/raid1/www/Hosts/bankrupt/TCR_Public/211112.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, November 12, 2021, Vol. 25, No. 315
Headlines
139-58TH ST: Case Summary & 8 Unsecured Creditors
ABARTA OIL: Seeks to Employ Copper Run Capital as Investment Banker
ABARTA OIL: Seeks to Hire Campbell & Levine as Legal Counsel
ABARTA OIL: Taps MorrisAnderson as Financial Advisor
AMERICAN ELECTRIC: Fitch Rates Jr. Subordinated Debentures 'BB+'
AMERICAN RESOURCE: Trustee Taps R.D. Wallace as Expert Consultant
AMERICAN WORKERS: Seeks to Tap Spencer Fane as Litigation Counsel
ASCEND LEARNING: S&P Affirms 'B-' ICR on Dividend Recapitalization
ASPIRA WOMEN'S: Incurs $9.7 Million Net Loss in Third Quarter
ASTA HOLDINGS: Seeks to Tap Schreeder, Wheeler & Flint as Counsel
AUBURN SCHOOL: Seeks to Hire Michael Van Dam as Legal Counsel
AULT GLOBAL: Increases Stake in Friedman Industries to 7.83%
BOY SCOUTS: Judge Worried that Rogue Email Tainted Ch.11 Vote
BRANCHES OF LIFE: Seeks to Hire Hirschler Fleischer as Counsel
BRIGHTHOUSE FINANCIAL: Fitch Rates $350MM Preferred Stock 'BB+'
CALLON PETROLEUM: Fitch Assigns FirstTime 'B' IDR, Outlook Stable
CALLON PETROLEUM: S&P Alters Outlook to Pos., Affirms 'B-' ICR
CARLSON TRAVEL: Case Summary & 30 Largest Unsecured Creditors
CHIMNEY PASTURE: Charles Newcomb to Contribute to Plan Funding
CHRISTOPHER BROGDON: Wells Fargo Wins Summary Judgment Bid
CRESTWOOD EQUITY: S&P Alters Outlook to Pos., Affirms 'BB-' ICR
DAVIDZON MEDIA: Seeks to Hire 'Ordinary Course' Professional
DIFFUSION PHARMACEUTICALS: Incurs $12.2M Net Loss in Third Quarter
DONALD CHAE: U.S. Trustee Appoints Creditors' Committee
DURRANI M.D.: Court Approves Disclosures and Confirms Amended Plan
EMERGENT BIOSOLUTIONS: S&P Affirms 'BB' ICR, Alters Outlook to Neg.
EMPLOYBRIDGE HOLDING: Fitch Affirms 'B+' LT IDR, Outlook Stable
ENTRUST ENERGY: Gets Court OK to Solicit Liquidation Plan Votes
ESSENTIAL PROPERTIES: S&P Affirms 'BB+' ICR, Alters Outlook to Pos.
FLEXIBLE FUNDING: Gets Cash Collateral Access Through Nov. 20
FOSSIL GROUP: Completes Sale of $150 Million Senior Notes
FRESH ACQUISITIONS: Unsecureds to Get 10% in Committee Plan
FTPO, LLC: Court Denies Cash Use Motion as Moot, Dismisses Case
FUTURUM COMMUNICATIONS: $14M Sale to Denver VoIP to Fund Plan
GATA HF: Seeks to Hire Larson & Zirzow as Bankruptcy Counsel
GAUCHO GROUP: Inks Deal to Sell $6.5 Million Convertible Notes
GIGA-TRONICS INC: Posts $64K Net Income in Second Quarter
GLAUKOM LLC: Seeks Approval to Hire Diaz & Larsen as Legal Counsel
GREATER WORKS: Court Approves Disclosures and Confirms Plan
GROWLIFE INC: All 5 Proposals Passed at Annual Meeting
GTT COMMUNICATIONS: Interim Access to Cash Collateral OK'd
GTT COMMUNICATIONS: Nov. 30 Common Stock Transfer Hearing Set
GUARDION HEALTH: Incurs $3 Million Net Loss in Third Quarter
GYM SOURCE: SSG Acted as Investment Banker in Sale to Johnson
HELIUS MEDICAL: Incurs $4.7 Million Net Loss in Third Quarter
HEMANI HOSPITALITY: Case Summary & 2 Unsecured Creditors
HIGHLINE AFTERMARKET: S&P Alters Outlook to Neg., Affirms 'B' ICR
HOLLY ACADEMY: S&P Affirms 'BB+' Rating on 2011 Revenue Bonds
I.C.S. CUSTOMS: Taps Crane, Simon, Clar & Goodman as Legal Counsel
IHEARTMEDIA INC: S&P Alters Outlook to Positive, Affirms 'B' ICR
INNERLINE ENGINEERING: Unsecureds to Recover 6.9%-21.5% in 5 Years
IRONSTONE PROPERTIES: Posts $141K Net Operating Loss in 3rd Quarter
JOHNSON & JOHNSON: Court Halts Talc Cases for 60 Days
JOHNSON & JOHNSON: Democratic Lawmakers Rebukes Talc Suit Maneuver
JONES SODA: Incurs $59K Net Loss in Third Quarter
JR BUYS: Seeks Approval to Hire Eric Gravel as Bankruptcy Counsel
JUST ENERGY: CCAA Stay Period Extended to Feb. 17, 2022
KOSMOS ENERGY: Incurs $28.6 Million Net Loss in Third Quarter
LIMENOS CORPORATION: Taps Bufete Morales Cordero as Special Counsel
LIMETREE BAY: Extends Auction Date to Qualify More Offers
LINDEN PONDS: Fitch Assigns 'BB' Issuer Default Rating
LRGHEALTHCARE: Court Confirms HGRL's Wind-Down Plan
LTL MANAGEMENT: Chapter 11 Case Transferred to New Jersey
MALLINCKRODT PLC: Rockford Directed to File Brief by Nov.15
MCAFEE LLC: Fitch Puts 'BB-' LongTerm IDR on Watch Negative
MERCURY BORROWER: S&P Affirms 'B-' ICR on Acquisition of Newport
METROPOLITAN REAL ESTATE: Taps Fairfax as Real Estate Broker
MID ATLANTIC PRINTERS: May Use BOTJ's Cash Collateral
MOUTHPEACE DENTAL: Plan & Disclosures Not Feasible, Bank Says
MYOMO INC: Incurs $2.1 Million Net Loss in Third Quarter
NAB HOLDINGS: S&P Upgrades ICR to 'B+' on Strong Revenue Growth
NATCHITOCHES MEDICAL: Unsecureds Will Get 100% w/o Interest
NATIONAL CINEMEDIA: Incurs $15.2 Million Net Loss in Third Quarter
NORTHERN OIL: Prices Private Offering of 8.125% Senior Notes
NXT ENERGY: To Release Third Quarter Results on Nov. 15
OCULAR THERAPEUTIX: Posts $2.7 Million Net Income in Third Quarter
OLD WORLD TIMBER: Seeks Approval to Hire Accounting Firm, LLC
PARK PLACE DEVELOPMENT: Court Junks Involuntary Chapter 7 Petition
PEOPLE SPEAK: Unsecured Creditors to Recover 100% in 4 Years
PETROTEQ ENERGY: Files Directors' Circular Regarding Takeover Bid
PRESIDIO DEVELOPMENT: Unsecureds Get 100% with Interest From Sale
PULMATRIX INC: Resolves Contract Dispute With Cipla
REALOGY GROUP: S&P Upgrades ICR to 'BB-' on Solid Deleveraging
RED RIVER WASTE: Use of Prepetition Collateral, Card Program OK'd
RENAISSANCE PUBLIC SCHOOL: S&P Affirms 'BB' Rating on Rev. Bonds
SARATOGA AND NORTH: Unsecured Creditors to Recover 5% to 7% in Plan
SIMPLY GOOD FOODS: S&P Affirms 'B+' ICR, Outlook Stable
SMOKY MOUNTAIN: Property Owners' Appeal Junked for Being Untimely
SOMO AUDIENCE: Unsec. Creditors to Get Share of Income for 3 Years
SPECTRUM GLOBAL: Gets Gross Proceeds of $2.4M From Note Offering
SRAK CORPORATION: Taps Brandon Tittle as Lead Bankruptcy Attorney
STATION CASINOS: S&P Rates New 500MM Senior Unsecured Notes 'B-'
STERLING INTERMEDIATE: S&P Upgrades ICR to 'B+' on Debt Repayment
TENRGYS LLC: Updates Unsecured 2013 Loan Claim Pay Details
TRI-WIRE ENGINEERING: SSG Was Investment Banker in Sale to ITG
TULSA HONOR ACADEMY: S&P Assigns 'BB' ICR, Outlook Stable
TWO'S COMPANY: May Use Cash Collateral Thru Final Hearing
UNIFIED SECURITY: Status Report Due Dec. 3
VBI VACCINES: Incurs $15.9 Million Net Loss in Third Quarter
VIZIV TECHNOLOGIES: 3:10 Disclosures Inadequate, KBST Says
VIZIV TECHNOLOGIES: ACT Needs More Info on Competing Plans
VIZIV TECHNOLOGIES: Disclosures Inadequate, Texzon Says
VIZIV TECHNOLOGIES: KBST Disclosures Misleading, 3:10 Capital Says
WILSON ORGANIC: Taps Stephen E. Robertson Law Firm as Counsel
WOODBRIDGE HOSPITALITY: $17.5M Sale of Property to SRE Approved
YOURELO YOUR: Devyap Plan Should be Amended, UST Says
ZEFNIK LLC: Du-All's Contribution & Rental Income to Fund Plan
[^] BOOK REVIEW: TAKING CHARGE: Management Guide to Troubled
*********
139-58TH ST: Case Summary & 8 Unsecured Creditors
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Debtor: 139-58th St LLC
139 58th Street
Brooklyn, NY 11220
Business Description: 139-58th St LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: November 11, 2021
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 21-42840
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: Charles Wertman, Esq.
LAW OFFICES OF CHARLES WERTMAN P.C.
100 Merrick Road Suite 304W
Rockville Centre, NY 11570
Tel: 516-284-0900
Email: charles@cwertmanlaw.com
Total Assets: $6,060,000
Total Liabilities: $4,421,293
The petition was signed by Janet Rush as sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZGPMRDQ/139-58th_St_LLC__nyebke-21-42840__0001.0.pdf?mcid=tGE4TAMA
ABARTA OIL: Seeks to Employ Copper Run Capital as Investment Banker
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ABARTA Oil & Gas Co., LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire Copper Run
Capital, LLC as investment banker.
The firm's services include:
(a) preparing an information memorandum describing the Debtor
and its historical performance and prospects, including existing
contracts, market and sales, labor force, management and
anticipated financial results of the Debtor;
(b) assisting the Debtor in identifying and developing a list
of suitable potential buyers who will be contacted to determine
interest in acquiring substantially all of its assets;
(c) coordinating the execution of confidentiality agreements
for potential buyers wishing to review the information memorandum;
(d) assisting the Debtor in evaluating indications of
interest, letters of intent and proposals regarding the sales
transaction from potential buyers or partners, and assisting the
Debtor in meetings with interested buyers;
(e) soliciting competitive offers from potential buyers;
(f) appearing in court and testifying as to the sale process
and any related issues;
(g) assisting the Debtor in structuring the sale transaction,
negotiating sale agreements, and closing the transaction; and
(h) otherwise assisting the Debtor and its attorneys and
accountants as necessary through the closing of the sale.
The firm will receive a non-refundable monthly retainer of $5,000.
Jason Stevens, managing director at Copper Run Capital, disclosed
in a court filing that he is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jason Stevens
Copper Run Capital, LCC
1201 Dublin Road, Third Floor
Columbus, OH 43215
Tel: 614-888-1786
Email: jstevens@copperruncap.com
About ABARTA Oil
ABARTA Oil & Gas Co., LLC is a Pittsburgh, Pa.-based independent
oil and gas exploration and production company operating under the
name ABARTA Energy.
ABARTA filed a petition for Chapter 11 protection (Bankr. W.D. Pa.
Case No. 21-22406) on Nov. 7, 2021, listing up to $10 million in
assets and up to $50 million in liabilities. James A. Taylor,
president and chief executive officer, signed the petition.
Judge Carlota M. Bohm oversees the case.
The Debtor tapped Campbell & Levine, LLC as legal counsel;
MorrisAnderson & Associates, Ltd. as financial advisor and
restructuring advisor; and Copper Run Capital, LLC as investment
banker.
ABARTA OIL: Seeks to Hire Campbell & Levine as Legal Counsel
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ABARTA Oil & Gas Co., LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire Campbell &
Levine, LLC to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) providing legal advice with respect to the Debtor's duties
in the case and management of its assets;
(b) taking all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on behalf of
the Debtor, the defense of actions commenced against the Debtor,
negotiations concerning all litigation in which the Debtor is
involved, and objections to claims filed against the estate;
(c) preparing legal papers;
(d) assisting the Debtor in preparing for and the filing of a
plan of reorganization at the earliest possible date; and
(e) performing other legal services for the Debtor in
connection with the case and the formulation and implementation of
a plan of reorganization.
The firm's hourly rates are as follows:
Douglas A. Campbell, Esq. $700 per hour
Stanley E. Levine, Esq. $700 per hour
David B. Salzman, Esq. $650 per hour
Philip E. Milch, Esq. $625 per hour
Mark S. Frank, Esq. $440 per hour
Paul J. Cordaro, Esq. $440 per hour
Jonathan G. Babyak, Esq. $440 per hour
Shannon M. Clougherty, Esq. $385 per hour
Frederick D. Rapone, Jr., Esq. $385 per hour
Kathryn L. Harrison, Esq. $300 per hour
Gwenyth S. Gamble Jarvi, Esq. $225 per hour
Heather L. Penn $130 per hour
Judy M. Boyle $110 per hour
Theresa M. Matiasic $120 per hour
Paul Cordaro, Esq., a member of Campbell & Levine, disclosed in a
court filing that he is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Paul J. Cordaro, Esq.
Campbell & Levine, LLC
310 Grant St., Suite 1700
Pittsburgh, PA 15219
Tel: 412-261-0310
Fax: 412-261-5066
Email: pcordaro@camlev.com
About ABARTA Oil
ABARTA Oil & Gas Co., LLC is a Pittsburgh, Pa.-based independent
oil and gas exploration and production company operating under the
name ABARTA Energy.
ABARTA filed a petition for Chapter 11 protection (Bankr. W.D. Pa.
Case No. 21-22406) on Nov. 7, 2021, listing up to $10 million in
assets and up to $50 million in liabilities. James A. Taylor,
president and chief executive officer, signed the petition.
Judge Carlota M. Bohm oversees the case.
The Debtor tapped Campbell & Levine, LLC as legal counsel;
MorrisAnderson & Associates, Ltd. as financial advisor and
restructuring advisor; and Copper Run Capital, LLC as investment
banker.
ABARTA OIL: Taps MorrisAnderson as Financial Advisor
----------------------------------------------------
ABARTA Oil & Gas Co., LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire
MorrisAnderson & Associates, Ltd.
The firm's services include:
(a) working as financial advisor and chief restructuring
officer as needed post-petition;
(b) assisting with bankruptcy filing and financial matters
including, but not limited to, bankruptcy schedules, statement of
financial affairs, cash collateral budget or debtor-in-possession
budget, monthly operating statements, and lender compliance
reporting;
(c) advising the Debtor on Section 341 meeting, status
conferences and court hearings;
(d) assisting with financial matters regarding adversarial
hearing and motions;
(e) facilitating and assisting with U.S. Trustee requests,
Uniform Commercial Code (UCC) requests and other procedural
requests;
(f) supporting Section 363 due diligence, auction process and
sale motion;
(g) assisting the Debtor's bankruptcy counsel with financial
advisement and other requests;
(h) assisting with bankruptcy plan, disclosure, claims process
as needed, and final disposition;
(i) assisting with feasibility analysis or other plan support
as needed by bankruptcy counsel; and
(j) doing any other tasks as requested by the Debtor and
agreed to by the firm.
The firm's hourly rates are as follows:
Mark Welch $575 per hour
Associate Directors $300 - $325 per hour
Directors $350 - $425 per hour
Managing Directors $450 - $475 per hour
Principals $495 - $675 per hour
As disclosed in court filings, MorrisAnderson is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Mark Welch
MorrisAnderson & Associates, Ltd.
55 West Monroe Street, Suite 2350
Chicago, IL 60603
Phone: (312) 254-0880
Fax: (312) 727-0180
Email: mwelch@morrisanderson.com
About ABARTA Oil
ABARTA Oil & Gas Co., LLC is a Pittsburgh, Pa.-based independent
oil and gas exploration and production company operating under the
name ABARTA Energy.
ABARTA filed a petition for Chapter 11 protection (Bankr. W.D. Pa.
Case No. 21-22406) on Nov. 7, 2021, listing up to $10 million in
assets and up to $50 million in liabilities. James A. Taylor,
president and chief executive officer, signed the petition.
Judge Carlota M. Bohm oversees the case.
The Debtor tapped Campbell & Levine, LLC as legal counsel;
MorrisAnderson & Associates, Ltd. as financial advisor and
restructuring advisor; and Copper Run Capital, LLC as investment
banker.
AMERICAN ELECTRIC: Fitch Rates Jr. Subordinated Debentures 'BB+'
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Fitch Ratings has assigned a 'BB+' rating to American Electric
Power Company Inc.'s (AEP) issuance of junior subordinated
debentures. Per Fitch's "Corporate Hybrids Treatment and Notching
Criteria", the junior subordinated debentures will receive 50%
equity credit.
Net proceeds from the sale of the junior subordinated debentures
will be used to repay the $400 million aggregate principal amount
of AEP's 3.65% series I senior notes maturing on Dec. 1, 2021 and
payment of short-term indebtedness. As of Nov. 3, 2021, AEP had
short-term indebtedness of $954 million.
KEY RATING DRIVERS
Kentucky Power Sale: AEP announced on Oct. 26, 2021 that it has
reached an agreement to sell Kentucky Power Co. (KPCo, BBB/Stable)
to Liberty Utilities (LU, BBB/Stable) the regulated business
subsidiary of Algonquin Power & Utilities (APUC, BBB/Stable) in a
transaction valued at $2.846 billion, including the expected
assumption of $1.3 billion in debt. The sale announcement is the
result of a strategic review process announced in April 2021.
The sale includes KPCo's Federal Energy Regulatory Commission
(FERC) regulated assets, both at KPCo and AEP Transco. The
transaction is expected to close in 2Q22 and will require the
approval of the KPSC and FERC, as well as federal clearance under
the Hart-Scott-Rodino Act and the Committee on Foreign Investment
in the U.S.
Separately, the parties are negotiating a new operating agreement
for the coal-fired Mitchell plant, which is currently operated by
KPCo but jointly-owned by KPCo and AEP subsidiary Wheeling Power
Co. (WPCo, NR). Under the new agreement WPCo will assume
operational responsibility. Additionally, the agreement is expected
to resolve Mitchell's disposition past 2028. It will require
approval by KPSC, Public Service Commission of West Virginia, and
FERC. Approval of the new Mitchell operating agreement is required
for the transaction to close.
Sale Proceeds to Offset Equity: AEP has announced that the $1.45
billion after tax cash proceeds from the sale of KPCo will be used
to offset forecasted equity needs in 2022. Fitch expects the
company's FFO leverage to average 5.4x over the forecast period,
exceeding the downgrade threshold for a 'BBB+' rating of FFO
leverage of 5.0x. Fitch's calculations include the effect and
assumed favorable regulatory treatment of approximately $1 billion
in additional fuel or purchased power costs amassed in February
2021 at PSO and SWEPCO as a result of Winter Storm Uri.
Capex Largely Debt Funded: AEP's 2021-2023 capex plan is 18% larger
than the previous three-year plan and will result in a 7.4% average
annual rate base growth from 2019. Over recent years, the company
has increasingly debt financed its capex, leading to higher
leverage. As of TTM June 30, 2021, cash from operations financed
only 50% of capex.
AEP's capex is almost exclusively geared to expanding the regulated
rate base, with 43% planned for transmission assets, the majority
of which are regulated by FERC. Management expects that nearly 70%
of the company's capital plan will be recoverable under reduced lag
mechanisms. Fitch estimates AEP's parent-level debt will account
for approximately 20%-25% of AEP's total debt load over the
forecast period, versus 25%-30% at most of its peers.
Balanced Regulatory Construct: Fitch views the state regulatory
constructs within AEP's 11-state (soon to be 10-state) service
territory as balanced. Authorized state ROEs are close to the
industry average in most jurisdictions and include provisions to
mitigate commodity and environmental regulation risks. AEP's
transmission entities, most of which are subsidiaries of AEP
Transco, operate under a tariff approved by the FERC. The FERC
tariff provides timely recovery of capital and operating costs as
well as favorable ROEs (10.35% and 10.50%) and robust capital
structures. Fitch expects consolidated earned ROE, which was 9.0%
for the LTM ended June 30, 2021, to average around 9.0% in
2021-2023.
Improving Asset Base: As a result of the companies' focus on
transmission investment, AEP Transco is currently AEP's second
largest subsidiary in terms of equity investment and is likely to
be the largest by the end of the forecast period. Fitch expects
that the favorably FERC-regulated entity will account for almost
20% of AEP's consolidated EBITDA. The company plans to continue
reducing its reliance on coal-fired generation and increase
renewable capacity through construction of rate-based assets and
power purchase agreements (PPAs).
Parent-Subsidiary Rating Linkage: AEP and its regulated
subsidiaries have operational, financial and functional ties,
resulting in moderate rating linkage. The treasury function is
centrally managed, and all regulated subsidiaries depend on AEP for
short-term liquidity and participate in its money pool. The money
pool allows the utilities to manage working capital needs and
provides short-term financing. Legal ties are weak, as the parent
does not guarantee the debt obligations of its regulated
subsidiaries. No cross-default provisions exist among AEP and its
subsidiaries.
Due to these linkages, Fitch typically limits the notching
difference between AEP and its subsidiaries to one or two notches.
Fitch rates AEP on a consolidated basis and applies a bottom-up
approach in rating AEP's utility subsidiaries.
DERIVATION SUMMARY
AEP's business mix compares favorably with other large multistate
utility holding companies, given the company's improved risk
profile after its 2017 merchant fossil generation exit. Over the
forecast period, Fitch expects AEP to derive approximately 90% of
its EBITDA from regulated assets, compared with 100% at Xcel Energy
Inc. (XEL: BBB+/Stable), 86% at Southern Company (SO; BBB+/Stable)
and 85%-90% at Dominion Energy, Inc. (DEI: BBB+/Stable). However,
AEP's consolidated credit metrics are weaker, owing to significant
capex. Fitch expects AEP's FFO leverage to average around 5.4x over
the forecast period, which is weaker than Xcel, SO, and DEI.
Fitch expects Xcel's FFO leverage to be 5.0x over the forecast
period, SO's consolidated FFO leverage to average 5.0x through the
forecast, and DEI's consolidated FFO leverage to be 5.0x. AEP is
unique among the large multistate entities for its limited
parent-level debt. Fitch currently estimates AEP parent-level debt
will account for approximately 20%-25% of AEP's total debt load
over the forecast period, this is lower than the 25%-35% at its
peers.
KEY ASSUMPTIONS
-- Consolidated capital expenditures of $22.3 billion over 2021-
2023;
-- Sale of KPCo competed 2Q22, after tax proceeds of $1.45
billion used to offset equity needs;
-- Common dividends of $1.4 billion in 2021, $1.5 billion in
2022, $1.5 billion in 2023 as per managements publicly stated
forecast;
-- Equity Issuances of $100 million in 2023 as per managements
publicly stated forecast;
-- Conversion of $805 million equity units in 2022 and $850
million equity units in 2023;
-- Rate case filings or resolutions over the forecast period in
Arkansas, Louisiana, Ohio, Oklahoma and Texas.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustained FFO leverage at or below 5.0x;
-- Continued balanced jurisdictional rate regulation across AEP's
service territory;
-- Continued strategic focus on relatively low risk utility and
transmission businesses.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Sustained FFO leverage exceeding 5.5x on a sustained basis;
-- Renewed emphasis on non-regulated or uncontracted investments;
-- Significant unexpected regulatory developments at any of the
regulated operating companies.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
AEP has a $4.0 billion committed revolving credit facility maturing
in March 2026 and a $1 billion committed facility maturing in March
2023, both of which serve as a backstop for AEP's CP program and
LOC. AEP must maintain a ratio of debt/total capitalization that
does not exceed 67.5%, under the covenants to its credit agreement.
This contractually-defined percentage was 59.3% as of Sept. 30,
2021. As of Sept. 30, 2021, AEP had $3.746 billion available on its
revolving credit facility (giving effect for CP issuance) and cash
of $1.373 billion.
Before the application of proceeds from the issuance of the junior
subordinated debentures AEP has parent level corporate maturities
as follows: $400 million in 2021, $1.605 billion in 2022, and
$1.900 billion in 2023, $300 million in 2024. AEP has $805 million
of equity units issued in 2019 and $850 million issued in 2020, for
which Fitch does not give equity credit. The notes are expected to
be remarketed in 2022 and 2023, respectively, at which time the
interest rate will reset at the then current market rate and
forward equity purchase contract associated with the units will be
settled with the issuance of equity. If either remarketing is
unsuccessful, investors have the right to put their notes to AEP at
a price equal to the principal. Fitch assumes successful
remarketings for the equity units.
AEP's regulated subsidiaries use a pool of corporate borrowing to
meet short-term funding needs. The money pool operates according to
regulators' approved terms and conditions, and includes maximum
authorized borrowing limits for individual companies.
ISSUER PROFILE
AEP is a utility holding company of regulated electric utility
subsidiaries serving portions of Arkansas, Indiana, Kentucky,
Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and
West Virginia. Additionally, the company has significant
investments in FERC regulated transmission assets.
SUMMARY OF FINANCIAL ADJUSTMENTS
As of Dec. 31, 2020, Fitch has made the following adjustments:
-- $716 million of securitized debt has been removed from Fitch's
AEP consolidated debt calculation.
AMERICAN RESOURCE: Trustee Taps R.D. Wallace as Expert Consultant
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Barry Mukamal, the appointed trustee in the Chapter 11 cases of
American Resource Management Group, LLC (DE) and its affiliates,
seeks approval from the U.S. Bankruptcy Court for the Southern
District of Florida to employ R.D. Wallace Resources, LLC as his
expert consultant.
The trustee requires an expert consultant in American Resource's
bankruptcy case and in the pending adversary proceeding (Case No.
20-01363-SMG) that he filed against Morse Family Holdings, LLC and
two other respondents.
R. David Wallace, the firm's owner and the primary professional in
this engagement, will be billed at his hourly rate of $450, while
other professionals' hourly rates would not exceed $300.
The firm requires an advance retainer of $5,000 and will seek
reimbursement for expenses incurred.
Mr. Wallace disclosed in a court filing that the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
R. David Wallace, CPA
R.D. Wallace Resources, LLC
4937 W. Desert Hollow Drive
Phoenix, AZ 85027
Telephone: (602) 821-3734
Email: rdavidwallace@gmail.com
About American Resource Management Group
American Resource Management Group, LLC (DE) and its affiliates
filed Chapter 11 bankruptcy petitions (Bankr. S.D. Fla. Lead Case
No. 19-14605) on April 9, 2019. Shyla Cline and Scott Morse,
managers, signed the petitions. In its petition, American
Resource estimated $100,000 to $500,000 in assets and $1 million to
$10 million in liabilities.
Judge Scott M. Grossman oversees the cases.
Tate M. Russack, Esq., an attorney based in Boca Raton, Fla., is
the Debtors' bankruptcy attorney.
Barry Mukamal is the Chapter 11 trustee appointed in the Debtors'
bankruptcy cases. The trustee tapped Kozyak Tropin & Throckmorton,
LLP as bankruptcy counsel; Bast Amron, LLP and Meland Budwick, PA
as special counsel; and KapilaMukamal, LLP as accountant. Scott
Tozian, Esq., at Smith, Tozian, Daniel & Davis, PA; R.D. Wallace
Resources, LLC; and C. Steven Baker are the trustee's expert
consultants.
AMERICAN WORKERS: Seeks to Tap Spencer Fane as Litigation Counsel
-----------------------------------------------------------------
American Workers Insurance Services, Inc. and Association Health
Care Management, Inc. seek approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ Spencer Fane, LLP as
special litigation counsel.
The Debtors need the assistance of a special counsel to represent
them in a complaint that they filed against Bene Market LLC.
The hourly rates of Spencer Fane's attorneys and staff are as
follows:
Brian Zimmerman $400
Nick Reisch $350
Other Attorneys and Paraprofessionals $220 - $400
In addition, the firm will seek reimbursement for expenses
incurred.
Brian Zimmerman, Esq., an attorney at Spencer Fane, disclosed in a
court filing that his firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Brian Zimmerman, Esq.
Spencer Fane LLP
3040 Post Oak Boulevard, Suite 1300
Houston, TX 77056
Telephone: (713) 552-1234
Facsimile: (713) 963-0859
Email: bzimmerman@spencerfane.com
About American Workers Insurance Services
American Workers Insurance Services, Inc. is a Rockwall,
Texas-based health insurance agency while Association Health Care
Management, Inc. is a provider of health care services. AHCM
conducts its business under the name Family Care.
AWIS and AHCM sought Chapter 11 protection (Bankr. N.D. Texas Lead
Case No. 19-44208) on Oct, 14, 2019 in Fort Worth, Texas. At the
time of the filing, AWIS listed up to $100 million in assets and up
to $50 million in liabilities while AHCM listed up to $100 million
in assets and up to $50 million in liabilities.
Judge Mark X. Mullin oversees the cases.
The Debtors tapped Forshey & Prosto, LLP as bankruptcy counsel and
J. Alexander CPA, LLC as auditor. The law firms of Oxendine Law
Group P.C., The Verde Law Firm PLLC, and Spencer Fane LLP serve as
special counsel.
ASCEND LEARNING: S&P Affirms 'B-' ICR on Dividend Recapitalization
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
U.S.-based Ascend Learning LLC.
S&P said, "At the same time, we assigned our 'B-' issue-level
rating and '3' recovery rating to the company's new first-lien
facility and our 'CCC' issue-level rating and '6' recovery rating
to its new second-lien term loan. We expect to withdraw the ratings
on the existing debt once the transaction closes and the debt is
repaid."
The stable outlook reflects its expectation that Ascend will
increase its revenue and earnings by at least a high-single-digit
percent over the next 12 months mainly from strong demand in its
health care business segment, which will support FOCF to debt of
around 3.5%-4%.
Ascend Learning plans to use proceeds from a new seven-year $2,005
million first-lien term loan, a new eight-year $755 million
second-lien term loan, along with $113 million of cash on hand to
fund a $1,138 million dividend to its financial sponsors, refinance
its existing debt, and pay related transaction fees.
Ascend's credit metrics will weaken significantly due to the
increase in its debt, but S&P expects the company will continue
reporting healthy growth in order to maintain moderate levels of
FOCF and adequate liquidity.
S&P said, "We forecast pro forma debt to EBITDA will increase to
around 10x as of year-end 2021 due to this transaction, which is
materially higher than the company's previous dividends to its
financial sponsors in each of the past two years. Despite the
company's high debt burden and interest costs, we expect Ascend
will generate modest positive FOCF. Pro forma FOCF to debt will be
weak at around 3.5% as of Sept. 30, 2021, down from 8.4% prior to
the transaction. We expect the company will maintain adequate
liquidity with support from a new five-year upsized $230 million
revolving credit facility (undrawn at close)."
Although Ascend has a good track record of solid growth that has
enabled it to deleverage following prior debt-funded dividends,
this transaction significantly reduces the company's financial
flexibility, increases execution risk because it will require
continued growth in at least the high-single-digit percent area to
deleverage to sustainable levels of leverage over the next two
years. S&P said, "Nevertheless, we believe continuing strong demand
for health care professionals will enable the company to generate
healthy growth over the next 12 months. For the first nine months
of 2021, revenue increased 16.6% and margins expanded by more than
200 basis points (bps), driven by strong growth across all its
business segments and cost savings from virtual delivery and
operating leverage. As a result, we now expect revenue to increase
by 13.5%-14.5% in 2021, up from 9%-11% and stable margins in our
prior forecast."
S&P continues to believe Ascend has good growth prospects given its
leading market position, high retention rates, and favorable
secular trends in the health care sector.
The company has a leading market position in the highly fragmented
health care segment, which is supported by its long-standing
customer relationships and multiyear agreements, including those
with more than 60% of nursing schools in the U.S. Ascend also has
favorable growth prospects because of the regulatory and
accreditation requirements in the health care sector. S&P said, "We
also expect the increased demand for health care professionals due
to the aging U.S. population and shortage of physicians and nurses
to support expanding enrollment at the institutions that Ascend
serves. We anticipate these secular factors will continue to lead
to favorable nursing employment opportunities and support the
demand for the company's products. We now view the company's
competitive position more favorably given its strong position in
its end markets and management's good execution which has resulted
in the company close to doubling its revenues and materially
expanding margins since its leveraged buyout in 2017, by increasing
its product offerings and gaining market share. Given these
factors, we revised our business risk to fair from weak. However,
the company's heavy debt burden and weak credit metrics limit
rating upside."
Ascend lacks geographic diversity and faces high levels of
competition.
Despite the company's good market position, there is little
diversification as it primarily operates in the niche health care
end market, and it generates the majority of revenue in the U.S.
Ascend competes against larger and better-capitalized peers such as
Kaplan Education, which is a subsidiary of Graham Holdings Co. In
S&P's view, the relatively low barriers to entry and minimal
switching costs in its industry could increase competition over
time, particularly in its Fitness & Wellness and Safety & Security
business segments.
S&P said, "The stable rating outlook on Ascend reflects our
expectation that the company will continue to report healthy
revenue and EBITDA growth over the next 12 months mainly from
continued strong demand for health care professionals. However, we
expect credit metrics will remain weak because of its high debt
burden. We expect the company's FOCF to debt will be 3.5%-4% in
2022.
"We could lower the rating on Ascend over the next 12 months if the
company's growth materially moderates or declines, resulting in
FOCF to debt declining below 2%. This could occur if the company
faces operating challenges, such as an inability to sufficiently
increase its revenue due to failed product launches, the loss of
key customers to competitors, or an inability to integrate
significant acquisitions.
"An upgrade is unlikely over the next 12 months. We could consider
raising the rating if the company adopts a less aggressive
financial policy such that it establishes a track record of
maintaining leverage of less than 7.5x and FOCF to debt of more
than 5%."
ASPIRA WOMEN'S: Incurs $9.7 Million Net Loss in Third Quarter
-------------------------------------------------------------
Aspira Women's Health Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $9.71 million on $1.67 million of total revenue for the three
months ended Sept. 30, 2021, compared to a net loss of $4.29
million on $1.24 million of total revenue for the three months
ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $22.70 million on $4.96 million of total revenue
compared to a net loss of $11.82 million on $3.21 million of total
revenue for the nine months ended Sept. 30, 2020.
As of Sept. 30, 2021, the Company had $48.05 million in total
assets, $9.54 million in total liabilities, and $38.50 million in
total stockholders' equity.
"We are very pleased with the growth in positive medical policy
coverage with the addition of AIM Specialty Health's Clinical
Appropriateness Guidelines and Medicaid coverage and credentialing
for OVA1. In addition, in spite of renewed COVID-19 restrictions
we were able to grow in specific markets," indicated Valerie
Palmieri, Aspira's chief executive officer. "We are also making
positive progress on our product collaboration with the Dana Farber
Cancer Institute with the successful completion of the Phase 1 of
our proof of concept study relating to our OvaInherit trial. We
had continued positive dialogue with the Food and Drug
Administration regarding our planned EndoCheck product and expect
resolution on our optimal regulatory path forward for Endocheck by
the end of the year."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/926617/000092661721000079/awh-20210930x10q.htm
About Aspira Women's Health
ASPIRA formerly known as Vermillion, Inc. --
http://www.aspirawh.com-- is transforming women's health with the
discovery, development and commercialization of innovative testing
options and bio-analytical solutions that help physicians assess
risk, optimize patient management and improve gynecologic health
outcomes for women. OVA1 plus combines its FDA-cleared products
OVA1 and OVERA to detect risk of ovarian malignancy in women with
adnexal masses. ASPiRA GenetiXSM testing offers both targeted and
comprehensive genetic testing options with a gynecologic focus.
With over 10 years of expertise in ovarian cancer risk assessment
ASPIRA has expertise in cutting-edge research to inform its next
generation of products. Its focus is on delivering products that
allow healthcare providers to stratify risk, facilitate early
detection and optimize treatment plans.
Aspira Women's reported a net loss of $17.90 million for the year
ended Dec. 31, 2020, compared to a net loss of $15.24 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$55.83 million in total assets, $8.99 million in total liabilities,
and $46.84 million in total stockholders' equity.
ASTA HOLDINGS: Seeks to Tap Schreeder, Wheeler & Flint as Counsel
-----------------------------------------------------------------
Asta Holdings, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Schreeder, Wheeler &
Flint, LLP to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) preparing pleadings, bankruptcy schedules and statements
of financial affairs, adversary proceedings and applications
incidental to administering the Debtor's estate;
(b) developing the relationship and status of the Debtor and
handling claims of creditors;
(c) advising the Debtor of its rights, duties and
obligations;
(d) performing legal services incidental and necessary to the
day-to-day operation of the Debtor;
(e) taking all necessary actions incident to the proper
preservation and administration of the Debtor and to the conduct of
its business;
(f) preparing a plan of reorganization and disclosure
statement; and
(g) providing post-confirmation legal services in connection
with the implementation of the plan.
The hourly rates of the firm's professionals who are likely to work
on this matter are as follows:
John A. Christy $495 per hour
Jonathan A. Akins $295 per hour
Prior to filing, the firm received a $30,000 retainer.
John Christy, Esq., a partner at Schreeder, Wheeler & Flint,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
John A. Christy, Esq.
Jonathan A. Akins, Esq.
Schreeder, Wheeler & Flint, LLP
1100 Peachtree Street, N.E., Suite 800
Atlanta, GA 30309-4516
Telephone: (404) 681-3450
Facsimile: (404) 681-1046
Email: jchristy@swfllp.com
jakins@swfllp.com
About Asta Holdings
Asta Holdings, LLC is a Cartersville, Ga.-based company that
operates a continuing care retirement community and assisted living
facility for the elderly.
Asta Holdings filed a voluntary petition for Chapter 11 protection
(Bankr. N.D. Ga. Case No. 21-41336) on Nov. 1, 2021, listing as
much as $50 million in both assets and liabilities. Bhavik Patel,
manager, signed the petition.
Schreeder, Wheeler & Flint, LLP serves as the Debtor's legal
counsel.
AUBURN SCHOOL: Seeks to Hire Michael Van Dam as Legal Counsel
-------------------------------------------------------------
Auburn School, LLC and School Place, LLC seek approval from the
U.S. Bankruptcy Court for the District of Massachusetts to employ
Michael Van Dam, Esq., a member of Van Dam Law LLP, to handle their
Chapter 11 cases.
Mr. Van Dam will be billed at his hourly rate of $475.
Mr. Van Dam disclosed in a court filing that he and his firm are
"disinterested persons" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Michael Van Dam, Esq.
Van Dam Law LLP
233 Needham Street
Newton, MS 02464
Telephone: (617) 969-2900
Facsimile: (617) 964-4631
Email: mvandam@vandamlawllp.com
About Auburn School
Auburn School, LLC and School Place, LLC filed voluntary petitions
for Chapter 11 protection (Bankr. D. Mass. Case Nos. 21-11620 and
21-11621) on Nov. 7, 2021, listing up to $1 million to $10 million
in both assets and liabilities. Lou G. Makrigiannis, manager,
signed the petitions. Judge Frank J. Bailey oversees the cases.
Michael Van Dam, Esq., at Van Dam Law LLP serves as the Debtors'
legal counsel.
AULT GLOBAL: Increases Stake in Friedman Industries to 7.83%
------------------------------------------------------------
Ault Global Holdings, Inc. disclosed in an amended Schedule 13D
filed with the Securities and Exchange Commission that as of Nov.
5, 2021, it beneficially owns 540,000 shares of common stock of
Friedman Industries, Incorporated, representing 7.83 percent based
upon 6,899,537 shares outstanding, which is the total number of
shares outstanding as of Aug. 23, 2021, as reported in the issuer's
Quarterly Report on Form 10-Q filed with the SEC on Aug. 23, 2021.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/896493/000121465921011291/p118211sc13da2.htm
About Ault Global Holdings
Ault Global Holdings, Inc. (fka DPW Holdings, Inc.) is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly and majority-owned subsidiaries and
strategic investments, the Company provides mission-critical
products that support a diverse range of industries, including
defense or aerospace, industrial, telecommunications, medical, and
textiles. In addition, the Company extends credit to select
entrepreneurial businesses through a licensed lending subsidiary.
Ault Global reported a net loss of $32.73 million for the year
ended Dec. 31, 2020, compared to a net loss of $32.94 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$259.10 million in total assets, $27.71 million in total
liabilities, and $231.39 million in total stockholders' equity.
BOY SCOUTS: Judge Worried that Rogue Email Tainted Ch.11 Vote
-------------------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge said
Wednesday, November 10, 2021, she was concerned the creditor vote
on the Boy Scouts of America's Chapter 11 plan may have been
tainted by an attorney's email sent to sexual abuse claimants from
the official Tort Claimants Committee account the debtor said was
"inflammatory, derogatory, false and misleading".
At a virtual hearing, U.S. Bankruptcy Judge Laurie Selber
Silverstein called a motion by the Boy Scouts that detailed an
email sent by attorney Timothy Kosnoff "very concerning." It had
accused law firm Eisenberg Rothweiler Winkler Eisenberg & Jeck PC
of making false statements and linked to a Twitter account with
messages denigrating the judge.
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.
BRANCHES OF LIFE: Seeks to Hire Hirschler Fleischer as Counsel
--------------------------------------------------------------
Branches of Life, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Virginia to employ Hirschler Fleischer,
PC as its bankruptcy counsel.
The firm's services include:
(a) advising the Debtor of its rights, powers and duties in
the continued operation and management of its business and
property;
(b) preparing legal documents and reviewing financial
reports;
(c) advising the Debtor and preparing responses to legal
papers that may be filed by other parties in its Chapter 11 case;
(d) assisting in the negotiation and documentation of any
necessary financing agreements;
(e) reviewing the nature and validity of any liens asserted
against the Debtor's property and advising the Debtor concerning
the enforceability of such liens;
(f) advising the Debtor regarding its ability to initiate
actions to collect and recover property for the benefit of its
estate;
(g) advising the Debtor concerning executory contract or
unexpired lease assumption, assignment and rejection as well as
contract restructuring and recharacterization;
(h) advising the Debtor in connection with the formulation,
negotiation and promulgation of a plan of reorganization and
related transactional documents;
(g) assisting the Debtor in reviewing, estimating and
resolving claims asserted against its estate;
(h) commencing and conducting litigation to assert rights held
by the Debtor, protect assets of the estate or otherwise further
the goal of completing the Debtor's successful reorganization; and
(i) providing non-bankruptcy services for the Debtor.
Prior to the petition date, the firm received payments from the
Debtor in the aggregate amount of $17,320.34.
The hourly rates of Hirschler Fleischer's professionals are as
follows:
Robert S. Westermann, Shareholder $500 per hour
Brittany B. Falabella, Associate $290 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
Robert Westermann, Esq., a shareholder of Hirschler Fleischer,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Robert S. Westermann, Esq.
Brittany B. Falabella, Esq.
Hirschler Fleischer, PC
The Edgeworth Building
2100 East Cary Street
P.O. Box 500
Richmond, VA 23218-0500
Telephone: (804) 771-9500
Facsimile: (804) 644-0957
Email: rwestermann@hirschlerlaw.com
bfalabella@hirschlerlaw.com
About Branches of Life
Branches of Life, LLC filed its voluntary petition for Chapter 11
protection (Bankr. E.D. Va. Case No. 21-33205) on Oct. 25, 2021,
listing under $1 million in both assets and liabilities. Hirschler
Fleischer, PC serves as the Debtor's legal counsel.
BRIGHTHOUSE FINANCIAL: Fitch Rates $350MM Preferred Stock 'BB+'
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to $350 million of
non-cumulative preferred stock to be issued by Brighthouse
Financial, Inc. (Brighthouse). At the same time, Fitch has assigned
a 'BBB' rating to $400 million of senior unsecured notes to be
issued by Brighthouse. The issuances do not impact existing
Brighthouse ratings. The Rating Outlook is Stable.
KEY RATING DRIVERS
The ratings for the new offerings are equivalent to the ratings on
Brighthouse's existing non-cumulative preferred stock and senior
unsecured notes. The rating assigned to the preferred stock
reflects standard notching as per Fitch's insurance rating criteria
and is rated three notches below Brighthouse's Issuer Default
Rating (IDR), reflecting two notches for 'Poor' recovery
expectations, with one additional notch for 'minimal'
non-performance risk. Consistent with the existing preferred stock,
the new non-cumulative perpetual preferred stock will receive 100%
equity credit in evaluating financial leverage.
Proceeds from the new offerings will be used to tender for a
portion of existing senior unsecured notes. As a result, Fitch
expects no material change in financial leverage and coverage
metrics.
Fitch affirmed the ratings of Brighthouse with a Stable Outlook on
April 9, 2021.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- A material deterioration in Brighthouse's overall
capitalization and leverage to below an overall score of 'aa-
'. This would include a significant decline in management's
strategic target for risk-based capital, a Prism capital score
inconsistent with the overall credit factor score or financial
leverage ratio exceeding 28%.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The establishment of a track record of strong operating
performance, risk management and reasonable stability in
capitalization.
-- A material improvement in business profile, such as a material
reduction in exposure to variable annuities with GMxB riders
and guaranteed universal life insurance.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
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.
CALLON PETROLEUM: Fitch Assigns FirstTime 'B' IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has assigned a first-time Long-Term Issuer Default
Rating (IDR) of 'B' to Callon Petroleum Company (Callon). Fitch has
also assigned issue-level ratings of 'BB'/'RR1' to Callon's senior
secured reserve-based lending (RBL) credit facility, 'BB-'/'RR2' to
the second-lien secured notes and 'B'/'RR4' to the senior unsecured
notes. The Rating Outlook is Stable.
Callon's ratings reflect its sizeable Permian-focused asset base,
credit accretive Primexx transaction that expands the footprint in
the Southern Delaware basin, rolling 18-month hedge book and
Fitch's base case leverage metrics in the 2.5x range throughout the
forecast period. Fitch recognizes that under current strip prices
the company generates considerable positive FCF that should help
reduce RBL borrowings and gross debt to a level generally
consistent with 'B+' rating tolerances, on a mid-cycle basis,
within 18-24 months. These factors are partially offset by the
company's elevated pro forma gross debt load, relatively high
interest expense which weakens cash netbacks, and roughly 70% pro
forma RBL utilization heightening liquidity and refinance risks.
KEY RATING DRIVERS
Footprint Enhancing Primexx Transaction: Fitch believes the Primexx
acquisition provides the company with an additional oil-weighted,
contiguous acreage position that expands the company's footprint in
the Southern Delaware basin. The $864.6 million transaction closed
on Oct. 1 and was funded with $453.7 million of cash through RBL
borrowings and 8.84 million shares of Callon common stock, making
it accretive to overall leverage metrics.
