/raid1/www/Hosts/bankrupt/TCR_Public/220124.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, January 24, 2022, Vol. 26, No. 23
Headlines
511 GROUP: Deal With Shellpoint Reached; Plan Confirmed
ABARTA OIL: Court Approves $10MM Sale of All Assets to Repsol Oil
ACM DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
AEROGROUP INT'L: To Sell Aerosoles to American Exchange
AETHON UNITED: S&P Raises ICR to 'B', Outlook Stable
ALPHA LATAM: DIP Lenders Plan to Block Plan Confirmation
AMERIGAS PARTNERS: Moody's Cuts CFR to Ba3 & Unsecured Notes to B1
ASHTON WOODS: $100MM Notes Add-on No Impact on Moody's B1 CFR
ASP NAPA: S&P Assigns 'CCC+' Issuer Credit Rating, Outlook Stable
ASSUREDPARTNERS INC: Moody's Affirms B3 CFR, Outlook Stable
ATHLETICO HOLDINGS: Moody's Rates 1st Lien Loan Facilities 'B2'
AUTOCANADA INC: S&P Rates New C$300MM Senior Unsecured Notes 'B+'
AVINGER INC: Closes $7.6 Million Registered Direct Offering
B D A AND K: Voluntary Chapter 11 Case Summary
BAKELITE US: Moody's Assigns B1 CFR & Rates $485MM Term Loan B1
BHCOSMETICS HOLDINGS: Jan. 27 Hearing on Bid Procedures for Assets
BLACKROCK INTERNATIONAL: Seeks to Hire Keating Firm as Counsel
BOYCE HYDRO: Trustee's $165K Sale of Gladwin Property Approved
BUILDERS FIRSTSOURCE: Moody's Hikes CFR & Secured Notes to Ba1
CALIFORNIA-NEVADA METHODIST: Auction of All Assets Set for Feb. 2
CARL MILLER: Case Summary & 16 Unsecured Creditors
CE ELECTRICAL: Unsecureds to Get 5% in Reorganizing Plan
CGM & DAUGHTERS: Case Summary & Seven Unsecured Creditors
CHESAPEAKE ENERGY: Nears Deal to Buy Chief Oil After Ch.11 Exit
CHS/COMMUNITY HEALTH: Fitch Rates Sr. Secured Notes 'BB-'
CHS/COMMUNITY HEALTH: Moody's Rates New 2030 Sr Secured Notes 'B2'
CHS/COMMUNITY HEALTH: S&P Rates New Senior Secured Notes 'B'
CMC II: Consulate Health Undergoes Rebranding Amid Restructuring
COMFORT CARE: Unsecureds Will Get 10% of Claims in 60 Months
COTTAGE CAR WASH: Feb. 1 Hearing on Second Amended Plan
CRECHALE PROPERTIES: $135K Sale of Hattiesburg Property Withdrawn
CYCLE FORCE: Ravinia Touts Successful Sec. 363 Sale
CYPRESS CREEK: Proposed Sale of Vehicles Free of All Liens Approved
DEL MONTE FOODS: Moody's Hikes CFR to B2, Outlook Stable
ELECTRO SALES: Sale of Properties to Pay Claims in Full
ELECTRONICS FOR IMAGING: S&P Ups ICR to B- on Improved Performance
EMERALD TECHNOLOGIES: Moody's Assigns First Time 'B3' CFR
ENDLESS POSSIBILITIES: Case Summary & 13 Unsecured Creditors
EXPRESS GRAIN: Jan. 25 Hearing on $75K Sale of Equipment & Truck
EXPRESS GRAIN: Jan. 25 Hearing on Bid Procedures for All Assets
FELICE THOMAS ALTEBRANDO: $935K Sale of Fort Salonga Property OK'd
FIRST CHOICE: Property Sale Proceeds, or Financing, to Fund Plan
FRANK LARISCEY, JR: $30K Sale of North Augusta Property Approved
GARDEN VIEW: Gets OK to Hire De Sol Property as Property Manager
GEM PREP - MERIDIAN: Moody's Rates $8.5MM Facility Bonds 'Ba1'
GEM PREP - NAMPA: Moody's Rates $8.5MM Facility Bonds 'Ba2'
GEM PREP - POCATELLO: Moody's Rates $5.8MM Facility Bonds 'Ba2'
GONGCOOK LLC: Unsecured Creditors Will Get 100% of Claims in Plan
HAPPY BEAVERS: Taps Dickensheets & Associates as Auctioneer
HOOT THE DOG: Amends Unsecured Claims Pay Details
HOYA MIDCO: Moody's Ups CFR to Ba3 & Rates $350MM Secured Loans Ba3
HOYA MIDCO: S&P Upgrades ICR to 'B+', Outlook Stable
HR NORTH DALE: Gets OK to Hire Citrus Capital as Real Estate Broker
ITZHAK MEIR SHTARK: $1.34-Mil. Sale of Sanford Homestead Approved
J. HUNTER PROPERTIES: Case Summary & 13 Unsecured Creditors
JAMES PATRICK DOYLE: Sale of Washington County Property Approved
K&L AG GROUP: Seeks to Hire Vice & Henley as Litigation Counsel
KB HOME: S&P Alters Outlook to Positive, Affirms 'BB' ICR
KEEPITSIMPLE.US LLC: Initial Order on Assets Sale Procedures Issued
KENNETH A. BERDICK: Court Denies Proposed Sale of Alva Property
KENNETH A. BERDICK: Deficient Proposed Sale of Alva Property Denied
LINDBLAD EXPEDITIONS: Moody's Affirms B3 CFR & Rates New Notes B3
LINDBLAD EXPEDITIONS: S&P Rates New $340MM Sr. Secured Notes 'B-'
LONG VALLEY: Unsecureds to Get Remaining Proceeds From Refinancing
LTL MANAGEMENT: Court Disbands 2 Talc Committees
MABEL SRIDHAR: Sale of Interest in Stock Options & Cars Approved
MANHATTAN STUDENT: Seeks to Hire Krigel & Krigel as Legal Counsel
NAKED JUICE: Moody's Assigns First Time B1 Corporate Family Rating
NORTHERN LIGHT: Moody's Alters Outlook on Ba1 Rating to Positive
NUFARM LIMITED: Fitch Assigns BB Rating on New USD Unsecured Notes
PDG PRESTIGE: Enters Purchase & Sale Agreement with Paul Rothbard
PG&E CORP: 5-Year Probation Ends for 'Continuing Menace'
PIPELINE FOODS: Gets Court Okay to Seek Liquidation Plan Vote
PLAMEX INVESTMENT: Auction of Plaza Mexico Set for April 11
PLANET HOME: Moody's Rates New 1st Lien Loans 'B1', Outlook Stable
PMHC II: Moody's Raises CFR to 'B3' & Rates New 1st Lien Debt 'B3'
PRECISELY SOFTWARE: $230MM Loan Add-ons No Impact on Moody's B3 CFR
PUTHENVEETIL K. BOBBY: March 29 Auction of Arlington Heights Asset
QHC FACILITIES: CEO's Son Takes Over, Says Trustee Moot
R & R TRUCKING: Court Approves Cantus' $110K Sale of Pasco Property
RYAN C. WENZEL: $1M Sale of Estero Property to Arands Approved
RYAN SPECIALTY: Moody's Rates $400MM Senior Secured Notes 'B1'
RYAN SPECIALTY: S&P Assigns 'BB-' Long-Term ICR, Outlook Stable
SARACEN DEVELOPMENT: Moody's Withdraws B3 CFR on Debt Repayment
ST ANNE'S RETIREMENT: Fitch Affirms BB+ Rating on 2012/2020 Bonds
STONE CLINICAL: Taps Gordian Seaport Advisors as Investment Banker
STRIKE LLC: Akin Gump Represents Unsecured Claimants
TECT AEROSPACE: Owner Challenges Legal Releases for Boeing
TELIGENT INC: $14.42MM Cash Sale of Assets to PAI Holdings Approved
TELIGENT INC: $27-Mil. Sale of Buena Assets to Leiters Approved
TELIGENT INC: $45.75-Mil. Sale of Canadian Assets to Hikma Approved
TENTLOGIX INC: Amends Plan to Include United Leasing Claim Details
TRC FARMS: $90K Private Sale of Dover Property to Daniel Approved
TRIPLE CROWN KITCHEN: Files for Chapter 7 Bankruptcy
TWISTED OAK: Unsecured Creditors to Get 100%; Files Amended Plan
UNIQUE CASEWORK: Unsecureds Will Get 5% of Claims in 60 Months
US ACUTE CARE: Moody's Affirms B2 CFR Following Alteon Transaction
VACO HOLDINGS: $100MM Upsize Term Loan No Impact on Moody's B2 CFR
VIANT MEDICAL: Moody's Alters Outlook on Caa1 CFR to Stable
WATSONVILLE COMMUNITY: Bill for New District Advanced
YOUNGBLOOD SKIN: Auction of Assets Set for February 15
YUNHONG CTI: Receives Noncompliance Notice From Nasdaq
ZIER PROPERTIES: Unsecured Creditors Out of Money in Plan
[*] Puerto Rico Restructuring Adviser Disclosure Bill Now a Law
[*] U.S. Retail Bankruptcies on the Decline
[^] BOND PRICING: For the Week from January 17 to 21, 2022
*********
511 GROUP: Deal With Shellpoint Reached; Plan Confirmed
-------------------------------------------------------
Bankruptcy Judge A. Jay Cristol has entered an order confirming the
Plan of 511 Group LLC
Based on the agreement between the Debtor and secured creditor
NewRez, LLC, d/b/a Shellpoint Mortgage Servicing, NewRez is deemed
to vote for the Plan, and the Plan is modified to include the
following terms which are incorporated in this order and constitute
the order of this Court:
* With respect to the Class 2 Secured claim of NewRez, beginning
Feb. 1, 2022, the Debtor shall make a combined monthly payment of
$3,207.86 directly to the Creditor. After payment in full of the
total arrearage over 60 months, the monthly contractual payment
will be $1,736.10. The due date for all payments shall be the
first of each month beginning on Feb. 1, 2022 and continuing
monthly thereafter. The Debtor is responsible for all taxes and
insurance on the property,.
* Class 5 Unsecured Claims consisting of IRS Claim 2 totaling
$14,040 and Patricia Leret are impaired. IRS claim is for unfiled
taxes which are proposed to be reconciled outside the Plan. As to
Patricia Leret's disputed scheduled claim, there was no claim filed
and therefore the disputed claim is disallowed.
About 511 Group LLC
511 Group LLC, a Miami Beach, Fla.-based limited liability company,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Fla. Case No. 20-21098) on Oct. 12, 2020. In its petition,
the Debtor estimated both assets and liabilities to be between
$100,001 and $500,000. Judge A. Jay Cristol presides over the
case. Joel M. Aresty P.A. is the Debtor's legal counsel.
ABARTA OIL: Court Approves $10MM Sale of All Assets to Repsol Oil
-----------------------------------------------------------------
Judge Carlota M. Bohm of the U.S. Bankruptcy Court for the Western
District of Pennsylvania authorized ABARTA Oil & Gas Co., LLC's
sale of substantially all assets to Repsol Oil & Gas USA, LLC, or
its affiliate(s) as assignee consistent with the terms of the
Agreement of Sale and Purchase for $10 million.
The sale is free and clear of any and all Liens. The Liens, if any,
will attach to the consideration to be received by the Debtor.
The Purchase Agreement (including all schedules, annexes, and
exhibits affixed thereto), all transactions contemplated therein,
and all of the terms and conditions thereof are approved, subject
to the terms and conditions of the Sale Order.
Subject to the terms of the Purchase Agreement and the occurrence
of the Closing, the Court authorizes and approves pursuant to
section 363 and 365 of the Bankruptcy Code the assumption by the
Debtor of the Assigned Contracts and the sale and assignment of the
same to the Buyer, as provided for or contemplated by the Purchase
Agreement.
Time is of the essence in closing the Sale Transaction and the
Debtor and the Buyer intend to close the Sale Transaction as soon
as practicable. The Sale Order constitutes a final and appealable
order within the meaning of 28 U.S.C. Section 158(a).
A copy of the Agreement is available at
https://tinyurl.com/2p8z8sd9 from PacerMonitor.com free of charge.
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.
ACM DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: ACM Development, LLC
562 Bowness Avenue
Ocoee, FL 34761
Business Description: ACM Development provides excavation
services.
Chapter 11 Petition Date: January 20, 2022
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 22-00210
Debtor's Counsel: Justin M. Luna, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
201 S. Orange Avenue
Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: jluna@lathamluna.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Eric R. Mynhier, manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/VLJWBUI/ACM_Development_LLC__flmbke-22-00210__0001.0.pdf?mcid=tGE4TAMA
AEROGROUP INT'L: To Sell Aerosoles to American Exchange
-------------------------------------------------------
American Exchange Group, announced Jan. 19, 2022, it has finalized
an agreement to acquire the assets of luxury comfort footwear
brand, Aerosoles. Together, the two companies will expand
distribution channels and introduce Aerosoles to new categories and
reach new audiences.
"This acquisition marks an exciting new chapter in the evolution of
American Exchange Group. We look forward to supporting the future
growth of this brand and are excited to welcome Aerosoles into our
brand portfolio," says Alen Mamrout, Chief Executive Officer of
American Exchange Group.
American Exchange Group acquires Aerosoles with the mission of
harmonizing their modern, elevated core with broader commercial
opportunities in distribution. The acquisition of Aerosoles will
drive significant growth opportunities for the company as American
Exchange Group introduces the brand to new categories, with a
continued unwillingness to compromise on Aerosoles brand vision and
quality control.
"Our strategy is to have the Aerosoles brand function as a separate
division to ensure the focus on the core brand DNA that has made
Aerosoles such a great name in the footwear category. We are
pleased that the team from Aerosoles will be joining our
organization to execute our vision," says Steve Velasquez, Chief
Strategy Officer of American Exchange Group.
* * *
Ben Unglesbee of Retail Diver recounts that Aerosoles previously
tried to sell itself more than four years ago as it sought a
balance between winning over new consumers and maintaining its
reputation as an affordable and comfortable option for older women.
In lieu of a sale, the company filed for bankruptcy in September
2017, and immediately moved to close most of the 78 stores it
operated at the time, leaving e-commerce and its wholesale business
as Aerosoles' remaining sales channels.
Prior to the acquisition deal, Aerosoles partnered with American
Exchange to collaborate on design, branding and strategy for a
value-priced shoe line targeting mass retail as well as off-price
channels.
About American Exchange Group
American Exchange Group is an industry leader in accessories design
and manufacturing. By facilitating distribution to major retailers
globally for custom private label brands, exclusive licensed
brands, and branded accessories includingfootwear, tech wearables,
watches, jewelry, handbags and fashion accessories, American
Exchange Group raises the bar by disrupting status quo pricing
while staying at the forefront of trends.
About Aerogroup International
Aerogroup International, Inc. -- http://www.aerosales.com/--
doing business as Aerosoles, was established in 1987 through a
buyout of the What's What division of Kenneth Cole. The company is
a New Jersey-based women's footwear brand offering a wide array of
footwear, including heels, flats, wedges, boots and sandals that
appeal to broad consumer tastes.
With plans to close 74 of 78 stores they are operating, Aerogroup
International, Inc., and five affiliated debtors each filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 17-11962) on Sept. 15, 2017.
The cases are pending before the Honorable Kevin J. Carey.
Aerosoles disclosed $73 million in assets and $109 million in
liabilities as of the Petition Date.
Aerosoles' legal advisor in connection with the restructuring is
Ropes & Gray LLP. The Debtors hired Bayard, P.A., as co-counsel;
Berkeley Research Group, LLC as restructuring advisor; and
EisnerAmper, LLC, as accountant. Hilco Merchant Resources is
assisting on store closings. Prime Clerk LLC is the claims and
noticing agent.
On Sept. 26, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee tapped
Cooley LLP as its lead counsel; Gellert Scali Busenkell & Brown,
LLC as co-counsel; and Province, Inc. as financial advisor.
AETHON UNITED: S&P Raises ICR to 'B', Outlook Stable
----------------------------------------------------
S&P Global Ratings raised the issuer credit rating on U.S.-based
oil and gas exploration and production company Aethon United BR
L.P. to 'B' from 'B-'.
S&P said, "We raised the senior unsecured rating to 'B+' from 'B'.
The '2' recovery rating indicates our expectation for substantial
(70%-90%; rounded estimate: 85%) recovery of principal in the event
of a default.
"The stable outlook reflects our expectation that Aethon will
maintain financial policies that support modest growth and strong
financial measures, while generating positive free cash flow.
"We expect improving financial metrics and free cash flow over the
next 12-24 months. We expect Aethon to focus on free cash flow
generation after several years of outspend to fund rapid growth,
which should help support improving financial measures and
liquidity. Modest financial policies should support funds from
operations (FFO) to debt of over 50% and debt to EBITDA below 2x
through 2023. Additionally, we expect excess cash flow to be used
to repay outstanding borrowings on Aethon's reserve-based lending
facility (RBL), further improving liquidity. Additional support for
financial measures is provided by the vertical integration of its
midstream and marketing businesses, which helps keep operating
costs low, provides access to favorable end markets, and generates
third-party revenues.
"Aethon's robust hedging program provides stable cash flows.
Aethon's extensive hedging program should provide some stability
through the often volatile price cycles of natural gas, which is
over 80% of its production. As a result, we would not expect to see
EBITDA and debt leverage swings as severe as many exploration and
production (E&P) peers experienced in 2020. Nevertheless, due to
hedging, Aethon has not fully benefitted from the recent run-up in
natural gas prices, although overtime pricing should improve as it
places new hedges at higher prices. We have adjusted historical
financial measures for noncash hedge losses, about $1.0 billion for
the nine months ended Sept. 30, 2021, as they don't reflect
financial performance in the current period.
"We now view production levels and positive free cash flow as in
line with 'B' category peers. Aethon has successfully grown
production in 2021, with expected full-year average production of
774–814 million cubic ft. (mmcf) equivalent per day, and proved
reserves to levels comparable to 'B' category peers such as
Rockcliff Energy and Encino Acquisition Partners. Additionally,
although we expect the pace of growth to slow from historical
levels, we believe the high proved undeveloped portion of total
proved reserves, about 70% as of Dec. 31, 2020, should begin to
fall, something we will look at for further ratings improvement.
Finally, we believe Aethon will continue to pursue less aggressive
growth and focus on free cash flow generation, which should support
improving financial performance and liquidity.
"The stable outlook reflects our expectation that Aethon will
maintain financial policies that support modest growth while
generating positive free cash flow. Over the next 12 months we
expect FFO to debt to average above 50%, while debt to EBITDA
averages below 2x. We also anticipate that any excess cash flow
will be used to reduce outstanding borrowings on the credit
facility."
S&P could lower the rating if:
-- Aethon pursues a more aggressive financial policy than
anticipated, such as large debt-financed acquisitions or
debt-funded shareholder returns;
-- FFO to debt approaches 20% with no near-term remedy; or
-- Liquidity materially weakens.
S&P could raise its rating on Aethon if:
-- It further expands its production and developed reserves to
levels comparable with those of higher-rated peers.
-- At the same time it maintains at least adequate liquidity, with
a low proportion of outstanding RBL borrowings relative to its
capacity, and FFO to debt comfortably above 20%.
ESG credit indicators: E-4 S-2 G-2
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis of Aethon as the E&P industry contends
with an accelerating energy transition and adoption of renewable
energy sources. We believe falling demand for fossil fuels will
lead to declining profitability and returns for the industry as it
fights to retain and regain investors that seek higher return
investments. As part of its ESG initiatives Aethon has reduced
emissions by 39% since 2016 and uses standardized measures
including the Global Reporting Initiative and Sustainability
Accounting Standards Board to help measure and report emissions."
ALPHA LATAM: DIP Lenders Plan to Block Plan Confirmation
--------------------------------------------------------
Jeff Montgomery of Law360 reports that a Chapter 11 creditor group
in the Delaware bankruptcy case of Colombian payday lender Alpha
Latam Management LLC warned Thursday, January 20, 2022, that it
would seek to block confirmation of the debtor's plan without
fuller disclosures and amendment of liability releases in the plan.
Investors in Alpha Latam's senior secured, super-priority
debtor-in-possession loan agreement included the blunt warning in
an objection to the debtor's liquidating plan, filed with Judge J.
Kate Stickles of the U. S. Bankruptcy Court for the District of
Delaware. The proposed bankruptcy liquidation followed approval of
a $149.5 million deal in November 2021.
The consortium of DIP Note Purchasers under the Senior Secured
Super-priority Debtor-in-Possession Note Purchase Agreement
(collectively, the "DIP Note Purchasers Consortium"), whose members
are lenders under the DIP Financing in these Chapter 11 Cases and
are some of the unaffiliated holders of indebtedness under the
10.000% Senior Notes due 2022 and/or the 9.000% Senior Notes due
2025 filed an objection to an extension of the Debtors' exclusive
periods.
"The Plan as currently proposed contains overly broad releases in
favor of the Debtors' current and former officers and directors and
other insiders. These releases are particularly inappropriate
given that the Debtors' Chapter 11 filings were precipitated by
their having engaged in accounting irregularities over an extended
period which resulted in their having to restate their financial
statements to reflect an approximately US$200 million reduction in
earnings and asset values from what was represented when the
Prepetition Notes were issued," the DIP Note Purchasers Consortium
said.
"The DIP Note Purchasers Consortium objects to these releases
and,thus, to the Plan in its current form. The Debtors' Plan
cannot be confirmed without the support of the DIP Note Purchasers
Consortium, whose members hold Prepetition Notes comprising more
than one-third of the total general unsecured claims under the only
voting class under the Plan and, thus, has a blocking position."
The DIP Note Purchasers Consortium said it is willing to continue
negotiating with the Debtors in an effort to reach agreement on a
consensual and mutually agreeable Chapter 11 liquidating plan that
would allow the Debtors to emerge quickly from Chapter 11.
