee in 15
years.
The Atlanta-based chain was in trouble before the pandemic even
started. Its parent company filed for Chapter 11 bankruptcy
protection in January of 2020, citing reasons that made it apparent
the chain was becoming outdated amid stiff competition. The rise of
online delivery platforms and shifting consumer tastes have all
made it difficult for the brand to thrive, and the financial losses
followed.
"The actions we are taking are intended to enable Krystal to
establish a stronger business for the future and to achieve a
restructuring in a fast and efficient manner," the company said in
a statement at the time. "We are pleased to be ready to move toward
a brighter future for the brand and have the support of our
stakeholders."
Krystal recognized soon enough that changes were in order if the
brand was to make a comeback, and tackled the improvements to its
menu. They innovated on their long-standing menu favorite Chik
pretty early on in the chicken sandwich wars and created a
Nashville Hot version of the crispy chicken slider.
The chain also launched Fresh Cracked Egg Biscuits on their
breakfast menu, which resulted in new egg sandwiches offered during
one of their busiest dayparts.
But the most recent novelty for Krystal is the new fries. Just a
few weeks ago the chain announced it is rolling out improvements to
the ubiquitous side with a new recipe for square-cut fries with a
crunchy coating.
The chain has also made investments into modernizing its operations
with a smaller, more efficient restaurant design and improvements
to its drive-thru functionality and delivery options. And with over
300 restaurants in operation today, the chain plans to onboard more
franchisees to propel the brand forward. "We have room to grow in
our current footprint and are looking at increasing penetration in
those markets while expanding to new markets," said Alice Crowder,
chief marketing officer of Krystal, in a recent interview. "The
benefit for us is that the spirit of Krystal is something that
everyone connects with."
And the chain is already making good on those plans to
expand—with the onboarding of its first new franchisee in 15
years. Yates Hospitality Services, LLC will be opening its first
Krystal location this October 2021 in Dublin, Ga. The restaurant
will be located at 1624 Veterans Blvd. and carry all the beloved
craveable classics customers have grown to love.
The newest location will be in Dublin, GA. Yates Hospitality
Services, LLC is the franchise partner that is taking on this
momentous move for the brand. The restaurant, located at 1624
Veterans Blvd., is slated to open October 2021.
"It's been over 15 years since a NEW franchisee has opened a new
Krystal, so this marks an incredibly exciting time for our
organization and adds to the momentum that we've been building as
part of our aggressive growth plans," said Thomas Stager, Krystal
Restaurants LLC president, in a press release.
About Krystal Co.
The Krystal Company is a corporation conducting business in the
state of Georgia. The Defendant has 350 locations in the United
States, including in the states of Georgia, Alabama, Arkansas,
Florida, Kentucky, Louisiana, Mississippi, North and South
Carolina, Tennessee and Virginia.
Krystal engages in the development, operation, and franchising of
quick-service restaurants in the southeastern United States. The
Company was founded in 1932 and is based in Dunwoody, Georgia.
Krystal Co. Chapter 11 protection (Bankr. N.D. Ga. Case No. 20-
61065) on Jan. 19, 2020. In its petition, Krystal Co. estimated
assets of between $10,000,001 and $50 million and estimated
liabilities of between $50,000,001 and $100 million. The case is
handled by Honorable Judge Paul W. Bonapfel. Britney K. Baker, of
King & Spalding LLP, is the Debtor's counsel.
LAMAR ADVERTISING: Moody's Ups CFR to Ba2, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded Lamar Advertising Company's
Corporate Family Rating to Ba2 from Ba3, subsidiary Lamar Media
Corporation's senior secured credit facility to Baa2 from Baa3, and
the senior unsecured notes to Ba3 from B1. The outlook remains
stable.
The upgrade of the CFR reflects Lamar's strong recovery from the
impact of the pandemic and reduction in leverage to 3.9x as of Q2
2021 (excluding Moody's standard lease adjustment) while
maintaining a strong liquidity position. While Moody's expects
EBITDA to return close to pre-pandemic levels by the end of 2021,
additional acquisitions are likely to be funded with cash and debt
that will result in leverage declining only modestly from current
levels.
Upgrades:
Issuer: Lamar Advertising Company
Corporate Family Rating, Upgraded to Ba2 from Ba3
Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD
Issuer: Lamar Media Corporation
Senior Secured Bank Credit Facility, Upgraded to Baa2 (LGD2) from
Baa3 (LGD2)
Senior Unsecured Notes, Upgraded to Ba3 (LGD4) from B1 (LGD4)
Outlook Actions:
Issuer: Lamar Advertising Company
Outlook, Remains Stable
Issuer: Lamar Media Corporation
Outlook, Remains Stable
RATINGS RATIONALE
Lamar's Ba2 CFR reflects its market position as one of the largest
outdoor advertising companies in the US, the moderate leverage
level, and very high margin business model with strong cash flow
generation prior to dividend payments. The ability to convert
traditional static billboards to digital provides ongoing growth
opportunities over the next several years. As a pure play outdoor
advertising company, Lamar provides mainly local advertising and
derives revenues from a diversified customer base, with no single
advertiser accounting for more than 2% of the company's billboard
advertising revenue.
Moody's expects Lamar will continue to be less affected by any
lingering impact from the pandemic compared to the rest of the
industry given the company's geographically diversified market
position with lower levels of transit exposure. Lamar has a greater
presence in small and mid-sized markets, with less focus on major
metropolitan areas that are more exposed to volatile national
advertising and were impacted by the pandemic to a greater degree.
Compared to other traditional media outlets, the outdoor
advertising industry is not likely to suffer from disintermediation
and benefits from restrictions on the supply of billboards which
help support advertising rates and high asset valuations going
forward.
The outdoor industry remains vulnerable to consumer ad spending and
contract terms are shorter than in prior periods as the percentage
of digital revenue has increased. As a result, the outdoor industry
was impacted more rapidly than in prior economic recessions, but
Moody's expects that performance will continue to improve quicker
than in previous recoveries due to the lower commitment level and
ease of initiating new outdoor campaigns.
Moody's macro outlook forecast is for the US economy to grow at
6.5% this year and 4.5% in 2022. Vaccine distributions in the U.S,
the rapid removal of health restrictions, and significant fiscal
stimulus, has placed the economy on a pace for robust growth.
However, the lingering impact of the pandemic has the potential to
impact the pace of economic growth.
A governance impact that Moody's considers in Lamar's credit
profile is a financial policy that targets moderate leverage and
significant cash distributions consistent with the REIT structure.
While Lamar's operating cash flow is very strong, material dividend
payments reduce the amount of free cash flow available for debt
repayment or acquisitions. Lamar reduced the quarterly dividend in
Q2 2020, but has gradually increased dividend payments to
pre-pandemic levels. The impact of the dividend policy is partly
offset by Lamar's maintenance of leverage levels in the 4x range
which Moody's expects to continue going forward. Several
acquisitions have been completed historically and additional
purchases are expected going forward that are likely to be funded
with cash and additional debt. Lamar is a publicly traded company
listed on the NASDAQ stock market, but the Reilly family has voting
control of the company.
Moody's speculative grade liquidity (SGL) rating of SGL-2 reflects
expectations that Lamar will maintain a good liquidity position
over the next year. The cash balance was $69 million with $736
million of availability on the $750 million revolver due 2025 as of
Q2 2021. Lamar also has a $175 million A/R securitization that had
$123 million drawn as of Q2 2021. Lamar reduced the dividend to $50
million from $101 million per quarter during the pandemic, but has
since increased the dividend back to approximately $100 million a
quarter. Capex was reduced to $62 million in 2020, but is projected
to increase to about $135 million in 2021.
Free cash flow as a percentage of debt was 11% as of LTM Q2 2021,
but is expected to decline to the mid-single percentages as the
increase in operating cash flow is more than offset by higher capex
and dividend payments going forward. There is no required
amortization payment on the term loan B and operating cash flow
will likely be used for dividends, capex, or acquisitions. Lamar
has an At-the-Market (ATM) offering program which could be used to
boost liquidity or help finance acquisitions. Assets sales of
outdoor billboards that typically trade at very high valuations
could also be a source of liquidity if needed.
The required secured net debt covenant ratio is 4.5x compared to a
0.7x ratio as of Q2 2021 and is applicable to the revolving credit
facility only. The term loan B is covenant lite. Moody's projects
that Lamar will maintain a significant cushion of compliance.
The stable outlook reflects Moody's expectation that leverage will
decline modestly from current levels in the near term as the impact
of higher EBITDA during the second half of 2021 is partly offset by
slightly higher debt levels as a result of projected acquisitions.
Moody's expects leverage will decline to the mid to high 3x range
in 2022 as a result of mid-single digit EBITDA growth, but leverage
levels will be impacted by the pace of acquisition activity going
forward.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The required distribution of 90% of taxable income from a REIT
qualified subsidiary limits additional upward rating pressure.
However, an upgrade could occur if leverage was maintained in the
low 3x range on a sustained basis (excluding Moody's standard lease
adjustment) with confidence that the board of directors intended to
maintain leverage below this level. Also required would be a
balanced financial policy between debt and equity holders, free
cash flow after distributions of about 5% of debt, and a good
liquidity position.
A ratings downgrade would occur if leverage was sustained above
4.5x (excluding Moody's standard lease adjustment) due to a debt
financed acquisition or a material decline in advertising spend.
Failure to maintain an adequate liquidity position could also lead
to negative rating pressure.
Lamar Advertising Company (Lamar), with its headquarters in Baton
Rouge, Louisiana, is one of the leading owner and operators of
advertising structures in the U.S. and Canada. Lamar is publicly
traded, but the Reilly family has voting control of the company.
Lamar generated revenues of approximately $1.6 billion in the LTM
period ending Q2 2021.
The principal methodology used in these ratings was Media published
in June 2021.
LECLAIRRYAN PLLC: Founder Fires Back at Trustee's Conspiracy Claims
-------------------------------------------------------------------
Justin Wise of Law360 reports that a founding partner of
now-defunct LeClairRyan PLLC is firing back at new claims by the
firm's Chapter 7 trustee that he played a part in a conspiracy with
legal services provider UnitedLex and other entities that resulted
in the law firm's bankruptcy.
Gary LeClair, who resigned from the firm months before its
September 2019 bankruptcy filing, said in a Monday filing
supporting his dismissal motion in Virginia federal bankruptcy
court that the trustee's amended complaint filed in August contains
"dozens of false and misleading statements attempting to
manufacture a conspiracy" involving him.
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind-down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm
claims assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth represented LeClairRyan in the case. Protiviti was the
Debtor's financial adviser for the liquidation.
The bankruptcy case was converted to a Chapter 7 liquidation on
Oct. 24, 20219. Lynn L. Tavenner was named a Chapter 7 trustee,
and then Benjamin C. Ackerly, a successor trustee.
The Chapter 7 trustee Ackerly's counsel:
Tyler P. Brown
Hunton Andrews Kurth LLP
Tel: 804-788-8200
E-mail: tpbrown@huntonak.com
LOYALTY VENTURES: S&P Assigns 'B+' ICR, Outlook Stable
------------------------------------------------------
S&P Global Ratings assigned its 'B+' issuer credit rating to
Dallas-based consumer loyalty solutions provider, Loyalty Ventures
Inc. At the same time, S&P Global Ratings assigned its 'BB-'
issue-level rating and '2' recovery rating to the company's senior
secured term loan B. The '2' recovery rating reflects its
expectation for substantial (70%-90%; rounded estimate: 70%)
recovery in the event of default.
S&P said, "The stable outlook reflects our expectation that Loyalty
Ventures will improve its adjusted debt to EBITDA aided by recovery
in EBITDA of the company's BrandLoyalty segment. Incorporated into
the outlook is our view that the company can protect its cash flows
through the reward points issuance and redemptions cycle and
generate positive free cash flows even in an event of
higher-than-normal point redemptions.
"We expect a recovery in operating performance should lead to
improvement in the debt-to-EBITDA ratio in the mid 4x area over the
next 12-18 months: On May 12, 2021, U.S.-based ADS announced the
spin-off of its global tech-enabled loyalty solutions division
loyalty points division known as LoyaltyOne. We expect the spin-off
transaction will close by year-end 2021. The company operates
through two business divisions: Canada-based AIR MILES and
Netherlands-based BrandLoyalty."
The operating performance for the company remains affected by both
COVID-19 pandemic-related travel and other restrictions, and rising
freight costs due to global supply chain challenges. Specifically,
the company's revenues declined 6% and EBITDA fell by 25% for the
first six months of 2021. The EBITDA decline was attributed to not
only lower revenues but also higher marketing and payroll costs.
S&P said, "We expect the company's operating performance will
rebound in the second half of the year as air travel recovers and
as retailers execute their campaign programs. Therefore, we expect
Loyalty Ventures' EBITDA margins on an S&P Global Ratings-adjusted
basis will improve to 16% from the current 15% as of LTM June 30,
2021, and the company's debt-to-EBITDA ratio will improve to the
mid-4x area over the next 12-18 months from about the mid-5x area
pro forma the transaction."
Key credit factors include the company's small scale of operations,
the AIR MILES program's narrow geographic presence, high
seasonality, and intense competition. Loyalty Ventures' AIR MILES
program has a narrow geographic focus, with operations solely in
Canada, while competing with proprietary loyalty programs of large
financial institutions (such as Toronto-Dominion Bank and Royal
Bank of Canada) and large and well-capitalized retailers (such as
Loblaw Cos. Ltd., Canadian Tire Corp., and the Aeroplan Program).
Barriers to entry to this industry are low and there is always the
risk that AIR MILES' sponsors/coalition partners could roll out
their own proprietary loyalty programs. In addition, AIR MILES has
significant customer concentration via the Bank of Montreal, Metro
Inc., and Sobeys Inc., which are among the company's top sponsors
and account for more than 60% of reward points issuance.
The company's BrandLoyalty segment, which has geographic diversity
and a larger revenue size and scale compared with some peers, is
similar to AIR MILES in that it competes with other
well-capitalized marketing services companies globally. In
addition, about five retailers accounted for a third of
BrandLoyalty's revenues in 2020. Although there is some customer
stickiness and BrandLoyalty has long-standing relationships with
its key customers, S&P believes that risks remain that retailers
could scale back their campaign programs and marketing spend during
periods of economic uncertainty, which could lead to a loss of key
customers and, in turn, to volatility in BrandLoyalty's operating
performance.
The AIR MILES program's strong brand recognition in Canada,
diversity in usage of points, and long-standing customer
relationships underpin the company's competitive strengths. S&P
said, "We positively view Air Miles' strong brand recognition in
Canada supported by about 10 million active collector accounts. The
company's solid market presence reaches about two-thirds of
Canadian households. AIR MILES also has long-standing relationships
with its key sponsors. Against the backdrop of the pandemic and
threat of variants, we forecast travel-related redemption activity
will gradually recover to pre-pandemic levels over the next 12-18
months. Therefore, we believe that consumers could be incentivized
to redeem their reward points for AIR MILES cash or other
merchandise, or put aside points for future travel, which is
supportive of EBITDA and margins. We expect a low, albeit slightly
higher than 2020, redemption ratio (approximately 70%) through the
remainder of 2021. Air Miles points can be redeemed for
merchandise, experiences, cash, and other rewards. This diversity
reduces the reliance on the airlines as a major source for points
redemption. We expect the redemption ratio will increase sharply in
2022 to about 80% from a rebound in travel-related points
redemptions. We also expect higher travel-related redemptions could
result in higher cost of redemptions compared with 2021. That said,
because of the diversity in source of points redemption, we expect
the company will manage through the higher costs such that
consolidated EBITDA margins are sustained in the 16% area in
2022."
S&P said, "We view the redemption settlement asset trust as a risk
mitigant that provides stability to cash flows amid uncertainty
about the level of redemption activity. The AIR MILES program is
significantly exposed to the risk that, in a given year, points
redemption activity could be meaningfully higher than expected.
Similarly, the costs related to redemptions could increase, leading
to volatility in the company's profitability and cash flows. To
manage through the cycles of rewards issuance and redemptions,
Loyalty Ventures has created a redemption settlement asset trust,
an escrowed trust that is principally designated for settling the
redemption of AIR MILES by collectors of AIR MILES programs.
Currently, the trust sufficiently funds the points liability
(calculated as redemption asset over points liability). The company
contributes a specific sum based on the expected redemption level
and at an estimated cost within this trust. As of June 30, 2021,
the asset value of the trust is US$745 million. We note that
significant risks of early recovery in travel toward the end of
2021 and 2022 could lead to higher-than-anticipated redemption of
travel reward points. Should such a situation arise, we believe
that the trust should limit the adverse effect on Loyalty Ventures'
cash flows and liquidity position.
"We expect the company will generate positive free operating cash
flows and maintain adequate liquidity. S&P Global Ratings considers
the flow of funds from the redemption settlement asset trust as an
operating source or use of cash and therefore includes the net cash
contributions within its operating cash flow calculation. At the
same time, we are adding the change in deferred revenue as a source
of funds. We therefore estimate that Loyalty Ventures should
generate positive free operating cash flow in the US$70
million-US$75 million range through 2022. In addition, considering
pro forma cash of US$118.9 million as of June 30, 2021, and
availability on the company's cash flow revolver of up to US$125
million, we believe Loyalty Ventures has adequate liquidity for the
next 12 months.
"The stable outlook reflects our expectation that Loyalty Ventures
will improve its adjusted debt to EBITDA 2021 aided by recovery in
EBITDA of the company's BrandLoyalty segment. Incorporated into the
outlook is our view that the company can protect its cash flows
through the reward points issuance and redemptions cycle and
generate positive free cash flows even in an event of
higher-than-normal point redemptions.
"We could lower the ratings on Loyalty Ventures if debt to EBITDA
remains above 5x. We envision this situation could occur due to
weaker operating performance, debt-funded acquisitions, or
shareholder remuneration. We could also lower the ratings if free
cash flow to debt weakened to below 5% on a sustained basis
possibly due to higher-than-anticipated redemption activity,
coupled with the loss of key coalition and redemption partners.
"We could raise the ratings on the company if Loyalty Ventures
demonstrates consistent operating performance such that debt to
EBITDA improves to the 3.5x-4.0x range in the next 12 months.
Improving operating performance could reflect not only a growing
AIR MILES program but also a geographically expanded BrandLoyalty
segment and the acquisition of new retailer customers where the
company sustains margins. An upgrade would also be predicated on
Loyalty Ventures demonstrating a prudent financial policy."
LRGHEALTHCARE: To Seek Bankruptcy Plan Votes From Creditors
-----------------------------------------------------------
Daniel Gill of Bloomberg Law reports that bankrupt LRGHealthcare
will seek creditor votes on its proposed Chapter 11 liquidation
plan, after a court conditionally approved the nonprofit hospital
operator's disclosures.
The U.S. Bankruptcy Court for the District of New Hampshire, which
approved the disclosure statement on an interim basis Monday, will
consider final approval during a Nov. 1, 2021 hearing to consider
confirming the liquidation plan.
Under the proposal, New Hampshire-based LRGHealthcare, now known as
HGRL, would liquidate its assets remaining after a $30 million sale
of its hospital and medical care businesses to Concord Hospital
Inc. in December 2020.
About LRGHealthcare
LRGHealthcare -- http://www.lrgh.org/-- was a not-for-profit
healthcare charitable trust operating Lakes Region General Hospital
(LRGH), Franklin Regional Hospital, and numerous other affiliated
medical practices and service programs.
LRGH was a community-based acute care facility with a licensed bed
capacity of 137 beds, and FRH is a 25-bed critical access hospital
with an additional 10-bed inpatient psychiatric unit. In 2002,
Lakes Region Hospital Association and Franklin Regional Hospital
Association merged, with the merged entity renamed LRGHealthcare.
LRGHealthcare offered a wide range of medical, surgical, specialty,
diagnostic, and therapeutic services, wellness education, support
groups, and other community outreach services.
LRGHealthcare filed a Chapter 11 petition (Bankr. D.N.H. Case No.
20-10892) on Oct. 19, 2020. The petition was signed by Kevin W.
Donovan, president and CEO. At the time of the filing, the Debtor
estimated to have $100 million to $500 million in both assets and
liabilities.
Judge Bruce A. Harwood was assigned to the case before Judge
Michael A. Fagone took over.
The Debtor tapped Nixon Peabody LLP as legal counsel; Baker Newman
Noyes as accountant; and Deloitte Transactions and Business
Analytics, LLP and Kaufman, Hall & Associates, LLC as financial
advisors. Epiq Corporate Restructuring, LLC is the claims,
noticing, solicitation, and administrative agent.
The U.S. Trustee for Region 1 appointed a committee of unsecured
creditors on Oct. 23, 2020. The committee is represented by the law
firms of Sills Cummis & Gross P.C. and Drummond Woodsum. CBIZ
Accounting, Tax and Advisory of New York, LLC, serves as the
committee's financial advisor.
In December 2020, the U.S. Bankruptcy Court, District of New
Hampshire issued a final order approving Concord Hospital's
acquisition of Lakes Region General Hospital, Franklin Hospital and
their ambulatory sites from LRGHealthcare. The healthcare system
and its two hospitals were sold to Concord Hospital for $30
million.
On May 5, 2021, the Debtor filed its change of name from
LRGHealthcare to HGRL with the Secretary of State for the State of
New Hampshire and the Laconia Town Clerk.
LRGHEALTHCARE: Unsecureds to Get 11.5% of Net Distributable Assets
------------------------------------------------------------------
HGRL, formerly known as LRGHealthcare, filed with the U.S.
Bankruptcy Court for the District of New Hampshire a Chapter 11
Plan of Liquidation and a Disclosure Statement dated Sept. 24,
2021.
The Plan proposed by the Debtor and the Official Committee of
Unsecured Creditors contemplates an orderly liquidation of the
Debtor's remaining Assets. The Debtor has already sold
substantially all of its assets to Concord Hospital, Inc. on May 1,
2021.
Holders of Secured Claims in Class 3 may receive distributions
under the Plan, at the Liquidation Trustee's discretion, by the
surrender to such Lienholder of its Collateral in full satisfaction
of the secured claim, or may receive Cash equal to its Claim.
Holders of Allowed General Unsecured Claims in Class 4 will receive
a Pro Rata share of the net Liquidating Trust Assets in full
satisfaction of their claim. HUD Claim Creditors in Class 2 shall
share 88.5% of the Net Distributable Assets, while holders of
General Unsecured Claims shall get 11.5% thereof, after payment of
all priority claims, secured creditor claims and administration
costs relating to the Plan and Liquidating Trust.
Holders of Allowed Convenience Claims in Class 5 will receive cash
equal to 10% of their Allowed Claim while Insured Claims in Class 6
will recover only from the available insurance coverage of the
Debtor.
A copy of the Disclosure Statement dated Sept. 24, 2021 is
available for free at https://bit.ly/39GruF1 from Epiq, claims
agent.
The Voting Deadline is Oct. 26, 2021 at 4 p.m., ET. Parties in
interest must file and serve objections to the Disclosure Statement
or confirmation of the Plan, if any, also by Oct. 26.
The confirmation hearing will be held at 10 a.m., ET. on Nov. 1,
2021.