The additional 35,000 net acres provides approximately 300 net core
drilling locations, of which 65% have 10,000-foot laterals
supporting competitive well costs similar to Callon's legacy
Southern Delaware acreage. Fitch believes Callon will continue to
focus its drilling activity on its core Southern Delaware acreage
and expects management will remain opportunistic and
credit-conscious on potential future M&A activity in the region.
Six-Rig, Delaware-Focused Drilling Program: Management's six-rig
drilling program provides a path toward deleveraging through FCF
generation in addition to modest production growth momentum with
total production of over 100 mboepd expected in 2022. Fitch expects
the company will run a majority of its rigs in the Delaware where
management has primarily targeted Wolfcamp A and B and the lower
Bone Spring intervals through its multi-interval development plan.
This approach helps minimize future parent and child well
interactions and allows the company to optimize returns and
recovery.
Fitch expects Midland basin development will be largely focused in
northwest Howard County where Callon continues to see strong
results and efficiency gains. Fitch believes Eagle Ford development
will be less emphasized, but the asset should generate positive FCF
with relatively flat production in the medium term.
Positive FCF; Debt Reduction Plan: Fitch forecasts annual FCF of
approximately $250 million for both 2021 and 2022 at Fitch's
mid-cycle price deck with potential for over $600 million of FCF in
2022 at current strip prices. Debt repayment remains management's
number one priority in the near term given the company's elevated
debt levels versus 'B' category Permian peers. Fitch believes
continued allocation of FCF to debt reduction and supportive prices
could accelerate positive rating momentum.
Fitch believes reducing the outstanding RBL balance (approximately
$1.1 billion outstanding pro forma the Primexx transaction; $1.6
billion borrowing base) will also improve the liquidity profile and
reduce refinance risk for the maturity in December 2024. On Nov. 5,
the company also successfully exchanged $197 million of second lien
notes held by Kimmeridge Energy for common stock, reducing the
balance to approximately $320 million. Fitch expects Callon will
prioritize redemption of the remaining second lien notes which are
callable in October 2022 to simplify the capital structure, extend
the maturity profile, accommodate a credit facility extension, and
reduce interest costs.
Improving Leverage Profile: Fitch expects meaningful gross debt
reduction in the near term if current strip prices hold, but
understands deleveraging could be prolonged in a lower price
environment. Callon is currently targeting 3.0x net leverage by YE
2021 and 2.0x net leverage in 2022 and beyond. Fitch's base case
forecasts 2.7x leverage in 2021 and 2.3x leverage in 2022 at
Fitch's base case mid-cycle price assumptions, but approaches 1.5x
in 2022 and beyond at current strip prices.
Hedging Supports Cash Flow: Management continues to use hedges to
support future cash flow and allow for debt reduction to meet its
near- and medium-term leverage targets. Callon has hedged
approximately 70% of its oil for 4Q21 and plans to maintain its
2022 oil hedge coverage at approximately 55% going into 2022. The
oil hedge book is weighted toward collars which affords the company
an opportunity to capture price upside, but the company also
utilizes swaps for a majority of its gas production. Fitch does not
expect an increase in hedges for 2022 but believes management will
continue to layer on hedges for 2023 given relatively strong strip
prices.
Divestitures Accelerate Debt Repayment: Callon continues to use
non-core divestitures to accelerate gross debt reduction given
their sizable asset profile. The company completed the
approximately $40 million Delaware divestiture in 2Q21 and has
entered into agreements to sell non-core Eagle Ford and Midland
Basin assets for approximately $100 million and $38 million,
respectively, in addition to non-core water assets for $30 million.
Estimated total divestments for 2021 is approximately $210 million,
reaching it's 2021 target of $125 million-$225 million. Fitch
expects the company will continue to remain opportunistic with
non-core asset sales but currently forecasts debt repayment will
happen through FCF proceeds.
DERIVATION SUMMARY
Callon is expected to produce over 100 mboepd pro forma the Primexx
acquisition and recent divestitures. This is slightly higher than
Permian peers Matador Resources Co. (B+/Stable; 90.1 mboepd in
3Q21, 56% oil) and CrownRock L.P (B+/Positive; 82.3 mboepd in 2020)
but is smaller than SM Energy Company (B/Stable; 155.8 mboepd in
3Q21, 56% oil). The company's oil mix of approximately 64% is
higher than peers and helps support the cash flow and margin
profiles.
The company's Fitch-calculated unhedged cash netback of $37.0/boe
in 3Q21 are on the lower-end of the Permian peer group driven
primarily by the company's comparatively high interest expense.
This is slightly lower than SM Energy ($39.4/boe) and lower than
Matador ($41.7/boe) and CrownRock. Fitch expects the netback will
improve following redemption of the second lien notes and progress
on the debt reduction plan in addition to continued drilling and
completion efficiency improvements.
Fitch believes Callon's operational and asset profiles are
consistent with higher-rated 'B' category peers; however, the pro
forma gross debt level of approximately $3 billion remains
considerably higher than peers. This is also observed by Callon's
pro forma debt/flowing barrel of approximately $28,000 versus the
peer average of approximately $16,000. Continued FCF generation and
execution on debt reduction initiatives should help improve
debt/flowing metrics and bring mid-cycle leverage toward 2.0x by YE
2022, which is in-line with leverage profiles across the Permian
peer group.
KEY ASSUMPTIONS
-- WTI oil price of $60/bbl for the remainder of 2021, $52/bbl in
2022 and $50/bbl thereafter;
-- Henry Hub natural gas price of $3.40/mcf in 2021, $2.75/mcf in
2022 and $2.45/mcf thereafter;
-- Mid-single-digit production growth throughout the forecast;
-- Drilling and Complation capex of approximately $700 million in
2022 with production-linked increases thereafter;
-- Prioritization of forecast FCF toward debt repayment;
-- No material M&A activity.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade: .
-- Material FCF generation that allows for gross debt reduction
that leads to RBL utilization approaching 25%;
-- Proactive management of the capital structure and maturity
profile that reduces refinance risks;
-- Mid-cycle debt/EBITDA below 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Inability to generate FCF or shift in capital allocation
leading to RBL utilization of 50%-75% heightening liquidity
risks;
-- Failure to manage the maturity profile and/or additional
capital structure complexity that increases refinance risks;
-- Mid-cycle debt/EBITDA above 3.0x.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Pro forma the Primexx acquisition, Callon will
have approximately $1.1 billion outstanding under its $1.6 billion
RBL credit facility, but is forecast to be reduced to below $900
million by YE 2021 through FCF generation and the announced
divestitures expected to close in 4Q21 with proceeds of
approximately $168 million. Fitch expects continued allocation of
FCF to reducing RBL borrowings and does not expect any incremental
borrowings given the company's 65%-75% reinvestment rate target.
The facility matures in December 2024 and Fitch believes continued
repayment will help alleviate future refinance risks.
The facility has two financial maintenance covenants: a secured
leverage ratio that cannot be greater than 3.0x which falls away
after 4Q21 and a current ratio that cannot be less than 1.0x. The
company's total leverage ratio of below 4.0x resumes in 1Q22.
Callon is forecast to be well within these metrics and Fitch does
not see any covenant risk over the rating horizon.
Manageable Maturity Schedule: Fitch believes Callon's maturity
profile is manageable given the maturities are spread out between
2024-2028. In July, Callon successfully refinanced its 6.25% senior
notes due 2023 with proceeds from the $650 million 8.000% senior
notes due 2028. Fitch expects the second lien notes will be
addressed first when they become callable in October 2022 and the
company will then look to opportunistically refinance the existing
notes as their maturities approach.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that Callon would be recognized
as a going-concern (GC) in bankruptcy rather than liquidated.
-- Fitch has assumed a 10% administrative claim.
GC Approach
Callon's going-concern EBITDA assumption reflects Fitch's
projections under a stressed case price deck, which assumes WTI oil
prices of $32/bbl in 2022, $42/bbl in 2023, and $45/bbl in the long
term.
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which it bases the enterprise
valuation, which reflects the decline from current pricing levels
to stressed levels, and then a partial recovery coming out of a
troughed pricing environment.
An EV multiple of 3.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of
this multiple considers the following factors:
-- The company's oil-weighted assets and sizable tier-1 drilling
inventory in each of its basins compared to peers. The
multiple also considers the relatively lower economic interval
perspectivity in the Southern Delaware and recent divestiture
of the company's Eagle Ford acreage, which tend to have lower
M&A valuations overall versus the Permian.
-- The historical bankruptcy case study exit multiples for peer
companies ranged from 2.8x to 7.0x, with an average of 5.6x
and a median of 6.1x.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
Fitch considers valuations such as SEC PV-10 and M&A transactions
for each basin including multiples for production per flowing
barrel, proved reserves valuation, value per acre, and value per
drilling location.
The revolver is assumed to be 80% drawn upon default with the
expectation that commitments would be reduced during a
redetermination. The RBL is senior to the second lien notes and
senior unsecured notes in the waterfall.
The allocation of value in the liability waterfall and its priority
position results in recovery corresponding to 'RR1' for the senior
secured RBL credit facility, 'RR2' for the second lien secured
notes and 'RR4' for the senior unsecured notes.
ISSUER PROFILE
Callon Petroleum Company is a public U.S. onshore-focused
exploration and production company focused in south and west Texas.
The company's asset base consists of approximately 190,000 net
acres split between the Delaware basin, Eagle Ford and Midland
Basin with pro forma production of over 100 mboepd.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CALLON PETROLEUM: S&P Alters Outlook to Pos., Affirms 'B-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Callon Petroleum Co. to
positive from stable and affirmed its 'B-' issuer credit rating.
S&P said, "At the same time, we raised our issue-level rating on
Callon's unsecured notes to 'B' from 'B-' and revised our recovery
rating to '2' from '3'. The '2' recovery rating indicates our
expectation for substantial (70%-90%; rounded estimate: 85%)
recovery to its creditors in the event of a payment default.
"The positive outlook reflects our expectation that the company
will maintain funds from operations (FFO) to debt above 30% while
using its free operating cash flow (FOCF) and asset sale proceeds
to significantly reduce the outstanding borrowings on its revolving
credit facility over the next 12 months.
"We project improved leverage metrics following Callon's recent
transactions and expect free cash flow will be used to reduce debt.
With the Primexx acquisition and associated equitization of
Kimmeridge's portion of Callon's 2025 second-lien notes having now
closed, we anticipate average FFO to debt will exceed 30% over the
next two years with average debt to EBITDA below 2.5x over the same
timeframe. Given the strong commodity market and the recent upward
revision of our oil and gas price assumptions, the company's
oil-focused production mix will be advantageous for its cash flow
generation over the next 12-24 months. Accordingly, the combination
of several hundred million dollars of free cash flow and asset sale
proceeds will likely enable Callon to accelerate the repayment of
the elevated balance on its $1.6 billion credit facility, which we
expect will have less than $900 million of borrowings outstanding
by the end of 2021. We also anticipate additional debt reduction in
2022, which would reduce the company's credit risk as it completes
its integration of the Primexx assets.
"The company's improving leverage and liquidity may facilitate a
future refinancing. Based on the aforementioned factors, we believe
Callon may attempt to extend its longer-term debt sometime in 2022
with its closest debt maturity of about $460 million scheduled for
October 2024 and a potential springing revolver maturity earlier
that year. With the company's 6.25% 2023 notes already repaid, the
currently accommodative capital markets could provide additional
refinancing opportunities if Callon maintains consistent financial
performance and continues to pay down debt (the company has repaid
almost $700 million of debt since the second quarter of 2020). We
note that Callon's long-term leverage target is for net debt to
EBITDA of less than 1.5x with under $2.0 billion of absolute debt,
which compares with its roughly $2.9 billion of outstanding debt as
of the end of the third quarter.
"The positive outlook on Callon reflects our expectation that it
will maintain FFO to debt above 30% while using its FOCF and asset
sale proceeds to significantly reduce the outstanding borrowings on
its revolving credit facility over the next 12 months."
S&P could lower its rating on Callon if:
-- Its liquidity deteriorates; or
-- S&P believes its capital structure is unsustainable. This would
likely follow a prolonged period of low commodity prices, combined
with a more aggressive financial policy than it currently
envisions, that results in cash outflows and an inability to
refinance its maturing debt.
S&P could raise its rating on Callon if:
-- The company substantially reduces its outstanding revolver
borrowings while successfully integrating the new assets and
maintaining FFO to debt of more than 30%. S&P believes this could
occur if it continues to make progress on integrating Primexx and
generates substantial free cash flow, which it uses to reduce its
debt.
CARLSON TRAVEL: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Thirty-eight affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Carlson Travel, Inc. 21-90017
701 Carlson Parkway
Minnetonka Minnesota 55305
Carlson Travel Holdings, Inc. 21-90018
WorldMate, LLC 21-90033
CWT US, LLC 21-90034
CWT US Holding I, LLC 21-90030
CWT US Holding II, LLC 21-90032
CCI Travel Cooperatief U.A. 21-90020
Carlson Travel B.V. 21-90023
SapoToro B.V. 21-90031
CWT B.V. 21-90024
CWT Global B.V. 21-90038
CWT Beheermaatschappij B.V. 21-90026
CWT Nederland B.V. 21-90053
CWT Spain Holdings I B.V. 21-90036
CWT Diemen B.V. 21-90039
CWT Lux Holding I S.A. R.L. 21-90046
CWT Lux Holding II, S.A. R.L 21-90047
CWT Belgium SRL 21-90028
CWT International S.A. 21-90043
CW Travel Canada, Ltd. 21-90022
152812 Canada Inc. 21-90025
CWT Canada 21-90029
CWT New Holdco Ltd 21-90049
CWT Holdco Limited 21-90042
CWT UK Group Ltd 21-90027
CWT SAS 21-90051
CWT France SAS 21-90037
CWT MEO SAS 21-90052
CWT Ireland Limited 21-90044
CWT Meetings & Events Ireland Limited 21-90048
Harrin Limited 21-90035
CWT Italia S.R.L. 21-90045
CWT Travel Services Global España, S.L.U. 21-90021
CWT Global Espana S.L.U. 21-90040
CWT Finland Holdings Oy 21-90016
CWT Finland Oy 21-90041
CWT Polska sp z o.o. 21-90050
Carlson Wagonlit eCenter Polska sp z o.o. 21-90019
Business Description: Carlson Travel operates as a business travel
management company. The Company offers
traveler care, travel management,
consulting, and booking services, as well as
conducts meetings and events.
Chapter 11 Petition Date: November 11, 2021
Court: United States Bankruptcy Court
Southern District of Texas
Judge: Hon. Marvin Isgur
Debtors'
General
Bankruptcy
Counsel: Allyson B. Smith, Esq.
KIRKLAND & ELLIS LLP (NEW YORK)
601 Lexington Aevnue
New York, NY 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: allyson.smith@kirkland.com
- and -
Ryan Blaine Bennett, P.C.
Alexandra Schwarzman, Esq.
KIKRLAND & ELLIS LLP (CHICAGO)
300 North LaSalle
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: ryan.bennett@kirkland.com
alexandra.schwarzman@kirkland.com
Debtors'
Local
Bankruptcy
Counsel: Matthew D. Cavenaugh, Esq.
Vienna F. Anaya, Esq.
Victoria N. Argeroplos, Esq.
JACKSON WALKER LLP
1401 McKinney Street
Suite 1900
Houston, TX 77010
Email: mcavenaugh@jw.com
vanaya@jw.com
vargeroplos@jw.com
Debtors'
Financial
Advisor: ALIXPARTNERS, LLP
Debtors'
Investment
Banker: HOULIHAN LOKEY CAPITAL, INC.
Debtors'
Notice &
Claims
Agent: PRIME CLERK LLC
Debtors'
Corporate
Counsel: SHEARMAN & STERLING LLP
Estimated Assets: $1 billion to $10 billion
Estimated Liabilities: $1 billion to $10 billion
The petitions were signed by Michelle McKinney Frymire, president
and chief executive officer.
A full-text copy of Carlson Travel's petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/FASCOOQ/Carlson_Travel_Inc__txsbke-21-90017__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. 2025 USD Senior Secured Notes Debt $436,099,030
c/o U.S. Bank Trustees Limited
125 Old Broad Street, Fifth Floor
London EC2N 1AR
United Kingdom
Attention: Structured Finance
Relationship Management
Fax: +44(0) 207 330 2156
e:mbs.relationship.management
@usbank.com
2. 2025 Euro Senior Secured Notes Debt $388,365,200
c/o U.S. Bank Trustees Limited
125 Old Broad Street; Fifth Floor
London EC2N 1AR
United Kingdom
Attention: Structured Finance
Relationship Management
Fax: +44(0) 207 330 2156
Email: mbs.relationship.management
@usbank.com
3. 2026 Senior Notes Debt $277,782,943
c/o U.S. Bank Trustees Limited
125 Old Broad Street; Fifth Floor
London EC2N 1AR
United Kingdom
Attention: Structured Finance
Relationship Management
Fax: +44(0) 207 330 2156
Email: mbs.relationship.management
@usbank.com
4. 0.50% Senior Subordinated Euro Debt $5,784,140
Notes due 2027
c/o U.S. Bank Trustees Limited
125 Old Broad Street; Fifth Floor
London EC2N 1AR
United Kingdom
Attention: Structured Finance
Relationship Management
Fax: +44(0) 207 330 2156
Email: mbs.relationship.management
@usbank.com
5. BNP Trade Supplier $5,033,216
Montagne Du Parc 8
1 KAIJ
Brussels 1000
Belgium
Sebastien DeRenne
Tel: +32 (0) 2 312 7082
Email: sebastien.derenne@bnpparibas.com
6. 0.50% Senior Subordinated USD Debt $4,050,332
Notes due 2027
c/o U.S. Bank Trustees Limited
125 Old Broad Street; Fifth Floor
London EC2N 1AR
United Kingdom
Attention: Structured Finance
Relationship Management
Fax: +44(0) 207 330 2156
Email: mbs.relationship.management
@usbank.com
7. CDS Trade Supplier $2,725,509
187 Bureau de la Colline
Saint Cloud 92210
France
Alain de Labaca
Tel: +33(0)1 74 71 49 60
Email: adelabaca@cdsgroupe.com
8. Pegasystems Inc. Operational $1,232,640
Attn: General Counsel Vendor
One Rogers Street
Cambridge, MA 02142-1590
Scott Downer
Tel: 617-498-8808
Email: Scott.Downer@pega.com
9. Oracle Operational $1,181,757
Attn: General Counsel, Vendor
Legal Department
500 Oracle Parkway
Redwood Shores, CA 94065
John Brooke
Tel: 415-519-5950
Email: john.brooke@oracle.com
10. Barclays CC Trade Supplier $1,181,068
1234 Pavillion Drive
Northhampton NN4 7SG
United Kingdom
Danielle Waugh
Tel: +44(0)7867 352 815
Email: Danielle.Waugh@barclaycard.co.uk
11. Ahead, Inc. Operational $1,126,866
Attn: Legal Vendor
401 N Michigan Ave
Suite 3400
Chicago, IL 60611
Dan Flood
Tel: 612-644-7915
Email: legal@thinkahead.com;
dan.flood@ahead.com
12. US Premium Finance Operational $1,107,978
280 Technology Pkwy; Suite 200 Vendor
Norcross, GA 30092
Michael Preston
Tel: 866-246-9691
Fax: 866-246-9692
13. HERTZ Trade Supplier $930,528
Hertz House
11 Vine St.
Uxbridge UB8 1QE
United Kingdom
Bernadett Kada
Director of Travel Industry Sales
EMEA
Tel: +49 6196 937 399
Email: bkada@hertz.com
14. Air Partner PLC Trade Supplier $810,015
2 City Place
Beehive Ring Road
Gatwick RH6 0PA
United Kingdom
Clive Chalmers
Tel: +44 1293 844864
Email: Clive.Chalmers@airpartner.com
15. Avis Budget Group Trade Supplier $760,850
Avis Budget House
Park Road
Bracknell RG12 2EW
United Kingdom
Jeanette Harper
Senior Director, International
Travel & Partnerships
Avis Budget EMEA Ltd
Tel: +44 7786 982624
Email: Jeanette.Harper@abg.com
16. Thalys International Trade Supplier $614,685
Place Marcel Broodthaers 4
Bruxelles 1060
Belgium
Houda Draouil
Tel: +32 2 435 77 32
Email: hod@thalys.com
17. IHG International Hotels Trade Supplier $590,517
3 Ravinia Drive
Suite 100
Atlanta, GA 30346
Melissa Shainman
Tel: +1 (480) 255-6273
Email: melissa.shainman@ihg.com
18. Concur Technologies Inc. Trade Supplier $470,580
601 108th Ave NE, Suite 1000
Bellevue, WA 98004
Denise Kelley
Tel: 443-341-7484
Email: denise.kelley@sap.com
19. OPCO Mobilites Operational $467,078
204 Rond-Point du Pont de Sevres Vendor
Boulogne-Billancourt 92649
France
Bernard Chaumat
Tel: +33 06 71 09 75 48
Email: bernard.chaumat@opcomobilites.fr
20. The Travel Birds Trade Supplier $404,110
4 Furstenallee
Salzburg 5020
Austria
Birgit Fuchs
Tel: +43 662 243192-40
Email: weare@thetravelbirds.at
21. Software House International Operational $361,364
Attn: Contracts Dept Vendor
290 Davidson Ave
Somerset, NJ 08873
Steve Young
Tel: 319-430-5184
Email: steve_young@shi.com
22. MTS Tourism Solutions SA Trade Supplier $360,422
35, Kapnikareas St
Athens 10556
Greece
Veniere Eleni
Tel: +30 210 3379000
Email: eleni.venieri@mtscitybreaks.eu
23. Insight Technology Solutions Operational $321,141
Attn: Legal Department Vendor
6820 S Harl Ave
Tempe, AZ 85283
Steve Schmitz
Tel: 952-279-5923
Email: Steve.Schmitz@insight.com
24. Europcar Trade Supplier $312,912
13 ter boulevard Berthier
Paris 75017
France
Stephane Engels
Tel: +33 1 73 13 74 61
Email: stephane.engels@europcar.com
25. Travel Centric Technology Operational $296,690
(TCT- dba Hotel Hub) Vendor
337 Bath Road
Slough, Berkshire SL 1 5PR
United Kingdom
Eric Meierhans
Tel: 33 950 51 86 35
Email: notices@tctmail.com;
eric.meierhans@hotelhub.com
26. Microsoft Operational $275,715
One Microsoft Way Vendor
Redmond, WA 98052
Kent Smith
Tel: 952-806-4223
Email: Kent.Smith@microsoft.com
27. AMADEUS Trade Supplier $264,562
Salvador de Madariaga 1
Madrid 28027
Spain
Paul de Villiers
Tel: +34 91 177 2169
Email: paul.devilliers@amadeus.com
28. Mondial GMBH & Co KG Trade Supplier $261,346
Operngasse 20B
Wien 1040
Austria
Stefan Walter
Tel: +43 1 58804 188
Email: walter@mondial-congress.com
29. SIXT Trade Supplier $225,101
Sixt GmbH & Co Autovermietung KG
Zugspitzstrasse 1
Pullach 82049
Germany
Anne Sophie Wuthrich
Director of Travel Sales
International
Tel: +33 6 33 84 57 57
Email: anne-sophie.wuthrich@sixt.com
30. GESTAIR Trade Supplier $164,040
11 3B c/Anabel Segura
Alcobendas 28108
Spain
Roger Sola Caballero
Email: rsola@gestair.com
CHIMNEY PASTURE: Charles Newcomb to Contribute to Plan Funding
--------------------------------------------------------------
Chimney Pasture Ranch, LLC, submitted a First Amended Plan of
Reorganization dated November 8, 2021.
Chimney Pasture is a Texas limited liability company that was
established in 2004 and is wholly owned by Charles L. Newcomb. It
owns approximately 1,254 acres of ranch land in Starr County, Texas
(the "Property") with improvements including a 10,000 square foot
barndominium.
This Plan of Reorganization proposes to pay Chimney Pasture's
creditors primarily from future rental income generated by the
Chimney Pasture's operation of the Property and/or from
contributions to Chimney Pasture from its owner, Charles Newcomb.
Although the Property is not yet leased, Chimney Pasture believes
that it will be able to find a suitable tenant and that rent from
the lease will be sufficient to fund the Plan.
Alternatively, until the Property is leased, the owner of Chimney
Pasture will provide the funds to Chimney Pasture for the payments
under this plan.
Class 1 consists of the claim of Texas First Bank. Texas First Bank
filed a proof of claim for $438,396.06. Chimney Pasture will pay
post-petition interest on Texas First Bank's claim of $438,396.06
at a rate of 4.75% per year from the petition date until the claim
amount is paid in full. Chimney Pasture will pay $50,000 to Texas
First Bank within 90 days of the effective date of the plan.
Chimney Pasture will pay the loan in full to Texas First Bank on or
before 270 days from the Effective Date of the plan. The monthly
payments will be in the amount of $1,735.32 (interest only
payments) until the loan is paid in full. Not less than 14 days
before the 270th day after the effective date of the plan and the
date that the final payment is due, Texas First Bank must deliver a
payoff statement to Chimney Pasture stating all remaining amounts
that Texas First Bank contends are due on its claim.
Class 2 consists of the claim of Starr County Tax Office. Chimney
Pasture will pay the claim of Starr County Tax Office, plus
post-petition interest accruing on this amount at a rate of 12% per
year from the petition date until the amount is paid in full in 36
equal monthly payments, beginning on the fifth day of the first
full calendar month after the effective date of the Plan. If the
Property is sold, the claims of Class 2 will be paid in full at the
sale of the Property.
Class 3 consists of NonPriority Unsecured Creditors. Chimney
Pasture will pay 100% of the claims in Class 3 in 36 equal monthly
payments, beginning on the fifth day of the first full calendar
month after the effective date of the Plan. If the Property is
sold, the claims of Class 3 will be paid in full at the sale of the
Property.
The owner of Chimney Pasture will be responsible and will provide
the funds to Chimney Pasture so that Chimney Pasture can make the
payments until the sale of the Property. Except for any items of
property specifically surrendered according to the terms of the
Plan, Chimney Pasture will retain the property of the bankruptcy
estate. Charles Newcomb will remain president of the reorganized
Debtor and will be responsible providing the funds to make the
payments of the Debtor pursuant to the terms of this plan.
A full-text copy of the First Amended Plan of Reorganization dated
Nov. 8, 2021, is available at https://bit.ly/3bXWGB3 from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Reese Baker, Esq.
Baker & Associates
950 Echo Lane, Ste 300
Houston, TX 77024
Tel: (713) 979-2279
About Chimney Pastures Ranch
Houston-based Chimney Pastures Ranch, LLC filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Tex. Case No. 21-32253) on July 2, 2021. Charles Newcomb,
president, signed the petition. In the petition, the Debtor
disclosed $1 million to $10 million in assets and $100,000 to
$500,000 in liabilities. Judge Christopher M. Lopez presides over
the case. Reese Baker, Esq., at Baker & Associates, represents the
Debtor as legal counsel.
CHRISTOPHER BROGDON: Wells Fargo Wins Summary Judgment Bid
----------------------------------------------------------
The United States District Court for the Middle District of
Alabama, Northern Division, granted the motion for summary judgment
filed by Wells Fargo Bank, N.A., in the case captioned WELLS FARGO
BANK, N.A. as Trustee for $3,160,000 The Medical Clinic Board of
the City of Montgomery - 1976 East First Mortgage Revenue Bonds
(Oaks Partners Two, LLC Project), Series 2010A and as Trustee for
$590,000 The Medical Clinic Board of the City of Montgomery 1976
East First Mortgage Revenue Bonds (Oaks Partners Two, LLC Project),
Taxable Series 2010B, Plaintiff, v. CHRISTOPHER F. BROGDON, et al.,
Defendants, Civil Action No. 2:20cv231-MHT (M.D. Ala.).
Pursuant to Georgia law, Wells Fargo filed the lawsuit claiming
that defendants Christopher F. Brogdon, Connie B. Brogdon, and
Brogdon Family, L.L.C., breached a guaranty agreement and owe
attorney's fees.
This case stems from a series of agreements entered to facilitate
the purchase of an assisted-living facility. A May 2010 agreement
between Wells Fargo and The Medical Clinic Board of the City of
Montgomery 1976-East made the bank the indenture trustee for bonds
issued by the board to purchase an assisted-living facility in
Montgomery County, Alabama and to renovate the facility. Oak
Partners Two, LLC, was named in the agreement as the beneficiary of
the bond issuance, and the board leased the facility to Oaks
Partners Two through a separate lease agreement.
Christopher Brogdon was the manager of Oaks Partners Two and signed
the lease in that capacity. Finally, Christopher and Connie
Brogdon, as well as the Brogdon Family, LLC, entered into a
guaranty agreement with Wells Fargo where they agreed to be
responsible for Oak Partners Two's financial obligations under the
lease. Starting in 2012, Oak Partners Two defaulted on the lease,
and Christopher and Connie Brogdon and Brogdon Family, LLC
defaulted on their obligations under the guaranty agreement.
As of May 21, 2021, the total amount owed by the Christopher and
Connie Brogdon and the Brogdon Family, LLC was $2,145,285.00,
consisting of $1,664,298.22 in principal and $480,986.78 in
interest.
The Court found that Wells Fargo has presented undisputed evidence
to support both of its claims. Neither of the defendants' defenses
is supported by the record, the Court noted. The bank has
established for both of its claims that "there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law," the Court concluded.
A full-text copy of the Opinion dated November 1, 2021, is
available at https://tinyurl.com/cbrc3c3x from Leagle.com.
About the Bogdons
Christopher F. Brogdon and Connie B. Brogdon are in the business of
investing in and own various interests in limited partnerships and
closely-held corporations. All of the entities own or lease either
a nursing homes, retirement centers, restaurants, or
retail/offices. The Brogdons also own management companies that
manage the operation of various nursing homes and assisted care
living facilities.
Christopher F. Brogdon and Connie B. Brogdon sought Chapter 11
protection (Bankr. N.D. Ga. Case No. 17-66172) on Sept. 15, 2017.
The Debtors tapped Theodore N. Stapleton, Esq., at Theodore N.
Stapleton, P.C., as counsel.
CRESTWOOD EQUITY: S&P Alters Outlook to Pos., Affirms 'BB-' ICR
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
Crestwood Equity Partners (CEQP), a Houston-based master limited
partnership, and revised its outlook to positive from stable.
S&P said, "We also affirmed our 'BB-' issue-level rating on CEQP's
senior notes and 'B-' rating on its preferred stock. Our '4'
recovery rating indicates average (30%-50%, rounded estimate 45%)
recovery in the event of payment default.
"The positive outlook reflects our view that the OMP acquisition
will materially increase CEQP's scale of operations and footprint
while reducing leverage to about 4x in 2022."
CEQP recently announced its acquisition of Oasis Midstream Partners
(OMP). As a part of the transaction, the company will assume $450
million of OMP's senior notes due in 2029.
Post-acquisition, CEQP will significantly increase its scale of
operations. On Oct. 26, CEQP announced its acquisition of 33.8
million common units of OMP held by its parent company Oasis
Petroleum, and 14.8 million common units owned by OMP public
investors. CEQP will fund the transaction with $1 billion of new
equity and it will also assume OMP's $450 million senior notes due
in 2029 and $218 million revolving credit facility (RCF). S&P said,
"We expect that the acquisition will allow CEQP to generate an
incremental EBITDA of about $240 million in 2022, while increasing
its dedicated acreage to 535,000 acres from 150,000 acres in the
Williston Basin. We view OMP's natural gas and crude oil gathering
and processing assets, as well as its water disposal assets as
highly complementary to CEQP's existing asset base."
S&P said, "We expect the company to generate strong cash flows that
it could use to deleverage. We anticipate CEQP will reduce its
adjusted leverage on a stand-alone basis to 4.5x in 2021 from 6.2x
in the previous year, and maintain it at 4x-4.3x in 2022 and 2023.
At the same time, we believe the company could generate $170
million-$230 million in discretionary cash flows given its reduced
capital budget that it could use to repay its outstanding debt.
"The acquisition exposes CEQP to volumetric risk associated with
Oasis Petroleum. With more than 90% of OMP's revenues coming from
acreage dedication contracts in the Bakken Basin, a prolonged
period of weak commodity prices could hurt CEQP's cash flows. In
addition, most of OMP's contracts are with Oasis Petroleum, which
underwent a bankruptcy process in 2020 and which we view as having
lower credit quality due to its relatively small size and
concentration in the Bakken Basin. Given the concentration of cash
flows in Oasis Petroleum, we believe the performance of OMP's
assets depends on the Oasis Petroleum's performance.
"The positive outlook reflects our view that the OMP acquisition
will materially increase CEQP's scale of operations and footprint,
while also increasing its EBITDA 30%-35%. We project adjusted debt
to EBITDA of 4.5x in 2021, declining to just above 4x in 2022."
S&P could revise its outlook to stable if, post-acquisition, CEQP's
leverage remains above 4.5x. This could happen due to:
-- Lower-than-expected realized acquisition synergies,
-- Weak gathering and processing volumes; or
-- Debt-financed increase in distributions or equity buybacks.
S&P could raise its rating if, post-acquisition, CEQP's adjusted
debt to EBITDA approaches 4x, driven by a volume increase in its
gathering and processing or other business segments.
DAVIDZON MEDIA: Seeks to Hire 'Ordinary Course' Professional
------------------------------------------------------------
Davidzon Media, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of New York to employ
Gregory Messel CPA, PC as a professional utilized in the ordinary
course of their business.
Gregory Messel will render a day-to-day payroll and tax preparation
services for the Debtors.
The Debtors propose to compensate Gregory Messel as follows:
(a) less than $35,000 per month; or
(b) $350,000 in aggregate.
The firm can be reached at:
Gregory Messel CPA, PC
414 Brighton Beach Ave., 2nd Floor
Brooklyn, NY 11235
Telephone: (718) 769-0620
About Davidzon Media
Brooklyn, N.Y.-based Davidzon Media, Inc. and its affiliates filed
voluntary petitions for Chapter 11 protection (Bankr. E.D.N.Y. Case
No. 21-40308) on Feb. 8, 2021. At the time of the filing, Davidzon
Media listed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Elizabeth S. Strong oversees the cases.
The Law Offices of Alla Kachan, PC and Wisdom Professional
Services, Inc. serve as the Debtors' legal counsel and accountant,
respectively.
DIFFUSION PHARMACEUTICALS: Incurs $12.2M Net Loss in Third Quarter
------------------------------------------------------------------
Diffusion Pharmaceuticals, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $12.20 million for the three months ended Sept. 30,
2021, compared to a net loss of $4.44 million for the three months
ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $20.62 million compared to a net loss of $10.12 million
for the same period during the prior year.
As of Sept. 30, 2021, the Company had $40.88 million in total
assets, $2.75 million in total liabilities, and $38.13 million in
total stockholders' equity.
As of Sept. 30, 2021, Diffusion had cash and cash equivalents of
approximately $40.3 million as compared to $18.5 million as of
Dec. 31, 2020. The increase was primarily attributable to the
proceeds of the Company's public offering of common stock in
February 2021. Diffusion estimates that it has sufficient cash to
fund operations and capital expenditures through 2023.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001053691/000143774921026014/dffn20210930_10q.htm
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is an innovative biotechnology
company developing new treatments that improve the body's ability
to bring oxygen to the areas where it is needed most, offering new
hope for the treatment of life-threatening medical conditions.
Diffusion's lead drug TSC was originally developed in conjunction
with the Office of Naval Research, which was seeking a way to treat
hemorrhagic shock caused by massive blood loss on the battlefield.
Diffusion reported a net loss of $14.18 million for the year ended
Dec. 31, 2020, compared to a net loss of $11.80 million for the
year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$52.71 million in total assets, $2.54 million in total liabilities,
and $50.17 million in total stockholders' equity.
DONALD CHAE: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Donald
Chae.
The committee members are:
1. Beach Orangethrope Hotel LLC
c/o Reid & Wise, LLC
Attn: Edward Wu
One Penn Plaza, Suite 2015
New York, NY 10119
2. Beach Orangethrope Hotel III LLC
Beijing Jiasheng Changquing Consulting Co., Ltd
as Special Manager for Beach Orangethrorpe Hotel III, LLC
Attn: Guo Sheng Jun, Manager of the Special Manager
Room 2306-08 Tower A, Futon Tower
No. 58 E. 3d Ring South Road
Chaoyang District
Beijing China
3. Hoi Thi Nguyen
5391 Laverne Cir.
Westminister, CA 92683
4. Shady Bird Lending LLC
Attn: Vikas Tandon
205 S. Martel Ave.
Los Angeles, CA 90036
5. The Source at Beach Lenders
Attn: Lea Zhou
955 Deep Valley Dr., Ste 3045
Palos Verdes Peninsula, CA 90274
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 Donald Chae
Donald Chae filed a petition for Chapter 11 protection (Bankr. C.D.
Calif. Case No. 21-17696) on Oct. 3, 2021. On Oct. 13, 2021, the
case was transferred to the Santa Ana division and was assigned a
new case number (Case No. 21−12493).
Judge Erithe A. Smith oversees the case.
Smiley Wang-Ekvall, LLP serves as Mr. Chae's legal counsel.
DURRANI M.D.: Court Approves Disclosures and Confirms Amended Plan
------------------------------------------------------------------
Judge Christopher Lopez has entered an order approving the
corrected Amended Disclosure Statement and confirming the Amended
Plan of Reorganization of Durrani, M.D., & Associates, P.A. and
Omar Hayat Durrani, M.D.
The Debtors' Plan, filed on Aug. 25, 2021, proposes to pay
creditors from the future income of the Debtors' practice of
medicine. Secured claims include claims of First United Bank &
Trust for the home loan of Dr. Durrani; dues payable to the
homeowner's association; and a condominium loan from Bank of
America, N.A, among others. Dr. Durrani intends to sell the home
to satisfy the related loan. He also intends to sell the
condominium unit to use the equity thereof, estimated at $100,000,
to pay the general unsecured creditors on a pro rata basis.
General unsecured claims, which approximate $900,000, will be paid
their pro rata share of the equity from the sale of the
condominium, and the investment dividends per month for 60 months
beginning on the 15th day of the first month following the 60th day
after the effective date of the Plan.
A copy of the Amended Plan is available for free at
https://bit.ly/3l2PnfB from PacerMonitor.com.
According to the Plan Confirmation Order, the Plan is approved with
the following modifications:
Alief Independent School District, City of Houston, and Harris
County Municipal Utility District #355 (the "Taxing Entities") –
Regarding Business Personal Property Taxes - Notwithstanding
anything in the Chapter 11 Plan or this Order, taxes for the 2021
tax year and all subsequent years payable to Alief Independent
School District, City of Houston, and Harris County Municipal
Utility District #355 (the "Taxing Entities") shall be paid in the
ordinary course of business prior to delinquency, whether or not a
claim is filed in this case. Failure to pay the taxes in the
ordinary course of business prior to delinquency for the 2021 and
subsequent tax years shall be a default under this Plan. The Taxing
Entities are not required to file a postpetition administrative
claims for the 2021 tax year. Payments of the Allowed Secured Tax
Claims for delinquent taxes to Alief Independent School District
and the City of Houston shall be paid in full no later than 60
months from the Petition Date in equal monthly instalments
beginning on the 15th day of the first calendar month following 30
days after the effective date as required by 11 U.S.C. §§ 1129
(a)(9)(C) and (D). The liens of the Taxing Entities for the
prepetition taxes, the current year and all subsequent years shall
be retained against the property. Failure to comply with any
provisions of this paragraph is a default under the Plan and
entitles the Taxing Entities, subject to the Default provisions of
the Plan, to take any and all action authorized under Texas law in
state court to collect the full amounts due as calculated under
Texas law.
Harris County, et al. – Regarding Business Personal Property
Taxes - This creditor's claim is $8,770.52 for the business
personal property taxes. It will be paid in full the amount it is
owed pursuant to the requirements of the United States Bankruptcy
Code in equal monthly payments so that all payments are made within
five years from the Petition Date with the first monthly payment
being due and payable on the 15th day of the 1st calendar month
following 30 days after the Effective Date of the Plan. It will be
paid the applicable non-bankruptcy rate of interest as provided
under 11 U.S.C. 511. This creditor shall retain all liens it
currently holds, whether for pre-petition tax years or for the
current tax year, on any personal property of the Debtors until it
receives payment in full of all taxes and interest owed to it under
the provisions of this Plan, and its lien position shall not be
diminished or primed by any Exit Financing approved by the Court in
conjunction with the confirmation of this Plan. The payment will be
approximately $231.00. Debtor shall pay all post-petition ad
valorem tax liabilities (tax year 2021 and subsequent tax years)
owing to Harris County in the ordinary course of business as such
tax debt comes due and prior to said ad valorem taxes becoming
delinquent without the need of Harris County to file an
administrative expense claim and/or request for payment.
First United Bank & Trust Company - The claim of First United
Bank & Trust Company is represented by a promissory note dated
November 22, 2019 in the original principal amount of $539,510.00
(the "Note"), secured by a Deed of Trust executed on even date
therewith, granting the holder of the aforementioned obligation a
lien on the real property commonly known as 2015 Ivy Crest Court,
Houston, Texas 77077 (hereinafter the "Collateral"). Upon
confirmation of the Chapter 11 Plan, the Debtor surrenders the
Collateral. First United Bank & Trust Company may proceed to
exercise its rights against the Collateral under the terms of the
note and Deed of Trust. Notwithstanding anything contained in this
Plan to the contrary, the lien granted to First United Bank & Trust
Company shall survive entry of the order of confirmation.
Harris County, et al. – Regarding Ad Valorem Property Taxes
Regarding Homestead – The Debtor is surrendering the homestead
located at 2015 Ivy Crest Court, Houston, Texas 77077. Accordingly,
no ad valorem property taxes will be paid in the plan regarding the
homestead.
A copy of the Disclosure Statement dated Nov. 3, 2021, is available
at https://bit.ly/3k8mfUg from PacerMonitor.com.
About Durrani, M.D.
Durrani, M.D., & Associates, P.A. -- http://www.durranimd.com/--
filed a Chapter 11 petition (Bankr. S.D. Tex. Lead Case No.
20-35543) on November 13, 2020. 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 Omar H.
Durrani, M.D., president. Judge Christopher M. Lopez presides over
the case.
Also on Nov. 13, Dr. Durrani himself filed a Chapter 11 petition
(Bankr. S.D. Tex. Case No. 35546). The cases are jointly
administered under Durrani, M.D., & Associates, P.A.
The Law Office of Margaret M. McClure represents the Debtors.
EMERGENT BIOSOLUTIONS: S&P Affirms 'BB' ICR, Alters Outlook to Neg.
-------------------------------------------------------------------
S&P Global Ratings revised its outlook on Emergent BioSolutions
Inc. to negative from stable and affirmed its ratings on the
company, including its 'BB' issuer credit rating and 'BB-'
issue-level rating on the senior unsecured notes.
S&P said, "The negative outlook reflects our view that the contract
termination and quality control issues at its Bayview facility in
Baltimore, Md. have increased the risk of disrupting the company's
relationships with key customers as well as impeding its ability to
develop new ones. We believe this reduces our ability to estimate
the company's earnings prospects thereby increasing the likelihood
of a downgrade."
Emergent BioSolutions Inc. recently announced the termination of
its Center for Innovation in Advanced Development and Manufacturing
(CIADM) contract with the U.S. government, including the task order
to reserve capacity for the manufacture of AstraZeneca's COVID-19
vaccine.
S&P said, "We believe the loss of the CIADM contract increases
uncertainty about the future of Emergent's existing and potential
customer relationships. We view the company's long-term contractual
agreements with government agencies as a key competitive advantage
that we incorporate in our rating analysis. We believe the
unilateral CIADM contract termination with BARDA (the Biomedical
Advanced Research and Development Authority) was driven by
Emergent's high-profile manufacturing issues at its Bayview
facility and raises concerns that other long-standing U.S.
government contracts may also be at risk. That said, we note the
Assistant Secretary for Preparedness and Response (ASPR), which
oversees BARDA, just exercised contract options to upsize orders
for anthrax and smallpox vaccines for the strategic national
stockpile, suggesting this relationship remains in good standing.
Additionally, we did not previously expect that the task order to
maintain capacity for the manufacture of AstraZeneca's vaccine
would be renewed into 2022, given that this vaccine had stopped
production and never received approval in the U.S. As a result, the
impact to our forecast of the company's credit measures from the
termination is not significant.
"We expect the reputational damage suffered by the company since
earlier this year will make it more difficult to win new contracts
within its CDMO business. We previously viewed the CDMO business
(net of COVID-19 related vaccine tailwinds) as a key growth driver
in Emergent's quest toward $2 billion in revenue, but we now
believe that expanding this segment will be more challenging.
Emergent announced around $120 million of new contract wins in the
third quarter of 2021, but we believe growth prospects are limited
at this time due to the operational missteps at its Bayview
facility in Baltimore, Md."
Uncertainty surrounds Narcan as generic competition looms. Sales of
the opioid antagonist nasal spray were up 50% year over year,
driven by the ongoing crisis in the U.S. However, S&P anticipates
generic competition will enter the market in the fourth quarter of
2021 or early 2022, resulting in substantial revenue declines and
margin compression. This might be mitigated somewhat by Narcan's
exposure to public interest pricing (PIP) markets (approximately
60% of sales), where it is already offered at a highly discounted
price. Emergent recently announced that it plans to launch its own
authorized generic when competition enters the market.
A substantial cash balance provides some credit protection and
financial flexibility. S&P said, "Emergent had around $400 million
of cash on Sept. 30, 2021, and we expect them to close the year
with more than $500 million on the balance sheet. While we do not
net cash against debt in our adjusted credit measures, we believe
the large balance provides a buffer against potential deficits in
operating cash flow generation. It also provides capacity for the
company to invest in growing the business through acquisitions or
capital expenditure projects while maintaining leverage within the
company's comfort level, which we believe is between 2x and 3x."
S&P said, "The negative outlook reflects our view that the contract
termination and quality control issues at its Bayview facility in
Baltimore, Md. have increased the risk of disrupting the company's
relationships with key customers as well as impeding its ability to
develop new ones. We believe this reduces our ability to estimate
the company's earnings prospects thereby increasing the likelihood
of a downgrade."
S&P could lower its rating on the company in the next 12 to 18
months if it expects Emergent's:
-- Competitive position has weakened, potentially due to further
negative contract developments, or significantly weaker earnings
prospects within its base products business; or
-- Adjusted debt to EBITDA to be sustained above 3x, potentially
due to weaker financial performance than expected or a change in
S&P's view of the company's financial policy.
S&P said, "We could return the rating outlook to stable within the
next 12 to 18 months if Emergent's operating performance is
trending roughly in line with, or better than, our forecast and we
see signs that its reputation with customers is improving. In this
scenario, we would also expect adjusted debt to EBITDA to remain
below 3x."
EMPLOYBRIDGE HOLDING: Fitch Affirms 'B+' LT IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) for EmployBridge Holding Company (EmployBridge) at 'B+'
following the announced acquisition of Hire Dynamics. The Rating
Outlook remains at Stable. Fitch has also affirmed the senior
secured term loan at 'BB-/RR3'. The ratings impact approximately
$925 million of term loan debt outstanding following completion of
the pending Hire Dynamics acquisition (projected in 4Q21).