However, if those efforts prove futile, it said it is also prepared
to file its own plan which would provide for the distribution of
the sales proceeds without the necessity of these releases, thereby
preserving potentially valuable claims for the benefit of general
unsecured creditors. Such a plan, the group says, should garner
widespread creditor support and be readily confirmable.
About Alpha Latam Management
Wilmington, Del.-based Alpha Latam Management, LLC, and its
affiliates operate a specialty finance business that offers
consumer and small business lending services to underserved
communities in Mexico and Colombia.
Alpha Latam Management and certain of its affiliates sought Chapter
11 protection (Bankr. D. Del. Case No. 21-11109) on Aug. 1, 2021,
disclosing assets of between $100 million and $500 million and
liabilities of between $500 million and $1 billion. Judge J. Kate
Stickles oversees the cases.
The Debtors tapped Richards, Layton & Finger, P.A., and White &
Case, LLP as legal counsel; Rothschild & Co US Inc. and Rothschild&
Co Mexico S.A. de C.V. as investment bankers; and AlixPartners,
LLP, as financial advisor. Prime Clerk, LLC is the claims and
noticing agent and administrative advisor.
On Aug. 11, 2021, Alpha Holding, S.A. de C.V. and AlphaCredit
Capital, S.A. de C.V. SOFOM, ENR commenced in Mexico City a jointly
administered voluntarily filed proceeding pursuant to the Ley de
Concursos Mercantiles. Through this proceeding, the MexicanDebtors
intend to pursue a controlled restructuring and possible sale of
their assets.
AMERIGAS PARTNERS: Moody's Cuts CFR to Ba3 & Unsecured Notes to B1
------------------------------------------------------------------
Moody's Investors Service downgraded AmeriGas Partners, L.P.'s
Corporate Family Rating to Ba3 from Ba2, Probability of Default
Rating to Ba3-PD from Ba2-PD and senior unsecured notes rating to
B1 from Ba3. AmeriGas' Speculative Grade Liquidity (SGL) rating
remains unchanged at SGL-3. The outlook was changed to stable from
negative.
"The downgrade of AmeriGas' ratings reflects continued high
leverage and the ongoing challenges to earnings growth and
sustained deleveraging," said Jonathan Teitel, a Moody's analyst.
Downgrades:
Issuer: AmeriGas Partners, L.P.
Corporate Family Rating, Downgraded to Ba3 from Ba2
Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD
Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD4)
from Ba3 (LGD4)
Outlook Actions:
Issuer: AmeriGas Partners, L.P.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
AmeriGas' Ba3 CFR reflects high leverage and weather-dependent
volumes offset by large scale and a strong market position in US
propane distribution. UGI Corporation (AmeriGas' parent, unrated)
depends on cash flow from its subsidiaries to support its
commitment to annual dividend growth and to support acquisitions
and invest in growth in other businesses. Moody's expects that
AmeriGas' will reduce debt/EBITDA but that leverage will remain at
levels more consistent with a Ba3 CFR. Key to offset secular
decline in propane demand and to increase market share are
continued growth in volumes at AmeriGas Cylinder Exchange (ACE),
Cynch home delivery and National Accounts programs. Challenging
growth is the highly competitive nature of the propane distribution
market. The pace of leverage reduction depends in part on the
allocation of cash flow between investment's necessary to reduce
costs, acquisitions to offset secular volume declines, dividends to
UGI Corporation and debt reduction.
AmeriGas' SGL-3 rating reflects Moody's expectation that AmeriGas
will maintain adequate liquidity. As of September 30, 2021,
AmeriGas had $14 million of cash and $170 million of borrowings
outstanding on its $600 million revolver due December 2022 ($60
million in letters of credit outstanding). Moody's expects the
revolver to be renewed well before maturity, maintaining adequate
liquidity. Revolver financial covenants are comprised of maximum
leverage ratios and a minimum interest coverage ratio. Moody's
expects that AmeriGas will maintain compliance with these covenants
well into 2023.
AmeriGas' senior unsecured notes are rated B1. The notes are not
guaranteed by AmeriGas Propane, L.P., the principal operating
subsidiary. Consequently, the notes are structurally subordinated
to AmeriGas Propane, L.P.'s $600 million senior unsecured revolver
(unrated) which results in the notes being rated one notch below
the CFR.
The stable outlook reflects Moody's expectation that AmeriGas'
debt/EBITDA will continue to decline to around 4.5x over the next
12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include debt/EBITDA declining
towards 4x on a sustained basis and growth of less
weather-dependent volumes.
Factors that could lead to a downgrade include debt/EBITDA rising
above 5x, debt-funded acquisitions or distributions, negative free
cash flow or weakening liquidity.
AmeriGas is a distributor of propane and related equipment and
supplies in the US. AmeriGas is subsidiary of publicly traded UGI
Corporation, a holding company.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
ASHTON WOODS: $100MM Notes Add-on No Impact on Moody's B1 CFR
-------------------------------------------------------------
Moody's Investors Service said Ashton Woods USA, LLC's B1 Corporate
Family Rating, B1-PD Probability of Default Rating and B1 senior
unsecured notes rating are unchanged following the company's
announcement that it plans to issue $100 million of senior
unsecured notes, which are an add-on to the 4.625% notes due 2030.
The outlook remains stable. Proceeds from the issuance will be used
to repay outstanding borrowings on the company's revolver.
The immediate impact of the transaction will result in a modest
increase to Ashton Woods' adjusted homebuilding
debt-to-capitalization to 59% on a pro forma basis as of 11/30/21,
from 56%. Ashton Woods' meaningful backlog of sold homes going into
2022 of almost 3,700 units, coupled with Moody's forecast of total
sales of about 7,900 units in fiscal 2022 (ending in May 2022),
will result in deleveraging through earnings growth. Moody's still
expects leverage to decline to below 50% by fiscal year-end 2023,
supported by strong demand for single-family housing and low
inventory of available homes.
Ashton Woods' B1 Corporate Family Rating (CFR) reflects the
company's diverse product portfolio and mix of entry-level homes, a
category that's experiencing outsized demand. In addition, the
rating takes into account the company's high levels of optioned
land and a highly developed inventory position, which helps to
reduce land impairment risk. These factors are offset by geographic
concentration in Texas, which made up 43% of fiscal 2021 revenue.
Finally, the rating reflects industry cost pressures, including
land, labor and materials that could negatively impact gross
margin, as well as the cyclical nature of the homebuilding industry
that could lead to protracted revenue declines.
Ashton Woods' proposed and existing senior notes are unsecured and
have the same priority of claim as Ashton Woods' unsecured
revolving credit facility. The B1 ratings assigned to the senior
unsecured notes, at the same level with the CFR, reflects that this
class of debt represents the preponderance of debt in the capital
structure.
Headquartered in Atlanta, Georgia and established in 1989, Ashton
Woods USA, LLC constructs single-family detached and attached homes
in Texas, Arizona, North Carolina, South Carolina, Georgia, and
Florida. The company is majority-owned by an affiliate of the Great
Gulf Group Limited of Canada.
ASP NAPA: S&P Assigns 'CCC+' Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned a new 'CCC+' issuer credit rating to
ASP NAPA Intermediate Holdings Inc. At the same time, S&P withdrew
the 'CCC' issuer credit rating on parent ASP NAPA Holdings LLC.
Effectively, S&P raised the issuer credit rating and moved it to a
different entity because of a change in the company's organization
structure. ASP NAPA Holdings LLC includes the anesthesia business
recently acquired from Mednax Inc. and is separate from ASP NAPA
Intermediate Holdings Inc.
S&P said, "We also raised our issue-level ratings on the company's
senior secured revolving facility and first-lien term loan to
'CCC+'. The recovery rating remains '3' (50%-70%, rounded estimate:
65%).
"We raised the issuer credit rating on NAPA Management Services
Corp. to 'CCC+' from 'CCC'. The outlook is stable."
Business levels have returned to normal. The company's business has
largely returned to normal from the pandemic. Patient volume is
slightly above levels from the same period in 2019 after declining
roughly 80% last spring when elective procedures were halted. In
addition, patient acuity is currently higher, contributing to
higher revenue per patient.
The company relies mostly on growth from new business although its
recently large increase in revenue is largely due to an accounting
consolidation, not from any acquisition or increase in growth rate.
Growth is mostly derived from new business contracts and
acquisitions. Its recently large growth in its revenue base in 2020
versus 2019 despite the pandemic slowdown was due to an accounting
change, and not an acquisition. In February 2020, North American
Partners in Anesthesia LLP amended its service agreement with NAPA
Management Services Corp., resulting in its consolidation into ASP
NAPA Intermediate Holdings LLC's financial statements. Previously,
ASP NAPA Intermediate recognized management fee income from this
subsidiary. The impact to adjusted EBITDA is minimal, but adverse
to margins because all the revenue and expenses associated with
that business are now recognized in the consolidated financial
statements as opposed to recognizing only management service
revenue.
The company has sufficient cash reserves to meet all cash outflows
in 2021, and all debt amortization requirements thru 2023. The
company built a large cash reserve of $36 million by the end of
2020 due to several measures including an equity infusion, benefits
from the CARE's Act including advanced Medicare payments, CARE's
Act grants, payroll tax deferrals, and working capital management
measures. S&P said, "We expect cash reserves in 2021 to decline
significantly from that level as the company repays a portion of
the advanced Medicare payments and payroll tax deferrals and
working capital returns to normal levels. Still, we expect the
combination of limited free cash flow and remaining cash reserves
will be adequate to cover all debt amortization prior to the
maturities of its debt in 2023."
S&P said, "The company struggles to generate cash flow.ASP NAPA has
not generated any free cash flow since 2015. We define free cash
flow as cash flow from operations minus capital expenditures. We do
expect some improvement in cash flow due to its increase in scale
and due to the benefits of the consolidation of North American
Partners in Anesthesia, but we believe free cash flow will remain
low.
"We believe there is significant refinancing risk in 2023 that
could lead to a defaultAll the company's debt matures in two years.
Its revolver expires in 2022, first-lien term loan matures in April
2023, and its second-lien facility in October 2023. Given high
leverage in excess of 7x, low organic growth, and the inability to
generate significant free cash flow, we are not certain the company
will be able to support the same debt level, suggesting a potential
for a distressed transaction or a default.
"The stable outlook on ASP NAPA Intermediate reflects that the
company can meet all its obligations, and has the liquidity to meet
its amortization requirements until its debt matures in 2023.
"We could lower our rating on ASP NAPA Intermediate if we believe
the company's performance is below our base case within the next 12
months with persistent cash flow deficits. Should this occur, we
would view the risk of a default or distressed exchange as elevated
given the approaching debt maturities.
"We could raise the rating if the company exceeds our base case
scenario, particularly on cash flow, and has a plan to address the
approaching debt maturities. We believe this would reduce the
likelihood for a distressed transaction or a default."
ASSUREDPARTNERS INC: Moody's Affirms B3 CFR, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating and B3-PD probability of default rating of AssuredPartners,
Inc following the company's announcement that it plans to issue a
new $500 million senior secured term loan due in February 2027,
which Moody's has rated B2. The rating agency also downgraded
AssuredPartners' existing senior secured credit facilities to B2
from B1 based on the change in the funding mix, and affirmed its
senior unsecured notes at Caa2. The company will use net proceeds
from the incremental borrowing to fund acquisitions, pay down its
revolver, and pay related fees and expenses. The rating outlook for
AssuredPartners is stable.
RATINGS RATIONALE
According to Moody's, AssuredPartners' ratings reflect its growing
presence in middle market insurance brokerage, its good mix of
business across property & casualty insurance and employee
benefits, and its healthy EBITDA margins. The company generated
mid-single digit organic growth through the first nine months of
2021 with steady EBITDA margins. AssuredPartners acquired over 50
agencies during 2021, and allows acquired brokers to operate fairly
autonomously under local and regional brands, while the group
centralizes accounting and control functions and certain carrier
relationships. Credit challenges for the group include aggressive
financial leverage, execution risk associated with acquisitions,
and significant cash outflows to pay contingent earnout
liabilities. AssuredPartners also faces potential liabilities from
errors and omissions in the delivery of professional services.
Moody's estimates that AssuredPartners' pro forma debt-to-EBITDA
ratio will be around 7.5x after giving effect to the proposed
incremental borrowing. Pro forma (EBITDA - capex) interest coverage
will be over 2x, and the free-cash-flow-to-debt ratio will be in
the low-to-mid-single digits. These pro forma metrics include
Moody's adjustments for operating leases, deferred earnout
obligations, run-rate earnings from completed and assumed
acquisitions and certain non-recurring costs.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade of AssuredPartners' ratings
include: (i) debt-to-EBITDA ratio below 6x, (ii) (EBITDA - capex)
coverage of interest exceeding 2x, and (iii) free-cash-flow-to-debt
ratio exceeding 5%.
Factors that could lead to a rating downgrade include: (i)
debt-to-EBITDA ratio above 7.5x, (ii) (EBITDA - capex) coverage of
interest below 1.2x, or (iii) free-cash-flow-to-debt ratio below
2%.
Moody's has affirmed the following ratings:
Corporate family rating at B3;
Probability of default rating at B3-PD;
$500 million senior unsecured notes maturing in August 2025 at Caa2
(LGD5);
$475 million senior unsecured notes maturing in May 2027 at Caa2
(LGD5);
$550 million senior unsecured notes maturing in January 2029 at
Caa2 (LGD5).
Moody's has downgraded the following ratings:
$414.5 million senior secured revolving credit facility maturing in
February 2025 to B2 (LGD3) from B1 (LGD3);
$847.8 million ($843.6 million outstanding) senior secured
first-lien term loan maturing in February 2027 to B2 (LGD3) from
B1(LGD3);
$2.122 billion ($2.080 billion outstanding) senior secured
first-lien term loan maturing in February 2027 to B2 (LGD3) from B1
(LGD3);
$250 million ($245.2 million outstanding) senior secured first-lien
delayed draw term loan maturing in October 2024 to B2 (LGD3) from
B1 (LGD3).
Moody's has assigned the following new rating:
$500 million senior secured term loan B maturing in February 2027
at B2 (LGD3).
The rating outlook for AssuredPartners, Inc is stable.
The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in June 2018.
Based in Lake Mary, Florida, AssuredPartners ranks among the 15
largest US insurance brokers. The company generated revenue of $1.4
billion during the first nine months of 2021.
ATHLETICO HOLDINGS: Moody's Rates 1st Lien Loan Facilities 'B2'
---------------------------------------------------------------
Moody's Investors Service affirmed Athletico Holdings, LLC.'s B2
Corporate Family Rating and B2-PD Probability of Default Rating. At
the same time, Moody's assigned B2 ratings on Athletico's new
proposed senior secured first lien credit facilities at a
subsidiary level. There are no changes to the other ratings
including the B1 senior secured first lien revolving credit
facility and senior secured first lien term loan, as the existing
facilities will be withdrawn upon close of the transaction. The
outlook remains stable.
The rating action follows the announced acquisition of Pivot Health
Solutions ("Pivot") for $550 million. Pivot has over 250 physical
therapy clinics throughout the Eastern United States including 12
occupational health locations in Maryland and Delaware and over 150
onsite corporate health clinics. The acquisition will be funded
with a $875 million first lien senior secured term loan, and $220
million of new sponsor equity.
The affirmation of the B2 CFR reflects the company's very good
liquidity but moderately high financial leverage. Athletico's pro
forma adjusted debt/EBITDA will be approximately 6.5x for the
twelve months ended December 31, 2021. Moody's forecasts leverage
will remain elevated in 2022 given labor pressures, but should
improve below 6.0x by the end of 2023. The acquisition of Pivot
will add scale and improve diversification, with concentration in
Illinois dropping from 64% to 44% on a pro forma basis. That said,
there is integration risk as Pivot is a large acquisition for
Athletico, and Athletico continues to operate amidst a potentially
weaker operational environment given labor pressures and the
ongoing coronavirus headwinds.
In its stable outlook, Moody's expects leverage improvement given
the combined entity's strong earnings outlook and ability to
achieve synergies. At the same time, Moody's anticipates that
Athletico will generate positive free cash flow and will prioritize
its future cash flow toward its growth strategy while maintaining
profitability.
Affirmations:
Issuer: Athletico Holdings, LLC.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Assignments:
Issuer: Athletico Management, LLC (co-borrower Accelerated Health
Systems, LLC)
Gtd Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
Gtd Senior Secured 1st lien Revolving Credit Facility, Assigned B2
(LGD3)
Outlook Actions:
Issuer: Athletico Holdings, LLC.
Outlook, Remains Stable
Issuer: Athletico Management, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Athletico's B2 Corporate Family Rating reflects its high financial
leverage and geographic concentration in the mid-western region of
the US. Athletico's pro forma adjusted debt/EBITDA will be
approximately 6.5x for the twelve months ended December 31, 2021.
Moody's forecasts leverage will remain elevated in 2022 given labor
pressures but should improve below 6.0x by the end of 2023. The
rating also reflects the relatively low barriers to entry in the
physical therapy business and the risk of market oversaturation
given the rapid expansion of Athletico and many of its competitors.
The rating also incorporates risks associated with the company's
rapid expansion strategy as it grows, both organically and through
acquisitions. The rating is supported by Athletico's track record
of growth and solid free cash flow given low capital expenditure
needs. Additionally, Athletico has some ability to conserve
liquidity by reducing new clinic openings. Moody's expects that
demand for physical therapy will continue to grow given its
relatively low-cost and as a prevention to more expensive
treatments.
Moody's considers Athletico to have very good liquidity, supported
by the company's expected $35 million of cash pro forma for the
transaction and full availability on the $100 million revolver. The
company generates positive free cash flow and has been able to
conserve liquidity by reducing new office openings and growth
capital expenditures. Moody's anticipates that Athletico will
generate about $25 million in free cash flow in 2022, given the
remaining headwinds for labor and the coronavirus.
The B2 ratings of the Senior Secured 1st Lien credit facilities
reflect the fact that the first lien credit facilities comprise a
preponderance of debt in the capital structure with the elimination
of the subordinated debt as part of the refinancing.
The stable rating outlook reflects the company's solid track record
of business execution, which should result in leverage improvement
and free cash flow generation.
Moody's considers coronavirus to be a social risk given the risk to
human health and safety. Aside from coronavirus, Athletico faces
other social risks such as the rising concerns around the access
and affordability of healthcare services. However, Moody's does not
consider the physical therapy providers to face the same level of
social risk as many other healthcare providers. Further, Athletico
benefits from positive social considerations, as physical therapy
can be a less expensive and a safer alternative to surgery or
opioid usage. From a governance perspective, Moody's expects
Athletico's financial policies to remain aggressive due to its
private equity ownership.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental debt capacity up to the greater of $175 million and
100% of Consolidated EBITDA, calculated on a pro forma basis, for
the most recently ended four fiscal quarter period of the Borrower
for which financial statements have been delivered, plus unused
capacity reallocated from the general debt basket, plus unlimited
amounts subject to the maximum First Lien Net Leverage on the
closing date if pari passu secured. Amounts incurred in connection
with a permitted acquisition or investment, amounts incurred using
the incremental starter capacity or reallocated general debt basket
capacity, and any additional amounts up to the greater of $175
million and 100% of Consolidated EBITDA may be incurred with an
earlier maturity date than the initial term loans.
The credit agreement permits the transfer of assets to unrestricted
subsidiaries, up to the carve-out capacities, subject to "blocker"
provisions which prohibit the transfer of intellectual property
that is material to the borrower and subsidiaries, taken as a
whole, to unrestricted subsidiaries other than the transfer of
licenses for legitimate business purposes to effect a bona fide
joint venture with an unaffiliated third party. Non-wholly-owned
subsidiaries are not required to provide guarantees; dividends or
transfers resulting in partial ownership of subsidiary guarantors
could jeopardize guarantees, subject to certain protections in the
credit agreement.
The proposed terms and the final terms of the credit agreement may
be materially different.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if the company's liquidity weakens or
if adjusted debt/EBITDA will remain above 6.0x for a sustained
period of time. Additionally, if the company fails to effectively
manage its rapid growth or the company pursues more aggressive
financial policies, the ratings could be downgraded.
Ratings could be upgraded if Athletico materially increases its
size and scale and demonstrates stable organic growth at the same
time it effectively executes on its expansion strategy.
Additionally, adjusted debt/EBITDA sustained below 4.5 times could
support an upgrade.
Athletico Holdings, LLC., headquartered in Oak Brook, IL, is a
provider of outpatient rehabilitation services - primarily physical
therapy. Through its subsidiaries, it operates about 629 clinics in
18 states, with a strong presence in the mid-western US. Revenues
are approximately $474 million as of September 30, 2021. Athletico
is owned by BDT Capital Partners, LLC.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
AUTOCANADA INC: S&P Rates New C$300MM Senior Unsecured Notes 'B+'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '4'
recovery rating to AutoCanada Inc.'s proposed C$300 million senior
unsecured notes due 2029. The '4' recovery rating on the notes
indicates its expectation for average (30%-50%; rounded estimate:
40%) recovery in the event of default.
The company will use the proceeds primarily to refinance its 8.75%
C$250 million unsecured notes due February 2025 and the balance to
reduce the outstanding balance under its credit facility. The
proposed notes will rank pari passu with AutoCanada's existing and
future senior debt.
S&P said, "Our 'B+' long-term issuer credit rating and stable
outlook on AutoCanada are unchanged. We expect AutoCanada will
sustain lease-adjusted debt to EBITDA in the low-3x area in 2022
and 2023, which provides ample cushion at the current rating. We
also estimate the company will continue to generate meaningful free
operating cash flows (FOCF) and maintain FOCF to debt above 10%
during this period. Our estimated credit measures are strong for
the rating but incorporate the potential volatility associated with
future vehicle demand and prices, and higher-than-expected
debt-financed acquisitions."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'B+' issue-level rating and '4' recovery
rating to AutoCanada's proposed C$300 million unsecured notes due
2029.