Counsel for the Debtor:
Morgan C. Nighan, Esq.
Nixon Peabody LLP
900 Elm Street
Manchester, NH 03101-2031
Telephone: (603) 628-4000
Facsimile: (603) 628-4040
Email: mnighan@nixonpeabody.com
- and -
Victor G. Milione, Esq.
Christopher M. Desiderio, Esq.
Christopher J. Fong, Esq.
Nixon Peabody LLP
55 West 46th Street
New York, NY 10036
Telephone: (212) 940-3000
Email: cdesiderio@nixonpeabody.com
cfong@nixonpeabody.com
About LRGHealthcare
LRGHealthcare -- http://www.lrgh.org-- was a not-for-profit
healthcare charitable trust operating Lakes Region General Hospital
(LRGH), Franklin Regional Hospital, and numerous other affiliated
medical practices and service programs.
LRGH was a community-based acute care facility with a licensed bed
capacity of 137 beds, and FRH is a 25-bed critical access hospital
with an additional 10-bed inpatient psychiatric unit. In 2002,
Lakes Region Hospital Association and Franklin Regional Hospital
Association merged, with the merged entity renamed LRGHealthcare.
LRGHealthcare offered a wide range of medical, surgical, specialty,
diagnostic, and therapeutic services, wellness education, support
groups, and other community outreach services.
LRGHealthcare filed a Chapter 11 petition (Bankr. D. N.H. Case No.
20-10892) on Oct. 19, 2020. The petition was signed by Kevin W.
Donovan, president and chief executive officer. At the time of the
filing, the Debtor estimated to have $100 million to $500 million
in both assets and liabilities.
Judge Bruce A. Harwood was assigned to the case before Judge
Michael A. Fagone took over.
The Debtor tapped Nixon Peabody LLP as legal counsel; Baker Newman
Noyes as accountant; and Deloitte Transactions and Business
Analytics, LLP and Kaufman, Hall & Associates, LLC as financial
advisors. Epiq Corporate Restructuring, LLC is the claims,
noticing, solicitation, and administrative agent.
The U.S. Trustee for Region 1 appointed a committee of unsecured
creditors on Oct. 23, 2020. The committee is represented by the
law firms of Sills Cummis & Gross P.C. and Drummond Woodsum. CBIZ
Accounting, Tax and Advisory of New York, LLC serves as the
committee's financial advisor.
In December 2020, the U.S. Bankruptcy Court, District of New
Hampshire issued a final order approving Concord Hospital's
acquisition of Lakes Region General Hospital, Franklin Hospital and
their ambulatory sites from LRGHealthcare. The healthcare system
and its two hospitals were sold to Concord Hospital for $30
million.
On May 5, 2021, the Debtor filed its change of name from
LRGHealthcare to HGRL with the Secretary of State for the State of
New Hampshire and the Laconia Town Clerk.
LSB INDUSTRIES: Moody's Rates New $500MM Senior Secured Notes 'B3'
------------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to LSB Industries,
Inc., proposed $500 million of senior secured notes due in 2028.
The proceeds of the note issuance will be used to refinance $435
million of senior secured notes due in 2023 and for general
corporate purposes. Outlook is stable.
"The transaction will result in a slight increase in leverage, but
will allow the company to improve the maturity profile and lower
interest cost," said Anastasija Johnson, VP- Senior Credit Office
at Moody's Investors Service.
Assignments:
Issuer: LSB Industries, Inc.
Senior Secured Regular Bond/Debenture (Local Currency), Assigned
B3(LGD4)
RATINGS RATIONALE
The B3 corporate family rating reflects LSB's small scale, limited
operational diversity and inherent volatility in performance
because of its exposure to volatile nitrogen prices, cyclical
industrial and mining end markets (54% of the last 12 months ended
June 30, 2021) and weather-dependent agricultural market (46%). The
rating incorporates inherent volatility in the company's credit
metrics and minimal cash flow generation at the trough of the cycle
when Moody's adjusted leverage peaks above 8x.
The credit profile incorporates Moody's expectations of improvement
in credit metrics with leverage below 5x in 2021 and 2022 due to
higher nitrogen prices and increased industrial demand. The credit
profile also benefits from access to low cost natural gas, new
contracts and initiatives to improve earnings, as well as improved
operating rates at all of the facilities and improved capital
structure.
The B3 rating on LSB's proposed $500 million senior secured notes
is in line with the corporate family rating, reflecting their
preponderance in the capital structure. The notes are secured on a
first priority basis on the tangible assets of the issuer and
guarantors and on the second priority lien on the collateral
securing the $65 million ABL revolver. There is also other secured
debt of approximately $40 million, which has a first priority lien
on certain fixed assets. The notes have a second lien on these
assets as well.
The SGL-2 reflects a good liquidity position over the next 12
months, supported by cash on hand, revolver availability and
projected free cash flow generation. The company is expected to
have $47 million cash on hand as of June 30,2021 pro forma for the
note issuance and no revolver borrowings. The company had $50.8
million availability under its $65 million asset-based revolver,
which is subject to borrowing base limitations (typically ranging
between $45-$50 million). The revolver expires on February 26,
2024. The company is subject to 1x fixed charge covenant if
availability falls below 10% of the total commitment. The company
will be able to meet the covenant in a rising pricing environment
over the next 12 months. All assets are encumbered by the revolver,
senior secured notes and other debt, leaving no sources of
alternative liquidity.
The stable ratings outlook reflects Moody's expectations that
metrics should improve on higher nitrogen prices, solid volumes and
new sales contracts.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade the rating if the company demonstrates a
longer track record of consistent operations, deploys cash
generated during current strong market conditions to improve
liquidity or enhance its business profile, and adheres to the
conservative financial policies. Given a relatively modest amount
of prepayable debt in the company's capital structure, an upgrade
likely would require increased confidence that the company can
maintain Debt/EBITDA below 7.0x and EBITDA/Interest above 2.0x at
the trough of the cycle.
Moody's could downgrade the rating with expectations for negative
free cash flow, substantive deterioration in liquidity, or if the
company experiences significant operational challenges.
LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma, is
a producer of commodity chemicals that are derived from ammonia
(nitrogen fertilizers, nitric acid and ammonium nitrate). LSB owns
and operates three facilities in El Dorado, Arkansas, Cherokee,
Alabama and Pryor, Oklahoma. The company also operates Baytown,
Texas, facility on a contractual basis for Coverstro AG. The
company generated sales of $402 million in the twelve months ended
June 30, 2021.
The principal methodology used in this rating was Chemical Industry
published in March 2019.
LSB INDUSTRIES: Proposes Private Offering of $500M Senior Notes
---------------------------------------------------------------
LSB Industries, Inc. intends to offer, subject to market and other
conditions, $500 million in aggregate principal amount of senior
secured notes due 2028 for sale in a private placement to eligible
purchasers. The Notes will be guaranteed on a senior secured basis
by all of LSB's existing subsidiaries and by certain of LSB's
future domestic wholly owned subsidiaries.
LSB intends to use the net proceeds from this offering to redeem
all of its outstanding $435 million aggregate principal amount of
9.625% Senior Secured Notes due 2023, to pay related transaction
fees, expenses and premiums, and, to the extent of any remaining
net proceeds, for general corporate purposes. Pending such
application of the net proceeds of this offering, they may be
invested in highly rated money market funds, U.S. government
securities, treasury bills or short-term commercial paper.
About LSB Industries
Headquartered in Oklahoma City, Oklahoma, LSB Industries, Inc. --
http://www.lsbindustries.com-- manufactures and sells chemical
products for the agricultural, mining, and industrial markets. The
Company owns and operates facilities in Cherokee, Alabama, El
Dorado, Arkansas and Pryor, Oklahoma, and operates a facility for a
global chemical company in Baytown, Texas. LSB's products are sold
through distributors and directly to end customers throughout the
United States.
LSB reported a net loss of $61.91 million in 2020, a net loss of
$63.42 million in 2019, and a net loss of $72.23 million in 2018.
As of June 30, 2021, the Company had $1.05 billion in total assets,
$95.32 million in total current liabilities, $461.46 million in
long-term debt, $20.28 million in noncurrent operating lease
liabilities, $7.37 million in other noncurrent accrued and other
liabilities, $31.2 million in deferred income taxes, $292.85
million in redeemable preferred stocks, and $141.02 million in
total stockholders' equity.
* * *
As reported by the TCR on July 23, 2021, Moody's Investors Service
placed the Caa1 corporate family rating, the Caa1-PD probability
rating of default rating of LSB Industries, Inc. and the Caa1
senior secured instrument rating under review for upgrade following
the company's announcement that it reached an agreement to convert
its redeemable preferred shares into common stock. Moody's also
upgraded the speculative grade liquidity rating to SGL-2 from
SGL-3.
LSF11 A5 HOLDCO: Moody's Rates New $350MM Unsecured Notes 'Caa1'
----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 senior unsecured rating
to LSF11 A5 HoldCo LLC's (dba AOC) proposed $350 million senior
unsecured notes issuance due 2029. The B2 Corporate Family Rating
and B2-PD Probability of Default Rating, B1 ratings to the $1.26
billion senior secured term loan and $200 million senior secured
revolving credit facility remain unchanged. The outlook is stable.
The proceeds from the term loan, a $40 million draw on the revolver
and $350 million senior unsecured notes, along with $955 million of
equity will be applied towards the purchase of AOC by Lone Star
Funds to repay existing indebtedness, transaction related fees and
expenses.
The ratings are subject to the deal closing as proposed and the
receipt and review of the final documentation.
"The assigned rating reflects the new senior unsecured notes
position in the capital structure given the preponderance of
secured debt with a priority claim," said Domenick R. Fumai,
Moody's Vice President and lead analyst for LSF11 A5 HoldCo LLC.
Assignments:
Issuer: LSF11 A5 HoldCo LLC
Senior Unsecured Regular Bond/Debenture, Assigned Caa1 (LGD6)
RATINGS RATIONALE
AOC's B2 Corporate Family Rating (CFR) is constrained by its
leveraged capital structure and weaker credit metrics following the
increase of approximately $1 billion in debt to finance Lone Star's
acquisition of the company. Moody's projects Debt/EBITDA of
approximately 6.0x, including standard adjustments, and anticipates
leverage will remain elevated through 2022. Moody's estimates that
Det/EBITDA will decline slightly towards 5.5x primarily through
further revenue and EBITDA growth with only modest debt reduction.
AOC's rating is also affected by its limited product diversity with
significant exposure to unsaturated polyester resins (UPR) and
vinyl ester resins (VER). The rating is further tempered by
exposure to cyclical end markets such as infrastructure,
construction and transportation, which can lead to depressed
volumes and volatile operating performance during recessions as
evidenced during the pandemic in FY 2020. Customer concentration is
another risk, with the top 10 customers accounting for about 28% of
sales; however, high customer retention and long-term relationships
offset some of this risk. Although AOC has a good geographic
footprint, sales are highly concentrated in more mature markets,
especially North America. Exposure to raw material price volatility
is another negative factor. Moody's also considers risks related to
private equity ownership, including more aggressive financial
policies compared to public companies, as limiting factors to the
rating.
The B2 CFR reflects AOC's strong industry positions with a top-3
position in the highly consolidated UPR and VER markets. Moody's
believes that the company has been able to improve its margins by
working directly with its customers to create products that are
tailored to specific applications and has reduced its exposure to
the more commoditized part of this market. The rating is further
underpinned by well-balanced end market diversity, with significant
exposure to the growth in a broad range of CASE (coatings,
adhesives, sealants and elastomers) and Colorants applications. AOC
benefits from its technical capabilities and innovation that allows
product customization, which often command higher margins and help
maintain customer loyalty. Management has also taken a number of
initiatives to expand EBITDA margins including improving product
mix by deemphasizing low profitability business and optimizing
procurement. AOC has good operational diversity with 12
manufacturing sites mainly in the US and Europe that enable close
geographic proximity to customers as transportation costs can have
a material impact on the delivered cost of the products.
Additionally, many of its products have a limited shelf life, which
increases the importance of timely deliveries. Moderate capex
requirements and increased capacity utilization should allow
positive free cash flow generation.
ESG CONDISERTATIONS
Moody's considers environmental, social and governance factors in
the rating. As a company that utilizes many commodity chemicals in
its operations, environmental risks are categorized as very high.
AOC's main raw material, styrene, is classified as a possible human
carcinogen and the US Occupational Safety and Health Administration
(OSHA) and Environmental Protection Agency (EPA) cite a number of
potential health risks to humans following chronic exposure to
styrene. AOC's present environmental reserves are immaterial with
provisions of about $806,000 for remediating past soil pollution.
Moreover, AOC is focused on sustainability through the development
of green products that contain low VOC resins, no styrene or high
recycled content. AOC's resins are also important contributors to
advanced composite materials that are used in light-weighting to
reduce fuel emissions. Governance risks are above-average, however,
due to the risks associated with private equity ownership which
include a minority representation of independent directors on the
board, limited financial disclosure requirements as a private
company and more aggressive financial policies including higher
leverage compared to most public companies
STRUCTURAL CONDISERTATIONS
As proposed, the new first lien term loan facility is expected to
provide covenant flexibility that if utilized could negatively
impact creditors. Notable terms include the following: Incremental
first lien debt capacity up to (i) the greater of $310 million and
1.0.x of consolidated EBITDA; plus (ii) unused amounts under the
General Debt Basket, plus unlimited amounts subject to a first lien
net leverage ratio of 4.5x. Amounts up to the greater of $310
million and 1.0.x of consolidated EBITDA may be incurred with an
earlier maturity date than the initial first lien term loan. There
are no express "blocker" provisions which prohibit the transfer of
specified assets to unrestricted subsidiaries; such transfers are
permitted subject to carve-out capacity and other conditions.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, with no
explicit protective provisions limiting such guarantee releases.
There are no express protective provisions prohibiting an
up-tiering transaction. The above are proposed terms and the final
terms of the credit agreement may be materially different.
The B1 ratings assigned to the $1.26 billion 7-year first lien term
loan and $200 million 5-year revolving credit facility are one
notch above the B2 CFR reflecting their first lien claim on
substantially all assets. The revolver has a springing first lien
net leverage ratio covenant of 7.25x which is tested if the
facility is 35% drawn at the end of the quarter commencing the
first two fiscal quarters following the close. The covenant is not
expected to be tested over the next 12 to 18 months. The Caa1
rating assigned to the proposed $350 million senior unsecured notes
issue refers to the amount of secured debt with a priority lien on
assets in the capital structure
Moody's expects AOC to maintain good liquidity including cash on
the balance of at least $70 million, access to its revolving credit
facility and positive free cash flow generation of around $100
million over the next 12 months.
The stable outlook reflects Moody's expectations that AOC's
financial performance will continue to be supported by a favorable
UPR market environment, that the company will sustain credit
metrics commensurate with the B2 rating with adjusted leverage
between 5.5x to 6.0x and maintain good liquidity during the rating
horizon.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could downgrade the rating if Debt/EBITDA remains above
6.5x on a sustained basis, operational performance and liquidity
significantly deteriorates, or annual free cash flow is expected to
be materially weaker on a sustained basis. A substantial
debt-financed dividend or acquisition could also result in a rating
downgrade.
Moody's could upgrade the rating on operating performance that
results in sustained adjusted Debt/EBITDA below 4.5x, consistent
positive free cash flow generation and the sponsor's commitment to
a more conservative financial policy. A potential upgrade would
also require market conditions to be supportive given some of the
company's exposure to cyclical end markets.
The principal methodology used in this rating was Chemical Industry
published in March 2019.
Headquartered in Schiphol, The Netherlands, AOC is a global CASE
and colorants leader. AOC manufactures and formulates unsaturated
polyester resins (UPR) and vinyl ester resins (VER) as well as
solutions for applications in Coatings & Protective Barriers,
Colorants & Visual Effects, Adhesives and Convention Composite
Resins. Through the company's 12 manufacturing facilities, AOC
serves customers in the transportation, construction and
infrastructure end markets. On July 13, 2021, Lone Star Funds
announced it had reached a definitive agreement to acquire AOC from
CVC Capital Partners. AOC had sales of $958 million in fiscal year
ended September 30, 2020.
MIDAS INTERMEDIATE II: Moody's Cuts CFR to Caa3, Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service downgraded all ratings of Midas
Intermediate Holdco II, LLC ("Service King"), with the corporate
family rating downgraded to Caa3 from Caa1 and its probability of
default rating, which was downgraded to Caa3-PD from Caa2-PD. The
outlook was changed to negative from positive.
"The actions reflect Moody's growing concern surrounding the risks
that Service King is facing as it faces its short-term capital
structure requirements, with the looming October 2022 notes
maturity potentially creating a domino effect with the various
springing maturities of other facilities," stated Moody's Vice
President Charlie O'Shea. "In addition, Service King's operating
performance continues to suffer from the impact on demand from
pandemic related issues, particularly reductions in miles driven,
as well as parts shortages."
Downgrades:
Issuer: Midas Intermediate Holdco II, LLC
Corporate Family Rating, Downgraded to Caa3 from Caa1
Probability of Default Rating, Downgraded to Caa3-PD from Caa2-PD
Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD2)
from B2 (LGD2)
Senior Unsecured Regular Bond/Debenture, Downgraded to C (LGD6)
from Caa3 (LGD4)
Outlook Actions:
Issuer: Midas Intermediate Holdco II, LLC
Outlook, Changed To Negative From Positive
RATINGS RATIONALE
Service King's ratings reflect the company's weak liquidity, with
the looming October 2022 senior unsecured notes maturity
potentially leading to "springing" maturities that would occur
beginning June 1, 2022 in the event more than $135 million remains
outstanding on the notes at that point, and its credit metrics,
which remain weak even after considering the impact of COVID-19
related expenses. Moody's believes that these risks well outweigh
Service King's solid market position in the highly fragmented
collision repair sub-sector, and its mutually-beneficial
relationships with national and major insurance carriers which
represents the vast majority of revenue. While demand fundamentals
are improving as miles driven creep up, there is limited visibility
as to the velocity of the improvement in this key industry metric.
The negative outlook highlights the risks in the event the
refinancing is not accomplished in due course and on reasonable
terms prior to the "practical" maturity date of June 1, 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings will be downgraded should the company fail to make its
principal or interest payments on time, should the company file for
bankruptcy or should Moody's lower its recovery estimates.
Ratings could be upgraded once the company executes a refinance of
the October 2022 note maturity under reasonable terms.
Headquartered in Richardson, Texas, Midas Intermediate Holdco II,
LLC is a leading provider of vehicle body repair services with
annual revenue of just under $1 billion. The company operates under
the Service King brand name and operates 339 locations in 24
states.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
MOUNTAIN PROVINCE: Extends Maturity of $25M Loan to March 31
------------------------------------------------------------
Mountain Province Diamonds Inc. announced the extension of its
US$25M Revolving Credit Facility, and the full repayment of its
US$35M term loan.
The Company has completed an agreement to extend by six months the
maturity date of its US$25M senior secured revolving credit
facility with Dunebridge Worldwide Ltd.), a company which Mr.
Dermot Desmond is the ultimate beneficial owner. The extended
revolving facility will mature on March 31, 2022 and will support
Mountain Province Diamonds' general working capital needs. The
interest rate and other features of the facility remain unchanged.
In connection with this extension, the Company paid Dunebridge
Worldwide Ltd. a fee equal to 2% of the aggregate principal amount
drawn under the revolving facility.
As a condition of the extension, the company has made a US$11.5M
payment towards the US$33M term loan announced on May 12, 2021.
This payment brings the balance of the term loan to zero ahead of
the term loan maturity date of Dec. 31, 2021.
The independent directors of Mountain Province, comprised of Ms.
Karen Goracke, Mr. Dean Chambers, and Mr. Ken Robertson, all of
whom are independent of management and the major shareholder of
Mountain Province, undertook a deliberate and full consideration of
the Transaction and concluded that the Transaction is reasonable
and represents the best alternative for Mountain Province in the
circumstances, having regard to the best interests of Mountain
Province and its stakeholders. The Independent Directors have
unanimously recommended the Transaction to the board of directors
of the Company. The Board has received the recommendations and
findings of the Independent Directors, and Mr. Jonathan Comerford
and Mr. Brett Desmond having declared conflicts of interest and not
attending any part of any meeting where the Transaction was
discussed and not voting on the Transaction, have unanimously found
that that the Company is in serious financial difficulty and that
the Transaction is designed to improve the financial position of
the Company, and that Section 5.5(f) of National Instrument 61-101
– Protection of Minority Shareholders in Special Transactions
("MI 61-101") is not applicable, and approved the Transaction.
Dermot Desmond is the ultimate beneficial owner of Dunebridge, and
thus is an insider and related party of Mountain Province. Mr.
Desmond owns approximately 33% of the Company's stock. The
Transaction therefore constitutes a "related party transaction"
within the meaning of MI 61-101. Mountain Province relied on an
exemption from the minority approval requirements of MI 61-101
contained in Section 5.7(e) on the basis of financial hardship.
The terms of the Transaction were unanimously approved by the
Independent Directors. Mountain Province was not in a position to
file a material change report 21 days prior to closing because the
terms of the Transaction and insider participation were not yet
established by that time, and Mountain Province elected to expedite
closing of the Transaction for sound business reasons.
About Mountain Province
Mountain Province is a Canadian-based resource company listed on
the Toronto Stock Exchange under the symbol 'MPVD'. The Company's
registered office and its principal place of business is 161 Bay
Street, Suite 1410, P.O. Box 216, Toronto, ON, Canada, M5J 2S1. The
Company, through its wholly owned subsidiaries 2435572 Ontario Inc.
and 2435386 Ontario Inc., holds a 49% interest in the Gahcho Kue
diamond mine, located in the Northwest Territories of Canada. De
Beers Canada Inc. holds the remaining 51% interest. The Joint
Arrangement between the Company and De Beers is governed by the
2009 amended and restated Joint Venture Agreement. The Company's
primary assets are its aforementioned 49% interest in the GK Mine
and 100% owned Kennady North Project.
Mountain Province reported a net loss of C$263.43 million for the
year ended Dec. 31, 2020, compared to a net loss of C$128.76
million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the
Company had C$595.33 million in total assets, C$75.73 million
in current liabilities, C$374.71 million in secured notes payable,
C$750,000 in lease liabilities, C$70.44 million in decommissioning
and restoration liability, and C$73.70 million in total
shareholders' equity.
Toronto, Canada-based KPMG LLP, the Company's auditor since 1999,
issued a "going concern" qualification in its report dated
March 29, 2021, citing that the Company has suffered recurring
losses from operations that raises substantial doubt about its
ability to continue as a going concern.
NESV ICE: Wins Cash Collateral Access
-------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Eastern Division, has authorized NESV Ice, LLC and affiliates to
use cash collateral on an interim basis in accordance with the
budget, with a 10% variance.
Specifically, the Debtor is authorized to use Cash Collateral in
the ordinary course of its business substantially in accordance
with the budget for the period from the Petition Date through the
earlier of conclusion of the continued hearing on the Motion or
entry of a further order regarding use of Cash Collateral.