Fitch views Hire Dynamics as complementary to EmployBridge's
business, and the acquisition will further bolster its scale and
capabilities in the industrial staffing segment. The acquisition
will increase gross leverage above Fitch's negative sensitivity in
the near term, but Fitch believes EBITDA growth in 2022-23 will
keep the company in the 4.0x-5.0x range in the coming years.
KEY RATING DRIVERS
End Market Concentration, Customer Diversification: Fitch considers
EmployBridge's product concentration a limiting factor for the IDR.
The company generates nearly all of its revenue from U.S. staffing
solutions for the light industrial market (e.g., warehouses,
distribution centers, e-commerce fulfilment centers). There are
tailwinds in these areas as demand continues to grow for e-commerce
and U.S. manufacturing trends improve post COVID. However, the
focus on these areas leaves it exposed to higher risk versus other
more diversified services companies. Customer concentration
positively impacts the IDR, as there is material diversification
with no customer representing more than 3% of revenue.
Fragmented Industry: EmployBridge has meaningful scale among
staffing companies, with $3.7 billion in expected pro forma
revenue, 13,000 customers across various industries and more than
400,000 annual job placements. However, the $136 billion U.S.
staffing industry is highly fragmented and competitive, which Fitch
believes is reflected in the company's low- to mid-single digit
percentage EBITDA margins. EmployBridge only competes in the
industrial component of the market and is among the largest
competitors but still has less than 10% market share.
Industry Cyclicality: The highly cyclical nature of the staffing
industry is a key credit consideration that limits the IDR. The
company could experience material negative headwinds in a recession
and/or during an industrial slowdown, given its meaningful exposure
to industrial end markets. Peers in the staffing space experienced
revenue declines as high as 30%-40% during 2008-2009. EmployBridge
was much smaller during the 2008 recession but reported its revenue
and adjusted EBITDA down 9% and 12%, respectively, during 2020.
While the pandemic conditions impacted U.S. economic output and the
company's financials during 2020, a more prolonged recession could
have a more material impact.
Low Margins: Fitch views the company's low margins as a
constraining factor for the IDR. Fitch calculates EBITDA in the 3%
to 4% range in recent years and the company could see modest
improvement in 2022-2024 driven by revenue growth and cost savings
initiatives. Margins are higher in the 25%-30% range when measured
by gross profit, which is also relevant to consider given the
pass-through nature of the business model. Even by this measure
both EBITDA and FCF margins are below those of certain peers Fitch
reviews in the business services area.
Moderate Leverage: Fitch-calculates gross debt/EBITDA will be in
the mid-5.0x range at YE 2021, pro forma for the pending Hire
Dynamics acquisition. Fitch projects it will be in the mid-4.0x to
low-5.0x range in the coming years, which is manageable for the
rating category given positive projected FCF. However, industry
cyclicality and the largely transactional nature of the business
imply higher risk versus other business services issuers Fitch
rates. EmployBridge underwent a material merger with one of its
competitors in 2015, and future M&A could impact leverage
materially. Fitch also believes private equity ownership and
potential capital returns over time will impact financial leverage
in the future.
Solid Liquidity: Fitch expects the company to continue to generate
positive FCF in the coming years, which should limit liquidity risk
over the medium-term horizon. Fitch estimates solid positive FCF
over the next few years. Given the cyclical nature of the business
model, cash flows would be negatively impacted during a prolonged
downturn. However, the largely variable cost structure of the
business would provide some buffer in a downside scenario. The
company also has a sizeable asset-based loan facility that is
projected to be undrawn at acquisition closing, which further
improves the company's liquidity position.
DERIVATION SUMMARY
Fitch's ratings and Outlook for EmployBridge are supported by the
company's sizeable presence in the U.S. industrial staffing market
and its asset-light business model that enables strong FCF
flow-through from EBITDA. Fitch compares the company to a variety
of high-yield business services issuers. Relative to other business
services companies Fitch reviews, EmployBridge relies more heavily
on transactional revenues and does not have a meaningful mix of
contractual sales (although its business is generally stable during
non-recessionary periods).
Similar to other staffing companies, it operates a low margin
business that increases risk during periods of macro weakness.
While gross leverage projected in the 4.0x to 5.0x range is
moderate for the rating category, industry cyclicality, low margins
and small scale constrain the IDR to the 'B+' rating category
versus other business services companies the agency rates.
KEY ASSUMPTIONS
-- Revenue rebounds in 2021 driven by U.S. economic improvement
and strong demand in e-commerce. Hire Dynamics acquisition
closes in late 2021.
-- EBITDA margins improve modestly in the next few years, helped
by cost reduction initiatives and incremental flow-through
from higher revenues.
-- FCF generation remains positive over the horizon, supported by
modest working capital needs, low capital intensity and tax
credits.
-- Gross leverage largely remains in the mid-4.0x to 5.0x range,
with fluctuations tied to capital allocation priorities that
could lean toward dividends or M&A over time.
Recovery Assumptions:
For entities rated 'B+' and below -- where default is closer and
recovery prospects are more meaningful to investors -- Fitch
undertakes a tailored, or bespoke, analysis of recovery upon
default for each issuance. The resulting debt instrument rating
includes a Recovery Rating or published 'RR' (graded from 'RR1' to
'RR6'), and is notched from the Issuer Default Rating accordingly.
In this analysis, there are three steps: (i) estimating the
distressed enterprise value (EV); (ii) estimating creditor claims;
and (iii) distribution of value.
Fitch assumed EmployBridge would emerge from a default scenario
under the going concern approach versus liquidation. Key
assumptions used in the recovery analysis are as follows:
-- Going Concern EBITDA of $148 million, or meaningfully below
the company's current pro forma profitability. This meaningful
pullback could be driven by macro issues, mis-execution and/or
share loss;
-- EV Multiple of 6.0x, which is validated by comparable trading
multiples in the staffing industry (current and historical),
M&A transactions in the space historically and reorganization
multiples Fitch has seen historically;
-- Fitch also assumes a majority draw at default on the company's
ABL revolver.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch-calculated gross leverage, or total debt with equity
credit/EBITDA, sustained below 4.0x;
-- (CFO-Capex)/total debt with equity credit sustained above
7.5%;
-- Fitch could also reassess the rating with a material increase
in EBITDA scale.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch-calculated gross leverage, or total debt with equity
credit/EBITDA, expected to be sustained above 5.0x;
-- Sustained EBITDA margin pressure to 3% or below could also
lead to a negative rating action.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: EmployBridge is well positioned from a liquidity
perspective, with cash on its balance sheet, a sizeable ABL
revolver in place following its acquisition by Apollo, and positive
FCF projected in the coming years. The company is expected to have
a sufficient cash balance at YE 2021 and has a $300 million ABL
revolver in place (will be upsized to $360 million along with the
acquisition). The company generated positive FCF in 2020 and Fitch
forecasts could generate strong positive FCF from 2022-2024, which
further supports liquidity.
Debt Structure: The company has a relatively simple debt capital
structure, with a $725 million term loan (will be upsized to $925
million upon closing of the Hire Dynamics acquisition) and a $300
million ABL revolving facility (undrawn; will be upsized to $360
million). The ABL facility expires in 2026 and the term loan
matures in 2028. All of the company's debt is floating rate.
ISSUER PROFILE
EmployBridge is one of the largest flexible workforce providers in
the U.S., with a focus on light industrial, supply chain jobs
including skilled manufacturing, forklift operators, pickers and
material handlers, assemblers, technicians, and other manufacturing
and logistics type roles.
ESG CONSIDERATIONS
EmployBridge has an ESG Relevance Score of '4' for Governance
Structure and Financial Transparency due to its current ownership
structure including private equity owners controlling the company,
which negatively impacts the rating due to high leverage and more
limited financial disclosure, and is relevant to the rating in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - 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.
ENTRUST ENERGY: Gets Court OK to Solicit Liquidation Plan Votes
---------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that Texas energy retailer
Entrust Energy Inc. won court approval to seek creditor votes on
its plan to wind down in bankruptcy and create a trust to liquidate
remaining assets, including a $175 million lawsuit against Shell
Energy North America US LP.
Entrust, which filed Chapter 11 following the toll of February
2021's winter storm on the Texas power grid, won approval of its
plan disclosure materials during a virtual hearing Wednesday, Nov.
10, 2021, in the U.S. Bankruptcy Court for the Southern District of
Texas.
Judge Marvin Isgur conditionally approved a creditor vote after the
company added details about how claims will be administered.
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. Tex. 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.
ESSENTIAL PROPERTIES: S&P Affirms 'BB+' ICR, Alters Outlook to Pos.
-------------------------------------------------------------------
S&P Global Ratings revised its outlook to positive from stable, and
affirmed all ratings, including its 'BB+' issuer credit rating on
Essential Properties Realty Trust Inc. (EPRT) and its 'BBB-'
issue-level rating on its senior unsecured notes.
S&P said, "The positive outlook reflects our expectation for
continued portfolio growth and solid operating performance,
supported by its long-term triple-net leases and high occupancy. It
also reflects our expectation that the company will fund its
investment activity with a combination of equity, free cash flow,
dispositions, and incremental debt such that it operates with S&P
Global Ratings-adjusted debt to EBITDA in the mid- to high-5x area
over the near term."
EPRT's operating performance was resilient over the past 18 months,
with many metrics now improved from pre-pandemic levels. Same-store
rent increased by 1.4% during the third quarter of 2021, the first
year-over-year period of growth since the start of the pandemic.
Collections have returned to 100% while deferrals that occurred
during the pandemic have been collected on schedule. The company's
leased percentage was 99.9% as of Sept. 30, 2021, with just one
vacant property, an improvement from 99.5% as of March 31, 2020.
Unit-level rent coverage improved to 3.5x as of Sept. 30, 2021,
compared with 3.2x the previous quarter and 2.9x as of March 31,
2020. The improvement has been seen throughout the company's
portfolio, but most notably among its weaker tenants, as the
percentage of cash annualized base rent (ABR) from tenants with
coverage below 1.5x declined to 17% from 27.2% the previous
quarter.
The company has continued to expand its portfolio via
sale-leaseback transactions. During the third quarter of 2021, EPRT
acquired 85 properties for $230.8 million at an average cash cap
rate of 7.0%, sourcing the majority of transactions through its
industry relationships. In the third quarter, 84% of the
acquisitions were sale-leaseback transactions. Over the past 12
months, EPRT has acquired 361 properties for nearly $900 million,
bringing the company's total gross real estate investments to $2.9
billion as of Sept. 30, 2021 (compared with $2.2 billion one year
earlier). S&P expects the company's pace of acquisitions to slow
modestly over the next two years, with net investment activity of
approximately $700 million annually.
S&P said, "We consider EPRT's approach to sale-leaseback
transactions under triple-net leases as a credit positive. These
transactions result in a lower likelihood of move-outs, given the
tenant's prior site selection and the long-term structure of
leases. Furthermore, the company's approach of leveraging existing
relationships allows it to reach lease agreements with less
competition and more favorable terms. We view triple-net leases as
having less volatility and more long-term predictability of cash
flows than other REIT property types, given their longer average
lease duration. As of Sept. 30, 2021, 83.3% of cash ABR was
generated from sale-leaseback transactions and 94.5% from
triple-net lease structures.
"EPRT has funded its acquisitions with a significant amount of
equity, helping to modestly improve key credit metrics. The company
sold 3.4 million shares of common stock at a weighted average sales
price of $30.51 in the third quarter, for total net proceeds of
$101.1 million. S&P Global Ratings-adjusted debt to EBITDA, which
we calculate on a trailing-12-month basis, improved to 5.9x as of
Sept. 30, 2021, from 6.2x the previous quarter. This metric is
still materially above the company's net debt to annualized
adjusted EBITDA calculation of 4.5x, as of Sept. 30, 2021, due to
the high level of growth and relatively small scale of the company.
We would expect the S&P Global Ratings-adjusted debt to EBITDA
metric to slowly converge toward the company's annualized metric,
assuming that investments continue to be funded with a significant
amount of equity."
"The positive outlook reflects our expectation for continued
portfolio growth and solid operating performance, supported by its
long-term triple-net leases and high occupancy. The outlook also
reflects our expectation that the company will fund its investment
activity with a combination of equity, free cash flow,
dispositions, and incremental debt such that it operates with
adjusted debt to EBITDA in the mid- to high-5x area over the next
12-24 months."
S&P would consider raising its issuer credit rating on EPRT if:
-- It continues to improve its scale to a level more comparable
with those of higher-rated peers without material degradation to
tenant coverage levels; and
-- It maintains its conservative financial policy as it relates to
funding acquisitions, such that key credit measures remain near
current levels.
S&P would consider revising its outlook to stable on EPRT if:
-- It adopts a more aggressive financial policy, financing
investment activity with a greater proportion of debt, such that
key credit metrics deteriorate materially from current levels; or
-- Its operating performance deteriorates and compares unfavorably
with peers, with material tenant bankruptcies leading to falling
occupancy and same-store cash net operating income (NOI) declines.
FLEXIBLE FUNDING: Gets Cash Collateral Access Through Nov. 20
-------------------------------------------------------------
Judge Mark X. Mullin of the U.S. Bankruptcy Court for the Northern
District of Texas authorized Flexible Funding Ltd. Liability Co.
and Instapay Flexible LLC to use cash collateral for the period
from November 7 through 20, 2021, pursuant to the budget, to fund
borrower accounts.
The cash flow forecast filed in Court provided, among others, for
total operating costs of $279,570 for the week ending November 13
and $90,662 for the week ending November 20, 2021.
As of September 20, 2021, the Debtors owe $77,778,667 under a
prepetition Credit Agreement, as amended, with their Lenders and
Umpqua Bank, as administrative agent, pursuant to which the
Prepetition Secured Parties provided the Debtors a revolving credit
line of up to $100,000,000 in aggregate original principal amount.
The Agent holds valid, senior, perfected and enforceable liens in
substantially all of the Debtors' assets as of the Petition Date,
and all proceeds thereof.
Judge Mullin ruled that the Lenders are granted a replacement lien
in the Debtors' assets in the same order of priority that existed
as of the Petition Date. The Lenders shall also have an allowed
superpriority administrative expense claim as additional partial
adequate protection, to the extent of any diminution in value of
their interest in the cash collateral. The replacement lien shall
be subject to the carve-out of funds for fees payable to the Clerk
of Court, the U.S. Trustee, and all fees and expenses of Candlewood
Partners, LLC.
All fees, costs and expenses incurred by the Prepetition Secured
Parties in relation to the Debtors' bankruptcy cases may be charged
by the Prepetition Secured Parties, and shall be paid by the
Debtors out of the cash collateral, provided that the Debtors, the
U.S. Trustee or any Committee may petition the Court to determine
the reasonableness of such costs and provided that such costs shall
not be considered as a budget item.
The Debtors' use of the cash collateral is conditioned on the
Debtors pursuing a sale of substantially all of their assets and
the accomplishment of these requirements:
* entry of a Court order approving the bid procedures and the
scheduling of a hearing to approve a sale transaction on or before
45 days after the Petition Date;
* commencement of the auction contemplated in the Bid Procedures
Order on or before November 15, 2021; and
* subject to the Court's availability, entry of an order
approving a sale transaction on or before 10 business days after
the auction.
On or before the first business day following the end of each week
during the budget period, the Debtors shall cause all cash
collateral in excess of $7,500,000 to be transferred to a blocked
account maintained at Umpqua Bank. To the extent the Debtors need
to use cash collateral in excess of $7,500,000 during the budget
period, the Debtors may request use of additional funds from the
Agent on a case-by-case basis with the need of further Court
approval.
A copy of the Fourth Interim Order is available for free at
https://bit.ly/3o2Wg1M from PacerMonitor.com.
About Flexible Funding
Flexible Funding Ltd. Liability Co. and Instapay Flexible LLC filed
voluntary petitions for Chapter 11 protection (Bankr. N.D. Tex.
Lead Case No. 21-42215) on Sept. 19, 2021. Judge Mark X. Mullin
oversees the cases.
At the time of the filing, Flexible Funding disclosed between $100
million and $500 million in both assets and liabilities while
Instapay listed between $10 million and $50 million in both assets
and liabilities.
The Debtors tapped Forshey & Prostok LLP as legal counsel and Ward
and Smith, PA as special counsel.
FOSSIL GROUP: Completes Sale of $150 Million Senior Notes
---------------------------------------------------------
Fossil Group, Inc. consummated the issuance and sale of
$150,000,000 aggregate principal amount of senior notes, including
the full exercise of the underwriters' over-allotment option
pursuant to the company's underwriting agreement with B. Riley
Securities, Inc.
On Nov. 3, 2021, Fossil Group entered into the underwriting
agreement with B. Riley, as representative of several underwriters,
providing for the issuance and sale of $140,000,000 aggregate
principal amount of the Company's 7.00% Senior Notes due 2026 plus
up to an additional $10,000,000 aggregate principal amount of 7.00%
Senior Notes due 2026 pursuant to an option to purchase additional
notes.
The Notes were offered pursuant to the Company's shelf registration
statement on Form S-3 (Registration No. 333-259352), which was
declared effective by the Securities and Exchange Commission on
Sept. 30, 2021.
The Underwriting Agreement contains customary representations,
warranties and covenants of the Company, customary conditions to
closing, indemnification obligations of the Company and the
Underwriters, including for liabilities under the Act, other
obligations of the parties and termination provisions.
On Nov. 8, 2021, the Company also entered into an indenture and a
first supplemental indenture with The Bank of New York Mellon Trust
Company, N.A., as trustee. The Indenture establishes the form, and
provides for the issuance, of the Notes.
The Notes are general unsecured obligations of the Company and rank
equally in right of payment with all of the Company's existing and
future senior unsecured and unsubordinated indebtedness, and will
rank senior in right of payment to the Company's future
subordinated indebtedness, if any. The Notes are effectively
subordinated to all of the Company's existing and future secured
indebtedness, to the extent of the value of the assets securing
such indebtedness, and the Notes are structurally subordinated to
all existing and future indebtedness and other liabilities
(including trade payables) of the Company's subsidiaries (excluding
any amounts owed by such subsidiaries to the Company). The Notes
bear interest at the rate of 7.00% per annum. Interest on the
Notes is payable quarterly in arrears on February 28, May 31,
August 31 and November 30 of each year, commencing on Feb. 28,
2022. The Notes will mature on
Nov. 30, 2026.
The Company may redeem the Notes for cash in whole or in part at
any time at its option. Prior to Nov. 30, 2023, the redemption
price will be $25.00 per $25.00 principal amount of Notes, plus a
"make-whole" premium consisting of the greater of (1) 1.0% of the
principal amount of the Note and (2) the excess of (a) the present
value at such redemption date of (i) the redemption price of the
Note at Nov. 30, 2023 plus (ii) all required interest payments due
on the Note through Nov. 30, 2023 (excluding accrued but unpaid
interest to the redemption date), computed using a discount rate
equal to the Treasury Rate as of such redemption date plus 50 basis
points discounted to the redemption date on a semi-annual basis
(assuming a 360- day year consisting of twelve 30-day months), over
(b) the principal amount of the Note, plus accrued and unpaid
interest, if any, to, but excluding, the date of redemption. On
and after Nov. 30, 2023 the Company may redeem the Notes (i) on or
after Nov. 30, 2023 and prior to Nov. 30, 2024, at a price equal to
$25.50 per $25.00 principal amount of Notes, (ii) on or after Nov.
30, 2024 and prior to Nov. 30, 2025, at a price equal to $25.25 per
$25.00 principal amount of Notes and (iii) on or after Nov. 30,
2025, at a price equal to $25.00 per $25.00 principal amount of
Notes, plus (in each case noted above) accrued and unpaid interest,
if any, to, but excluding, the date of redemption.
The Indenture contains customary events of default and cure
provisions. If an event of default (other than an event of default
of the type described in the following sentence) occurs and is
continuing with respect to the Notes, the Trustee may, and at the
direction of the registered holders of at least 25% in aggregate
principal amount of the outstanding debt securities of the Notes
shall, declare the principal amount plus accrued and unpaid
interest, premium and additional amounts, if any, on the Notes that
series to be due and payable immediately. If an event of default
relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, the principal amount plus
accrued and unpaid interest, and premium, if any, on the Notes will
become immediately due and payable without any action on the part
of the Trustee or any holder of the Notes.
About Fossil Group
Headquartered in Richardson, Texas, Fossil Group, Inc. --
www.fossilgroup.com -- is a global design, marketing and
distribution company that specializes in consumer fashion
accessories. The Company's principal offerings include an
extensive line of men's and women's fashion watches and jewelry,
handbags, small leather goods, belts, and sunglasses. In the watch
and jewelry product categories, the Company have a diverse
portfolio of globally recognized owned and licensed brand names
under which its products are marketed.
Fossil Group reported a net loss of $95.94 million in 2020, a net
loss of $50.01 million in 2019, and a net loss of $938,000 in 2018.
As of July 3, 2021, the Company had $1.34 billion in total assets,
$521.8 million in total current liabilities, $406.31 million in
total long-term liabilities, and $409.33 million in total
stockholders' equity.
FRESH ACQUISITIONS: Unsecureds to Get 10% in Committee Plan
-----------------------------------------------------------
The Official Committee of Unsecured Creditors in Fresh
Acquisitions, LLC, et al.'s cases filed an Amended Chapter 11 Plan
for the Debtors and a corresponding Disclosure Statement.
The Creditors Committee has filed a Plan to liquidate the Debtors'
remaining assets and to provide for an orderly payment of the
liquidation funds to Creditors. As of the date of the Disclosure
Statement, the Debtors' assets consist principally of cash believed
to be approximately $2,020,000 that was derived from the operation
and sale of the Tahoe Joe's restaurants and the Causes of Action as
defined in the Plan and described in Sections XI and XIII of this
Disclosure Statement.
The Plan proposes a liquidation of the remaining assets of the
Debtors and their Estates through the creation of a Liquidating
Trust to which all of Estates' remaining assets will be transferred
on the Effective Date of the Plan. A Liquidating Trustee will be
appointed to evaluate and liquidate the assets for the benefit of
Creditors, to prosecute and litigate Causes of Action and Claim
objections, and to ultimately distribute all proceeds to Creditors
and Interest Holders.
Under the Plan, Class 2 General Unsecured Creditors will each
receive a Pro-Rata beneficial interest in the Liquidating Trust and
will be paid its pro-rata share of the Liquidating Trust Fund in
accordance with the Liquidating Trust Agreement and the Plan after
full payment of Allowed Administrative Claims, Allowed Priority Tax
Claims, and the Holders of Claims in Class 1. Class 2 is
impaired.
The Committee believes that administrative creditors will be paid
in full in the first year after the Effective Date. In the third
year after the Effective Date, priority claims will be paid in full
and the Trustee will be able to commence payments to unsecured
creditors. Unsecured creditors will receive by the end of year
five a total of $9,785,000 predicted to be about a 10 percent
recovery.
Plan funding and payment to Creditors is based on the Litigation
Recovery. The failed VitaNova Sale included the proposed purchase
of all of the Causes of Action for no identifiable consideration.
In litigating its objection to the VitaNova Sale on that basis, the
Committee believed it was critical to evaluate and retain for the
benefit of the Creditors the potential monetary recoveries from the
pursuit of the Causes of Action, particularly those causes of
action against VitaNova and its Affiliates.
The Debtors question whether the Plan satisfies the Feasibility
Test. As part of this standard, the Committee has the burden to
prove that the Liquidating Trustee will be able to make all
required payments to taxing authorities on account of their Allowed
Priority Tax Claims. Given the amounts presently asserted by
taxing authorities -- approximately $175 million -- the Debtors
question whether a Chapter 11 plan can be confirmed. The Committee
believes that the actual Allowed Priority Claims will be reduced to
$6.5 million, and that the Litigation Recovery will be sufficient
to pay such amounts over time.
Counsel for the Official Committee of Unsecured Creditors:
Carolyn J. Johnsen
William L. Novotny
DICKINSON WRIGHT PLLC
1850 North Central Avenue, Suite 1400
Phoenix, Arizona 85004
Telephone: (602) 285-5000
Facsimile: (844) 670-6009
E-mail: cjjohnsen@dickinsonwright.com
wnovotny@dickinsonwright.com
A copy of the Disclosure Statement dated October 30, 2021, is
available at https://bit.ly/3bGDBmP from PacerMonitor.com.
About Fresh Acquisitions
Fresh Acquisitions LLC and Buffets, LLC, operate independent
restaurant brands and are based in San Antonio, Texas. Prior to the
COVID-19 pandemic, the Debtors were a significant operator of
buffet-style restaurants in the United States with approximately 90
stores operating in 27 states. The Debtors' concepts include six
buffet restaurant chains and a full service steakhouse, operating
under the names Furr's Fresh Buffet, Old Country Buffet, Country
Buffet, HomeTown Buffet, Ryan's, Fire Mountain, and Tahoe Joe's
Famous Steakhouse, respectively.
Buffets Holdings, Inc., filed for Chapter 11 relief in January 2008
and won confirmation of a reorganization plan in April 2009. In
January 2012, Buffets again sought Chapter 11 protection and
emerged from bankruptcy in July 2012.
On Aug. 19, 2015, Alamo Ovation, LLC, acquired Buffets Restaurants
Holdings, Inc., and as a result of the merger, Buffets operated
over 300 restaurants in 35 states. Down to 150 restaurants in 25
states after closing unprofitable locations, Buffets LLC and its
affiliated entities sought Chapter 11 protection (Bankr. W.D. Tex.
Case No. Lead Case No. 16-50557) in San Antonio, Texas, on March 7,
2016. On April 27, 2017, the Court confirmed the Debtors' Second
Amended Joint Plan of Reorganization. The Effective Date of the
Plan was May 18, 2017.
Fresh Acquisitions, LLC and 14 affiliates, including Buffets LLC
(a/k/a Ovation Brands), sought Chapter 11 protection (Bankr. N.D.
Tex. Lead Case No. 21-30721) on April 20, 2021. Fresh Acquisitions
was estimated to have $1 million to $10 million in assets and $10
million to $50 million in liabilities. The Hon. Harlin Dewayne Hale
is the case judge.
In the recent cases, the Debtors tapped GRAY REED as counsel; and
B. RILEY ADVISORY SERVICES as financial advisor. KATTEN MUCHIN
ROSENMAN LLP is special counsel. BMC GROUP, INC., is the claims
and noticing agent. HILCO REAL ESTATE, LLC, is the real estate
consultant.
FTPO, LLC: Court Denies Cash Use Motion as Moot, Dismisses Case
---------------------------------------------------------------
Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern
District of Florida denied as moot FTPO, LLC's motion to use the
cash collateral of First Citizens Bank & Trust Company. Judge Mora
on September 13, 2021, granted the Debtor's Motion to Approve
Compromise and Settlement with First Citizens Bank and to
Voluntarily Dismiss Cases of Subsidiary Debtor Entities. The
Court, on that date, entered an order dismissing the Debtor's case.
A copy of the cash collateral order is available for free at
https://bit.ly/3GZ68lP from PacerMonitor.com.
About FTPO, LLC
FTPO, LLC is a Single Asset Real Estate debtor, as defined in
Section 101(51B) of the Bankruptcy Code. The Debtor filed a
Chapter 11 petition (Bankr. S.D. Fla. Case No. 21-15445) on June 1,
2021.
On the Petition Date, the Debtor reported $686,408 in total assets
and $3,192,633 in total liabilities. The petition was signed by
Ajay K. Goyal, manager of HRAG, LLC.
Judge Erik P. Kimball presides over the case. FurrCohen P.A. is
the Debtor's counsel.
On September 13, 2021, the Court dismissed the Debtor's case, after
entry of an order approving the compromise and settlement agreement
between the Debtor and First Citizens Bank & Trust Company, and the
voluntary dismissal of the case, at the Debtor's behest.
FUTURUM COMMUNICATIONS: $14M Sale to Denver VoIP to Fund Plan
-------------------------------------------------------------
Debtors Futurum Communications Corporation, Brainstorm Internet,
Inc., and San Isabel Telecom, Inc., filed with the U.S. Bankruptcy
Court for the District of Colorado a Chapter 11 Plan dated November
8, 2021.
This Plan constitutes a motion for substantive consolidation of the
liabilities and properties of Debtors' estates. Substantive
consolidation will extinguish the separate legal existence of each
Debtor. Substantive consolidation will have no effect on valid,
enforceable and unavoidable Liens except for Liens that may secure
intercompany claims. Further, substantive consolidation shall not
have the effect of creating a Claim and a Class different from the
class in which a Claim would have been placed in the absence of
substantive consolidation.
Asset Sale
Sellers, Debtors and Peak Internet, have entered into the APA with
Purchaser, Denver VoIP, LLC, for the sale of substantially all of
their assets, defined as the "Purchased Assets." The purchase price
consists of $14 million of cash at closing, the assumption of
certain liabilities and up to an additional $1.75 million based on
the performance of specified assets over the period of 2 years
following closing. Debtors believe that the $14 million in Cash at
closing offered by Purchaser is sufficient to pay all Allowed
Claims in full.
Secured Claims in Classes 1, 2A-2C, 3, 4A, 4B, 5A-5G, 6A-6C, 8 and
9. These Classes consist of the following Secured Claims: CP Bank
Secured Claim, Consara Secured Claims, SBA Towers Secured Claim,
Ally Bank Secured Claims, CIT Bank Secured Claims, LEAF Secured
Claims, Baker Secured Claim, and Other Secured Claims, which are
unimpaired. If these Claims have not been previously paid from Net
Sale Proceeds as may be authorized by the Sale Order, Allowed
Claims in these Classes shall, unless otherwise agreed, be paid in
full on the later of (i) the Initial Distribution Date, or (ii)
within 20 business days after any such Claim becomes an Allowed
Claim. Since these Classes are unimpaired and are deemed to accept
the Plan pursuant to Section 1126(f), the holders of Claims in
these Classes are not entitled to vote to accept or reject the
Plan.
Class 10 consist of the Priority Non-Tax Claims, which is
unimpaired. Allowed Claims in these Classes shall, unless otherwise
agreed, be paid in full, including interest at the Federal Judgment
Rate under 28 U.S.C. § 1961(a),on the later of (i) the Initial
Distribution Date, or (ii) within 20 business days after any such
Claim becomes an Allowed Claim. Since this Class is unimpaired and
is deemed to accept the Plan pursuant to Section 1126(f), the
holders of Claims in this Class are not entitled to vote to accept
or reject the Plan.
Class 11 consists of the General Unsecured Claims, which is
unimpaired. Allowed Claims in this Class shall, unless otherwise
agreed, be paid in full, including interest at the Federal Judgment
Rate under 28 U.S.C. § 1961(a), in Cash from the General Unsecured
Claims Fund on the later of (i) the Initial Distribution Date, or
(ii) within 20 business days after any such Claim becomes an
Allowed Claim. Since this Class is unimpaired and is deemed to
accept the Plan pursuant to Section 1126(f), the holders of Claims
in this Class are not entitled to vote to accept or reject the
Plan.
Class 14A consists of Futurum Shareholders. To the extent there are
funds remaining after the payment in full of Class 13 Claims,
Futurum Equity Interest holders will be paid the remaining Cash pro
rata. Since Class 14A is impaired, holders of Equity Interests in
this Class are entitled to vote to accept or reject the Plan.
Class 14B consists of San Isabel Preferred Shareholder. The
treatment of this Equity Interest under the Plan shall constitute a
settlement with the San Isabel Preferred Shareholder. She shall be
treated as a creditor holding an Allowed Subordinated Insider
Claim, with an Allowed Claim equal to $100,000. Since Class 14B is
impaired, the San Isabel Preferred Shareholder is entitled to vote
to accept or reject the Plan.
The funds necessary for Consolidated Futurum to windup the business
and make Cash distributions to creditors shall be obtained from Net
Sale Proceeds, Cash from the disposition of any remaining assets
(including "Excluded Assets" as that term is defined in the APA),
other Cash existing on the Effective Date (such as the amount of
unused retainers), and the proceeds of any litigation. Under the
terms of the APA, Sellers have the opportunity to earn up to
$1,750,000 in "Additional Compensation" which constitutes a part of
purchase price. If any such Additional Compensation is earned it
will not be payable until approximately 25-27 months after the
closing of the Asset Sale.
Upon the Effective Date, the Chapter 11 Cases shall be consolidated
into the case of Futurum as a single consolidated case. All
property of the estates of each Debtor shall become property of the
estate of Consolidated Futurum, and all Claims against each Debtor
(except for Secured Claims, which shall remain Claims against the
property of the Debtor) shall become Claims against Consolidated
Futurum.
All intercompany Claims of any Debtor against another Debtor shall
be cancelled, as well as any intercompany Claims of Forethought
Acquisitions and Peak Internet (the non-debtor subsidiaries)
against Debtors, and all guarantees by any Debtor in favor of any
other Debtor shall be eliminated. All intercompany Equity Interests
held by any Debtor in another Debtor shall be terminated and
cancelled, so that Consolidated Futurum, the resulting entity,
shall wholly hold the equity interests in the remaining non-debtor
affiliates, Peak Internet and Forethought Acquisitions.
A full-text copy of the Chapter 11 Plan dated Nov. 8, 2021, is
available at https://bit.ly/3Di1ay8 from PacerMonitor.com at no
charge.
Attorneys for Futurum Communications:
ONSAGER | FLETCHER | JOHNSON LLC
Andrew D. Johnson, #36879
Alice A. White, #14537
600 17th Street, Suite 425 North
Denver, Colorado 80202
Tel: (720) 457-7061
E-mail: ajohnson@OFJlaw.com
consager@OFJlaw.com
Attorneys for Brainstorm Internet:
WEINMAN & ASSOCIATES, P.C.
Jeffrey A. Weinman
730 17th Street, Suite 240
Denver, CO 80202-3506
Telephone: (303) 572-1010
Facsimile: (303) 572-1011
E-mail: jweinman@weinmanpc.com
Attorneys for San Isabel Telecom:
BELL, GOULD, LINDER, AND SCOTT, P.C.
Gregory S. Bell
318 East Oak Street
Fort Collins, CO 80524
Tel: (970) 493-8999
E-mail: gbell@bell-law.com
About Futurum Communications Corporation
Futurum Communications Corporation -- https://forethought.net/ --
is an independent locally owned internet, cloud and communications
service provider with offices in Denver, Grand Junction and
Durango.
Futurum Communications filed a petition for Chapter 11 protection
(Bankr. D. Colo. Case No. 21-11331) on March 21, 2021, listing up
to $50 million in both assets and liabilities. Affiliates San
Isabel Telecom, Inc. and Brainstorm Internet, Inc. filed their
voluntary Chapter 11 petitions (Bankr. D. Colo. Case Nos. 21-12534
and 21-12549) on May 12, 2021. Jawaid Bazyar, president, signed the
petitions.
Judge Kimberley H. Tyson oversees the cases.
The Debtors tapped Onsager Fletcher Johnson, LLC as bankruptcy
counsel, Lance J.M. Steinhart, PC as special counsel, and SL Biggs
as accountant.
GATA HF: Seeks to Hire Larson & Zirzow as Bankruptcy Counsel
------------------------------------------------------------
Gata HF, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Nevada to employ Larson & Zirzow, LLC as its legal
counsel.
The firm's services include:
(a) preparing legal papers;
(b) taking all necessary action in connection with a sale or a
plan of reorganization, and all related documents as may be
required in the administration of the Debtor's estate;
(c) taking all necessary actions to protect and preserve the
Debtor's estate; and
(d) performing all other legal services in connection with the
prosecution of the Chapter 11 case.
The Debtor and the firm have agreed to an original retainer of
$35,000.
The hourly rates of the firm's attorneys and staff are as follows:
Partners $600 per hour
Paraprofessionals $220 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
Matthew Zirzow, Esq., a partner at Larson & Zirzow, disclosed in a
court filing that his firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Matthew C. Zirzow, Esq.
Zachariah Larson, Esq.
Larson & Zirzow, LLC
850 E. Bonneville Ave.
Las Vegas, NV 89101
Telephone: (702) 382-1170
Facsimile: (702) 382-1169
Email: mzirzow@lzlawnv.com
zlarson@lzlawnv.com
About Gata HF LLC
Gata HF, LLC, a part of the "other crop farming industry" based in
Pahrump, Nev., filed its voluntary petition for Chapter 11
protection (Bankr. D. Nev. Case No. 21-14989) on Oct. 20, 2021,
listing as much as $10 million in both assets and liabilities.
Paul Thomas, sole member, signed the petition. Larson & Zirzow,
LLC serves as the Debtor's legal counsel.
GAUCHO GROUP: Inks Deal to Sell $6.5 Million Convertible Notes
--------------------------------------------------------------
Gaucho Group Holdings, Inc. entered into a securities purchase
agreement with certain institutional investors, pursuant to which
the company will sell to the investors a series of senior secured
convertible notes of the company, in the aggregate original
principal amount of $6,480,000, which notes shall be convertible
into shares of common stock of the company at a conversion price of
$3.50 (subject to adjustment).
The notes are due and payable on the first anniversary of the
issuance date and bear interest at a rate of 7% per annum, which
shall be payable in cash quarterly in arrears on each amortization
date (as defined in the notes) or otherwise in accordance with the
terms of the notes. The investors are entitled to convert any
portion of the outstanding and unpaid Conversion Amount (as defined
in the notes) at any time or times on or after the issuance date,
but Gaucho may not effect the conversion of any portion of the
notes if it would result in either of the investors beneficially
owning more than 4.99% of the common stock.
Under the applicable rules of The Nasdaq Stock Market LLC, in no
event may Gaucho issue any shares of common stock upon conversion
of the notes or otherwise pursuant to the terms of these notes if
the issuance of such shares of common stock would exceed 19.99% of
the shares of the common stock outstanding immediately prior to the
execution of the purchase agreement and notes, unless the company
(i) obtain stockholder approval to issue shares of common stock in
excess of the Exchange Cap or (ii) obtain a written opinion from
its counsel that such approval is not required. In any event, the
company may not issue any shares of its common under the purchase
agreement or notes if such issuance or sale would breach any
applicable rules or regulations of the Nasdaq.
The notes will rank senior to all outstanding and future
indebtedness of Gaucho and its subsidiaries, and will be secured by
all existing and future assets of the company, as evidenced by the
Security and Pledge Agreement between the company and the
investors. Additionally, Scott L. Mathis, President and CEO of
Gaucho, will pledge certain of his shares of common stock and
certain options to purchase common stock of the company as
additional collateral under the notes, as evidenced by the
Stockholder Pledge Agreement between the company, Mr. Mathis and
the investors.
In connection with the foregoing, Gaucho will enter into a
registration rights agreement with the investors, pursuant to which
the company has agreed to provide certain registration rights with
respect to the Registrable Securities (as defined in the
registration rights agreement) under the Securities Act of 1933 and
the rules and regulation promulgated thereunder, and applicable
state securities laws. The purchase agreement and the registration
rights agreement contain customary representations, warranties,
conditions and indemnification obligations of the parties. The
representations, warranties and covenants contained in such
agreements were made only for purposes of such agreements and as of
specific dates, were solely for the benefit of the parties to such
agreements and may be subject to limitations agreed upon by the
contracting parties.
EF Hutton, division of Benchmark Investments, Inc. acted as the
exclusive placement agent in connection with the transactions
contemplated by the purchase agreement, for which Gaucho will pay
to EF Hutton a cash placement fee equal to 6.0% of the amount of
capital raised, invested or committed under the purchase agreement
and notes.
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. --
http://www.algodongroup.com-- was incorporated on April 5, 1999.
Effective Oct. 1, 2018, the Company changed its name from Algodon
Wines & Luxury Development, Inc. to Algodon Group, Inc., and
effective March 11, 2019, the Company changed its name from Algodon
Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly-owned
subsidiaries, GGH invests in, develops and operates real estate
projects in Argentina. GGH operates a hotel, golf and tennis
resort, vineyard and producing winery in addition to developing
residential lots located near the resort. In 2016, GGH formed a new
subsidiary and in 2018, established an e-commerce platform for the
manufacture and sale of high-end fashion and accessories. The
activities in Argentina are conducted through its operating
entities: InvestProperty Group, LLC, Algodon Global Properties,
LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L.,
and Algodon Wine Estates S.R.L. Algodon distributes its wines in
Europe through its United Kingdom entity, Algodon Europe, LTD.
Gaucho Group reported a net loss of $5.78 million for the year
ended Dec. 31, 2020, compared to a net loss of $6.95 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$13.96 million in total assets, $4.62 million in total
liabilities, and $9.33 million in total stockholders' equity.
GIGA-TRONICS INC: Posts $64K Net Income in Second Quarter
---------------------------------------------------------
Giga-Tronics Incorporated filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $64,000 on $3.57 million of total revenue for the three months
ended Sept. 25, 2021, compared to a net loss of $474,000 on $2.69
million of total revenue for the three months ended Sept. 26,
2020.
For the six months ended Sept. 25, 2021, the Company reported a net
loss of $750,000 on $5.62 million of total revenue compared to a
net loss of $399,000 on $6.24 million of total revenue for the six
months ended Sept. 26, 2020.
As of Sept. 25, 2021, the Company had $9.10 million in total
assets, $3.76 million total liabilities, and $5.34 million in total
shareholders' equity.
The Company stated, "Our primary sources of liquidity come from
customer sales and our Financing Agreement with Western Alliance
Bank, both of which are dependent on our receipt and shipment of
customer orders, and capital raised from investors and lenders.
Therefore, if we are unable to maintain sufficient levels of
liquidity solely from sales to customers and borrowings under the
Financing Agreement, we may be required to seek funding from other
sources. To address our liquidity needs in the near term,
management is evaluating various funding alternatives and may seek
to raise additional funds through the issuance of equity or debt
securities, additional borrowings, arrangements with strategic
partners or by obtaining credit from government or other financial
institutions. There can be no assurance that such financing would
be available to us on favorable terms or at all. Our ability to
obtain additional financing is subject to several factors,
including market and economic conditions, our performance and
investor and lender sentiment with respect to us and our industry.
If we are unable to raise additional financing in the near term as
needed, our operations and production plans may be scaled back or
curtailed and our operations and growth would be impeded."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000719274/000143774921025919/giga20210925_10q.htm
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-tronics is a publicly
held company, traded on the OTCQB Capital Market under the symbol
"GIGA". Giga-tronics -- http://www.gigatronics.com-- produces
RADAR filters and Microwave Integrated Components for use in
military defense applications as well as sophisticated RADAR and
Electronic Warfare (RADAR/EW) test products primarily used in
electronic warfare test & emulation applications.
Giga-Tronics reported a net loss attributable to common
shareholders of $407,000 for the year ended March 27, 2021,
compared to a net loss attributable to common shareholders of $2.03
million for the year ended March 28, 2020. As of June 26, 2021,
the Company had $8.21 million in total assets, $4.68 million in
total liabilities, and $3.53 million in total shareholders' equity.
GLAUKOM LLC: Seeks Approval to Hire Diaz & Larsen as Legal Counsel
------------------------------------------------------------------
Glaukom, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Utah to employ Diaz & Larsen as its legal counsel.
The firm's services include:
(a) advising the Debtor of its rights, powers, and duties;
(b) taking all necessary action to protect and preserve the
Debtor's estate;
(c) preparing legal papers;
(d) assisting in presenting the Debtor's proposed plan of
reorganization and all related transactions; and
(e) performing all other necessary legal services in
connection with the Debtor's Chapter 11 case.
The firm received a retainer from the Debtor in the amount of
$27,000.
The hourly rates of Diaz & Larsen's attorneys and staff are as
follows:
Andres Diaz, Esq. $400 per hour
Timothy J. Larsen, Esq. $375 per hour
Other Attorneys $300 per hour
Law Clerks $100 per hour
Paraprofessionals $75 per hour
Andres Diaz, Esq., a manager at Diaz & Larsen, disclosed in a court
filing that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Andres Diaz, Esq.
Timothy J. Larsen, Esq.
Diaz & Larsen
757 East South Temple, Suite 201
Salt Lake City, UT 84102
Telephone: (801) 596-1661
Facsimile: (801) 359-6803
Email: courtmail@adexpresslaw.com
About Glaukom LLC
Glaukom, LLC is an ophthalmology practice located in Salt Lake
City, Utah. Its services range from LASIK, cataract surgery,
glaucoma management and surgery, to comprehensive, routine, and
diabetic eye exams.
Glaukom filed its voluntary petition for Chapter 11 protection
(Bankr. D. Utah Case No. 21-24757) on Nov. 5, 2021, listing
$547,603 in total asset and $1,015,696 in total liabilities as of
Dec. 31, 2020. Gregory A. Christiansen, manager, signed the
petition. Judge Joel T. Marker oversees the case. Diaz & Larsen
serves as the Debtor's legal counsel.
GREATER WORKS: Court Approves Disclosures and Confirms Plan
-----------------------------------------------------------
Judge James R. Sacca has entered an order approving the Disclosure
Statement of Greater Works Childcare and Community Development Inc.
and confirming the First Amendment to Plan of Liquidation.
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.
As reported in the TCR, 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. A copy of
the Disclosure Statement dated Sept. 24, 2021 is available at
PacerMonitor.com at https://bit.ly/3EXTR08
According to the Plan Confirmation Order, the following
modification to the First Amendment to Plan of Liquidation is
made:
4.03 Priority Tax Claims. Each holder of a priority tax claim
will be paid consistent with Section 1129(a)(9)(C) of the
Bankruptcy Code.
Specifically, the Internal Revenue Service ("IRS") timely filed
a proof of claim (Claim No. 1-1) ("IRS Claim") on December 15,
2020, which asserts a priority unsecured federal tax claim in the
amount of $4,400.51 ("IRS Priority Tax Claim") and a general
unsecured federal tax claim in the amount of $18,147.46 ("IRS
Unsecured Tax Claim"). Debtor shall pay, with interest, any portion
of the IRS Priority Tax Claim that has been assessed in sixty (60)
equal monthly installments commencing on the Effective Date of the
Plan and continuing on the first (1st) day of each subsequent
month, or the following business day if such day is a Saturday,
Sunday, or federal holiday. Interest on any portion of the Priority
Tax Claim shall accrue daily at the rate of 3% per annum, unless at
the time of confirmation of the Plan a different rate applies under
11 U.S.C. § 511, 26 U.S.C. § 6621, and any applicable Revenue
Ruling.
The IRS Unsecured Tax Claim shall be treated as a Class 3 claim
and paid accordingly. The IRS Claim contains several "estimated,"
or unassessed federal tax liabilities for tax periods in which the
Debtor has not filed a federal tax return or IRS Form. Debtor shall
file all outstanding federal tax returns that came due under
applicable nonbankruptcy law for pre-Petition time periods.
Following the processing of such unfiled tax returns or forms, the
IRS shall amend its proof of claim to reflect all assessed tax
liabilities. Any additional assessed tax liabilities included in
the IRS Priority Tax Claim or IRS Unsecured Tax Claim shall be paid
as provided in this section. The Debtor shall preserve its right to
object to the amended claim as provided for under the Plan or the
Bankruptcy Code.