-- S&P's '4' recovery rating indicates its expectation for average
(30%-50%; rounded estimate: 40%) recovery in its hypothetical
default scenario.
-- S&P's simulated default scenario contemplates a default in
2025, caused by a sustained economic downturn that suppresses
demand for new and used vehicles, resulting in AutoCanada's
inability to meet financial commitments.
-- S&P's enterprise value is derived from an estimate of the
company's new and used vehicle inventory (based on realization
rates ranging from 90%-95% of the most recently reported book
values), in tandem with an estimate of its post-default emergence
EBITDA proxy.
-- In S&P's default scenario, it estimates that AutoCanada's
floorplan financing is secured by the underlying estimated value of
the company's vehicle inventory (uncovered amounts are treated as
unsecured claims).
-- S&P estimates that the company's C$225 million revolving credit
facility will be 60% drawn and is fully covered, with the remaining
value available to unsecured creditors, including AutoCanada
noteholders.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: C$80 million
-- Multiple: 5x (excludes vehicle inventory)
-- Gross enterprise value excluding vehicle inventory: C$398
million
-- Discounted vehicle inventory value: C$448 million
-- Gross enterprise value: C$846 million
Simplified waterfall
-- Net recovery value after administrative expenses (5%): C$803
million
-- Value secured by floorplan facility claims: C$426 million
-- Floorplan facility claims: C$591 million
-- Value available to other secured claims: C$378 million
-- Senior secured claims: C$175 million
-- Value available to unsecured/unrecovered claims: C$203 million
-- Senior unsecured notes/pari passu unrecovered claims: C$309
million/C$166 million
--Recovery expectations: 30%-50% (rounded estimate: 40%)
-- All debt amounts include six months of prepetition interest;
claims and debt amounts are rounded.
AVINGER INC: Closes $7.6 Million Registered Direct Offering
-----------------------------------------------------------
Avinger, Inc. has closed its previously announced registered direct
offering of an aggregate of 7,600 shares of Series D convertible
preferred stock and warrants to purchase up to an aggregate of
16,150,000 shares of common stock to certain institutional
investors for gross proceeds of $7.6 million. The shares of
Preferred Stock have a stated value of $1,000 per share and are
convertible into an aggregate of 19,000,000 shares of common stock
at a conversion price of $0.40 per share. The Preferred Stock will
not be convertible until after the effective date of an amendment
to the Amended and Restated Certificate of Incorporation of the
Company to effect a reverse stock split at a ratio between and
including 1-for-5 and 1-for-20. The warrants have an exercise
price of $0.48 per share, and will become exercisable on the later
of (i) the effective date the Reverse Split Amendment and (ii) six
months following the date of issuance. The warrants will expire
five years following such initial exercise date.
H.C. Wainwright & Co. acted as the exclusive placement agent for
the offering.
The Company currently intends to use the net proceeds from the
offering for general corporate and working capital purposes.
The Company expects to call a special meeting of stockholders for
the approval of the Reverse Split Amendment. The Preferred Stock
has voting rights, with the common stock as a single class, equal
to 750,000 votes per share of Preferred Stock on the proposal,
provided that, in accordance with Nasdaq listing rules, any votes
cast by the Preferred Stock with respect to the proposal to effect
a reverse split of the common stock must be counted by the Company
in the same proportion as the aggregate shares of common stock
voted on such proposal.
The securities described were offered by Avinger, Inc. pursuant to
a "shelf" registration statement on Form S-3 (File No. 333-230124),
including the accompanying prospectus contained therein, initially
filed with the Securities and Exchange Commission (SEC) on March 7,
2019 and became effective on March 29, 2019. The offering was made
by means of a prospectus, forming a part of the effective
registration statement. The final prospectus supplement and the
accompanying prospectus relating to and describing the terms of the
offering were filed with the SEC on Jan. 13, 2022. Electronic
copies of the final prospectus supplement and the accompanying
prospectus relating to this offering may be obtained on the SEC's
website at http://www.sec.govor by contacting H.C. Wainwright &
Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by
phone at (212) 856-5711 or e-mail at placements@hcwco.com.
About Avinger
Headquartered in Redwood City, California, Avinger --
http://www.avinger.com-- is a commercial-stage medical device
company that designs and develops image-guided, catheter-based
system for the diagnosis and treatment of patients with Peripheral
Artery Disease (PAD).
Avinger reported a net loss applicable to common stockholders of
$22.87 million for the year ended Dec. 31, 2020, a net loss
applicable to common stockholders of $23.03 million for the year
ended Dec. 31, 2019, and a net loss applicable to common
stockholders of $35.69 million for the year ended Dec. 31, 2018.
As of Sept. 30, 2021, the Company had $33.74 million in total
assets, $22.17 million in total liabilities, and $11.57 million in
total stockholders' equity.
B D A AND K: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: B D A and K LLC
140 Atlantic City Boulevard
Berkeley Township, NJ 08721
Business Description: B D A and K LLC is a privately held company
in the liquor store business.
Chapter 11 Petition Date: January 21, 2022
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 22-10500
Debtor's Counsel: Donald F. Campbell, Jr., Esq.
GIORDANO, HALLERAN & CIESLA, P.C.
125 Half Mile Road Suite 300
Redbank, NJ 07701-6777
Tel: (732) 741-3900
Fax: (732) 224-6599
Email: dcampbell@ghclaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by William Muirhead, sole member.
The Debtor did not file together with the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/5KKP7NY/B_D_A_and_K_LLC__njbke-22-10500__0001.0.pdf?mcid=tGE4TAMA
BAKELITE US: Moody's Assigns B1 CFR & Rates $485MM Term Loan B1
---------------------------------------------------------------
Moody's Investors Service assigns a B1 Corporate Family Rating and
B1-PD probability of default rating to Bakelite US Holdco, Inc.
("Bakelite"). Moody's also assigns a B1 rating to the company's
proposed $485 million seven-year senior secured term loan B.
Proceeds from the financing will be used to fund the $425 million
acquisition of Georgia Pacific (GP) Chemicals business, refinance
existing indebtedness at Bakelite UK Holding LTD and pay related
transaction fees and expenses. The outlook on the ratings is
stable.
The ratings at Bakelite UK Holding LTD will be withdrawn once this
transaction closes and the debt is repaid.
"The acquisition of GP Chemicals roughly doubles Bakelite's
revenues and EBITDA but is virtually leverage neutral and is
complimentary to Bakelite's existing platforms in the US and Europe
and a good fit with Bakelite's leading formaldehyde-based phenolic
resin business. The combined business generated pro forma TTM
September 2021 revenue and adjusted EBITDA of $1.3 billion and $149
million (-11.6% margin), respectively, with pro forma total net
leverage of 3.2x," according to Joseph Princiotta, SVP and senior
analyst at Moody's. "GP Chemicals is a leading producer of
formaldehyde-based thermosetting resins and formaldehyde solutions
primarily serving the North American market with a focus on wood
and industrial resins segments," Princiotta added.
Assignments:
Issuer: Bakelite US HoldCo, Inc.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
Gtd Senior Secured Term Loan B, Assigned B1 (LGD3)
Outlook Action:
Issuer: Bakelite US HoldCo, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
Key strengths in Bakelite's credit profile include leading market
shares in phenolic specialty resins in Europe and the US with
globally recognized brands sold into diverse end markets, including
building products, industrial products, transportation, and
chemical intermediates; both management and sponsors have extensive
experience in these markets. The credit profile is strengthened by
the addition of GP's wood resins business with strong market
positions in the Americas. Customer stickiness, facilitated by
location and proximity to customers, the heavy water content of
products, and short shelf life are also positive factors in the
credit profile.
Initially low balance sheet leverage, particularly for a private
equity transaction, reflects a relatively conservative approach to
acquisition financing, while first lien net leverage incremental
covenants provide a mitigant to M&A risk or future leveraging
events that might impair the financial profile. Margins are modest,
but margin stability and free cash flow are supported by
pass-through features in margin-over-material (MOM) contracts that
support margin stability on roughly 40% and 60% of revenues in the
Americas and Europe, respectively. Free cash flow is also supported
by the high variable cost component relative to fixed costs and low
capital intensity of the business.
Negative factors or risks in the credit profile include the modest
scale in the business with about $1.3 billion in LTM revenues and
modest pro forma EBITDA margins at about 11.6%, although in-process
operational projects including automation and cost reduction
actions will provide margin support and upside potential to
margins. Other risks in the business profile include significant
exposure to more cyclical construction and auto end markets, and
some customer and supplier concentration with the top 10 customers
on a pro forma basis accounting for roughly 32% of sales. The top
five suppliers provide nearly 50% of raw materials for Bakelite and
82% for GP Chemicals.
Lastly, as a private equity-owned firm focused on EBITDA growth,
M&A risk overtime is relevant to the credit profile. However, this
risk is mitigated by the initial low pro forma net leverage of 3.2x
and sponsor track record of not using excessive leverage in
transactions or portfolio companies. The GP transaction is financed
with $138 million in new cash equity plus $338 million Bakelite
rolled equity, indicating a more conservative approach than the
typical private equity transaction.
ESG CONSIDERATIONS
Moody's has also evaluated environmental, social and governance
factors in the rating consideration. As a specialty chemicals
company, environmental risks are categorized as moderate. However,
the chemical properties of several key raw materials, including
methanol, ammonia and phenol, and the company's phenolic resins,
amino resins and formaldehyde chemical chain of products, could
result in future product or environmental liability claims for
improperly handling, processing, storage, transportation or
disposal. Bakelite does not currently have any substantial
litigation or remediation costs related to environmental issues. At
December 31, 2019, Bakelite had $1 million of undiscounted
liabilities recorded for probable environmental remediation,
indemnification or restoration costs.
Governance risks are inherently higher due to private equity
ownership and a board of directors with majority representation by
members affiliated with the sponsors and reduced financial
disclosure requirements as a private company. Bakelite has moderate
financial leverage initially, but the absence of maintenance
financial covenants could allow funding of future acquisitions or
for other corporate uses with new debt.
LIQUIDITY
Moody's expects Bakelite to have good liquidity supported by the
projected positive free cash flow and a committed new $100 million
revolving credit facility, availability under, which is expected to
be subject to a leverage incurrence test. There are no financial
covenants under the term loan facility as it is a covenant lite
loan with limited restrictions to the borrower. Bakelite does not
have any debt maturities until 2029.
The stable outlook anticipates further recovery and a favorable
trend in EBITDA resulting from recovery in key construction,
industrial and auto end markets, and from cost reduction and
operating initiatives. The stable outlook assumes liquidity remains
adequate and that Net Leverage might increase but is contained by
covenants despite occasional acquisitions and other growth
initiatives.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would be unlikely to consider an upgrade given the private
equity ownership. However, an upgrade could be considered if
results materially improve, and balance sheet leverage is
conservatively managed. Moody's would consider a downgrade if
operations and margins were to deteriorate, if adjusted gross
leverage is sustained above 4.5x, or if liquidity becomes an
issue.
Headquartered in Louisville, KY, Bakelite is a global producer of
phenolic specialty resins and engineered thermoset molding
compounds that was previously a division of Hexion, Inc., a global
diversified chemical company. The company has operational
concentration in Europe but also operates out of North America.
Bakelite generated approximately $496 million of revenues in 2020
and operates through four segments: Building Materials, Industrial
Applications, Transportation, and Chemical Intermediaries &
Specialties.
The principal methodology used in these ratings was Chemicanl
Industry published in March 2019.
BHCOSMETICS HOLDINGS: Jan. 27 Hearing on Bid Procedures for Assets
------------------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware shortened the time for notice of BHCosmetics
Holdings, LLC, and affiliates' proposed bidding procedures in
connection with the sale of de minimis assets.
Approval of the Bidding Procedures Motion and the De Minimis Asset
Sale Motion will be considered on Jan. 27, 2022, at 1:00 p.m. (ET),
and any objection to the relief provided for in such motions will
be filed and served by Jan. 24, 2022, at 4:00 p.m. (ET).
The Debtors will serve a copy of the Order on the Service Parties
within one business day of the entry of the Order.
About BH Cosmetics
Originally launched in 2009, BH Cosmetics is a beauty brand
specializing in high quality, clean, vegan, and cruelty-free
cosmetics and other beauty products. BH Cosmetics sells its
products on its Shopify e-commerce platform directly to consumers
and wholesale to various global retailers.
On Jan. 14, 2022, BHCosmetics Holdings, LLC and three of its
affiliates filed petitions seeking relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10050), to pursue
a sale of the assets.
BHCosmetics Holdings estimated assets and debt of $50 million to
$100 million as of the bankruptcy filing.
The Debtors tapped YOUNG CONAWAY STARGATT & TAYLOR, LLP, as
bankruptcy counsel; and RIVERON MANAGEMENT SERVICES, LLC, as
financial advisor. TRAVERSE LLC provides the controller and other
accounting personnel. SB360 CAPITAL PARTNERS LLC and HILCO IP
SERVICES, LLC are the sale and liquidation agents. EPIQ CORPORATE
RESTRUCTURING, LLC, is the claims agent.
BLACKROCK INTERNATIONAL: Seeks to Hire Keating Firm as Counsel
--------------------------------------------------------------
Blackrock International, Inc. seeks approval from the U.S.
Bankruptcy Court for the Western District of Louisiana to hire The
Keating Firm, APLC to serve as legal counsel in its Chapter 11
case.
The firm's services include:
a. providing the Debtor with legal advice with respect to its
power and duties under the Bankruptcy Code;
c. preparing legal papers;
d. preparing and filing bankruptcy schedules, statements of
affairs and other documents that may be required;
e. representing the Debtor at hearings and other proceedings;
f. representing the Debtor at the initial interview and
meeting of creditors;
g. preparing and filing disclosure statement and Chapter 11
plan, and representing the Debtor at confirmation hearings;
h. performing all other legal services.
The hourly rates charged by the firm's attorneys and staff are as
follows:
David Patrick Keating $250 per hour
Paralegal and Law Clerks $75 per hour
David Patrick Keating, Esq., a partner at Keating Firm, disclosed
in court filings that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
Keating Firm can be reached at:
David Patrick Keating, Esq.
The Keating Firm, APLC
P.O. Box 3426
Lafayette, LA 70502
Tel: (337)594-8200
Email: rickkeating@charter.net
About Blackrock International
Blackrock International, Inc., is a single asset real estate debtor
(as defined in 11 U.S.C. Section 101(51B)). The company is based
in New Orleans, La.
Blackrock International filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No.
22-50015) on Jan. 11, 2022, listing as much as $500,000 in both
assets and liabilities. Helen Jean Williams, authorized
representative, signed the petition.
Judge John W. Kolwe oversees the case.
D. Patrick Keating, Esq. at The Keating Firm, APLC serves as the
Debtor's legal counsel.
BOYCE HYDRO: Trustee's $165K Sale of Gladwin Property Approved
--------------------------------------------------------------
Judge Daniel S. Opperman of the U.S. Bankruptcy Court for the
Eastern District of Michigan authorized the sale proposed by Scott
Wolfson, the liquidating trustee appointed in the Chapter 11 cases
of Boyce Hydro, LLC, and Boyce Hydro Power, LLC, of the real
property commonly known as 755 Wolverine Drive, in Gladwin,
Michigan 48624, to Four Lakes Task Force for $165,000.
The property is a house consisting of three bedrooms and one
bathroom. Geographically, the property is located on Smallwood
Lake, adjacent to a former Boyce dam location.
A telephonic hearing on the Motion was held on Jan. 20, 2022, at
11:00 a.m.
The Liquidating Trustee is authorized to deliver, implement, and
fully perform any and all obligations under the Purchase Agreement
and to close the sale of property.
The sale to Four Lakes Task Force will be free and clear of all
liens, claims, and encumbrances, with all liens, claims, and
encumbrances attaching to the proceeds of sale.
The Liquidating Trustee is authorized to pay reasonable and
necessary escrow and closing costs to effectuate the sale.
He is authorized to compensate Vanas a sales commission of 6% of
the sales price, $9,900, at closing.
The Order is deemed to be in recordable form sufficient to be
placed in the filing or recording system of each and every federal,
state or local government agency, department or office.
To the extent applicable, the 14-day stay of Fed. R. Bankr. P.
6004(h) is waived.
About Boyce Hydro
Boyce Hydro, LLC and Boyce Hydro Power, LLC, Michigan-based
providers of electrical power services, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Lead Case No.
20-21214) on July 31, 2020. At the time of the filing, the
Debtors
each disclosed up to $50 million in assets and up to $10 million
in
liabilities.
Judge Daniel S. Oppermanbaycity oversees the cases.
Goldstein & McClintock LLP, led by Matthew E. McClintock, Esq., is
the Debtors' legal counsel.
On Feb. 25, 2021, the court entered a nonconsensual order, which
confirmed the Debtors' joint consolidated Chapter 11 plan of
liquidation, and approved the establishment of the Boyce Hydro
liquidating trust and Scott A. Wolfson's appointment as
liquidating
trustee. The plan was declared effective on March 3, 2021.
The liquidating trustee tapped Wolfson Bolton PLLC as bankruptcy
counsel, Honigman LLP and Steinhardt Pesick & Cohen P.C. as
special
counsel, and Plante & Moran, PLLC as accountant. Stretto is the
claims agent.
BUILDERS FIRSTSOURCE: Moody's Hikes CFR & Secured Notes to Ba1
--------------------------------------------------------------
Moody's Investors Service upgraded Builders FirstSource, Inc.'s
(BLDR) Corporate Family Rating to Ba1 from Ba2 and Probability of
Default Rating to Ba1-PD from Ba2-PD. Moody's also upgraded the
ratings on BLDR's secured notes due 2027 to Ba1 from Ba2 and both
senior unsecured notes to Ba2 from Ba3. BLDR is issuing an
additional $300 million to its senior unsecured notes due 2032.
Proceeds from the add-on will be used to term out a similar amount
of borrowings used for general corporate purposes including recent
acquisitions under BLDR's asset based revolving credit facility.
The company's speculative grade liquidity rating is maintained at
SGL-1. The outlook is changed to stable from positive.
The upgrade of BLDR's CFR to Ba1 from Ba2 reflects Moody's
expectation that BLDR will continue to perform well, generating
solid operating margin and cash flow. Moody's forecasts good
operating performance, with EBITDA margin sustained above 12%
through 2023. High profitability should translate into low
leverage, remaining below 2x through 2023 and free cash
flow-to-debt in excess of 25% over the next two years. BLDR's
ability to generate robust free cash flow also supports the
upgrade.
The change in rating outlook to stable from positive reflects
Moody's expectation that BLDR will continue to benefit from ongoing
demand in the US residential construction market, the main driver
of BLDR's revenue. A very good liquidity profile and conservative
financial policies further support the stable outlook.
"Builders FirstSource has come a long way over the past eight years
when we rated the company Caa1," said Peter Doyle, Vice President
at Moody's. "Market leadership, national footprint, record margins,
low leverage and more conservative financial policies support
Builder's rating upgrade, the highest rating ever," added Doyle.
The following ratings are affected by the action:
Upgrades:
Issuer: Builders FirstSource, Inc.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Senior Secured Regular Bond/Debenture, Upgraded to Ba1 (LGD3) from
Ba2 (LGD3)
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2 (LGD5)
from Ba3 (LGD5)
Outlook Actions:
Issuer: Builders FirstSource, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
BLDR's Ba1 CFR reflects Moody's expectation that BLDR will maintain
very good liquidity and that the company will benefit from end
market dynamics that support growth. Moody's projects 1.63 million
new housing starts in 2022, a 6% increase from Moody's forecast of
1.54 million in 2021. Also, it appears that BLDR is successfully
merging with BMC Stock Holdings, Inc. (BMC), which combined with
BLDR in January 2021, and is contributing to BLDR's success.
Although Moody's expect good growth prospects over the next two
years, new home construction is very volatile and is the greatest
challenge facing BLDR. This volatility dictates that BLDR maintain
a low amount of debt in its capital structure to contend with the
inevitable downturn in new home construction. Also, the company is
enhancing shareholder returns through share repurchases. This is
capital that could otherwise be deployed towards enhancing
liquidity for acquisitions, future working capital needs or for
debt reduction. BLDR will also continue to pursue bolt-on
acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade would be predicated on sustaining debt-to-EBITDA below
2.0x and EBITDA margin maintained above 15%. An upgrade would also
require preservation of the company's very good liquidity profile,
a capital structure that ensures maximum financial flexibility and
continuing conservative financial policies.
A downgrade could occur should BLDR adopt an aggressive financial
strategy, particularly with respect to share repurchases and
acquisitions, or experience a weakening of liquidity. Negative
rating pressure would also likely result from debt-to-EBITDA
sustained above 3.0x.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Builders FirstSource, Inc., headquartered in Dallas, Texas, is the
largest national distributor of lumber, trusses, millwork, and
other building products and a provider of construction services.
CALIFORNIA-NEVADA METHODIST: Auction of All Assets Set for Feb. 2
-----------------------------------------------------------------
Judge Charles Novack of U.S. Bankruptcy Court for the Northern
District of California authorized California-Nevada Methodist
Homes' bidding procedures in connection with the auction sale of
substantially all assets to Pacifica Companies, LLC, for $30
million, cash, subject to overbid.
Pacifica is approved as the Stalking Horse Bidder under the Bidding
Procedures, pursuant to the terms set forth in the Stalking Horse
Agreement attached to the Bidding Procedures.
The Single Facility Break-up Fee and Break-up Fee are approved and
may only be paid upon Closing from the proceeds of the pertinent
Sale.
The Assumption and Assignment Procedures are authorized for use.
The Debtor will file and serve a motion seeking authority to sell
substantially all of its Assets, including without limitation
pursuant to Sections 363 and 365 of the Bankruptcy Code and
consistent with the relief granted on Jan. 14, 2022 ("Sale
Motion").