The Debtor requires the use of cash collateral in order to preserve
its operations and the value of its assets.
SHS ACK, LLC claims a security interest in Ice's property,
including the cash proceeds thereof, and Ice's deposit accounts.
As adequate protection for the Debtor's use of cash collateral, SHS
is granted replacement liens in and to all property of the kind
presently securing the prepetition obligations of Ice to SHS. The
Replacement Liens will only attach to and be enforceable against
the same types of property, to the same extent, and in the same
order of priority as existed immediately prior to the Petition
Date. The Replacement Liens will be recognized only to the extent
of any post-petition diminution in value of the prepetition
collateral of SHS resulting from Ice's use of Cash Collateral
during the bankruptcy case.
The Debtor's authority to use Cash Collateral will terminate upon
the occurrence of these following events, unless waived by SHS in
writing:
a. a default by the Debtor in reporting the information, if
such default will remain uncured for three business days following
written notice from SHS to the Debtor;
b. reversal, vacatur, or modification of the Second Interim
Order; or
c. dismissal of the case or conversion of Ice's case to
chapter 7.
A telephonic hearing on the continued use of cash collateral is
scheduled for December 2, 2021 at 1:30 p.m.
On or before November 22, 2021, the Debtor must file and serve a
Notice of Supplement to the Motion, which attaches the following as
exhibits: (i) an updated rolling 13-week budget and cash report
setting forth, in comparative form, the actual results achieved
against those projected for the prior weeks, including the actual
cash receipts and disbursements and the variance of the actual
results from those estimated in the Budget; and (ii) a revised form
of order regarding the continued use of cash collateral, along with
a redline comparing the form of order to the Second Interim Order.
A copy of the order and the Debtor's 13-week budget for the period
from September 17 to December 10, 2021 is available for free at
https://bit.ly/3igDeTt from PacerMonitor.com.
The Debtor projects $133,518 in total cash collected and $26,829 in
total cash disbursements for the week ended October 1.
About NESV Ice, LLC
NESV Ice, LLC and affiliates NESV Swim, LLC, NESV Field, LLC, NESV
Hotel, LLC, NESV Tennis, LLC, NESV Land, LLC, and NESV Land East,
LLC, offer fitness and sports training services. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Mass. Case No. 21-11226) on August 26, 2021. The petitions were
signed by Stuart Silberberg as manager.
Judge Christopher J. Panos oversees the case.
William McMahon, Esq., at Downes McMahon LLP is the Debtor's
counsel.
NEW ENTERPRISE: S&P Rates New $575MM Senior Secured Notes 'B+'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '2'
recovery rating to New Enterprise Stone & Lime Co. Inc.'s proposed
$575 million senior secured notes due July 2028. The '2' recovery
rating indicates our expectation for substantial (70%-90%; rounded
estimate: 70%) recovery in the event of a payment default. All
S&P's existing ratings on the company are unchanged.
New Enterprise announced it plans to use the proceeds from the $575
million senior secured note issuance, a $67 million add-on to its
$200 million unsecured notes due July 2028, and cash on hand to
fund a $185.5 million buyout or share repurchase of the
non-employee shareholders of the company. Pro forma for the
transaction, the employee owners, Paul Detwiler (CEO) and his
brother Jeff Detwiler (president), will have a 94% ownership stake.
The company will also use the proceeds to repay the existing $450
million senior secured notes due in 2026, as well as the call
premium on the existing senior notes and associated fees. NESL also
recently extended the maturity of its $105 million asset-based
lending (ABL) revolving credit facility (unrated) four years to
September 2026 from October 2022.
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'B+' issue-level rating and '2' recovery
rating to New Enterprise's proposed $575 million senior secured
notes due 2028. The '2' recovery rating indicates its expectation
for substantial (70%-90%; rounded estimate: 70%) recovery in the
event of a payment default. The 'CCC+ issue-level rating and '6'
recovery rating on New Enterprise's upsized senior unsecured notes
due July 2028 are unchanged.
-- S&P's valuation uses an enterprise value approach because it
believed its creditors would realize greater recoveries through a
reorganization than through a liquidation.
-- S&P said, "We have valued the company using a 6x multiple of
our projected emergence EBITDA, which is toward the higher end of
our range for building materials companies. This is because we
consider aggregates to be more profitable and expect New Enterprise
will be able to extract a higher multiple in a default scenario."
-- S&P's recovery analysis assumes that, in a hypothetical
bankruptcy scenario, the value of the receivables and inventory
that collateralize the company's ABL facility would be sufficient
to cover the amount owed.
-- S&P's recovery analysis also assumes New Enterprise's ABL
facility would be 60% drawn.
Simulated default assumptions
-- Simulated year of default: 2024
-- EBITDA at emergence: $87 million
-- EBITDA multiple: 6x
-- Gross enterprise value: $522 million
Simplified waterfall
-- Net recovery value for waterfall after administrative expenses
(5%): $496 million
-- Estimated priority claims: $74 million (ABL facility)
-- Estimated first-lien claims: $590 million
--Recovery expectations: 70%-90% (rounded estimate: 70%)
-- Estimated subordinated claims: $280 million
--Recovery expectations: 0%-10% (rounded estimate: 0%)
NEWPORT CENTRE: $161MM Loan Extended Thru May 2023
--------------------------------------------------
Commercial Real Estate Direct reports that the $161.69 million loan
against the Newport Centre shopping mall in Jersey City, N.J., has
been given a two-year extension by its lenders. That loan wasn't
paid off at its May maturity, the report notes.
As reported by the Troubled Company Reporter in July, DBRS Limited
upgraded the ratings on three classes of Commercial Mortgage
Pass-Through Certificates, Series 2011-C4 issued by JP Morgan Chase
Commercial Mortgage Securities Trust 2011-C4 as follows:
-- Class C to AAA (sf) from AA (low) (sf)
-- Class D to AAA (sf) from A (sf)
-- Class E to AA (low) (sf) from BBB (high) (sf)
DBRS Morningstar also confirmed the ratings on the remaining
classes as follows:
-- Class F at BBB (low) (sf)
-- Class G at BB (low) (sf)
-- Class H at B (sf)
DBRS Morningstar changed the trend on Class H to Stable from
Negative. All other trends are Stable.
The rating upgrades reflect the collateral reduction to date, while
the rating confirmations reflect the overall stable performance of
the remaining collateral in the transaction. Since December 2020,
10 loans, with a combined balance of $141.2 million, have been
repaid. As a result, there has been total collateral reduction of
86.7% since issuance. As of the June 2021 remittance, the remaining
collateral consists of three loans, the largest of which is the
Newport Centre loan (Prospectus ID#1, 87.3% of the pool).
According to DBRS, the Newport Centre loan is secured by a
782,000-square-foot (sf) portion of a 1.15-million-sf regional mall
located in Jersey City, New Jersey, owned by a joint venture
between Melvin Simon & Associates and the LeFrak family, who also
developed the Newport Master Planned Community where the property
is located. The management company for Simon Property Group manages
the mall. The loan was transferred to special servicing in July
2020 when a Coronavirus Disease (COVID-19) relief request was made
by the borrower. A loan modification was granted in September 2020
that allowed for the deferral of principal, replacement, and
leasing reserve payments from May 2020 through to July 2020. The
loan was brought current in November 2020 and was returned to the
master servicer in January 2021.
The loan was transferred to special servicing for a second time,
however, after the loan failed to repay at its May 2021 maturity
date. The servicer reports that the borrower has requested approval
for a loan modification that would extend the maturity date for a
period of two years through to May 2023, with an additional
12-month extension option available that would extend the maturity
through May 2024. The servicer has not provided confirmation of a
modification or terms to date, but the loan was returned to the
master servicer with the June 2021 remittance, suggesting a
modification has closed.
Prior to the pandemic, performance had been quite stable, with the
YE2019 and YE2018 debt service coverage ratios (DSCRs) reported at
2.08 times (x) and 2.05x, respectively. Cash flow dipped slightly
in 2020 due to lower percentage rents and other income, with
occupancy holding steady at 93.2% as of February 2021. The YE2020
DSCR was reported at 1.85x, representing a 10.8% decline from
YE2019 and a 9.7% increase from the issuer's underwritten DSCR.
Although the healthy DSCR figures are encouraging, DBRS Morningstar
does note risks in the anchor mix, which includes Macy's (23.6% of
total net rentable area (NRA), expiring January 2028), Sears (19.8%
of total NRA, subject to a ground lease that expires in October
2027), JCPenney (18.5% of total NRA, expiring January 2050), Kohl's
(14.9% of total NRA, expiring January 2028), and an 11-screen AMC
Theatres (4.9% of total NRA, expiring January 2026). All of these
tenants have reported difficulties both before and during the
pandemic, with noteworthy developments including JCPenney's Chapter
11 bankruptcy filing in May 2020 and Macy's prepandemic
announcement that 125 stores would be closed in the next few years.
Although there is tenant risk at the subject, the mall has held its
value even throughout the pandemic, with the most recent appraised
value as of April 2021 being reported at $315.0 million. This
represents a 6.5% decline from the issuance value of $337.0 million
but is still well in excess of the current loan amount of $167.6
million.
NICHOLAS H. NOYES: S&P Affirms 'BB-' LT Rating on Revenue Debt
--------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'BB-' long-term rating on Livingston County Industrial
Development Agency, N.Y.'s revenue debt, issued for Nicholas H.
Noyes Memorial Hospital.
"The outlook revision reflects Noyes' return to profitability in
fiscal 2020, albeit aided by CARES Act relief funds, along with the
expectation of continued profitability in fiscal 2021, as well as a
strengthening in maximum annual debt service coverage and improved
liquidity and financial flexibility, as seen by higher days' cash
on hand," said S&P Global Ratings credit analyst Marc Bertrand.
The rating also reflects Noyes' vulnerable enterprise profile, as
seen by the small service area, and the weaker payor mix, with a
high concentration in governmental payors. The rating also reflects
the benefits the hospital derives from its relationship with
University of Rochester Medical Center in areas such as physician
recruitment and strategic planning. The rating incorporates Noyes'
solid debt profile, characterized by a leverage and debt burden,
which are well below rating medians. The rating also incorporates a
negative adjustment for the system's very low total operating
revenue.
S&P said, "We could revise the outlook to positive or raise our
rating to 'BB' if Noyes is able to consistently generate positive
operating margins without the support of governmental relief
programs, and if days' cash on hand reaches levels more in line
with a higher rating. While an outlook revision or higher rating is
predicated upon improving financial trends, we would also expect
Noyes to demonstrate strengthening demand and an improving
competitive profile.
"We could lower the rating or revise the outlook to negative if
financial performance deteriorates such that operating margins turn
negative, MADS coverage approaches 1x, or if unrestricted reserves
and days' cash on hand declines to levels no longer appropriate for
our 'BB-' rating."
NIDA ALSHAIKH DDS: Taunt Law's Erika Hart Named PC Ombudsman
------------------------------------------------------------
Andrew R. Vara, United States Trustee for Regions 3 and 9,
appointed Erika Hart as Patient Care Ombudsman for Nida Alshaikh
DDS, PC. Ms. Hart is an attorney at The Taunt Law Firm.
As Patient Care Ombudsman, Ms. Hart will be compensated at an
hourly rate of $335, plus reimbursement of reasonable expenses
incurred in the discharge of her duty. Ms. Hart declared that she
is a disinterested person within the meaning of Section 101(14) of
the Bankruptcy Code.
A copy of the notice of appointment is available for free at
https://bit.ly/3kTRWkU from PacerMonitor.com.
About Nida Alshaikh DDS, PC
Nida Alshaikh DDS, PC owns and operates a dental clinic called Oval
Dental. The Debtor filed a Chapter 11 petition (Bankr. E.D. Mich.
Case No. 21-47459) on September 17, 2021, listing up to $50,000 in
assets and $1 million to $10 million in liabilities. Nida
Alshaikh, owner, signed the petition. Schafer and Weiner, PLLC
represents the Debtor as counsel.
NORTHWEST BAY: Oct. 27 Hearing on Disclosure Statement
------------------------------------------------------
Judge Robert E Littlefield, Jr., will convene a hearing to consider
the approval of the Disclosure Statement of Northwest Bay Partners,
Ltd. at the James T. Foley Courthouse, 445 Broadway, Suite 306,
Albany, NY on Oct. 27, 2021, at 10:30 a.m.
Written objections to the Disclosure Statement must be filed and
served no later than 7 days prior to the Disclosure Hearing date.
As reported in the TCR, the Debtor filed a First Amended
Disclosure
Statement and a First Amended Plan of Reorganization on Sept. 21,
2021. On the Distribution Date, the holders of Allowed General
Unsecured Claims in Class 3 will receive payment in full of their
scheduled or filed claims or an amount as agreed upon between the
Debtor and each creditor. Payment to Class 3 shall be generated
from the proceeds of the sale of Debtor's lots.
A full-text copy of the First Amended Disclosure Statement dated
Sept. 21, 2021, is available at https://bit.ly/3i3IxWs from
PacerMonitor.com at no charge.
About Northwest Bay Partners
Northwest Bay Partners Ltd., a real estate holding company in
Albany, N.Y., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D.N.Y. Case No. 19-10615) on April 4, 2019. At the
time of the filing, the Debtor estimated assets of between $1
million and $10 million and liabilities of between $1 million and
$10 million. The case is assigned to Judge Robert E. Littlefield
Jr. The Debtor hired McNamee Lochner P.C. as its legal counsel,
and Walsh & Walsh, LLP, as special counsel.
OLCAN III PROPERTIES: Unsecured to Recover 100% in 5 Years
----------------------------------------------------------
Olcan III Properties, LLC, owner of three parcels of real estate,
filed a Reorganization Plan and a Disclosure Statement on Sept. 24,
2021.
Under the Plan, the debtor corporation, as reorganized, will
continue to operate its rental properties. The Debtor will be
operated by Mr. Mehran Sadeghi, as the Reorganized Debtor's
Managing Member upon Confirmation of the Plan by the Bankruptcy
Court.
In summary, the debtor corporation will pay in full its approved
administrative expenses in the amounts allowed by the Bankruptcy
Court. The Debtor will pay the agreed Secured Claim of D.A.N. and
any Tax Claims that may be owed. The Debtor will pay with
statutory interest in full the real property taxes owed to the
Mayor and City Council of Baltimore, Maryland. The Debtor will
also pay with statutory interest in full the Secured Claims
asserted by Stonefield, by EB, by Truitt assigned to EB. In
addition, the debtor will pay without interest its Unsecured Claims
and will enable its ownership by Mr. Sadeghi to be retained.
The Debtor has scheduled one Unsecured Claim in Class 10 that of
the State Employees Credit Union for $15,061 shown on Proof of
Claim No. 1 filed Aug. 31, 2021. The Debtor shall pay in full
without interest its unsecured debt of $15,061 to the State
Employees Credit Union over a term of five years in 10 equal
semi-annual installments of each in the amount of $1,506 on May 1
and on Nov. 1 beginning May 1, 2022, and again on Nov. 1, 2022,
continuing semi-annually thereafter with a 15-day grace period for
all payments and no pre-payment penalty or fee.
A copy of the Disclosure Statement dated Sept. 24, 2021, is
available at PacerMonitor.com at https://bit.ly/2Y9EgK5
About Olcan Properties III
Olcan III Properties, LLC, owns and operates three parcels of
investment real estate which it rents and from which it derives
income. Two of the real properties are located in Baltimore City,
Maryland, and the third is in Anne Arundel County, Maryland.
Olcan III Properties filed a Chapter 11 bankruptcy petition (Bankr.
D. Md. Case No. 21-15323) on Aug. 18, 2021, disclosing $1 million
in assets and $500,000 in liabilities. The Debtor is represented
by the Law Office of Marc R. Kivitz.
OMNIQ CORP: License Plate Recognition Systems to be Deployed at MIA
-------------------------------------------------------------------
omniQ Corp. will deploy omniQ VISION at Miami International Airport
(MIA). omniQ was selected by DESIGNA Access Corporation to deploy
omniQ VISION, its advanced A.I. based license plate recognition
(LPR) and vehicle recognition technology. omniQ VISION is now
deployed at more than 40 airports, including 50% of the top 20 hub
airports in the U.S. including Atlanta, Dallas Fort Worth, Los
Angeles International Airport and John F. Kennedy Airport in New
York.
In bidding on the MIA contract, omniQ VISION participated in a
detailed Request for Quotation (RFQ) thru DESIGNA with several
other LPR companies. DESIGNA is the contracted PARCS vendor with
Miami-Dade County for the deployment of a new Parking Access and
Revenue Control System which includes License Plate Recognition.
Key requirements for DESIGNA's RFQ included the ability to work in
a VM Ware environment along with providing a fully integrated fixed
and mobile LPR solution from the same supplier utilizing a single
database of LPR records.
omniQ Vision was awarded the Designa/MIA contract which calls for
50+ fixed lanes of LPR for entry and exit plazas at the airport
which includes license plate processing in a virtualized
environment, along with failover capabilities. The agreement also
includes omniQ's SeeMobile Vehicle mounted LPR and SeePatrol
Handheld LPR units for license plate inventory along with Bluetooth
printers for vehicle notifications. The system is expected to be
deployed at Miami International Airport during Q4 2021.
Miami International Airport ranks #11 in the U.S. for large hub
airports with 18.6 million passenger boardings in 2020 and becomes
the fourth major hub airport in Florida to deploy omniQ VISION AI
LPR based solutions. MIA joins Jacksonville, Tampa and Fort
Lauderdale-Hollywood International Airport, all utilizing omniQ
advanced AI technology.
"The momentum continues, omniQ VISION's selection by DESIGNA at
Miami International follows a successful multi-year deployment with
DESIGNA at the Port Authority of New York and New Jersey, covering
the four New York Area Airports for our integrated fixed and mobile
LPR systems," Shai Lustgarten, chief executive officer of omniQ,
said. "We are very grateful to partner with DESIGNA again in
future-proofing another major U.S. hub airport location."
"We are experiencing a diversified demand for our AI Based
solutions from different verticals that each represent a
significant potential growth for our technology, demand based on
quality and accuracy," the CEO said.
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic & parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Omniq Corp. reported a net loss attributable to common stockholders
of $11.31 million for the year ended Dec. 31, 2020, compared to a
net loss attributable to common stockholders of $5.31 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$35.86 million in total assets, $44.50 million in total
liabilities, and a total stockholders' deficit of $8.64 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 31, 2021, citing that the Company has a deficit in
stockholders' equity, and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
PATH MEDICAL: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------
The U.S. Trustee for Region 21 on Sept. 28 appointed an official
committee to represent unsecured creditors in the Chapter 11 case
of Path Medical, LLC.
The committee members are:
1. Absolute Medical Imaging
Attention: Will Hengemuhle
120 Enterprise Drive
Ann Arbor, MI 48103
Tel: 843-568-9865
E-mail: will.hengemuhle@gmail.com
2. State Farm Fire and Casualty Company
Attention: Tim Banahan
One State Farm Plaza, B-3
Bloomington, IL 61710
Tel: 863-318-2095
Fax: 309-766-8202
E-mail: timothy.banahan.cfqq@statefarm.com
3. PBC Madison, LLC
Attention: Nathan Ward
525 S. Flagler Drive, Suite 201
West Palm Beach, FL 33401
Tel: 561-714-1355
E-mail: nward@pbcap.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Path Medical
Path Medical Center Holdings, Inc. and Path Medical, LLC filed
their voluntary petitions for Chapter 11 protection (Bankr. S.D.
Fla. Lead Case No. 21-18339) on Aug. 28, 2021. Manual Fernandez,
chief executive officer, signed the petitions.
At the time of filing, Path Medical Center listed $220,060 in
assets and $76,988,419 in liabilities while Path Medical listed
$30,047,477 in assets and $86,494,715 in liabilities.
Judge Scott M. Grossman oversees the cases.
The Debtors tapped Edelboim Lieberman Revah Oshinsky PLLC as
bankruptcy counsel, Foley & Lardner, LLP as special counsel, and
Davis Goldman, PLLC as litigation counsel. KapilaMukamal, LLP
serves as the Debtors' financial advisor.
PHI GROUP: Delays Filing of Form 10-K
-------------------------------------
PHI Group, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay in the filing of its Annual
Report on Form 10-K for the year ended June 30, 2021.
The company was unable to file, without unreasonable effort and
expense, its Form 10-K for the fiscal year ended June 30, 2021, due
to the impact of the coronavirus pandemic and the requirement for
additional time by the auditors to review its financial information
to be included in the referenced Form 10-K.
About PHI Group
Headquartered in Irvine, California, PHI Group, Inc.
(www.phiglobal.com) primarily focuses on advancing PHILUX Global
Funds, a group of Luxembourg bank funds organized as "Reserved
Alternative Investment Fund", and building the Asia Diamond
Exchange in Vietnam. The Company also engages in mergers and
acquisitions and invests in select industries and special
situations that may substantially enhance shareholder value.
PHI reported a net loss of $2.18 million for the year ended June
30, 2020, compared to a net loss of $2.93 million for the year
ended June 30, 2019.
Eastvale, California-based MS Madhava Rao, issued a "going concern"
qualification in its report dated June 22, 2021, citing that the
Company has an accumulated deficit of $44,010,352 and stockholders'
deficit of $7,059,790 as of June 30, 2020. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
PINECREST ACADEMY: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative on
Arizona Industrial Development Authority's debt outstanding, issued
for Pinecrest Academy of Nevada. At the same time, S&P affirmed its
'BB+' long-term rating on Pinecrest Academy's debt outstanding.
"The outlook revision to stable represents our view of the school's
positive enrollment trends, which were in line with management's
projections and resulted in healthy operating results that we
believe will be maintained through fiscal 2022," said S&P Global
Ratings credit analyst Brian Marshall.
S&P siad, "We view the risks posed by the COVID-19 pandemic to
public health and safety as an elevated social risk for all charter
schools under our environmental, social, and governance factors. We
believe there is a social risk for Pinecrest Academy should local
demand preferences shift toward home-school options amid the spread
of the Delta variant. Despite the elevated social risks, we
consider the school's environmental and governance risks in line
with our view of the sector as a whole.
"We could consider a lower rating or negative outlook during the
one-year outlook period if additional debt issuances pressure
financial metrics to levels no longer consistent with the rating,
including lease-adjusted maximum annual debt service (MADS)
coverage, MADS burden, and unrestricted resources-to-debt, or if
enrollment projections are not met. It is our understanding that
the school has no near-term material debt plans.
"While not likely in the near term, given potential medium-term
debt plans, we could raise the rating if the school demonstrates a
trend of maintaining its lease-adjusted MADS coverage, liquidity,
and operating margins at ratios in line with those of a higher
rating level."
PROMENADE SHOPS: CMBS Trust Forecloses on Shopping Center
---------------------------------------------------------
Commercial Real Estate Direct reports that the CMBS trust that
holds an $82.65 million loan against the Promenade Shops at
Centerra in Loveland, Colo., has taken over the property through
foreclosure. This is the second time in 11 years that the property
was foreclosed, the report notes.