Nothing in this Plan shall modify the Debtor's obligation to
file all federal tax returns or IRS Forms (and pay all resulting
taxes) that come due for post-Petition time periods. Additionally,
nothing in this Plan shall modify or waive the IRS's right to
assess any additional tax or applicable penalty in relation to the
untimely filing of a pre-Effective Date return or the Debtor's
obligation to pay same. Notwithstanding any other provision of this
Plan, nothing in this Plan or Confirmation Order thereon shall
discharge a federal tax debt for which a tax return or IRS Form
came due on or before the Effective Date of the Plan and the Debtor
did not timely file such federal tax return or applicable IRS Form.
For any tax returns or IRS Forms, whether income or employment,
that come due under applicable nonbankruptcy law on or before to
the Effective Date, the Debtor shall send proof of filing all such
tax returns, forms, and making such federal tax deposits to:
Internal Revenue Service, Summit Building, Room 905, 401 W.
Peachtree Street, Stop 334D, Attn: Cheryl Mangham, Atlanta, Georgia
30308-3539.
An Order and Final Decree shall not be entered in this
bankruptcy case until the Debtor has filed all delinquent tax
returns and reports that came due under applicable nonbankruptcy
law on or before the Effective Date and the IRS has amended its
proof of claim accordingly.
Notwithstanding anything to the contrary in Section 10.04 of the
Plan, upon an uncured default of the Plan, the IRS may seek to
collect any outstanding federal taxes owed by the Debtor using any
administrative or judicial collection method available to the IRS
under applicable nonbankruptcy law.
Nothing herein shall constitute an admission as to the nature,
validity, or amount of the IRS's claim. Debtor reserves the right
to object to any and all claims.
Attorney for Debtor:
Paul Reece Marr
PAUL REECE MARR, P.C.
1640 Powers Ferry Road
Building 24, Suite 350
Marietta, GA 30067
Tel: (770) 984-2255
E-mail: paul.marr@marrlegal.com
About Greater Works Childcare
and Community Development
Greater Works Childcare and Community Development Inc., owner of a
day-care facility in Lilburn, Ga., 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. and Brooks, McGinnis & Company, LLC serve as
the Debtor's legal counsel and accountant, respectively.
GROWLIFE INC: All 5 Proposals Passed at Annual Meeting
------------------------------------------------------
Growlife, Inc. held its 2021 Annual Meeting of Stockholders at
which the stockholders:
(1) elected Marco Hegyi, Michael E. Fasci, and Thom Kozik as
directors to serve on the board of directors until the 2022 annual
meeting of stockholders;
(2) adopted and approved the Second Amended and Restated 2017
Stock Incentive Plan;
(3) approved a reverse stock split of not less than 1 for 10,
and not more than 1 for 150 to be determined in the discretion of
the company's board of directors;
(4) approved an amendment to the company's Certificate of
Incorporation to increase the authorized common shares from
120,000,000 to 750,000,000 shares; and
(5) ratified the appointment of BPM LLP as the company's
independent registered public accounting firm for the fiscal years
ended Dec. 31, 2020.
About GrowLife
GrowLife, Inc. (PHOT)-- http://www.shopgrowlife.com-- aims to
become the nation's largest cultivation service provider for
cultivating organics, herbs and greens and plant-based medicines.
GrowLife is headquartered in Kirkland, Washington and was founded
in 2012.
GrowLife reported a net loss of $6.38 million in 2020, a net loss
of $7.37 million in 2019, and a net loss of $11.47 million in 2018.
As of June 30, 2021, the Company had $5.08 million in total assets,
$10.07 million in total current liabilities, $777,858 in total
long-term liabilities, and a total stockholders' deficit of $5.77
million.
Walnut Creek, California-based BPM LLP, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
April 15, 2021, citing that the Company has sustained recurring
losses from operations and has an accumulated deficit since
inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
GTT COMMUNICATIONS: Interim Access to Cash Collateral OK'd
----------------------------------------------------------
Judge Michael E. Wiles of the U.S. Bankruptcy Court for the
Southern District of New York authorized GTT Communications, Inc.,
and its debtor-affiliates to use cash collateral and all other
prepetition collateral, pursuant to the approved budget, during the
period through and including the Termination Date in order to
provide working capital for the Debtors and certain of their
non-debtor affiliates, as well as for other general corporate
purposes, including the provision of adequate protection to the
secured lenders and KeyBank National Association, as administrative
agent.
The Termination Date shall be the earliest to occur of: (a) the
date that is 45 days after the date the current Interim Order is
entered if the Final Order has not been entered by the Court by
such date, unless extended by mutual agreement of the parties; and
(b) five business days following delivery of a written notice by
the Administrative Agent of the occurrence of an event of default,
unless waived in writing by the Administrative Agent.
The consolidated 13-week cash flow forecast filed in Court (for
Debtors and non-Debtors) provided for:
(i) $245,000,000 in non-payroll operating disbursements,
(ii) $38,000,000 in payroll, and
(iii) $26,000,000 in non-ordinary course disbursements for the
period from November 5, 2021 through January 28, 2022.
In accordance with the terms of the Credit Agreement and the
Restructuring Support Agreement, the Debtors retained $35,000,000
in cash proceeds from the sale of the Infrastructure Business to
finance the Debtors' Chapter 11 Cases. As of the Petition Date,
$20,000,000 remains of the Retained Cash Proceeds, all of which
constitutes cash collateral.
Prepetition Secured Obligations
As of the Petition Date, the Debtors are jointly and severally
indebted to the Secured Parties, as follows:
* $38,130,907 in aggregate principal amount under the Revolving
Credit Facility, including all accrued and unpaid interest as of
the Petition Date;
* $870,394,354 in aggregate principal amount under the U.S. Term
Facility, together with all accrued and unpaid interest as of the
Petition Date; and
* (i) EUR368,811,167 in aggregate principal amount under the
Original EMEA Term Facility; and (ii) $70,093,110 in aggregate
principal amount under the 2020 EMEA Term Loan, together with all
accrued and unpaid interest thereon as of the Petition Date, plus
all premiums, fees, costs and expenses, inclusive of approximately
$4,135,506 of outstanding letters of credit issued.
These prepetition obligations are secured by first priority liens
on substantially all of the Debtors' assets.
The Debtors and the Secured Parties will seek a finding in the
Final Order that the Secured Parties are entitled to (a) the rights
and benefits of Section 552(b) of the Bankruptcy Code and (b) a
waiver of (x) any "equities of the case" claims under Section
552(b) of the Bankruptcy Code, (y) the provisions of Section 506(c)
of the Bankruptcy Code, and (z) the doctrine of "marshaling" and
other similar equitable doctrine, in light of the Secured Parties'
agreement (or non-opposition) to:
* the subordination of the Prepetition Debtor Liens, Adequate
Protection Liens and Adequate Protection Superpriority Claims to
the Carve Out;
* the current payment of the Debtors' prepetition trade payables
in the ordinary course of business during the pendency of the
Chapter 11 Cases; and
* the use of Cash Collateral.
Debtor GTT was a party to certain secured hedge agreements with
each of SunTrust Bank; Credit Suisse International; ING Capital
Markets, LLC; and Citizens Bank, National Association, as of the
Petition Date. The Hedging Obligations are secured pari passu by
the Prepetition Liens.
In addition, the Credit Parties, several of GTT's direct and
indirect subsidiaries that are not Credit Parties -- Subordinated
Intercompany Lenders -- and the Administrative Agent, are party to
an Intercompany Subordination Agreement dated as of May 31, 2018,
pursuant to which the parties agreed that (a) all debts owed by a
Credit Party to a Subordinated Intercompany Lender is subordinated
in right of payment to the Secured Obligations and (b) no
Subordinated Intercompany Lender would demand, sue for, take or
receive from any Credit Party any amounts owing to such
Subordinated Intercompany Lender, in an Event of Default under the
Credit Agreement.
Adequate Protection for Cash Collateral Use
As adequate protection, the Administrative Agent, for itself and
the other applicable Secured Parties, is granted, subject to the
Carve Out (i) additional and replacement, valid, binding and
automatically perfected postpetition security interests in and
liens on all property of the Debtors; and (ii) allowed
administrative expense claims against each of the Debtors, with
recourse to all Adequate Protection Collateral, to the extent of
diminution in value of the Prepetition Secured Parties' interests
in the Cash Collateral from and after the Petition Date.
The Carve Out includes, among other things, (i) all reasonable fees
and expenses up to $100,000 incurred by a trustee under Section
726(b) of the Bankruptcy Code, and (ii) Allowed Professional Fees
of Debtor Professionals -- incurred after the first business day
following delivery by the Administrative Agent of the Carve Out
Trigger Notice -- in an aggregate amount up to $11,000,000, which
shall be increased to $13,000,000 if a Committee is appointed and
the Court approves the retention of at least one professional
advisor to such Committee, plus the amount of any Court-approved
transaction fee approved in connection with the Debtors' retention
of Piper Sandler & Co. as their investment banker.
As further adequate protection, the Debtors are authorized and
directed to:
(1) pay all reasonable and documented fees and out-of-pocket
expenses of:
a. Jones Day and Huron Consulting Group, as counsel and
financial advisor, respectively, to the Administrative Agent;
b. Milbank LLP and Houlihan Lokey Capital, Inc., as counsel
and financial advisor, respectively, to an ad hoc group of Secured
Lenders, as well as any local counsel(s), a board search consultant
retained on market terms reasonably acceptable to the Ad Hoc Lender
Group and the Debtors and any other attorneys, accountants, other
professionals, advisors and consultants for the Ad Hoc Lender
Group, if any, as may be mutually agreed between the Ad Hoc Lender
Group and the Debtors; and
c. Paul, Weiss, Rifkind, Wharton & Garrison LLP, as counsel
to an ad hoc group of 2020 EMEA Term Loan Lenders, as well as any
local counsel(s) and any other attorneys, accountants, other
professionals, advisors and consultants for the 2020 Ad Hoc Lender
Group, as may be mutually agreed between the 2020 Ad Hoc Lender
Group and the Debtors;
(2) make cash payments to the Administrative Agent equal to the
accrued and unpaid interest due under the:
a. Revolving Loans (for the benefit of the Revolving
Lenders);
b. U.S. Term Loans (for the benefit of the U.S. Term Loan
Lenders);
c. Original EMEA Term Loans (for the benefit of the Original
EMEA Term Loan Lenders);
d. 2020 EMEA Term Loans (for the benefit of the 2020 EMEA
Term Loan Lenders); and
(3) make cash payments to the Secured Hedge Providers for the
accrued and unpaid interest due under the Secured Hedge
Agreements.
The Debtors shall pay the reasonable and documented professional
fees and out-of-pocket expenses and disbursements of professionals
no later than 10-calendar day Review Period after the receipt by
the Debtors, counsel for the Committee (if any), and the U.S.
Trustee of each of the invoices therefor without the necessity of
filing formal fee applications or complying with the U.S. Trustee
Guidelines.
Moreover, the Administrative Agent shall have the right to credit
bid up to the full amount of the Secured Obligations in any sale of
the Prepetition Collateral or Adequate Protection Collateral.
A copy of the Interim Order is available for free at
https://bit.ly/3o8rUeh from Prime Clerk, claims and noticing agent.
A final hearing on the motion is scheduled for November 30, 2021 at
10 a.m., prevailing Eastern Time. Objections must be filed and
served no later than 4 p.m., prevailing Eastern Time, on Nov. 23.
About GTT Communications
Headquartered in McLean, Virginia, GTT Communications, Inc. --
http://www.gtt.net/-- owns and operates a global Tier 1 internet
network and provides a comprehensive suite of cloud networking
services. GTT connects people across organizations, around the
world, and to every application in the cloud.
GTT Communications, Inc., and its affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 21-11880) on Oct. 31,
2021, to implement a prepackaged Chapter 11 plan.
GTT had total assets of $2.8 billion and total debt of $4.1 billion
as of June 30, 2201. As of the Petition Date, the Debtors had
prepetition funded indebtedness totaling $2.015 billion.
The Debtors tapped Akin Gump Strauss Hauer & Feld LLP as counsel;
TRS Advisors as investment banker; and Alvarez & Marsal, LLC as
restructuring advisor. Prime Clerk, LLC, is the claims agent.
GTT COMMUNICATIONS: Nov. 30 Common Stock Transfer Hearing Set
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will hold a final hearing on Nov. 30, 2021, at 10:00 a.m.
(Prevailing Eastern Time) to approve the notification and hearing
procedures for certain transfers of common stock of GTT
Communications Inc. and its debtor-affiliates. Objections, if any,
must be filed no later than 10:00 a.m. (Prevailing Eastern Time) on
Nov. 23, 2021.
The Court issued an interim order on the Debtors' request on Nov.
4, 2021.
About GTT Communications
Headquartered in McLean, Virginia, GTT Communications, Inc. --
http://www.gtt.net/-- owns and operates a global Tier 1 internet
network and provides a comprehensive suite of cloud networking
services. GTT connects people across organizations, around the
world, and to every application in the cloud.
GTT Communications, Inc., and its affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 21-11880) on Oct. 31,
2021, to implement a prepackaged Chapter 11 plan.
GTT had total assets of $2.8 billion and total debt of $4.1 billion
as of June 30, 2201. As of the Petition Date, the Debtors had
prepetition funded indebtedness totaling $2.015 billion.
The Debtors tapped Akin Gump Strauss Hauer & Feld LLP as counsel;
TRS Advisors as investment banker; and Alvarez & Marsal, LLC as
restructuring advisor. Prime Clerk, LLC, is the claims agent.
GUARDION HEALTH: Incurs $3 Million Net Loss in Third Quarter
------------------------------------------------------------
Guardion Health Sciences, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q a net loss of
$3.01 million on $3.15 million of total revenue for the three
months ended Sept. 30, 2021, compared to a net loss of $2.14
million on $253,188 of total revenue for the three months ended
Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $10.22 million on $4.61 million of total revenue
compared to a net loss of $5.20 million on $1.69 million of total
revenue for the nine months ended Sept. 30, 2020.
As of Sept. 30, 2021, the Company had $38.61 million in total
assets, $1.97 million in total liabilities, and $36.64 million in
total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001642375/000149315221027760/form10-q.htm
About Guardion Health Sciences
Headquartered in San Diego, California, Guardion --
http://www.guardionhealth.com-- is a specialty health sciences
company that develops clinically supported nutrition, medical foods
and medical devices, with a focus in the ocular health marketplace.
Located in San Diego, California, the Company combines targeted
nutrition with innovative, evidence-based diagnostic technology.
Guardion Health reported a net loss of $8.57 million for the year
ended Dec. 31, 2020, compared to a net loss of $10.88 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$41.28 million in total assets, $1.99 million in total liabilities,
and $39.29 million in total stockholders' equity.
GYM SOURCE: SSG Acted as Investment Banker in Sale to Johnson
-------------------------------------------------------------
SSG Capital Advisors, LLC ("SSG") acted as the investment banker to
Gym Source USA, LLC in the sale of all of its retail locations to
Johnson Health Tech Retail, Inc. (Johnson). The transaction closed
in November 2021.
With a strong east coast retail presence and a broad commercial
customer base, Gym Source is recognized as one of the industry's
leading distributors of premium fitness equipment. The Company's
diverse product offering includes many of the top fitness brands
with whom Gym Source maintains advantageous exclusivity rights.
While Gym Source has a strong history of growth and profitability,
the Company was in the process of an internal restructuring plan
when the COVID-19 pandemic caused shutdowns in March 2020. As a
result, Gym Source was unable to fully execute its plan to realize
the benefits of the initiatives and ultimately decided to pursue
investors who could provide the Company with the capital necessary
to pursue its strategic objectives.
Gym Source retained SSG to conduct a comprehensive marketing
process and solicit offers for the Company. The process attracted
interest from multiple parties that engaged in a thorough review of
the business. Johnson's offer ultimately provided the best value
for the retail stores while allowing Gym Source to continue owning
and operating its commercial business. SSG's industry knowledge and
experience running efficient sale processes enabled the Company to
continue operations, preserve jobs and maximize value for all
stakeholders.
Johnson is among the world's largest and fastest-growing fitness
equipment manufacturers and is home to some of the most respected
brands in the fitness industry, including Matrix, Vision and
Horizon. Johnson Fitness and Wellness is the retail division of
Johnson and is the world's largest specialty fitness retailer with
more than 465 stores worldwide.
Other professionals who worked on the transaction include:
* James H. Carll, James G. Smith and Jerrold S. Kulback of
Archer Law, counsel to Gym Source USA, LLC;
* Andrew L. Nelson of Foley & Lardner LLP, counsel to Johnson
Health Tech Retail, Inc.; and
* Mitchell F. Schaffer of Cantor Fitzgerald, Investment Banker
to Johnson Health Tech Retail, Inc.
HELIUS MEDICAL: Incurs $4.7 Million Net Loss in Third Quarter
-------------------------------------------------------------
Helius Medical Technologies, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $4.69 million on $109,000 of total operating revenue
for the three months ended Sept. 30, 2021, compared to a net loss
of $3.48 million on $131,000 of total operating revenue for the
three months ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $14.03 million on $264,000 of total operating revenue
compared to a net loss of $11.60 million on $470,000 of total
operating revenue for the same period during the prior year.
As of Sept. 30, 2021, the Company had $7.88 million in total
assets, $2.84 million in total liabilities, and $5.04 million in
total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001610853/000156459021055705/hsdt-10q_20210930.htm
About Helius Medical
Helius Medical Technologies -- http://www.heliusmedical.com-- is a
neurotech company focused on neurological wellness. Its purpose is
to develop, license or acquire non-invasive technologies targeted
at reducing symptoms of neurological disease or trauma.
Helius Medical reported a net loss of $14.13 million for the year
ended Dec. 31, 2020, compared to a net loss of $9.78 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$10.72 million in total assets, $2.35 million in total liabilities,
and $8.37 million in total stockholders' equity.
Philadelphia, Pennsylvania-based BDO USA, LLP issued a "going
concern" qualification in its report dated March 10, 2021, citing
that the Company has incurred substantial net losses since its
inception, has an accumulated deficit of $118.9 million as of Dec.
31, 2020 and the Company expects to incur further net losses in the
development of its business. These conditions raise substantial
doubt about its ability to continue as a going concern.
HEMANI HOSPITALITY: Case Summary & 2 Unsecured Creditors
--------------------------------------------------------
Debtor: Hemani Hospitality, LLC
1122 Wayne Avenue
Chambersburg, PA 17201
Chapter 11 Petition Date: November 11, 2021
Court: United States Bankruptcy Court
Middle District of Pennsylvania
Debtor's Counsel: Beverly Weiss Manne, Esq.
TUCKER ARENSBERG, P.C.
1500 One PPG Place
Pittsburgh, PA 15222
Tel: (412) 566-1212
Fax: (412) 594-5619
Email: bmanne@tuckerlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Niranjan Khatiwala as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/EJOW7NA/Hemani_Hospitality_LLC__pambke-21-02416__0001.0.pdf?mcid=tGE4TAMA
HIGHLINE AFTERMARKET: S&P Alters Outlook to Neg., Affirms 'B' ICR
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
U.S.-based automotive aftermarket manufacturer and distributor
Highline Aftermarket Acquisition Parent LLC's (Highline) and
revised its outlook to negative from stable.
S&P said, "At the same time, we affirmed our 'B' issue-level rating
on the company's $955 million senior secured first-lien credit
facilities, including a $125 million revolver and $830 million
first-lien term loan. The '3' recovery rating indicates our
expectation for meaningful (50%-70%, rounded estimate: 55%)
recovery in the event of a default.
"The negative outlook reflects the potential for a lower rating
over the next few quarters if the company's operating performance
does not improve, such that we believe it is unable to improve
adjusted debt to EBITDA to below 7x.
"The outlook revision reflects the deterioration in credit metrics
and further risks due to raw material cost inflation and labor and
supply chain challenges. Despite overall healthy demand, the
company's year-to-date adjusted EBITDA was down double digits
compared with 2020. This is primarily due to the rise in raw
material costs; a price lag in its lubricant products; and labor
and supply chain challenges, which continue to pose capacity and
fulfillment constraints. The company has taken some pricing action
to offset these headwinds, but there is a price lag, and we expect
some of the pricing will take hold later this year into 2022. As
such, we expect continued margin pressure for the balance of the
year. The integration of Warren Distribution Inc. is on track, as
the company fully integrated the commercial and operation teams and
only some back-office functions remain. In our base case scenario,
we expect adjusted leverage by the end of 2021 to be about 9x,
improving to the low-7x area by 2022 as pricing action takes effect
and supply chain difficulties ease. However, we recognize that if
raw material inflation and supply chain pressures persists,
profitability could further deteriorate.
"We believe industry fundamentals remain favorable in the
automotive aftermarket. The company's top-line growth remains
healthy. This is because miles driven--the key determinant of
demand--continues to recover, along with an overall healthy demand
environment. There is a large and growing U.S. car parc, which
should drive future demand for automotive aftermarket products.
U.S. miles driven has continued to recover from the significant
decline in in 2020 due to the COVID-19 pandemic and
shelter-in-place restrictions. We believe that declines in public
transportation ridership could potentially increase use of vehicles
and miles driven and increase vehicle maintenance. We also believe
the automotive aftermarket industry is relatively stable and
resilient in recession, evidenced by relatively stable performance
in total U.S. automotive aftermarket sales during 2008 and 2009. We
think battery electric vehicles present a long-term risk to the
business, but the impact is relatively low in the near-term.
"We expect the company to maintain adequate liquidity and headroom
under its leverage covenant. The company has about $95 million of
liquidity, including $10 million cash and about $85 million
available under its revolver as of the end of the second quarter.
The company has no substantial debt maturities until 2027. The
credit agreement contains a springing maximum first-lien net
leverage covenant of 6.9x when revolver utilization exceeds 35% of
the commitment, which equates to $43.75 million of the $125 million
revolver. We expect Highline to maintain sufficient cushion above
25% in 2021.
"The negative outlook reflects the potential for a lower rating
over the next few quarters if the company's operating performance
does not improve, such that we believe it is unable to improve
adjusted debt to EBITDA below 7x."
S&P could lower its ratings if the company's operating performance
fell short of its expectations, including weaker profitability and
cash flows, and adjusted debt to EBITDA sustained around 7x. This
could occur if:
-- There were prolonged inflationary pressure and a supply chain
challenge;
-- Infection rates spiked again due to a coronavirus variant,
leading to additional lockdowns and fewer miles driven or a change
in consumer behavior; or
-- The company's financial policy became more aggressive, with
significant debt-financed acquisitions or dividends.
S&P could revise its outlook to stable if Highline stabilized and
improved its operating performance, such that adjusted leverage
improved to below 7x. This could happen if:
-- The company successfully passed on price increase to its
customers,
-- Labor and supply chain challenges eased, and
-- Vehicle miles driven continued to recover.
HOLLY ACADEMY: S&P Affirms 'BB+' Rating on 2011 Revenue Bonds
-------------------------------------------------------------
S&P Global Ratings revised the outlook to stable from negative and
affirmed its 'BB+' long-term rating on the Michigan Finance
Authority's series 2011 public academy revenue and refunding bonds.
In addition, S&P Global Ratings assigned its 'BB+' long-term rating
to the authority's series 2021 public academy revenue and refunding
bonds. All bonds were issued for Holly Academy.
"The outlook revision reflects our anticipation of the
strengthening of the academy's financial profile as a result of
improved debt metrics," said S&P Global Ratings credit analyst
David Holmes. "These improved metrics stem from our expectation of
a successful refinancing related to the academy's series 2011 debt
through the issuance of the series 2021 bonds," Mr. Holmes added.
S&P said "We view the risks that COVID-19 poses to public health
and safety as an elevated social risk for all charter schools under
our environmental, social, and governance factors given the
potential impact on modes of instruction and state funding, on
which charter schools depend to support operations. For Holly
Academy, recent increases to per pupil funding have somewhat offset
the impact of declining enrollments, and this, in our view,
mitigates some near-term risk, although we expect to monitor the
impact of the pandemic on state budgets over the longer term. We
view the social capital risk as slightly elevated as a result of
the impact of demographic factors on the school's enrollment
trends, with the out-migration in the greater Detroit metropolitan
area and an aging population base lending to a smaller school age
population from which to draw students. For Holly Academy, we
understand management is making strategic efforts to stabilize
enrollment, evidenced by flat enrollment growth for fall 2021,
partly mitigating these risks. We view the school's environmental
and governance risks as in line with our view of the sector."
I.C.S. CUSTOMS: Taps Crane, Simon, Clar & Goodman as Legal Counsel
------------------------------------------------------------------
I.C.S. Customs Service, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
the law firm of Crane, Simon, Clar & Goodman as its legal counsel.
The firm's services include:
(a) preparing legal papers;
(b) advising the Debtor regarding its rights and duties
involving its property and its reorganization efforts;
(c) appearing in court and litigating whenever necessary; and
(d) performing other legal services that may be required in
the Debtor's Chapter 11 case.
Prior to the petition date, the firm received an advance payment
retainer in the amount of $48,596 from the Debtor.
The hourly rates of the firm's attorneys and staff are as follows:
Arthur G. Simon $520 per hour
Scott R. Clar $520 per hour
Karen R. Goodman $520 per hour
Jacob D. Comrov $300 per hour
John H. Redfield $400 per hour
Scott Clar, Esq., a partner at Crane, Simon, Clar & Goodman,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Scott R. Clar, Esq.
Crane, Simon, Clar & Goodman
135 S. LaSalle Street, Suite 3950
Chicago, IL 60603
Telephone: (312) 641-6777
Facsimile: (312) 641-7114
Email: sclar@cranesimon.com
About I.C.S. Customs Service
Founded in 1989, I.C.S. Customs Service Inc. is a full-service
customs broker with headquarters in Chicago, Ill. It offers a full
range of customs brokerage and freight forwarding services to
customers throughout Europe, Asia and North America.
I.C.S. Customs Service filed its voluntary petition for Chapter 11
protection (Bankr. N.D. Ill. Case No. 21-12153) on Oct. 25, 2021,
listing as much as $10 million in both assets and liabilities.
William Sharpe, president, signed the petition.
Judge Jacqueline P. Cox presides over the case.
Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman represents the
Debtor as legal counsel.
IHEARTMEDIA INC: S&P Alters Outlook to Positive, Affirms 'B' ICR
----------------------------------------------------------------
S&P Global Ratings revised the outlook on iHeartMedia Inc. to
positive from negative and affirmed the 'B' issuer credit rating.
S&P said, "The positive outlook reflects our expectation that the
company's current leverage of 6.4x will decline to the mid-4x area
by the end of 2022 through a combination of double-digit EBITDA
growth and voluntary debt repayment.
"We expect iHeartMedia's leverage will decline to the mid-4x area
in 2022. iHeartMedia Inc.'s S&P Global Ratings-adjusted net
leverage is currently about 6.4x (annualized for the third quarter
of 2021). We expect leverage will materially improve to the mid-4x
area in 2022 due to a combination of EBITDA growth and voluntary
debt repayment. We expect EBITDA will increase by nearly 50% in
2022 from 2021 due to a continued recovery in broadcast radio
advertising, the benefit of political advertising revenue in an
election year, and healthy digital revenue growth. The strong
growth rate in 2022 also reflects relatively low levels of EBITDA
in the first half of 2021, as performance was still largely weighed
down by the coronavirus (impacting both broadcast radio advertising
and live events). At the same time, we expect the company will
generate between $480 million and $500 million of free operating
cash flow (FOCF) in 2022 that it will largely use for debt
repayment." Management has publicly said it will prioritize debt
reduction until it improves leverage to around 4x, at which point
it will reevaluate its capital allocation priorities. The company
has also proactively taken actions to reduce debt and improve cash
flow. In October 2021, the company used its cash balance to redeem
its $60 million balance of preferred stock, thereby removing the
most expensive and restrictive instrument in its capital structure.
The company also repriced its term loan and made a $250 million
voluntary repayment in July 2021, which will result in annual
interest expense savings of around $13 million. The company has
also mentioned that its 8.375% senior unsecured notes will become
callable in mid-2022, which, if refinanced, could also improve its
cash flow profile.
Total revenue will fully recover to pre-pandemic levels in the
fourth quarter of 2021, bolstered by digital revenue growth.
iHeartMedia's digital revenue grew about 77% year over year in the
third quarter, with digital revenue more than double 2019 levels.
While podcasting had led the category's growth, the company's other
digital products--such as its digital sites and the iHeartRadio
app--have also had healthy growth. iHeartMedia generates
significantly more revenue from its digital offerings than its
broadcast radio peers, including 2.5x the amount generated by
Audacy (the second-largest radio company). S&P said, "iHeartMedia
is the No. 1 commercial podcasting company (generating more than
$150 million of podcasting revenue through the first nine months of
2021), which we expect will accelerate the company's digital
revenue growth given the increasing popularity of podcasting. We
estimate the CPMs (cost per thousand) for podcasting are more than
3x those for broadcast radio. We expect digital revenue (currently
22% of total revenue) will be an increasing share of iHeartMedia's
revenue over the next several years, although radio advertising
will still make up the majority of total revenue. Given the scale
of the company's digital audio business, the company's digital
audio segment has healthy EBITDA margins in the low-30% area."
iHeartMedia's broadcast radio advertising revenue has continued to
outperform the industry. iHeartMedia's broadcast radio advertising
revenue was down less than 16% in the third quarter of 2021 versus
2019, while the industry was down more than 20%. Given the
company's leading scale and geographic diversity, we believe it has
been less affected than its peers by the delta variant and supply
chain challenges. In particular, no single advertising category
contributes more than 5% to the company's revenue and no single
advertiser contributes more than 2% to revenue. iHeartMedia also
owns technology that allows advertisers to more easily view and buy
inventory, which other radio companies have not had the resources
to develop. For example, the company's SmartAudio product creates
digital-like broadcast inventory around user cohorts, which could
expand the segment's access to digital advertising dollars.
S&P said, "While we expect iHeartMedia's broadcast radio
advertising revenue will continue to outperform the overall
industry, we do not envision broadcast radio advertising revenue
ever fully recovering to pre-pandemic levels. We expect some
incremental recovery in 2022 as economic conditions continue to
improve, with broadcast radio revenue reaching around 90% of 2019
revenue, but beyond 2022 expect broadcast radio advertising to
decline in the low-single-digit percent area as advertising dollars
continue to shift toward digital formats. Broadcast radio
advertising's revenue could also be hurt by changes in consumer
behavior as a result of the pandemic since it is largely dependent
on listening in the car, which could be reduced if consumers
increasingly work from home. While broadcast radio advertising had
short lead times prior to the pandemic, they were further reduced
during the pandemic and we believe this change may be permanent,
further reducing visibility into future performance.
"The positive outlook reflects our expectation that the company's
current leverage of 6.4x will decline to the mid-4x area by the end
of 2022 through a combination of double-digit EBITDA growth and
voluntary debt repayment."
S&P could raise the rating if:
-- Leverage improves below 5.5x and we expect it to remain there
on a sustained basis; and
-- EBITDA margins remain above 25% despite digital investments.
S&P could revise the outlook to stable if it expects leverage to
remain above 5.5x in 2022.
This could occur if:
-- Broadcast radio advertising revenue declines; or
-- Digital revenue growth slows due to increased competition; or
-- Increased digital investments cause EBITDA margins to
deteriorate; or
-- The company uses its cash for sizable acquisitions that are not
immediately accretive rather than paying down debt.
INNERLINE ENGINEERING: Unsecureds to Recover 6.9%-21.5% in 5 Years
------------------------------------------------------------------
Innerline Engineering, Inc., filed with the U.S. Bankruptcy Court
for the Central District of California a Plan of Reorganization for
Small Business.
The Debtor is a California corporation and a wholly owned
subsidiary of I.E. Storm Tech Leasing, Inc. The Debtor's primary
business is to provide underground utility inspection services.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $35,000.00 per month in
year one, $37,500 per month in year two, $40,000 per month in year
3, $45,000.00 per month in year four and $50,000 per month in year
5. The final Plan payment is expected to be paid on 60 months
after the effective date.
This Plan of Reorganization proposes to pay creditors of the Debtor
from its projected disposable income over five years.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the Debtor has valued at anywhere
between 6.9 to 21.5 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of Non-priority unsecured creditors in the total
amount of $2,800,202. The Debtor proposes to pay a minimum of
$193,788 over 5 years in the Plan to this Class from projected
disposable operating income. The Plan proposes to pay $35,000 per
month for 12 months, and to increase the payments in years two and
three by $2,500 each, and years four and five by $5,000 per month,
such that the Debtor will be paying $50,000 monthly for months
49-60 of the Plan.
If all claims in Class 3 are allowed and no additional funds are
received to make additional distributions under the Plan, the
projected distribution to unsecured non-priority Class 3 creditors
will be approximately 6.9%
The Debtor believes that at least one significant creditor in this
Class, James Aanerud in the scheduled amount of $520,000 is
objectionable. If disallowed, that claim will decrease the total
Class 3 by about 18%, and increase the Class 3 distribution to
approximately 8.5% of the remaining claims.
Next, the Debtor has scheduled and intends to pursue certain
claims, the most prevalent of which is a civil claim of unknown
value after the cost of legal fees and expenses, but which the
Debtor estimates could generate as much as $300,000 after fees and
expenses against the Operating Engineer's Health & Welfare Trust
Fund. If those funds are recovered for the benefit of the estate
the distribution to Class 3 creditors could increase to as much as
21%.
Equity security holders will retain their equity interests.
The Debtor will fund the plan from projected disposable income from
operations over the life of the plan as set forth in its
projections. The Debtor's operations have begun to increase with
the waning of COVID-19 related slowdowns throughout the industry.
The Debtor has applied for and believes it will receive
approximately $600,000 in IRS Employee Retention TaxCreditrs
pursuant to Taxpayer Certainty and Disaster Tax Relief Act of
2020.
A full-text copy of the Plan of Reorganization dated Nov. 8, 2021,
is available at https://bit.ly/30cfZ6S from PacerMonitor.com at no
charge.
Attorney for the Plan Proponent:
Jeffrey B. Smith, Esq.
Curd Galindo & Smith, LLP
301 East Ocean Boulevard, Suite 1700
Long Beach, CA 90802
Tel: (562) 624-1177
Fax: (562) 624-1178
Email: jsmith@cgsattys.com
About Innerline Engineering Inc.
Corona, Calif.-based Innerline Engineering, Inc. --
http://www.innerlineengineering.com/-- offers a variety of
services to municipalities, utility owners, industrial facilities
and commercial property owners for the maintenance of their
underground utilities.
Innerline Engineering filed a petition for Chapter 11 protection
(Bankr. C.D. Calif. Case No. 21-14305) on Aug. 9, 2021, listing as
much as $10 million in both assets and liabilities. Thomas J.C.
Yeh, chief financial officer, signed the petition. Judge Wayne E.
Johnson oversees the case. Curd Galindo & Smith, LLP is the
Debtor's legal counsel.
IRONSTONE PROPERTIES: Posts $141K Net Operating Loss in 3rd Quarter
-------------------------------------------------------------------
Ironstone Properties, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net
operating loss of $140,862 for the three months ended Sept. 30,
2021, compared to a net operating loss of $70,130 for the three
months ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net operating loss of $350,501 compared to a net operating loss of
$207,316 for the same period during the prior year.
As of Sept. 30, 2021, the Company had $5.90 million in total
assets, $3.45 million in total liabilities, and $2.45 million in
total stockholders' equity.
Net cash used in operating activities was $274,321 and $20,288 for
the nine months ended Sept. 30, 2021 and 2020, respectively. The
Company has a line of credit arrangement with First Republic Bank
with a borrowing limit of $350,000 with interest based upon the
lender's prime rate plus 4.5%. Interest is currently payable
monthly at 7.75%. The line is guaranteed by William R. Hambrecht,
chief executive officer, director. The line of credit is due on
demand and is secured by all of the Company's business assets. At
Sept. 30, 2021 the outstanding balance under the line was
$350,000.
At Sept. 30, 2021, the outstanding balance the Company borrowed
from related party Mr. William R. Hambrecht was $324,313 with
interest at 7.75% per annum and $300,000 at 6.0% per annum. As of
Sept. 30, 2021, the total notes payable to the third party was
$2,272,237.
The Company said it may obtain additional equity or working capital
through additional bank borrowings, debt conversion to common
stock, and public or private sales of equity securities. The
Company may also borrow additional funds from Mr. William R.
Hambrecht. There can be no assurance, however, that such
additional financing will be available on terms favorable to the
Company, or at all.
Ironstone stated, "While the Company explores new business
opportunities, the primary capital resource of the Company relates
to the 74,000 shares held of Arcimoto valued at $1,272,060 and
Arcimoto options that are $75,648 in the money for the three months
ended June 30, 2021. The 468,121 shares of non-marketable
investment TangoMe, Inc. is also a primary capital resource. The
investment in TangoMe, Inc. shares is valued at $2,574,666 for the
three months ended June 30, 2021. Given the investment in TangoMe,
Inc. does not have a readily determinable fair value, the Company
exerts significant judgment in estimating the fair value using
various pricing models and the information available to the Company
that it deems most relevant."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/723269/000143774921025708/irns20210930_10q.htm
About Ironstone Properties
Ironstone Properties' main assets are investments in non-marketable
securities of TangoMe Inc., and Buoy Health, Inc., and marketable
securities of Arcimoto Inc. There can be no assurance that a
market will continue to exist for these investments.
Ironstone reported a net loss of $258,753 in 2014 following a net
loss of $169,747 in 2013. As of June 30, 2021, the Company had
$4.20 million in total assets, $3.51 million in total liabilities,
and $687,400 in total stockholders' equity.
JOHNSON & JOHNSON: Court Halts Talc Cases for 60 Days
-----------------------------------------------------
Maria Chutchian of Reuters reports that a U.S. judge gave Johnson &
Johnson a temporary reprieve from tens of thousands of claims that
its talc-based products cause cancer, but handed the drugmaker a
potential setback by moving the cases to a court where the outcomes
might be less favorable.
U.S. Bankruptcy Judge Craig Whitley in Charlotte, North Carolina,
put the claims on hold for 60 days, while directing that they be
moved to a federal court in New Jersey.
The judge said at a hearing that New Jersey was the "most natural
fit" for the claims because J&J is based there, and the state is
home to much of the nationwide litigation over its talc products.
Shares of J&J were up 1% at $164.10 in late afternoon trading.
J&J has maintained that its talc products are safe.
While New Jersey is its home state, J&J wanted the claims to stay
in North Carolina because of that court's experience with so-called
"mass tort" bankruptcies, and because of favorable legal
precedents.
"Although we believe this case was properly venued in North
Carolina, we will continue to work with all parties to seek an
efficient and equitable resolution," said John Kim, chief legal
officer of LTL Management LLC.
J&J created LTL to hold its talc liabilities shortly before placing
it into bankruptcy, where it hopes to settle the talc claims
separate from the parent company.
That effort has been challenged by talc users who later got cancer,
as well as by their families.
Their lawyers have argued that J&J should not reap the benefits of
bankruptcy protection when it has not filed for bankruptcy itself
and is financially strong.
They also said shielding J&J would interfere with upcoming trials,
amounting to an unprecedented "overreach" in mass tort bankruptcy
cases.
Andy Birchfield, a lawyer at Beasley Allen representing many
plaintiffs, in a statement said "any justice delayed is justice
denied" but welcomed the claims being moved.
J&J "should not be able to manipulate the bankruptcy system -- in
any state -- to avoid liability for decades of corporate
negligence, and the resulting deaths and disease suffered by
thousands of victims," he said.
J&J has spent close to $1 billion defending against nearly 40,000
legal claims that its baby powder and other talc-containing
products caused mesothelioma and ovarian cancer.
Settlements and verdicts have cost the New Brunswick, New
Jersey-based company about $3.5 billion more, although it has
prevailed in some cases.
LTL had argued that letting the litigation proceed would defeat the
purpose of the bankruptcy, which was to consolidate and settle all
talc claims.
It also said the litigation would reduce insurance proceeds
available for a settlement, because the same policies covered J&J
and LTL.
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.
About LTL Management
LTL Management LLC is a newly formed subsidiary of Johnson &
Johnson. LTL was formed to manage and defend thousands of
talc-related claims and to oversee the operations of its
subsidiary, Royalty A&M. Royalty A&M owns a portfolio of royalty
revenue streams, including royalty revenue streams based on
third-party sales of LACTAID, MYLANTA /MYLICON and ROGAINE
products.
LTL Management LLC filed a Chapter 11 petition (Bankr. W.D.N.C.
Case No. 21-30589) on Oct. 14, 2021. The Hon. J. Craig Whitley is
the case judge.
The Debtor tapped JONES DAY as counsel, RAYBURN COOPER & DURHAM,
P.A., as co-counsel; BATES WHITE, LLC, as financial consultant; and
ALIXPARTNERS, LLP, as restructuring advisor. KING & SPALDING LLP
and SHOOK, HARDY & BACON L.L.P., serve as special counsel, and
McCARTER & ENGLISH, LLP is the litigation consultant. EPIQ
CORPORATE RESTRUCTURING, LLC, is the claims agent.
JOHNSON & JOHNSON: Democratic Lawmakers Rebukes Talc Suit Maneuver
------------------------------------------------------------------
Jeremy Hill of Bloomberg News reports that Senate Majority Whip
Dick Durbin and other leading Democrats are calling for Johnson &
Johnson to reverse course on a bid to shed billions of dollars in
legal liabilities, alleging the company is exploiting bankruptcy
law to dodge accountability for its talc products.
According to NPR, on Nov. 10, the U.S. Senate Judiciary Committee
sent a letter to J&J urging the company to drop the bankruptcy
maneuver. "We urge you to immediately reverse course so that tens
of thousands of consumers can have their fair day in court," the
letter said.
"Another giant corporation is abusing our bankruptcy system to
shield its assets and evade liability for the harm it has caused
people across the country," Sen. Elizabeth Warren, D-Mass., tweeted
last month.
Johnson & Johnson is facing tens of thousands of lawsuits stemming
from claims that its talc products cause cancer and other health
problems in women.
Johnson & Johnson is trying to resolve the lawsuits via bankruptcy
by putting a new unit, LTL Management, that holds the claims in
Chapter 11. The maneuver is known in legal circles as the Texas
Two-step. First, the company created a new subsidiary called LTL
in Texas and shoved all its baby-powder-related liability into the
new company. Then the new firm LTL quickly filed for bankruptcy in
North Carolina, a federal bankruptcy venue seen as favorable for
this kind of maneuver because of earlier rulings.
J&J and LTL also requested that the baby powder lawsuits be frozen
while the bankruptcy case is reviewed, a process that could take
years.
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.
About LTL Management
LTL Management LLC is a newly formed subsidiary of Johnson &
Johnson. LTL was formed to manage and defend thousands of
talc-related claims and to oversee the operations of its
subsidiary, Royalty A&M. Royalty A&M owns a portfolio of royalty
revenue streams, including royalty revenue streams based on
third-party sales of LACTAID, MYLANTA /MYLICON and ROGAINE
products.
LTL Management LLC filed a Chapter 11 petition (Bankr. W.D.N.C.
Case No. 21-30589) on Oct. 14, 2021. The Hon. J. Craig Whitley is
the case judge.
The Debtor tapped JONES DAY as counsel, RAYBURN COOPER & DURHAM,
P.A., as co-counsel; BATES WHITE, LLC, as financial consultant; and
ALIXPARTNERS, LLP, as restructuring advisor. KING & SPALDING LLP
and SHOOK, HARDY & BACON L.L.P., serve as special counsel, and
McCARTER & ENGLISH, LLP is the litigation consultant. EPIQ
CORPORATE RESTRUCTURING, LLC, is the claims agent.
JONES SODA: Incurs $59K Net Loss in Third Quarter
-------------------------------------------------
Jones Soda Co. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $59,000
on $4.57 million of revenue for the three months ended Sept. 30,
2021, compared to a net loss of $450,000 on $3.54 million of
revenue for the three months ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $469,000 on $11.88 million of revenue compared to a net
loss of $2.08 million on $9.43 million of revenue for the same
period during the prior year.
As of Sept. 30, 2021, the Company had $11.05 million in total
assets, $5.14 million in total liabilities, and $5.91 million in
total shareholders' equity.
As of Sept. 30, 2021, the Company had cash and cash-equivalents of
approximately $5.9 million and working capital of approximately
$7.3 million. Net cash used in operations during the nine months
ended Sept. 30, 2021 and 2020 totaled approximately $702,000 and
$1.9 million, respectively.
During the nine months ended Sept. 30, 2021 and 2020, the Company
received $295,000 and $0, respectively, from the cash exercise of
stock options. From time to time, the Company may receive
additional cash through the exercise of stock options. However,
the Company cannot predict the timing or amount of cash proceeds it
may receive from the exercise, if at all, of any of the outstanding
stock options or warrants.
Jones Soda stated, "We have experienced recurring losses from
operations and negative cash flows from operating activities. This
situation creates uncertainties about our ability to execute our
business plan, finance operations, and indicates substantial doubt
about the Company's ability to continue as a going concern. On
July 14, 2021, we received net proceeds of $1.7 million in
connection with the Convertible Debenture...We believe that this
recent financing will help alleviate the conditions which we
believed initially indicated substantial doubt about our ability to
continue as a going concern. However, we have experienced and
continue to experience negative cash flows from operations, as well
as an ongoing requirement for additional capital to support working
capital needs. Therefore, even with the proceeds of this
financing, we may require additional financing to support our
working capital needs in the future. The amount of additional
capital we may require, the timing of our capital needs and the
availability of additional financing to fund those needs will
depend on a number of factors, including the receipt of any
proceeds from the planned Concurrent Offering ... as well as from
any other financing we complete in connection with the
Arrangement..., our strategic initiatives and operating plans, our
ability to execute our plans to develop and market cannabis-infused
beverages and edibles and the timing and costs of the development
of this new product line, our estimates of the size of the markets
for our potential cannabis products, the performance of our
business and the market conditions for available debt or equity
financing. Additionally, the amount of capital required will
depend on our ability to meet our sales goals and otherwise
successfully execute our operating plan. We believe it is
imperative that we meet these sales objectives in order to lessen
our reliance on external financing in the future. We intend to
continually monitor and adjust our operating plan as necessary to
respond to developments in our business, our markets and the
broader economy. In addition, the continuation of the COVID-19
pandemic and uncertain market conditions may limit our ability to
access capital, may reduce demand for certain products, and may
negatively impact our supply chain.
"Although we believe various debt and equity financing alternatives
will be available to us to support our working capital needs,
financing arrangements on acceptable terms may not be available to
us when needed. In addition, the terms of the Convertible
Debenture restrict, among other things, the amount of additional
debt we can incur, as well as the number of shares of common stock
we may issue, without the consent of the debentureholder.
Moreover, any debt or equity financing alternatives may require
significant cash payments for interest and other costs or could be
highly dilutive to our existing shareholders. Any such financing
alternatives may not provide us with sufficient funds to meet our
long-term capital requirements. If necessary, we may explore
strategic transactions in addition to the Arrangement, Concurrent
Financing and any related financings that we consider to be in the
best interest of our company and our shareholders, which may
include, without limitation, public or private offerings of debt or
equity securities, a rights offering, and other strategic
alternatives; however, these options may not ultimately be
available or feasible when needed.