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Jan. 31, 2022, at 6:00 p.m. (PT)
b. Initial Bid: Each Overbid must offer to the Debtor
aggregate value in an amount as determined by the Debtor, in its
reasonable business judgment formulated in consultation with the
Consultation Parties, that is greater than or equal to the sum of
(i) the value offered under the Stalking Horse Agreement, plus (ii)
cash (or, in the case of the Stalking Horse Bidder, a credit-bid)
in the amount of $500,000 for each Facility sought to be acquired,
plus (iii) cash in the amount of at least $250,000 ("Minimum
Initial Overbid Amount"), regardless of whether the Overbid is for
one or both of the Facilities.
c. Deposit: $500,000
d. Auction: If no Qualified Bids (other than the Stalking
Horse Bid) are received by the Bid Deadline, the Auction will not
be held and the Debtor will file a notice with the Court indicating
that no Auction will be held within one business day after the Bid
Deadline. If the Debtor receives one or more Qualified Bids (in
addition to the Stalking Horse Bid) by the Bid Deadline, the Debtor
will conduct the Auction on Feb. 2, 2022, at 9:00 a.m. (PT) by Zoom
or similar virtual process.
e. Bid Increments: $250,000
f. Sale Hearing: Feb. 4, 2022, at 11:00 a.m. (PT)
g. Sale Objection Deadline: Jan. 27, 2022, at 5:00 p.m. (PT)
h. Pre-Auction Objections Deadline: Jan. 27, 2022, at 5:00
p.m. (PT). Replies to the Pre-Auction Objections may be filed by
Feb. 1, 2022.
i. Credit Bid: If any Overbids are submitted, Pacifica may
credit-bid $1 million of the Break-Up Fee if it submits a
subsequent Overbid on both Facilities. If Pacifica opts to overbid
on only one of the Facilities, it may credit-bid $500,000 and will
waive the $500,000 remaining of the Break-Up Fee.
The Debtor will cause notice of the Sale Hearing and the deadlines
for Pre-Auction Objections and Excluded Objections to be served on:
(a) all creditors of the Debtors listed on the Debtor's Schedules
of Assets and Liabilities, as amended; (b) all parties which have
filed proofs of claim in the case; (c) all parties requesting
notice in this case pursuant to Fed. R. Bankr. Pro. 2002; (d) the
Notice Parties; (e) all current residents of the Debtor's
Facilities; (f) parties asserting liens and encumbrances in any of
the Assets; and (g) all parties that signed a non-disclosure or
similar agreement with the Debtor at any time on or after the date
of the commencement of the case in connection with the possible
sale of Assets, all on Jan. 14, 2022.
A hearing on the Motion was held on Jan. 10, 2022.
A copy of the Bidding Procedures and the Agreement is available at
https://tinyurl.com/2p94kcc6 from PacerMonitor.com free of charge.
About California Nevada Methodist Homes
California Nevada Methodist Homes is a senior living housing
operator.
California Nevada Methodist Homes sought Chapter 11 protection
(Bankr. N.D. Ca. Case No. 21- 40363) on March 16, 2021. In the
petition signed by CRO Steven A. Nerger, California Nevada
Methodist Homes estimated assets between $10 million and $50
million and estimated liabilities between $50 million and $100
million. The case is handled by Honorable Judge Charles Novack.
Hanson Bridgett LLP, led by Neal L. Wolf, is the Debtor's counsel.
CARL MILLER: Case Summary & 16 Unsecured Creditors
--------------------------------------------------
Debtor: Carl Miller Funeral Home, Inc.
831 Carl Miller Blvd
Camden, NJ 08104
Chapter 11 Petition Date: January 20, 2022
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 22-10479
Debtor's Counsel: Jenny R. Kasen, Esq.
KASEN & KASEN, P.C.
Society Hill Office Park
1874 E. Marlton Pike, Suite 3
Cherry Hill, NJ 08003
Tel: 856-424-4144
Fax: 856-424-7565
Email: jkasen@kasenlaw.com
Estimated Assets: $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Pamela M. Dabney, shareholder and
president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 16 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/3IT6YPA/Carl_Miller_Funeral_Home_Inc__njbke-22-10479__0001.0.pdf?mcid=tGE4TAMA
CE ELECTRICAL: Unsecureds to Get 5% in Reorganizing Plan
--------------------------------------------------------
Ce Electrical Contractors, LLC submitted a Third Amended Chapter 11
Plan (before Confirmation) and a corresponding Disclosure
Statement.
The Debtor is an electrical sub-contractor working on construction
projects in the State of Connecticut. Due to changes, the Debtor
has moved from large losses prepetition to smaller losses
post-petition and is moving into positive cash flow.
The Debtor's assets include the following as of Dec. 31, 2021:
* Monies: $31,176.
* Receivables: $608,571.
* The Debtor, through special counsel, commenced suit against O &
G Industries, Inc. made returnable to the Litchfield Judicial
District on November 2, 2021, Docket No. LLI-CV21-6029363-S,
demanding $207,988.25 for work performed at two jobs, plus the
value of equipment retained by the defendant. On January 3, 2022,
the Debtor obtained the entry of a default against the defendant
based on its failure to plead.
* Postpetition, the Debtor has taken steps to help ensure that
its receivables will be collected.
* Ongoing jobs with a remaining contract value between $900,000
and $1.2 million (depending on the value of certain change
orders).
* Machinery and equipment with an aggregate value of $366,825).
The Debtor no longer has four scissor lifts that are in Florida
with a value of $10,000 (purchase price $30,000 in the aggregate).
Some items have been disposed of when no longer properly
functioning or have reached the limits of their use. Estimated
value at date of confirmation $300,000.
The Plan is a reorganizing Plan. The Debtor intends to remain in
business and generate funds so that it can pay a dividend to
creditors. The Debtor does not intend to sell assets to fund the
Plan.
Under the Plan, class 9 consists of the Allowed Unsecured Claims of
the Debtor. The Schedules indicate that there are approximately
240 general unsecured creditors, more or less in this Class. The
Debtor estimates that the general unsecured Claims against the
Estate total approximately $9,706,959. When deficiency or
unsecured claims of De Lage Landen, Global Merchant, the U.S.
S.B.A. and Wellen Capital are included, general unsecured claims
rise to $10,378,565.
Unsecured claims will be paid 5% of the allowed amounts of their
claims over 68 months beginning in month 5 of the Plan. In year 1,
beginning in month 5, the monthly payment will be $2,400, the
monthly payment amount in year 2 will be $4,000, the monthly
payment amount in year 3 will be $5,999, the monthly payment amount
in year 4 will be $5,999, the monthly payment amount in year 5 will
be $10,479, and the monthly payment amount in year 6 will be
$17,198 with $640 added to the final payment in month 72. Total
payments to members of this class will be $543,942. If the Court
approves the proposed temporary injunction and Paul Calafiore
obtains the sole membership interest in the Debtor, then at month
36 he will contribute an additional $50,000 in new value monies to
the Debtor with the $50,000 to be distributed by the Debtor to
members of Class 9 in month 36. Class 9 is impaired.
Attorney for the Debtor:
Steven R. Fox
THE FOX LAW CORPORATION, INC.
17835 Ventura Blvd. Suite 306
Encino, CA 91316
Tel: (818) 774-3545
Fax: (818) 774-3707
E-mail: srfox@foxlaw.com
Jenna N. Sternberg
BOATMAN LAW LLC
155 Sycamore Street
Glastonbury, CT 06033
Tel: (860) 291-9061
Fax: (860) 291-9073
E-mail: jsternberg@boatmanlaw.com
A copy of the Disclosure Statement dated Jan. 19, 2021, is
available at https://bit.ly/3tM3qvW from PacerMonitor.com.
About CE Electrical Contractors
CE Electrical Contractors LLC filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No.
21-20211) on Mar. 5, 2021. Paul Calafiore, the managing member,
signed the petition. In the petition, the Debtor disclosed total
assets of $1,625,485 and total liabilities of $8,648,831.
Judge James J. Tancredi oversees the case.
The Debtor tapped The Fox Law Corporation, Inc. as lead bankruptcy
counsel and Boatman Law LLC as local bankruptcy counsel.
CGM & DAUGHTERS: Case Summary & Seven Unsecured Creditors
---------------------------------------------------------
Debtor: CGM & Daughters Corporation
27 Verona Avenue
Newark, NJ 07104
Chapter 11 Petition Date: January 20, 2022
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 22-10481
Debtor's Counsel: Adrian Johnson, Esq.
JOHNSON & ASSOCIATES AT LAW, PC
485C US Highway 1 S Ste 100
Iselin, NJ 08830
Tel: 848-229-2254
E-mail: ajohnson@johnsonlegalpc.com
Total Assets: $222,820
Total Liabilities: $1,042,204
The petition was signed by Christian Monne, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/FQOZZAQ/CGM__Daughters_Corporation__njbke-22-10481__0001.0.pdf?mcid=tGE4TAMA
CHESAPEAKE ENERGY: Nears Deal to Buy Chief Oil After Ch.11 Exit
---------------------------------------------------------------
Reuters reports that Chesapeake Energy Corp is in advanced talks to
acquire privately owned natural gas producer Chief Oil & Gas for
around $2.4 billion, including debt, people familiar with the
matter said on Wednesday, January 19. 2022.
A deal for Chief Oil & Gas, founded and controlled by Texan
'wildcatter' Trevor Rees-Jones, could be announced as soon as this
week, the sources said. In wildcat drilling, exploration wells are
dug in areas not known to be natural resource fields.
The acquisition by Chesapeake, a U.S. shale gas and oil producer
that only emerged from bankruptcy just last year, underscores the
recovery of parts of the energy industry as natural resource prices
surge to multi-year highs.
The sources, who spoke on condition of anonymity to discuss private
information, cautioned that negotiations could still fall apart at
the last moment.
A Chief Oil & Gas spokesperson declined to comment. Chesapeake did
not immediately respond to a request for comment.
Reuters reported in October that Chief Oil & Gas was up for sale,
amid the surge in energy prices that has boosted corporate
valuations in the industry.
If completed, it would be the second acquisition which Chesapeake
has made since February 2021, when it emerged from one of the
largest oil and gas producer bankruptcies of recent years. In
November, Chesapeake completed the purchase of Vine Energy for $615
million.
Since exiting Chapter 11 bankruptcy protection, Chesapeake has
focused on natural gas production, a return to its roots as a
company founded in 1989 by wildcatters Aubrey McClendon and Tom
Ward.
Rees-Jones launched Chief Oil & Gas in 1994. The company operates
in the Marcellus shale in northeastern Pennsylvania and has around
600,000 net acres, producing more than 1 billion cubic feet per day
(bcf/d) of natural gas.
The sale of Chief Oil & Gas would be the latest combination of U.S.
natural gas producers in the last few months.
Privately held Alta Resources was sold in July to EQT Corp for $2.9
billion, and Southwestern Energy Co acquired Indigo Natural
Resources for $2.7 billion in September and GEP Haynesville for
$1.85 billion in December 2021.
About Chesapeake Energy Corporation
Chesapeake Energy Corporation (NASDAQ: CHK) engages in the
acquisition, exploration, and development of properties for the
production of oil, natural gas, and natural gas liquids (NGL) from
underground reservoirs in the United States. The company was
founded in 1989 and is headquartered in Oklahoma City, Oklahoma.
Chesapeake Energy and its affiliates sought Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after
reaching terms of a Chapter 11 plan of reorganization to eliminate
approximately $7 billion of debt.
The Debtors tapped Kirkland & Ellis LLP as legal counsel, Jackson
Walker LLP as co-counsel and conflicts counsel, Alvarez & Marsal as
restructuring advisor, Rothschild & Co and Intrepid Financial
Partners as financial advisors, and Reevemark as communications
advisor. Epiq Global served as claims agent.
Wachtell, Lipton, Rosen & Katz served as legal counsel to
Chesapeake Energy's Board of Directors.
MUFG Union Bank, N.A., the DIP facility agent and exit facilities
agent, tapped Sidley Austin LLP as legal counsel, RPA Advisors LLC
as financial advisor, and Houlihan Lokey Capital Inc. as investment
banker.
Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. served as legal
counsel to an ad hoc group of first lien last out term loan lenders
while Perella Weinberg Partners and Tudor, Pickering, Holt & Co.
served as the group's investment bankers.
Franklin Advisers, Inc., tapped Akin Gump Strauss Hauer & Feld LLP
as legal counsel, FTI Consulting, Inc. as financial advisor, and
Moelis & Company LLC as investment banker.
On July 9, 2020, the Office of the U.S. Trustee appointed a
committee to represent unsecured creditors in Debtors' Chapter 11
cases. The unsecured creditors' committee tapped Brown Rudnick, LLP
and Norton Rose Fulbright US, LLP as its legal counsel, and
AlixPartners, LLP as its financial advisor.
On July 24, 2020, the bankruptcy watchdog appointed a committee of
royalty owners. The royalty owners' committee was represented by
Forshey & Prostok, LLP.
The Debtors obtained confirmation of their exit plan on January 16,
2021, and emerged from Chapter 11 the following month.
This concludes the Troubled Company Reporter's coverage of
Chesapeake Energy until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
CHS/COMMUNITY HEALTH: Fitch Rates Sr. Secured Notes 'BB-'
---------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR1' rating to the senior
secured notes being issued by CHS/Community Health Systems, Inc., a
subsidiary of Community Health Systems, Inc. (B/ Stable), herein
and collectively, CHS. Fitch expects the proceeds will be used to
refinance a similar amount of pari passu debt.
KEY RATING DRIVERS
Improving Financial Flexibility: CHS's operating margins lagged
peers for several years following the acquisition of rival hospital
operator Health Management Associates, LLC (HMA) in late 2014, but
the company has recently improved profitability. This was
accomplished through a portfolio pruning and repositioning program
that concluded in 2020, and an ongoing cost rationalization program
focused on the remaining hospitals and associated care delivery
assets. Although near-term inflationary pressure on labor and
supplies could put upward pressure on operating expenses, Fitch
expects most of the recent improvements to be durable and forecasts
a 13%-14% operating EBITDA margin.
Balance Sheet De-Risked: CHS encountered the pandemic with a highly
leveraged balance sheet despite the company's efforts to reduce
debt since the HMA acquisition by repaying more than $3 billion of
debt using the proceeds of the divestiture program and completing
two transactions that Fitch determined were distressed debt
exchanges in June 2018 and December 2019.
The business disruption effects of the pandemic put further upward
pressure on leverage, but CHS took advantage of favorable capital
market conditions to continue progress in de-risking the balance
sheet. The company extended the debt maturity schedule and lowered
cash interest expense through debt tenders and refinancing
transactions completed in 2020-2021.
Coronavirus Business Disruption Manageable: CHS's hospitals
experienced a surge in COVID-19 patients during 3Q21 due to the
emergence of the Delta variant and the Omicron variant may pose a
temporary threat to labor availability. Fitch believes COVID-19
cases are a headwind to profitability for healthcare providers
because of staffing requirements and some disruption to elective
patient cases, but thinks that CHS has sufficient headroom in the
'B-' rating to continue to absorb the effect of the pandemic on
operations. This is predicated on an assumption that the potential
for further government-mandated shutdowns and business disruption
related to spiking COVID-19 patient volumes will not significantly
disrupt the recovery in elective patient volumes that began in
mid-2020.
Cash Generation Enables Sufficient Investment: Healthcare providers
are increasingly focused on building good depth of care delivery
assets in geographic markets in order to boost share of patients,
which in turn enhances pricing power in negotiations with
commercial health insurers. CHS's improved profitability and lower
cash interest expense will result in cash from operations (CFO)
sufficient for CHS to spend 3%-4% of revenue on capex, which is a
level that Fitch believes is appropriate to address maintenance
needs while continuing to build networks of care delivery assets in
CHS's remaining hospital markets.
Benign Regulatory Environment: A 2021 U.S. Supreme Court decision
that left the Affordable Care Act (ACA) intact is a credit positive
for healthcare providers, including CHS. Under the Trump
administration, the ACA was a target of legal challenges, but the
Biden administration has demonstrated via executive orders that it
intends to protect and strengthen the ACA and Medicaid programs.
Fitch believes the ACA has had a slightly positive effect on the
financial profile of healthcare issuers. Census data from 2019
reported that 8.5% of Americans are without health insurance, down
about 500bp from before the ACA's insurance expansion took effect,
but up for the first time since 2008. Uninsured patients are a
headwind to profitability since they contribute to the cost of
uncompensated care for healthcare providers.
DERIVATION SUMMARY
CHS's 'B-' IDR reflects the company's recently improved although
still limited financial flexibility with high gross debt leverage
relative to peers and positive but slim cash generation. High
leverage reflects a legacy operating profile focused on rural and
small suburban hospital markets that were facing secular headwinds
to organic growth. A pivot toward faster growing and more
profitable markets is boosting profitability closer to higher rated
industry peers HCA Healthcare Inc. (HCA; BB+/Stable), Tenet
Healthcare Corp. (THC; B/Positive) and Universal Health Services
Inc. (UHS; BB+/Stable).
In applying Fitch's Parent and Rating Subsidiary Linkage Criteria,
Fitch assesses the entities on a consolidated basis believing that
the subsidiary is stronger than the parent due to relative
proximity to the assets and cashflows but that ring-fencing is
limited, the parent effectively controls the subsidiary and due to
the guarantee structure.
KEY ASSUMPTIONS
-- Revenue growth of 4%-5% annually (2% patient volume growth and
2%-3% pricing growth);
-- Operating EBITDA margin of about 14%;
-- Capex equals 3%-4% of annual revenues;
-- FCF is negative in 2021 and 2022 as CARES Act Advanced
Medicare Payments and deferred payroll taxes unwind;
thereafter FCF margin of about 2%;
-- No change to gross debt or equity issuances/repurchases;
-- Leverage (total debt/EBITDA) of 7.4x at the end of 2021 and
gradually declining through the forecast period due to EBITDA
growth.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- CHS maintains leverage (total debt/EBITDA after associate and
minority dividends) at 7.0x or below;
-- CHS sustains CFO after capex to total debt sustained at or
above 2.5%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- CHS maintains leverage (total debt/EBITDA after associate and
minority dividends) at 8.0x or above;
-- CFO after capex to total debt is flat to negative.
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 During Pandemic: CHS has maintained a
comfortable liquidity cushion during the pandemic-related business
disruption. Sources of liquidity include $1.3 billion of cash on
hand at Sept. 30, 2021 and $728 million of availability under the
$1 billion asset-based lending (ABL) facility, with about $108
million of letters of credit outstanding.
ABL availability is subject to a borrowing base calculation. The
company's debt agreements do not include financial maintenance
covenants. Following recent refinancing transactions, the debt
maturity schedule is improved. The next significant maturity is the
$1.5 billion of senior secured notes due 2025 that are expected to
be refinanced via the proposed issuance.
Liquidity has been supported by funding received through the CARES
Act including grant funding, accelerated Medicare payments and
deferred payroll taxes. Fitch does not expect the unwinding of
these government funded liquidity bolsters to strain CHS's
financial profile in 2021-2022.
Debt Issue Notching: Fitch's recovery assumptions result in a
recovery rate for CHS's first-lien, senior secured debt, which
includes the ABL and $8.2 billion senior secured notes, within the
'RR1' range to generate a three-notch uplift to the debt issue
ratings from the IDR, to 'BB-'/'RR1'. The $3.2 billion senior
secured junior priority notes are notched down by two to reflect
estimated recoveries in the 'RR6' range, to 'CCC'/'RR6', and the
$767 million senior unsecured notes are notched down by three, to
'CCC-'/'RR6' to reflect estimated recoveries in the 'RR6' range and
structural subordination of these notes relative to the prior
ranking junior priority secured notes. Fitch assumes that CHS would
draw $700 million on the ABL prior to a bankruptcy scenario and
includes that amount in the claims waterfall.
Fitch estimates an enterprise value (EV) on a going concern (GC)
basis of $8.8 billion for CHS, after a deduction of 10% for
administrative claims. The EV assumption is based on
post-reorganization EBITDA after payments to noncontrolling
interests of $1.4 billion and a 7.0x multiple. Fitch's post
reorganization EBITDA estimate assumes ongoing deterioration in the
business is offset by corrective measures taken to arrest the
decline in EBITDA after the reorganization.
The GC EBITDA estimate is about 20% lower than Fitch's 2021
forecasted EBITDA and considers the attributes of the acute care
hospital sector including a high proportion of revenue (30%-40%)
generated by government payors, exposing hospital companies to
unforeseen regulatory changes; the legal obligation of hospital
providers to treat uninsured patients, resulting in a high
financial burden for uncompensated care, and the highly regulated
nature of the hospital industry.
The 7.0x multiple employed for CHS reflects a history of
acquisition multiples for large acute care hospital companies with
similar business profiles as CHS in the range of 7.0x-10.0x since
2006 and the average public trading multiple (EV/EBITDA) of CHS's
peer group (HCA, UHS and THC), which has fluctuated between
approximately 6.5x and 9.5x since 2011.
ISSUER PROFILE
CHS is the third largest for-profit operator of acute care
hospitals in the U.S. measured by revenue. The company operates 82
general acute care hospitals and two stand-alone rehabilitation or
psychiatric hospitals. CHS's hospitals offer a variety of services
involving a broad range of inpatient and outpatient medical and
surgical services.
ESG CONSIDERATIONS
CHS has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to societal and regulatory pressures to constrain
growth in healthcare spending in the U.S. This dynamic has a
negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CHS/COMMUNITY HEALTH: Moody's Rates New 2030 Sr Secured Notes 'B2'
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to CHS/Community
Health Systems, Inc.'s ("Community") new senior secured notes due
2030. There are no changes to Community's existing ratings,
including its B3 Corporate Family Rating, B3-PD Probability of
Default Rating, B2 senior secured first lien ratings, or the Caa2
ratings to its senior secured junior notes ratings and senior
unsecured notes. There is also no change to Community's Speculative
Grade Liquidity Rating of SGL-2. The outlook remains stable.