As reported by the Troubled Company Reporter in March 2021, S&P
Global Ratings lowered its ratings on eight classes of commercial
mortgage pass-through certificates from Natixis Commercial Mortgage
Securities Trust 2018-FL1, a U.S. CMBS transaction. At the same
time, S&P affirmed its ratings on 18 other classes from the same
transaction.
This is a U.S. large loan CMBS transaction backed by five uncrossed
floating-rate, interest-only (IO) mortgage loans. These loans are
secured by retail, lodging, office, and/or industrial properties in
various U.S. states.
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects. Vaccine production is ramping up and rollouts are
gathering pace around the world. Widespread immunization, which
will help pave the way for a return to more normal levels of social
and economic activity, looks to be achievable by most developed
economies by the end of the third quarter. However, some emerging
markets may only be able to achieve widespread immunization by year
end or later. S&P said, "We use these assumptions about vaccine
timing in assessing the economic and credit implications associated
with the pandemic. As the situation evolves, we will update our
assumptions and estimates accordingly."
S&P said, "The downgrades on the class B, C, and D pooled
certificates reflect primarily our reevaluation of the open-air
lifestyle retail center securing the Promenade Shops at Centerra
loan ($83.7 million; 29.8% of the pooled trust balance), based on
our review of the updated lower-than-expected Oct. 25, 2020,
appraisal value and the performance data for the trailing 12-months
(TTM) ended Sept. 30, 2020, that were provided by the special
servicer after our November 2020 review. Furthermore, we considered
that, according to the February 2021 trustee remittance report,
class D had accumulated interest shortfalls outstanding totaling
$78,903 due primarily to appraisal subordinate entitlement
reduction amounts totaling $78,160 on the Promenade Shops at
Centerra loan.
"We lowered our expected-case valuation on the retail property
securing the Promenade Shops at Centerra loan by 26.5% to $76.7
million based on the updated October 2020 appraisal value totaling
$77.5 million (which was 52.6% lower than the $163.5 million
appraisal value at origination) and performance information.
Specifically, the lower S&P Global Ratings' expected-case value on
the Promenade Shops at Centerra loan reflects a lower S&P Global
Ratings' net cash flow (NCF) and our application of a higher S&P
Global Ratings' capitalization rate.
"The downgrades on the class B, C, and D pooled certificates are
generally in line with the model-indicated ratings and reflect the
increased susceptibility to liquidity interruption and losses due
to our revised lower expected-case value and the lower appraisal
value for the Promenade Shops at Centerra loan. Specifically, the
class D downgrade reflects our view that, based on the
significantly reduced appraisal value and an S&P Global Ratings'
loan-to-value (LTV) ratio higher than 100%, the risk of default and
loss on the class has increased due to uncertain market conditions.
In addition, S&P considered the outstanding interest shortfalls
affecting class D, as noted above."
S&P said, "While the model-indicated rating on class A was lower
than the class' current rating level, we affirmed our rating on
class A. In addition, we tempered our downgrade on class B even
though the model-indicated rating was lower than the class' revised
rating level. We considered qualitatively the classes' relative
positions in the waterfall as well as the fact that these classes
do not rely solely on the Promenade Shops at Centerra loan to pay
off. However, if there are any reported negative changes to the
remaining loans in the pool beyond what we have already considered,
we may revisit our analysis and adjust our ratings as necessary."
Promenade Shops at Centerra Loan
The Promenade Shops at Centerra loan has an $83.7 million pooled
trust balance (unchanged from issuance and last review). The IO
loan pays interest at an annual floating rate of LIBOR plus a 2.45%
gross margin. The loan initially matures on March 9, 2021, and has
two one-year extension options. In addition, there is a $31.3
million mezzanine loan. The loan transferred to special servicing
on June 5, 2020, due to monetary default because the borrower was
unwilling to inject additional capital to support the loan. The
loan has a reported 30-days delinquent payment status. According to
the special servicer, a receiver has been appointed at the property
and resolution strategy discussion is ongoing. The special servicer
stated that the rental collection rate was approximately 29% in May
2020 before increasing to about 78% in June, 111% in July
(reflecting some tenants paying their August 2020 rent in advance),
53% in August, and 71% in September 2020.
The loan is secured by the borrower's fee simple interests in a
493,160-sq.-ft. open-air lifestyle retail center in Loveland, Colo.
that includes 3,063 parking spaces. Anchors at the property
includes Macy's (non-collateral) and Dick's Sporting Goods
(collateral). The property is located off I-25, approximately 46
miles north of the Denver central business district (CBD) and 12
miles southeast of Fort Collins.
S&P's property-level analysis considered the decline in
servicer-reported occupancy to 89.0% and NCF of $5.3 million as of
the TTM ended Sept. 30, 2020, down from 90.8% and $9.7 million,
respectively, in 2019 and 91.2% and $10.2 million in 2018.
According to the May 2020 rent roll, the property was 86.9%
occupied. However, the property faces significant rollover risk
between 2020 and 2022, with about 49.7% of the net rentable area
(NRA) rolling, including three of the top five tenants. The five
largest tenants comprised 37.2% of the NRA: Dick's Sporting Good
(13.4% of NRA; January 2021 expiration; confirmed open during our
visit to the property); MetroLux Theaters (10.1%; January 2026);
Best Buy (6.1%; March 2021); Barnes & Noble (5.3%; February 2021);
and Glow Golf (2.3%; August 2021 expiration after renewing its
lease for one year from August 2020).
S&P said, "We briefly toured the property on Feb. 17, 2021; we
noted that it was well maintained and that the parking lots
appeared relatively active. Based on our observations, the vacant
units were concentrated at one section of the property.
"In our current analysis, in addition to the upcoming rollover
risk, we considered the increased retailer bankruptcies and store
closures, as well as the lower billed rent collection rates, due to
the COVID-19 pandemic. To account for these risks, we excluded
income from tenants that are no longer listed on the mall directory
website or those that have announced store closures. We also
increased our capitalization rate by 150 basis points (bps) from
last review in November 2020 to account for ongoing cash flow
volatility due to declining and weakening trends within the retail
mall sector, the overall perceived increase in market risk premium
for this property type, and competition in the mall's trade area.
"We derived an S&P Global Ratings' NCF of $7.5 million, down 13.2%
from the last review (at $8.6 million). We then divided our NCF by
a 9.75% S&P Global Ratings' capitalization rate (up from 8.25% in
the last review) to determine our expected-case value, which was
$76.7 million, down from $104.4 million in the last review. This
yielded an S&P Global Ratings' LTV ratio of 109.1% on the trust
balance. The master servicer, Wells Fargo Bank N.A., reported a
1.44x debt service coverage (DSC) for the TTM ended September
2020."
PROSPECT-WOODWARD: Wins Cash Collateral Access
----------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire has
authorized The Prospect-Woodward Home, dba Hillside Village, to use
cash collateral on a final basis pursuant to the budget and provide
adequate protection.
The Debtor requires the use of cash collateral to preserve the
value of its business.
The Debtor is obligated to UMB Bank, N.A., the Bond Trustee, for
the benefit of the beneficial holders of the tax-exempt Bonds,
authorized and issued by the New Hampshire Health and Education
Facilities Authority. The Issuer issued its $93,015,000 New
Hampshire Health and Education Facilities Authority Revenue Bonds,
Hillside Village Issue, Series 2017 pursuant to that Bond
Indenture, dated as of June 1, 2017 between the Issuer and the Bond
Trustee.
UMB Bank, N.A., in its capacity as successor trustee for the bonds,
has a first priority security interest in substantially all of the
Debtor's assets, subject only to the pari passu lien of Savings
Bank of Walpole in Gross Receipts.
As of the Petition Date, the amounts due and owing by the Debtor
with respect to the Bonds and the obligations under the Bond
Documents are:
a. Unpaid principal on the Bonds in the amount of
$60,445,000;
b. Accrued but unpaid interest on the Bonds in the amount of
$4,197,667.12; and
c. unliquidated, accrued and unpaid fees and expenses of the
Bond Trustee and its professionals incurred through the Petition
Date. The amounts, when liquidated, will be added to the aggregate
amount of the Bond Claim.
With the consent of the Bond Trustee, the Debtor and SBW are
parties to a Construction Loan Agreement dated as of April 22, 2019
which provided a line of credit of up to $3,000,000. Proceeds of
the SBW Loan were used to finance certain construction needs at the
Facility. As of the Petition Date, the amounts due and owing by the
Debtor with respect to the SBW Loan and the obligations under the
Construction Loan Agreement are:
a. Unpaid principal on the SBW Loan in the amount of
$1,727,760;
b. Accrued but unpaid interest on the SBW Loan in the amount
of $138,277 as of the Petition Date; and
c. unliquidated, accrued and unpaid fees and expenses of SBW
and its attorneys incurred through the Petition Date. The amounts,
when liquidated, will be added to the aggregate amount of the SBW
Claim.
Pursuant to a Forbearance Agreement, the Bond Trustee has agreed to
make certain advances on behalf of the Debtor in connection with
urgent construction needs up to $570,000. The Postpetition Advances
will be made and otherwise used in a manner consistent with the
terms of the Forbearance Agreement.
As adequate protection for the Debtor's use of cash collateral,
each Secured Party will have a pari passu, valid, perfected, and
enforceable replacement lien and security interest in (i) all
Postpetition Collateral of the same type as such Secured Party's
Prepetition Collateral to the same extent, validity, perfection,
enforceability, and priority of the liens and security interests of
each Secured Party as of the Petition Date.
As additional adequate protection for any diminution, and solely to
the extent of such Diminution, each Secured Party will have
superpriority administrative expense claims pursuant to Bankruptcy
Code section 507(b) with recourse to and payable from any and all
assets of the Debtor's estate.
The Debtor will also make adequate protection payments consistent
with the Cash Collateral Budget in an amount of $75,000 per month
to the Bond Trustee and $8,500 per month to the SBW.
A copy of the order and the Debtor's 13-week budget is available at
https://bit.ly/3F1oeT4 from Donlin Recano, the claims agent.
The Debtor projects $$249,436 in total operating receipts and
$263,941 in total operating disbursements for the week of October
1.
About The Prospect-Woodward Home
The Prospect-Woodward Home owns and operates a licensed continuing
care retirement facility with 222 units, comprised of 141
independent living units, 43 assisted living units, 18 memory care
units, and 20 licensed but not yet opened long term nursing care
units located on or about 95 Wyman Road, Keene, New Hampshire,
comprising approximately 66 acres.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.H. Case No. 21-10523) on August 30,
2021. In the petition signed by Toby Shea, chief restructuring
officer, the Debtor disclosed up to $50 million in assets and up
to $50 million in liabilities.
Judge Bruce A. Harwood oversees the case.
The Debtor tapped Polsinelli, PC as bankruptcy counsel; Hinckley,
Allen & Snyder, LLP as special counsel; Silverbloom Consulting, LLC
as financial consultant; and OnePoint Partners, LLC as
restructuring advisor. Toby B. Shea of OnePoint Partners serves as
the Debtor's chief restructuring officer. Donlin, Recano &
Company, Inc. is the claims and noticing agent and administrative
agent.
UMB Bank, N.A., as bond trustee, is represented by:
Daniel S. Bleck, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Email: Dsbleck@mintz.com
Savings Bank of Walpole, as lender, is represented by:
Devine Millimet
11 Amherst Street
Manchester, NH 03101
Email: Cpowell@devinemillimet.com
PURDUE PHARMA: California, Connecticut, Appeal Confirmation Order
-----------------------------------------------------------------
In separate filings with the U.S. Bankruptcy Court for the Southern
District of New York, Rob Bonta, attorney general for the State of
California, and William Tong, attorney general for the State of
Connecticut, appealed the Court's decision confirming the Twelfth
Amended Plan of Reorganization of Purdue Pharma L.P. and its
affiliated debtors.
A copy of the State of California notice of appeal is available for
free at https://bit.ly/3ia18Qn from Prime Clerk, claims agent.
A copy of the State of Connecticut notice of appeal is available
for free at https://bit.ly/3F1e9Wg from Prime Clerk, claims agent.
Counsel for the State of California, Rob Bonta, Attorney General:
Nicklas A. Akers
Senior Assistant Attorney General
Judith A. Fiorentini
Bernard A. Eskandari
Supervising Deputy Attorneys General
Michelle Burkart
Timothy D. Lundgren
Deputy Attorneys General
300 South Spring Street, Suite 1702
Los Angeles, CA 90013
Telephone: (213) 269-6348
Email: bernard.eskandari@doj.ca.gov
Counsel for the State of Connecticut, William Tong, Attorney
General:
Irve J. Goldman, Esq.
Pullman & Comley, LLC
850 Main Street, 8th Floor
P.O. Box 7006
Bridgeport, CT 06601-7006
Telephone: (203) 330-2213
Email: igoldman@pullcom.com
About Purdue Pharma
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as
legal counsel; PJT Partners as investment banker; AlixPartners as
financial advisor; and Grant Thornton, LLP as tax structuring
consultant. Prime Clerk LLC is the claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in the Debtors'
bankruptcy cases.
David M. Klauder, Esq., is the fee examiner appointed in the
Debtors' cases. The fee examiner is represented by Bielli &
Klauder, LLC.
R. INVESTMENTS: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee for Region 19 on Sept. 28 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of R. Investments, RLLP.
About R. Investments
Denver-based R. Investments, RLLP sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 21-11011) on
March 4, 2021, listing up to $1 million in assets and up to $50
million in liabilities. William Travis Steffens, chief executive
officer, signed the petition.
Judge Elizabeth E. Brown oversees the case.
The Debtor tapped Moye White, LLP as bankruptcy counsel and the Law
Offices of Silver & Brown as special counsel.
RM BAKERY: Files Debt-for-Equity Plan; Unsecured Get Profit Share
-----------------------------------------------------------------
RM Bakery, LLC, and BKD Group, LLC, filed a Joint Chapter 11 Plan
of Reorganization and a Disclosure Statement on Sept. 24, 2021.
All cash required for payments to be made under the Plan on the
effective date shall be obtained:
1. first, from cash on hand on the Effective Date;
2. second, from the new value contributed by the electing
beneficial Holders of Class 9 equity interest will elect to
subscribe for Equity Units;
3. third, from the proceeds of an Economic Injury Disaster Loan
("EDIL") which the Debtors have applied for and from which the
Debtors expect to receive approximately $500,000; and
4. fourth, from the proceeds of an equity investment made by the
Equity Investor in an amount from $0 to $1.5 million, which would
equate to an equity stake of 0% to 38% of the Reorganized Debtor.
In full settlement of all claims of Pac West and the SBA related to
the Pac West Loan against the Debtors and their affiliated
guarantors, the parties agree that:
1. Pac West will be deemed to have an Allowed Secured Claim in
the amount of $300,000. Such claim will be paid $50,000, and
thereafter in equal quarterly installments over the next four years
with interest at the prime rate in effect on the Effective Date at
Citibank, N.A., but not more than 5% per annum. No payments will
be made to the SBA under the plan on account of the Pac West Loan;
all payments will be made directly to Pac West. As this is in full
settlement of all obligations of the Debtors and their affiliated
guarantors, there also will not be any payments to Pac West or the
SBA from RMB's guarantors: BKD, KI 27323, and RM Bakery Manager
LLC.
2. The remainder of Pac West's Claim of $3,075,000 will be in
the category of Allowed Class 6 Non-insider General Unsecured
Claim. Pac West is entitled to keep all of the adequate
protections payments which it has received during the pendency of
the Bankruptcy Cases, which amounts will be deemed payments on its
secured claim in addition to the remaining $300,000 Allowed Secured
Claim, thus reducing the amount of its allowed General Unsecured
Claim.
3. Upon a change of control of the Reorganized Debtor, Pac West,
at its option, can elect to be paid the remainder of its Allowed
Secured Claim at a 15% discount. The Reorganized Debtor is
prohibited from selling more than 50% of its Equity Interests or
assets after the Effective Date unless the buyer assumes the
obligations to Pack West under the settlement.
The Plan will treat other claims and interests as follows:
* The Class 3 Secured Claim of Mayrich Capital LLC will be paid
the full amount of its secured claim of $750,000, the value of its
collateral. Mayrich has agreed that its unsecured deficiency claim
of $450,000 will be converted to New Equity Units at the rate of
four New Equity Units per one dollar of face amount of the allowed
claim.
* Class 4 Secured Claim of FS Lender 2015 LLC, the DIP lender,
will be converted to equity at the ratio of four membership units
in the reorganize debtor for each one dollar of allowed claim,
other than its claim for professional fees, which the Debtors will
pay in accordance with the DIP Facility.
* Class 6 Non-insider General Unsecured Claims each in the
amount greater than $15,000, which total $4.0263 million, will each
receive $50,000 plus 25% of the net profits of the Reorganized
Debtor for a three year-period ending March 31, 2025.
* Class 7 General unsecured claims each in the amount of $15,000
or less (identified as convenience claims), which total $256,100,
will each receive a pro rata share of $30,000.
* Class 8 Insider General Unsecured Claims totaling $3,860,000
will receive 1.5 New Equity Units in the Reorganized Debtor for
each one dollar of face amount of the Allowed Claim. KI 27323, the
Managing Member of BKD, has agreed to a different treatment for its
Claim for management fees in the approximate amount of $1.6
million. On account of such Allowed Class 6 Claim, KI 27323 will
receive 0.5 New Equity Units in the Reorganized Debtor for each
dollar of Face Amount of its Allowed Class 8 Claim.
* Each beneficial Holder of Equity Interests in BKD in Class 9
will be offered the opportunity to provide new value by subscribing
for New Equity Interest in the Reorganized Debtor. For each
membership unit comprising its Allowed Equity Interests, a
beneficial Holder will be entitled to subscribe for four New Equity
Units in the Reorganized Debtor. The cost of the New Equity Units
to the holder of Allowed Class Equity Interest will be $1.00 for
every four New Equity Units.
A copy of the Disclosure Statement dated Sept. 24, 2021 obtained
from Epiq is available at https://bit.ly/39IF3nv
About RM Bakery and BKD Group
RM Bakery, LLC, owner of a bakery business, and BKD Group, LLC
sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No.
20-11422) on June 15, 2020.
At the time of the filing, RM Bakery disclosed assets of between $1
million and $10 million and liabilities of the same range.
Meanwhile, BKD Group had estimated assets of less than $50,000 and
estimated liabilities of between $1 million and $10 million.
Judge Martin Glenn presides over the case.
The Debtors tapped Mayerson & Hartheimer, PLLC as legal counsel and
Vernon Consulting Inc. as financial advisor and accountant. Epiq
Corporate Restructuring, LLC is the claims and noticing agent.
ROCHELLE HOLDINGS: HMG/PMS Say Amended Plan Not Confirmable
-----------------------------------------------------------
Parties in interest, HMG Venture Partner, LLC ("HMG") and PM S-1
REO, LLC ("PMS") object to approval of the Disclosure Statement,
and confirmation of Amended Plan of Reorganization of Rochelle
Holdings XIII, LLC.
HMG/PMS points to numerous deficiencies in the Disclosure
Statement:
-- The Disclosure Statement failed to adequately describe the
Debtor's assets. The Disclosure Statement fails to provide a
complete description of the Debtor's assets and their value. While
the Disclosure Statement generally explains that the Debtor has
acquired "205 acres of what has become highly sought after real
estate", it is devoid of any further description of the property to
permit interested parties to sufficiently ascertain its value or
the likelihood that the Debtor can sell the property in accordance
with Amended Plan.
-- The Disclosure Statement failed to adequately describe the
Debtor's means of implementation. The Disclosure Statement
contemplates that the Debtor will sell "two large tracts of land"
to "two different potential buyers" to generate money sufficient to
pay the Debtor's secured creditors. However, there is no
description of the "tracts of land" that the Debtor intends to
sell, who these "potential buyers" are, what, if any, commitments
the Debtor has received from the potential buyers, the estimated
purchase prices, the marketing process the debtor undertook to
obtain this contracts, or any other information related to the
buyers or alleged sales.
-- The Disclosure Statement failed to adequately describe the
debtor's liquidation analysis:
* Neither the Disclosure Statement or Amended Plan
demonstrate or explain how the Debtor determined the market value
of the 205 acres of property or the Chapter 7 liquidation value in
violation of 11 U.S.C. Secs. 1125(a) and 1129(a)(7).
* The Debtor allocates a fair market value of $85,000,000 to
the 205 acres property but failed to explain or provide any
information regarding how this value was derived. The Debtor also
assigns a liquidation value of $27,000,000 without providing any
explanation. In fact, the Debtor's own Affidavit in Opposition to
Motion to Dismiss that was filed in this case on August 10, 2021,
suggests that the liquidation value of the property is likely far
greater than the $27,000,000 listed in the Disclosure Statement.
-- The Disclosure Statement failed to adequately describe
material changes contemplated by the amended Plan. While the
Disclosure Statement provided a vague summary of the originally
filed Plan, the Amended Plan contains several material changes that
are not adequately summarized in the Disclosure Statement. While
the Debtor is authorized to file an amended Plan under Section
1127(a), the Debtor is required to comply with the disclosure and
solicitation requirement of Section 1125 with respect to a modified
plan. The Debtor has failed to satisfy this statutory obligation
when filing the Amended Plan.
HMG/PMS also points out that the Plan violates the good-faith
requirement of Sec. 1129(a)(3):
* Given the size of HMG/PMS's claims and the over $30 million
owed to secured creditors in this case, the Debtor would be
required to sell the 205 acres at issue for over $95 million for
Palmer to ever receive a distribution from the Debtor. The Debtor
estimates the property to be worth $85 million on its best day.
Given these numbers, Palmer has no economic interest in the Debtor
thereby making it difficult to understand the reasoning behind
Palmer's decision to file the case unless it was done to pay all or
a portion of HMG/PMS's claims. Based on a review of the Amended
Plan and Palmer's past conduct, that is not the purpose of the
Amended Plan.
* The Amended Plan in no way references or includes any
mechanism to pay
HMG/PMS upon the sale of any portion of the 205 acres. Instead,
the Amended Plan simply provides that equity will retain its
interest in the Debtor with nor reference to HMG/PMS or Steve
Oscher as the receiver authorized to collect distribution to be
paid to Palmer.
HMG/PMS further points out that the Amended Plan fails to disclose
the identity of any director or officer of the debtor who will
serve after confirmation in violation of Sec. 1129(a)(5). While
the Amended Plan and Disclosure Statement state that the current
management of the Debtor is run by Matthew Hill, neither indicate
whether Mr. Hill will continue in such capacity after confirmation.
Specifically, the Amended Plan fails to address whether Palmer
will remain involved in ongoing management or operations of the
Debtor post=confirmation. Based on the actions taken by Palmer
over the years, it is vitally important to the creditors and
HMG/PMS to know whether Palmer will be taking an active role in the
management of the Debtor as his involvement will have a significant
impact as to all parties' willingness to accept the plan.
HMG/PMS asserts that the Amended Plan violates 11 U.S.C. Sec.
1129(a)(7)(a)(ii). The Amended Plan violates Section
1129(a)(7)(a)(ii), the best interest of creditors test. According
to the Affidavit and the Case Management Summary, the land is
valued between $50 and $100 million. While this amount is
substantially higher than the secured debt, the Amended Plan makes
no allocation or provision for payment to HMG/PMS.