"As of the date of this Quarterly Report, as a result of our cash
on hand as well as the issuance of the Convertible Debenture, we
believe that our current cash and cash equivalents will be
sufficient to meet the Company's funding requirements for one year
after these consolidated financial statements are issued."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001083522/000143774921026203/jsda20210930_10q.htm
About Jones Soda
Headquartered in Seattle, WA, Jones Soda Co. -- www.jonessoda.com
-- develops, produces, markets and distributes premium beverages
primarily in the United States and Canada through its network of
independent distributors and directly to its national and regional
retail accounts. The Company also sells products in select
international markets. The Company's products are sold in grocery
stores, convenience and gas stores, on fountain in restaurants, "up
and down the street" in independent accounts such as delicatessens,
sandwich shops and burger restaurants, as well as through its
national accounts with several large retailers.
Jones Soda reported a net loss of $3 million for the year ended
Dec. 31, 2020, compared to a net loss of $2.78 million for the year
ended Dec. 31, 2019. As of March 31, 2021, the Company had $8.21
million in total assets, $3.72 million in total liabilities, and
$4.49 million in total shareholders' equity.
Seattle, Washington-based BDO USA, LLP, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 24, 2021, citing that the Company has suffered recurring
losses from operations and has negative cash flows from operating
activities that raise substantial doubt about its ability to
continue as a going concern.
JR BUYS: Seeks Approval to Hire Eric Gravel as Bankruptcy Counsel
-----------------------------------------------------------------
JR Buys Houses, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of California to employ Eric Gravel,
Esq., an attorney practicing in San Francisco, Calif., to handle
its Chapter 11 case.
Mr. Gravel will render these services:
(a) prepare and file bankruptcy schedules, statement of
financial affairs and related documents in connection with the
case;
(b) appear with the Debtor at the first meeting of creditors;
(c) prepare legal orders as may be required; and
(d) prepare a disclosure statement and plan of reorganization
and appear at proceedings related to the confirmation of the plan.
Prior to the petition date, Mr. Gravel received an initial retainer
of $7,738.
Mr. Gravel will be billed at his hourly rate of $400.
The attorney disclosed in a court filing that he is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The attorney can be reached at:
Eric J. Gravel, Esq.
Law Offices of Eric J. Gravel
1390 Market St, Suite 200
San Francisco, CA 94102
Telephone: (650) 931-6000
Email: ctnotices@gmail.com
About JR Buys Houses
JR Buys Houses, LLC filed its voluntary petition for Chapter 11
protection (Bankr. N.D. Calif. Case No. 21-41242) on Oct. 6, 2021,
listing as much as $50,000 in both assets and liabilities. Ricardo
Ceja, Jr., a member of JR Buys Houses, signed the petition. Judge
Charles Novack oversees the case. The Law Offices of Eric J. Gravel
serves as the Debtor's legal counsel.
JUST ENERGY: CCAA Stay Period Extended to Feb. 17, 2022
-------------------------------------------------------
Just Energy Group Inc., a retail energy provider specializing in
electricity and natural gas commodities and bringing energy
efficient solutions, carbon offsets and renewable energy options to
customers, on Nov. 11 disclosed that the Ontario Superior Court of
Justice (Commercial List) has, among other things, approved (i) the
extension of the stay period under the Companies' Creditors
Arrangement Act (Canada) ("CCAA") to Feb. 17, 2022 (the "Stay
Extension"); and (ii) an amendment to the CCAA Interim
Debtor-In-Possession ("DIP") Financing Term Sheet (the "DIP
Facility") between the Company and the DIP lenders to, among other
things, extend the maturity of the DIP Facility to September 30,
2022.
The Stay Extension and DIP maturity extension allow the Company to
continue to operate in the ordinary course of business while
pursuing a restructuring plan with its stakeholders.
In addition, further to the Company's announcement on November 1,
2021, the Court approved Just Energy entering into a support
agreement with an affiliate of Generac Holdings Inc. ("Generac") to
vote in favour of the acquisition of Just Energy's shares of ecobee
Inc. by Generac.
As previously reported, FTI Consulting Canada Inc. (the "Monitor")
is overseeing the Company's CCAA proceedings as the court-appointed
Monitor. Further information regarding the CCAA proceedings is
available at the Monitor's website at
http://cfcanada.fticonsulting.com/justenergy.Information regarding
the CCAA proceedings can also be obtained by calling the Monitor's
hotline at 416-649-8127 or 1-844-669-6340 or by email at
justenergy@fticonsulting.com.
About Just Energy Group
Just Energy Group Inc. (TSX:JE; NYSE:JE) --
https//www.justenergy.com/ -- is a retail energy provider
specializing in electricity and natural gas commodities and
bringing energy-efficient solutions and renewable energy options to
customers. Currently operating in the United States and Canada,
Just Energy serves residential and commercial customers. Just
Energy is the parent company of Amigo Energy, Filter Group Inc.,
Hudson Energy, Interactive Energy Group, Tara Energy, and
terrapass.
On March 9, 2021, Just Energy Group Inc., Just Energy Corp.,
Ontario Energy Commodities Inc., Universal Energy Corporation, Just
Energy Finance Canada ULC, Hudson Energy Canada Corp., Just
Management Corp., Just Energy Finance Holding Inc., 11929747 Canada
Inc., 12175592 Canada Inc., JE Services Holdco I Inc., JE Services
Holdco II Inc., 8704104 Canada Inc., Just Energy Advanced Solutions
Corp., Just Energy (U.S.) Corp., Just Energy Illinois Corp, Just
Energy Indiana Corp., Just Energy Massachusetts Corp., Just Energy
New York Corp., Just Energy Texas I Corp., Just Energy, LLC, Just
Energy Pennsylvania Corp., Just Energy Michigan Corp., Just Energy
Solutions Inc., Hudson Energy Services LLC, Hudson Energy Corp.,
Interactive Energy Group LLC, Hudson Parent Holdings LLC, Drag
Marketing LLC, Just Energy Advanced Solutions LLC, Fulcrum Retail
Energy LLC, Fulcrum Retail Holdings LLC, Tara Energy, LLC, Just
Energy Marketing Corp., Just Energy Connecticut Corp., Just Energy
Limited, Just Solar Holdings Corp., and Just Energy (Finance)
Hungary ZRT filed for protection under the Companies' Creditors
Arrangement Act ("CCAA") before the Ontario Superior Court of
Justice (Commercial List).
Just Energy Group Inc. and its affiliates filed petitions under
Chapter 15 of the Bankruptcy Code in the United States (Bankr. S.D.
Tex. Lead Case No. 21-30823) on March 9, 2021, to seek recognition
of the Canadian proceedings.
FTI Consulting Canada Inc. has consented to act as monitor in the
CCAA proceeding. BMO Capital Markets has been engaged as financial
advisor, Osler, Hoskin & Harcourt LLP and Fasken Martineau DuMoulin
LLP are legal advisors in Canada, Kirkland & Ellis LLP and Jackson
Walker LLP are legal advisors in the United States.
KOSMOS ENERGY: Incurs $28.6 Million Net Loss in Third Quarter
-------------------------------------------------------------
Kosmos Energy Ltd. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $28.6 million on $200.54 million of total revenues and other
income for the three months ended Sept. 30, 2021, compared to a net
loss of $37.38 million on $224.78 million of total revenues and
other income for the three months ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $176.55 million on $761.23 million of total revenues
and other income compared to a net loss of $419.54 million on
$529.88 million of total revenues and other income for the same
period during the prior year.
As of Sept. 30, 2021, the Company had $4.15 billion in total
assets, $461.74 million in total current liabilities, $3.41 billion
in total long-term liabilities, and $286.75 million in total
stockholders' equity.
Commenting on the Company's third quarter 2021 performance and
subsequent events, Chairman and Chief Executive Officer Andrew G.
Inglis said: "With the recently executed transactions, Kosmos has
significantly enhanced the outlook for the Company. The Oxy Ghana
transaction accelerates our strategic delivery with increased
near-term production and cash flow driving down leverage. The cash
flow from the acquired assets also supports our portfolio
transition to LNG at a time of increasing global gas demand.
Operationally, Kosmos delivered in line with expectations for the
quarter, taking account of the impact of Hurricane Ida in the Gulf
of Mexico. At Tortue, the project continued to make good progress,
and we now have a clear funding path to first gas following the
successful completion of the FPSO sale and leaseback announced in
the third quarter. This transaction materially reduces our
outstanding capital to first gas with the remainder expected to be
funded through organic free cash flow.
Looking forward, growing production and increased exposure to
current oil prices as 2021 hedges roll off give us visibility to
materially higher EBITDAX and cash flow in 2022, with leverage
expected to continue to fall. Over the next year, we also expect
to substantially de-risk the delivery of Tortue Phase 1 while
advancing Phase 2 to maximize the value of our significant gas
resources in Mauritania and Senegal. With the right portfolio for
the future and a strengthened balance sheet, we are excited about
the outlook for Kosmos."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1509991/000150999121000086/kos-20210930.htm
About Kosmos Energy
Kosmos is a full-cycle deepwater independent oil and gas
exploration and production company focused along the Atlantic
Margins. The Company's key assets include production offshore
Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, as well as a
world-class gas development offshore Mauritania and Senegal. The
Company also maintains a sustainable proven basin exploration
program in Equatorial Guinea, Ghana and the U.S. Gulf of Mexico.
Kosmos is listed on the NYSE and LSE and is traded under the ticker
symbol KOS.
Kosmos Energy reported a net loss of $411.58 million in 2020, a net
loss of $55.78 million in 2019, a net loss of $93.99 million in
2018, and a net loss of $222.79 million in 2017. As of June 30,
2021, the Company had $4 billion in total assets, $645.29 million
in total current liabilities, $3.05 billion in total long-term
liabilities, and $307.24 million in total stockholders' equity.
LIMENOS CORPORATION: Taps Bufete Morales Cordero as Special Counsel
-------------------------------------------------------------------
Limenos Corporation seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to hire Bufete Morales Cordero,
C.S.P. as special counsel.
The firm will represent the Debtor in proceedings pending before
the U.S. District Court for the District of Puerto Rico or state
agencies constituting legal labor claims against the Debtor.
Jesus Morales Cordero, Esq., the firm's attorney who will be
providing the services, will be paid at an hourly rate of $275.
The Debtor paid $8,000 to the firm as a retainer fee.
Mr. Cordero disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Jesus R. Morales Cordero, Esq.
Bufete Morales Cordero, C.S.P.
PO Box 191836
San Juan, PR 00919
Tel.: (787) 758-7819
Fax: (787) 758-4152
About Limenos Corporation
Limenos Corporation sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 20-02169) on June 5, 2020,
listing as much as $500,000 in both assets and liabilities.
Judge Mildred Caban Flores oversees the case.
Francisco J. Ramos Gonzalez, Esq., at Francisco J Ramos &
Asociados, CSP and Nelson Robles-Diaz, P.S.C. serve as the Debtor's
bankruptcy counsel while Bufete Morales Cordero, C.S.P. serves as
the special counsel. Monge Robertin Advisors, LLC is the Debtor's
restructuring advisor.
LIMETREE BAY: Extends Auction Date to Qualify More Offers
---------------------------------------------------------
The Source (US Virgin Islands) reports that the much-anticipated
auction of St. Croix's Limetree Bay Refinery did not take place on
Friday as scheduled due to a request by the refinery for more time
to qualify bidders.
"We had bids due this week and did receive a number of them, but we
are working through the details on those bids," Limetree lead
bankruptcy counsel Elizabeth Green said in a bankruptcy court
status hearing. "Some of the bids are non-conforming but could
become conforming. Some require additional work to conform."
Green filed an extension resetting Limetree's sale milestones to
the following dates:
* Sale milestone: Dec. 14
* Deadline for qualified bidder(s) to make good faith cash
deposit(s): Nov. 10
* Deadline to file notice of potential assumption and assignment
of executory contracts: Nov. 10
* Auction date, if necessary: Nov. 12
* Deadline to file the designation of winning bid: Nov. 15
* Deadline to object to the sale: Nov. 26
* Deadline to reply to objection(s) to the Sale: Nov. 29
* Contract assumption: Nov. 29
* Deadline to file amended designation of winning bid to add
additional purchased contracts: Dec. 3
* Sale hearing (subject to Court availability): Dec. 3
* Expected entry of Sale Order: Dec. 6
* Deadline to file amended designation of winning bid to remove
previously identified executory contracts: Dec. 9
* Deadline for winning bidder to close sale transaction: Dec. 10
* Deadline for back-up bidder to close sale transaction (if
applicable): Dec. 13
Green also filed a revised budget with Limetree's
debtor-in-possession and prepetition lenders that requires an
immediate hearing because the refinery's cash flow expires this
weekend.
On behalf of the DIP lender Arena Investors, attorney Jason
Brookner protested deductions approaching $2 million for legal fees
taken by J. Aron, Goldman Sachs' energy trader.
"We believe the fees are exorbitant and unreasonable and the DIP
lender will be filing an objection if not resolved," Brookner
said.
About Limetree Bay
Limetree Bay Energy is a large-scale energy complex strategically
located in St. Croix, U.S. Virgin Islands. The complex consists of
Limetree Bay Refining, a refinery with peak processing capacity of
650 thousand barrels of petroleum feedstock per day, and Limetree
Bay Terminal, a 34-million-barrel crude and petroleum products
storage and marine terminal facility serving the refinery and
third-party customers.
Limetree Bay Refining, LLC, restarted operations in February 2021,
and is capable of processing around 200,000 barrels per day. Key
restart work at the site began in 2018, including the 62,000
barrels per day modern, delayed Coker unit, extensive
desulfurization capacity, and a reformer unit to produce clean,
low-sulfur transportation fuels. The restart project provided much
needed economic development in the U.S.V.I. and created more than
4,000 construction jobs at its peak.
Limetree Bay Refining, LLC and its affiliates sought Chapter 11
protection on July 12, 2021. The lead case is In re Limetree Bay
Services, LLC (Bankr. S.D. Tex. Case No. 21-32351).
Limetree Bay Terminals, LLC, did not file for bankruptcy.
In the petitions signed by Mark Shapiro, chief restructuring
officer, Limetree Bay Services disclosed up to $10 million in
assets and up to $50,000 in liabilities. Limetree Bay Refining,
LLC, estimated up to $10 billion in assets and up to $1 billion in
liabilities.
The Debtors tapped Baker Hostetler as legal counsel and B. Riley
Financial Inc. as restructuring advisor.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' cases on July 26, 2021. The
committee is represented by Pachulski Stang Ziehl & Jones, LLP.
405 Sentinel, LLC serves as administrative and collateral agent for
the DIP lenders.
LINDEN PONDS: Fitch Assigns 'BB' Issuer Default Rating
------------------------------------------------------
Fitch Ratings has assigned a 'BB' Issuer Default Rating (IDR) to
Linden Ponds, Inc. (MA) and affirmed the 'BB' rating on
approximately $110.6 million revenue bonds series 2018 that were
issued by Massachusetts Development Finance Agency on behalf of
Linden Ponds, Inc. (Linden Ponds).
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a pledge of gross revenues, a first
mortgage on the property and a debt service reserve fund (DSRF).
Debt service payments on the bonds are senior to any subordinate
debt obligations and annual management fees.
ANALYTICAL CONCLUSION
The 'BB' rating reflects the expected resilience of Linden Pond's
financial profile through Fitch's forward-looking scenario
analysis, within the context of the strength of its business
profile, characterized by strong revenue defensibility, as a Type
'C' life plan community (LPC) provider, with good demand and
moderate entrance fee pricing, combined with a midrange operating
risk, with a history of steady operating metrics.
The rating also incorporates the effect of Linden Pond's series
2011B zero coupon bonds that are subordinate to Linden Pond's other
long-term debt. About $17 million of the bonds still need to be
paid off and that figure does not appear on Linden Pond's balance
sheet, given the structure of the zero coupon bonds. Payment of the
2011B bonds comes from a portion of Linden Pond's excess cash flow,
the amount of which is calculated yearly and based on Linden Pond's
performance. In 2020, the excess cash flow taken out to pay the
2011B bonds was $3.2 million. Beyond understating Linden Ponds'
long-term debt, the 2011B bonds continue to suppress growth in
unrestricted liquidity. However, even with the drag of the
subordinate debt structure, Linden Ponds' steady cash flow, helped
by the extra revenues from a 104 independent living (IL) apartment
expansion that opened in June 2018, has led to good recent
liquidity growth. Unrestricted cash and investments of about $50
million at June 30, 2021 increased from about $38 million at YE
2019.
Fitch's forward look, which includes the $17 million of zero coupon
debt, shows a steady level of performance, with no major capital
projects underway, as the financial profile remaining consistent
with the current rating through Fitch's moderate stress scenario.
Linden Ponds is contemplating a $25 million assisted living (AL)
expansion project. Fitch's analysis shows Linden Ponds likely being
able to undertake the project at the current rating level should it
sustain current level of cash flow. Fitch does not expect the
project to begin in the next year.
KEY RATING DRIVERS
Revenue Defensibility: 'a'
Sizable, Moderately Priced Single Site LPC Provider with Good
Demand
The strong revenue defensibility reflects the good demand for
services at Linden Ponds as indicated by historical IL occupancy
generally between 92% and 95%, across a sizable base of over 1,000
IL units. The good demand is supported by range of apartments sizes
and entrance fee pricing that is competitive relative to its
competition and comfortably below local area housing prices.
Operating Risk: 'bbb'
Steady Cash Flow; Manageable Capital Needs
The midrange operating assessment risk reflect Linden Pond's steady
historical operations and coverage levels supported by a solid
census, effective expense controls, and added revenue from the
completion of an IL expansion project.
Financial Profile: 'bb'
Stable Financial Profile Under Stress Scenario
At YE 2020, Linden Ponds had unrestricted cash-to-adjusted debt of
about 40% and maximum annual debt service (MADS) coverage of 2.2x
(as calculated by Fitch). Given Linden Pond's strong revenue
defensibility and midrange operating risk assessments and Fitch's
forward-looking scenario analysis, Linden Pond's key leverage
metrics remain consistent with the rating level through a moderate
stress, as operations remain steady over the next two to four years
and Linden Pond's continues to pay down the subordinate debt from
its excess cash flow.
Asymmetric Additional Risk Considerations
No asymmetric risks were factored into the rating assessment.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Continued growth in unrestricted liquidity such that cash to
adjusted debt stabilizes at closer to 50%.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- A deterioration in unrestricted liquidity such that cash to
adjusted is expected to stabilize below 30%.
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.
CREDIT PROFILE
Linden Ponds is a not-for-profit corporation established in 2002
for the purpose of operating a life plan community (LPC). LP
operates a Type-C continuing care retirement community (CCRC),
which is located on a 108-acre campus in Hingham, MA, approximately
17 miles southeast of Boston, MA. The campus, which opened in 2004,
consists of: 1,086 ILUs, 22 ALUs, 44 MCUs, and 66 SNF beds. Linden
Ponds offers only 90% refundable, fee-for-service (Type-C)
contracts to its residents.
Linden Ponds's sole member is National Senior Communities (NSC,
formerly National Senior Campuses, Inc.), a not-for-profit
organization that is committed to providing housing, healthcare,
and other related services to seniors. NSC provides governance
oversight and strategic planning for 16 CCRCs throughout the U.S.
Additionally, Linden Ponds contracts with Erickson Living (EL) to
provide management services. As part of this agreement, Linden
Ponds pays EL annual base and incentive fees, which totaled $2.3
million in fiscal 2020. EL's management fees are subordinate to
debt service. In fiscal 2020, Linden Ponds had total operating
revenues of approximately $64.9 million.
Revenue Defensibility
The strong revenue defensibility is supported by IL occupancy that
has averaged 94% over the last four fiscal years. The IL occupancy
average includes the filling of the 104 IL apartment expansion.
Occupancy across the continuum of care--AL, memory care, and
skilled nursing--has been well above 90%. As has been typical in
the sector, skilled nursing occupancy fell below 90% in 2020 and
was at 75% at June 30, 2021. However, Fitch expects skilled nursing
occupancy to improve over the next year. Further support for the
strong revenue defensibility is provided by an IL waitlist of
approximately 407 priority members, who have put down a $1,000
refundable deposit.
There is some competition locally and regionally, but competition
is currently manageable and management reports no new competitors
entering the market. Linden Ponds has a modest level of geographic
diversity among its recent entering residents, with about 60%
coming from the local Hingham, MA, market, another 24% coming from
other parts of Massachusetts, and another 16% relocating from out
of state.
Linden Ponds's entrance fees range from approximately $150,000 to
just over $800,000 with a weighted average of about $372,000, which
compare favorably to local real estate values in both Hingham and
Plymouth County, the city and county in which Linden Ponds is
located. The entrance fee pricing is also favorable relative to the
net worth of entering residents and is competitive relative to the
competition. Linden Ponds has regular entrance fee and monthly
service fee increases, which further supports the strong revenue
defensibility assessment.
Operating Risk
Linden Ponds offers a Type 'C' contract indicating a greater
ability to increases rates and manage expenses across the continuum
of care given the minimal healthcare liability.
Over the last four audited years, Linden Ponds averaged a 94.8%
operating ratio, 16% NOM, and 25.6% NOMA, which is consistent with
midrange operating risk assessment. Linden Ponds has maintained its
steady operational performance through the six month interim period
as evidenced by a 98.2% operating ratio, 19.6% NOM, and 24.2% NOMA
at the six-month 2021 interim period. Fitch attributes the
maintenance of Linden Ponds's strong performance to its good
expense management and the maintenance of IL occupancy above 90%.
Linden Ponds's capex has averaged about 104% of depreciation over
the last four years, which is consistent with the midrange
assessment. Capex spending has been well below depreciation in
recent years. However, the lower level of spending is not a concern
as Linden Ponds's is coming off the 104 unit IL expansion and
continues to invest in the necessary lifecycle projects. Linden
Ponds is contemplating an approximate $25 million AL expansion.
Fitch believes Linden Ponds has the debt capacity at the current
rating level to fund the project. Beyond the potential AL
expansion, Linden Ponds has minimal capital needs.
Linden Ponds's capital-related metrics are consistent with the
midrange operating risk assessment. MADS represented 12.2% of 2020
revenues and debt to net available has been below 7.1x through the
last three years and through the interim period. Revenue only
coverage has been solid as well, averaging 1.3x over the last four
audited years, which indicates a reduced reliance on net entrance
fee receipts to cover debt service.
Financial Profile
Given Linden Ponds's strong revenue defensibility and midrange
operating risk and Fitch's forward-looking scenario analysis, Fitch
expects key leverage metrics to remain consistent with the current
financial profile, throughout the current economic and business
cycle. As of YE 2020, Linden Ponds had unrestricted cash and
investments of approximately $45.7 million. This represents about
54% of total adjusted debt, when including a $7.9 million debt
service reserve fund. Days cash on hand (DCOH) was good at 273 days
at YE 2020.
Fitch's baseline scenario, which is a reasonable forward look of
financial performance over the next five years given current
economic expectations, shows Linden Ponds producing steady
operating and financial metrics consistent with its recent
performance, with operating ratios in the mid-90s and net operating
margins - adjusted just above 25%. Capital spending over the next
few years is expected to remain below depreciation. Fitch's forward
look incorporates the approximate $17 million in zero coupon debt
that remains to be paid off. The forward look assumes an economic
stress (to reflect both operating and equity volatility). The
equity stress is specific to Linden Ponds's asset allocation. The
forward look shows cash-to-adjusted remining consistent with the
below investment grade financial profile, as MADS coverage remains
strong. DCOH remains above 200 days in the base case which is
neutral to the rating outcome.
Asymmetric Additional Risk Considerations
No asymmetric risks were factored into the rating assessment.
Linden Pond's outstanding long-term debt consists of $110.6 million
in series 2018 bonds and approximately $17 million in subordinate
series 2011B bonds.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
LRGHEALTHCARE: Court Confirms HGRL's Wind-Down Plan
---------------------------------------------------
Judge Michael A. Fagone entered an order confirming the Chapter 11
Plan and approving the Disclosure Statement of HGRL.
Under the Plan, LRGHealthcare's bankruptcy estate, winding down
under the name HGRL, will create a liquidating trust and distribute
proceeds from a $30 million sale of its hospital and medical care
businesses. 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.
A copy of the Disclosure Statement dated Sept. 24, 2021 is
available for free at https://bit.ly/39GruF1 from Epiq, claims
agent.
Judge Michael A. Fagone entered an order that the Disclosure
Statement of HGRL is approved on a final basis as containing
"adequate information" within the meaning of Section 1125 of the
Bankruptcy Code. The Plan is approved and confirmed in each and
every respect pursuant to section 1129 of the Bankruptcy Code.
Pursuant to Section 1122(b), the Plan designates a Class of
Convenience Claims (Class 5) consisting only of every General
Unsecured Claims that is either "(a) in the amount of $5,000 or
less or (b) in an amount greater than $5,000 and whose Holder
elects to reduce in amount to $5,000[,]" and the designation of
such Class is reasonably and necessary for administrative
convenience.
Class 1 and Class 3 are unimpaired under the Plan and deemed to
have accepted the Plan. As set forth in and demonstrated by the
Voting Certification, Class 2, Class 4, Class 5, and Class 6 have
voted to accept the Plan, determined without including acceptance
of the Plan by any insider, satisfying the requirements of Section
1129(a)(10) of the Bankruptcy Code.
On the Effective Date, the Estate's interest in any D&O Claims,
Tort Claims, and rights in and proceeds of any Insurance Policies
necessary for the prosecution of all such Causes of Action will
revest in the Debtor.
On the Effective Date, the Liquidating Trust will be established
pursuant to and in accordance with the terms of the Plan and the
Liquidating Trust Agreement. Charles M. Berk, is appointed as the
Liquidating Trustee effective as of the date of execution of the
Liquidating Trust Agreement.
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.
LTL MANAGEMENT: Chapter 11 Case Transferred to New Jersey
---------------------------------------------------------
A federal bankruptcy judge in North Carolina on Nov. 10, 2021,
agreed to enter an order transferring the venue of the Chapter 11
case of the Johnson & Johnson subsidiary, LTL Management, from
North Carolina to New Jersey, where J&J is headquartered.
LTL, a newly created unit of J&J, filed for Chapter 11 bankruptcy
in North Carolina to deal with roughly 38,000 lawsuits against
Johnson & Johnson that claim the company's baby powder was
contaminated with cancer-causing asbestos.
U.S. Bankruptcy Judge J. Craig Whitley granted the U.S. Bankruptcy
Administrator's bid to transfer the case of LTL Management in the
interests of justice and judicial economy. The motion had support
from the steering committee of plaintiffs in the more than 35,000
talc injury suits involved in multidistrict litigation pending in
New Jersey federal court.
The U.S. Bankruptcy Court administrator in North Carolina asked the
judge overseeing the Chapter 11 case of a Johnson & Johnson
subsidiary to transfer the
case to New Jersey, saying the debtor has a strained and limited
connection to the Tar Heel State.
"The Court should transfer this bankruptcy case to the District of
New Jersey in the interest of justice or for the convenience of the
parties. While venue may be (barely) proper in this district
because the Debtor is a North Carolina entity, nothing requires the
Court to give deference to the Debtor's choice of venue when it is
entirely manufactured. The interest of justice prong of 28 U.S.C.
Sec. 1412 is triggered where, as here, a debtor has created facts
to fit the statute," the Bankruptcy Administrator said in a court
filing.
The Plaintiffs' Steering Committee for the national multidistrict
litigation docket for talcum powder claims supported the bid to
transfer the case to New Jersey.
About LTL Management
LTL Management LLC is a newly formed subsidiary of Johnson &
Johnson (J&J) to manage and defend thousands of talc-related claims
and oversee the operations of its subsidiary, Royalty A&M, which
owns a portfolio of royalty revenue streams, including royalty
revenue streams based on third-party sales of LACTAID,
MYLANTA/MYLICON and ROGAINE products.
LTL Management filed a Chapter 11 petition (Bankr. W.D.N.C. Case
No. 21-30589) on Oct. 14, 2021. The Debtor was estimated to have $1
billion to $10 billion in assets and liabilities as of the
bankruptcy filing.
The Hon. J. Craig Whitley is the case judge.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A. as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC is the claims agent.
About Johnson & Johnson
Johnson & Johnson is an American multinational corporation founded
in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. It 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.
The corporation had worldwide sales of $82.6 billion during
calendar year 2020.
MALLINCKRODT PLC: Rockford Directed to File Brief by Nov.15
-----------------------------------------------------------
The Chief Magistrate of the United States District Court for the
District of Delaware issued a Recommendation dated November 2,
2021, in the case captioned CITY OF ROCKFORD, IL, et al.,
Appellants, v. MALLINCKRODT PLC, et al., Appellees, C.A. No.
21-1161-LPS (D. Del.), recommending that the Appellants' opening
brief be due on November 15, 2021, the Appellees' responsive brief
December 15, 2021, and the Appellants' reply brief be due on
December 28, 2021.
This Appeal relates to a July 21, 2021 Order by the Honorable John
T. Dorsey of the United States Bankruptcy Court for this District,
which disallowed Appellants' class proofs of claim against the
Debtors in their Chapter 11 cases. Because of the nature of the
relief granted and the issues on appeal, one of the parties believe
mediation would be fruitful and request that this matter be removed
from mandatory mediation. The Appellants proposed a briefing
schedule identical to the schedule proposed in the City of Rockford
et al v. Mallinckroft plc., Case No. 21-1150 LPS, and do not agree
with the briefing schedule proposed by Appellees. The proposed
briefing schedule by Appellants was to begin on October 21, 2021,
with the responsive brief due on November 22, 2021 and the reply
brief by December 6, 2021. Their concern was that delay works
against the interests of their clients and potentiates a finding of
equitable mootness. Although the Appellants recognize that there
are questions of law which are similar, the dissimilarity creates
the risk of confusion on the issues.
A full-text copy of the Recommendation is available at
https://tinyurl.com/fp25m7ad from Leagle.com.
About Mallinckrodt PLC
Mallinckrodt -- http://www.mallinckrodt.com/-- is a global
business consisting of multiple wholly-owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics; and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case
No. 20-12522) to seek approval of a restructuring that would reduce
total debt by $1.3 billion and resolve opioid-related claims
against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC, is the claims agent.
The official committee of unsecured creditors retained Cooley LLP
as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon
Advisers LLC as its financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid related claimants. The OCC tapped Akin
Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz as
Delaware co-counsel, Province Inc. as financial advisor, and
Jefferies LLC as investment banker.
A confirmation trial for the Debtors' First Amended Joint Plan of
Reorganization was set to begin Nov. 1, 2021. The Confirmation
Hearing is slated to have two phases. Phase 1 commenced the week of
Nov. 1. Phase 2 will begin on or around the week of Nov. 15, when
the Acthar Administrative Claims Hearing proceedings conclude.
MCAFEE LLC: Fitch Puts 'BB-' LongTerm IDR on Watch Negative
-----------------------------------------------------------
Fitch Ratings has placed the ratings for McAfee, LLC, including the
'BB-' Long-Term Issuer Default Rating (IDR) and 'BB+'/'RR1' first
lien secured revolver and term loans, on Rating Watch Negative
following the company's announcement that it plans to be acquired
by a consortium of private equity investors.
On Nov. 5, 2021, McAfee announced they were under agreement to be
acquired by an investor group in an all-cash deal valued at
approximately $12 billion on an equity value basis, and over $14
billion on an enterprise value basis after giving effect to
repayment of McAfee's debt. The transaction is expected to close in
the first half of 2022 and will result in materially elevated
leverage compared with what was seen under public ownership. Fitch
is projecting pro forma leverage of 8.5x.
Fitch views the transaction negatively given the leveraging nature
of the transaction. The transaction could result in a multi-notch
downgrade.
KEY RATING DRIVERS
Elevated Pro Forma Leverage Profile: Current leverage at McAfee
stands at 3.7x. Pro forma for the LBO transaction, leverage is
expected to rise to over 8.5x. Fitch believes the company's
leverage tolerance under private ownership will be significantly
elevated compared to what was seen under public ownership.
Narrower Product Focus: The recent divestiture of the Enterprise
segment has resulted in a leaner, higher margin company with an
increased growth rate. In recent years, high growth and margins at
the Consumer segment have been held back by under performance in
the Enterprise segment. Although scale and revenue diversity has
decreased substantially following the divestiture, Fitch believes
this is offset by the stronger operating profile of the new
consumer-focused company, which will be better able to focus on its
core growth areas.
IT Security Threats Increasingly Complex: IT security threats have
evolved from PC-centric to mobile devices, networks and user
identities. The evolving threats enable a continuous stream of
niche solutions to develop, addressing threats beyond the
traditional PC-centric security to protect users, data and networks
at various levels of the internet. While some of these solutions
were developed by legacy cybersecurity providers, many were created
by suppliers with narrow expertise. McAfee has recently has placed
an increased emphasis on providing security to mobile device in
order to align its product offerings to modern computing habits.
Fragmented Industry: The cyber security market is highly fragmented
but only a limited number of providers have the scale, breadth of
offerings, and technical capabilities to deliver a platform-based
security approach. A number of smaller providers provide security
services in an ad-hoc manner to businesses but lack the scale to be
a full-service provider. McAfee has the scale and breadth of
offering to be the sole security provider for many enterprises. The
fragmented market also provides a wealth of acquisition targets for
a competitor of McAfee's size.
DERIVATION SUMMARY
McAfee's 'BB-' rating is supported by consistently positive FCF,
adequate liquidity and LTM gross leverage of 3.9x. Fitch expects
the company to maintain EBITDA margins in the high-40% range. Fitch
believes the company has a similar operational profile to pure play
consumer cybersecurity peer NortonLifeLock, Inc. (BB+/Stable),
although the leverage profile is expected to remain elevated over
the rating horizon.
The Rating Watch Negative reflects the proposed capital structure
following the announced privatization transaction. Upon completion
of the transaction as proposed, Fitch expects a significant change
in financial structure that could result in a multi-notch
downgrade.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- Revenue growth in the high-single-digits;
-- EBITDA margins in high-40% range;
-- FCF margins increase to low-30% range;
-- No substantial acquisitions over rating horizon.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch's expectation of gross leverage as estimated by total
debt with equity credit/operating EBITDA below 3.5x;
-- Sustained Fitch-defined EBITDA margins in the mid 50% range.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch's expectation of gross leverage as estimated by total
debt with equity credit/operating EBITDA above 4.5x;
-- Sustained erosion of EBITDA and FCF margins;
-- Negative revenue growth implying weakening market position.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Current liquidity at McAfee consists of $660 million in revolver
availability as well as $416 million in available cash.
As of June 26, 2021, debt at the company consists of a $164 million
revolver due 2022 with no current borrowings, a $500 million
revolver maturing 2024 with no current borrowings, a $3,179 million
first-lien term loan due September 2024, with $2,690 million
outstanding, a EUR1,073 term loan due September 2024 with $1,269
equivalent in euros outstanding using June 26, 2021 exchange
rates.
The first lien term loans amortize at a rate of 1% of principal
annually, payable quarterly. McAfee is in the process of applying
proceeds from the sale of its Enterprise segment to $1 billion in
debt prepayments.
ISSUER PROFILE
McAfee is a provider of cybersecurity software that derives revenue
from the sale of security products, subscriptions, software as a
service, support and maintenance, and professional services,
primarily through indirect relationships with original equipment
manufacturers or direct sales to customers. The company remains one
of the world's largest pure-play cyber-security providers.
MERCURY BORROWER: S&P Affirms 'B-' ICR on Acquisition of Newport
----------------------------------------------------------------
S&P Global Ratings affirmed its ratings on Dresher, Pa.-based
retirement, health, and government savings plan administrator and
record-keeper Mercury Borrower Inc. (Ascensus LLC), including its
'B-' issuer credit rating, 'B-' issue-level and '3' recovery
ratings on its first-lien term loan, and 'CCC' issue-level and '6'
recovery ratings on its second-lien term loan.
S&P said, "We will discontinue all ratings on Newport Group
Holdings II Inc. following the completion of the acquisition and
repayment of its existing debt, which we expect to occur in the
first quarter of 2022.
"The stable outlook reflects our expectation for
low-single-digit-percent organic revenue growth, stable pro forma
S&P Global Ratings-adjusted EBITDA margins in the low-20% area,
modest leverage reduction, and reported free operating cash flow
(FOCF) to debt in the low-single-digit-percent area."
Ascensus LLC will fund its proposed $1.325 billion acquisition of
Newport Group Holdings, L.P. and the associated transaction fees
and expenses with a $750 million incremental first-lien term loan,
a $100 million incremental second-lien term loan, $294 million in
new equity, and $215 million in rolled equity.
Ascensus' very high financial leverage risk tolerance will likely
limit ratings upside over the near term. Following the acquisition
of Newport Group, S&P Global Ratings pro forma adjusted leverage
will remain in the mid-9x area (excluding synergies), which is very
high relative to our 7x upgrade threshold. Ascensus has a record of
maintaining S&P Global Ratings-adjusted leverage above 9x in
pursuit of its industry consolidation growth strategy, and the
company's growing debt burden, which now totals over $2.3 billion
on an S&P Global Ratings-adjusted basis, limits its room for cost
overruns, customer attrition, or other execution miscues as it
integrates the Newport acquisition.
S&P said, "We expect S&P Global Ratings pro forma leverage around
9x in 2021, increasing to the mid-9x area in 2022 due primarily to
modest pricing pressure and wage inflation, before declining to 9x
in 2023. A key assumption underlying our forecast for leverage
reduction in 2023 is our expectation the company will successfully
achieve against the vast majority of targeted acquisition cost
synergies. This is supported by the company's strong recent
operating record integrating over 30 acquisitions totaling over
$500 million net of cash acquired since 2016 largely into its
retirement third-party administrator (TPA) segment. Additionally,
we expect Ascensus will benefit from the knowledge its financial
sponsor Stone Point Capital provides, since Stone Point was the
majority owner of Newport in 2013-2018 and remained a minority
investor until now."
Nevertheless, Newport's revenue base is larger than that of the
combined revenues of Ascensus' prior acquisitions. Newport's
significantly larger scale could pose unique integration challenges
relative to Ascensus' historical acquisitions, which were mostly
smaller tuck-ins that generated less than $15 million in annual
revenues.
S&P said, "Our improved business risk assessment reflects the
greater operating scale, product diversity, and customer quality of
the combined company. We view favorably the addition of Newport's
qualified retirement business, and its complementary capabilities
in servicing nonqualified retirement plans and providing insurance
and consulting services. Through the addition of these
complementary product lines, Ascensus will gain access to larger
Fortune 500 customers and diversify its somewhat concentrated
exposure to large government 529 savings customers like New York
and Rhode Island. While not factored into our base-case scenario,
the addition of these services could also provide opportunities for
revenue synergies through product extension.
"Both Ascensus and Newport have demonstrated stable earnings
through the pandemic-driven recession. We expect the combined
company will generate low-single-digit-percent organic revenue
growth and stable pro forma adjusted EBITDA margins in the low-20%
area. Visibility into our forecast is supported by the company's
highly recurring revenue model, and the resilience of retirement
plans, which typically operate through bankruptcy, with robust
participant and asset growth driven in part by industry regulatory
tailwinds incentivizing the adoption of dedicated savings
vehicles.
"At its improved scale, we expect the combined company will gain
negotiating leverage with its key channel partners and customers,
though it will remain much smaller than well-capitalized
competitors such as ADP, John Hancock, Voya, and Fidelity. We
expect the integration of Newport retirement clients onto Ascensus'
platform could result in modest customer attrition or price
concessions."
"Cash integration costs will continue to burden reported EBITDA and
FOCF. We forecast Ascensus will invest over $50 million over the
coming years to integrate Newport and achieve targeted cost-savings
synergies. Additionally, we expect the company to resume its
debt-funded tuck-in industry consolidation growth strategy, which
will likely result in high, ongoing acquisition execution,
integration, and client conversion expenses."
These expenses will likely limit reported FOCF generation, and keep
FOCF as a percentage of debt in the low-single-digit-percent area
through 2023. Any cost overruns or execution missteps could limit
the company's ability to cover its debt service costs and generate
positive FOCF, potentially resulting in pressure on the ratings.
S&P also believes a material increase in interest rates would
adversely impair cash flow due to the company's variable rate
capital structure. That said, the company's pro forma liquidity
position of $240 million across its $175 million revolver and cash
balances on hand provides an adequate buffer in the event of
short-term operating cash flow deficits, and the company has a
natural hedge against a large portion of its interest rate risk due
to incremental float income in a higher-rate environment.
S&P said, "The stable outlook reflects our expectation for
low-single-digit-percent organic revenue growth, stable pro forma
S&P Global Ratings-adjusted EBITDA margins in the low-20% area,
modest leverage reduction, and reported FOCF in the
low-single-digit-percent area."
S&P could lower its rating if further increases in leverage or
expected persistent cash flow deficits lead them to view the
capital structure as unsustainable. This would result either from:
-- High acquisition integration costs or unanticipated client
attrition from integration challenges;
-- A severe equity market downturn; or
-- Financial policy choices consistent with additional
debt-financed shareholder returns or large debt-funded
acquisitions.
S&P said, "Specifically, we would lower the rating if reported
EBITDA to cash interest coverage falls below 1.2x, cash flow
generation after debt service is persistently negative, or we
expect available liquidity to deteriorate meaningfully.
"Given the company's aggressive financial policy, we believe an
upgrade is unlikely over the next 12 months. We could raise the
rating if the company improves credit metrics such that S&P Global
Ratings-adjusted leverage is below 7x on a sustained basis.
Faster-than-anticipated incorporation of acquisition synergies, a
continuation of demonstrated contract wins in the 529 and
retirement segments, and expansion of key distribution channels
could lead to such deleveraging."
METROPOLITAN REAL ESTATE: Taps Fairfax as Real Estate Broker
------------------------------------------------------------
Metropolitan Real Estate Investment Group, LLC seeks approval from
the U.S. Bankruptcy Court for the District of Maryland to hire
Fairfax Realty Elite, Inc. to market its properties for sale.
The firm will get a commission equal to 6 percent of the purchase
price of the properties.
Cassandra Smith, a broker at Fairfax Realty Elite, disclosed in a
court filing that she is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Cassandra Smith
Fairfax Realty Elite, Inc.
10210 Greenbelt Rd., Suite 120
Lanham, MD 20706
Mobile: 301-653-5070
Office: 301-653-5070
About Metropolitan Real Estate
Investment Group
Beltsville, Md.-based Metropolitan Real Estate Investment Group,
LLC is the fee simple owner of three real properties located in
Maryland having a total comparable sale value of $1.09 million.
Metropolitan Real Estate Investment Group filed its voluntary
petition for Chapter 11 protection (Bankr. D. Md. Case No.
21-16509) on Oct. 15, 2021, listing $1,104,500 in assets and
$1,055,278 in liabilities. Judge Thomas J. Catliota oversees the
case.
Steven L. Goldberg, Esq., at McNamee Hosea, P.A. represents the
Debtor as legal counsel.
MID ATLANTIC PRINTERS: May Use BOTJ's Cash Collateral
-----------------------------------------------------
Judge Rebecca B. Connelly of the U.S. Bankruptcy Court for the
Western District of Virginia authorized, on an interim basis, Mid
Atlantic Printers, Ltd. to use the cash collateral of the Bank of
the James ("BOTJ") in the operation of its business.
As adequate protection, BOTJ is granted a replacement perfected
security interest and lien in the cash collateral to the extent of
cash collateral used by the Debtor, and to the extent and with the
same priority as that held by BOTJ in the prepetition collateral.
The Court ruled that the BOTJ issued certified check (dated October
25, 2021) for $96,463 payable to the Virginia Department of
Taxation must be returned to BOTJ before the funds covered by the
check can be used by the Debtor.
The Debtor may pay professional fees (including those payable to
the Subchapter V Trustee) from the cash collateral, upon approval
of the Court.
The current order shall automatically become a final order absent
any objections filed within 15 days after service of said order.
In the event of timely filed objection(s), the Court will convene a
hearing on the motion and objection on December 2, 2021, at 2 p.m.
via Zoom.
A copy of the interim is available for free at
https://bit.ly/3bSuhw8 from PacerMonitor.com.
Counsel for Bank of the James, secured creditor:
Leighton S. Houck, Esq.
Pavlina B. Dirom, Esq.
CASKIE & FROST
P.O. Box 6320
Lynchburg, VA 24505
Telephone: 434-846-2731
Facsimile: 434-846-0496
Email: lhouck@caskiefrost.com
About Mid Atlantic Printers Ltd.
Mid Atlantic Printers, Ltd. is a full service commercial sheet fed
printer, with two production facilities and multiple sales offices.
The Altavista, Va.-based company offers commercial printing
services.
Mid Atlantic Printers filed a petition for Chapter 11 protection
(Bankr. W.D. Va. Case No. 21-61173) on Oct. 27, 2021, listing up to
$10 million in assets and up to $1 million in liabilities. Nancy
Edwards, president of Mid Atlantic Printers, signed the petition.
Andrew S. Goldstein, Esq., at Magee Goldstein Lasky & Sayers, P.C.
serves as the Debtor's legal counsel. Jennifer M. McLemore has
been appointed as the Debtor's Subchapter V Trustee.
Leighton S. Houck, Esq., at Caskie & Frost represents Bank of the
James, secured creditor.
MOUTHPEACE DENTAL: Plan & Disclosures Not Feasible, Bank Says
-------------------------------------------------------------
Bank of America, N.A., filed an objection to Mouthpeace Dental,
LLC's Disclosure Statement.
Bank of America claims that the Disclosure Statement describes a
Plan that is unconfirmable on its face because the Disclosure and
Plan are not fair and equitable as required by 11 U.S.C. Sec. 1129.
The bank added that the Plan is unconfirmable because it violates
the absolute priority rule. Moreover, the bank claims that the
Plan is not feasible as the Debtors' August 2021 Operating Report
reports a loss of $25,511.
BofA also cites these deficiencies in the Disclosure Statement:
-- Although the Disclosure Statement refers to appraisals of
Debtor's assets, none of those appraisals are attached to the
Disclosure Statement.
-- The Disclosure Statement fails to state the amount of Bank's
debt to be paid and instead merely includes a blank line for same.
-- Bank points out that the Plan does not include a provision
providing for the Bank's rights upon a default by Debtor under the
Plan on the proposed payments to the Bank.
About Mouthpeace Dental
Mouthpeace Dental, LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
20-72289) on Dec. 3, 2020. Syretta Wells, sole shareholder, signed
the petition. In the petition, the Debtor disclosed total assets
of up to $50,000 and total liabilities of up to $1 million.
Judge Barbara Ellis-Monro oversees the case.
Rountree Leitman & Klein, LLC and Carroll & Company, CPAs, P.C.,
serve as the Debtor's legal counsel and accountant, respectively.
Bank of America, N.A., as lender, is represented by:
Beth E. Rogers, Esq.
Rogers Law Offices
100 Peachtree Street, Ste. 1950
Atlanta, GA 30303
Tel: 770-685-6320
Fax: 678-990-9959
Email: brogers@berlawoffice.com
MYOMO INC: Incurs $2.1 Million Net Loss in Third Quarter
--------------------------------------------------------
Myomo, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $2.06
million on $4.38 million of revenue for the three months ended
Sept. 30, 2021, compared to a net loss of $2.78 million on $1.93
million of revenue for the three months ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $7.64 million on $9.82 million of revenue compared to a
net loss of $9.87 million on $3.79 million of revenue for the same
period during the prior year.
As of Sept. 30, 2021, the Company had $17.46 million in total
assets, $4.31 million in total liabilities, and $13.15 million in
total stockholders' equity.