Proceeds from the new debt offering will be used to redeem all of
the company's $1.46 billion senior secured notes due in 2025 and to
pay related fees and expenses. While the transaction will be
slightly leveraging, it is credit positive as it will extend
Community's debt maturity profile and lower its cash interest
costs.
Assignments:
Issuer: CHS/Community Health Systems, Inc.
Senior Secured Global Notes, Assigned B2 (LGD3)
RATINGS RATIONALE
Community's B3 Corporate Family Rating reflects Moody's expectation
that the company will operate with high financial leverage over the
next 12-18 months. Adjusted debt to EBITDA was approximately 5.9
times as of September 30, 2021. The rating is also constrained by
Moody's expectation for limited free cash flow due to the company's
high (though improving) cash interest costs and the significant
capital requirements of the business. In addition, the rating also
considers industry-wide operating headwinds which will limit
operational improvement despite Community's turnaround initiatives
including the cost and availability of labor and other operating
challenges. The rating is supported by Community's large scale,
geographic diversity, and the successful execution of its
divestiture program. Despite the negative effects of the COVID-19
pandemic on volumes, Community's profit margins have strengthened
thanks to elevated acuity levels and operating initiatives. The
company also maintains good liquidity. As of September 30, 2021,
the company had approximately $0.5 billion of cash, pro-forma for
the repayment, in full, of $814 million of remaining Medicare
advances in October 2021. The company's good liquidity profile also
reflects access to a $1 billion asset-based revolving credit
facility, with $728 million of availability as of September 30,
2021.
Community's senior secured notes are rated B2 (LGD3), one notch
higher than the Corporate Family Rating of B3. This reflects the
priority claim on the assets and the presence of a considerable
amount of debt below the first lien borrowings that would absorb
losses ahead of the first lien secured creditors. The rating on the
first lien secured debt also reflects its position behind a $1
billion ABL which has first priority on the company's most liquid
assets including cash, receivables and inventory ("ABL
collateral").
The stable outlook reflects Moody's view that Community will
operate with good scale, strong geographic diversity, and high
financial leverage during the next 12-18 months while maintaining
good liquidity.
From a governance perspective, Community has historically operated
with aggressive financial policies (e.g., high leverage, distressed
exchanges in the past, etc.). As a for-profit hospital operator,
Community also faces high social risk. The affordability of
hospitals and the practice of balance billing has garnered
substantial social and political attention. Hospitals are now
required to publicly provide pricing for several services, although
compliance and practice is inconsistent across the industry.
Additionally, hospitals rely on Medicare and Medicaid for a
substantial portion of reimbursement. Any changes to reimbursement
to Medicare or Medicaid directly impacts hospital revenue and
profitability. Further, as Community is focused on non-urban
communities, slow population growth tempers the company's capacity
to grow admissions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could downgrade the ratings if liquidity erodes or if
Community's earnings weaken such that the debt burden becomes
unsustainable.
Moody's could upgrade the ratings if operational initiatives result
in improved volume growth and margin expansion. Community would
also need to improve its free cash flow and liquidity and reduce
financial leverage. Specifically, sustaining debt to EBITDA around
6.0 times while consistently generating positive free cash flow
could support a ratings upgrade.
CHS/Community Health Systems, Inc., headquartered in Franklin,
Tennessee, is an operator of general acute care hospitals in
non-urban and mid-sized markets throughout the US. Revenues in the
last twelve months ended September 30, 2021 were approximately
$12.3 billion.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
CHS/COMMUNITY HEALTH: S&P Rates New Senior Secured Notes 'B'
------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level and '2' recovery
ratings to the proposed senior secured notes due 2030 issued by
Community Health Systems Inc.'s subsidiary CHS/Community Health
Systems Inc. The '2' recovery rating indicates its expectation for
substantial (70%-90%; rounded estimate 70%) recovery for the
debtholders in the event of a payment default. The company will use
the proceeds of the new debt to refinance its existing senior
secured notes due 2025, which S&P rates the same as the new notes.
S&P said, "Our other ratings on Community Health, including our
'B-' issuer credit rating and stable outlook on Community Health
Systems Inc., are unchanged and reflect our view of the company's
improved hospital portfolio and debt profile, its increased focus
on local market strategy, and its now-manageable debt maturity
schedule and good free cash flow prospects."
CMC II: Consulate Health Undergoes Rebranding Amid Restructuring
----------------------------------------------------------------
Jordyn Reiland of Skilled Nursing News, citing a Tampa Bay Times
report, says Nursing home giant Consulate Health Care may be
undergoing a rebranding and a restructuring.
Despite being the largest nursing home provider in Florida, and one
of the largest in the country, Consulate no longer has any
long-term care facilities listed in the state on the company's Web
site, as reported by the Times on Wednesday, January 19, 2022.
The operator appears to have split up into three individual
companies within Florida -- Independence Living Centers, Raydiant
Health Care Services and NSPIRE Healthcare, according to the
Times.
As of January 2021 Consulate had 140 skilled nursing and assisted
living centers -- 81 of which were in Florida.
Attempts by Skilled Nursing News to reach Consulate for comment
were unsuccessful as of Wednesday, January 19, 2022, evening.
"Consulate broke into four different companies," a receptionist at
Consulate Health Care office in Georgia told the Times. "Anything
that's outside of the state of Florida is still considered
Consulate. Anything inside the state of Florida has been divvied
up between Radiant, Independence and NSPIRE. But we are still the
corporate office for any of those companies."
The apparent restructuring of the company comes on the heels of a
bankruptcy filing and a financial settlement with the Department of
Justice.
Consulate was able to avoid nearly the entirety of a $258 million
False Claims Act judgment last year -- instead agreeing to pay $4.5
million after filing for bankruptcy and citing the financial impact
of the pandemic.
The deal, which was officially approved by a U.S. bankruptcy judge
in September 2021, emanated from a decision by a federal appeals
court in Florida to reinstate part of a verdict that was initially
overturned in 2018.
Several former executives at Consulate -- including former CEO
Chris Bryson, COO Tim Lehner and CFO Greg Hayes -- seemingly made
the move to join newly formed Atlanta-based Synergy Health Care
Services at the end of last year.
Synergy HCS describes itself as a "trusted consultant" to
post-acute operators spanning multiple states, according to its
LinkedIn page.
"With expertise in a broad range of administrative services, we
work behind-the-scenes to deliver solutions that allow providers to
focus on what they do best, patient and resident care,' the page
states.
Jennifer Trapp, vice president of brand management for Synergy HCS
and former Consulate spokesperson, told the Times that Synergy is
an independent company that contracts with Consulate.
'The buildings in Florida were acquired by other operating
management companies,' she told the Times. "The company that I work
for, we contract with several different providers, including
Consulate, who operates outside of the state of Florida."
About CMC II LLC
CMC II, LLC, 207 Marshall Drive Operations LLC, 803 Oak Street
Operations LLC and three inactive affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-10461) on March 1,
2021.
CMC II, LLC, et al., are part of a group of Consulate Health care
corporate affiliates that manage and operate 140 skilled nursing
facilities. CMC II provides management and support services to
approximately 140 SNFs, each of which is operated by an affiliate
of the Debtors under the common ownership of non-Debtor LaVie Care
Centers, LLC, doing business as Consulate Health Care. 207 Marshall
Drive Operations LLC operates Marshall Health and Rehabilitation
Center, a 120-bed SNF located in Perry, Florida. 803 Oak Street
Operations LLC operates Governor's Creek Health and Rehabilitation,
a 120-bed SNF located in Green Cove Springs, Fla.
CMC II estimated assets and debt of $100 million to $500 million as
of the bankruptcy filing.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Chipman Brown Cicero & Cole, LLP, as counsel;
Alvarez & Marsal North America, LLC as restructuring advisor; and
Evans Senior Investments as broker. Stretto is the claims agent.
COMFORT CARE: Unsecureds Will Get 10% of Claims in 60 Months
------------------------------------------------------------
Comfort Care, LLC, filed with the U.S. Bankruptcy Court for the
Northern District of Illinois a Second Amended Plan of
Reorganization dated Jan. 17, 2022.
Comfort Care, LLC ("CCL") is a licensed Health Care Agency located
on the South Side of Chicago at 8527 S. Stony Island Chicago, IL
60629. CCL provides Home Health Aide, Skilled Nursing, Occupational
Therapy, Physical and Speech Therapy and Medical Social Work.
The Debtor filed this Bankruptcy to restructure its debt, lease
obligations and to provide payment to its creditors in an orderly
structured manner consistent with the applicable requirement of the
bankruptcy code. The Debtor estimates that after accounting for
payment of administrative and priority claims, there will be
monthly distributions to unsecured creditors paid over 5 years
that, excluding amounts payable to CMS as cure of monetary defaults
in order for Debtor to assume the Medicare provider agreement,
shall total $28,383.
The Debtor is the proponent and disbursing agent of this Plan.
This Plan provided for distribution to the holders of allowed
claims from the continued operation of the Debtor's Business. The
Debtor has also worked diligently to procure additional accounts
insured by the entities which has increased the number of home care
visits and corresponding revenues.
Class 3 consists of Allowed General Unsecured Claims that are
impaired.
* 3a) Consist of the allowed nonpriority unsecured claims in
the total amount of $283,830.72 which includes the unsecured
portion of wage claims in the amount of $211,431.00. These claims
will be paid 10% of the total claim in the aggregate amount of
$28,383.07 over 60 months in monthly payments of $473.05 without
interest. All payments shall begin on the 10st day of the month
following the effective date of the Plan.
* 3b) Allowed Unsecured Claim of the Centers for Medicare &
Medicaid Services. Debtor must cure its defaults under the Medicare
provider agreement in order to assume that agreement, which is a
prerequisite to eligibility for a home health agency to receive
Medicare reimbursement for home health services. The Debtor and CMS
have compromised by agreeing that the Debtor will pay $399,753.61
of CMS's $3,997,536.08 cure claim over 60 months in payments of
$6,662.56 per month, except for the last monthly payment of
$6,662.57.
Class 4 consists of Shareholder Interest. The Debtor is a closely
held corporation. Sandy Wilborn is the sole shareholder of the
Debtor. Under the plan, Sandy Wilborn will retain her stock
interest in the Debtor. Class 4 is not impaired by the plan.
In the event of a forced liquidation, any proceeds realized from
the sale of the debtor's limited assets and liquidation of bank
accounts would be applied to broker's commission, mortgage and Real
Estate Taxes. The assets would be used for administration of the
sale with nothing paid to general unsecured creditors. Under the
plan as presented the General Unsecured Creditors will receive
approximately 10% of their claims. The General Unsecured would
receive nothing if the debtor were liquidated. The unsecured
creditors are clearly getting more under the plan.
A full-text copy of the Second Amended Plan of Reorganization dated
Jan. 17, 2022, is available at https://bit.ly/3GQZGgr from
PacerMonitor.com at no charge.
Attorney for Debtor:
William E. Jamison, Jr., Esq.
William E. Jamison, Jr. & Associates
53 W. Jackson Blvd., Suite #309
Chicago, IL 60604
Tel: (312) 226-8500
Email: wjami39246@aol.com
About Comfort Care
Comfort Care, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No.
21-03842) on March 24, 2021. Sandy Wilborn, manager and chief
executive officer, signed the petition. At the time of the filing,
the Debtor disclosed $500,000 to $1 million in assets and $1
million to $10 million in liabilities. Judge Jacqueline P. Cox
oversees the case. William E. Jamison, Jr. & Associates serves as
the Debtor's legal counsel.
COTTAGE CAR WASH: Feb. 1 Hearing on Second Amended Plan
-------------------------------------------------------
Judge Janet E. Bostwick will hold a hearing on the Second Amended
Chapter 11 Plan and the Motion to alter the First Amended Plan of
Cottage Car Wash, LLC, on Feb. 1, 2022, at 10:00 a.m. The hearing
will be conducted by video. Objections are due Jan. 31, 2022.
About Cottage Car Wash
Cottage Car Wash, LLC, a Norfolk, Mass.-based company in the car
wash business, filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 21-10596) on
April 26, 2021. Michael Brabants, manager, signed the petition. The
Debtor disclosed total assets of $916,000 and total liabilities of
$1,481,676.
Judge Janet E. Bostwick oversees the case.
Madoff & Khoury LLP serves as the Debtor's legal counsel.
CRECHALE PROPERTIES: $135K Sale of Hattiesburg Property Withdrawn
-----------------------------------------------------------------
Judge Katharine M. Samson of the U.S. Bankruptcy Court for the
Southern District of Mississippi withdrew Crechale Properties,
LLC's sale of the real property located at 24 Oak Hollow, in
Hattiesburg, Mississippi 39402, to Brett Schmidt for $135,000,
without prejudice.
The Debtor proposed to sell the Property free and clear of liens.
About Crechale Properties
Crechale Properties, LLC is a Hattiesburg, Miss.-based company
engaged in the operation of apartment buildings.
Crechale Properties filed its voluntary petition for Chapter 11
protection (Bankr. S.D. Miss. Case No. 21-50079) on Jan. 21, 2021,
listing up to $10 million in assets and up to $50 million in
liabilities. Elizabeth Crechale, manager of Crechale Properties,
signed the petition.
Judge Katharine M. Samson presides over the case.
W. Jarrett Little, Esq., at Lentz & Little, PA serves as the
Debtor's legal counsel.
CYCLE FORCE: Ravinia Touts Successful Sec. 363 Sale
---------------------------------------------------
Ravinia Capital LLC, a Chicago-based boutique investment bank
specializing in sell-side M&A advisory for middle-market companies,
is pleased to announce the sale of Cycle Force Group LLC through a
Chapter 11 Section 363 sale process overseen by Hon. Judge Anita L.
Shodeen of the Iowa Southern Bankruptcy Court. The transaction
closed in December of 2021.
Cycle Force Group, an Ames, Iowa-based importer and distributor of
bicycles, parts and accessories founded in 1998, filed for
bankruptcy protection in April of 2021 when it found itself with
insufficient liquidity to support its purchasing requirements and
an inability to source the necessary funds to cover this
shortfall.
Once the Bankruptcy Court approved its retention, Ravinia worked
quickly to launch a full-scale sales process, and marketed Cycle
Force to both private equity firms and strategic buyers. Working
closely with the company's other professional advisors, Ravinia was
able to secure a Stalking Horse Bid from Messingschlager GmbH & Co.
KG in under 75 days, as well as negotiate with them a purchase
agreement which ensured that the company would be preserved as a
going concern, helping save jobs and position Cycle Force for
future growth.
In its role as exclusive investment banking advisor to the debtor,
Ravinia Capital ensured continuity of business for this innovative
player within the growing micromobility market, and in doing so,
avoided a costly liquidation process which would have dramatically
reduced the sale proceeds received by Cycle Force's creditors.
The sell-side professional advisors on the transaction were:
* Investment Bankers -- Ravinia Capital LLC - Tom Goldblatt,
Managing Partner; Michael Shanahan, Analyst
* Turnaround Consultants -- CR3 Partners LLC - Jeff Hyland,
Partner; Carmen Barrett, Director
* Global Turnarounds Inc. -- Kobus van der Zel, Founder & CEO
* Debtor's Counsel -- Bradshaw, Fowler, Proctor & Fairgrave,
P.C. - Jeffrey D. Goetz, Shareholder; Krystal R. Mikkilineni,
Shareholder; Tirzah R. Roussell, Associate
About Cycle Force Group
Ames, Iowa-based Cycle Force Group, LLC -- https://www.cyclefg.com
-- is a centrally located importer of bicycles, parts and
accessories serving all facets of the cycling industry including
independent retailers, mass retailers, sporting goods retailers,
e-commerce retailers, premium and incentive distributors and
jobbers and OEM customers worldwide.
Cycle Force Group filed a petition for Chapter 11 protection
(Bankr. S.D. Iowa Case No. 21-00571) on April 22, 2021, listing
$9,795,675 in total assets and $8,516,707 in total liabilities.
Nyle Nims, president and chief executive officer of Cycle Force
Group, signed the petition.
Judge Anita L. Shodeen oversees the case.
Bradshaw, Fowler, Proctor & Fairgrave PC represents the Debtor as
bankruptcy counsel. The Debtor also tapped CR3 Partners as
financial advisor, Miller & Co. as special counsel, and Ravinia
Capital LLC as investment banker.
The U.S. Trustee for Region 12 appointed an official committee of
unsecured creditors on May 7, 2021. Frost Brown Todd, LLC and
Cutler Law Firm, P.C. serve as the committee's bankruptcy counsel
and associate counsel, respectively.
Great Western Bank, a secured creditor, is represented by Jeffrey
W. Courter, Esq., at Nyemaster Goode, PC.
CYPRESS CREEK: Proposed Sale of Vehicles Free of All Liens Approved
-------------------------------------------------------------------
Judge Christopher M. Lopez of the U.S. Bankruptcy Court for the
Southern District of Texas authorized Cypress Creek Emergency
Medical Services Association's sale of vehicles free and clear of
all liens, claims, and encumbrances.
Notwithstanding anything in the Order to the contrary, no property
in which Philips Medical Capital, LLC has a lease or security
interest will be included with the sale of vehicles and the rights
of Philips Medical are expressly preserved.
The terms and conditions of the Order are immediately effective and
enforceable upon its entry.
About Cypress Creek
Cypress Creek Emergency Medical Services Association is an
emergency medical service provider based in Spring, Texas.
Cypress Creek filed a petition for Chapter 11 protection (Bankr.
S.D. Texas Case No. 21-33733) on Nov. 18, 2021, listing as much as
$10 million in both assets and liabilities. Wren Nealy, Jr.,
chief
executive officer, signed the petition.
Judge Christopher M. Lopez oversees the case.
The Debtor tapped Annie Catmull, Esq., at O'Connorwesler, PLLC as
legal counsel; J. Patrick Magill of Magill, PC as chief
restructuring officer; and CBRE Inc. as real estate advisor.
DEL MONTE FOODS: Moody's Hikes CFR to B2, Outlook Stable
--------------------------------------------------------
Moody's Investors Service upgraded the ratings of Del Monte Foods,
Inc. including the company's Corporate Family Rating to B2 from B3,
Probability of Default Rating to B2-PD from B3-PD and senior
secured notes rating to B3 from Caa1. The asset backed revolving
credit facility ("ABL") is not rated. Moody's withdrew the SGL-3
Speculative Grade Liquidity rating. The rating outlook is stable.
The rating upgrades reflect the company's strengthening operating
performance following a May 2020 recapitalization and major
operational restructuring, which have improved liquidity and
allowed the company to accelerate deleveraging from just over 10x
debt-to-EBITDA in fiscal 2020 to 4.3x in the LTM period ended
October 31, 2021 (on Moody's adjusted basis). Leverage from October
to the FYE April 2022 should decrease further as the ABL revolver
balance is reduced after the peak packing season.
The B3 rating on the senior secured notes is one notch lower than
the B2 Corporate Family Rating, reflecting its subordinate lien on
the ABL collateral consisting of working capital assets. This
notching also reflects the absence of any significant debt
instruments that are subordinate to the senior secured notes.
Moody's took the following rating actions:
Upgrades:
Issuer: Del Monte Foods, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Senior Secured Global Notes, Upgraded to B3 (LGD5) from Caa1
(LGD4)
Withdrawals:
Issuer: Del Monte Foods, Inc.
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-3
Outlook Actions:
Issuer: Del Monte Foods, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
The B2 Corporate Family Rating reflects Del Monte's relatively
volatile free cash flow from inventory swings, weak long-term
category fundamentals in U.S. canned fruit and vegetables, and
execution risk related to the company's ability to manage
inflationary headwinds over the next 12 to 18 months. The company's
ratings are supported by the strength of the Del Monte™ brand,
which holds leading shares in core shelf stable fruits and
vegetables, and strong execution on recent restructuring
initiatives that have improved the margin profile of the business.
As a result, leverage is declining and Del Monte is targeting to
further reduce debt-to-EBITDA leverage (3.5x as of October 31, 2021
per the company's calculation, in which total debt reflects average
ABL draw over the LTM period) to below 3.0x long term. The ratings
are also supported by a history of significant liquidity support
provided by the parent company, Del Monte Pacific Ltd ("DMPL").
Moody's expects such support will continue in periods of earnings
weakness, but that the company's improved operating performance and
free cash flow will reduce the need for DMPL's seasonal cash flow
support.
Del Monte's adequate liquidity is supported by a sizable $450
million ABL facility due April 2026 which is the primary source of
external liquidity. As of October 31, 2021, Del Monte had
approximately $341 million drawn on the revolver and $25 million of
letters of credit outstanding, reducing ABL availability to $85
million. Seasonal borrowings typically peak during the first half
of the April fiscal year as the company builds inventory during its
seasonal production cycle ahead of the US holiday season. Moody's
anticipates that Del Monte will maintain a comfortable cushion
within the revolver's minimum 1.0x fixed charge coverage covenant,
which applies if ABL revolver borrowings exceed certain levels.
ESG CONSIDERATIONS
Del Monte is moderately exposed to social risks related to customer
relations, responsible production, health and safety standards and
evolving consumer trends. The company is also moderately exposed to
environmental risks such as soil/water and land use, energy &
emissions impacts, waste and pollution, among others. These factors
will continue to play an important role in evaluating the overall
creditworthiness of food manufacturers like Del Monte, particularly
as the industry continues to evolve globally.
Notwithstanding currently favorable demand dynamics from the
pandemic, longer-term, Moody's expects consumption trends in the
company's core canned fruit and vegetable category to eventually
resume secular declines for the foreseeable future. Moody's expects
that canned food products typically found in the center grocery
aisles will gradually lose market share as consumers gravitate to
fresher produce found on the perimeter of the store. Del Monte is
attempting to offset this negative trend by focusing on innovation
outside of the can, such as fruit cups, aseptic broth and frozen
veggie snacks. Better innovation also strengthens the Del Monte
brand.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety, and the government measures put in place to contain it.