According to HMG/PMS, the Amended Plan violates the feasibility
requirement of Sec. 1129(a)(11). While the Debtor suggests that it
has "Letters of Intent" and "Contracts" for these potential sales,
it does not provide any details with respect to any material terms,
including closing dates, purchase price, permitting requirements,
or any approvals as may be required by the City. Further, if the
Debtor is still in the process of vetting and/or negotiating with
potential buyers, there is little to no chance that any sale of any
portion of the property can be completed by or before April 4,
2022.
Counsel for HMG Venture Partner, LLC and PM S-1 REO, LLC:
Patrick M. Mosley
Florida Bar No. 0033735
Jessica A. Clemente
Florida Bar No. 1003462
HILL WARD HENDERSON
101 East Kennedy Boulevard
Suite 3700
Tampa, FL 33602
Telephone: (813) 221-3900
Facsimile: (813) 221-2900
E-mail: patrick.mosley@hwhlaw.com
E-mail: jessica.clemente@hwhlaw.com
E-mail: tricia.elam@hwhlaw.com
About Rochelle Holdings XIII
Longwood, Fla.-based Rochelle Holdings XIII, LLC, sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
21-03216) on July 15, 2021, disclosing total assets of $85 million
and total liabilities of $29.06 million. Matthew R. Hill, managing
member of Rochelle Holdings, signed the petition. Judge Lori V.
Vaughan oversees the case. Kosto & Rotella, PA serves as the
Debtor's legal counsel.
SAMARCO MINERACAO: Renews Talks With Bondholders on Restructuring
-----------------------------------------------------------------
Cristiane Lucchesi and Mariana Durao of Bloomberg News report,
citing people familiar with the matter, that Samarco Mineracao SA
and its major bondholders are back at the negotiation table as the
company looks to restructure its debt.
The two sides are holding the second meeting in a week on Monday,
the people said, asking not to be named because the negotiations
aren't public. The iron-ore company was hit by a dam disaster in
2015 that interrupted production.
The talks bring renewed hope of a negotiated solution to Samarco's
debt crisis, after previous discussion broke down before the
company filed for bankruptcy protection from creditors in April
2021.
About Samarco Mineracao SA
Samarco Mineracao SA is a Brazilian mining joint venture between
BHP Group and Vale SA. erves as an iron ore processing company. The
company provides blast furnace, direct reduction, sinter feed, as
well as low and normal silica content pellets.
On April 9, 2021, the Debtor filed a voluntary petition for
judicial reorganization in the 2nd Business State Court for the
Belo Horizonte District of Minas Gerais in Brazil pursuant to
Brazilian Federal Law No. 11,101 of February 9, 2005.
Samarco Mineracao filed for Chapter 15 bankruptcy recognition
(Bankr. S.D.N.Y. Case No. 21-10754) on April 19, 2021, in New York,
to seek U.S. recognition of its Brazilian proceedings.
The Debtor's U.S. counsel:
Thomas S. Kessler
Cleary Gottlieb Steen & Hamilton LLP
Tel: 212-225-2000
E-mail: tkessler@cgsh.com
SEMILEDS CORP: All Proposals Passed at Annual Meeting
-----------------------------------------------------
SemiLEDs Corporation held its Annual Meeting of Stockholders at
which the stockholders:
(1) elected Trung T. Doan, Walter Michael Gough, Dr. Edward
Hsieh, Roger Lee, and Scott R. Simplot as directors for a one-year
term ending with the 2022 Annual Meeting of Stockholders;
(2) ratified the appointment of KCCW Accountancy Corp as the
company's independent registered public accounting firm for the
fiscal year ending Aug. 31, 2021; and
(3) approved, on an advisory (non-binding) basis, the
compensation of the company's named executive officers.
About SemiLEDs
Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs --
http://www.semileds.com-- develops and manufactures LED chips and
LED components for general lighting applications, including street
lights and commercial, industrial, system and residential lighting,
along with specialty industrial applications such as ultraviolet
(UV) curing, medical/cosmetic, counterfeit detection, horticulture,
architectural lighting and entertainment lighting.
SemiLEDs reported a net loss of $547,000 for the year ended Aug.
31, 2020, compared to a net loss of $3.56 million for the year
ended Aug. 31, 2019. As of May 31, 2021, the Company had $15.64
million in total assets, $14.07 million in total liabilities, and
$1.57 million in total equity.
KCCW Accountancy Corp., in Diamond Bar, California, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 17, 2020, citing that the Company incurred
recurring losses from operations and has an accumulated deficit,
which raises substantial doubt about its ability to continue as a
going concern.
SEP SOFTWARE: Case Summary & 6 Unsecured Creditors
--------------------------------------------------
Debtor: SEP Software Corporation
160 Greentree Street, Suite 101
Dover, DE 19901
Business Description: SEP Software Corporation is a technology
company that provides a single backup and
disaster recovery solution for hybrid
environments of any size.
Chapter 11 Petition Date: September 29, 2021
Court: United States Bankruptcy Court
District of Colorado
Case No.: 21-14963
Judge: Hon. Michael E. Romero
Debtor's Counsel: Jonathan M. Dickey, Esq.
KUTNER BRINEN DICKEY RILEY, P.C.
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Tel: 303-832-2400
Email: jmd@kutnerlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Russell Wine as CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/5APIDTA/SEP_Software_Corporation__cobke-21-14963__0001.0.pdf?mcid=tGE4TAMA
SOUND HOUSING: Stuart Heath Appointed as Chapter 11 Trustee
-----------------------------------------------------------
Judge Marc Barreca of the U.S. Bankruptcy Court for the Western
District of Washington granted the application of Acting U.S.
Trustee for Region 18, Gregory M. Garvin, to appoint Stuart Heath,
Esq. as Chapter 11 Trustee for Sound Housing LLC. Mr. Heath was
directed to obtain a bond in the initial amount of no less than
$30,000.
A copy of the order is available for free at https://bit.ly/3zO4v5K
from PacerMonitor.com.
About Sound Housing LLC
Sound Housing LLC filed its Chapter 11 petition (Bankr. W.D. Wash.
Case No. 21-10341) on Feb. 19, 2021. At the time of filing, the
Debtor had $1 million to $10 million in assets and $1 million to
$10 million in liabilities. Judge Marc Barreca presides over the
case. Jacob D DeGraaff, Esq., at Henry & DeGraaff, P.S., is the
Debtor's legal counsel.
SPECIALTY BUILDING: Moody's Rates New Term Loan Due 2028 'B2'
-------------------------------------------------------------
Moody's Investors Service affirmed Specialty Building Products
Holdings, LLC's (dba U.S. Lumber) B2 Corporate Family Rating and
B2-PD Probability of Default Rating. Moody's also upgraded the
company's senior secured notes due 2026 to B2 from B3 and assigned
a B2 rating to U.S. Lumber's proposed senior secured term loan
maturing 2028. The new term loan will have similar terms and
conditions as the existing senior secured notes and will be pari
passu. Proceeds from the $800 million term loan will be used to
fund the acquisition of two distribution companies. The outlook is
stable.
Moody's views the proposed term loan as credit negative since
proceeds from the term loan will result in higher leverage. Moody's
projects adjusted debt-to-EBITDA will be about 5.0x at year end
2022 versus 4.3x for the last twelve months ending July 4, 2021.
However, Moody's believes that proposed acquisitions will expand
U.S. Lumber's geography in the Southwestern market and add new
products such as specialty doors, giving U.S. Lumber more cross
selling opportunities.
The upgrade of the rating on U.S. Lumber's existing senior secured
notes due 2026 to B2 from B3 and the B2 rating on the proposed
senior secured term loan maturing 2028 is due to the increase in
the proportion secured debt in U.S. Lumber's capital structure
relative to the asset based revolving credit facility, resulting in
improved recovery for the secured debt holders.
The following ratings are affected by the action:
Upgrades:
Issuer: Specialty Building Products Holdings, LLC
Senior Secured Regular Bond/Debenture, Upgraded to B2 (LGD4) from
B3 (LGD4)
Assignments:
Issuer: Specialty Building Products Holdings, LLC
Gtd Senior Secured 1st Lien Term Loan B, Assigned B2 (LGD4)
Affirmations:
Issuer: Specialty Building Products Holdings, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Outlook Actions:
Issuer: Specialty Building Products Holdings, LLC
Outlook, Remains Stable
RATINGS RATIONALE
U.S. Lumber's B2 CFR reflects Moody's expectation that the company
will retain a leveraged capital structure over through 2022. At the
same time U.S. Lumber may face challenges integrating the two
target companies into its own operating and administrative systems
and intense competition.
Providing significant offset to U.S. Lumber's leveraged capital
structure is good profitability. Moody's forecasts adjusted EBITDA
margin in the range of 9% - 11% through 2022, which is a credit
strength of the company. Moody's projects revenue will approach
$3.1 billion by year end 2022 from $2.1 billion for the last twelve
months ending July 4, 2021. Higher revenue is due to organic growth
and full year revenue from acquired companies. Interest coverage,
measured as EBITA-to-interest expense, will be slightly above 3.0x
by late 2022, which is reasonable given the company's high interest
expense.
Moody's anticipates good growth over the next 18 months for the
domestic construction end markets, including the US Homebuilding
sector, which is a key driver of U.S. Lumber's revenue. Moody's
projects 1.63 million new housing starts in 2022, a 6% increase
from Moody's forecast of 1.54 million in 2021.
Moody's also forecast that U.S. Lumber will have good liquidity
over the next twelve to 18 months. Cash flow, ample revolver
availability and no near-term maturities provide more some
financial flexibility for U.S. Lumber to contend with a more
leveraged capital structure and the integration of acquired
companies.
The senior secured term loan is expected to contain certain
covenant flexibility for transactions that can adversely affect
creditors. Notable terms include incremental first lien debt
capacity up to the greater of 100% closing date EBITDA and 100% of
LTM Consolidated EBITDA; plus unused amounts under the general debt
basket; plus the amounts under the available amount basket (the
greater of (x) 50% of closing date EBITDA and (y) 50% of the TTM
Consolidated EBITDA plus 50% of Consolidated Net Income); plus
additional amounts subject to 5.0x first lien net leverage ratio.
Amounts up to the greater of 100% closing date EBITDA and 100% of
LTM Consolidated EBITDA or amounts incurred in connection with a
permitted acquisition or investment may be incurred with an earlier
maturity date than the initial term loan. Collateral leakage is
permitted through the transfer of assets to unrestricted
subsidiaries, subject to carve-out capacity and other conditions;
there are no express "blocker" provisions which prohibit the
transfer of specified assets to unrestricted subsidiaries.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors that could jeopardize guarantees, with no
explicit protective provisions limiting such guarantee releases.
There are no express protective provisions prohibiting an
up-tiering transaction. The above are proposed terms and the final
terms of the credit agreement may be materially different.
Governance characteristics Moody's consider in U.S. Lumber's credit
profile include an aggressive financial strategy, evidenced by high
leverage. Since acquiring U.S. Lumber earlier this year, affiliates
of The Jordan Company, L.P., the owner of U.S. Lumber, will have
almost doubled total adjusted debt to about $1.7 billion, including
the additional term loan, from about $860 million at December 31,
2020. Moody's expects that the company will pursue acquisitions to
build scale, using debt as the primary source of funding.
Additional debt for dividends to shareholders are an ongoing
possibility.
The stable outlook reflects Moody's expectation that U.S. Lumber's
leverage will not deteriorate over the next eighteen months. Good
liquidity, no near term maturities and end market dynamics that
support growth further support the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of U.S. Lumber's ratings would depend on how quickly the
company delevers such that adjusted debt-to-LTM EBITDA is
maintained near 5.0x, while preserving good liquidity. The CFR
could be downgraded if U.S. Lumber's adjusted debt-to-LTM EBITDA
does not improve and stays above 6.0x or EBITA-to-interest expense
is sustained below 1.5x. Deterioration in liquidity or aggressive
acquisition with additional debt or shareholder return activity
could result in downward rating pressure as well.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
U.S. Lumber, headquartered in Duluth, Georgia, operates as a
two-step distributor, buying and reselling a large variety of
specialty products mostly to national and other one-step
distributors. The Jordan Company, L.P. through its affiliates, is
the owner of U.S. Lumber.
STONEMOR INC: Receives Invitation for Strategic Alternative Talks
-----------------------------------------------------------------
StoneMor Inc.'s Board of Directors has received a letter, dated
Sept. 22, 2021, from Axar Capital Management, LP in which it
expressed an interest in pursuing discussions concerning strategic
alternatives that may be beneficial to the company and its various
stakeholders.
Axar currently owns approximately 75% of StoneMor's outstanding
common stock. It has engaged Schulte Roth & Zabel LLP as its legal
advisor and stated in the letter that it would engage a financial
advisor at the appropriate time. According to the letter, Axar
expects that any such discussions would be conducted with a special
committee of the Board, assisted by financial and legal advisors it
engages. The letter also stated that any transaction involving
Axar arising from such discussions would be conditioned upon, among
other things, approval of the special committee and the Board, the
negotiation and execution of mutually satisfactory definitive
agreements and customary terms. The letter also stated that any
transaction structured as a take-private transaction would be
subject to a closing condition that the approval of holders of a
majority of the outstanding shares not owned by Axar or its
affiliates be obtained.
On Sept. 26, 2021, the Board authorized its conflicts committee,
which is comprised of independent directors Stephen J. Negrotti,
Kevin Patrick and Patricia Wellenbach, to engage in the discussions
contemplated by the letter, including the authority to engage in
discussions concerning and to negotiate the terms and provisions of
any strategic alternative the conflicts committee determines to be
appropriate in connection with such discussions. Under its
charter, the conflicts committee has the authority to reject,
approve or recommend that the Board approve any transaction that is
a related party transaction, which would include any transaction to
which Axar is a party. The conflicts committee intends to retain
independent legal and financial advisors to assist in such
discussions.
The Board cautions StoneMor's stockholders and others considering
trading in the company's securities that the discussions
contemplated by the letter have not commenced, and there can be no
assurance that any transaction will result from such discussions.
The company does not undertake any obligation to provide any
updates with respect to these matters, except as required under
applicable law.
About StoneMor Inc.
StoneMor Inc. (http://www.stonemor.com),headquartered in Bensalem,
Pennsylvania, is an owner and operator of cemeteries and funeral
homes in the United States, with 304 cemeteries and 70 funeral
homes in 24 states and Puerto Rico. StoneMor's cemetery products
and services, which are sold on both a pre-need (before death) and
at-need (at death) basis, include: burial lots, lawn and mausoleum
crypts, burial vaults, caskets, memorials, and all services which
provide for the installation of this merchandise.
StoneMor reported a net loss of $8.36 million for the year ended
Dec. 31, 2020, compared to a net loss of $151.94 million for the
year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$1.71 billion in total assets, $1.84 billion in total liabilities,
and a total stockholders' deficit of $131.41 million.
SUMMIT FAMILY: South Park Creators Buy Casa Bonita for $3.1M
------------------------------------------------------------
Sam Tabachnik of The Denver Post reports that "South Park"
creators, Trey Parker and Matt Stone, have signed a deal to buy
Casa Bonita. Bankruptcy court filings show Matt Stone and Trey
Parker have moved to buy the restaurant for $3.1 million.
Casa Bonita will soon, officially, be in the "South Park" creators'
hands.
Six weeks after Trey Parker and Matt Stone publicly said they
planned on buying the legendary Colorado restaurant, filings in
federal bankruptcy court show the comedy duo have moved to
purchase Casa Bonita for $3.1 million.
Keith Pizzi, a representative with the comedy duo's company, Park
County, signed the purchase agreement in U.S Bankruptcy Court for
the District of Colorado accompanied by the name "The Beautiful
Opco, LLC." A search on the California Secretary of State's Office
shows that company shares the same address as Park County.
Westword first reported the purchase agreement Monday evening,
which still has to be signed off on by a federal bankruptcy judge.
The buzz around Casa Bonita's future has been palpable since Stone
and Parker in July told The Hollywood Reporter that they wanted to
buy the Lakewood staple.
"It's just sitting there. It sucks," Parker told The Hollywood
Reporter. "For a moment, when it was like Casa Bonita is going to
close down, we said, 'We're going to go buy it.' And I felt like it
was the crowning achievement of my life."
Then the pair last month told Colorado Gov. Jared Polis in an
interview that they would be buying the 47-year institution in a
matter of months.
Stone promised the governor that the food, which has never been
Casa Bonita’s calling card, would improve.
The restaurant has been closed since March 2020. Its owners, Summit
Family Restaurants, filed for Chapter 11 bankruptcy a year later.
With its doors shuttered, the restaurant had been losing around
$40,000 a month, according to court documents filed in April 2021.
Casa Bonita, which seats more than 1,000 people, takes up 52,000
square feet behind its pink palace facade, located in a West Colfax
Avenue shopping center.
The restaurant's current owners during the pandemic have come under
fire for their treatment of its workers, leading to one
discrimination lawsuit and multiple employees reporting unpaid
wages last 2020 following the restaurant's COVID-19 closure.
The restaurant's website since March has said it would be
"reopening soon." Guided tours resumed earlier in the summer as the
bankruptcy proceedings continued.
About Summit Family Restaurants
Scottsdale, Ariz.-based Summit Family Restaurants Inc. owns and
operates Denver restaurant Casa Bonita. The restaurant, which
opened in 1974, shut its doors in March 2020, at the beginning of
the COVID-19 pandemic.
Summit's parent, Star Buffet, Inc., owns and operates restaurants
in several western states, Oklahoma and Florida. It operates
restaurants under the HomeTown Buffet, JB's Restaurants,
BuddyFreddys, JJ North's Country Buffet, Holiday House, Casa
Bonita, and North's Star Buffet names. Star Buffet's restaurants
provide customers with a variety of fresh food at moderate prices.
Summit Family Restaurants filed a petition under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
21-02477) on April 6, 2021. The Debtor disclosed total assets of
$3.682 million and total liabilities of $4.425 million as of March
31, 2021.
On June 23, 2021, the Debtor's Chapter 11 proceeding was
transferred to the U.S. Bankruptcy Court for the District of
Colorado and was assigned a new case number (Case No. 21-13328).
Judge Brenda K. Martin oversees the case. Kutner Brinen Dickey
Riley, PC serves as the Debtor's legal counsel.
SUMMIT FINANCIAL: Gets Access to Cash Collateral Thru Oct 20
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Santa Ana Division, has authorized Summit Financial, Inc. to use
cash collateral, on an interim basis, pursuant to the budget
through October 20, 2021.
The Court says all secured creditors, solely to the extent of any
diminution in the value of the cash collateral, will receive
replacement liens in assets of the same kind, type, and nature as
the collateral in which the secured creditors held a lien that are
acquired after the petition date, and the proceeds thereof, to the
same extent, validity, and priority as any lien held by the secured
creditor in such Assets as of the petition date, though all rights
of the Debtor to challenge the extent, validity, and priority of
any asserted lien or liens are reserved.
The Debtor is directed to pay CalPrivate Bank its contractual
monthly payment, which is approximately $8,950.32 per month.
A final hearing on the matter is scheduled for October 20 at 1:30
p.m.
A copy of the motion is available for free at
https://bit.ly/3CXcI9L from PacerMonitor.com.
About Summit Financial, Inc.
Summit Financial, Inc., which operates six high-end luxury nail
salons in Southern California, sought Chapter 11 protection (Bankr.
C.D. Cal. Case No. 21-12276) on September 18, 2021. On the
Petition Date, the Debtor estimated $100,000 to $500,000 in assets
and $1,000,000 to $10,000,000 in liabilities. The petition was
signed by Hao Tang as chief executive officer.
The Honorable Scott C. Clarkson presides over the case.
Arent Fox LLP is the Debtor's counsel.
TANGO DELTA: Lowe & Warren Trustees Agree on Liquidating Plan
-------------------------------------------------------------
John Patrick Lowe, as the duly-appointed Chapter 7 Trustee for the
Bankruptcy Estate of Dickinson of San Antonio, Inc. d/b/a Career
Point College ("Lowe-Trustee"), and Jeffrey W. Warren, as the
duly-appointed Chapter 11 Trustee of Tango Delta Financial, Inc.
("Warren-Trustee"), filed a Mediated Joint Amended Plan of
Liquidation for Tango Delta Financial, Inc.
The Amended Plan amends the Plan of Liquidation for Tango Delta
Financial by the Lowe-Trustee to incorporate the terms of a
mediated settlement between Lowe-Trustee, Warren-Trustee, TRD and
the Duoos Parties. As part of the mediated settlement,
Warren-Trustee has agreed to withdraw his prior competing plan and
to be a Plan Proponent under this mediated joint Plan.
The Plan contemplates that TRD Consulting Services, LLC ("TRD")
will subordinate its liens against certain assets and release its
lien on certain other assets. In addition, the Lowe-Trustee will
subordinate the Allowed Unsecured Claims held by Dickinson of San
Antonio, Inc. d/b/a Career Point College ("CPC") to the Claims of
all Creditors holding General Unsecured Claims in an amount not to
exceed $100,000, except any Claims asserted by TRD and the Duoos
Parties. These voluntary subordinations of Claims will allow for
payment in full of Class 2 General Unsecured Claims from Available
Plan Cash and future recoveries by the Liquidating Trust.
Tango Delta's Estate will be liquidated through the creation of the
Liquidating Trust. John Patrick Lowe, or an individual appointed
by Lowe-Trustee, will be appointed as the Liquidating Trustee. The
assets to be transferred to the Liquidating Trust will include: (1)
Causes of Action, including the Warren-Duoos Adversary; (2) the
Student Loan Portfolio with a face value of approximately
$9,000,000 of which approximately $1,200,000 in loans are still
performing; (3) the claims Causes of Action against Aequitas
Capital Management, Inc., which is itself in receivership; and (4)
miscellaneous other assets of de minimis value. The Student Loan
Portfolio is managed by UAS, which has collected approximately
$850,000 post-petition and continues to receive approximately
$30,000 in loan proceeds per month. The servicing agreements with
UAS will be assumed by the Debtor and assigned to the Liquidating
Trust.
The terms of the Plan incorporate agreements reached in a
mediation, which was conducted by a retired bankruptcy judge over
an extended period of time. The Plan seeks approval of the
agreements reached at mediation and authorization to consummate
actions to implement the agreements reached at mediation.
Attorneys for John Patrick Lowe, as the duly-appointed Chapter 7
Trustee for the Bankruptcy Estate of Dickinson of San Antonio, Inc.
d/b/a Career Point College:
Scott A. Stichter
Florida Bar No. 0710679
STICHTER, RIEDEL, BLAIN & POSTLER, P.A.
110 E. Madison Street, Suite 200
Tampa, Florida 33602
Tel: (813) 229-0144
Fax: (813) 229-1811
E-mail: sstichter@srbp.com
- and -
Randall A. Pulman
PULMAN, CAPPUCCIO & PULLEN, LLP
2161 NW Military Highway, Suite 400
San Antonio, Texas 78213
www.pulmanlaw.com
Tel: (210) 222-9494
Fax: (210) 892-1610
E-mail: rpulman@pulmanlaw.com
Jeffrey W. Warren, as the duly-appointed Chapter 11 Trustee of
Tango Delta Financial, Inc.:
Adam L. Alpert, Esquire
Florida Bar No. 490857
BUSH ROSS, P.A.