"We are proud to be reporting both the highest quarterly revenue
and the highest direct billing channel revenue in the Company's
history. These achievements demonstrate the continued success of
our transition to being a direct provider of the MyoPro to our
patients," stated Paul R. Gudonis, Myomo's chairman and chief
executive officer. "Our focus is on growing the pipeline and
backlog to position the Company for a strong start to 2022, while
remaining ever mindful of our mission to improve the lives of
people with upper-limb paralysis."
Cash and cash equivalents as of Sept. 30, 2021 were $12.6 million.
Cash used in operating activities was $2.2 million in the third
quarter of 2021. The Company continues to believe its existing
cash is sufficient to fund operations for at least the next 12
months.
"While we expect to report strong year-over-year revenue growth for
2021, we face some short-term challenges in the fourth quarter.
Although there are a record number of units in backlog, a temporary
labor shortage at one of our subcontractors constrained capacity
and deliveries in the early part of the quarter," said Mr. Gudonis.
"Capacity at that subcontractor has returned to nearly normal, but
it will be difficult to make up all the delayed shipments by the
end of the year. Therefore, those deliveries and associated
revenue may be realized in early 2022. In addition, we are
appealing a number of recent claim denials after receipt of a
pre-authorization and delivery to the patient. As a result of
these factors, it is difficult to forecast revenue for the fourth
quarter."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001369290/000156459021056254/myo-10q_20210930.htm
About Myomo
Headquartered in Cambridge, Massachusetts, Myomo, Inc. --
http://www.myomo.com-- is a wearable medical robotics company that
offers expanded mobility for those suffering from
neurologicaldisorders and upper limb paralysis. Myomo develops and
markets the MyoPro product line. MyoPro is a powered upper limb
orthosis designed to support the arm and restore function to the
weakened or paralyzed arms of patients suffering from CVA stroke,
brachial plexus injury, traumatic brain or spinal cord injury, ALS
or other neuromuscular disease or injury.
Myomo reported a net loss of $11.56 million for the year ended Dec.
31, 2020, compared to a net loss of $10.71 million for the year
ended Dec. 31, 2019. As of June 30, 2021, the Company had $17.71
million in total assets, $3.90 million in total liabilities, and
$13.81 million in total stockholders' equity.
NAB HOLDINGS: S&P Upgrades ICR to 'B+' on Strong Revenue Growth
---------------------------------------------------------------
S&P Global Ratings raised all its ratings on U.S.-based payment
processing solutions provider NAB Holdings LLC to 'B+' from 'B',
and assigned its 'B+' issue-level and '3' recovery ratings to the
new credit facilities.
S&P said, "The stable outlook reflects our view that the dividend
recapitalization will raise initial adjusted leverage to close to
4x. We also expect the company to manage its balance sheet
conservatively and that its solid growth trajectory will build
credit cushion to absorb modest acquisitions over the next 12
months."
NAB's strong financial performance in 2021 was driven by robust
macroeconomic recovery that benefited consumer payments, increased
merchant count, and increased operational leverage from the EPX
payments platform. NAB's revenue performance steadily improved
during 2021. Revenues were up around 25% in the first quarter year
over year, 45% in the second quarter, and 21% in the third quarter.
S&P said, "We expect momentum to continue into the fourth quarter
and 2022, and project around 20% organic revenue growth in 2021,
before moderating to the high-single-digit percent range in 2022.
NAB's expected 2021 revenue performance of about $550 million is
strong even compared to the pre-COVID $480 million in 2019. We
believe the quick U.S. macroeconomic recovery helped boost
transaction volumes and the number of merchants NAB works with. We
also believe that NAB's technology, such as its proprietary EPX
payments platform, helped grow revenue share from transaction
volume over the year ago period. Most of NAB's September 2021
year-to-date processing volumes came from the EPX platform. New
services, such as Edge (NAB's cash discounting program), are also
helping revenue growth."
S&P Global Ratings-adjusted EBITDA margins have improved
significantly in 2021. S&P expects the company to sustain EBITDA
margins in the mid-30% area, up about 500 basis points from 2020.
S&P said, "We anticipate no material integration issues with
Signature Payments. Signature Payments' business model is largely
the same as NAB's, and we therefore see minimal integration risks.
NAB has made similarly sized acquisitions before without
operational issues. Signature Payments' active merchant count is
about 4% of NAB's, and its revenue size about 8% of NAB's. Despite
its small scale, Signature Payments is growing quickly; its net
revenue compound annual growth rate from 2018 to August 2021 is
35%. Its portfolio also includes more specialty merchants than NAB,
and therefore a higher revenue share from transaction volumes than
NAB standalone. NAB's management has targeted a modest amount of
synergies (less than $5 million), mostly related to selling,
general, and administrative cost savings and savings by moving some
Signature Payments volume onto EPX, with full run-rate savings
expected by 2023. We believe these targets are achievable.
"Our assessment of NAB's financial risk has improved given material
deleveraging over the past year. The company's S&P Global
Ratings-adjusted leverage is 3.9x as of September 2021, pro forma
for the pending debt raise. We expect leverage to improve toward
the mid-3x area by the end of 2022, with continued growth in the
business and mid-30% EBITDA margins. This will provide good cushion
within the rating level for modestly leveraging acquisitions or
shareholder distributions. We expect ongoing consolidation in the
payments industry to continue and for NAB to continue making
tuck-in acquisitions, sometimes funded with debt. However, given
our expectations for business growth and synergies from possible
future tuck-in acquisitions, we do not anticipate leverage to
remain above 5x (our previous leverage threshold at the 'B' rating
category). NAB's free operating cash flow to debt is expected to be
in the high-single-digit percent to low-double-digit percent range,
in line with other 'B+' rated peers.
"The stable outlook reflects our view that NAB will continue its
current revenue growth trajectory and maintain its current
profitability levels. We also expect the company to remain
acquisitive, but for leverage to remain below 5x."
S&P could lower its rating on NAB if:
-- Industry disruption or high merchant attrition led to a
significant decline in EBITDA, such that leverage rises to above
5x.
-- Debt-financed acquisitions or shareholder returns cause
leverage to rise above 5x.
S&P could raise its rating on NAB if:
-- It consistently increases its organic revenue faster than the
overall industry, while improving the diversity of its revenue
streams.
-- The company commits to maintaining long-term leverage below 4x
when considering acquisitions or dividends.
NATCHITOCHES MEDICAL: Unsecureds Will Get 100% w/o Interest
-----------------------------------------------------------
Natchitoches Medical Specialists, LLC, submitted an Immaterially
Modified Plan of Reorganization.
The Debtor owns no real property, and estimates its personal
property (or its interest in such) to be valued at $1,474,463. The
majority of the Debtor's personal property is in the form of cash
and accounts receivable.
Class 1 General Unsecured Claims totaling approximately $412,298
will each receive 100% of the value of its Allowed General
Unsecured Claim, without interest, within thirty days of the
confirmation of this Plan. Class 1 is impaired.
The Plan will be funded from the Debtor's continued operations.
Attorneys for Debtor in Possession:
Bradley L. Drell
Heather M. Mathews
GOLD, WEEMS, BRUSER, SUES & RUNDELL
P. O. Box 6118
Alexandria, LA 71307-6118
Telephone (318) 445-6471
Fax: (318) 445-6476
E-mail: bdrell@goldweems.com
A copy of the Disclosure Statement dated Nov. 3, 2021, is available
at https://bit.ly/3wjb1B9 from PacerMonitor.com.
About Natchitoches Medical Specialist
Natchitoches Medical Specialists, LLC, a Natchitoches, La.-based
company that operates in the healthcare industry, sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No.
21-80137) on April 11, 2021. Its affiliate, Keyser Avenue Medical
Park, LLC, filed its Chapter 11 petition (Bankr. W.D. La. Case No.
21-80221) on June 11, 2021. The cases are jointly administered
under Case No. 21-80137. Judge Stephen D. Wheelis oversees the
cases.
At the time of the filing, Natchitoches disclosed total assets of
$8,009,156 and total liabilities of $286,300. Keyser had between $1
million and $10 million in both assets and liabilities as of the
petition date.
Natchitoches and Keyser are represented by Diment & Associates, LLC
and Gold Weems Bruser Sues & Rundell, APLC, respectively.
NATIONAL CINEMEDIA: Incurs $15.2 Million Net Loss in Third Quarter
------------------------------------------------------------------
National Cinemedia, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
attributable to the company of $15.2 million on $31.7 million of
revenue for the three months ended Sept. 30, 2021, compared to a
net loss attributable to the company of $12.7 million on $6 million
of revenue for the three months ended Sept. 24, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss attributable to the company of $57.3 million on $51.1
million of revenue compared to a net loss attributable to the
company of $30.2 million on $74.7 million of revenue for the nine
months ended Sept. 24, 2020.
As of Sept. 30, 2021, the Company had $820.1 million in total
assets, $1.21 billion in total liabilities, and a total deficit of
$385.2 million.
Commenting on the Company's third quarter 2021 operating results
and future outlook, NCM CEO Tom Lesinski said, "Advertisers are
beginning to come back to the cinema as fall attendance levels were
well in excess of original aggregate projections. Beginning with a
strong Labor Day weekend performance, which exceeded the 2019
level, the box office continued to pick up through October,
resulting in one of the best Octobers ever. For the first time
since the pandemic started there has been consistent and meaningful
week-to-week theater attendance. These favorable market trends are
once again attracting major brands that value our young, engaged
movie audience and are finding it more and more challenging to
achieve their marketing goals on TV networks as their audiences
continue to age and decline. This recent strong momentum puts us
back on track to reestablish the growth that we had created before
the pandemic started."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1377630/000137763021000195/ncminc-20210930.htm
About National CineMedia, Inc.
National CineMedia (NCM) is a cinema advertising network in the
U.S., the Company unites brands with the power of movies and engage
movie fans anytime and anywhere. NCM's Noovie pre-show is
presented exclusively in 50 leading national and regional theater
circuits including AMC Entertainment Inc. (NYSE:AMC), Cinemark
Holdings, Inc. (NYSE:CNK) and Regal Entertainment Group (a
subsidiary of Cineworld Group PLC, LON: CINE). NCM's cinema
advertising network offers broad reach and audience engagement with
over 20,700 screens in over 1,600 theaters in 195 Designated Market
Areas (all of the top 50). NCM Digital and Digital-Out-Of-Home
(DOOH) go beyond the big screen, extending in-theater campaigns
into online, mobile, and place-based marketing programs to reach
entertainment audiences. National CineMedia, Inc. (NASDAQ:NCMI)
owns a 48.3% interest in, and is the managing member of, National
CineMedia, LLC. For more information, visit www.ncm.com and
www.noovie.com.
* * *
As reported by the TCR on July 27, 2021, S&P Global Ratings placed
its ratings on U.S. theater advertiser National CineMedia Inc.
(NCM), including its 'CCC+' issuer credit rating, on CreditWatch
with positive implications. S&P plans to resolve the CreditWatch
over the next few months depending on the pace of recovery in
theater advertising, which relies on theater attendance.
NORTHERN OIL: Prices Private Offering of 8.125% Senior Notes
------------------------------------------------------------
Northern Oil and Gas, Inc. has priced a private placement under
Rule 144A and Regulation S of the Securities Act of 1933, as
amended, to eligible purchasers, of $200.0 million in aggregate
principal amount of additional 8.125% senior notes due 2028 at an
offering price equal to 106.75% of par, plus accrued interest from
Sept. 1, 2021, representing a yield to worst of 6.31%.
The additional notes will be issued under the same indenture as the
notes issued by the company on Feb. 18, 2021 and will form a part
of the same series of notes as the existing notes. The offering is
expected to close on Nov. 15, 2021, subject to the satisfaction of
customary closing conditions.
The company intends to use the net proceeds from the offering to
repay a portion of the outstanding borrowings under its revolving
credit facility.
The additional notes will not be registered under the Securities
Act or under any state or other securities laws, and the notes will
be issued pursuant to an exemption therefrom, and may not be
offered or sold within the United States, or to or for the account
or benefit of any U.S. Person, absent registration or an applicable
exemption from registration requirements.
The additional notes are being offered only to persons who are
either reasonably believed to be "qualified institutional buyers"
under Rule 144A or who are non-"U.S. persons" under Regulation S as
defined under applicable securities laws.
About Northern Oil and Gas
Northern Oil and Gas, Inc. -- http://www.northernoil.com-- is an
independent energy company engaged in the acquisition, exploration,
development and production of oil and natural gas properties,
primarily in the Bakken and Three Forks formations within the
Williston Basin in North Dakota and Montana.
Northern Oil reported a net loss of $906.04 million for the year
ended Dec. 31, 2020, compared to a net loss of $76.32 million for
the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company
had $1.24 billion in total assets, $1.40 billion in total
liabilities, and a total stockholders' deficit of $157.71 million.
NXT ENERGY: To Release Third Quarter Results on Nov. 15
-------------------------------------------------------
NXT Energy Solutions Inc. will release its third quarter 2021
financial and operating results for the quarter ended Sept. 30,
2021, on Monday, Nov. 15, 2021 after market close. A conference
call to discuss the third quarter 2021 results will be held on
Tuesday, Nov. 16, 2021 at 4:30 p.m. Eastern Time (2:30 p.m.
Mountain Time).
Details of the conference call are as follows:
Date: Tuesday, November 16, 2021
Time: 4:30 p.m. Eastern Time (2:30 p.m. Mountain Time)
Participants call 1-800-806-5484
Local dial-in number 416-340-2217
International Dial in Numbers
https://www.confsolutions.ca/ILT?oss=7P1R8008065484
Conference ID 9976703#
NXT's third quarter 2021 financial and operating results will be
filed in Canada on SEDAR at www.sedar.com and will be available in
the USA on EDGAR at www.sec.gov/edgar. The financial and operating
results will also available on NXT's website at www.nxtenergy.com.
About NXT Energy
NXT Energy Solutions Inc. is a Calgary-based technology company
whose proprietary SFD survey system utilizes quantum-scale sensors
to detect gravity field perturbations in an airborne survey method
which can be used both onshore and offshore to remotely identify
areas with exploration potential for traps and reservoirs. The SFD
survey system enables the Company's clients to focus their
hydrocarbon exploration decisions concerning land commitments, data
acquisition expenditures and prospect prioritization on areas with
the greatest potential. SFD is environmentally friendly and
unaffected by ground security issues or difficult terrain and is
the registered trademark of NXT Energy Solutions Inc. NXT Energy
Solutions Inc. provides its clients with an effective and reliable
method to reduce time, costs, and risks related to exploration.
NXT Energy reported a net loss and comprehensive loss of C$5.99
million for the year ended Dec. 31, 2020. As of June 30, 2021, the
Company had C$24.82 million in total assets, C$3.90 million in
total liabilities, and C$20.92 million in shareholders' equity.
Calgary, Canada-based KPMG LLP, the Company's auditor since 2006,
issued a "going concern" qualification in its report dated
March 30, 2021, citing that the Company's current and forecasted
cash and cash equivalents and short-term investments position is
not expected to be sufficient to meet its obligations that raises
substantial doubt about its ability to continue as a going concern.
OCULAR THERAPEUTIX: Posts $2.7 Million Net Income in Third Quarter
------------------------------------------------------------------
Ocular Therapeutix, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
and comprehensive income of $2.66 million on $12.15 million of net
total revenue for the three months ended Sept. 30, 2021, compared
to a net loss and comprehensive loss of $11.94 million on $5.88
million of net total revenue for the three months ended Sept. 30,
2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss and comprehensive loss of $2.70 million on $31.21 million
of net total revenues compared to a net loss and comprehensive loss
of $70.02 million on $10.05 million of net total revenues for the
nine months ended Sept. 30, 2020.
As of Sept. 30, 2021, the Company had $217.74 million in total
assets, $130.40 million in total liabilities, and $87.34 million in
total stockholders' equity.
As of Sept. 30, 2021, the Company had $179.3 million in cash and
cash equivalents versus $191.9 million at June 30, 2021. Based on
current plans and related estimates of anticipated cash inflows
from DEXTENZA and ReSure product sales and anticipated cash
outflows from operating expenses, the Company believes that
existing cash and cash equivalents, as of Sept. 30, 2021, will
enable the Company to fund planned operating expenses, debt service
obligations and capital expenditure requirements through 2023.
This cash guidance is subject to a number of assumptions including
those related to the severity and duration of the COVID-19
pandemic, the revenues, expenses and reimbursement associated with
DEXTENZA, and the pace of research and clinical development
programs, among other aspects of the business.
"The previous four months have been an exceptionally busy time at
Ocular," said Antony Mattessich, president and chief executive
officer. "We had a couple of positive outcomes that we believe
will set the course for the future of DEXTENZA. The first was the
approval of the sNDA for itching associated with allergic
conjunctivitis that opens a large, new and discrete opportunity for
DEXTENZA in the office setting. The second was Medicare's final
rule that determined that DEXTENZA will be paid separately in the
hospital outpatient and ASC settings in 2022 and is eligible under
the current criteria for separate payment in the ASC as a
non-opioid pain management drug beyond 2022, positioning our
vibrant business in the surgical setting to grow into the
foreseeable future. We also continued to advance our pipeline.
While we were disappointed with the outcome of our Phase 2 dry eye
clinical trial with OTX-CSI, we expect to announce the Phase 2
clinical trial topline results for OTX-DED, our clinical trial in
episodic dry eye disease in the first quarter of 2022. Further,
our U.S.-based clinical trial of OTX-TKI in wet-AMD is enrolling
well, and we expect to initiate a Phase 2 clinical trial for
OTX-TIC in glaucoma by the end of the year. Overall, we are pleased
with our continued progress as we enter a period of significant
data and news flow that will shape our leadership position within
ophthalmology."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1393434/000155837021015029/ocul-20210930x10q.htm
About Ocular Therapeutix
Headquartered in Bedford, MA, Ocular Therapeutix, Inc. --
http://www.ocutx.com-- is a biopharmaceutical company focused on
the formulation, development, and commercialization of innovative
therapies for diseases and conditions of the eye using its
proprietary bioresorbable hydrogel-based formulation technology.
Ocular Therapeutix's first commercial drug product, DEXTENZA, is
FDA-approved for the treatment of ocular inflammation and pain
following ophthalmic surgery.
Ocular Therapeutix reported a net loss and comprehensive loss of
$155.64 million for the year ended Dec. 31, 2020, compared to a net
loss and comprehensive loss of $86.37 million for the year ended
Dec. 31, 2019. As of June 30, 2021, the Company had $230.71
million in total assets, $150.46 million in total liabilities, and
$80.25 million in total stockholders' equity.
OLD WORLD TIMBER: Seeks Approval to Hire Accounting Firm, LLC
-------------------------------------------------------------
Old World Timber, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Kentucky to hire Accounting Firm LLC.
The firm's services include:
(a) preparing the Debtor's payroll and related payroll tax
reporting;
(b) preparing the Debtor's sales and use tax returns; and
(c) advising and assisting the Debtor with respect to its
post-petition bookkeeping and necessary transitions in QuickBooks
software.
The firm will be paid at an hourly rate of $145 for accounting
services related to the preparation of the Debtor's sales and use
tax returns, and consulting services related to the Debtor's
implementation and use of QuickBooks for its internal financial
record keeping.
Moreover, the firm will be paid at the rate of $180 per month for
payroll services, plus a one-time $450 set-up fee to reconcile the
Debtor's historical data and prepare for payroll management
services, and an annual $285 fee for the preparation of 1099
returns for employees (subject to increase based on the number of
employees).
Daniel Tuz, a manager at Accounting Firm, disclosed in a court
filing that he is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Daniel Tuz
Accounting Firm LLC
841 Corporate Drive, Suite 100
Lexington, KY 40503
Tel: +1 859-753-0672
About Old World Timber
Old World Timber, LLC, a wood product manufacturing business based
in Lexington, Ky., filed its voluntary petition for Chapter 11
protection (Bankr. E.D. Ky. Case No. 21-51160) on Oct. 19, 2021,
listing $1,938,717 in total assets and $1,901,401 in total
liabilities. Nathan S. Brown, chief executive officer, signed the
petition.
Judge Tracey N. Wise oversees the case.
Kaplan Johnson Abate & Bird, LLP serves as the Debtor's legal
counsel while Accounting Firm LLC serves as the Debtor's
accountant.
PARK PLACE DEVELOPMENT: Court Junks Involuntary Chapter 7 Petition
------------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
issued an Opinion dated November 2, 2021, dismissing with prejudice
the Involuntary Chapter 7 Petition filed against Park Place
Development Primary, LLC, for being filed in bad faith.
The Alleged Debtor is a Delaware limited liability company that
owns a single asset -- a partially completed 43-story residential
building in New York City. To finance the Project, the Alleged
Debtor on April 26, 2016, entered into a Building Facility
Agreement (the "BFA") and a Project Facility Agreement (the "PFA")
with Malayan Banking Berhad, New York Branch, as administrative
agent for Malayan Banking Berhad, London Branch, Intesa Sanpaolo
S.P.A., New York Branch, WARBA Bank K.S.C.P. and 45 Park Place
Investments, LLC. The Alleged Debtor obtained $174 million in
financing.
Also, in furtherance of the Project, the Alleged Debtor entered
into a Construction Management Agreement with Gilbane Residential
Construction, LLC, which was hired as the general contractor.
Gilbane agreed to, among other things, provide construction
management services, including hiring various construction trades
to work on the Project.
In turn, Gilbane entered into agreements with various
sub-contractors, including Permasteelisa North American Corp.
("PNA"), Construction Realty Safety Group, Inc. ("CR Safety"),
Trade Off Plus, LLC ("Trade Off"), and S&E Bridge & Scaffold, LLC
("S&E"). Also, Soho Properties, Inc., an alleged affiliate and
authorized agent of the Alleged Debtor, entered into an agreement
with Ismael Leyva Architect, P.C. ("ILA") on October 18, 2013, to
provide architectural services for the Project. These entities are
the "Petitioning Creditors."
As of December 6, 2019, each of the Petitioning Creditors (aside
from ILA) were notified via a letter delivered by e-mail that the
CMA had been terminated for convenience and were asked to provide
final invoices to Gilbane for services and materials provided under
the Agreements.
The Alleged Debtor purportedly owes the Lenders $130,856,015.
When the Alleged Debtor did not repay the amounts alleged to be due
and owing under the Facility Documents on the Termination Date, a
"Notice of Event of Default" was sent by Malayan Banking Berhad,
New York Branch, (the "Administrative Agent"), demanding immediate
payment of the outstanding amount.
The Alleged Debtor did not cure its defaults, so, on March 11,
2020, the Administrative Agent initiated a mortgage foreclosure
action in the Supreme Court of New York against the Alleged Debtor.
All Petitioning Creditors are parties to the Foreclosure Action and
have filed answers, crossclaims, and counterclaims in connection
therewith.
On January 22, 2021, the Lenders filed a Motion for Summary
Judgment in the Foreclosure Action against various parties,
including the Alleged Debtor and the Petitioning Creditors.
On May 24, 2021, two days prior to the Petitioning Creditors'
deadline to respond to the Lenders' Motion, the Petitioning
Creditors instituted the Chapter 7 action by filing an Involuntary
Petition against the Alleged Debtor. The Petitioning Creditors
assert, among other things, Mechanic's Liens and Third-Party
Beneficiary Claims under the BFA.
According to the Alleged Debtor, the Petitioning Creditors are not
qualified to file an involuntary petition under 11 U.S.C. Section
303(b).
The Court found that that the Involuntary Petition was filed in bad
faith and should be dismissed with prejudice. In coming to this
conclusion, the Court considered the pertinent factors in In re
Forever Green Athletic Fields, Inc., 804 F.3d 328, 330 (3d Cir.
2015). Certain of these factors weigh against a finding of bad
faith, while others are neutral or weigh in favor of a finding of
bad faith. In consideration of all the factors, the Alleged Debtor
has met its evidentiary burden in showing that the Involuntary
Petition was filed in bad faith, the Court concluded.
Citing In re Taberna Preferred Funding IV, Ltd., the Court also
held that solely holding a mechanic's lien, i.e., a fully secured,
non-recourse claim, does not satisfy the statutory criteria of Sec.
303(b).
A full-text copy of the Opinion dated November 2, 2021, is
available at https://tinyurl.com/ms4aaukw from Leagle.com.
The case is In re: PARK PLACE DEVELOPMENT PRIMARY, LLC., Chapter 7,
Alleged Debtor, Case No. 21-10849 (CSS)(Bankr. D. Del.).
TROUTMAN PEPPER HAMILTON SANDERS LLP, Marcy J. McLaughlin Smith,
Esq. -- marcy.smith@troutman.com -- Wilmington, DE.
Gary W. Marsh, Esq. -- gary.marsh@troutman.com -- Atlanta, GA.
Brett D. Goodman New York, NY. Counsel to Park Place Development
Primary, LLC
VENABLE LLP Daniel A. O'Brien, Esq. -- dao'brien@Venable.com --
Wilmington, DE.
Jeffrey S. Sabin, Esq. -- jssabin@Venable.com -- James E. Frankel,
Esq. -- JEFrankel@Venable.com -- Gary L. Rubin, Esq. --
GLRubin@Venable.com -- Carol A. Weiner, Esq. -- cwlevy@Venable.com
-- New York. Counsel for the Petitioning Creditors
PACHULSKI STANG ZIEHL & JONES LLP Laura Davis Jones, Esq. --
ljones@pszjlaw.com -- Wilmington, DE FRIED, FRANK, HARRIS, SHRIVER
& JACOBSON LLP Gary L. Kaplan, Esq. -- gary.kaplan@friedfrank.com
-- Matthew D. Parrott, Esq. -- M.Parrott@friedfrank.com -- Andrew
M. Minear, Esq. -- andrew.minear@friedfrank.com -- One New York
Plaza New York, NY Counsel for Malayan Banking Berhad, New York
Branch, as Administrative Agent For Malayan Banking Berhad, London
Branch Intesa Sanpaolo S.P.A., New York Brank, Warba Bank K.S.C.P.,
and 45 Park Place Investments, LLC
PEOPLE SPEAK: Unsecured Creditors to Recover 100% in 4 Years
------------------------------------------------------------
People Speak, LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of Louisiana a Disclosure Statement for the Plan
of Reorganization dated Nov. 8, 2021.
The Debtor is a Louisiana limited liability company founded in 2012
as a real estate investment, rehabilitation, and management
company.
The Debtor currently operates the Dauphine Property and the Blue
Lagoon Property, located at 1419 Dauphine Street and 4417 Dryades
Street, respectively. The Debtor offers those properties for short
term rental through Airbnb and VRBO.
Beginning in February 2020, the Debtor experienced a significant
decline in rental revenue due to the emergence of the COVID-19
pandemic and the resulting shutdowns by local, state, and national
governments to address the pandemic. Facing the expiration of
government benefits and efforts by LaGraize to pursue the LaGraize
Litigation before the 24th Judicial District Court, the Debtor
filed a voluntary bankruptcy petition seeking relief pursuant to
Chapter 11 of the Bankruptcy Code to restructure its debts to Loan
Partners, the SBA, LaGraize, and other creditors.
Class 3 consists of the Loan Partners Secured Claim. The total
amount of the Loan Partners Secured Claim is estimated at
$2,228,495.37. The Blue Lagoon Property will be or has been listed
for sale, with net sale proceeds to be paid to Loan Partners in
full or partial payment of the total amount of the Loan Partners
Secured Claim. The Plan provides for the payment of the Loan
Partners Secured Claim by selling the Blue Lagoon Property via
private sale under 11 U.S.C. § 363 through a broker or directly to
a local developer and distributing the net proceeds of the sale of
such Collateral to Loan Partners.
Class 4 consists of the SBA Secured Claim. The SBA Secured Claim
shall be paid from the proceeds of the sale of the SBA Collateral,
if any, after payment in full of the Allowed Loan Partners Secured
Claim, with any remaining portion to be paid in 36 monthly
installments of interest at the rate of 3.75% per annum, with
monthly principal payments based on a 60-month amortization
schedule with a 37th and final payment for all remaining principal,
interest, costs a d attorney's fees on or before the 1st Business
Day of the 37th month from the Effective Date. Any portion of the
Allowed Claim of the SBA that is not a Secured Claim shall be
treated as a Class 6 General Unsecured Claim.
Class 5 consists of the Allowed LaGraize Claim. The Plan shall
treat the Allowed LaGraize Claim under one of the following two
scenarios, both contingent on satisfaction of the following 3
conditions: (i) stipulation between Dr. LaGraize and the Debtor as
to the nature, amount, and allowability of the LaGraize Claim; (ii)
consent from all parties in the LaGraize Litigation to a global
compromise resolving all Claims or Causes of Action which have been
or may be asserted in the LaGraize Litigation; and (iii) with
respect to Option One only, Dr. LaGraize's assumption of all
obligations to pay or otherwise satisfy all Allowed Unsecured
Claims:
* Option One: The Allowed LaGraize Claim shall be satisfied
first from the Pro Rata net proceeds from sale of the Blue Lagoon
Property remaining after payment of proceeds due to Loan Partners,
if any. Any remaining portion of the Allowed LaGraize Claim shall
be satisfied by transferring ownership of the Dauphine Property to
Dr. LaGraize or paying the net proceeds from the sale thereof
following a marketing and sales process under Section 363 of the
Bankruptcy Code or refinancing,
* Option Two: Otherwise, the Allowed LaGraize Claim shall be
satisfied by exchanging the indebtedness thereunder for an agreed
upon portion of the Membership Interests in the Debtor, subject to
a mutually agreeable amendment to the Debtor's operating agreement
by the Debtor's Members.
Class 6 consists of Holders of Allowed General Unsecured Claims.
Each Holder of an Allowed General Unsecured Claims shall receive
100% payment within four years from the Effective Date, payable
either from net proceeds of the sale of Assets of the Estate after
payment of Holders of senior Allowed Claims, or assumption by Dr.
LaGraize or a third party of the obligation to pay or otherwise
satisfy Allowed Unsecured Claims, and any recoveries obtained by
the Reorganized Debtor from Chapter 5 Claims or other Retained
Causes of Action.
The Debtor estimates that there are approximately 7 General
Unsecured Claims with an aggregate value of approximately $305,812,
exclusive of any portion of the SBA Claim that is not Secured. The
Debtor reserves all rights to object to such Claims and to seek the
allowance or disallowance of same with the Bankruptcy Court. Based
upon the projections, the Debtor anticipates that Holders of Class
6 General Unsecured Claims are likely to recover 100% of the total
value of their Allowed Claims. The Holders of General Unsecured
Claims are Impaired under the Plan and are entitled to vote to
accept or reject the Plan.
Class 7 consists of Holders of Membership Interests in the Debtor,
Rachele Riley and Derrick Riley. The Holders of the Membership
Interests will receive nothing under the Plan unless all Holders of
Allowed Claims in Classes 1—6 are either paid in full or agree to
different treatment of Holders of this Class under the Plan. The
Plan contemplates that Dr. LaGraize will be granted an election and
may opt to take a portion of the Membership Interests pursuant to a
debt-for-equity swap in satisfaction of the Allowed LaGraize
Claim.
On or before the Effective Date, it is expected that the Debtor
will be able to liquidate certain Assets, including, but not
limited to, the Blue Lagoon Property, and may have sufficient Cash
available to fund payments required to be made at that time under
the Plan. In the event that there is, in fact, insufficient Cash,
the Chapter 11 Professionals will be paid and have or will have
agreed to be paid from the proceeds of the liquidation of Assets of
the Debtor pursuant to the Plan.
The Debtor intends to sell the Blue Lagoon Property and intends to
file motions to effect such sale prior to the Confirmation Hearing,
including motions seeking ancillary relief such as employment of
one or more real estate listing agents (the "Real Estate Agents").
The Debtor submits that the planned sale of the Blue Lagoon
Property is beneficial to the Debtor's estate and its creditors.
Furthermore, Loan Partners will have the right to credit bid
pursuant to Bankruptcy Code Section 363(k) up to the full amount of
its Allowed Secured Claim. The Debtor reserves the right to sell
the Dauphine Property in the unlikely event that sale proceeds of
the Blue Lagoon Property are insufficient to satisfy the Allowed
Loan Partners Secured Claim.
The Debtor estimates that it will receive proceeds from the sale of
the Blue Lagoon Property sufficient to satisfy all Allowed
Administrative, Priority Tax Claims, and any Other Priority Claims
which will be due and payable on the Effective Date. All
Distributions to be made after the Effective Date pursuant to the
Plan will be made from the proceeds of the sale or liquidation of
Assets of the Debtor and potential refinancing of the Dauphine
Property. The Debtor does not intend to obtain any additional
post-petition financing in order to continue its operations or to
fund the Distributions under the Plan; provided, however, the
Debtor may refinance the Dauphine Property to pay amounts due and
owing on the Loan Partners Secured Claim and obtain a line of
credit on that Property for general business purposes.
A full-text copy of the Disclosure Statement dated Nov. 8, 2021, is
available at https://bit.ly/3c15sOx from PacerMonitor.com at no
charge.
Debtor's Counsel:
LUGENBUHL, WHEATON, PECK, RANKIN & HUBBARD
STEWART F. PECK
CHRISTOPHER T. CAPLINGER
JAMES W. THURMAN
601 Poydras Street, Suite 2775
New Orleans, LA 70130
Telephone: (504) 568-1990
Facsimile: (504) 310-9195
About People Speak
People Speak, LLC, a privately held company that operates in the
traveler accommodation industry, sought protection under Chapter 11
of the Bankruptcy Code (Bankr. E.D. La. Case No. 21-10315) on March
11, 2021. Rachele Riley, owner, and member signed the petition.
The Debtor disclosed $1 million to $10 million in both assets and
liabilities in the petition.
Judge Meredith S. Grabill oversees the case.
Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, led by Stewart F. Peck,
Esq., serves as the Debtor's counsel.
PETROTEQ ENERGY: Files Directors' Circular Regarding Takeover Bid
-----------------------------------------------------------------
Petroteq Energy Inc. has filed a Directors' Circular in response to
the offer and take-over bid circular of 2869889 Ontario Inc., an
indirect, wholly-owned subsidiary of Viston United Swiss AG for all
of the issued and outstanding common shares in the capital of the
Company.
As stated in the Directors' Circular, the Board of Directors of
Petroteq, in consultation with its independent financial and legal
advisors, is considering whether or not the Viston Offer is
adequate and in the best interests of Petroteq and its
shareholders. Accordingly, the Board is considering whether to make
a recommendation to accept or reject the Viston Offer and has
determined not to make a recommendation to Petroteq Shareholders
until such time as the Company has an opportunity to complete its
Strategic Review and receives input on valuation from its financial
advisor, Haywood Securities Inc.
The Board therefore advises that Petroteq Shareholders DO NOT
TENDER their Common Shares until further communication is received
from the Board. The Viston Offer is open for acceptance until Feb.
7, 2022, unless extended, accelerated or withdrawn in accordance
with its terms. The Board notes that tendering to the Viston Offer
before the Company has had an opportunity to fully explore all
available alternatives may preclude the possibility of a
financially superior transaction emerging. Any Petroteq
Shareholder who has already tendered his, her or its Common Shares
to the Viston Offer should withdraw those Common Shares until such
further communication from the Board is received. For further
information, please see the section entitled "How to Withdraw your
Deposited Common Shares" in the Directors' Circular.
Petroteq cautions its shareholders and potential investors that
there can be no certainty that the Viston Offer will be supported
by the Board or that any other strategic transaction with any other
person will be pursued by Petroteq or ultimately completed.
Consistent with its fiduciary duties, the Board will evaluate the
Viston Offer and Petroteq's options, including continuing to
operate the business to drive shareholder value and potentially
exploring possible alternative transactions. The Board continues
to believe Petroteq is well positioned to be an industry leader
with its one of a kind oil sands extraction technology.
Reasons for the Board Not Making a Recommendation at this Time
The reasons why the Board is not making a recommendation to
Petroteq Shareholders to accept or reject the Viston Offer at this
time are as follows:
* The Board has engaged Haywood to conduct a review of the value
of the Company and any potential ‎strategic partners or other
strategic transactions available to the Company, which will assist
the Board ‎in advising Petroteq Shareholders whether or not to
reject or accept the Viston Offer.
* The Board is currently undertaking a strategic review process
of alternatives available ‎to the Company, ‎including
value-maximizing alternatives, equity or debt financings, core and
non-core asset sales, strategic ‎investments, joint ventures and
mergers. The Board considers that ‎undergoing a Strategic Review
process and, in ‎particular, providing sufficient time to
consider and evaluate ‎alternatives, and, if applicable, evaluate
interested parties, if any, to complete due diligence activities,
is ‎vital to identifying the ‎transaction that is in the
Company's best interests and the best interests of the Petroteq
‎Shareholders.‎ ‎
* The Viston Offer was unsolicited and potentially very
opportunistic and it was made by Viston without the ‎benefit of
due diligence or any negotiations with the Company. The Board
requires more time to ‎appropriately assess the adequacy of the
Viston Offer and to consider strategic alternatives to maximize
value for Petroteq ‎Shareholders. ‎
* The timing of the Viston Offer is intended to force Petroteq
Shareholders to make determination on ‎the Viston Offer at
‎this time in the Company's development without the Company
having had the opportunity to fully canvas the ‎‎market and
other available opportunities or to complete its Strategic
Review.‎
* The Company attempted to engage with Viston in order to explore
whether a friendly transaction with Viston was ‎feasible to
benefit all stakeholders; however, Viston elected not to engage
with the Board ‎following the Company's initial request for
information about Viston and Viston then launched the Viston
‎Offer.
* The Board can only fully assess the adequacy of the Viston
Offer with ‎the benefit of the results of the ‎Strategic Review
and input from its legal and financial advisors.‎
The Company also announced the appointment of Mr. Ron Cook as the
new ‎chief financial officer of the Company.‎ The Company
thanks Mark Korb, the former chief financial officer of the
Company, for all of his efforts and ‎commitment to the Company
and wishes him well in his future endeavors.‎
About Petroteq Energy Inc.
Petroteq Energy Inc. -- www.Petroteq.energy -- is a clean
technology company focused on the development, implementation and
licensing of a patented, environmentally safe and sustainable
technology for the extraction and reclamation of heavy oil and
bitumen from oil sands and mineable oil deposits. Petroteq is
currently focused on developing its oil sands resources at Asphalt
Ridge and upgrading production capacity at its heavy oil extraction
facility located near Vernal, Utah.
Petroteq reported a net loss and comprehensive loss of $12.38
million for the year ended Aug. 30, 2020, compared to a net loss
and comprehensive loss of $15.78 million for the year ended Aug.
31, 2019.
Vancouver, British Columbia, Canada-based Hay & Watson, the
Company's auditor since 2012, issued a "going concern"
qualification in its report dated Dec. 15, 2020, citing that the
Company has had recurring losses from operations and has a net
capital deficiency, which raises substantial doubt about its
ability to continue as a going concern.
PRESIDIO DEVELOPMENT: Unsecureds Get 100% with Interest From Sale
-----------------------------------------------------------------
Presidio Development, LLC, d/b/a MBZ Toys, submitted a Plan and a
Disclosure Statement.
In order to mitigate any further damage to the Debtor, it
ultimately filed this Chapter 11 case on Jan. 6, 2021, in order to
stop the foreclosure sale of the Debtor's real property.
The Debtor will fund the Plan from its business operations, the
funds it has/will have accumulated in its Debtor-in-Possession bank
account, and the sale of its vacant lot in San Diego, California.
The Plan will treat Class 4 General Unsecured Claims as follows:
* Class 4(a) totaling approximately $15,819. This class will be
paid in full at 5% interest no later than nine months from the Plan
effective date, from the proceeds of the sale of the Debtor's
vacant lot. Class 4(a) is impaired.
* Class 4(b) totaling approximately $6,200. This insider claim
is subordinated to the claims held by Class 4(a) claimants, such
that this insider claim will be paid only in the event that all
other Class (a) general unsecured claims have first been satisfied.
If that condition is met, then Class 4(b) will be paid in full
with no interest no later than 10 months from the Plan effective
date. This claim will be paid from the proceeds of the sale of the
Debtor's vacant lot. Class 4(b) is impaired.
Attorneys for the Debtor:
Roksana D. Moradi-Brovia
W. Sloan Youkstetter
RESNIK HAYES MORADI LLP
17609 Ventura Blvd., Suite 314
Encino, CA 91316
Tel: (818) 285-0100
Fax: (818) 855-7013
E-mail: roksana@RHMFirm.com
sloan@RHMFirm.com
A copy of the Disclosure Statement dated Nov. 3, 2021, is available
at https://bit.ly/3CN8hhW from PacerMonitor.com.
About Presidio Development
Presidio Development, LLC, owns a retail toy business that leases
space at 5060 E. Montclair Plaza Lane, Units 5124, 5228 and 2188,
Montclair, CA 91763. It also owns a commercial vacant land located
at 1229 Hollister Street, San Diego, CA 92154.
Presidio Development, doing business as MBZ Toys, filed a petition
for Chapter 11 protection (Bankr. C.D. Cal. Case No. 21-10086) on
Jan. 6, 2021, listing as much as $1 million in assets and as much
as $500,000 in liabilities. The Law Offices of Michael Jay Berger
serves as the Debtor's legal counsel.
PULMATRIX INC: Resolves Contract Dispute With Cipla
---------------------------------------------------
Pulmatrix, Inc. has completed an amendment to Pulmatrix's agreement
with Cipla Technologies, LLC for the development and
commercialization of Pulmazole. The completion of the amendment
resolves Pulmatrix's previously disclosed dispute with Cipla
regarding the continued funding of the development costs for
Pulmazole.
Pursuant to the 2nd Amendment Cipla will continue to reimburse
Pulmatrix for 50% of all third-party costs for the development of
Pulmazole, provided Cipla will only be required to reimburse
Pulmatrix for 40% of Pulmatrix dedicated personnel and consulting
costs. Upon the timely achievement of certain development
milestones, Cipla will reimburse another 10% of Pulmatrix's "direct
costs". The development milestones for Pulmatrix's planned Phase
2b clinical trial include the dosing of 25% of participants in the
clinical trial by June 30, 2023, and the delivery of top-line data
results to the joint steering committee for the program by June 30,
2024. If the development milestones are not achieved within
9-months of such dates either party may terminate its obligation to
fund its share of development costs. Pulmatrix also granted Cipla
exclusive rights to the development and commercialization of
Pulmazole in the "Cipla Territory" (India, Nepal, Yemen, Iran,
South Africa, Sri Lanka, Myanmar and Algeria) in exchange for,
under certain circumstances, 2% royalties on net sales of Pulmazole
in the Cipla Territory.
Pulmatrix successfully completed a Type C Meeting with the U.S.
Food and Drug Administration (FDA) in February of 2020 and intends
to initiate a Phase 2b clinical study of Pulmazole in allergic
bronchopulmonary aspergillosis (ABPA) with registration endpoints
in Q1 2023 with topline data expected Q2 2024, which may enable a
Phase 3 registration study.
"We are pleased to have come to this resolution which will enable
the continued development of Pulmazole globally with our valued
partners at Cipla," said Ted Raad, chief executive officer of
Pulmatrix. "After a successful Type C Meeting with the FDA, we are
now ready to resume clinical activities with Pulmazole which has
the potential to address the underlying cause of ABPA while
avoiding the side effects of oral antifungals and prolonged steroid
treatment."
About Pulmatrix
Pulmatrix, Inc. -- http://www.pulmatrix.com-- is a clinical stage
biopharmaceutical company developing innovative inhaled therapies
to address serious pulmonary and non-pulmonary disease using its
patented iSPERSE technology. The Company's proprietary product
pipeline includes treatments for serious lung diseases such as
allergic ronchopulmonary aspergillosis and lung cancer, as well as
neurologic disorders such as acute migraine. Pulmatrix's product
candidates are based on iSPERSE, its proprietary engineered dry
powder delivery platform, which seeks to improve therapeutic
delivery to the lungs by maximizing local concentrations and
reducing systemic side effects to improve patient outcomes.
Pulmatrix reported a net loss of $19.31 million for the year ended
Dec. 31, 2020, compared to a net loss of $20.59 million for the
year ended Dec. 31, 2019. As of March 31, 2021, the Company had
$69.85 million in total assets, $13.20 million in total
liabilities, and $56.65 million in total stockholders' equity.
REALOGY GROUP: S&P Upgrades ICR to 'BB-' on Solid Deleveraging
--------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Madison,
N.J.-based real estate service company Realogy Group LLC to 'BB-'
from 'B+'. The outlook is stable.
S&P revised its existing ratings on Realogy's unsecured and secured
debt to 'B+' from 'B', and 'BB+' from 'BB', respectively.
The stable outlook on Realogy reflects S&P's expectation it will
maintain market share, manage long-term leverage in the high-3x
area, and maintain a strong liquidity profile.
Realogy's focus on debt repayment and growing cash balance provide
ample cushion to absorb future earnings volatility and address 2023
maturities while prioritizing investment in the business. Over the
last 12 months, the company has prudently managed its capital
structure by extending maturities, lowering interest expense, and
shifting to unsecured debt. Despite positive trends in U.S. job
growth and a resurging Manhattan real estate market, rising
mortgage rates and delays in new housing starts are likely to slow
home price appreciation and curtail volumes (albeit still above
historical levels). S&P said, "As such, we expect the U.S.
residential housing market to slow in 2022 following historical
growth in 2021, resulting in modest revenue and EBITDA margin
declines. We believe Realogy is still well-positioned to take share
due to its exposure to high-end markets, notably New York City,
which is currently experiencing a strong rebound. Under our
base-case scenario, in 2022 we expect S&P Global Ratings-adjusted
leverage to modestly rise to the high-3x area, primarily due to a
softening residential real estate market and the return of share
buybacks."
The stable outlook on Realogy reflects S&P's expectation it will
maintain market share, manage long term leverage in the high 3x
area, and maintain a strong liquidity profile.
S&P could lower the ratings if Realogy were to sustain leverage
above 4.5x. In this scenario:
-- Revenue and EBITDA margins deteriorate greater than expected,
primarily due to lower price/volumes, higher commissions, and/or
agent attrition.
-- The company engages in debt-funded share repurchases, dividends
or nonaccretive mergers and acquisitions.
Over the next 12 months S&P could raise its rating if Realogy were
to manage leverage below 3.5x on a sustained basis. In this
scenario:
-- Economic and industry conditions support a favorable U.S.
residential housing market, such that the company demonstrates
year-over-year revenue growth through improved volume and price.
-- Realogy demonstrates strong market share gains and improving
retention rates.
-- The company commits to conservative capital allocation
policies.
RED RIVER WASTE: Use of Prepetition Collateral, Card Program OK'd
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Red River Waste Solutions LP to:
a. provide, on an interim basis, adequate protection to
Prepetition Secured Parties, MUFG Union Bank, N.A. and
Comerica Bank, as follows:
* joint and several superpriority claims in the aggregate
amount of diminution of the applicable Agent's or
Prepetition Secured Party's interest in the Prepetition
Collateral (including the Cash Collateral) from and
after the Petition Date resulting from the use, sale,
or lease by the Debtor of the Prepetition Collateral
and the imposition of the automatic stay, subject only
to the Carve Out.