Although an economic recovery is underway, it is tenuous, and its
continuation will be closely tied to containment of the virus. As a
result, the degree of uncertainty around Moody's forecasts is
high.
In terms of governance, Moody's expects that the parent company,
Del Monte Pacific Ltd, will continue to be supportive of Del Monte
within limitations. DMPL is not a guarantor of Del Monte debt, but
has provided significant liquidity support in the past through
intercompany trade financing and most recently through a $387
million equity contribution in 2020.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that Del Monte will
sustain debt-to-EBITDA below 5.5x, even as favorable pandemic
effects abate, and will begin generating positive free cash flow in
fiscal 2023.
A rating upgrade could occur if Del Monte is able to sustain
operating performance including positive organic revenue growth
with stable to higher margins, and consistent and solid free cash
flow generation. Del Monte would also need to sustain debt/EBITDA
in a low 4x range or lower through strong operating performance or
significant debt repayment. An upgrade is unlikely in the near term
due to the uncertainty of sustainability of recent strong
performance that was partially driven by the favorable pandemic
effects.
A rating downgrade could occur if Del Monte is unable to maintain
stable operating performance, margins were to significantly
deteriorate from current levels, or the financial policy becomes
more aggressive. Quantitatively, a downgrade could occur if
debt/EBITDA is not likely to be sustained below 5.5x, or liquidity
deteriorates.
CORPORATE PROFILE
Headquartered in Walnut Creek, California, Del Monte Foods, Inc. is
a manufacturer and marketer of branded and private label food
products for the U.S. and South American retail market. Its brands
include Del Mont(TM) in shelf stable fruits, vegetables and
tomatoes; Contadina(TM) in tomato-based products; College Inn(TM)
in broth products; and S&W(TM) in shelf stable fruit, vegetable and
tomato products. The company generates annual sales of
approximately $1.5 billion. Del Monte Foods, Inc. is a wholly owned
subsidiary of Del Monte Foods Holdings Limited, which is in turn
approximately 94% owned by DMPL. DMPL is publicly traded on the
Philippine and Singapore stock exchanges. DMPL is 71%-owned by
NutriAsia Pacific Ltd and Bluebell Group Holdings Limited, which
are beneficially-owned by the Campos family of the Philippines.
Public investors and Lee Pineapple Group (a pineapple supplier in
Malaysia) hold the remaining 29% stake.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
ELECTRO SALES: Sale of Properties to Pay Claims in Full
-------------------------------------------------------
Electro Sales & Service, Inc., submitted a Small Business Chapter
11 Plan and a corresponding Disclosure Statement.
The Debtor's schedule of assets, which have not been appraised by
an independent appraiser, provides:
Description Value
----------- -----
Checking Accounts $3,285
Office furniture, equipment and computers $3,000
Inventory $47,000
Real property $1,100,000
----------
Total Assets $1,153,285
Under the Plan, the Debtor proposes to pay all Secured Creditors
and General Unsecured Creditors of their claims in full. The
Debtor proposes to fund its Plan through the liquidation of its
assets. Specifically, the Debtor shall market and sell its
commercial real estate within 180 days from the Confirmation Date.
Class V - All Allowed General Unsecured Claims of creditors,
consists solely of the claim of American Express in the amount of
$1,179. This claim shall be paid in full from either the sale of
the property at 3941 Eisenhauer Rd, San Antonio, Texas 78218 or the
property at 2750 S. Loop 1604 E, San Antonio, Texas 78229,
whichever one occurs first. These properties shall be sold within
180 days of the Confirmation Date. Class V is impaired.
Attorney for the Debtor:
David T. Cain, Esq.
LAW OFFICE OF DAVID T. CAIN
8626 Tesoro Dr., Suite 811
San Antonio, Texas 78217
Tel: (210) 308-0388
Fax: (210) 503-5033
A copy of the Disclosure Statement dated Jan. 15, 2021, is
available at https://bit.ly/3GN5xmG from PacerMonitor.com.
About Electro Sales & Service
Electro Sales & Service filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.
21-50546) on May 3, 2021. At the time of the filing, the Debtor
disclosed $500,001 to $1 million in assets and $100,001 to $500,000
in liabilities. Judge Ronald B. King oversees the case. David T.
Cain, Esq., represents the Debtor as legal counsel.
ELECTRONICS FOR IMAGING: S&P Ups ICR to B- on Improved Performance
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on digital
imaging solutions company Electronics for Imaging Inc. (EFI) to
'B-' from 'CCC+'.
S&P also raised its issue-level rating on the company's revolving
credit facility and first-lien term loan to 'B-' from 'CCC+'. The
'3' recovery rating is the same.
The stable outlook reflects S&P's expectation that EFI will
continue to achieve stable EBITDA margins from its cost savings
plan and strong top-line growth from good industry tailwinds such
that leverage will be below the high-6x area in 2022.
EFI's improved operational performance is due to the focus on
cost-structure optimization. EFI has implemented cost-savings plans
since its leveraged buyout (LBO) back in 2019. While it took some
time for EFI to see the benefits because of the COVID-19 pandemic,
it was able to optimize its cost structure in 2021. EFI has
achieved some of its highest quarterly S&P Global Ratings-adjusted
EBITDA margin since the LBO in 2019. S&P said, "We believe that
future growth in operating costs will be leveraged to growth. While
EBITDA margins will come down due to the sale of the higher-margin
productivity software business, we still expect EFI's EBITDA margin
to improve to the 13%-17% range in 2021 following the divestiture.
We also expect some one-time costs to roll off and additional cost
savings to help keep EFI's EBITDA margin in this range in 2022."
S&P said, "The stable outlook reflects our expectation that EFI
will continue to achieve stable EBITDA margins from its
cost-savings plan and strong top-line growth from good industry
tailwinds such that leverage will be below the high-6x area in
2022.
"We could look to raise our rating if EFI were able to sustain
leverage approaching the 5x area and generate more than $50 million
of unadjusted free operating cash flow after debt service. This
could occur if it were able to continue to achieve strong
projections for its industrial inkjet on good customer demand and
improve its EBITDA margins from its cost savings plan.
"We could lower our rating on EFI if we believed that its capital
structure were unsustainable. This could occur if free cash flow
after debt service were breakeven due to weakened demand for its
digital imaging solutions, prolonged restructuring costs, issues
with its business operations, and further macroeconomic headwinds
from COVID-19."
ESG credit indicators: E-2 S-2 G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of the company, as is
the case for most rated entities owned by private-equity sponsors.
We believe Electronics For Imaging Inc.'s highly leveraged
financial risk profile points to corporate decision-making that
prioritizes the interests of the controlling owners. This also
reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
EMERALD TECHNOLOGIES: Moody's Assigns First Time 'B3' CFR
---------------------------------------------------------
Moody's Investors Service assigned first time ratings to Emerald
Technologies AcquisitionCo., Inc. ("Emerald EMS"), including a B3
Corporate Family Rating and B3-PD Probability of Default Rating.
Concurrently, Moody's assigned a B3 rating on the proposed first
lien credit facility consisting of a $45 million revolver due 2027
and $250 million term loan due 2029. The outlook is stable.
Net proceeds from the $250 million first lien term loan will be
used, in conjunction with new cash equity, to support Crestview
Partners' ("Crestview" or "Sponsor") buyout of Emerald EMS. The $45
million first lien revolving credit facility will have $15 million
drawn at close due to the timing of a receivable collection which
is expected to be repaid shortly thereafter. Pro forma debt/EBITDA
and EBITA/Interest (both as adjusted by Moody's and excluding the
initial $15 million revolver balance) are expected to be around
4.4x and 3.0x, respectively, for the twelve month period ending
October 30, 2021.
Assignments:
Issuer: Emerald Technologies AcquisitionCo., Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured 1st Lien Revolving Credit Facility, Assigned B3
(LGD3)
Senior Secured 1st Lien Term Loan B, Assigned B3 (LGD3)
Outlook Actions:
Issuer: Emerald Technologies AcquisitionCo., Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
The B3 CFR reflects Emerald EMS' small scale relative to the
electronic manufacturing services (EMS) industry participants and
the broader B3 rating category, and its significant customer
concentration with the largest and top 10 customers accounting for
roughly 40% and 70% of annual revenue, respectively. The rating
also considers the company's narrow scope of operations as a tier-3
EMS provider within the semiconductor, industrial, aerospace and
defense (A&D), and medical end markets. The company's limited
operating history as a combined entity and the expectation for
aggressive financial policies under private equity ownership
further constrain the rating. Furthermore, the rating reflects the
ongoing supply chain disruptions and component shortages and the
uncertainty of when these industry-wide headwinds will subside.
The EMS industry is categorized by its high working capital
intensity, long ramp times to onboard new programs,
moderate-to-high customer concentration risk, and the challenges of
maximizing existing facility utilization rates for profitability
while simultaneously expanding capacity to support future revenue
growth. The loss of operating leverage and material purchasing
power during periods of revenue contraction can rapidly erode
EBITDA margins and accelerate the rate of decline for aggregate
dollar EBITDA generation to be greater than the rate of revenue
decline. As a result, Moody's has a lower tolerance for financial
leverage metrics for EMS providers relative to many other
industries within the same rating category. Moody's views Emerald
EMS' pro forma debt/EBITDA of 4.4x as moderately high.
The ratings are supported by the specialty nature of Emerald EMS'
high-mix, low volume assembly and engineering services, which
support EBITDA margins that are well above its larger tier 1 and
tier 2 provider peers, as well as the company's long-term,
strategic relationships with core customers. Emerald EMS'
free-cash-flow (FCF) generation and interest coverage metrics are
strong for the B3 category and further support its credit profile.
Closing EBITDA is not overly reliant on adjustments and EBITDA
growth over the next 12-18 months is not predicated on synergy
realization. FCF/debt (as adjusted by Moody's) is projected to
remain above 6.5% over the next 12-18 months.
The stable outlook reflects Moody's expectation that Emerald EMS
will sustain organic revenue growth in the low single digit range
while increasing corporate investments to support its projected
revenue trajectory. Moody's projects resulting EBITDA margins will
erode by no more than 100bps from FY 2021P levels; however,
debt/EBITDA and FCF/debt are expected to remain comfortably below
5x and above 4%, respectively, through FY 2023. Contracts with
Emerald EMS' largest customer are diversified across nearly 1,000
SKUs and contain 12-month notification clauses which partially
mitigate its very high customer concentration risk over the next
12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Emerald EMS increases scale and
customer diversity (organically or through M&A) such that annual
revenue generation approaches $500 million and revenue
concentration from its top 10 customers is reduced, debt/EBITDA is
sustained below 4.5x, and FCF/debt is sustained above 5%. Emerald
EMS' ratings are unlikely to be upgraded until adequate scale and
customer diversity are achieved.
The ratings could be downgraded if Emerald EMS' revenue
concentration with its largest customer or its top 10 customers in
aggregate increases, its liquidity profile diminishes, is unable to
grow revenue on an organic basis, or if debt/EBITDA is sustained
above 5.5x. The ratings could also be downgraded should Moody's
anticipate a deteriorating relationship with the largest customer,
especially while the largest customer accounts for at least 30% of
annual revenue. The adoption of more aggressive financial policies
could also negatively pressure the ratings.
Emerald EMS has a good liquidity profile underpinned by its solid
FCF generation and the expectation for full availability to its $45
million revolver in the near term. Like most EMS providers, Emerald
EMS is exposed to working capital swings which can stress quarterly
cash flow generation. Moody's believes the Company's closing cash
balance of roughly $5 million will not provide adequate cushion
against potential working capital swings over the next 6 months.
However, Moody's projects Emerald EMS' will have the ability to
accumulate an adequate cash balance over the next 12-15 months
should it decide to do so. Moody's projects Emerald EMS will
generate at least $15 million of FCF annually over the next 12-15
months. Maintenance capital expenditures are roughly $5 million per
year and recent capacity expansions can support up to $100 million
of incremental revenue growth. Nonetheless, Moody's expectation for
$15 million FCF includes $4-5 million of growth capital
expenditures which can be throttled down should performance falter.
Emerald EMS' external liquidity is supported by its $45 million
revolver due 2027, which is expected to remain undrawn over the
next 12-15 months. Access to the revolver is governed by a 6.0x net
first lien leverage ratio which tests when 25%+ of the commitment
is drawn (or $11.25 million). Emerald EMS' 25% utilization test is
stricter than the typical 30-35% utilization test governing similar
peers' credit agreements but is not expected to impede revolver
access over the next 12-15 months.
Emerald EMS is exposed to governance risks typical of
private-equity ownership, given that financial sponsors, including
Crestview, look to enhance equity returns through distributions or
debt financed acquisitions. Accordingly, Moody's views Emerald EMS'
financial policy to be somewhat aggressive given the private-equity
ownership, moderately high closing leverage, and the potential for
debt financed distributions or acquisitions to enhance equity
returns. Lack of public financial disclosure and the absence of
board independence are also governance risks.
Preliminary terms in the first lien credit facility contain
provisions for incremental facility capacity up to the greater of
(i) $45 million and (ii) 75% of LTM EBITDA; plus unlimited amounts
up to (i) Closing Date First Lien Net Leverage if secured equally
and ratably, or (ii) Closing Date Net Secured Leverage if secured
on a junior lien basis, or (iii) up to 0.50x above Closing Date Net
Total Leverage if unsecured. Wholly-owned material domestic
subsidiaries must provide guarantees, provided that the burden or
cost of providing a guarantee would not outweigh the practical
benefit to the Lenders afforded thereby. There are leverage-based
step-downs in the asset sale prepayment requirement to 50%, 25%,
and 0% if the First Lien Net Leverage Ratio pro forma for the
transaction is within 0.75x, 1.0x, and 1.25x, respectively, of the
Closing Date First Lien Net Leverage Ratio.
The proposed terms and the final terms of the credit agreement can
be materially different.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Emerald EMS, headquartered in Salem, New Hampshire, is a tier-3 EMS
provider of high mix, low volume (HMLV) design, prototyping,
assembly, and lifecycle support services (supply chain management,
order fulfilment, and reverse logistics) for original equipment
manufacturer (OEM) customers in "non-traditional" end markets
including semiconductor equipment, industrial controls, A&D,
utility infrastructure, and medical. Emerald specializes in
high-complexity electronic assemblies, specifically printed circuit
boards (PCBA) and box builds/systems integrations, for
customer-specific products with significant design variations. The
company's manufacturing footprint spans more than 500,000 square
feet across seven manufacturing facilities in the US (6) and China
(1). Emerald EMS is owned by private equity firm Crestview Partners
following the January 2022 buyout. Revenue for the twelve months
ending October 31, 2021 was approximately $350 million.
ENDLESS POSSIBILITIES: Case Summary & 13 Unsecured Creditors
------------------------------------------------------------
Debtor: Endless Possibilities, LLC
d/b/a Regymen Fitness
23684 U.S. Hwy. 19 N.
Clearwater, FL 33765
Case No.: 22-00259
Business Description: Endless Possibilities specializes in event
planning of Themed Birthday Parties, Baby
Showers, Bridal Showers, Brunches,
Graduation Open Houses, Weddings,
Anniversaries, Family Reunions and more.
Chapter 11 Petition Date: January 21, 2022
Court: United States Bankruptcy Court
Middle District of Florida
Debtor's Counsel: Scott A. Stichter, Esq.
STICHTER, RIEDEL, BLAIN & POSTLER, P.A.
110 E. Madison St.
Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
Email: sstichter@srbp.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Gretchen Mitchell, managing member.
A copy of the Debtor's list of 13 unsecured creditors is available
for free at PacerMonitor.com at:
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XLZLEOA/Endless_Possibilities_LLC__flmbke-22-00259__0001.0.pdf?mcid=tGE4TAMA
EXPRESS GRAIN: Jan. 25 Hearing on $75K Sale of Equipment & Truck
----------------------------------------------------------------
Judge Selene D. Maddox of the U.S. Bankruptcy Court for the
Northern District of Mississippi granted the request of Express
Grain Terminals, LLC, and its affiliates to conduct an expedited
hearing on their proposed sale of the following to Dodd Turner for
$75,000: (i) 12 Lexsong Model LSZOZOASZ golfcarts, three Lexsong
Model LSZOZOASZOI golfcarts, and a Lexsong Model LSIO30H electric
flatbed truck.
Any parties desiring to object to the Motion must file an objection
by Jan. 24, 2022, at 2:00 p.m. (CT). In the event objections are
filed, they will be heard by the Court on Jan. 25, 2021, commencing
at 10:00 a.m. The hearing will be conducted telephonically.
All attorneys, parties, and other interested parties appearing
should follow these dial-in instructions:
1. Complete the dial-in instructions at least 5 minutes prior
to the time of the hearing.
2. Dial 877-402-9757, and, when prompted, enter number
1558104#;
3. Once you are connected to the call, identify yourself by
stating your name;
4. Once your telephonic presence is acknowledged by the
Courtroom Deputy, please
mute your phone until further notice from the Court;
5. Do not place the call on hold at any time during the call
as this may lead to disturbing
noises for the other call participants.
Should you experience difficulties connecting to the telephonic
hearing, please contact the Clerk's Office at 662-369-2596.
The Counsel for the Debtor will immediately provide a copy of the
Sale Motion and the Order to all creditors and parties-in-interest
having entered an appearance, all secured creditors, the 20 largest
unsecured creditors and the U.S. Trustee.
About Express Grain Terminals
Greenwood, Mississippi-based Express Grain Terminals, LLC,
produces
soy products such as oil and biodiesel.
Express Grains Terminals and its affiliates, Express Biodiesel,
LLC
and Express Processing, LLC, sought Chapter 11 protection (Bankr.
N.D. Miss. Lead Case No. 21-11832) on Sept. 29, 2021. At the time
of the filing, Express Grains Terminals listed up to $50 million
in
assets and up to $100 million in liabilities. Judge Selene D.
Maddox oversees the cases.
The Law Offices of Craig M. Geno, PLLC, is the Debtors' legal
counsel.
UMB Bank, N.A., the Debtors' lender, is represented by Spencer
Fane
LLP.
EXPRESS GRAIN: Jan. 25 Hearing on Bid Procedures for All Assets
---------------------------------------------------------------
Judge Selene D. Maddox of the U.S. Bankruptcy Court for the
Northern District of Mississippi granted the request of Express
Grain Terminals, LLC, and its affiliates to conduct an expedited
hearing on their proposed bidding procedures in connection with the
auction sale of substantially all assets.
Any parties desiring to object to the Motion must file an objection
by Jan. 24, 2022, at 2:00 p.m. (CT). In the event objections are
filed, they will be heard by the Court on Jan. 25, 2021, commencing
at 10:00 a.m. The hearing will be conducted telephonically.
All attorneys, parties, and other interested parties appearing
should follow these dial-in instructions:
1. Complete the dial-in instructions at least 5 minutes prior
to the time of the hearing.
2. Dial 877-402-9757, and, when prompted, enter number
1558104#;
3. Once you are connected to the call, identify yourself by
stating your name;
4. Once your telephonic presence is acknowledged by the
Courtroom Deputy, please
mute your phone until further notice from the Court;
5. Do not place the call on hold at any time during the call
as this may lead to disturbing
noises for the other call participants.
Should you experience difficulties connecting to the telephonic
hearing, please contact the Clerk's Office at 662-369-2596.
The Counsel for the Debtor will immediately provide a copy of the
Bid Procedures Motion and the Order to all creditors and
parties-in-interest having entered an appearance, all secured
creditors, the 20 largest unsecured creditors and the U.S. Trustee.
About Express Grain Terminals
Greenwood, Mississippi-based Express Grain Terminals, LLC,
produces
soy products such as oil and biodiesel.
Express Grains Terminals and its affiliates, Express Biodiesel,
LLC
and Express Processing, LLC, sought Chapter 11 protection (Bankr.
N.D. Miss. Lead Case No. 21-11832) on Sept. 29, 2021. At the time
of the filing, Express Grains Terminals listed up to $50 million
in
assets and up to $100 million in liabilities. Judge Selene D.
Maddox oversees the cases.
The Law Offices of Craig M. Geno, PLLC, is the Debtors' legal
counsel.
UMB Bank, N.A., the Debtors' lender, is represented by Spencer
Fane
LLP.
FELICE THOMAS ALTEBRANDO: $935K Sale of Fort Salonga Property OK'd
------------------------------------------------------------------
Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle
District of Florida authorized Felice Thomas Altebrando's sale of
the real property located at 14 Truxton Lane, in Fort Salonga, New
York 11768, to Dennis Cesar, Daniel I. Pagano, and Jennifer I.
Cesar for $935,000.
A hearing on the Motion was held on Jan. 19, 2022, at 10:30 a.m.
The result of the Auction was that Cesar was the successful bidder
at the purchase price of $935,000, with David I. Konanez and
Geraldine A. Grace as a back-up bid of $930,000.
The sale must occur within 30 days of the entry of the Order.
Should the sale to Cesar not occur in a timely fashion, then the
Court authorizes and approves the sale of the Debtor's interest and
the interest of the Debtor's non-filing spouse, Marilyn Altebrando,
in the Premises, to be sold to Grace at the Back Up Bid price, with
said closing to occur no later than 30 days thereafter.
The sale of the Premises will be free and clear of any liens,
claims or encumbrances, with such liens, claims and encumbrances to
attach to the proceeds of the sale and disbursed in accordance with
the Order.
At closing of the sale of the Premises, from the proceeds of the
sale, the following charges, fees and costs, (collectively referred
to as "Charges"), will be paid at closing, and same are
specifically approved:
1) all ordinary closing costs will be paid, including but not
limited to transfer taxes;
2) reasonable attorney fee for representation of the Debtor
and Spouse for closing of the sale transaction; and
3) real estate commission to the real estate broker, Coldwell
Banker American Homes and Crysellen Bouziotis, (collectively
referred to as "Broker"), at the rate of 4% of the sale price.