1801 N. Highland Ave.
Tampa, FL 33602
Tel: (813) 204-6466
Fax: (813) 223-9620
Email aalpert@bushross.com
A copy of the Disclosure Statement dated September 22, 2021, is
available at https://bit.ly/3EPYd9i from PacerMonitor.com.
About Tango Delta Financial
Tango Delta Financial Inc., formerly doing business as American
Student Financial Group Inc. (ASFG), is a Sarasota, Fla.-based
company that buys student loans for investment purposes.
On May 11, 2020, Tango Delta sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-03672). Tango
Delta President Timothy R. Duoos signed the petition. At the time
of the filing, the Debtor disclosed assets of between $1 million
and $10 million and liabilities of the same range.
Judge Catherine Peek McEwen oversees the case.
The debtor is represented by Cole & Cole Law, P.A. Jeffrey W.
Warren was appointed as Debtor's Chapter 11 trustee. The trustee
is represented by Bush Ross, P.A.
TNT CRANE: Moody's Withdraws B3 CFR Following Debt Repayment
------------------------------------------------------------
Moody's Investors Service withdrew all of TNT Crane & Rigging LLC's
ratings, including its B3 Corporate Family Rating, B3-PD
Probability of Default Rating, B1 priority term loan rating and
Caa2 takeback term loan rating. The outlook was changed to rating
withdrawn from stable.
Withdrawals:
Issuer: TNT Crane & Rigging LLC
Probability of Default Rating, Withdrawn, previously rated B3-PD
Corporate Family Rating, Withdrawn, previously rated B3
Senior Secured 1st Lien Term Loan-Takeback, Withdrawn, previously
rated Caa2 (LGD5)
Senior Secured 1st Lien Term Loan-Priority, Withdrawn, previously
rated B1 (LGD2)
Outlook Actions:
Issuer: TNT Crane & Rigging LLC
Outlook, Changed to Rating Withdrawn From Stable
RATINGS RATIONALE
Moody's withdrew the ratings because TNT has fully repaid its
priority term loan and takeback term loan debt.
Headquartered in Houston, Texas, TNT provides lifting equipment
rental services for the energy sector and for commercial,
industrial, infrastructure and other end-markets in North America.
TOPBUILD CORP: S&P Rates New $500MM Senior Unsecured Notes 'BB+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '3'
recovery rating to Daytona Beach, Fla.-based insulation and
building material installer and distributor TopBuild Corp.'s
proposed $500 million senior unsecured notes due 2032. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 50%) recovery in the event of a payment default.
The company will use the proceeds from these notes, along with a
$300 million incremental term loan and cash off its balance sheet,
to pay for its $1 billion acquisition of specialty insulation
products distributor Distribution International Inc.
S&P said, "We view the transaction as neutral from a ratings
perspective. Although we expect pro forma leverage to increase
above 2x, we forecast it will improve back toward the 1.5x-2x range
by the end of 2022 due to a favorable operating environment, EBITDA
growth, and over $400 million of free operating cash flow
generation. Still, the transaction limits TopBuild's financial
flexibility at the 'BB+' rating level. We could lower our rating on
the company if we expected leverage would remain above 2x on a
sustained basis. This would most likely be due to additional large
debt-financed acquisitions or a significant fall in new housing
starts and TopBuild's backlog of work."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- TopBuild's pro forma debt capitalization will comprise a $500
million revolving credit facility, a $600 million senior secured
term loan (both unrated, and due 2026), $40 million of priority
claims related to vehicle and equipment notes due through 2024,
$400 million senior unsecured notes due 2029, and the new $500
million senior unsecured notes due 2032.
-- TopBuild Corp. is the issuer and borrower of the debt. The new
notes rank junior to the company's existing senior secured credit
facilities.
-- S&P's simulated default scenario contemplates a default
occurring in 2026 stemming from decreased demand due to a downturn
in the company's end markets (namely U.S. single- and multi-family
residential construction) and heightened competition.
-- S&P's assessment of its recovery prospects contemplates a
reorganization value for the proforma company of about $1.45
billion, which reflects emergence EBITDA of about $210 million and
a 5x multiple.
Simulated default assumptions
-- Simulated year of default: 2026
-- EBITDA at emergence: $210 million
-- Implied enterprise valuation multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): About
$1.37 billion
-- Priority claims and adjustments (vehicle and equipment notes):
$40 million
-- Total collateral value available for secured debt: $1.33
billion
-- Secured debt claims: About $835 million
-- Total collateral available for unsecured debt: $495 million
-- Unsecured debt claims: About $918 million
--Recovery expectations: 50%-70% (rounded estimate: 50%)
Note: All debt amounts include six months of prepetition interest.
TRAXIUM LLC: Schmutz Disputes Carpenter's Claim as Equity Holder
----------------------------------------------------------------
Traxium, LLC, Serendipity Holdings, LLC and Cadence Holdings, LLC,
(the "Debtors") submitted a Third Amended Joint and Consolidated
Disclosure Statement to accompany Plan of Reorganization.
There are 100 issued and outstanding membership units of Traxium,
LLC George Schmutz owns 99 of the Class A voting membership units
of Traxium, LLC while his wife, Tina Schmutz, owns the remaining 1
Class A voting membership unit. Upon information and belief, John
Carpenter alleges that he owns 13.725 of George Schmutz's Class A
membership units, an allegation that George Schmutz disputes. Were
that to be true, George Schmutz would own 85.275%, John Carpenter
would own 13.725% and Tina Schmutz would own 1% of the Class A
membership units of Traxium.
The Plan contemplates that George Schmutz and, Tina Schmutz will
remain as the sole Class A equity holders and John Carpenter will
remain as the sole Class B equity holder of the Reorganized
Debtors, subject to John Carpenter's claim to the 13.725 Class A
units. The Plan does not determine or affect John Carpenter's claim
to the 13.725 Class A units.
Substantive Consolidation
Serendipity owns the real property located at 4246 Hudson Drive,
Stow, Ohio where Traxium conducts its business operations under the
trade name Printing Concepts. This property has a market value of
$2,400,000 pursuant to the valuations of the Summit County Fiscal
Office. The property is encumbered by recorded mortgage loans in
the aggregate amount of $6,000,668.84. TCF Bank also holds a
blanket lien against all assets of Serendipity. Serendipity has no
unencumbered assets to liquidate and distribute to unsecured
creditors.
Cadence owns the real property located at 4005 Clark Avenue,
Cleveland, Ohio where Traxium conducts its business operations
under the trade name Great Lakes Integrated. This property has a
market value of $604,100 pursuant to the valuations of the Cuyahoga
County Treasurer. The property is encumbered by recorded mortgage
loans in the aggregate amount of $4,227,460.09. Cadence has no
unencumbered assets to liquidate and distribute to unsecured
creditors.
One unsecured claim was filed against Serendipity and one unsecured
claim was filed against Cadence. But for substantive consolidation
of the estates, neither unsecured creditor would otherwise receive
a distribution since neither Serendipity nor Cadence have any
unencumbered assets to distribute for the benefit of unsecured
creditors.
While Serendipity and Cadence own the real property, neither
company entity generates any independent income as part of the
business operations and rely solely upon Traxium for their
survival. Likewise, Traxium's ability to generate income is
dependent upon the real property and facilities provided by
Serendipity and Cadence.
Obligations incurred incident to the ownership of real property by
Serendipity and Cadence historically have been paid by Traxium and
the Debtors will continue to do so during the term of the Plan. It
is the income generated by Traxium, as the operating entity, that
will be used to finance the Creditor's Fund in order to pay allowed
claims in the consolidated bankruptcy estates a 100% dividend.
Accordingly, substantive consolidation is in the best interests of
the Debtors, their respective bankruptcy estates and their
creditors.
On September 16, 2021, a full 11 months after the filing of the
Chapter 11 Cases, CENPRAA filed an adversary proceeding against
George Schmutz, Tina Schmutz, John Carpenter and Stark & Knoll Co.,
L.P.A.2 While not named as a defendant in the adversary proceeding,
the Debtors believe that the adversary proceeding is without merit
and anticipate that it will be dismissed with prejudice. Moreover,
the Court, on September 21, 2021, approved two Motions for
Sanctions against CENPRAA and its counsel filed by the Debtors and
Stark & Knoll. The damages owed by CENPRAA and its counsel to the
Debtors and Stark & Knoll will be determined at a later date.
The Third Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Each holder of an Allowed Class 3 General Unsecured Claim
shall receive in full satisfaction of its Allowed Class 3 General
Unsecured Claim a Pro Rata portion of the Creditor Fund assets of
$3,300,000.00.
* The holder of Interests shall continue their equity
ownership under the Plan; provided that such holders of Interest
shall not receive any distributions from the Debtors or Reorganized
Debtors on account of such Interests until the Unsecured Creditor
Note is paid in full.
Traxium expects to have adequate capitalization and operations to
fund all obligations committed to under the Plan derived from cash
flow from operations and future income.
A full-text copy of the redlined version of Third Amended
Disclosure Statement dated September 27, 2021, is available at
https://bit.ly/3CRFsAv from PacerMonitor.com at no charge.
Debtors' Counsel:
Peter G. Tsarnas, #0076934
Gertz & Rosen, Ltd.
11 South Forge Street
Akron, OH 44304
Tel: (330) 255-0735
Fax: (330) 932-2367
E-mail: ptsarnas@gertzrosen.com
About Traxium LLC
Traxium, LLC is a holding company in Stow, Ohio, comprised of
commercial printing and marketing businesses. It provides a
complete platform of graphic design, marketing and printing
solutions, and services consisting of print, bindery, finishing
services, and mailing services to customers throughout the region
and across the country.
Traxium and its affiliate, Serendipity Holdings, LLC, filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ohio Case Nos. 20-51888 and 20-51889) on Oct. 16,
2020. On Oct. 20, 2021, another affiliate, Cadence Holdings LLC,
filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 20-51908).
The cases are jointly administered under Traxium LLC. The
petitions were signed by George Schmutz, chief executive officer.
On the petition date, Traxium reported $4,420,019 in total assets
and $5,665,021 in total liabilities while Serendipity Holdings
disclosed $2,435,809 in total assets and $9,870,438 in total
liabilities. Cadence Holdings estimated between $500,001 and
$1,000,000 in total assets and between $1,000,001 and $10,000,000
in total liabilities at the time of the filing.
Judge Alan M. Koschik oversees the cases.
Gertz & Rosen, Ltd., Stark & Knoll Co. L.P.A. and Rysenia Capital
Solutions, LLC serve as the Debtors' bankruptcy counsel, special
counsel and restructuring advisor, respectively. Dennis Durco of
Rysenia Capital is the Debtors' operations consultant and chief
restructuring officer.
TRINET GROUP: Moody's Ups CFR to Ba1 & Sr. Unsecured Notes to Ba2
-----------------------------------------------------------------
Moody's Investors Service upgraded TriNet Group, Inc.'s corporate
family rating to Ba1 from Ba2 and the company's probability of
default rating to Ba1-PD from Ba2-PD. Concurrently, Moody's
upgraded the rating on TriNet's senior unsecured notes to Ba2 from
Ba3 and maintained the speculative grade liquidity rating ("SGL")
at SGL-1. The upgrade was driven principally by ongoing improvement
in TriNet's operating performance trends as well as Moody's
expectation that the company will sustain a conservative financial
policy with respect to incremental debt financing of share
repurchases and acquisitions. The ratings outlook is stable.
Upgrades:
Issuer: TriNet Group, Inc.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2 (LGD4)
from Ba3 (LGD5)
Outlook Actions:
Issuer: TriNet Group, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The Ba1 CFR is supported by TriNet's consistently modest and pro
forma LTM debt leverage of 1.4x and relatively good business
visibility provided by a recurring sales model which contributed to
net service revenue growth of 14% in 2020. Additionally, the
company's healthy long term revenue growth prospects, coupled with
modest capital expenditures, support TriNet's healthy free cash
flow ("FCF") production (before worksite employee ("WSE") working
capital fluctuations) which should approximate 50% of total debt
(Moody's adjusted) over the next year. Historically modest debt
leverage and strong free cash flow generation are key supports to
Ba1 rating. While the company's business model demonstrated healthy
resiliency throughout the macroeconomic and social challenges
presented by the coronavirus outbreak, TriNet's ratings consider
the negative credit impact from exposure to economic cyclicality as
periods of high unemployment typically weigh on operating
performance trends due to prospective declines in the company's
base of worksite employees. Additionally, periods of volatility in
TriNet's insurance services segment, particularly in the event of
elevated medical insurance claims expenses, present uncertainty.
TriNet's credit profile is also negatively impacted by corporate
governance concerns, particularly with respect to highly
concentrated control of the company's stock by Atairos Group, Inc.
("Atairos") and the company's management as well as the potential
use of material debt financing to fund acquisitions or share
repurchases.
Moody's believes TriNet's liquidity will be very good over the next
year, as indicated by the SGL-1 rating. Liquidity is supported by
approximately $595 million of unrestricted cash and short term
investments on TriNet's balance sheet as of June 30, 2021, nearly
$500 million of revolver availability, and Moody's expectation of
FCF (before WSE working capital fluctuations) of approximately $300
million over the next year. Borrowings under the revolver are
subject to a financial covenant based on a maximum net leverage
ratio test of 4x. Moody's expects TriNet to remain comfortably in
compliance with this covenant over the next 12-18 months.
The stable outlook reflects Moody's expectation that TriNet's net
services sales will not increase meaningfully over the next 12
months driven by declining net insurance revenues that will likely
fall from elevated prior year levels. The negative impact of this
revenue decline on the company's profitability is expected to fuel
a more pronounced drop in EBITDA, resulting in only a moderate
reduction in debt to EBITDA (Moody's adjusted) to 1.3x during this
period.
The Ba2 rating for the senior unsecured bonds reflects TriNet's
Ba1-PD PDR and a loss given default ("LGD") assessment of LGD4. The
Ba2 rating is one notch below the CFR given the senior ranking and
priority in the collateral of TriNet USA's secured revolving credit
facility (unrated) in the capital structure relative to the
unsecured bonds.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings are unlikely to be upgraded given TriNet's small scale,
competitive positioning, and relative lack of revenue
diversification. However, the ratings could be upgraded if the
company meaningfully increases its scale, expands profit margins,
and diversifies its business profile. A ratings upgrade would also
require maintaining conservative credit metrics demonstrated by
debt to EBITDA below 2.0x and excellent liquidity which would
include a strong cash position. Finally, a ratings upgrade could be
considered if the company publicly articulates a detailed,
disciplined financial policy and transitions to a fully unsecured
capital debt structure.
The ratings could be downgraded if TriNet's revenues or profit
margins decline materially, evidencing a loss of market share or
increasing client attrition. The rating could also be downgraded if
TriNet undertakes debt financed acquisitions or engages in
shareholder-friendly actions which result in debt to EBITDA
(Moody's adjusted) to be sustained above 2.5x and FCF/debt of less
than 30%.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
TriNet is a Professional Employer Organization ("PEO") which
provides outsourced human resource functions, including payroll,
benefits acquisition, and regulatory compliance management to small
and mid-sized businesses. Moody's expects TriNet to generate net
service revenues (net of insurance costs) of nearly $1.1 billion in
2021.
UNITI GROUP: To Sell Bonds to Cut Debt, Windstream Burden
---------------------------------------------------------
Uniti Group Inc. (Nasdaq: UNIT) announced Sept. 28, 2021, that its
subsidiaries, Uniti Group LP, Uniti Fiber Holdings Inc., Uniti
Group Finance 2019 Inc. and CSL Capital, LLC (together, the
"Issuers"), have commenced an offering of $700 million aggregate
principal amount of senior notes due 2030 (the "New Notes").
The New Notes will be guaranteed on a senior unsecured basis by the
Company and by each of its subsidiaries (other than the Issuers)
that guarantees indebtedness under the Company's senior secured
credit facilities and the Company's existing notes (except
initially those subsidiaries that require regulatory approval prior
to guaranteeing the New Notes).
The Issuers intend to use the net proceeds from the offering of the
New Notes to fund the redemption (the "Redemption") in full of the
outstanding 7.125% senior notes due 2024 (the "2024 Senior Notes"),
including related premiums, fees and expenses in connection with
the foregoing. The Issuers will redeem the 2024 Senior Notes on
December 15, 2021 (the "Redemption Date") at a redemption price of
101.781% of the principal amount of 2024 Senior Notes being
redeemed plus accrued and unpaid interest, if any, to, but
excluding, the Redemption Date. The Issuers will use any remaining
net proceeds to prepay settlement obligations under the settlement
agreement Uniti entered into with Windstream Holdings, Inc.
(together with Windstream Holdings II, LLC, its successor in
interest, and its subsidiaries, "Windstream") in connection with
Windstream's emergence from bankruptcy.
The notice of redemption for the 2024 Senior Notes is conditioned
upon completion of one or more debt financings in an aggregate
principal amount of at least $700 million.
Uniti Group Inc. also announced Sept. 28, 2021, that its
subsidiaries, Uniti Group LP, Uniti Fiber Holdings Inc., Uniti
Group Finance 2019 Inc. and CSL Capital, LLC, have priced their
offering of $700 million aggregate principal amount of 6.000%
senior notes due 2030 (the "New Notes"). The New Notes will be
issued at an issue price of 100.000%. The New Notes will be
guaranteed on a senior unsecured basis by the Company and by each
of its subsidiaries (other than the Issuers) that guarantees
indebtedness under the Company's senior secured credit facilities
and the Company's existing notes (except initially those
subsidiaries that require regulatory approval prior to guaranteeing
the New Notes). The offering is expected to close on Oct. 13,
2021.
About Uniti
Headquartered in Little Rock, Arkansas, Uniti --
http://www.uniti.com/-- is an internally managed real estate
investment trust. It is engaged in the acquisition and
construction of mission critical communications infrastructure, and
is a provider of wireless infrastructure solutions for the
communications industry. As of June 30, 2021, Uniti owns
approximately 123,000 fiber route miles, 7.1 million fiber strand
miles, and other communications real estate throughout the United
States.
Uniti Group reported a net loss of $718.81 million for the year
ended Dec. 31, 2020, compared to net income of $10.91 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$4.75 billion in total assets, $6.88 billion in total liabilities,
and a total shareholders' deficit of $2.13 billion.
* * *
In March 2020, S&P Global Ratings placed all ratings on U.S.
telecom REIT Uniti Group Inc., including the 'CCC-' issuer credit
rating, on CreditWatch with positive implications. The CreditWatch
placement follows the company's announcement it reached an
agreement in principle with its largest tenant Windstream Holdings
Inc. to resolve all legal claims it asserted against Uniti in the
context of Windstream's bankruptcy proceedings.
UPLAND POINT: Ombudsman to File Report Every 6 Months
-----------------------------------------------------
Judge Catherine J. Furay of the U.S. Bankruptcy Court for the
Western District of Wisconsin, at the behest of the United States
Trustee, modified the appointment of the Patient Care Ombudsman
appointed for Upland Point Corporation.
The Court ruled that the Ombudsman must file written reports with
the Bankruptcy Court at intervals of 180 days, on the quality of
patient care provided to patients of the Debtor.
The remaining provisions of the prior order granting the
Ombudsman's appointment remain in force.
A copy of the order is available for free at https://bit.ly/3kRTAnh
from PacerMonitor.com.
About Upland Point Corporation
Upland Point Corporation, which operates six assisted living
facilities, sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wisc. Case No. 20-12186) on Aug. 21,
2020, estimating under $1 million in both assets and liabilities.
Judge Catherine J. Furay oversees the case. Michelle A. Angell,
Esq., at Krekeler Strother, S.C., is the Debtor's legal counsel.
USA GYMNASTICS: 6 Insurers Back $425M Settlement Plan
-----------------------------------------------------
USA Gymnastics submitted an Amended Plan of Reorganization and a
corresponding Disclosure Statement.
Following its bankruptcy filing, the Debtor has engaged the
Survivors' Committee, the Debtor's insurance carriers, athletes,
the United States Olympic & Paralympic Committee (the "USOPC"),
creditors, and other parties in interest in good faith and lengthy
negotiations over the terms of a plan of reorganization that will
compensate all persons holding allowed claims against the Debtor.
The Debtor's paramount focus has been on reaching an equitable
resolution of the Abuse Claims.
As a result of these efforts, the Debtor, the Survivors' Committee,
certain survivors, and certain of the Settling Insurers executed a
Plan Support Agreement, which sets forth the key terms of the Plan.
The Debtor and the Survivors' Committee believe the Plan is in the
best interests of, and provides the highest and most expeditious
recoveries to, all parties who hold Claims against the Debtor,
including holders of abuse claims. The Debtor and the Survivors'
Committee recommend that all classes of claims entitled to vote
accept the Plan.
The Plan provides two alternatives for Abuse Claims (and the USOPC
Claim and Indemnification Claims): (a) the Full or Partial
Settlement Alternative; or (b) the Litigation Only Alternative.
In broad overview, under the Full or Partial Settlement
Alternative: (a) if the CGL Insurers each accept the Survivors'
Committee's CGL Insurer Settlement Offer (which, in the aggregate,
is $425,000,000, the "Total Settlement Demand Amount") the Trust
will be created for the benefit of Abuse Claimants and Future
Claimants and will be funded by the Total Settlement Demand Amount
(less the Professional Fee Hold-Back) and the Twistars Payment; or
(b) if less than all CGL Insurers accept the Survivors' Committee's
CGL Insurer Settlement Offer, then the Survivors' Committee and the
Debtor may jointly elect the Partial Settlement Option and the
Trust will be created for the benefit of Abuse Claimants and Future
Claimants and will be funded by the payments by the Partial
Settlement Option Accepted Parties (less the Professional Fee
Hold-Back), the Twistars Payment, and the assignment of Insurance
Claims, and Abuse Claimants whose Claims are covered by a
Non-Settling Insurer's policy may elect to pursue litigation
against the Debtor and any other defendant subject to the terms of
the Plan.
Under the Litigation Only Alternative -- which will occur if the
CGL Insurers do not commit to fund the Total Settlement Demand
Amount and the Debtor and the Survivors' Committee do not jointly
elect to proceed with the Partial Settlement Option -- the Plan
permits all Holders of Abuse Claims filed or deemed to be filed by
the Bar Date to prosecute their Claims against the Reorganized
Debtor in name only in the courts where such Claims were pending
before the Petition Date or the courts in which such Claims could
have been brought, but for the automatic stay imposed by Section
362 of the Bankruptcy Code.
The Survivors’ Committee made the CGL Insurer Settlement Offer to
each of the below CGL Insurers in the aggregate amount of
$425,000,000:
CGL Settlement Offer
--------------------
Virginia Surety Company $XXXX
National Casualty Company $XXXX
TIG Insurance Company $106,201,818
CIGNA Insurance Company $XXXX
Nat'l Union Fire Insurance Co. of Pittsburgh $XXXX
Gemini Insurance Company $XXXX
Great American Assurance Company $41,287,985
Philadelphia Indemnity Insurance Company $XXXX
------------
$425,000,000
GL Insurers who have reached agreement on a number are shown as
XXXX.