The Carve Out includes, among other things, reasonable
fees and expenses of up to $20,000 incurred by a
trustee appointed in the Debtor's case under Section
726(b) of the Bankruptcy Code;
* a valid, fully perfected and non-avoidable first
priority replacement lien on, and security interest in
(x) receivables generated from the use of the
prepetition collateral and (y) in the Debtor's
unencumbered vehicles, subject to the rights and lien
of the DIP Lender; and
* maintaining and insuring the prepetition collateral in
the ordinary course of business.
b. continue using the Corporate Card Program with Comerica
Bank, a Texas Banking Association, on a final basis,
and pay all amounts owed to Comerica under the Corporate
Card Program on a weekly basis, consistent with the
Debtor's prepetition business practices; and
c. use the prepetition collateral, including the cash
collateral, through and including the Termination Date,
in accordance with the budget, to conduct its operations,
as well as for working capital and other general
corporate purposes, and to pay administration costs and
expenses incurred in its Chapter 11 case.
As of the Petition Date, Union Bank, as administrative and
collateral agent under the Prepetition Credit Agreement, asserts
that $4,800,000 and $26,300,000 in aggregate principal amount was
outstanding under the prepetition Revolving Facility and the Term
Loan Facility, respectively. The Debtor has granted security
interest in certain of its assets in favor of Union Bank.
Moreover, in the ordinary course of business, the Debtor uses a
corporate credit card with Comerica Bank. The Debtor pays its
balance in full on a weekly basis and this account is secured by
approximately $105,000 held by Comerica Bank. Comerica Bank, as
agent, maintains a prior perfected first priority security interest
in $105,000 in Prepetition Comerica Bank Collateral. The
Prepetition Comerica Bank Collateral is not available for the
Debtor's use as collateral other than for the purpose of paying its
obligations to Comerica Bank. Approximately $40,000 of cash in the
Debtor's beginning cash balance may be subject to prepetition liens
asserted by the agents.
The Prepetition Secured Parties shall also be entitled to accrue
all unpaid postpetition interest, fees and costs due under the
Prepetition Credit Agreement and any agreement with Comerica Bank
pertaining to the Debtor's corporate credit cards, to the extent
the Prepetition Secured Parties are oversecured.
A copy of the Second Interim Order is available for free at
https://bit.ly/3EUYrv1 from Stretto, claims agent.
About Red River Waste Solutions
Red River Waste Solutions LP is a Dripping Springs, Texas-based
company that provides waste management services. It also offers
solid waste and garbage pickup, recycling, industrial waste
collection, disposal, and landfill management services.
Red River Waste Solutions sought Chapter 11 protection (Bankr. N.D.
Tex. Case No. 21-42423) on Oct. 14, 2021, listing up to $50 million
in assets and up to $100 million in liabilities. James Calandra,
chief restructuring officer of Red River Waste Solutions, signed
the petition.
Marcus Alan Helt, Esq., at McDermott Will & Emery LLP, is the
Debtor's counsel.
RENAISSANCE PUBLIC SCHOOL: S&P Affirms 'BB' Rating on Rev. Bonds
----------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'BB' rating on Renaissance Public School Academy,
Mich.'s revenue bonds.
"The stable outlook revision reflects our view of the school's
improved financial performance, material growth in liquidity, and
stabilizing demand profile, demonstrated by a rebound in enrollment
from previous declines, steady student retention, and healthy
academic outcomes expected as state testing resumes fully this
coming spring," said S&P Global Ratings credit analyst Alexander
Enriquez. Based on unaudited fiscal 2021 and budgeted fiscal 2022
results, S&P expects the academy to sustain good financial metrics,
providing cushion at the rating level to offset some of the
limitations associated with its small size and prior operating
volatility.
S&P said, "We view the risks posed by COVID-19 to public health and
safety as an elevated social risk for the charter school sector
under our environmental, social, and governance (ESG) factors. The
risk is primarily attributed to the uncertainty surrounding the
duration of the COVID-19 pandemic and its potential effects on
modes of instruction and enrollment. Despite the elevated social
risk, we consider the school's environmental and governance risks
in line with our view of the sector as a whole.
"We could consider raising the rating if the school is able to
generate continued surplus operations and margins demonstrating a
trend of stronger operations, supporting sustained maximum annual
debt service (MADS) coverage and growth in days' cash on hand
commensurate with higher-rated peers. Additionally, we expect
Renaissance to maintain a stable demand profile, including
enrollment meeting budget projections, with a successful charter
renewed in 2022.
"We could revise the outlook back to stable should management miss
enrollment and financial projections, leading to weaker operations
and MADS coverage. Though unlikely, we would view large drawdowns
of cash negatively, given the school's history of maintaining very
low levels of liquidity."
SARATOGA AND NORTH: Unsecured Creditors to Recover 5% to 7% in Plan
-------------------------------------------------------------------
Saratoga and North Creek Railway, LLC, submitted an Amended
Disclosure Statement for the Chapter 11 Plan of Liquidation.
The Plan proposes to pay creditors of the Debtor from cash held by
the estate and the net proceeds of the sale of the Saratoga Assets.
The Reorganized Debtor will retain causes of action but at this
time, the Debtor has not identified an actionable causes of
action.
The Debtor has cash. The Debtor held approximately $300,000 on the
Petition Date and that amount increased to approximately $970,000
during the case. Pursuant to the settlement with Big Shoulders,
$300,000 has been used to pay off Big Shoulder's $7,661,533 claim,
leaving the estate of approximately $670,000.00 in cash as of the
date of this Disclosure Statement.
Settlement with Big Shoulders Capital
At the time Saratoga filed its Chapter 11 case, Big Shoulders
Capital, LLC ("Big Shoulders") held a pre-petition claim against
the estate in the amount of approximately $7,661,532.55,
purportedly secured by a mortgage on Saratoga's real property and
security agreement as to Saratoga's personal property.
Post-petition, the SLRG Trustee, on behalf of Saratoga, reached a
settlement with Big Shoulders. Specifically, Big Shoulders agreed
to accept $300,000.00 in cash from Saratoga in complete settlement
of its entire claim against Saratoga. Upon payment, Big Shoulders
will release its security interests in the Debtor's real and
personal property. On October 21, 2021, the Bankruptcy Court
entered its order approving the Big Shoulders settlement.
The Plan provides that the Plan Administrator shall use his best
efforts to ensure that the Initial Distribution Date occurs on or
before 90 days following the Confirmation Date. Accordingly, the
Plan Administrator anticipates scheduling the sale of the Debtor's
Assets as soon as possible following the Confirmation Date.
However, should an unanticipated buyer be the highest bidder at the
auction, the closing of the sale will be contingent upon that buyer
obtaining regulatory approval of the purchase of the Saratoga lines
which may delay the Initial Distribution Date.
The Debtor anticipates that following the sale of the Assets, the
Reorganized Debtor will have at least $1,370,000.00 ($700,000.00 in
sale proceeds plus accumulated cash of $970,000 less $300,000.00 to
Big Shoulders) to distribute pursuant to the Plan.
The Debtor's best current estimate of the amounts that would be
paid under the Plan:
* The Administrative Claims and Liquidation Expenses have
$350,000.00 amount of claims and will receive a distribution of
100% of their allowed claims.
* Priority Claims have $674,273.92 amount of claims and will
receive a distribution of 100% of their allowed claims.
* Unsecured Creditors have $5,000,000 to $7,295,836.00 total
amount of claims. Unsecured Creditors will receive a distribution
of 5% - 7% of their allowed claims equal to $345,726,.08.
Each Holder of a General Unsecured Claim shall be treated as a
Class 3 Claim and shall receive its Pro Rata share of all cash
available for distribution by the Plan Administrator up to the full
amount of each Allowed Class 3 Claim after satisfaction in full of
the Liquidation Expenses, all Allowed Administrative Expenses, all
Allowed Priority Tax Claims, and all Allowed Class 1 and 2 Claims.
Distributions on Allowed General Unsecured Claims falling within
Class 3 shall be made at such time and in such amounts as the Plan
Administrator shall determine in his sole discretion. Class 3 is
impaired.
According to a footnote in the Amended Disclosure Statement, the
Debtor anticipates that the only administrative claims and
liquidation expenses will be claims of the estate's bankruptcy
professionals: its accountant, Development Specialists, Inc., and
its attorneys, Markus Williams Young & Hunsicker, LLC.
The priority claims consist of the following proofs of claims: (1)
$37,782.59 asserted by the New York Department of Revenue: (2)
$421,880.54 asserted by the Internal Revenue Services; (3)
$175,022.64 asserted by Essex County; and (4) $39,588.15 asserted
by the Town of Corinth. For purposes of this estimation, the Debtor
presumes that each of these claims will be fully "Allowed" under
the Plan; however, nothing herein should be deemed a waiver of the
Plan Administrator's rights to object that all or a portion of
these claims are not entitled to priority status."
After deducting Big Shoulders' claim of $7,661,532.55 and the
priority claims, the total amount of unsecured claims filed equals
$7,295,836.00. The Debtor's initial review of the claims register
suggests that after the claims allowance process set forth in the
Plan, the total amount of Allowed Claims will be closer to
$5,000.000.
A full-text copy of the Amended Disclosure Statement dated Nov. 8,
2021, is available at https://bit.ly/3F3zZI2 from PacerMonitor.com
at no charge.
Debtor's Counsel:
MARKUS WILLIAMS YOUNG & HUNSICKER LLC
Jennifer Salisbury, No. 37168
1775 Sherman Street, Suite 1950
Denver, Colorado 80203
Telephone (303) 830-0800
Facsimile (303) 830-0809
E-mail: jsalisbury@markuswilliams.com
About Saratoga and North Creek Railway
Saratoga and North Creek Railway, LLC, a privately held company in
the rail transportation industry, filed a voluntary Chapter 11
(Bankr. D. Col. Case No. 20-12313) on March 30, 2020. In the
petition signed by William A. Brandt, Jr., Chapter 11 trustee of
San Luis & Rio Grande Railroad, Inc., Debtor was estimated to have
$1 million to $10 million in both assets and liabilities. Judge
Thomas B. Mcnamara oversees the case. The Debtor tapped Markus
Williams Young & Hunsicker LLC as its legal counsel, and
Development Specialists, Inc. as its accountant.
SIMPLY GOOD FOODS: S&P Affirms 'B+' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on
U.S.-based The Simply Good Foods Co. despite relatively low
leverage for the rating because it expects Simply Good to pursue
leveraging acquisitions, consistent with its strategy.
S&P raised its issue-level ratings on the senior secured credit
facilities to 'BB' from 'BB-' and revised the recovery rating to
'1' (rounded recovery: 95%) from '2'. This reflects the company's
repayment of first-lien debt, improving recovery prospects in the
event of a default.
The stable outlook reflects the company's favorable market position
in the health and wellness snacking industry, which should support
its ability to increase revenue close to 10% and generate healthy
free operating cash flow (FOCF) in 2022. Although leverage could
remain in the 2x area or lower temporarily, S&P expects Simply Good
will pursue debt-financed acquisitions that return S&P Global
Ratings-adjusted leverage to the 4x-5x area over time.
The affirmation reflects good revenue growth, margin expansion, and
debt repayment despite headwinds from the COVID-19 pandemic. S&P's
adjusted leverage declined to about 3.2x in fiscal 2021 (about 2.4x
excluding warrant liability, which it adds to debt until the
warrants expire in July 2022). These measures are down from about
4.1x at the end of fiscal 2020 and 5x at the close of the Quest
acquisition in November 2019. Simply Good increased revenue 23% in
fiscal 2021, mainly due to strong Quest and International growth
and an extra two months' contribution of Quest in 2021. The Atkins
business expanded about 1% despite slowness in bars and
ready-to-drink (RTD) shakes as consumers remained less mobile,
which led to lower away-from-home consumption. The company also
expanded its S&P Global Ratings-adjusted EBITDA margin nearly 300
basis points to 20.6% from 17.7% due to operating leverage from
strong sales growth, the realization of remaining Quest synergies,
and lower integration costs. It also repaid $150 million of
first-lien term loan debt during the year.
S&P said, "We expect financial policy to remain prudent, with
management maintaining its stated long-term leverage target of
3x-4x (S&P Global Ratings-adjusted about 4x-5x) over time. Although
the company's last-12-months leverage is below its long-term target
range of 3x-4x, we expect it will pursue additional debt-funded
acquisitions similar to Quest. This could spike leverage to
potentially even the high side of its target range. Our adjustments
add about 1x of leverage, especially following acquisitions because
we typically do not add back restructuring and integration costs.
Nevertheless, we believe the company funding 55% of the Quest
acquisition with equity and cash, as well as the recent debt
repayment, illustrate management's prudent financial policy and
commitment to keep leverage near or below the lower end of its
stated target range, absent acquisitions. We expect Simply Good to
seek acquisitions in the better-for-you snacking and health and
wellness categories. We believe the company could pursue larger
acquisitions now that the Quest integration is largely complete and
it has sufficient leverage capacity."
Price increases already implemented should protect margins and
offset most inflation. Simply Good, like others in the industry,
faces high inflation in commodities, transportation, and labor
costs. The company aggressively increased prices effective near the
beginning of its fiscal first quarter (ending November 2021).
Management expects gross margin in fiscal 2022 to be modestly lower
than the prior year. However, S&P believes the price increases,
operating leverage, and cost-saving initiatives should keep EBITDA
margin relatively flat.
The company's strong brands and asset-light model supports strong
cash flow generation and downside protection. Simply Good holds a
strong market position in the highly crowded nutritional snacking
category. The company's sales are concentrated with the Atkins and
Quest brand names, which leaves it vulnerable to reputational
damage or changing consumer tastes and preferences. The asset-light
business model limits its fixed overhead, and provides greater
flexibility and downside protection if demand is soft. The
company's marketing budget is a significant portion of operating
expenses, though it has been effective and is necessary to
communicating and positioning Atkins as a lifestyle brand. The
Quest brand, which caters to a younger demographic, utilizes more
social media marketing but should be supported with broader
marketing to drive growth as well. S&P said, "We expect the company
to continue to invest heavily in its brands, especially as we head
into the new year when consumers have historically focused on
weight loss and nutrition. We forecast Simply Good will generate at
least $130 million of FOCF for fiscal 2022. We expect capital
expenditures (capex) to remain low, about $6 million-$7 million for
fiscal 2022."
Growth for Atkins could accelerate if workplace mobility improves.
Stay-at-home orders and store closures throughout the pandemic led
to changes in consumer buying patterns, which reduced demand for
on-the-go products such as bars and RTD shakes. Simply Good
benefitted in some of its subcategories, such as its protein chips
and pizza, and trends for bars and RTD shakes improved as
restrictions eased. However, demand for Atkins products is still
lower than before the pandemic because of lower at-work and
on-the-go consumption. The company is increasing household
penetration for Atkins, but the buy rate per consumer is still
down. If workers return to offices more often in 2022, we believe
Atkins growth could accelerate significantly.
The stable outlook reflects the company's favorable market position
in the health and wellness snacking industry, which should support
its ability to continue to increase organic revenue and generate
healthy FOCF in 2022. Although leverage could remain in the 2x area
or lower temporarily, S&P expects the company will pursue
debt-financed acquisitions that return S&P Global Ratings-adjusted
leverage to the 4x-5x area over time.
S&P could lower the ratings if the company's leverage rises above
5x. This could happen if:
-- It makes another debt-financed acquisition more leveraging than
its Quest acquisition or encounters unexpected integration
challenges with its next acquisition;
-- Inflation worsens and the company cannot offset the higher
costs, significantly compressing margin; or
-- The company loses market share to competitors.
While unlikely, S&P could consider raising the rating if:
-- The company adopts less-aggressive financial policies, such
that it maintains leverage under 3x, incorporating periodic spikes
for acquisitions; or
-- It increases scale and product diversity.
SMOKY MOUNTAIN: Property Owners' Appeal Junked for Being Untimely
-----------------------------------------------------------------
Smoky Mountain Country Club is a planned community governed by the
North Carolina Planned Community Act, N.C. Gen. Stat. Section
47F-1-101 et seq., and by a declaration, which required that
property owners in the Community be members of the Smoky Mountain
Country Club Property Owners' Association. The Declaration also
states that Conleys Creek Limited Partnership will construct,
manage, and operate a clubhouse, swimming pool, and two tennis
courts in the Community. The Declaration grants Property Owners
the perpetual nonexclusive right to use the Community's clubhouse
and its amenities and requires Property Owners to pay monthly
"Clubhouse Dues" to the Association. The Association is charged
with the responsibility of assessing, billing, and collecting the
Clubhouse Dues from the Property Owners to pay Conleys Creek. In
January of 2013, Conleys Creek assigned its right to receive the
Clubhouse Dues to SMCC Clubhouse, LLC.
In 2014, the Property Owners gained control of the Association, and
the Association sent written notice informing the Property Owners
that it would no longer bill for Clubhouse Dues. While some of the
Property Owners continued to pay Clubhouse Dues directly to SMCC,
others did not pay Clubhouse Dues.
On October 13, 2014, CCLP, SMCC, and Marshall Cornblum filed an
action against the Association in the Superior Court of Swain
County, asserting that the Association had breached its contract by
failing to collect and pay the Clubhouse Dues. On January 26,
2016, the trial court granted the Association's motion for summary
judgment on the breach of contract claim.
On September 5, 2017, the North Carolina Court of Appeals reversed
the trial court's judgment and remanded the case for further
proceedings because the Court of Appeals concluded that there was a
genuine dispute of material fact as to whether the Association
breached its contract. The Court of Appeals did not determine
whether the Property Owners were obligated to pay Clubhouse Dues.
The Court of Appeals also noted that "the Planned Community Act
does allow that when homeowners take control of an association
board from the developer, the association may relieve itself of
obligations made on its behalf by the developer, where it is found
that the arrangement was 'not bona fide or was unconscionable[.]'"
Thus, the Court of Appeals decision left open the question of
whether the Association could void the Declaration by bringing
"forth evidence tending to show that the provisions in the 1999
Declaration are not 'bona fide' or are 'unconscionable.'"
On March 26, 2019, the Association adopted a resolution that
terminated its obligation to pay Clubhouse Dues on the grounds that
the Declaration was unconscionable and was not bona fide under the
Planned Community Act.
A jury trial was subsequently conducted on the breach of contract
claim. The jury returned a verdict against the Association, thus
impliedly finding that the Declaration was bona fide and not
unconscionable. On May 31, 2019, judgment was entered against the
Association on the breach of contract claim in the amount of
$5,149,921.94, with an additional $1,921,132.52 in prejudgment
interest. The Association appealed.
On July 26, 2019, the Association filed a bankruptcy petition
pursuant to Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Western District of North Carolina. On
November 18, 2019, the Association and SMCC jointly filed a
proposed Plan of Reorganization with the Bankruptcy Court, which
was amended on December 17, 2019.
On December 2, 2019, Property Owners Ronnie Hedgepeth, Shira
Hedgepeth, Robinson Myers, Elizabeth Myers, and "other members of
the Smoky Mountain Country Club community" filed a Motion
Requesting Relief from Automatic Stay, which was amended on
December 3, 2019. In their motion, the Hedgepeths and the Myerses
"request[ed] that the Court modify the automatic stay for the
limited purpose of allowing the movants to file an action in state
court to enjoin collection of fees against members until the court
has determined if the fees are real or personal covenants and
whether or not it is discharged by the Bankruptcy action." On
January 21, 2020, the Bankruptcy Court entered an Order denying the
motion for relief from automatic stay.
The Bankruptcy Court entered an Order on December 19, 2019,
confirming the Amended Plan, over objections filed by Property
Owners Robert and Mary Young and Ronnie and Shira Hedgepeth. Under
the Amended Plan, SMCC agreed to stay execution on the Judgment and
the Association agreed to: (1) assess, bill, and collect overdue
Clubhouse Dues from the Property Owners; (2) assess, bill, and
collect future Clubhouse Dues from the Property Owners; (3) pay
SMCC $1,500,000 in three annual $500,000 payments; (4) assess each
of the Property Owners for their share of the $1,500,000; (5)
dismiss the appeal of the Judgment; and (6) reinstate the
Declaration that the Association terminated on March 26, 2019.
Robert Young, Mary Young, Ronnie Hedgepeth, and Shira Hedgepeth had
objected to the provision calling on the Association to collect the
$1,500,000 from the Property Owners on the grounds that the
provision subjected them to increased liability.
On December 31, 2019, Property Owners Robert Young and Mary Young
and Hedgepeths filed a Notice of Appeal of the Bankruptcy Court's
December 19, 2019 Order confirming the Plan. The Association and
SMCC moved to dismiss the appeal. The United States District Court
for the Western District of North Carolina, Asheville Division,
granted the Association and SMCC's Motion to Dismiss on September
21, 2020. The Court concluded that the Youngs and the Hedgepeths
did not have standing to appeal the Bankruptcy Court's Order
confirming the Plan because the issue of whether they were liable
to the Association had yet to be determined.
On March 26, 2020, the Hedgepeths filed an action against Conleys
Creek and SMCC in the Superior Court of Swain County "requesting a
declaratory judgment of the relative obligations of the Appellants
regarding the clubhouse dues and any assessment arising from the
clubhouse dues." On July 9, 2020, the Superior Court of Swain
County issued a final Order dismissing the Appellants' action
because it was initiated "in violation of the automatic stay in 11
U.S.C. Section 362(a)(3)." The Appellants filed a Motion to
Reconsider the Superior Court's Order on July 20, 2020 and, after
that motion was denied, filed a Notice of Appeal on July 31, 2020.
Following the Superior Court's July 2020 Order dismissing their
state action, the Appellants filed a second Motion Requesting
Relief from Automatic Stay on October 29, 2020. In that motion, the
Appellants reiterated their assertion from their December 2, 2019,
motion for relief from automatic stay requesting relief so that
they could file an action in state court to determine whether they
are responsible for paying Clubhouse Dues. In addition, the
Appellants requested relief so that they could file an action in
state court to determine whether the Association engaged in unfair
debt collection practices based on a letter sent by the Association
on August 28, 2020 urging Property Owners to pay Clubhouse Dues.
The August 28, 2020 letter was not the first attempt on the part of
the Association to collect Clubhouse Dues. Instead, a bill for
Clubhouse Dues was sent by the Association to the Appellants on
December 1, 2019, immediately before Appellants' first motion for
relief from stay. On December 2, 2020, the Bankruptcy Court denied
the Appellants' October 29, 2020 motion for relief from automatic
stay. The next day, the Appellants filed a Motion to Reconsider,
which was denied.
On February 19, 2021, the Appellants filed a Notice of Appeal in
the Bankruptcy Court appealing the Bankruptcy Court's denial of the
October 29, 2020 Motion Requesting Relief from Automatic Stay and
the December 3, 2020 Motion to Reconsider. Now, the Appellees move
to dismiss the appeal.
The Appellees argue that the Appellants' appeal should be dismissed
because the Court "does not have subject matter jurisdiction to
hear this appeal."
An order issued by a bankruptcy court is immediately appealable "if
[it] finally dispose[s] of discrete disputes within the larger
[bankruptcy] case." A bankruptcy court's order denying relief from
automatic stay is a final, appealable decision. A party appealing
an order issued by a bankruptcy court must file a notice of appeal
within 14 days after entry of the order. Fed. R. Bankr. Pro.
8002(a)(1).
The Appellants have twice moved for relief from automatic stay. In
both motions, the Appellants sought the same relief and requested
that they be permitted to file an action in state court to
determine their obligation to pay Clubhouse dues. While the
Appellants sought relief to file an additional claim in their
second motion for relief, that claim is based on that same issue.
The Debtor had initiated the collection efforts at issue prior to
the Appellants' filing their first motion for relief on December 2,
2019. The Appellants cannot skirt the requirements of Rule
8002(a)(1) by filing a new motion for relief from automatic stay to
relitigate the same issues based on the same conduct, the Court
said. Since the Appellants sought the same relief in both motions,
the order subject to appeal is the Bankruptcy Court's January 21,
2020 Order denying their first Motion Requesting Relief from
Automatic Stay. Accordingly, because the Appellants did not file
their Notice of Appeal within fourteen days of the January 21, 2020
Order, the Court said it lacks subject matter jurisdiction over
this appeal.
Accordingly, the Court granted the Appellees' Motion to Dismiss the
appeal.
A full-text copy of the Memorandum of Decision and Order dated
November 2, 2021, is available at https://tinyurl.com/mjz262a9 from
Leagle.com.
The appeals case is captioned RONNIE C. HEDGEPETH, JR., and SHIRA
HEDGEPETH, Appellants, v. SMOKY MOUNTAIN COUNTRY CLUB PROPERTY
OWNERS' ASSOCIATION, INC., and SMCC CLUBHOUSE, LLC, Appellees,
Civil Case No. 1:21-cv-00051-MR (W.D.N.C.).
About Smoky Mountain Country Club Property
Smoky Mountain Country Club Property Owners Association, Inc., a
North Carolina nonprofit corporation, is an association of
homeowners of the Smoky Mountain Country Club, a residential
planned community, in Whittier, North Carolina.
Smoky Mountain Country Club Property Owners Association, Inc. filed
a voluntary petition for relief under chapter 11 of the Bankruptcy
Code (Bankr. W.D.N.C. Case No. 19-10286) on July 26, 2019. In the
petition signed by Paul DeCarlo, president, the Debtor estimated
$50,000 in assets and $1 million to $10 million in liabilities.
The case is assigned to Judge George R. Hodges.
John R. Miller Jr., Esq. at Rayburn Cooper & Durham, P.A.,
represents the Debtor.
SOMO AUDIENCE: Unsec. Creditors to Get Share of Income for 3 Years
------------------------------------------------------------------
SoMo Audience Corp. filed with the U.S. Bankruptcy Court for the
District of Delaware a Plan of Reorganization under Subchapter V
dated Nov. 8, 2021.
The Debtor is filing this plan of reorganization based on two
important events which occurred during the pendency of the Chapter
11 Case: an agreement to sell substantially all of the assets of
the Debtor except for its consulting business, and a settlement
with its largest creditor, JPMorgan Chase Bank, N. A. Both of these
elements were vital to a successful reorganization.
The Debtor is selling almost all of its assets, including its
proprietary digital advertising platform, to Consumable, Inc.
("Consumable" or "Purchaser"), in consideration of $1 million, plus
entering into a three year consulting contract with a minimum
consulting fee of $10,000 per month. It is retaining certain
assets, including, its consulting business and its account
receivable from Verve Wireless, Inc.
The Debtor will re-organize around its consulting business which it
hopes to grow, and will make payments to creditors from the
consulting business over the next four years. The initial payments
due on the Effective Date will be made from the consideration paid
at closing for the sale of assets. Consumable is paying a $50,000
good faith deposit upon the signing of the asset purchase
agreement, an additional $600,000 at Closing (for a total of
$650,000 by the Closing), and an additional $350,000 in equal
quarterly installments over 36 months, beginning no later than May
1, 2022.
With the framework for a sale in hand, the Debtor was able to enter
into a settlement agreement with its largest and only secured
creditor, Chase. Pursuant to the settlement, Chase will receive
$1,250,000 over four years in discharge of all of its secured and
unsecured claims, $1,050,000 of which will come from the Debtor's
estate, and $200,000 of which will come directly from Houck and
Manoff.
The $1,250,000 will be paid as follows: Chase has already received,
with Court approval, $148,000 from the payment of a prepetition
account receivable on which it had a lien; $400,178.06 will be paid
at the Closing from the sale proceeds; $100,000 has already been
paid to Chase from Manoff and Houck, and they will pay another
$100,000 in equal quarterly installment payments over the 36 months
immediately following the Closing Date; $350,000 in equal quarterly
installment payments over the 36 months immediately following the
Closing Date from the deferred sale proceeds; $101,821.94 from the
continued operations of the Reorganized Debtor on the one-year
anniversary of the Closing Date; $50,000 from the Debtor's
continued operations four years from the Closing Date.
As a result of the sale, the settlement with Chase, and the
contributions by the Principals, Creditors will be paid as follows:
Administrative Claims, other than for Professional Fees, will be
paid in the ordinary course as they become due unless the Holder of
such Claim agrees to a different treatment. Allowed Professional
Fee Claims will receive a payment of approximately $170,000 Pro
Rata at Closing, with the remainder of the Allowed Professional
Fees to be paid in monthly installments over the ensuing 36
months.
Class 1 consists of the Allowed Priority Non-tax Claims, which will
be paid in full shortly after the Closing Date unless the Holder of
the Claim agrees to a different treatment. The known Holders of
Class 1 claims have agreed to a different treatment, and will be
paid in 12 equal monthly installments beginning January 2023. Class
2 consists of both the Secured and Unsecured Claims of Chase.
Class 3 consists of Allowed general Unsecured Claims which will
receive their Pro Rata share of semi-annual payments of the
Debtor's Disposable Income up to the Face Amount of their Allowed
Claims beginning in July 2023 for the semiannual period ending June
30, 2023. The amounts of Disposable Income to be shared by the
Allowed general Unsecured Claims is: $ 11,334 for the six month
period ended June 30, 2023; $23,028 for the six-month period ended
December 31, 2023; $0 for the sixth month period ended June 30,
2024; $34, 193 for the six month period ended December 31, 2024;
$14,884 for the six-month period ended June 30, 2025; and the final
payment of $8, 098 for the six-month period ended December 31,
2025. In total, the Allowed General Unsecured Claims will be paid
$91, 537. The Debtor does not anticipate having any Disposable
Income in 2022. The Holders of Equity Interests, Class 4, will
retain their equity interest in the Debtor.
The Debtor has scheduled Chase as a Holder of a disputed Secured
Claim in the approximate amount of $1,299,000. The Debtor has
scheduled approximately $3,042,000 of Unsecured Claims,
approximately 1 million of which were scheduled as disputed,
contingent, or unliquidated. Based on a review of the Schedules and
Proofs of Claim filed against the Debtor, the Debtor believes that
ultimately the Allowed General Unsecured Claims will be in the
range of $2,038,861.72 to $2,128,033.60.
The Debtor is proposing a four year plan, instead of the customary
three year plan because the settlement with Chase requires the
final payment to Chase to be paid on the fourth anniversary of the
Closing, and because since there is no available disposable income
for unsecured's in the first year of the Plan, this will allow the
Unsecured Creditors to receive three years of Disposable Income.
This Plan constitutes the Debtors request that the Bankruptcy Court
approve a four year Plan.
The Plan would not have been feasible without the substantial
contributions made by the Principals. The Principals have: (i)
forgone and/or reduced salary and expenses post-petition from time
to time in order for the Debtor to meet its expenses; (ii) deferred
payment of their Administrative Claim for pre-petition salary until
2023, when it will be paid in monthly installments for one year,
and chose not file a proof of claim for the substantial six figure
amount of unpaid salary pre-petition above the Priority Claim;
(iii) waived their substantial pre-petition claim for
indemnification and omitted filing a proof of claim for same; (iv)
contributed $200,000 to the settlement with Chase; and (v) each
gave a personal guarantee for the approximately $500,000 of
deferred payments which Chase is to receive after the Closing Date
pursuant to the Plan.
In light of these essential contributions by the Principals, the
Plan includes third-party releases from Creditors and Interest
Holders extending to the Principals to protect them from thirdparty
claims related to the Debtor and its business which could interfere
with the Principals' ability to make the contributions.
A full-text copy of the Plan of Reorganization dated Nov. 8, 2021,
is available at https://bit.ly/3HdKLNS from PacerMonitor.com at no
charge.
Counsel for Debtor:
Jason A. Gibson
Frederick B. Rosner, Esq.
The Rosner Law Group LLC
824 N. Market St.
Wilmington, DE 19801
Tel: (302) 777-1111/(302) 319-6300
Email: rosner@teamrosner.com
MAYERSON & HARTHEIMER, PLLC
845 Third Avenue, 11th floor
New York, NY 10022
Tel: (646) 778-4380
Sandra E. Mayerson, Esq.
David H. Hartheimer, Esq.
About Somo Audience Corp.
Livingston, N.J.-based SoMo Audience Corp. --
https://somoaudience.com -- is an advertising technology company
focused on providing solutions for Web Publishers, Mobile, CTV and
DOOH.
SoMo Audience sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 21-10464) on March 11, 2021. On
June 22, 2021, the proceeding was transferred to the U.S.
Bankruptcy Court for the District of Delaware and was assigned a
new case number (Case No. 21-10958). Judge Craig T. Goldblatt
oversees the case.
The Debtor disclosed total assets of $437,993 and total liabilities
of $4,426,241 at the time of the filing.
Mayerson & Hartheimer, PLLC and The Rosner Law Group, LLC serve as
the Debtor's lead bankruptcy counsel and Delaware counsel,
respectively.
SPECTRUM GLOBAL: Gets Gross Proceeds of $2.4M From Note Offering
----------------------------------------------------------------
Spectrum Global Solutions, Inc. closed on a private placement
transaction whereby it issued a senior secured convertible
promissory note with a principal amount of $2.5 million to an
institutional investor for gross proceeds of $2.425 million.
The note accrues interest at the rate of 9.9% per annum, and is
convertible into the company's common stock at a fixed conversion
price of $0.50 per share, subject to adjustment as set forth in the
note. The note amortizes beginning 10 months following issuance,
in 18 monthly installments.
In connection with the transaction, the company agreed to file a
registration statement registering the resale of the shares of
common stock issuable upon conversion of the note within 30 days of
the closing of the transaction.
The issuance of the note was made in reliance upon the exemption
provided by Section (4)(a)(2) of the Securities Act of 1933, as
amended, for the offer and sale of securities not involving a
public offering, and Regulation D promulgated under the Securities
Act.
About Spectrum Global Solutions
Boca Raton, Florida-based Spectrum Global Solutions Inc. --
https://SpectrumGlobalSolutions.com -- operates through its
subsidiaries ADEX Corp., Tropical Communications Inc. and AW
Solutions Puerto Rico LLC. The Company is a provider of
telecommunications engineering and infrastructure services across
the United States, Canada, Puerto Rico and Caribbean.
Spectrum Global reported a net loss attributable to the company of
$17.71 million for the year ended Dec. 31, 2020, compared to a net
loss attributable to the company of $5.83 million for the year
ended Dec. 31, 2019. As of March 31, 2021, the Company had $6.38
million in total assets, $22.17 million in total liabilities, $1.02
million in total mezzanine equity, and a total stockholders'
deficit of $16.81 million.
Draper, Utah-based Sadler, Gibb & Associates, LLC, the Company's
auditor since 2014, issued a "going concern" qualification in its
report dated April 1, 2021, citing that the Company has incurred
losses since inception, has negative cash flows from operations,
and has negative working capital, which creates substantial doubt
about its ability to continue as a going concern.
SRAK CORPORATION: Taps Brandon Tittle as Lead Bankruptcy Attorney
-----------------------------------------------------------------
SRAK Corporation seeks approval from the U.S. Bankruptcy Court for
the Northern District of Texas to employ Brandon Tittle, Esq., of
Tittle Law Group, PLLC as its lead bankruptcy attorney.
Mr. Tittle was previously employed by Glast, Phillips & Murray,
P.C., the other firm handling the Debtor's Chapter 11 case.
The court approved the firm's employment as legal counsel for the
Debtor on Dec. 9, 2020. Since then, Mr. Tittle has left Glast,
Phillips & Murray and started his own firm.
Tittle Law Group's services include:
(a) advising the Debtor regarding its powers and duties in the
continued operation of its business and management of its
property;
(b) preparing legal papers;
(c) assisting the Debtor in preparing and filing a plan of
reorganization at the earliest possible date; and
(d) performing other legal services for the Debtor in
connection with its Chapter 11 case.
The firm will charge for time at its normal billing rates for
attorneys and legal assistants and will request reimbursement for
its out-of-pocket expenses.
Mr. Tittle disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Brandon J. Tittle, Esq.
Tittle Law Group, PLLC
5550 Granite Pkwy, Suite 220
Plano, TX 75024
Telephone: (972) 987-5094
Email: btittle@tittlelawgroup.com
About SRAK Corporation
SRAK Corporation filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No.
20-43155) on Oct. 9, 2020, listing under $1 million in both assets
and liabilities. Judge Edward L. Morris oversees the case.
Brandon J. Tittle, Esq., at Tittle Law Group, PLLC and Glast,
Phillips & Murray, P.C. serve as the Debtor's legal counsel.
STATION CASINOS: S&P Rates New 500MM Senior Unsecured Notes 'B-'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating to Las
Vegas, Nev.-based gaming operator Station Casino LLC's proposed
$500 million senior unsecured notes due 2031 and placed the rating
on CreditWatch with positive implications. The recovery rating is
'6', reflecting its expectation of negligible (0%-10%; rounded
estimate: 0%) recovery for noteholders in the event of a payment
default. Station plans to use the proceeds from the notes offering
along with revolver borrowings to purchase up to $350 million of
its common stock via an equity tender offer, and to pay a special
dividend of approximately $344 million.
S&P said, "Despite the issuance of incremental debt to fund share
repurchases, our 'B+' issuer credit rating on Station remains on
CreditWatch, where we placed it with positive implications on May
12, 2021. Notwithstanding the effects this transaction will have on
leveraging and the planned $750 million in development spending
beginning in 2022 to build a casino catering to locals in the
Durango area of Las Vegas, we continue to believe that Station
could sustain adjusted leverage below 5x in 2022 through EBITDA
generation and the benefit of asset sale proceeds to be received by
the end of this year. Nevertheless, the issuance of incremental
debt to fund share repurchases and a special dividend reflects a
shift to a more aggressive financial policy compared to the
company's recent use of cash flow to voluntarily reduce debt.
Therefore, as part of our CreditWatch resolution, we will evaluate
Station's financial policy with respect to shareholder returns and
development spending and assess management's commitment to
maintaining adjusted leverage below 5x over the long run.
"In resolving the CreditWatch listing we will also monitor
Station's EBITDA performance over the next few months and evaluate
its ability to sustain materially higher levels of EBITDA and
margin compared to pre-COVID levels, progress toward completing the
sale of its Palms Casino Resort, and the potential use of asset
sale proceeds. We could raise the rating one notch if we believe
Station will sustain adjusted leverage below 5x, incorporating
development spending and shareholder returns."
Issue Ratings - Recovery Analysis
Key analytical factors
-- S&P's 'BB-' issue-level rating and '2' recovery rating on
Station's senior secured term loans and revolver are unchanged. The
'2' recovery rating reflects its expectation of substantial
(70%-90%; rounded estimate: 85%) recovery for lenders in the event
of a payment default.
-- S&P's 'B-' issue-level rating and '6' recovery rating on
Station's existing senior unit its expectation for negligible
(0%-10%; rounded estimate: 0%) recovery for noteholders in the
event of a payment default.
Simulated default assumptions
-- S&P's simulated default scenario considers a payment default in
2025 reflecting a substantial decline in cash flow as a result of
prolonged economic weakness or increased competition in the Las
Vegas locals market.
-- S&P assumes a reorganization following default, using an
emergence EBITDA multiple of 7x to value the company given its
high-quality owned real estate and its leading position in the Las
Vegas locals market.
-- S&P assumes Station's $1.03 billion revolver is 85% drawn at
default.
Simplified waterfall
-- Emergence EBITDA: $341 million
-- EBITDA multiple: 7x
-- Gross recovery value: $2.4 billion
-- Net recovery value (after 5% administrative expenses): $2.2
billion
-- Obligor/nonobligor valuation split: 100%/0%
-- Estimated first-lien claims (senior secured credit facilities)
at default: $2.5 billion
--Recovery expectation: 70%-90% (rounded estimate: 85%)
-- Remaining recovery value available to unsecured claims: $0
-- Estimated unsecured claims and pari-passu secured deficiency
claims: $1.5 billion
--Recovery expectation: 0%-10% (rounded estimate: 0%)
Note: All debt amounts include six months of prepetition interest.
STERLING INTERMEDIATE: S&P Upgrades ICR to 'B+' on Debt Repayment
-----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on New
York-based background screening services provider Sterling
Intermediate Corp. to 'B+' from 'B' and its issue-level rating on
its first-lien secured credit facility to 'BB-' from 'B'. At the
same time, S&P revised its recovery rating on the first-lien
facility to '2' from '3' to reflect its improved lender recovery
prospects following the debt reduction.
S&P expects the company's financial risk tolerance to moderate
following the IPO.
S&P said, "We expect Sterling, as a public company, to manage its
capital allocation to sustain S&P adjusted leverage in the 3.0x to
4.0x area. We forecast that Sterling will reduce its adjusted
leverage to the mid-3x area by year-end 2021 (chart 1).
Accelerating organic revenue growth and improving operating
leverage will likely expand EBITDA margins to the mid-20% area over
the next 12 months. In addition, we expect reduced interest expense
and growing EBITDA to provide healthy cash flow generation over the
next 12 months, providing increased financial flexibility to pursue
organic and inorganic growth initiatives. Our assumptions reflect
its solid year-to-date performance and our expectation for healthy
hiring trends across its verticals, including financial services,
technology and media, and health care.
"Sterling's financial-sponsor control limits further upside to our
ratings. Goldman Sach's Merchant Banking and Caisse de dépôt et
placement du Québec (CDPQ) retain about 64% equity interest
following its IPO, and we don't expect the financial sponsors to
relinquish their controlling position over the next year.
Accordingly, our ratings reflect the risk that financial sponsors
may pursue aggressive policies to maximize their investment
returns, including debt-funded share repurchases."
Acquisitions of small to midtier background screeners may slow
deleveraging prospects given high industry acquisition EBITDA
multiples. The EBITDA purchase multiples for background screeners
can reach the low-double digits depending on the target's scale,
end market exposure, and customer type.
The stable outlook reflects S&P's expectation for solid operating
performance over the next 12 months, including sustained adjusted
leverage in the 3.0x-4.0x range, as Sterling executes its growth
initiatives.
S&P could lower its rating if its expect adjusted leverage to rise
and remain above 5x or its free operating cash flow (FOCF) to debt
weakens to the 5% area, likely because of:
-- A change in its financial policy involving debt-funded
shareholder returns or significant acquisitions;
-- Sustained revenue declines primarily due to lower screening
volumes and weaker retention rates stemming from increased
competition; or
-- Deteriorating EBITDA margins due to higher third-party data
costs or increased investments to remain competitive.
S&P could raise its rating if:
-- Financial sponsors decrease their equity stake below 40%;
-- S&P expects the company to sustain S&P Global Ratings-adjusted
leverage of less than 4.0x and FOCF to debt of more than 15%; and
-- The company improves scale by growing with existing blue-chip
customers, winning market share, and expanding revenue streams from
new products (Identify solutions and workforce monitoring).
TENRGYS LLC: Updates Unsecured 2013 Loan Claim Pay Details
----------------------------------------------------------
Tenrgys, LLC and its Debtor Affiliates submitted a First Amended
Disclosure Statement for the First Amended Joint Chapter 11 Plan of
Reorganization dated November 8, 2021.
The Debtors operate an independent oil and natural gas business.
Headquartered in Ridgeland, Mississippi, as of Sept. 1, 2021, the
Debtors had 11 productive fields and fieldwide units in Mississippi
and Louisiana. As of August 2021, the Debtors had total proved
reserves of approximately 10 million barrels of oil and 102 billion
cubic feet of natural gas.
With respect to the Colombian Assets, PanAm refused to commit to
allow Telpico to remain operator of the Colombian Assets beyond the
first exploration wells to be drilled under the VSM 22 and LLA 42
concessions. Instead, PanAm insisted that it have the right to
force Telpico to resign as operator after the first two exploration
wells were drilled. PanAm also insisted that it be assigned 85% of
the LLC membership interests in Telpico in the event the Colombian
Agencia Nacional de Hidrocarburos, or National Hydrocarbons Agency
(the "ANH") would not approve an assignment of an 85% participation
interest in the Colombian Assets themselves. These and other
requests by PanAm convinced the Debtors that PanAm desired to take
over control and operation of the Colombian Assets, and was willing
to receive the LLC membership interests in Telpico in furtherance
of that objective.
Stand-Alone Restructuring
If the Debtors elect (with the reasonable consent of the Consenting
2013 Loan Lender) not to pursue the Colombian Collateral Tender
Transaction, then the Allowed Secured 2012 RBL Facility Claim will
be repaid in full over a five-year period in deferred cash payments
with an interest rate of 3.25% per annum (the current federal prime
rate) or such other interest rate as the Court may determine.
Consistent with section 1129(b)(2)(A)(i) of the Bankruptcy Code,
PanAm shall retain its liens until the Allowed Secured 2012 RBL
Facility Claim has been fully paid.
Class 1 consists of the Secured 2012 RBL Facility Claim. This Class
has $71,060,717.80 (alleged) amount of claims and will receive a
distribution of 100%. On the Effective Date, or as soon as
reasonably practicable, except to the extent that the Holder of the
Allowed Secured 2012 RBL Facility Claim agrees to a less favorable
treatment of its Allowed Claims, in full and final satisfaction,
settlement, release, and discharge of and in exchange for the
Allowed Secured 2012 RBL Facility Claim:
* if the Colombian Collateral Tender Transaction is pursued,
the Debtors shall, under section 1129(b)(2)(A)(iii) of the
Bankruptcy Code (i) convey, transfer, or otherwise assign all of
the Debtors' right, title, and interest in and to Telpico to the
Holder of the Allowed Secured 2012 RBL Facility Claim; or (ii)
alternatively, at the option of the Holder, cause Telpico to
convey, transfer, or otherwise assign all of Telpico's right,
title, and interest in and to and the Colombian Assets to the
Holder of the Allowed Secured 2012 RBL Facility Claim; or
* if the Stand-Alone Restructuring is pursued, the Debtors
shall repay the Allowed Secured 2012 RBL Facility Claim in full
over a five-year period in deferred Cash payments at an interest
rate of 3.25% per annum, or such other interest rate as the Court
may determine. Consistent with section 1129(b)(2)(A)(i) of the
Bankruptcy Code, PanAm shall retain its liens until the Allowed
Secured 2012 RBL Facility Claim has been fully paid.
Class 4 consists of the Unsecured 2013 Loan Claim. This Class has
$122,327,458 amount of claims and will receive a distribution of
41/30%. On the Effective Date, except to the extent that the Holder
of the Allowed Unsecured 2013 Loan Claim agrees to a less favorable
treatment of its Allowed Claim in full and final satisfaction,
settlement, release, and discharge of and in exchange for the
Allowed Unsecured 2013 Loan Claim, such Holder shall receive: (i)
payment of the sum of $500,000.00 in Cash on the Effective Date;
(ii) a membership interest equal to ten percent (10.00%) of the
equity in the Reorganized Tenrgys; and (iii)
* if the Colombian Collateral Tender Transaction is pursued, a
new $40 million floating rate first-lien term loan with market
pricing (but with an interest rate of L+650 with a LIBOR floor of
1% if paid in cash, or L+850 with a LIBOR floor of 1% if paid in
kind), and other market terms to be agreed and set forth in the New
Secured Term Loan Documents; or
* if the Stand-Alone Restructuring is pursued, a new $20
million floating rate second-lien term loan with market pricing
(but with an interest rate of L+750 with a LIBOR floor of 1% if
paid in cash, or L+950 with a LIBOR floor of 1% if paid in kind),
and other market terms to be agreed and set forth in the New
Secured Term Loan Documents.