After the Charges are paid, the following items will be paid at
closing, and same are specifically approved:
1) based upon an unexpired pay-off letter issued by or on
behalf of BOA, the mortgage lien held by BOA will be paid in full,
and the lien will be satisfied, and BOA will record a satisfaction
of mortgage within 30 days of the payment, and the original
promissory note evidencing the debt due to BOA will be marked
"paid, satisfied and discharged", and returned to Debtor's counsel
within 45 days of the closing;
2) the net proceeds from the sale after payment of all the
afore-mentioned items set forth in the Order, will be split in
equal halves, and paid, as follows: (a) 50% of the net proceeds
will be paid to Spouse, and (b) 50% of the net proceeds will be
paid to 145 Marcus Blvd, Inc. Upon receipt of its 50% share of the
net proceeds of sale at closing, and by no later than 15 days of
the closing, 145 Marcus Blvd, Inc. will prepare and deliver to
buyer (or buyer's title company) a Partial Release of Judgment Lien
against the Premises for recording.
Within five business days of closing of the sale of the Premises,
the Debtor will file with the Court a closing statement detailing
the flow of funds at closing including all disbursements made in
accordance with the Order.
The 14-day stay provided for under Bankruptcy Rule 6004(h) is
waived and the Order will be effective and enforceable immediately
upon entry.
Felice Thomas Altebrando sought Chapter 11 protection (Bankr. M.D.
Fla. Case No. 21-00968) on July 27, 2021. The Debtor tapped Brian
Behar, Esq., as counsel.
FIRST CHOICE: Property Sale Proceeds, or Financing, to Fund Plan
----------------------------------------------------------------
First Choice Trucking, LLC, filed with the U.S. Bankruptcy Court
for the District of New Jersey a Chapter 11 Plan and a Disclosure
Statement dated Jan. 17, 2022.
The Debtor is a Limited Liability Company formed for the purpose of
renting storage space for construction companies. The Debtor
suffered from financial difficulty because the Debtor's rental
income declined, then became non-existent and it could not support
the expenses to maintain real estate taxes on its real property
located at 208 Bennett Road, Howell Township, New Jersey (the
"Property").
In the ensuing commercial foreclosure initiated by Debtor's primary
creditor GMN Toms River LLC, GMN obtained final judgment in the
amount of $575,375.06 and a sheriff sale was scheduled. The Debtor
filed Chapter 11 prior to the sale in order to preserve its equity
in the Property. The Debtor now seeks to either secure take-out
financing to pay off GMN Toms River, LLC or, if unsuccessful, sell
the Property to pay GMN while preserving its equity.
This is a plan of reorganization. In other words, the Proponent
seeks to either secure take-out financing to pay off GMN Toms
River, LLC or, if unsuccessful, sell its sole asset of real
property to pay GMN while preserving its equity.
Class 1 consists of the Secured Claim of GMN Toms River, LLC in the
amount of $624,486.87 secured by foreclosure judgment on real
property. The Debtor shall attempt to obtain financing to pay the
claim of GMN in full within 60 days of the Effective Date. In the
event the Debtor is unable to secure said financing, the real
property securing this claim will be listed for sale and sold
within 9 months from the Effective Date.
The creditor in this Class will be paid in full upon the sale of
the real property. To the extent net proceeds are insufficient to
pay GMN's judgment in full, the unpaid balance shall be
reclassified as unsecured. In the event the Debtor is unsuccessful
in the marketing and sale of the Property within the timeframe, GMN
shall be free to proceed with remedies allowable by state law.
Class 2 consists of the claim of the Tax Collector, Township of
Howell. The Debtor shall pay the tax lien amount of $35,855.16 plus
any accrued interest in full within 30 days of the Effective Date.
Funds for this payment shall be contributed as capital
contributions by the Debtor's sole member, Robert Schlumpf.
Class 3 consists of Unsecured claims not entitled to priority
totaling approximately $9,412.44. While it is seeking to obtain
financing, the Debtor initially will make monthly payments of
$160.00 per month to be distributed pro rata to Allowed Claims in
this Class. Funds for these payments shall be contributed as
capital contributions by the Debtor's sole member, Robert
Schlumpf.
If the Debtor is able to obtain financing sufficient to pay off the
balance, these payments shall be made from said financing. In the
event the Debtor is unable to secure financing and therefore
required to sell the Property following the expiration of its
financing deadline (60 days from the Effective Date), the balance
of these payments shall be made from the proceeds of the sale of
its property.
Class 4 consists of Debtor's ownership interests in their assets.
The Debtor shall retain ownership of their assets except to the
extent provided in the Plan.
The funds needed to fulfill the Debtor's obligations under the Plan
will be derived either from obtaining financing or from the sale of
the Property. The Debtor plan to obtain financing as well as
capital contribution from its sole member, Robert Schlumpf, to pay
all creditor in full. The Debtor has financing in place and is
waiting on the outcome of its motion to Reduce the Claim of GMN so
it can provide the lender with an accurate payoff figure. In the
event the Debtor is unsuccessful in securing financing it shall
sell its sole asset at 208 Bennett Road, Howell Township, NJ.
A full-text copy of the Disclosure Statement dated Jan. 17, 2022,
is available at https://bit.ly/3rDrLBs from PacerMonitor.com at no
charge.
Debtor's Counsel:
Timothy P. Neumann Esq.
Geoffrey P. Neumann, Esq.
BROEGE, NEUMANN, FISCHER & SHAVER LLC
25 Abe Voorhees Dr
Manasquan, NJ 08736-3560
Tel: (732) 223-8484
Fax: (732) 223-2416
E-mail: timothy.neumann25@gmail.com
E-mail: geoff.neumann@gmail.com
About First Choice Trucking
First Choice Trucking is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)). The Debtor's sole asset is
a six-acre warehouse and office located in Freehold, NJ, having a
current value of $1 million.
The Debtor filed a Chapter 11 petition (Bankr. D.N.J. Case No.
21-18098) on Oct. 18, 2021. In the petition signed by Robert
Schlumpf, the Debtor disclosed $500,000 to $1 million in assets
and $1 million to $10 million in liabilities. Timothy P. Neumann
Esq., of BROEGE, NEUMANN, FISCHER & SHAVER LLC, is the Debtor's
counsel.
FRANK LARISCEY, JR: $30K Sale of North Augusta Property Approved
----------------------------------------------------------------
Judge Susan D. Barrett of the U.S. Bankruptcy Court for the
Southern District of Georgia authorized Frank Lariscey, Jr.'s sale
of the real property located at 685 Seymour Drive, in North
Augusta, South Carolina, for $30,000.
All proceeds will be paid to the Trust Account of the counsel for
the Debtor, Hall & Navarro, LLC, maintained at Truist Bank until
further order(s) of the Court.
The bankruptcy case is In re: Frank Lariscey, Jr., Case No.
21-10495-SDB (Bankr. S.D. Ga.).
GARDEN VIEW: Gets OK to Hire De Sol Property as Property Manager
----------------------------------------------------------------
Garden View Condominium Apartments Association, Inc. received
approval from the U.S. Bankruptcy Court for the Southern District
of Florida to employ De Sol Property Management, Inc. as its
property manager.
The firm will render these services:
a) Board Relations. Meet and discuss upcoming goals and
activities for the association and prepare management reports.
b) Declaration and By-Laws: Review, interpret and modify the
association's governing documents in accordance with the Board of
Directors' objective.
c) Rules & Regulations: Guide the Board with the development
or update of rules and regulations along with enforcement
procedures, and creation door-tag templates, letters and
follow-up.
d) Correspondence: Prepare and distribute association
correspondence and notices, develop and maintain effective
complaint procedures, and respond to inquiries in a timely manner.
e) Annual Meeting: Prepare agenda and coordinate notices as
per Florida Statute requirements, mail proxies, ballots, voting
certificates, and conduct annual meeting and elections as per
by-laws and state regulations.
f) Board & Special Meetings: Prepare agenda and coordinate
notices as per Florida Statute requirements, post agenda, attend
monthly meetings and assist in the preparation of minutes of the
meeting.
g) Insurance: Review insurance coverage and present
recommendations, negotiate competitive coverage options for the
association, and assist in processing claims related to the
property.
h) Office Services: Maintain central business office for the
association and answer phone calls.
i) Record Maintenance: Maintain current records including
resident and unit owner information, contracts, insurance
information, accounting records, and a vast variety of other
miscellaneous official records for the association.
j) Association Approvals: Prepare association application
package for potential buyers and tenants, run nationwide criminal
background checks and credit reports, forward packages for board
approval, implement screening process to familiarize residents with
current rules and regulations, and execute notarized approval
letters if required.
k) Legal: Facilitate legal counsel assistance in appropriate
matters, including collections and suits.
l) Energy Conservation: Analyze and propose energy
conservation measures.
m) Newsletter: Assist the Board of Directors in the creation
of an association newsletter.
n) Be accessible 24 hours a day, seven days per week for
emergency service.
o) Inspections: Conduct inspections of association common
areas including property grounds, equipment and other facilities,
and prepare inspection report of the property including
recommendations to be given to the Board of Directors.
p) Resident Relations: Respond to maintenance request,
concerns, suggestions, complaints or questions in a prompt and
systematic manner by courteous staff trained to provide excellent
customer service, and follow up with maintenance request and work
orders created.
q) Major Maintenance Project Management: Arrange for outside
professional consultant (when needed) to prepare specifications for
projects, obtain competitive bids, and see all of the association's
projects.
r) Personnel: Provide part-time or full-time maintenance
employees for the association upkeep.
s) Preventive Maintenance: Provide a preventive maintenance
program for the buildings and grounds, coordinate scheduled and
unscheduled maintenance activities with employees or vendors, and
create a performance schedule for all common elements.
t) Vendor Supervision: Supervise routine and special projects
conducted in the property.
u) Life Safety: Prepare annual fire code inspection if
required.
The firm has agreed to provide the services for a monthly fee of
$1,700.
As disclosed in court filings, De Sol Property Management, Inc. is
a disinterested person within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Pablo De Los Santos, LCAM
De Sol Property Management, Inc.
7990 SW 117th Avenue Suite 206
Miami, FL 33183
Tel: 786-347-2758
Fax: 786-364-1215
Email: info@desolpm.com
About Garden View Condominium
Apartments Association
Miami-based Garden View Condominium Apartments Association, Inc.
filed its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-21650) on Dec. 13,
2021, listing up to $500,000 in assets and up to $10 million in
liabilities. Joseph Varela, president, signed the petition.
John Paul Arcia, Esq., at John Paul Arcia, P.A. represents the
Debtor as legal counsel.
GEM PREP - MERIDIAN: Moody's Rates $8.5MM Facility Bonds 'Ba1'
--------------------------------------------------------------
Moody's Investors Service has assigned Ba1 underlying and Aa3
enhanced ratings to the Idaho Housing and Finance Association's
$8.5 million Nonprofit Facilities Revenue Bonds (Gem Prep:
Meridian, LLC Project), Series 2022A (Credit Enhancement) and
$265,000 Nonprofit Facilities Revenue Bonds (Gem Prep: Meridian,
LLC Project), Series 2022B (Credit Enhancement) (Federally
Taxable). Concurrently, Moody's assigned a stable outlook.
Post-sale, Gem Prep: Meridian will have $8.8 million in facilities
revenue bonds outstanding.
GEM PREP - MERIDIAN: Moody's Rates $8.5MM Facility Bonds 'Ba1'
RATINGS RATIONALE
The Ba1 underlying rating reflects the limited, though stable,
operating position of Gem Prep: Meridian. The school's debt service
coverage and liquidity are strong relative to the scope of the
school's operations, however, operating margins are very narrow and
minor enrollment challenges or declines in state aid could impact
financial outcomes materially. Enrollment growth is required to
meet the school's financial projections. Strong economic expansion
in the City of Meridian and greater Boise metropolitan area coupled
with the school's satisfactory academic record, which is in line
with the local competitor school district and well ahead of state
results, points to continued modest annual enrollment growth and
the likelihood of charter renewal in 2023.
Governance considerations are a key driver for this rating action
given the school's lack of charter renewal and limited operating
history. Gem Prep: Meridian operates as a charter school under the
umbrella of Gem Innovation Schools of Idaho, Inc. (GIS) which
operates five charter schools and four campuses in Idaho (the 5th
school is an online campus). GIS is managed by a single Board of
Directors and set of Business Executives. Under Idaho law, each
school in the network is financially distinct and independent from
the others; funds cannot be intermingled. Additionally, the school
receives mentorship, grant management, and philanthropic guidance
and support from a non-profit third-party organization.
The Aa3 enhanced rating reflects the credit quality of the State of
Idaho (Aa1 stable) and its moral obligation pledge under the
provisions of the Idaho Public Charter School Facilities Program.
The program's strengths include statutory requirements that the
Idaho Housing and Finance Association and the Governor request the
legislature to make an appropriation to replenish the bonds' debt
service reserve fund in the event of a draw on that fund. The
rating also reflects the essentiality of charter schools in the
state's K-12 education system and the state's established track
record of making appropriation-backed debt payments under certain
financing agreements for state projects. The two-notch distinction
between the programmatic rating and the state's issuer rating
reflects the weaknesses inherent in the contingent,
subject-to-appropriation nature of the state's support.
RATING OUTLOOK
The stable outlook on the underlying rating reflects Moody's
expectation that Gem Prep: Meridian will maintain its market
position and financial performance, leading to improved liquidity
and debt service coverage over the next several years. Enrollment
growth is projected to be driven by annual economic expansion in
the area and a strong waitlist relative to current enrollment.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Financial trends that outpace proforma projections and lead to
materially improved days cash on hand and/or debt service coverage
-- Reaching full enrollment under the charter without compromising
leverage, liquidity, or operating performance
-- Successful charter renewal and continued strong academic
performance relative to state peers leading to an improved
competitive profile
-- Upgrade of the State of Idaho's issuer rating (enhanced)
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Trend of weak academic performance resulting in operational
and/or enrollment pressure or nonrenewal of charter
-- Material erosion of operating liquidity or decline in debt
coverage levels commensurate with a lower rating category
-- Downgrade of the State of Idaho's issuer rating (enhanced)
LEGAL SECURITY
The Series 2022 bonds constitute special, limited obligations of
the issuer payable solely from payments received pursuant to a loan
agreement and trust indenture between Gem Prep: Meridian and the
Idaho Housing and Finance Association (Issuer). Under the loan
agreement, Gem Prep: Meridian's pledged revenues include all state
and Charter School Facility Payments allocable to the school along
with all revenues, rentals, fees, third-party payments, receipts,
donations, contributions and other income derived from the
operation of the school. The school has also executed a deed of
trust pledging the campus as security for repayment.
The school has been approved and intends to use the Idaho Public
Charter School Facilities Program. A key requirement of the program
is a direct-pay arrangement for debt service, whereby all state per
pupil payments to the school are sent directly to the bond trustee
to set aside funds in accordance with the bond indenture. The bonds
will also benefit from a debt service reserve funded at the lesser
of the standard three-prong test and at least twelve months of debt
service. The school's fixed costs are anticipated to remain
manageable post-issuance at less than 20% of operating revenue,
which, when coupled with the school's satisfactory liquidity
position, provides flexibility to address most operational
challenges that could arise.
USE OF PROCEEDS
Bond proceeds will be used to purchase the school's existing
facility, which is presently leased, and fund the debt service
reserve.
PROFILE
Gem Prep: Meridian is a public charter school located in Meridian,
Idaho. The school operates a single-site K-12 charter school
building serving 488 students in the 2021-2022 school year. The
school's charter and facility have capacity to serve 732 students.
METHODOLOGY
The principal methodology used in the underlying ratings was US
Charter Schools published in September 2016.
GEM PREP - NAMPA: Moody's Rates $8.5MM Facility Bonds 'Ba2'
-----------------------------------------------------------
Moody's Investors Service has assigned Ba2 underlying and Aa3
enhanced ratings to the Idaho Housing and Finance Association's
$8.5 million Nonprofit Facilities Revenue Bonds (Gem Prep: Nampa
Project), Series 2022A (Credit Enhancement) and $265,000 Nonprofit
Facilities Revenue Bonds (Gem Prep: Nampa Project), Series 2022B
(Credit Enhancement) (Federally Taxable). Concurrently, Moody's
assigned a stable outlook. Post-sale, Gem Prep: Nampa (ID) will
have $8.8 million in facilities revenue bonds outstanding.
RATINGS RATIONALE
The Ba2 underlying rating reflects the limited, though stable,
operating position of Gem Prep: Nampa. The school's debt service
coverage and liquidity are strong relative to the scope of the
school's operations, however, operating margins are very narrow and
minor enrollment challenges or declines in state aid could impact
financial outcomes materially. Enrollment growth is required to
meet the school's financial projections with strong annual economic
expansion in the City of Nampa (Aa3 stable) and greater Boise
metropolitan area likely to drive modest enrollment growth over the
next few years. The school's leverage is elevated relative to
operations, though the school does not have any further near term
issuance plans.
Governance considerations are a key driver for this rating action
given the school's limited charter renewal and operating history.
Gem Prep: Nampa operates as a charter school under the umbrella of
Gem Innovation Schools of Idaho, Inc. (GIS) which operates five
charter schools and four campuses in Idaho (the 5th school is an
online campus). GIS is managed by a single Board of Directors and
set of Business Executives. Under Idaho law, each school in the
network is financially distinct and independent from the others and
funds cannot be intermingled. Additionally, the school receives
mentorship, grant management, and philanthropic guidance and
support from a non-profit third-party organization.
The Aa3 enhanced rating reflects the credit quality of the State of
Idaho (Aa1 stable) and its moral obligation pledge under the
provisions of the Idaho Public Charter School Facilities Program.
The program's strengths include statutory requirements that the
Idaho Housing and Finance Association and the Governor request the
legislature to make an appropriation to replenish the bonds' debt
service reserve fund in the event of a draw on that fund. The
rating also reflects the essentiality of charter schools in the
state's K-12 education system and the state's established track
record of making appropriation-backed debt payments under certain
financing agreements for state projects. The two-notch distinction
between the programmatic rating and the state's issuer rating
reflects the weaknesses inherent in the contingent,
subject-to-appropriation nature of the state's support.
RATING OUTLOOK
The stable outlook on the underlying rating reflects Moody's
expectation that Gem Prep: Nampa will maintain its market position
and financial performance, leading to improved liquidity and debt
service coverage over the next several years. Enrollment growth is
projected to be driven by annual economic expansion in the area and
a strong waitlist relative to current enrollment.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Financial trends that outpace proforma projections and lead to
materially improved days cash on hand and/or debt service coverage
-- Reaching full enrollment under the charter without compromising
leverage, liquidity, or operating performance
-- Material improvement of academic performance relative to peers
leading to an improved competitive profile
-- Upgrade of the State of Idaho's issuer rating (enhanced)
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Trend of weak academic performance resulting in operational
and/or enrollment pressure or nonrenewal of charter
-- Material erosion of operating liquidity or decline in debt
coverage levels commensurate with a lower rating category
-- Downgrade of the State of Idaho's issuer rating (enhanced)
LEGAL SECURITY
The Series 2022 bonds constitute special, limited obligations of
the issuer payable solely from payments received pursuant to a loan
agreement and trust indenture between Gem Prep: Nampa and the Idaho
Housing and Finance Association (Issuer). Under the loan agreement,
Gem Prep: Nampa's pledged revenues include all state and Charter
School Facility Payments allocable to the school along with all
revenues, rentals, fees, third-party payments, receipts, donations,
contributions and other income derived from the operation of the
school. The school has also executed a deed of trust pledging the
campus as security for repayment.
The school has been approved and intends to use the Idaho Public
Charter School Facilities Program. A key requirement of the program
is a direct-pay arrangement for debt service, whereby all state per
pupil payments to the school are sent directly to the bond trustee
to set aside funds in accordance with the bond indenture. The bonds
will also benefit from a debt service reserve funded at the lesser
of the standard three-prong test and at least twelve months of debt
service. The school's fixed costs are anticipated to remain
manageable post-issuance at less than 20% of operating revenue,
which, when coupled with the school's satisfactory liquidity
position, provides flexibility to address most operational
challenges that could arise.
USE OF PROCEEDS
Bond proceeds will be used to purchase the school's existing
facility, which is presently leased, and fund the debt service
reserve.
PROFILE
Gem Prep: Nampa is a public charter school located in Nampa, Idaho.
The school operates a single-site K-12 charter school building
serving 457 students in the 2021-2022 school year. The school's
charter and facility have capacity to serve 600 students.
METHODOLOGY
The principal methodology used in the underlying ratings was US
Charter Schools published in September 2016.
GEM PREP - POCATELLO: Moody's Rates $5.8MM Facility Bonds 'Ba2'
---------------------------------------------------------------
Moody's Investors Service has assigned Ba2 underlying and Aa3
enhanced ratings to the Idaho Housing and Finance Association's
$5.8 million Nonprofit Facilities Revenue Bonds (Gem Prep:
Pocatello Project), Series 2022A (Credit Enhancement) and $270,000
Nonprofit Facilities Revenue Bonds (Gem Prep: Pocatello Project),
Series 2022B (Credit Enhancement) (Federally Taxable).
Concurrently, Moody's assigned a stable outlook. Post-sale, Gem
Prep: Pocatello will have $6.1 million in facilities revenue bonds
outstanding.
RATINGS RATIONALE
The Ba2 underlying rating reflects the limited, though stable,
operating position of Gem Prep: Pocatello. The school's debt
service coverage and liquidity are strong relative to the scope of
the school's operations, however, operating margins are very narrow
and minor enrollment challenges or declines in state aid could
impact financial outcomes materially. Enrollment growth is required
to meet the school's financial projections, which could be a
challenge given slower economic expansion and growing charter
competition in the area. The school's leverage is high relative to
operations, though the school does not have any further near term
issuance plans.