As of Sept. 22, 2021, CIGNA Insurance Company (n/k/a ACE American
Insurance Company), National Union Fire Insurance Company of
Pittsburgh, P.A. (n/k/a AIG), National Casualty Company, Virginia
Surety Company (f/k/a Combined Specialty Insurance Company),
Philadelphia Indemnity Insurance Company, and Gemini Insurance
Company have committed to fund their respective CGL Insurer
Settlement Offers.
To be clear, a vote for the Plan is to accept the Plan, and is not
a vote for a particular alternative.
General unsecured claims classified as Class 4 General Unsecured
Convenience Claims will recover 100% under the Plan. Class 4 is
unimpaired.
Class 5 General Unsecured Claims will recover 80% over three years
to be paid from existing and future revenues in equal annual
installments, beginning on Aug. 15, 2022. In total, filed and
scheduled General Unsecured Claims assert liabilities of
approximately $1,841,188.
Counsel for the Debtor:
Catherine L. Steege
Dean N. Panos
Melissa M. Root
Adam T. Swingle
JENNER & BLOCK LLP
353 N. Clark Street
Chicago, Illinois 60654
Tel: (312) 222-9350
E-mail: csteege@jenner.com
dpanos@jenner.com
mroot@jenner.com
aswingle@jenner.com
A copy of the Disclosure Statement dated September 22, 2021, is
available at https://bit.ly/3kF0Qmy from PacerMonitor.com.
About USA Gymnastics
USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit
organization incorporated in Texas. Based in Indianapolis,
Indiana, USAG's organization encompasses six disciplines: women's
gymnastics, men's gymnastics, trampoline and tumbling, rhythmic
gymnastics, acrobatic gymnastics, and group gymnastics. USAG
provides educational opportunities for coaches and judges, as well
as gymnastics club owners and administrators, and sanctions
approximately 4,000 competitions and events throughout the United
States annually. More than 200,000 athletes, professionals, and
clubs are members of USAG. USAG sets the rules and policies that
govern the sport of gymnastics in the United States, including
selecting and training the United States gymnastics teams for the
Olympics and World Championships. As of the Petition Date, USAG
employs 53 individuals, nearly all of whom work for USAG
full-time.
USA Gymnastics sought Chapter 11 protection (Bankr. S.D. Ind. Case
No. 18-09108) on Dec. 5, 2018. USAG estimated $50 million to $100
million in assets and the same range of liabilities as of the
bankruptcy filing.
The Hon. Robyn L. Moberly is the case judge.
USAG tapped JENNER & BLOCK LLP as counsel; ALFERS GC CONSULTING,
LLC and SCRAMBLE SYSTEMS, LLC, as business consulting services
providers; and OMNI Management Group, Inc., as claims agent.
WADSWORTH ESTATES: Files Disclosures Reflecting Approved Changes
----------------------------------------------------------------
Wadsworth Estates, LLC filed with the U.S. Bankruptcy Court for the
Eastern District of Louisiana a Second Amended Chapter 11 Plan and
a Supplemental Amended Disclosure Statement reflecting the
immaterial modifications approved by the Court.
General Unsecured Creditors will share of what's left, on a pro
rata basis, of the $150,000 carved out from the allowed secured
claim of Joseph Young, after payment of administrative and
professional fee claims according to the Plan. However, it is
unlikely that the General Unsecured Creditors will receive a
substantial distribution. Mr. Young will also pay $200,000 cash,
upon Court approval, to First American Bank to settle the bank's
$597,000 Claim from the cash Mr. Young would otherwise be entitled.
The Debtor recognizes a valid debt to Mr. Young for $4,443,040,
plus interest, as a compromise settlement of his disputed claim.
This amount will be paid out of the remaining sale proceeds of the
Debtor's primary asset, after payment to other priority secured
creditors.
The allowed secured claims of First American Bank and Beverly
Construction Company LLC have already been paid in full, except for
certain attorney's fees.
The Debtor said its reorganization is not feasible. The company has
a negative cash flow and no regular income. The Plan contemplates
a plan of liquidation that will be implemented through the sale of
the primary asset, which sale occurred in June 2021. The net sales
proceeds is currently on deposit in the bankruptcy court registry,
pending Plan confirmation and subsequent distribution.
A copy of the Supplemental Amended Disclosure Statement is
available for free at https://bit.ly/3uveVq1 from PacerMonitor.com.
The Court will consider confirmation of the Plan on Thursday,
October 28, 2021 at 1:30 p.m.
About Wadsworth Estates
Wadsworth Estates is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)). Its only significant asset was a
92.5034-acre tract of land located in St. Tammany Parish that was
marketed under the name of Wadsworth Estates.
Wadsworth Estates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. La. 20-10540) on March 10, 2020. In
the petition signed Ashton J. Ryan, Jr., managing member, the
Debtor was estimated to have between $10 million to $50 million in
both assets and liabilities. William G. Cherbonnier, Jr., Esq. at
The Caluda Group, LLC, represents the Debtor.
WADSWORTH ESTATES: In-Person Hearing on Plan on Oct. 28
-------------------------------------------------------
Judge Meredith S. Grabill has entered an order approving the
Disclosure Statement of Wadsworth Estates, LLC.
The Plan is set for an in-person confirmation hearing on Thursday,
Oct. 28, 2021, at 1:30 p.m. before the undersigned Bankruptcy Judge
at the United States Bankruptcy Court for the Eastern District of
Louisiana, 500 Poydras Street, Courtroom B-709, New Orleans, LA
70130.
Thursday, Oct. 21, 2021, is fixed as the last day for filing
acceptances or rejections of the Plan.
Thursday, Oct. 21, 2021, is fixed as the last day for filing and
serving written objections to Confirmation of the Plan.
Not later than Monday, Oct. 4, 2021, an affidavit of mailing shall
be filed electronically by Debtor's counsel.
The Debtor's counsel is to tabulate the acceptances and/or
rejections of the Plan certify the tabulation of ballots and file
the tabulation of ballots into the record by Monday, Oct. 25, 2021.
Plan After $9M Sale
Wadsworth Estates, LLC, submitted a Second Supplemental and Amended
Chapter 11 Plan.
The Plan provides for the distribution of the sales proceeds of the
Debtor's only significant asset, the Wadsworth Tract, which was
sold on June 10, 2021, after a court approved auction resulting
ultimately in a purchase price of $9,000,000.
The net proceeds of the sale were deposited in the registry of the
court for distribution to Wadsworth's creditors pursuant to further
order of the court and the provisions of Debtor's confirmed plan.
First American Bank and Beverly Construction Company LLC sought and
subsequently obtained orders from the bankruptcy court authorizing
the payment and release of their contractual post-petition interest
and attorney's fees under 11 U.S.C. Sec. 506(b).
As of the date of this Disclosure Statement, the amount of Sales
Proceeds remaining on deposit with the Clerk of bankruptcy court
$1,561,091, exclusive of interest, calculated as follows:
Amount received from closing notary.....................$1,864,458
Amount withdrawn by First American Bank....................149,179
Amount withdrawn by Beverly Construction Company...........154,187
-----------
Balance on hand (excluding interest)....................$1,561,091
Additionally, counsel for the Debtor holds the sum of $13,103
deposited prepetition in his law firm's Clients Trust Account, and
Henderson Auction Company retains in trust the sum of $10,000 in
liquidated damages paid by an auction bidder who defaulted on his
obligations under the original auction bidding process.
The total amount that remains available for distribution according
to the terms of debtor's confirmed plan is therefore $1,584,194,
plus whatever interest is earned on the deposit by the clerk of
bankruptcy court.
Class 6 General Unsecured Non-Priority Claims will be paid pro-rata
out of funds remaining, if any, after the payment of Administrative
Claims and Professional Fee Claims approved by the bankruptcy court
after notice and hearing.
The Debtor's counsel:
William G. Cherbonnier, Jr.
The Caluda Group, LLC
PO Box 52017
New Orleans, LA 70152
Telephone 504-309-3304
Telecopier 504-309-3306
E-mail: wgc@billcherbonnier.com
Christopher A. Sisk
The Caluda Group, LLC
830 Union St, Ste 301
New Orleans, LA 70112
Telephone: 504-799-9987
Telecopier 504-500-3376
E-mail: chris@sisklawfirm.com
A copy of the Order dated September 22, 2021, is available at
https://bit.ly/3i3MJpb from PacerMonitor.com.
A copy of the Disclosure Statement dated September 22, 2021, is
available at https://bit.ly/3zxU0TW from PacerMonitor.com.
About Wadsworth Estates
Wadsworth Estates is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)). Its only significant asset was a
92.5034-acre tract of land located in St. Tammany Parish that was
marketed under the name of Wadsworth Estates.
Wadsworth Estates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. La. 20-10540) on March 10, 2020. In
the petition signed by Ashton J. Ryan, Jr., managing member, the
Debtor was estimated to have between $10 million to $50 million in
both assets and liabilities. William G. Cherbonnier, Jr., Esq. at
the CALUDA GROUP, LLC, represents the Debtor.
WOODBRIDGE HOSPITALITY: $17.5-Million Sale to Fund Plan
-------------------------------------------------------
Woodbridge Hospitality, L.L.C., submitted a Plan of Reorganization
and a Disclosure Statement on Sept. 22, 2021.
The Debtor intends to sell its hotel property in Scottsdale,
Arizona, to SRE, pursuant to the prepetition SRE PSA, for the
purchase price of $17.5 million. SRE intends to convert the
property to apartments.
If the sale to SRE does not close for any reason, then the Debtor
intends to sell the Property pursuant to a Court-supervised auction
after an appropriate Bid Solicitation Period. T
The Debtor intends to use the Sale Proceeds, and any remaining
Cash-on-Hand following the Sale, to pay all allowed claims, in full
and with interest, and to distribute any excess sale proceeds to
holders of allowed interests.
In the event that the Sale Proceeds are insufficient to pay all
allowed claims, in full and with interest, then a Litigation Agent
will be appointed to analyze and, if appropriate, pursue claims of
the Estate against third parties. Any Litigation Proceeds recovered
by the Litigation Agent will be distributed to Allowed Claims in
their order of priority.
Class 3 consists of all Allowed Unsecured Claims that are not
otherwise classified in the Plan. Unless they agree to an
alternative form of treatment, claimants holding Allowed Unsecured
Claims will be paid in full with post-petition interest at the Plan
Rate, on the Effective Date from the Sale Proceeds, after payments
to, and/or reserves for, the Claimants in Classes 2-A, 2-B and 2-C,
and after payment, in full with interest at the applicable
statutory rate, of Allowed Priority Claims in Class 1-B.
In the event that the sale proceeds are insufficient to pay the
full amount of the Allowed Secured Claims in Classes 2-A, 2-B and
2-C and the Allowed Priority Claims in Class 1-B, then Allowed
Unsecured Claims will be paid, pro rata, from any amounts remaining
from the Litigation Proceeds, if any, after Allowed Priority Claims
in Class 1-B are paid in full with interest at the applicable
statutory rate for such claims.
Class 3 is impaired.
Attorneys for the Debtor:
Randy Nussbaum (SBN 006417)
Philip R. Rudd (SBN 014026)
Sierra M. Minder (SBN 035795)
SACKS TIERNEY P.A.
4250 N. Drinkwater Blvd., 4th Floor
Scottsdale, AZ 85251-3693
Telephone: 480.425.2600
Facsimile: 480.970.4610
Randy.Nussbaum@SacksTierney.com
Philip.Rudd@SacksTierney.com
Sierra.Minder@SacksTierney.com
A copy of the Disclosure Statement dated September 22, 2021, is
available at https://bit.ly/2XJdUOL from PacerMonitor.com.
About Woodbridge Hospitality
Woodbridge Hospitality, LLC, owns the Suites on Scottsdale hotel
located at 9880 North Scottsdale Road in Scottsdale, Arizona.
Woodbridge Hospitality filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
21-04096) on May 26, 2021, disclosing $10 million to $50 million in
both assets and liabilities. Judge Paul Sala oversees the case.
Sacks Tierney P.A. and R&A CPAs serve as the Debtor's legal counsel
and accountant, respectively.
Canyon Community Bank, as lender, is represented by Michael
McGrath, Esq., at Mesch Clark Rothschild.
WRENCH GROUP: S&P Cuts ICR to 'B-' On Aggressive Financial Policy
-----------------------------------------------------------------
S&P Global Ratings lowered its ratings on U.S.-based Wrench Group
LLC to 'B-' from 'B', reflecting its expectation that the company's
financial policy has become more aggressive and that it is now
comfortable increasing leverage to the 8x area for the right
acquisitions, as compared to our previous expectation of under 7x.
S&P said, "At the same time, we lowered our issue-level rating on
the company's current first-lien term loan to 'B-' from 'B' in
conjunction with the issuer downgrade. The recovery rating is
unchanged at '3', and we revised the rounded estimate to 55% from
50% to reflect higher simulated default enterprise valuation after
incorporating its latest acquisitions. We base the ratings on
preliminary terms, and they are subject to review of final
documentation.
"The downgrade reflects our view that Wrench's financial policy has
become more aggressive and it will sustain leverage above 7x as it
continues to pursue acquisitions. Wrench made six acquisitions in
2020 and is on track for another four in 2021. The company has
almost doubled its size since 2019, when we assigned our initial
rating. In addition, the price of the acquisitions has increased
significantly compared to three years ago, with EBITDA purchase
multiples for similar size targets increasing by approximately 30%.
Wrench has also taken on larger targets with higher multiples. We
estimate the company will purchase Morris-Jenkins with a multiple
in the high-teens, compared to the smaller tuck-in acquisition
multiples of high-single digits. Residential HVAC and plumbing
service is a very fragmented industry with mostly regional and
mom-and-pop operators. Wrench Group was formed through the
combination of several regional players to form a national
platform. Since Wrench's inception in 2016, several
private-equity-backed platform companies have emerged, such as
Service Experts. Mergers and acquisitions remain a key growth
driver for the larger players in this industry. Given the
fragmented nature of the market, we believe the largest national
player by revenue, American Residential Services LLC, has less than
3% of overall share. The pace of acquisitions and prices of the
targets will continue to rise. As a result, Wrench's pro forma
leverage has now increased above 8x from about 6x two years ago.
"Wrench has a track record of integrating acquisitions. We expect
the company will continue to integrate its latest acquisitions.
Management has historically mitigated its integration risk by
keeping the local brand and leadership of most of its targets in
place. In addition, it has not typically relied on cutting costs to
achieve synergies. Wrench's annual restructuring and integration
costs have been modest, and its acquired businesses continue to
perform well. However, Morris-Jenkins is its largest acquisition,
thus we believe there is higher integration risk. We believe Wrench
may need to devote more resources to bring newly acquired companies
onto its platform and integrate them with its systems, which could
increase its costs and lower our expectations for EBITDA and cash
flow generation.
"Wrench is a good operator that provides nondiscretionary services.
The company's organic growth accelerated above 20% in 2021, from
the very healthy 15% area in 2020. We believe this is due to its
ability to take share from mom-and-pop competitors (which is about
80% of the industry), especially during the onset of the COVID-19
pandemic when smaller competitors could not equip workers with
adequate personal protective equipment or had insufficient
technician staffing. Longer term, we believe the pace of organic
growth will slow, but Wrench will continue to benefit at the
expense of smaller players. Modernizing the home services industry
has required technology, customer service, and digital marketing
infrastructure investments that are costly for smaller players. We
believe instead of tackling these initiatives alone, smaller
players will strategically align with larger players either through
a sale or partnership.
"In addition, Wrench's year-round maintenance service subscription
is a source of recurring income typically not available with
smaller competitors. We believe this business model offers
flexibility to allocate capacity among its technicians more
effectively and allows it to better manage cost and service. Labor
is the largest component of its operating costs. While we expect
inflationary pressures in the next 12 months, the business can
raise prices if needed due to the nondiscretionary nature of its
services.
"The stable outlook reflects our view that demand for
nondiscretionary residential HVAC and plumbing services will remain
healthy. Wrench will continue to expand and operate as an effective
consolidator in the industry and take share from smaller
competitors. We expect leverage will be about 8x for 2021 and above
7x as the company continues to make acquisitions. We forecast
Wrench will continue to generate positive free operating cash flow
(FOCF).
"We could lower our ratings if we determine Wrench's capital
structure becomes unsustainable, with leverage approaching the
double-digit area or interest coverage ratio weakening to the
mid-1x area." This could occur if:
-- The company exhibits further aggressive financial policies by
continuing to make debt-funded acquisitions at high multiples;
-- It has difficulties integrating its acquired companies; or
-- Its operations suffer from deteriorating service, resulting in
customer losses or the inability to maintain margins amid
inflationary cost increases.
While unlikely in the next 12 months, S&P could raise its ratings
if leverage is sustained below 7x. This could occur if:
-- Financial policy becomes less aggressive and the company
prioritizes debt repayment over acquisitions;
-- The private equity sponsors contribute additional equity to
support Wrench's acquisition strategy; or
-- The company meaningfully expands its scale, products, and
geographic diversification, which S&P believes is not likely unless
it undertakes transformative acquisitions.
YIELD10 BIOSCIENCE: Adds Forum Selection Provision to Bylaws
------------------------------------------------------------
The Board of Directors of Yield10 Bioscience, Inc. approved an
amendment to the Corporation's Amended and Restated Bylaws,
effective as of Sept. 28, 2021, to include a forum selection
provision for the adjudication of certain disputes.
The provision, as set forth in Article VI of the Bylaws, provides
that, unless the Corporation consents in writing to the selection
of an alternative forum, the federal district courts of the United
States shall, to the fullest extent permitted by applicable law, be
the sole and exclusive forum for the resolution of any complaint
asserting a cause of action arising under the Securities Act of
1933, as amended. The provision also sets forth additional claims
or causes of action that will be subject to the exclusive
jurisdiction of the Court of Chancery of the State of Delaware.
About Yield10
Yield10 Bioscience, Inc. -- http://www.yield10bio.com-- is an
agricultural bioscience company that uses its "Trait Factory" and
the Camelina oilseed "Fast Field Testing" system to develop high
value seed traits for the agriculture and food industries. Yield10
is headquartered in Woburn, MA and has an Oilseeds Center of
Excellence in Saskatoon, Canada.
Yield10 Bioscience reported a net loss of $10.21 million for the
year ended Dec. 31, 2020, compared to a net loss of $12.95 million
for the year ended Dec. 31, 2019. As of June 30, 2021, the Company
had $25.21 million in total assets, $4.75 million in total
liabilities, and $20.46 million in total stockholders' equity.
ZOHAR FUNDS: MBIA Renews $1 Bil. Ch.11 Suit vs. Tilton, Affiliates
------------------------------------------------------------------
Jeff Montgomery of Law360 reports that MBIA Insurance Corp. has
renewed a Delaware bankruptcy court suit seeking more than $1
billion from distressed debt mogul Lynn Tilton and 13 affiliated
businesses, alleging the systematic, multiyear looting of assets
and funds that triggered massive MBIA noteholder payouts and left
the insurer wrongfully blocked from recoveries.
The amended suit filed late Friday retained much of an earlier
complaint that U.S. Bankruptcy Judge Karen B. Owens largely
dismissed with leave to amend in late July 2021.
About the Zohar Funds
New York-based Patriarch Partners, LLC, is a private equity firm
specializing in acquisition, buyouts, and turnaround investment in
distressed American companies and brands. Patriarch Partners was
founded by Lynn Tilton in 2000. Lynn Tilton and her affiliates
held substantial equity stakes in portfolio companies, which
include iconic American manufacturing companies with tens of
thousands of employees.
The Zohar funds were created to raise money through selling a form
of notes called collateralized loan obligations to investors that
was then used to extend loans to dozens of distressed mid-size
companies, often in connection with the acquisition of those
companies out of bankruptcy.
Patriarch bought "distressed" companies via funding from a series
of collateralized loan obligations (CLOs) marketed through
Patriarch via its $2.5 billion "Zohar" funds. Tilton placed the
funds into bankruptcy in 2018 in an attempt to keep Patriarch's
portfolio from being liquidated by Zohar creditors including bond
insurer MBIA, which insured $1 billion worth of Zohar notes.
Combined debt of the funds is estimated at $1.7 billion.
Zohar CDO 2003-1, Zohar CDO 2003-1 Corp., Zohar II 2005-1, Limited,
Zohar II 2005-1 Corp., Zohar III, Limited, and Zohar III, Corp.
(collectively, the "Zohar Funds"), sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 18-10512 to
18-10517) on March 11, 2018. In the petition signed by Lynn
Tilton, director, the Debtors were estimated to have $1 billion to
$10 billion in assets and $500 million to $1 billion in
liabilities.
Young Conaway Stargatt & Taylor, LLP, is the Debtors' bankruptcy
counsel.
ZOHAR FUNDS: Tilton-Led MD Helicopter Faces $36.2Mil. Fraud Verdict
-------------------------------------------------------------------
Jeff Montgomery, writing for Law360, reports that the efforts to
sell a helicopter company long seen as a high-value holding of
distressed debt investor Lynn Tilton's Patriarch Partners have hit
serious turbulence in the form of a $36. 2 million federal
whistleblower suit award and potential treble damages against the
company, MD Helicopters Inc.
Jurors in the U.S. District Court for the Northern District of
Alabama found the company guilty of fraud Friday, September 24,
2021, in connection with U.S. Army-brokered MDHI sales to forces in
El Salvador, Costa Rica and Saudi Arabia.
About the Zohar Funds
New York-based Patriarch Partners, LLC, is a private equity firm
specializing in acquisition, buyouts, and turnaround investment in
distressed American companies and brands. Patriarch Partners was
founded by Lynn Tilton in 2000. Lynn Tilton and her affiliates
held substantial equity stakes in portfolio companies, which
include iconic American manufacturing companies with tens of
thousands of employees.
The Zohar funds were created to raise money through selling a form
of notes called collateralized loan obligations to investors that
was then used to extend loans to dozens of distressed mid-size
companies, often in connection with the acquisition of those
companies out of bankruptcy.
Patriarch bought "distressed" companies via funding from a series
of collateralized loan obligations (CLOs) marketed through
Patriarch via its $2.5 billion "Zohar" funds. Tilton placed the
funds into bankruptcy in 2018 in an attempt to keep Patriarch's
portfolio from being liquidated by Zohar creditors including bond
insurer MBIA, which insured $1 billion worth of Zohar notes.
Combined debt of the funds is estimated at $1.7 billion.
Zohar CDO 2003-1, Zohar CDO 2003-1 Corp., Zohar II 2005-1, Limited,
Zohar II 2005-1 Corp., Zohar III, Limited, and Zohar III, Corp.
(collectively, the "Zohar Funds"), sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 18-10512 to
18-10517) on March 11, 2018. In the petition signed by Lynn Tilton,
director, the Debtors were estimated to have $1 billion to $10
billion in assets and $500 million to $1 billion in liabilities.