The Debtors shall fund distributions under the Plan with one or
more of the following, subject to appropriate definitive agreements
and documentation: (1) the Exit Facility; (2) the Colombian
Collateral Tender Transaction; (3) the New Term Loan; (4) the New
Reorganized Tenrgys Membership Interests; and (5) encumbered and
unencumbered Cash on hand, including Cash from operations of the
Debtors. Each distribution and issuance referred to in the Plan
shall be governed by the terms and conditions set forth in the Plan
applicable to such distribution or issuance and by the terms and
conditions of the instruments or other documents evidencing or
relating to such distribution or issuance, which terms and
conditions shall bind each Entity receiving such distribution or
issuance.
A full-text copy of the First Amended Disclosure Statement dated
Nov. 8, 2021, is available at https://bit.ly/30cDxZe from
PacerMonitor.com at no charge.
Counsel for the Debtors:
Glenn Gates Taylor
John H. Geary, Jr.
Christopher H. Meredith
Copeland, Cook, Taylor & Bush, P.A.
P.O. Box 6020
Ridgeland, MS 39158
Telephone: (601) 856-7200
Facsimile: (601) 856-7626
E-mail: gtaylor@cctb.com
jgeary@cctb.com
cmeredith@cctb.com
About Tenrgys LLC
Tenrgys, LLC, operates as an oil and gas exploration and production
company. It is headquartered in Ridgeland, Miss.
Tenrgys and its affiliates filed their voluntary petitions for
Chapter 11 protection (Bankr. S.D. Miss. Lead Case No. 21-01515) on
Sept. 17, 2021, listing as much as $500 million in both assets and
liabilities. Richard H. Mills, Jr., manager, signed the
petitions.
Judge Jamie A. Wilson oversees the cases.
Copeland, Cook, Taylor & Bush, P.A. and FTI Consulting, Inc. serve
as the Debtors' legal counsel and financial advisor, respectively.
TRI-WIRE ENGINEERING: SSG Was Investment Banker in Sale to ITG
--------------------------------------------------------------
SSG Capital Advisors, LLC (SSG) acted as the investment banker to
Tri-Wire Engineering Solutions, Inc., in the sale of substantially
all of its assets to ITG Communications, LLC (ITG). The sale was
effectuated through a Chapter 11 Section 363 process in the U.S.
Bankruptcy Court for the District of Massachusetts (Eastern
Division). The transaction closed in October 2021.
Headquartered in Salem, New Hampshire, Tri-Wire is one of the
largest independent providers of consumer broadband installation
and maintenance for large cable operators. The Company's skilled
technicians operate in 13 competitive regions throughout the
Northeastern and Mid-Atlantic United States. The Company leveraged
its large base of technical services talent to expand into fiber
construction, fiber-to-the-home (FTTH), and enterprise services.
For over twenty years, Tri-Wire successfully met its financial and
growth targets. However, shortly after the completion of an ESOP
transaction, the Company experienced operational and working
capital issues, as well as unforeseen legal expenses. A new senior
management team was brought in to accelerate the Company's
strategic vision, expand its market position, and focus on
communication services with higher margins and recurring revenues.
Despite strong consumer demand for faster internet and fiber optic
services, including new installation requests as consumers worked
from home or relocated during the lockdown, revenue decreased as
larger multiple-system operators restricted installation services
and delayed buildouts of new FTTH networks during the COVID-19
pandemic.
SSG was retained in July 2021 to conduct an expedited marketing
process and solicit interest from both strategic and financial
buyers. The marketing efforts resulted in several offers, with the
bid from ITG ultimately determined to be the highest and best offer
for substantially all of the Company's assets. The Company filed
for Chapter 11 protection in September 2021 with ITG as the
proposed stalking horse purchaser. While several parties conducted
extensive due diligence up until the bid deadline, ultimately no
competing bids were received and the sale to ITG was approved by
the bankruptcy court and closed in October 2021. SSG's extensive
experience managing the competing priorities of multiple key
stakeholders while effectuating accelerated transactions in Chapter
11 resulted in a process that maximized value, preserved hundreds
of jobs and enabled thousands of cable customers to continue
service without interruption.
ITG Communications, LLC, headquartered in Hendersonville, Tennessee
is a national provider of fulfillment, construction and project
management services to the cable and telecommunications
industries.
Other professionals who worked on the transaction include:
* Michael J. Goldberg, A. Davis Whitesell, Michael F. Zullas
and Hanna J. Ciechanowski of Casner & Edwards, LLP, counsel to
Tri-Wire Engineering Solutions, Inc.;
* Robert A. Kuhn, Mark D. Podgainy and Charvi Gupta of Getzler
Henrich & Associates LLC, financial advisor to Tri-Wire Engineering
Solutions, Inc.;
* Jonathan Motley of Safford Motley PLC, counsel to ITG
Communications, LLC;
* James F. Wallack and Timothy J. Carter of Goulston & Storrs
PC, counsel to ITG Communications, LLC;
* William J. Hanlon of Seyfarth Shaw LLP, counsel to the senior
secured lender; and
* Jeffrey D. Sternklar of Jeffrey D. Sternklar, LLC, counsel to
the Unsecured Creditors Committee.
About Tri-Wire Engineering
Tri-Wire Engineering Solutions, Inc. -- https://www.triwire.net/ --
provides installation, construction, maintenance and other
technical support services to cable and telecommunications
companies throughout North America. Tri-Wire Engineering was
formed in 1999 and is headquartered in Tewksbury, Mass.
Tri-Wire Engineering sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 21-11322 on Sept. 13,
2021. In the petition filed by Ruben V. Klein, president, the
Debtor disclosed up to $10 million in assets and up to $50 million
in liabilities.
Casner & Edwards, LLP is the Debtor's counsel. Gentzler Henrich &
Associates LLC is the financial advisor and turnaround consultant.
SSG Advisors, LLC, serves as investment banker.
TULSA HONOR ACADEMY: S&P Assigns 'BB' ICR, Outlook Stable
---------------------------------------------------------
S&P Global Ratings assigned its 'BB' issuer credit rating to Tulsa
Honor Academy (THA), Okla. The outlook is stable.
THA is an Oklahoma not-for-profit charter school serving grades
five through eleven. An ICR reflects an obligor's general
creditworthiness, focusing on its capacity and willingness to meet
financial commitments when they come due. It does not apply to any
specific financial obligation because it does not take into account
the obligation's nature and provision, standing in bankruptcy or
liquidation, statutory preferences, or legality and
enforceability.
"We assessed THA's enterprise profile as adequate, with healthy
academic performance in comparison with its district peers,
seasoned and effective management, good demand, growing enrollment,
and positive charter relationship with a recent renewal for its
middle school campus for the maximum term," said S&P Global Ratings
credit analyst Mel Brown. This is tempered by the limited operating
history of the school and recent variability in the state funding
environment. "We assessed THA's financial profile as vulnerable,
with a small revenue base of less than $10 million, historically
slim, but growing unrestricted reserve levels, a manageable debt
burden, and thin pro forma lease-adjusted maximum annual debt
service coverage, requiring growth in enrollment and operations to
meet future debt service requirements," added Ms. Brown.
The stable outlook reflects S&P Global Ratings' opinion that over
our outlook period, S&P expects THA to preserve its stable market
position, continue growing enrollment above 1,000 students, and
meet its financial performance goals such that DCOH strengthens and
lease-adjusted MADS coverage improves to above 1x. There are no
additional plans to expand beyond articulated levels and it does
not anticipate any additional debt over the outlook period.
TWO'S COMPANY: May Use Cash Collateral Thru Final Hearing
---------------------------------------------------------
Judge Catherine J. Furay of the U.S. Bankruptcy Court for the
Western District of Wisconsin authorized Two's Company Restaurant &
Lounge, LLC to use the cash collateral through and including the
date of the final hearing on the Debtor's cash collateral motion,
on an interim basis.
Judge Furay ruled that the Debtor's lenders and any other secured
creditor are granted valid and properly perfected liens on the
Debtor's postpetition acquired property that is of the same nature
and character as each lender's respective prepetition collateral,
to the extent of any diminution in value of the cash collateral and
to the extent said lenders hold valid liens as of the Petition
Date.
A copy of the interim order is available for free at
https://bit.ly/3kfGUG2 from PacerMonitor.com.
About Two's Company Restaurant & Lounge
Two's Company Restaurant & Lounge, LLC filed a petition for Chapter
11 protection (Bankr. W.D. Wisc. Case No. 21-12177) on Oct. 22,
2021, listing up to $500,000 in assets and up to $1 million in
liabilities. The Debtor is represented by Goyke & Tillisch, LLP.
UNIFIED SECURITY: Status Report Due Dec. 3
------------------------------------------
Judge Sandra R. Klein will hold a status conference of Unified
Security Services, Inc., on Jan. 12, 2022 at 9:00 a.m. in Courtroom
1575, Roybal Federal Building, 255 E. Temple Street, Los Angeles,
CA 90012.
The Debtor shall file with the Court, deliver a Judge's copy to
chambers, and serve the United States Trustee, all secured
creditors, the holders of the 20 largest unsecured claims and all
official committees by Dec. 3, 2021, a report regarding the status
of this reorganization case.
The Status Report must be supported by admissible evidence in the
form of declarations and supporting documents and must:
A. Provide an estimate of when the Debtor plans to file and
serve a motion for order approving adequacy of disclosure statement
(Disclosure Statement Motion) and a motion for order confirming
Chapter 11 Plan (Confirmation
Motion);
B. Propose a deadline for filing proofs of claims. If the
Debtor does not believe that a deadline for filing proofs of claims
should be set during the initial status conference in the Case, the
Debtor must explain why;
C. Disclose whether Debtor has performed all of its duties under
11 U.S.C. Secs. 521, 1106 and 1107 and if not, why;
D. Describe concisely the post-petition operations of the Debtor
(including authority to use cash collateral), litigation in which
the Debtor is involved and the status of the Debtor's efforts to
reorganize;
E. If Debtor's proposed counsel is not filing documents
electronically via CM/ECF, explain why not; and
F. Disclose whether Debtor has hired any professionals and, if
so, whether the professionals' employment has been approved by the
Court. If such employment has not been approved, then explain why,
and provide a budget of estimated fees and expenses to be incurred
by the professionals employed at the expense of the estate.
About Unified Security Services
Unified Security Services, Inc., was founded in February 2016 by
Sherif Antoon. It provides in person, on-site security personnel
to corporations.
Unified Security sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-18392) on Nov. 2,
2021. In the petition signed by Sherif Antoon, as president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Sandra R. Klein oversees the case.
Michael Jay Berger, Esq., at Law Offices of Michael Jay Berger, is
the Debtor's counsel.
VBI VACCINES: Incurs $15.9 Million Net Loss in Third Quarter
------------------------------------------------------------
VBI Vaccines Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $15.85
million on $107,000 of revenues for the three months ended Sept.
30, 2021, compared to a net loss of $13 million on $298,000 of
revenues for the three months ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $50.97 million on $550,000 of revenues compared to a
net loss of $30.87 million on $897,000 of revenues for the same
period during the prior year.
As of Sept. 30, 2021, the Company had $224.23 million in total
assets, $32.95 million in total current liabilities, $31.14 million
in total non-current liabilities, and $160.14 million in total
stockholders' equity.
VBI ended the third quarter of 2021 with $137.5 million in cash,
cash equivalents, and short-term investments compared with $93.8
million as of Dec. 31, 2020.
Jeff Baxter, VBI's president and CEO commented: "The third quarter
of 2021 was a notably busy and productive time as we support the
ongoing regulatory reviews of our prophylactic 3-antigen HBV
vaccine candidate, prepare for the potential launch of this
candidate in the U.S., Europe, and Canada, and advance both our
immunotherapeutic vaccine candidates against GBM and chronic HBV,
as well as our coronavirus pipeline, with the objective of creating
vaccines that provide long-term breadth of protection with good
safety and tolerability profiles. We look forward to sharing data
and updates from the various milestones expected over the next six
months across our portfolio. The public health space is constantly
evolving, evidenced by the renewed focus on prevention of HBV with
the recently revised adult vaccination guidelines, plus the
mutational evolution of COVID-19 with new and emerging variants.
We are working hard to address significant and relevant unmet
medical and public health needs, we believe this dedication and
focus on successfully achieving these fundamentals will drive
shareholder value."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/764195/000149315221027458/form10-q.htm
About VBI Vaccines Inc.
Cambridge, Massachusetts-based VBI Vaccines Inc. --
http://www.vbivaccines.com-- is a biopharmaceutical company driven
by immunology in the pursuit of powerful prevention and treatment
of disease. Through its innovative approach to virus-like
particles, including a proprietary enveloped VLP platform
technology, VBI develops vaccine candidates that mimic the natural
presentation of viruses, designed to elicit the innate power of the
human immune system. VBI is committed to targeting and overcoming
significant infectious diseases, including hepatitis B,
coronaviruses, and cytomegalovirus (CMV), as well as aggressive
cancers including glioblastoma (GBM). VBI is headquartered in
Cambridge, Massachusetts, with research operations in Ottawa,
Canada, and a research and manufacturing site in Rehovot, Israel.
VBI Vaccines reported a net loss of $46.23 million for the year
ended Dec. 31, 2020, compared to a net loss of $54.81 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$224.63 million in total assets, $26.07 million in total current
liabilities, $30.48 million in total non-current liabilities, and
$168.08 million in total stockholders' equity.
VIZIV TECHNOLOGIES: 3:10 Disclosures Inadequate, KBST Says
----------------------------------------------------------
Jamison Partners, LLC, Surface Energy Partners, L.P. and KBST
Investments, LLC (collectively, the "Movants") filed an objection
to approval of Viziv Technologies, LLC' plan solicitation
procedures and addendum in connection with the disclosure statement
for 3:10 Capital's proposed plan.
KBST, et al., and 3:10 Capital have filed competing plans in the
case.
According to KBST, in connection with Debtor's recommendation that
exclusivity be terminated, the Debtor expressed to the Court that
it would take a position of neutrality in the plan process and
would not make a recommendation on either of the two competing
plans. The Debtor stated that since creditors were being paid in
full that it was the equity interests in the Debtor that should be
heard from and allowed to express their voice and vote to the
Court.
KBST asserts that as the Court is aware, the Debtor's equity is
divided into three classes: Series A-1 units, Series A-2 units, and
Series A-3 units. There is fourth class, Series B units issued to
employees which has no value. The A-1 and A-2 units are primarily
held by the four Founders and their related trusts. Many of the A-3
units are held by investors indirectly through one or more funds
formed for the express purpose of facilitating investments in the
Debtor. Eight of these funds are controlled by a fund manager that
is an entity directly or indirectly controlled by Rod Sanders
("3:10 Funds"). Mr. Sanders is also the manager of the entity
which is proponent of the 3:10 Plan. If the individual investors in
the 3:10 Funds are not authorized to vote on the competing plans,
then Mr. Sanders would presumably be able to affect the outcome of
this case by casting votes on behalf of the funds in favor of the
3:10 Plan with no input from the beneficial holders.
KBST points out that it is important to highlight that one issue
the court found important in the Southland decision was the
potential for "possible self-interest" created by soliciting just
the record holders. 124 B.R. at 220-21. Similar concerns exist
here. To be sure, the vote of Rod Sanders as a fund manager on
behalf of individuals that invested in the Debtor through 3:10
Capital would create a conflict of interest in light of Mr. Sanders
effectively being a plan proponent.
KBST further points out that the 3:10 Addendum fails to include
adequate information regarding critical matters that a hypothetical
investor would need to understand in order to make an informed
decision about the 3:10 Plan. These matters include, but are not
limited to: (i) the feasibility of the 3:10 Plan; (ii) the rights
of the Series A-1 and Series A-2 units to be issued under the 3:10
Plan, (iii) the go-forward post-emergence business plans of 3:10
Capital; (iv) the source and current commitment of funds required
to fund the 3:10 Plan and the operations going forward; (v) 3:10
financial projections and budget; and (vi) the potential objections
to claims which are unimpaired under the 3:10 Plan.
According to KBST, the 3:10 Plan requires the payment of
approximately $15,000,000 on the effective date to the holders of
unimpaired claims under the 3:10 Plan. The 3:10 Addendum does not
describe the source or current commitment of such funds other than
from investors. There is no disclosure if commitments exist for
such funding and the identity of the parties making the commitment.
This information is necessary for investors to assess the viability
and feasibility of the 3:10 Plan.
KBST asserts that the 3:10 Addendum does not provide adequate
information regarding the business plan of Newco and the required
funding for that business plan. The 3:10 Addendum does not include
any financial projections or budget for future operations or the
source of funds for payment of future operations. This is necessary
information to assess the feasibility of the 3:10 Plan and allow
current A-1, A-2 and A-3 unit holders in the Debtor to compare the
3:10 Plan with the KBST Plan.
KBST points out that the 3:10 Plan provides two classes of units in
Newco which will be the new parent of the Debtor and its
subsidiaries. The two classes of units are Series A-1 Preferred and
Series A-2 Preferred. The A-1 Preferred Units are issued to the DIP
Lender and the providers of new capital. There is no disclosure
regarding the breakout of these units. The A-2 Preferred Units are
issued to the existing A-1, A-2 and A-3 unit holders in Viziv and
are the subject of the rights offering.
KBST further points out that the 3:10 Plan provides that all
creditor classes, including administrative claims, general
unsecured claims, secured claims of Surface Energy Partners, and
unsecured convertible note claims of Jamison Partners and WS 2006
Irrevocable Trust are to be paid in full and are unimpaired. The
3:10 Addendum should disclose the interest rate to be applied to
the claims for payment.
Attorneys for Surface Energy Partners, LLC, Jamison Partners, LP
and KBST Investments, LLC:
Kenneth Stohner
J. Machir Stull
JACKSON WALKER LLP
2323 Ross Ave., Suite 600
Dallas, TX 75201
Telephone: 214.953.5904
Email: kstohner@jw.com
mstull@jw.com
About Viziv Technologies
Viziv Technologies, LLC is an electronics company in Italy, Texas,
which specializes in the field of electromagnetic surface waves.
On Oct. 7, 2020, creditors Surface Energy Partners LP, Kendol C.
Everroad and Jamison Partners, LP, filed an involuntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Tex. Case No. 20-32554) against Viziv Technologies. The creditors
are represented by Kenneth Stohner Jr., Esq., at Jackson Walker,
LLP.
Judge Stacey G. Jernigan, who oversees the case, entered an order
for relief on Oct. 12.
Cavazos Hendricks Poirot, PC, is the Debtor's bankruptcy counsel.
The Debtor tapped Allred & Wilcox, PLLC, The Beckham Group and King
& Fisher Law Group, PLLC as special counsel; Stout Risius Ross, LLC
as investment banker; RSM US LLP as auditor; and Johnson McNamara,
LLC as accountant.
3:10 Capital WPF VII LLC, a post-petition lender, filed a Chapter
11 plan of reorganization for the Debtor on Sept. 3, 2021. KBST
Investments, LLC filed its proposed Chapter 11 plan of liquidation
for the Debtor on Sept. 6.
VIZIV TECHNOLOGIES: ACT Needs More Info on Competing Plans
----------------------------------------------------------
ACT Family Ltd ("ACT") objects to Viziv Technologies, LLC's
Disclosure Statement and accompanying addenda with respect to the
competing Chapter 11 plans proposed by KBST Investments and 3:10
Capital.
ACT objects to the Disclosure Statement and accompanying Addenda to
the extent they fail to adequately disclose the nature and extent
of the relationship between the DIP Lender and the Sanders Funds.
According to ACT, this is a critical issue to properly
understanding what is proposed under the 3:10 Plan and -- by
extension -- how it compares to the KBST Plan.
ACT points out that under the KBST Plan, the DIP Lender would
simply be repaid its allowed claim in full in cash. In contrast,
the 3:10 Plan would instead issue to the DIP Lender approximately
46.35 million of the 100 million authorized equity units to be
issued under that Plan.1 3:10 Plan at 16. Moreover, these 46.35
million Series A-1 Preferred Units would be the only voting units
issued under the 3:10 Plan, with the result that the DIP Lender
would apparently hold all voting power over the Reorganized Debtor
post-confirmation.
ACT further points out that perhaps nowhere are these
organizational lines more blurred than through the use of a
newly-formed entity called 3:10 Capital AV, LLC, which the 3:10
Plan defines as "3:10 Newco." 3:10 Plan at 5. According to the 3:10
Plan, 3:10 Newco was "organized by the Plan Sponsors" (i.e., the
3:10 Proponents collectively, including the Sanders Funds) to
acquire 100% of the equity in the Reorganized Debtor under that
Plan. 3:10 Plan at 5. As a result, the 3:10 Plan implies a degree
of cooperative engagement by the various 3:10 Proponents that is
not necessarily borne out by the facts. Upon information and
belief, 3:10 Newco was actually formed on or about August 19, 2021
by or at the direction of Rod Sanders (who is now also its manager)
without any input or consent from the Sanders Funds. See
Certificate of Formation.
Accordingly, ACT submits that the 3:10 Plan and 3:10 Addendum
should not be approved for the solicitation of votes absent proper
disclosures of (1) the methodology by which the proposed
distribution of new equity to the DIP Lender was calculated and (2)
the nature and extent of the relationships among the various 3:10
Proponents, including disclosure of the extent to which any 3:10
Proponents share common control or management.
A copy of the the Addendum to the Disclosure Statement for the Plan
of Liquidation submitted by KBST Investments for Viziv is available
at https://bit.ly/3wKdvsM
A copy of the the Addendum to the Disclosure Statement for 3:10
Capital's Plan of Reorganization for Viziv is available at
https://bit.ly/30n4qu7
Solicitation Procedures
ACT asserts that under the procedures proposed in the Amended
Motion, investors whose investment capital accounts for 38.5% of
the Class A-3 Units would receive neither notice of the proposed
disposition of their investments nor an opportunity to vote on that
treatment. ACT objects to the solicitation procedures proposed in
the Amended Motion to the extent they would permit Class A-3 Units
held through the Sanders Funds to be voted by someone other than
the Fund Investors themselves. ACT further objects to the
solicitation procedures to the extent they would permit the
solicitation and confirmation process to go forward without any
requirement for the Debtor to provide notice to the Fund Investors
of the proposed Plans, the accompanying disclosure statement and
addenda, and the accompanying confirmation deadlines.
Attorneys for ACT Family Ltd.:
Keith M. Aurzada
Michael P. Cooley
REED SMITH LLP
2850 N. Harwood St., Ste. 1500
Dallas, Texas 75201
Tel: 469.680.4200
Fax: 469.680.4299
E-mail: kaurzada@reedsmith.com
mpcooley@reedsmith.com
About Viziv Technologies
Viziv Technologies, LLC is an electronics company in Italy, Texas,
which specializes in the field of electromagnetic surface waves.
On Oct. 7, 2020, creditors Surface Energy Partners LP, Kendol C.
Everroad and Jamison Partners, LP, filed an involuntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Tex. Case No. 20-32554) against Viziv Technologies. The creditors
are represented by Kenneth Stohner Jr., Esq., at Jackson Walker,
LLP.
Judge Stacey G. Jernigan, who oversees the case, entered an order
for relief on Oct. 12.
Cavazos Hendricks Poirot, PC, is the Debtor's bankruptcy counsel.
The Debtor tapped Allred & Wilcox, PLLC, The Beckham Group and King
& Fisher Law Group, PLLC as special counsel; Stout Risius Ross, LLC
as investment banker; RSM US LLP as auditor; and Johnson McNamara,
LLC as accountant.
3:10 Capital WPF VII LLC, a post-petition lender, filed a Chapter
11 plan of reorganization for the Debtor on Sept. 3, 2021. KBST
Investments, LLC filed its proposed Chapter 11 plan of liquidation
for the Debtor on Sept. 6.
VIZIV TECHNOLOGIES: Disclosures Inadequate, Texzon Says
-------------------------------------------------------
Texzon Utilities Ltd., Steve Wilson, Basil Pinzone, Jr., David R.
Griffith, the Indian Shore Trust, and the Pinzone Family
Irrevocable Trust objection to the approval of the Amended Viziv
Technologies, LLC's Disclosure Statement for the Plans of
Reorganization of 3:10 Capital WPF VII LLC And KBST Investments,
LLC.
The Objecting Parties disagree with a significant portion of the
factual background in the Amended Disclosure Statement and one of
the attached addenda. To provide creditors and interest holders a
more fulsome perspective on certain factual statements contained
therein, the Objecting Parties request that the facts be updated or
substituted to provide interest holders "adequate information" to
vote on the plans. If the Debtor does not update the Amended
Disclosure Statement to properly state the facts and background of
this case, the Court should withhold approval. The KBST addendum is
one-sided and appears to intentionally seek to put the Objecting
Parties, and the other Founders, in a "bad light" which is
misleading, at best. The Class A3 investors invested directly or
indirectly in Debtor knowing that the Founders owned a huge
majority of the Debtor and created the existing technology held by
the Debtor. For additional context and facts regarding the Debtor
and the Founders and their disputes with the plan proponents,
creditors, equity holders and other parties in interest may review
certain pleadings filed in this bankruptcy case by the Objecting
Parties and the other Founders.
COUNSEL FOR TEXZON UTILITIES LTD, et al.:
Jason S. Brookner
Micheal W. Bishop
Matthew Wilbert Bourda
GRAY REED
1601 Elm Street, Suite 4600
Dallas, TX 75201
Telephone: (214) 954-4135
Facsimile: (214) 953-1332
Email: jbrookner@grayreed.com
mbishop@grayreed.com
mbourda@grayreed.com
About Viziv Technologies
Viziv Technologies, LLC is an electronics company in Italy, Texas,
which specializes in the field of electromagnetic surface waves.
On Oct. 7, 2020, creditors Surface Energy Partners LP, Kendol C.
Everroad and Jamison Partners, LP, filed an involuntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Tex. Case No. 20-32554) against Viziv Technologies. The creditors
are represented by Kenneth Stohner Jr., Esq., at Jackson Walker,
LLP.
Judge Stacey G. Jernigan, who oversees the case, entered an order
for relief on Oct. 12.
Cavazos Hendricks Poirot, PC, is the Debtor's bankruptcy counsel.
The Debtor tapped Allred & Wilcox, PLLC, The Beckham Group and King
& Fisher Law Group, PLLC as special counsel; Stout Risius Ross, LLC
as investment banker; RSM US LLP as auditor; and Johnson McNamara,
LLC as accountant.
3:10 Capital WPF VII LLC, a post-petition lender, filed a Chapter
11 plan of reorganization for the Debtor on Sept. 3, 2021. KBST
Investments, LLC filed its proposed Chapter 11 plan of liquidation
for the Debtor on Sept. 6.
VIZIV TECHNOLOGIES: KBST Disclosures Misleading, 3:10 Capital Says
------------------------------------------------------------------
3:10 Capital WPF II, LLC, and other related entities, as DIP
lenders and equity interest holders of Viziv Technologies, LLC's
object to the Addendum of KBST Investments, LLC made a part of
Viziv Technologies' Disclosure Statement Dated October 8, 2021.
A copy of the the Addendum to the Disclosure Statement for the Plan
of Liquidation submitted by KBST Investments for Viziv is available
at https://bit.ly/3wKdvsM
A copy of the the Addendum to the Disclosure Statement for 3:10
Capital's Plan of Reorganization for Viziv is available at
https://bit.ly/30n4qu7
3:10 Capital Parties object to the KBST Addendum because it is
misleading in several respects and therefore lacks sufficient
information from which a voting interest holder can make an
informed judgment about the Plan. The Court, therefore, should
deny the approval of the KBST Addendum and prohibit dissemination
of the proposed KBST Plan.
3:10 Capital Parties point out that the KBST Addendum is deficient
in its discussion of the following matters:
* At p.10, the KBST Addendum suggests that Viziv accomplished a
successful transmission of power over the Zenneck surface wave over
approximately one mile in 2019. It is only within the last year
that Viziv has accomplished a transmission over this distance, but
it was a very small amount of power and inconsistent results.
* On p. 12, KBST's description of the Board changes that
occurred in August of 2021 are at odds with the Debtor's internal
determination that the Board changes were done in complete
conformity with the governance documents of the Debtor and were
supported by the requisite majorities of A-3 and A-1 unit holders.
KBST's editorializing is unnecessary and completely uninformative
to any issue related to confirmation of their proposed Plan.
* On p.14, KBST wildly overstates the amount its constituents
have invested in Viziv. Attached hereto as Exhibit A is an accurate
accounting of the amounts invested by the KBST Group through both
equity and debt. The reality is that KBST members have only
invested just under $30 million of the approximately $90 million in
total investment in Viziv rather than the approximately $46 million
they are claiming in their Addendum. It appears that KBST is
including in its claimed "contributions" to Viziv, its members own
internal legal costs associated with Viziv, "other expenses
incurred" etc. all with the intent to overstate the actual hard
dollars that has either been loaned to Viziv or invested in Viziv
by any of the KBST members.
3:10 Capital Parties further point out that the KBST Plan employs a
classification scheme for equity in the Debtors that separates
equity holders into four separate classes, Classes 7, 8, 9 and 10.
Each of these classes include interest holders in the Debtor who
have the exact same economic rights under the Debtor's
organizational documents. Under the Debtor's Sixth Amended and
Restated Operating Agreement ("OA6"), Viziv's issued and
outstanding membership interests are identified as 10,000,000 Class
A-1 Units, 60,300,000 Class A-2 Units, 7,644,346 Class A-3 Units
and 6,597,150 Class B Units. Except for Subsequently Issued Class B
Equity Interests as defined in OA6, all the membership units of
Viziv have the exact same economic rights. In other words, if Viziv
had $1 of profit to distribute or after a liquidation and payment
of all debts, Viziv had $1 of cash left, the Class A-1, Class A-2,
Class A-3 and Class B Unit holders, other than Subsequently Issued
Class B Equity Interests, would share that $1 dollar ratably on a
per unit basis.
3:10 Capital Parties assert that the KBST Plan ignores this agreed
upon priority of the equity interest holders by separating the
equity classes into four separate classes and treats each one
differently and favors the A-3 Class 9 at the expense of the other
equity classes. Section 1129(b) of the Bankruptcy Code provides
that a Plan must not "discriminate unfairly".
According to 3:10 Capital Parties, hand in hand with its unfair
discrimination among the equity interest holders in Viziv, who all
share the same economic rights, KBST proposes to solicit votes from
parties that are not even parties in interest in this Bankruptcy
Case. KBST proposes to allow any "individual that invested funds to
acquire A-3 Interests to vote to accept or reject [its Plan]"
regardless of whether they did so directly or through a separate
investment fund which is the actual record holder of the Viziv
equity interest. KBST says this even though the Debtor's
solicitation motion makes it clear that it is only soliciting votes
from record holders of Viziv's equity as of the date of the order
approving the Disclosure Statement. KBST is trying to enfranchise
fund investors who invested in funds that were organized for the
purpose of investing in Viziv, even though those fund investors do
not have any rights to or control over any Viziv equity units.
Attorneys for 3:10 CAPITAL WPF II, LLC; 3:10 CAPITAL WPF III, LLC;
3:10 CAPITAL WPF IV, LLC; 3:10 CAPITAL WPF V, LLC; P6835 CAPITAL TT
I, LLC; P6835 CAPITAL TT II, LLC; P6835 CAPITAL TT III, LLC; and
P6835 CAPITAL TT QP, LLC:
J. MARK CHEVALLIER
Mark W. Taubenfeld
MCGUIRE, CRADDOCK & STROTHER, P.C.
500 N. Akard Street, Suite 2200
Dallas, Texas 75201
Tel: (214) 954-6800
Fax: (214) 954-6868
E-mail: mchevallier@mcslaw.com
mtaubenfeld@mcslaw.com
About Viziv Technologies
Viziv Technologies, LLC is an electronics company in Italy, Texas,
which specializes in the field of electromagnetic surface waves.
On Oct. 7, 2020, creditors Surface Energy Partners LP, Kendol C.
Everroad and Jamison Partners, LP, filed an involuntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Tex. Case No. 20-32554) against Viziv Technologies. The creditors
are represented by Kenneth Stohner Jr., Esq., at Jackson Walker,
LLP.
Judge Stacey G. Jernigan, who oversees the case, entered an order
for relief on Oct. 12.
Cavazos Hendricks Poirot, PC, is the Debtor's bankruptcy counsel.
The Debtor tapped Allred & Wilcox, PLLC, The Beckham Group and King
& Fisher Law Group, PLLC as special counsel; Stout Risius Ross, LLC
as investment banker; RSM US LLP as auditor; and Johnson McNamara,
LLC as accountant.
3:10 Capital WPF VII LLC, a post-petition lender, filed a Chapter
11 plan of reorganization for the Debtor on Sept. 3, 2021. KBST
Investments, LLC filed its proposed Chapter 11 plan of liquidation
for the Debtor on Sept. 6.
WILSON ORGANIC: Taps Stephen E. Robertson Law Firm as Counsel
-------------------------------------------------------------
Wilson Organic Farm Services, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of North Carolina to
employ Stephen E. Robertson Law Firm, PLLC to serve as legal
counsel in its Chapter 11 case.
The hourly rates of the firm's attorneys and staff are as follows:
Jennifer A. Ledford $300 per hour
Stephen E. Robertson $300 per hour
Paralegals $150 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
On Nov. 4, 2021, the firm received an initial retainer of $2,000
from the Debtor.
Jennifer Ledford, Esq., an attorney at Stephen E. Robertson Law
Firm, disclosed in a court filing that her firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Jennifer A. Ledford, Esq.
Stephen E. Robertson Law Firm, PLLC
437 W. Friendly Ave., Ste. 134
Greensboro, NC 27401
Telephone: (336) 370-6760
Email: jl@serlawfirm.com
About Wilson Organic Farm Services
Wilson Organic Farm Services, Inc. filed its voluntary petition for
Chapter 11 protection (Bankr. E.D.N.C. Case No. 20-01190) on March
18, 2020, listing as much as $500,000 in both assets and
liabilities. Judge Joseph N. Callaway oversees the case. Stephen E.
Robertson Law Firm, PLLC serves as the Debtor's legal counsel.
WOODBRIDGE HOSPITALITY: $17.5M Sale of Property to SRE Approved
---------------------------------------------------------------
Woodbridge Hospitality, L.L.C., submitted an Amended Disclosure
Statement in Support of Amended Plan of Reorganization Dated Nov.
8, 2021.
In late 2020, while the hospitality industry was in decline due to
the COVID pandemic and the Debtor was struggling to comply with the
PIP requirements of the Franchise Agreement, SRE approached the
Debtor seeking to purchase the Property and convert the Property to
apartments. Since the proposed purchase price of $17,500,000 (i.e.,
the Purchase Price) was and is sufficient to pay the Lender's Loan,
the delinquent TPT taxes, and all other claims, in full, and a sale
would negate any obligation to raise and expend additional capital
to comply with the PIP requirements or to renovate the Property to
operate under a different hospitality flag, the Debtor agreed to
sell the Property to SRE.
SRE is aware of the Debtor's entry into the Endeavors Contract and
remains committed to continuing the process of obtaining the
Rezoning and Change of Use Approval and pursuing the purchase of
the Property pursuant to the existing terms of the SRE PSA. The
Endeavors Contract, and the Debtor's use of the Property has no
impact on SRE's commitment to pursue the closing of the sale
pursuant to the terms of the SRE PSA. Further, the Debtor and
Endeavors have agreed to extend the Endeavors Contract through
December 31, 2021. SRE has consented to this extension, and to the
assignment of the Endeavors Contract to SRE in the event the sale
to SRE closes prior to the extended term of the Endeavors
Contract.
Approval to Use Cash Collateral
At the Debtor's request, the Court authorized the Debtor to use the
funds in the Canyon bank account, that constituted Canyon's cash
collateral, to pay the Debtor's payroll. Also at the Debtor's
request and, over Wilmington Trust's objections, the Court has
authorized the Debtor to use cash collateral to pay its ordinary
and necessary operating expenses through September 29, 2021.
Finally, the Debtor, Wilmington Trust and Maxim have stipulated to
the Debtor's use of cash collateral through December 31, 2021 and
the Court has approved such stipulation.
Motion to Sell the Property
The Debtor filed a motion for authority to sell the Property to SRE
pursuant to the SRE PSA (the "Sale Motion"). Wilmington Trust and
Maxim objected to the Sale Motion. The Court has entered its Order
Approving Motion to Sell Debtor's Property Free and Clear of Liens
to SRE Partners, LLC Pursuant to Pre-Petition Purchase and Sale
Agreement ("SRE Sale Order"), approving the Sale Motion, over
Wilmington Trust's objection.
The Debtor filed a motion for authority to retain Ledgestone to
manage and operate the Property (the "Ledgestone Motion").
Wilmington Trust and the US Trustee objected to the Ledgestone
Motion. Those objections have either been withdrawn or resolved and
the Court entered an order approving the Ledgestone Motion.
The Debtor filed a motion to assume the Endeavors Contract (the
"Endeavors Motion"). Wilmington Trust objected to the Endeavors
Motion. That objection has been resolved and the Court entered an
order approving the Endeavors Motion.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* 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 in this Class 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.
* Class 5 consists of the Allowed Interests in the Debtor. Any
and all remaining Sale Proceeds after payment of all Allowed
Claims, in full with interest as provided in the Plan (the "Excess
Sale Proceeds"), shall be distributed, in equal parts, to the
Interest Holders to be used in their sole and absolute discretion.
It is currently contemplated that the Interest Holders, to defray
adverse tax consequences, will invest the Excess Sale Proceeds into
a Section 1031 exchange and that the Excess Sale Proceeds will
remain in escrow pending the consummation of the Section 1031
Exchange.
The Debtor intends to sell the Property to SRE pursuant to the SRE
PSA and the SRE Sale Order. The Debtor reserves the right to amend
or modify the SRE PSA in its sole and absolute discretion provided,
however, that any such amendment or modification shall be subject
to Court approval.
A full-text copy of the Amended Disclosure Statement dated Nov. 8,
2021, is available at https://bit.ly/3D8CWq2 from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Randy Nussbaum
Philip R. Rudd
Sierra M. Minder
SACKS TIERNEY P.A.
4250 N. Drinkwater Blvd., 4th Floor
Scottsdale, AZ 85251-3693
Telephone: 480.425.2600
Facsimile: 480.970.4610
E-mail: Randy.Nussbaum@SacksTierney.com
Philip.Rudd@SacksTierney.com
Sierra.Minder@SacksTierney.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.
YOURELO YOUR: Devyap Plan Should be Amended, UST Says
-----------------------------------------------------
The United States Trustee states that the first amended proposed
disclosure statement submitted by Devyap Realty Group, Inc., in the
case of Yourelo Your Full-Service Relocation Corporation fails to
provide adequate information regarding the proposed plan of
reorganization of even date.
UST asserts that the Disclosure Statement and Plan should be
amended to provide creditors with complete and substantiated
information with respect to the scope of the proposed development
project(s) (including a discussion of conditions and assumptions),
the estimated immediate and prospective costs associated with
completing each stage of the project(s), and the demonstrated
ability of Devyap to meet its purported financial commitment to
fund each stage of the project(s) (from planning and permitting
through demolition and construction associated with the restoration
of the Property) over an identified period of time, achieve a
quantified stream of rental income and/or otherwise fund all of the
payments due to creditors under the Plan.
UST points out that the Disclosure Statement should be amended to
include a copy of the report that explains the scope and estimated
costs associated with the permitting schedules and each stage of
the proposed repair, demolition, rehabilitation and/or renovation
of the Property as well as corroborating information with respect
to the proposed sources and amounts of funds available to complete
the project(s).
According to UST, the Disclosure Statement and Plan should be
amended to discuss any resolution with the City of Revere. The Plan
should be amended to remove reference to Class 5 (section 4.3) and
injunction and release (section 5.5).
A full-text copy of Devyap Realty Group's First Amended Disclosure
Statement dated October 12, 2021, is available at
https://bit.ly/3p34B7G from PacerMonitor.com at no charge.
About Yourelo Your Full-Service Relocation
Yourelo Your Full-Service Relocation Corporation is a real estate
lessor based in Revere, Mass. It conducts business under the name
Gentle Movers.
Yourelo sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Mass. Case No. 19-13602) on Oct. 23, 2019. The petition
was signed by Umida Yusupova, president. At the time of filing, the
Debtor had estimated assets of $1 million to $10 million and
liabilities of $100,000 to $500,000. Judge Christopher J. Panos
oversees the case. The Debtor is represented by Casner & Edwards,
LLP.
ZEFNIK LLC: Du-All's Contribution & Rental Income to Fund Plan
--------------------------------------------------------------
Zefnik, LLC, submitted an Amended Combined Plan and Disclosure
Statement dated Nov. 8, 2021.
For the purposes of approval and implementation of this Plan and
the resultant reorganization of the Debtor, United States Trustee
fee, Administrative Creditors, and Priority Creditors shall be paid
on account of their respective statutory, Administrative, and
Priority Claims.
Notwithstanding any provisions in this Plan to the contrary, the
Debtor will continue to remit to the Office of the United States
Trustee all appropriate post confirmation monthly reports for the
relevant time periods, and continue to remit in full all quarterly
fee payments owed and/or due based on all disbursements, until this
Bankruptcy Case is closed by Court Order, converted or dismissed.
Class 1 (Unimpaired): This class shall consist of Chief Financial
Federal Credit Union ("CFFCU"). CFFCU shall have an allowed secured
claim in the aggregate amount of $709,536 against the Debtor,
secured by 101 South Street, Rochester, MI ("Property"), which
shall accrue interest at the pre-petition contract rate. CFFCU
holds a first-priority mortgage, junior to the statutory liens in
favor of the City of Rochester.
The Debtor will cure the outstanding default as follows: the Debtor
will pay $60,000 to CFFCU on the Effective Date and an additional
$60,000 thirty days after the Effective Date. These payments shall
be applied: (1) first, to cure any outstanding pre and postpetition
default (with interest), (2) second, to compensate CFFCU for any
damages, including attorneys' fees, incurred as a result of such
default, and (3) third, to the principal balance owed to CFFCU.
Thereafter, CFFCU's claim shall mature as set forth in the contract
between the parties, and the Debtor shall make regular monthly
payments in accordance with the terms of the contract between the
Debtor and CFFCU at the non-default interest rate. Such payments
shall commence on the Effective Date and continue until CFFCU's
claim is paid in full.
Class 2 (Impaired) Property Taxes will consist of the City of
Rochester, which has a secured claim in the amount of $13,593 for
property taxes from 2020 against the Property. Pursuant to M.C.L.
Sec. 211.40 and 211.59, the lien of the City of Rochester is
superior to all other liens, claim, or encumbrances. The lien of
the City of Rochester shall remain attached to the Property until
such lien (with applicable interest) is paid in full. This claim
shall not accrue interest. This claim will be paid in 60 monthly
installments, with interest at 12% per annum, commencing on the
Effective Date. The City of Rochester shall retain its lien until
such time as its claim is paid in full, with applicable interest.
In the event the Property is sold, the City of Rochester's
outstanding claim must be paid in full at closing. The fair market
value of this property is $1,000,000.
No portion of this claim is unsecured.
The Plan will be funded in the following manner:
* Contribution from Du-All Contracting, Inc. Du-All
Contracting, Inc., a Michigan company solely owned by the Debtor's
principal, shall voluntarily contribute the following amounts to
the Debtor, to enable the Debtor to make the payments to CFFCU:
$60,000.00 on or before the Effective Date; and $60,000.00 within
30 days of the Effective Date.
* Collection of Monthly Rents. Debtor currently receives rents
from tenants totaling $12,550.00 per month (including $3,650.00
currently paid directly by a tenant to CFFCU). Debtor will utilize
such funds to satisfy its obligations under this Plan.
* Collection of Judgment. Debtor shall take all commercially
prudent steps required to collect the past-due rent owed by its
former tenant. To the extent Debtor recovers any funds from this
judgment, such funds will be contributed to the Plan.
A full-text copy of the Amended Combined Plan and Disclosure
Statement dated November 08, 2021, is available at
https://bit.ly/3c3ATrI from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Yuliy Osipov, Esq.
Jeffrey H. Bigelman, Esq.
Osipov Bigelman, P.C.
20700 Civic Center Dr., Ste. 420
Southfield, MI 48076
Tel: (248) 663-1800
Fax: (248) 663-1801
Email: yo@osbig.com
jhb@osbig.com
About Zefnik LLC
Zefnik, LLC, is a Michigan limited liability company. Zef
Nikprelaj is the sole member.
Zefnik, LLC, a Rochester, Mich.-based company, filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D. Mich. Case No. 21-44889) on June 7, 2021. Zef Nikprelaj,
authorized representative, signed the petition. At the time of the
filing, the Debtor disclosed total assets of up to $10 million and
total liabilities of up to $1 million. Judge Mark A. Randon
oversees the case. Osipov Bigelman, P.C. represents the Debtor as
legal counsel.
[^] BOOK REVIEW: TAKING CHARGE: Management Guide to Troubled
------------------------------------------------------------
Companies and Turnarounds
Author: John O. Whitney
Publisher: Beard Books
Softcover: 283 Pages
List Price: $34.95
Order a copy today at:
http://beardbooks.com/beardbooks/taking_charge.html
Review by Susan Pannell
Remember when Lee Iacocca was practically a national hero? He won
celebrity status by taking charge at a company so universally known
as troubled that humor columnists joked their kids grew up thinking
the corporate name was "Ayling Chrysler." Whatever else Iacocca may
have been, he was a leader, and leadership is crucial to a
successful turnaround, maintains the author.
Mediagenic names merit only passing references in Whitney's book,
however. The author's own considerable experience as a turnaround
pro has given him more than sufficient perspective and acumen to
guide managers through successful turnarounds without resorting to
name-dropping. While Whitney states that he "share[s] no personal
war stories" in this book, it was, nonetheless, written from inside
the "shoes, skin, and skull of a turnaround leader." That sense of
immediacy, of urgency and intensity, makes Taking Charge compelling
reading even for the executive who feels he or she has already
mastered the literature of turnarounds.
Whitney divides the work into two parts. Part I is succinctly
entitled "Survival," and sets out the rules for taking charge
within the crucial first 120 days. "The leader rarely succeeds who
is not clearly in charge by
the end of his fourth month," Whitney notes. Cash budgeting, the
mainstay of a successful turnaround, is given attention in almost
every chapter. Woe to the inexperienced manager who views accounts
receivable management as "an arcane activity 'handled over in
accounting.'" Whitney sets out 50 questions concerning AR that the
leader must deal with--not academic exercises, but requirements for
survival.
Other internal sources for cash, including judiciously managed
accounts payable and inentory, asset restructuring, and expense
cuts, are discussed. External sources of cash, among them banks,
asset lenders, and venture capital funds; factoring receivables;
and the use of trust receipts and field warehousing, are handled in
detail. Although cash, cash, and more cash is the drumbeat of Part
I, Whitney does not slight other subjects requiring attention. Two
chapters, for example, help the turnaround manager assess how the
company got into the mess in the first place, and develop
strategies for getting out of it.
The critical subject of cash continues to resonate throughout Part
II, "Profit and Growth," although here the turnaround leader
consolidates his gains and looks ahead as the turnaround matures.
New financial, new organizational, and new marketing arrangements
are laid out in detail. Whitney also provides a checklist for the
leader to use in brainstorming strategic options for the future.
Whitney's underlying theme--that a successful business requires
personal leadership as well as bricks and mortar, money and
machinery--is summed up in a concluding chapter that analyzes the
qualities that make a leader. His advice is as relevant in this
1999 reprint edition as it was in 1987 when first published.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***