Young Conaway Stargatt & Taylor, LLP, is the Debtors' bankruptcy
counsel.
[*] Dallas Court Seeks to Attract Large, Complex Cases
------------------------------------------------------
Maria Halkias, writing for The Dallas Morning News, reports that
the U.S. Bankruptcy Court for the Northern District of Texas in
Dallas wants to update its policies to attract big, complex,
high-dollar bankruptcy cases.
The Northern District bankruptcy judges appointed more than 20
restructuring lawyers from Dallas-Fort Worth and elsewhere to a
committee that will evaluate and recommend changes to the complex
case rules.
Large companies can usually file for bankruptcy in any court they
choose. Making a court more attractive with updated procedures and
rules could attract big cases and may encourage distressed local
companies to file in their hometown where judges are familiar with
their businesses. Filing closer to home also saves on travel
costs.
The rule revisions are expected to be presented to the Northern
District's five bankruptcy court judges by the end of 2021, said
Ian Peck, a committee member and an attorney in the Dallas office
of Haynes and Boone.
"The goal of the committee is to ensure that the Northern District
of Texas remains on the cutting edge of addressing issues in the
largest and most complex Chapter 11 cases," he said.
While courtrooms are starting to open back up, most courts are
allowing certain matters to continue virtually, and that's just one
of the more visible changes the committee is considering.
[*] New York Bankruptcy Judge Robert Drain to Retire
----------------------------------------------------
New York Bankruptcy Judge Robert D. Drain has declared his
intention to retire on June 30, 2022, according to the a Sept. 28,
2021 announcement by the U.S. Bankruptcy Court for the Southern
District of New York.
Judge Drain joined the Southern District bench in 2002. During his
tenure, he has presided over such chapter 11 cases as Loral, RCN,
Cornerstone, Refco, Allegiance Telecom, Delphi, Coudert Brothers,
Frontier Airlines, Star Tribune, Reader's Digest, A&P, Hostess
Brands, Christian Brothers, Momentive, Cenveo, 21st Century
Oncology, Tops, G A&T, Sears, Standard Amusements (Playland), Full
Beauty Brands, Sungard, Windstream, Purdue Pharma, Jason
Industries, OneWeb, and Frontier Communications.
He has served as the court-appointed mediator in a number of
chapter 11 cases, including New Page, Cengage, Quicksilver,
LightSquared, Molycorp and Breitburn Energy. Judge Drain is a
fellow of the American College of Bankruptcy, a member and board
member of the American Bankruptcy Institute, a member of the
International Insolvency Institute, a member and former Secretary
of the National Conference of Bankruptcy Judges and a founding
member and chair of the Judicial Insolvency Network. He is the
current chair of the Bankruptcy Judges Advisory Group established
through the Administrative Office of the U.S. Courts and was
appointed to the FDIC's Systemic Resolution Advisory Committee
through May 1, 2021. He was an adjunct professor for several years
at St. John's University School of Law's LLM in Bankruptcy Program
and currently is an adjunct professor at Pace University School of
Law and has lectured and written on numerous bankruptcy-related
topics.
Until his retirement date, Judge Drain plans to stay active with
cases. Judge Drain's judicial vacancy will be filled by the
Second Circuit.
[*] SBA Loans Saved Firms Before Covid -- Now They Could Ruin Them
------------------------------------------------------------------
David Hood, Isabelle Sarraf and Jasmine Ye Han of Bloomberg Law
report that pre-pandemic SBA 7(a) loans may impair small
businesses, as a wave of defaults and bankruptcies looms.
As the owner of Bane, the biggest haunted-house attraction in New
York City, Jennifer Condron knows her way around scary situations.
Except what to do about her bank loan. Condron's BulletProof
Productions LLC got a $350,000 loan backed by the U.S. Small
Business Administration in 2019, before the Covid-19 pandemic shut
down entertainment venues and dried up their revenue. Under the
extraordinary circumstances, the agency issued guidance in early
March 2020 that encouraged lenders participating in its 7(a)
program to allow deferred payments for six months and beyond.
But the latest extension of that policy, one of the last remaining
forms of pandemic relief for businesses, expires at the end of
September. Borrowers without the means to pay back the loans
because of the pandemic, such as those that relied on foot traffic
from people working in offices, will have few options to stop
lenders from demanding payments, small-business attorneys say.
Condron's bank has already tried taking her to court, which in turn
caused her to be rejected by a federal pandemic-relief fund for
shuttered entertainment venues. She already exhausted both a
Paycheck Protection Program (PPP) loan and a Economic Injury
Disaster Loan (EIDL). Now, her hopes hinge on winning an appeal
for the entertainment venue grant before she has to declare
bankruptcy.
More defaults and bankruptcies are likely unless the agency -- or
Congress—steps in.
"I paid every single bill, every single monthly statement, on
time," Condron said of her financial situation before the pandemic.
"It's not like I don't pay my bills, I've always had stellar
business and personal credit. Now, I have no credit."
Lifeline
The SBA'7(a) program provides government-guaranteed loans for small
businesses that otherwise can't get loans from banks because of
thin credit files or other risk factors.
Before the pandemic, it was the agency's most-popular program.
Since fiscal year 2008, it has approved about 730,000 loans worth
more than $270 billion. Typically, an owner will put up valuable
personal assets as collateral in the form of vehicles or real
estate—or in the case of a haunted house, lighting, cameras, and
sound equipment.
A lender will then approve the loan, set repayment terms, and
disburse the money.
The program, which has a maximum lending amount of $5 million, is
popular because it is the last channel of major financing for many
small businesses before predatory lenders. For Condron, the option
was attractive as she sought to build on the more than $1 million
in annual revenue her business generated before she received the
loan.
But when a borrower can't pay back the loan, the lender has to sue
in order to trigger the government guarantee, which is up to 75%
for loans larger than $150,000. That often means seizing business
and personal assets the borrower put up as collateral.
Throughout the pandemic, the agency has been paying lenders
principal, interest, and any associated fees on the loans that
borrowers owe so they wouldn’t take too much of a hit from missed
payments.
The deferment policy, as well as other relief programs offered
through the SBA like the PPP, EIDL, Shuttered Venues Operators
Grant, and Restaurant Revitalization Fund, has staved off a wave of
defaults.
All programs but EIDL have expired, and without an updated policy
in place, "we are going to see some lenders moving to enforce these
loans that are delinquent," said Davis Senseman, attorney and
founder of Minnesota-based small business advocacy law firm Davis
Law Office said.
"I hope that the government can realize this, before we get to a
point like we saw in 2008, 2009 where you just have these really
high rates of delinquency, and you have these really high rates of
loans getting called," Senseman said. "It's hard to see where any
of that would be good for the economy as a whole—for the country
as a whole."
Jason Milleisen, owner and operator of Distressed Loan Advisors,
who consults for small businesses with defaulted SBA loans, said
delinquencies and defaults will likely come in November or
December.
The government is "not making special concessions due to Covid," he
said. "They're still looking at it the way that they always have,
which is: The amount of the settlement should be directly related
to the financial wherewithal of the individual guarantors,
regardless of why they closed."
Chargeoffs Rising
The SBA, in a statement to Bloomberg Tax, said it doesn't foresee
any wave of defaults. It said "there are currently no specific
changes charted" for its deferment policy for its regular business
loan programs.
"Although defaults over the last 12 months have been historically
low due to the CARES 1112 payments and other government aid, at
this time we see no indication of an upcoming decline in the
portfolio's performance," the agency said.
But the agency's visibility into these loans is minimal, said Ethan
Smith, co-founder and managing partner of SBA-focused law firm
Starfield & Smith, which represents some of the biggest SBA
lenders.
While lenders are required to update the SBA on the status of each
loan every month, it is on the most basic of terms. The agency
doesn't know if a loan is in trouble until an advanced stage.
Charge-offs, a term bankers use to signify loans that are unlikely
to be paid back, peaked for 7(a) loans in 2010. In the first three
quarters of fiscal 2021, lenders charged off about 2,100 loans,
compared with almost 2,700 loans during the same period of fiscal
2020, agency data shows. Defaults usually follow charge-offs, and
while it is currently on a downward trend, it takes time to kick up
again.
Tony Wilkinson, president and CEO of a Texas-based trade group that
represents government-guaranteed lending institutions, said it is
too early to tell whether defaults on 7(a) loans will spike like
they did in the wake of the 2008 financial crisis.
Few Options
To avoid mass defaults, the agency could coordinate with Congress
to codify, clarify, and close any loopholes—like encouragement to
extend deferred payments beyond the expiration date—for lenders
to sue in the SBA's deferment policy, said Didier Trinh, director
of policy and political impact at Main Street Alliance, a
small-business advocacy group.
"While obviously, programs were were stood up quickly in an
emergency emergency situation during COVID, it's absolutely
critical that that the language be written with the correct
legislative intent, so that SBA can implement the law the way it
was intended," he said, referring to the deferred payment policy
written into the March 2020 relief law.
Because real estate prices are so high right now, business owners
that put up homes as collateral may be able to take equity out of
their homes to pay off some loans, Milleisen said, noting the
difference in real estate prices from the 2008 crisis to the
pandemic. On the flip side, banks may not be willing to negotiate
better settlements if that is an available option, he said.
Lenders also may be willing to extend the loan terms, or
temporarily accept interest-only payments, but when a bank begins
negotiations, it is only delaying the inevitable.
"A borrower who's in distress is likely to default on this
restructuring just as easily as they defaulted the first time
around, and they just don't have the resources to be basically
re-underwriting these loans," Milleisen said.
Declaring bankruptcy could be a way for some businesses to retain
assets, but proceedings could drag on for years.
Condron's lender, Florida-based First Home Bank, eventually dropped
its suit "in the regular course of business," according to a bank
spokesperson.
But Condron is still seriously considering bankruptcy if her last
option, the shuttered venues grant, falls through. Her initial
application was denied, but she appealed when the bank dropped its
suit—negating why she was disqualified from the beginning.
Condron isn't opening this Halloween season. At best, she said, it
might make Christmas if the grant comes through. For now, she is
moving out five floors full of stuff accumulated over a decade to
set up somewhere else.
"I just don't want to file for bankruptcy," Condron said. "I've
been doing this for 11 years, I can’t just give up my life like
that."
[*] Supreme Court Urged to Review Equitable Mootness in Plan Appeal
-------------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that creditors who feel they got
a raw deal in corporate bankruptcies are asking the U.S. Supreme
Court to scrap a legal doctrine that judges increasingly are using
to block appeals from court-approved Chapter 11 plans.
Federal courts often cite the doctrine of "equitable mootness" to
deny appeals from creditors, the U.S. Trustee, or other parties to
review bankruptcy plans that have been approved. The judge-made
doctrine dictates that once a company starts using the approved
plan to restructure and make payments, undoing that process would
be both difficult and unfair to both the debtor and other
creditors.
Once a plan is approved, "your odds of obtaining review are next to
nothing," said bankruptcy attorney Norman Kinel of Squire Patton
Boggs LLP. "That's not an accident. That's clearly by design."
Critics of the doctrine say that courts are relying too heavily on
it. Corporate debtors are rushing to put their approved
reorganization plans into motion to stop dissenters' appeal. The
result is that creditors lose any means of overturning a
potentially unlawful bankruptcy plan that they believe unfairly
leaves them out in the cold.
"It's not clear that the doctrine should exist at all," said
Melissa Jacoby, a bankruptcy law professor at the University of
North Carolina at Chapel Hill. "If anything, bankruptcy needs more
appellate review, not less."
Pending Petitions
Investor David Hargreaves is one of a handful of petitioners whose
challenges to equitable mootness are before the Supreme Court,
awaiting a decision on whether the justices will weigh in.
A creditor of Nuverra Environmental Solutions Inc., Hargreaves was
slated to recover roughly 5% on the $450,000 worth of unsecured
notes he held. He appealed the oilfield servicer's plan approval,
arguing that the plan unfairly discriminated against him and other
noteholders because it paid another group of unsecured creditors in
full.
His claims should've been treated the same as theirs, Hargreaves
argued.
But Hargreaves lost his appeal when the district court applied the
equitable mootness doctrine. The court reasoned that undoing the
plan would be unfair because the company had already issued and
distributed securities in the reorganized business.
Urging the Supreme Court to hear Hargreaves' case, Jacoby and 20
other bankruptcy law professors said in a filing last month that
the justices should "rein in the lower courts' abdication of their
jurisdictional obligations" and "level the playing field in
bankruptcy cases."
National Attention
Purdue Pharma LP's bankruptcy case could be the tipping point if
the Supreme Court passes on the other petitions.
The Justice Department's bankruptcy watchdog and a few state
attorneys general have appealed controversial aspects of the opioid
maker's Chapter 11 plan, including provisions releasing the Sackler
family from all future opioid-related litigation.
The DOJ's U.S. Trustee's Office has asked the bankruptcy court to
block the plan from taking immediate effect while the appeal is
pending. If the bankruptcy court denies that request and Purdue
starts implementing the plan, the company later could argue that
equitable mootness blocks the appeal.
The U.S. Trustee said it doesn't believe equitable mootness would
apply to Purdue's case. Nevertheless, allowing the company's plan
to go into effect while the confirmation is being appealed means
"public confidence in the bankruptcy system may be irredeemably
shaken," the agency said.
Purdue's case already has federal lawmakers expressing concerns
about alleged abuses of the corporate bankruptcy system, including
equitable mootness.
During a House Judiciary Committee hearing in July 2021, Chairman
Jerrold Nadler (D-N.Y.) expressed dismay that the Sackler family
could use the bankruptcy process to escape liability for its role
in the opioid crisis "despite the objections of many of their
victims."
Georgetown Law professor Adam Levitin told the committee that
"there's unlikely to be any appellate review because of the
equitable mootness doctrine."
Growing Frequency
Equitable mootness has existed for decades, becoming a fixture
shortly after modern bankruptcy rules were created in 1978.
Over time, federal appellate courts have established largely
similar sets of selective criteria for when the doctrine can be
invoked. The U.S. Court of Appeals for the Eighth Circuit has said
equitable mootness should be used "only in extremely rare
circumstances," while other circuits—like the Third and
Fifth—have said it should be wielded like a "scalpel."
But bankruptcy lawyers say it's on the rise.
"You're in an uphill battle" to appeal a bankruptcy plan if money
already has changed hands, Mayer Brown LLP bankruptcy attorney
Aaron Gavant said. "Once the egg is scrambled they’re just less
likely, it seems, to want to put things back together."
Dissenting from the Third Circuit's majority opinion in Hargreaves'
case, Judge Cheryl Ann Krause said the "narrow" doctrine is
intended to be used more like "a scalpel . . . than an axe."
But now "it is wielded with anything but surgical precision," she
said.
The issue already has some resonance with Justice Samuel Alito, who
railed against equitable mootness while serving on the Third
Circuit. The doctrine "can easily be used as a weapon" and "places
far too much power in the hands of bankruptcy judges," he wrote in
a 2001 decision.
In addition to Hargreaves' appeal of the Nuverra plan confirmation,
the Supreme Court has an opportunity to take up at least two other
petitions challenging equitable mootness.
One was filed by a group of investors holding Puerto Rican
municipal bonds that were restructured as part of the island's
bankruptcy proceedings. The other involves a Windstream Holdings
Inc. vendor challenging its exclusion from receiving payments
during the broadband provider's Chapter 11 case.
Some appellate court judges have expressed dismay over what they
say is an expansion of the doctrine, suggesting that the time could
be ripe for the Supreme Court to step in.
An Eighth Circuit panel in August ruled that a lower court
stretched the doctrine too far. If equitable mootness becomes the
rule rather than the exception, "we predict the Supreme Court,
having up to now denied petitions for certiorari to review the
doctrine, will step in and severely curtail—perhaps even
abolish—its use," the appeals court said.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Ronly Alcoriza and Susan E. Alcoriza
Bankr. E.D. Cal. Case No. 21-23314
Chapter 11 Petition filed September 22, 2021
represented by: Stephen M. Reynolds, Esq.
In re Pitt Stop Services, LLC
Bankr. D.N.J. Case No. 21-17434
Chapter 11 Petition filed September 22, 2021
See
https://www.pacermonitor.com/view/DJYC6OA/Pitt_Stop_Services_LLC__njbke-21-17434__0001.0.pdf?mcid=tGE4TAMA
represented by: David A. Kasen, Esq.
KASEN & KASEN, P.C.
E-mail: dkasen@kasenlaw.com
In re Vyachelsav Suleymanov and Marina Suleymanov
Bankr. E.D.N.Y. Case No. 21-42386
Chapter 11 Petition filed September 22, 2021
represented by: Alla Kachan, Esq.
In re Sherman S. Joseph and DeNey S. Joseph
Bankr. E.D.N.C. Case No. 21-02123
Chapter 11 Petition filed September 22, 2021
represented by: Trawick Stubbs, Esq.
STUBBS & PERDUE, P.A.
In re Highland Property, LLC
Bankr. W.D. Pa. Case No. 21-22083
Chapter 11 Petition filed September 22, 2021
See
https://www.pacermonitor.com/view/Y4FHBYI/Highland_Property_LLC__pawbke-21-22083__0001.0.pdf?mcid=tGE4TAMA
represented by: Dennis Spyra, Esq.
DENNIS J. SPYRA & ASSOCIATES
E-mail: attorneyspyra@dennisspyra.com
In re JR Buys Houses, LLC
Bankr. N.D. Cal. Case No. 21-41193
Chapter 11 Petition filed September 23, 2021
See
https://www.pacermonitor.com/view/UDO24FQ/JR_Buys_Houses_LLC__canbke-21-41193__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Brian W. Mead
Bankr. D.N.J. Case No. 3:21-bk-17470
Chapter 11 Petition filed September 23, 2021
represented by: David L. Stevens, Esq.
In re Ryan Nicholas Weiss
Bankr. N.D. Tex. Case No. 21-31701
Chapter 11 Petition filed September 23, 2021
represented by: Areya Holder, Esq.
HOLDER LAW
In re Princeton-Windsor Pediatrics, P.A.
Bankr. D.N.J. Case No. 21-17501
Chapter 11 Petition filed September 24, 2021
See
https://www.pacermonitor.com/view/3H2OR3A/Princeton-Windsor_Pediatrics_PA__njbke-21-17501__0001.0.pdf?mcid=tGE4TAMA
represented by: Brian G. Hannon, Esq.
NORGAARD, O'BOYLE & HANNON
E-mail: bhannon@norgaardfirm.com
In re Spring Valley NY Realty LLC
Bankr. S.D.N.Y. Case No. 21-22541
Chapter 11 Petition filed September 24, 2021
See
https://www.pacermonitor.com/view/RX3HCWA/Spring_Valley_NY_Realty_LLC__nysbke-21-22541__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Sylvester Brown
Bankr. C.D. Cal. Case No. 21-12321
Chapter 11 Petition filed September 24, 2021
represented by: Tina Shimizu, Esq.
In re AB Robinson Trucking Inc.
Bankr. N.D. Ill. Case No. 21-11021
Chapter 11 Petition filed September 24, 2021
See
https://www.pacermonitor.com/view/HASZTGA/AB_Robinson_Trucking_Inc__ilnbke-21-11021__0001.0.pdf?mcid=tGE4TAMA
represented by: Karen Porter, Esq.
PORTER LAW NETWORK
E-mail: porterlawnetwork@gmail.com
In re Peter Gordon
Bankr. E.D.N.Y. Case No. 21-42402
Chapter 11 Petition filed September 24, 2021
represented by: Lawrence Morrison, Esq.
In re Remond Remodeling Co., Inc.
Bankr. M.D. Pa. Case No. 21-02101
Chapter 11 Petition filed September 24, 2021
See
https://www.pacermonitor.com/view/CTLOKFY/Remond_Remodeling_Co_Inc__pambke-21-02101__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re James Daniel Wilson, Jr.
Bankr. S.D. Tex. Case No. 21-33129
Chapter 11 Petition filed September 24, 2021
represented by: Reese Baker, Esq.
In re LJA Ventures, Inc.
Bankr. W.D. Tex. Case No. 21-10734
Chapter 11 Petition filed September 24, 2021
See
https://www.pacermonitor.com/view/HANOTMI/LJA_Ventures_Inc__txwbke-21-10734__0001.0.pdf?mcid=tGE4TAMA
represented by: Darwin McKee, Esq.
DARWIN MCKEE, ATTORNEY AT LAW
E-mail: darwinmckee@yahoo.com
In re Business Credit Solutions of Ohio, LLC
Bankr. N.D. Ohio Case No. 21-61251
Chapter 11 Petition filed September 26, 2021
See
https://www.pacermonitor.com/view/F2K7CFY/Business_Credit_Solutions_of_Ohio__ohnbke-21-61251__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven J. Heimberger, Esq.
RODERICK LINTON BELFANCE LLP
E-mail: sheimberger@rlbllp.com
In re Freedom Oweikeme Ebikake
Bankr. M.D. Ala. Case No. 21-10839
Chapter 11 Petition filed September 27, 2021
represented by: Anthony Bush, Esq.
In re Yim Pooi Wong and Lai Hung Wong
Bankr. C.D. Cal. Case No. 21-17515
Chapter 11 Petition filed September 27, 2021
represented by: James Bastian, Esq.
In re Kurtis James Vandermolen
Bankr. M.D. Fla. Case No. 21-04917
Chapter 11 Petition filed September 27, 2021
In re Kristin L. Miller, Esq.
Bankr. D. Nev. Case No. 21-50684
Chapter 11 Petition filed September 27, 2021
represented by: Kevin A. Darby, Esq.
In re Ralph Costagliola
Bankr. E.D.N.Y. Case No. 21-42417
Chapter 11 Petition filed September 27, 2021
represented by: Paul Hollender, Esq.
In re Roscoe Guitars, Inc.
Bankr. M.D.N.C. Case No. 21-10520
Chapter 11 Petition filed September 27, 2021
See
https://www.pacermonitor.com/view/YHAGNHI/Roscoe_Guitars_Inc__ncmbke-21-10520__0001.0.pdf?mcid=tGE4TAMA
represented by: Dirk W. Siegmund, Esq.
IVEY, MCCLELLAN, SIEGMUND, BRUMBAUGH &
MCDONOUGH, LLP
In re Anthony Hayes Mitchell
Bankr. S.D. Tex. Case No. 21-33139
Chapter 11 Petition filed September 27, 2021
represented by: Arnow Shoshana, Esq.
In re Nathan Clay Grubb
Bankr. E.D. Va. Case No. 21-32913
Chapter 11 Petition filed September 27, 2021
represented by: Daniel Press, Esq.
CHUNG & PRESS, P.C.
Email: dpress@chung-press.com
In re Leon Kohn
Bankr. S.D. Fla. Case No. 21-19334
Chapter 11 Petition filed September 28, 2021
represented by: Chad P. Pugatch, Esq.
LORIUM LAW
In re Jaime Cuevas Dermody
Bankr. S.D. Fla. Case No. 21-19374
Chapter 11 Petition filed September 28, 2021
represented by: Jeffrey Bast, Esq.
BAST AMRON LLP
Email: jbast@bastamron.com
*********
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
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*********
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