Governance considerations are a key driver for this rating action
given the limited charter renewal and operating history. Gem Prep:
Pocatello operates as a charter school under the umbrella of Gem
Innovation Schools of Idaho, Inc. (GIS) which operates five charter
schools and four campuses in Idaho (the 5th school is an online
campus). GIS is managed by a single Board of Directors and set of
Business Executives. Under Idaho law, each school in the network is
financially distinct and independent from the others and funds
cannot be intermingled. Additionally, the school receives
mentorship, grant management, and philanthropic guidance and
support from a non-profit third-party organization.
The Aa3 enhanced rating reflects the credit quality of the State of
Idaho (Aa1 stable) and its moral obligation pledge under the
provisions of the Idaho Public Charter School Facilities Program.
The program's strengths include statutory requirements that the
Idaho Housing and Finance Association and the Governor request the
legislature to make an appropriation to replenish the bonds' debt
service reserve fund in the event of a draw on that fund. The
rating also reflects the essentiality of charter schools in the
state's K-12 education system and the state's established track
record of making appropriation-backed debt payments under certain
financing agreements for state projects. The two-notch distinction
between the programmatic rating and the state's issuer rating
reflects the weaknesses inherent in the contingent,
subject-to-appropriation nature of the state's support.
RATING OUTLOOK
The stable outlook on the underlying rating reflects Moody's
expectation that Gem Prep: Pocatello will maintain its market
position and financial performance, leading to improved liquidity
and debt service coverage over the next several years. The school's
satisfactory waitlist is expected to support stable enrollment over
the next few years, though charter competition in the area could
dampen growth.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Financial trends that outpace proforma projections and lead to
materially improved days cash on hand and/or debt service coverage
-- Reaching full enrollment under the charter without compromising
leverage, liquidity, or operating performance
-- Successful charter renewal and material improvement of academic
performance relative to peers leading to an improved competitive
profile
-- Upgrade of the State of Idaho's issuer rating (enhanced)
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Trend of weak academic performance resulting in operational
and/or enrollment pressure or nonrenewal of charter
-- Material erosion of operating liquidity or decline in debt
coverage levels commensurate with a lower rating category
-- Downgrade of the State of Idaho's issuer rating (enhanced)
LEGAL SECURITY
The Series 2022 bonds constitute special, limited obligations of
the issuer payable solely from payments received pursuant to a loan
agreement and trust indenture between Gem Prep: Pocatello and the
Idaho Housing and Finance Association (Issuer). Under the loan
agreement, Gem Prep: Pocatello's pledged revenues include all state
and Charter School Facility Payments allocable to the school along
with all revenues, rentals, fees, third-party payments, receipts,
donations, contributions and other income derived from the
operation of the school. The school has also executed a deed of
trust pledging the campus as security for repayment.
The school has been approved and intends to use the Idaho Public
Charter School Facilities Program. A key requirement of the program
is a direct-pay arrangement for debt service, whereby all state per
pupil payments to the school are sent directly to the bond trustee
to set aside funds in accordance with the bond indenture. The bonds
will also benefit from a debt service reserve funded at the lesser
of the standard three-prong test and at least twelve months of debt
service. The school's fixed costs are anticipated to remain
manageable post-issuance at less than 20% of operating revenue,
which, when coupled with the school's satisfactory liquidity
position, provides flexibility to address most operational
challenges that could arise.
USE OF PROCEEDS
Bond proceeds will be used to purchase the school's existing
facility, which is presently leased, and fund the debt service
reserve.
PROFILE
Gem Prep: Pocatello is a public charter school located in
Pocatello, Idaho. The school operates a single-site K-12 charter
school building serving 439 students in the 2021-2022 school year.
The school's charter and facility have capacity to serve 732
students.
METHODOLOGY
The principal methodology used in the underlying ratings was US
Charter Schools published in September 2016.
GONGCOOK LLC: Unsecured Creditors Will Get 100% of Claims in Plan
-----------------------------------------------------------------
GongCook, LLC, a/k/a GongCook LTD Liability Co., filed with the
U.S. Bankruptcy Court for the Eastern District of New York a
Disclosure Statement describing Plan of Reorganization dated Jan.
17, 2022.
The Debtor is a manufacturer of frozen food products for
distribution throughout the United States. The Debtor Limited
Liability Company was formed in 2017 but the Debtor did not
commence any operations until late 2019/early 2020, and was
practically, almost immediately, forced to shut down as a
consequence of the Covid crises.
Unless the holder of an Allowed Class 2 Unsecured Claim agrees to
less favorable treatment, the Debtor shall pay holders of Allowed
Class 2 Unsecured Claims 100% of the amount of the Allowed Class 2
Claims, in cash, on the effective date. Allowed Unsecured Priority
Claims and Allowed Secured Claims are being paid 100% of the amount
of Allowed Claims, with interest.
Class 1 consists of the Secured Claim of Crown Equipment
Corporation. The Debtor was current in the remittance of its lease
payment obligations to this creditor and has remained current
throughout the pendency of this Chapter 11 case. The Debtor shall
assume these leases, remain current and in compliance with its
agreements with this creditor going forward.
Class 2 consists of General Unsecured Claims:
* Class 2 claimants other than creditor 305 Clearview Limited
Partnership, whose claims total $15,433.87, shall be paid the
amount of their allowed claims in cash on the effective date. These
general unsecured creditors are not impaired.
* 305 has asserted an unsecured claim for rent arrears in the
amount of $549,169.67. The Debtor shall assume its lease with 305
and pay 305 the sum of $549,169.67 in cash on the effective date.
Chiu Ng and Fuzhi Li, the sole members of the Limited Liability
Corporation shall retain their respective interests in the
reorganized debtor and act as Post Confirmation Managers of the
Debtor. Although Equity Security Holders are impaired under the
Plan, they will vote to accept the Plan.
The payments to cover the cash required on the effective date of
the Debtor's Plan will come from the Debtor's forecasted cash flow,
a capital contribution from member Chiu Li, and a credit facility
is a sum sufficient to pay the remaining balance in full on the
effective date.
A full-text copy of the Disclosure Statement dated Jan. 17, 2022,
is available at https://bit.ly/3fMJUXV from PacerMonitor.com at no
charge.
Attorney for Debtor:
Richard S. Feinsilver, Esq.
One Old Country Road, Suite 125
Carle Place, NY 11514
Telephone: (516) 873-6330
Facsimile: (516) 873-6183
Email: feinlawny@yahoo.com
About GongCook LLC
Valley Stream, N.Y.-based GongCook, LLC filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y.
Case No. 21-71260) on July 8, 2021. Chiu Ng, managing member,
signed the petition. At the time of the filing, the Debtor listed
as much as $10 million in assets and as much as $1 million in
liabilities. Judge Alan S. Trust oversees the case. Richard S.
Feinsilver, Esq., is the Debtor's legal counsel.
HAPPY BEAVERS: Taps Dickensheets & Associates as Auctioneer
-----------------------------------------------------------
Happy Beavers, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Colorado to employ
Dickensheets & Associates to market and auction some of their
assets.
Dickensheet & Associates has requested a marketing budget of $2,500
to be paid up front. After the auction, the firm will get a fee of
$5,000 in addition to the marketing fee in the event Great Western
Bank, a secured creditor, is the winning bidder.
In the alternative, if the business is sold to a third-party bidder
other than the bank, the firm will receive a commission of 2
percent of gross sale proceeds along with the marketing fee.
As disclosed in court filings, Dickensheet & Associates is
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Christine Dickensheet
Dickensheet & Associates, Inc.
1501 West Wesley Avenue
Denver, CO 80223
Telephone: (303) 934-8322
Toll Free: (877) 284-0338
Fax: (303) 934-8252
Email: customerservice@dickensheet.com
About Happy Beavers
Happy Beavers, LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No.
20-14853) on July 17, 2020. On July 22, 2020, affiliates Gunsmoke,
LLC and Armed Beavers, LLC filed for Chapter 11 protection (Bankr.
D. Colo. Case Nos. 20-14962 and 20-14963). The bankruptcy cases
are jointly administered with Happy Beavers' case.
At the time of the filing, Happy Beavers listed as much as $10
million in both assets and liabilities.
Judge Joseph G. Rosania Jr. oversees the cases.
The Debtors tapped Jorgensen, Brownell & Pepin P.C. as legal
counsel, Nickie Stobbe of Profit Accounting Plus as bookkeeper, and
Brian Jacobson of Haynie & Company as accountant.
HOOT THE DOG: Amends Unsecured Claims Pay Details
-------------------------------------------------
Hoot the Dog, LLC, and Hoot the Dog Five's LLC submitted an Amended
Plan of Reorganization for Small Business dated Jan. 17, 2022.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $2,594,400 ($2,216,400 for
Hoot the Dog, LLC and $378,000 - Hoot the Dog Five, LLC).
The final Plan payment is expected to be paid on March 1, 2027.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of the Secured claim of Bridge Capital Ventures.
Bridge Capital Ventures holds scheduled claims for Hoot the Dog and
Hoot the Dog Five in the amount of $507,000 which is secured by a
UCC Lien on the Debtors' Assets. Prior to confirmation the Debtor
has made 3 adequate protection payments totaling $30,315 reducing
the amount owed to $476,685. The secured claim will be amortized
over 60 months at 0% interest with monthly payments of $7,945
commencing 30 days from the entry of the Confirmation Order.
Bridge Capital Ventures will retain its lien to the same extent,
validity, and priority as existed prepetition.
Class 4 is comprised of entities that hold claims against the
Debtor based upon agreements with the Debtor under which the
claimants purchased a percentage of the Debtor's future accounts,
contract rights and other entitlements arising from or relating to
the payment of money by the Debtor's customers and/or third-party
payors for payments due to the Debtor as the result of the sale of
goods and/or services. The members of this class are: (a) Panthers
Capital, LLC; (b) BMF Advance, LLC; (c) Fox Capital Group; (d) EBF
Holdings; (e) Kingdom Kapital aka Wynwood Capital Group; (f) Meged
Funding Group Corp; (f) East Harbor; and (g) Delta Bridge aka Cloud
Fund.
Beginning on the 5th day of the 1st full month following the
Effective Date of the Plan, and continuing on the 5th day of each
month thereafter for a total of 60 consecutive months, the Debtor
will deposit or will cause to be deposited into a non-IOTA,
interest-bearing account maintained by Jake C. Blanchard, Esquire,
who shall serve as the Disbursing Agent, an amount equal to 5% of
the preceding month's gross receipts (the "Distribution Fund"),
plus an administrative fee of $1,300 per month to compensate the
Disbursing Agent for expenses incurred maintaining the Distribution
Fund and making distributions.
Beginning on the 15th day of the first full month following the
Effective Date of the Plan and continuing on the 15th day of each
month thereafter for a total of 60 consecutive months, the
Disbursing Agent will make pro-rata distributions to the class
members from the funds deposited into the Distribution Fund.
Distributions will be made via ACH transaction. Over the life of
the Plan, each class member is responsible to ensure the Disbursing
Agent has current information for the ACH transactions.
Class 5 consists of Non-priority unsecured creditors. The Members
of this Class are the IRS (unsecured portion of claims); (a)
Florida Department of Revenue (unsecured portion of claims), and
(c) Capital One (Claim 4 in HTD). Class 5 shall be paid in full
within 5 years from the effective date of confirmation, with equal
quarterly payments commencing the fifteenth day after the beginning
of the first quarter after the effective date.
Class 6 consists of Non-priority unsecured creditors. The Member of
this Class is JP Morgan Chase (Claim 3 in HTD and Claim 3 in HTD5).
The claims of JP Morgan Chase are for forgivable loans pursuant to
the CARES Act and Debtors will seek loan forgiveness in accordance
with procedures promulgated by the Small Business Administration.
Post Confirmation all plan payments will be funded by the Debtor's
cash flow in accordance with projections. The Debtor will continue
to be owned and operated by its owner Jay Thomas. HTD lists a
potential for recovering gold from an overseas investment, which
was also disclosed on the Statement of Financial Affairs. In the
event HTD, HTD5, or the owner recovers the gold referenced in
Schedule B and the Statement of Financial Affairs, and is able to
liquidate it, all payments to claimants will be accelerated.
A full-text copy of the Amended Plan of Reorganization dated Jan.
17, 2022, is available at https://bit.ly/3nOKatL from
PacerMonitor.com at no charge.
About Hoot The Dog
Hoot the Dog, LLC, operates the restaurant The Brown Boxer Pub and
Grille at 483 Mandalay Ave #118, Clearwater Beach, Florida.
Affiliate Hoot the Dog Five, LLC owns and operates a smaller
location in a leased premises under the same fictitious name
located at 741 Bayway Blvd., Clearwater Beach, Florida.
Hoot The Dog LLC and Hoot the Dog Five LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
21-04799 and 21-04803) on Sept. 20, 2021. In the petition signed
by Jay Thomas, managing member, HTD disclosed up to $50,000 in
assets and up to $10 million in liabilities.
Judge Caryl E. Delano oversees the cases.
Jake C. Blanchard, Esq., at Blanchard Law, P.A., is the Debtors'
counsel.
HOYA MIDCO: Moody's Ups CFR to Ba3 & Rates $350MM Secured Loans Ba3
-------------------------------------------------------------------
Moody's Investors Service upgraded Hoya Midco, LLC's (Vivid Seats)
corporate family rating to Ba3 from B1 and probability of default
rating to Ba3-PD from B1-PD. Concurrently, Moody's assigned a Ba3
rating to the amended and extended senior secured credit facility
consisting of $275 million senior secured term loan due 2029 and
$75 million revolver due 2027. Moody's also assigned an SGL-1
Speculative Grade Liquidity rating, indicating very good liquidity.
The outlook remains stable.
Vivid Seats plans to use the proceeds from the amended term loan
along with $194 million cash to pay off the existing term loan and
to cover fees and expenses. The rating on the existing term loan
will be withdrawn when it is paid off.
The rating upgrades reflect Vivid Seats' additional reduction in
leverage proforma for the planned $194 million debt paydown,
improved liquidity with added access to a revolving credit line,
and stronger than previously anticipated earnings recovery.
Moody's projects FY2021 Debt/EBITDA will decline to 2.7x from 4.5x
(Moody's adjusted) proforma for the planned debt paydown, with the
company maintaining nearly $300 million cash on balance sheet (or
roughly $100 million net of estimated seller payables).
Importantly, since the SPAC merger and Moody's CFR upgrade in
October 2021, Vivid Seats provided more clarity on its financial
policy as a public company. Vivid Seats has publicly stated its
intention to operate with moderate net leverage, which will not
exceed 3x for potential acquisitions, and maintain significant cash
balances affording it financial flexibility for growth initiatives.
The company's proposed refinancing and debt paydown demonstrate its
commitment to a disciplined financial policy.
Upgrades:
Issuer: Hoya Midco, LLC
Corporate Family Rating, Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Assignments:
Issuer: Hoya Midco, LLC
Speculative Grade Liquidity Rating, Assigned SGL-1
Senior Secured 1st Lien Term Loan, Assigned Ba3 (LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Assigned Ba3
(LGD3)
Outlook Actions:
Issuer: Hoya Midco, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Vivid Seats' Ba3 corporate family rating reflects its modest
operating scale, concentrated business profile in the ticket resale
market and the stiff competition it faces from larger, diversified
companies operating both primary and secondary ticket marketplaces.
As a growth-oriented public company, Moody's expects Vivid Seats to
maintain low debt levels. Nevertheless, private equity firm GTCR
still owns approximately 61% of Vivid Seats' common stock and the
potential for shareholder friendly actions given ownership
concentration is a rating constraint.
The company's Ba3 CFR also reflects the company's entrenched
position in the secondary ticket marketplace, the scalable nature
of its platform which benefits from network effects, and strong
double-digit EBITDA margins the company has been able to
consistently achieve prior to the pandemic. Moody's expects revenue
growth to bring the company's top line to pre-pandemic levels in
2022, with continued growth at a high-single-digit percentage rate
in 2023-2024, buoyed by pent-up demand for live events
post-pandemic and increased marketing efforts.
The SGL-1 Speculative Grade Liquidity Rating reflects Moody's
expectation that Vivid Seats will maintain very good liquidity over
the next 12-18 months. Sources of liquidity consist of a robust
cash balance of over $200 million proforma for the refinancing and
debt paydown (before seller payables), expectation for strong free
cash flow, and full access to a proposed $75 million revolving
credit facility due 2027. The revolver will be undrawn at close,
and Moody's expects it to remain undrawn for the next 12-18 months
given strong internally generated cash flows. There are no
financial maintenance covenants under the amended first-lien term
loan, but the proposed revolver is subject to a springing maximum
first-lien net leverage ratio. Moody's does not expect the company
to tap into the revolver during the next 12-18 months or the
covenant to be tested. Moody's expects that Vivid Seats will remain
well in compliance with the springing first-lien net leverage
covenant, if tested.
The Ba3 instrument ratings on the proposed first lien term loan due
2029 reflects the probability of default of the company, as
reflected in its Ba3-PD probability of default rating, and an
average expected family recovery rate of 50% at default given there
is only a single class of debt and the proposed term loan does not
have financial maintenance covenants.
The stable outlook reflects Moody's expectations that Vivid Seats'
operating performance will return, if not exceed, its pre-pandemic
level in 2022, and that the company will maintain very good
liquidity, low debt levels and cash well above seller payables.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Vivid Seats' ratings if the company
profitably expands its scale and business diversity, and
demonstrates a track record of conservative financial policies
including low leverage, consistently strong free cash flow to debt
and very good liquidity along with a material reduction of
private-equity ownership.
Ratings could be downgraded if an aggressive financial policy or
weak earnings cause leverage to exceed 3.5x (Moody's adjusted), or
free cash flows weaken, or the company fails to maintain good
liquidity.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Chicago, Illinois, Hoya Midco, LLC is the parent
company of Vivid Seats LLC, a provider of an online marketplace
serving the secondary ticketing industry. Hoya is an indirect
subsidiary of publicly traded Vivid Seats Inc. and is
majority-owned by affiliates of GTCR, LLC.
HOYA MIDCO: S&P Upgrades ICR to 'B+', Outlook Stable
----------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Hoya Midco
LLC (d/b/a Vivid Seats Inc.) to 'B+' from 'B'.
S&P said, "We concurrently assigned our 'B+' issue-level and '3'
recovery ratings on the company's proposed first-lien credit
facility.
"The stable outlook reflects our expectation that Vivid Seats will
maintain S&P Global Ratings' adjusted leverage of about 3x in 2022.
The stable outlook also reflects our belief that leverage will
remain below 5x, inclusive of potential tax receivable liabilities,
while maintaining free operating cash flow (FOCF) to debt of
10%-15% through 2022.
"The upgrade reflects our expectation that Vivid Seats will
maintain leverage below 5x, even incorporating potential
liabilities associated with the company's tax receivable agreement.
Vivid Seats is using the proceeds from its proposed $275 million
term loan B as well as $194 million of cash on hand to refinance
its $466 million of outstanding term loans, reduce its debt
balance, and pay related fees and expenses. Vivid Seats has
significantly reduced debt balances since its merger with special
purpose acquisition company (SPAC) Horizon Acquisition Corp. Vivid
Seats used substantially all the proceeds from its SPAC merger to
pay down term loans and redeem the company's senior preferred
equity. Pro forma for the transaction, we expect Vivid Seats will
have approximately $375 million of S&P Global Ratings' adjusted
debt inclusive of $275 million outstanding on its proposed
first-lien term loan and about $35 million in warrant liabilities,
associated with its SPAC merger, as well as sales tax liabilities
and earnout liabilities from its acquisition of Betcha Sports. With
the refinancing, in addition to prior debt repayments, the company
will have dramatically reduced its overall debt balance compared to
prior years of approximately $800 million and $1 billion of S&P
Global Ratings' adjusted debt in 2019 and 2020, respectively. Pro
forma for the transaction, we expect the company will end 2021 with
S&P Global Ratings' adjusted leverage of approximately 3.5x-4.0x
following a strong second half of the year. Moreover, we expect the
company's leverage to be approximately 3.0x-3.5x by year-end 2022.
"Vivid Seats does not currently have any balance sheet liabilities
related to its tax receivable agreement (TRA) with its sponsor.
However, over time we expect the company will likely have TRA
balance sheet liabilities, which we expect to treat as debtlike and
include in our S&P Global Ratings' adjusted leverage calculation.
Nevertheless, given the company's deleveraging over the last 12
months, we expect the company to limit debt-financed transactions
and maintain leverage below 5x including any TRA liabilities. We
have not currently incorporated a TRA liability in our measure of
adjusted debt through 2022.
"We expect a recovery in ticketing volumes, driven by pent-up
demand for live entertainment, will help the Vivid Seats increase
its revenue and earnings. Vivid Seats' ticketing volume and gross
order value (GOV) continued to recover through the third quarter as
the global vaccination effort progressed, restrictions on live
events were mostly lifted, and as consumers began to feel more
comfortable in traditional venues for entertainment. The company's
GOV in the second and third quarters was substantially higher than
the comparable quarter in 2019 as Vivid Seats benefited from
significant pent-up demand for concerts, sporting events, and
theater shows, and we believe these trends continued through the
end of the year. We expect demand for live entertainment will
continue to support elevated GOV and net revenue over the next
several months and that volumes will remain modestly above
pre-pandemic levels throughout the end of the year despite
lingering consumer apprehensions regarding large gatherings. We
expect Vivid Seats' GOV and net revenue will increase in 2022 to
approximately 20%-25% above pre-pandemic levels as pent-up demand
drives higher levels of event attendance and elevated consumer
savings support highest average order sizes.
"Absent a return of pandemic-related restrictions on large
gatherings, we expect GOV associated with sporting events and
theater shows will return to just under pre-pandemic levels in 2022
as restrictions continue to ease and major sports leagues and
theater productions that were disrupted throughout 2020 return to
normal schedules. However, we expect concert ticket volumes to be
20%-30% above pre-pandemic levels. Our understanding is that a good
portion of concerts since the start of the pandemic either remain
postponed or have been rescheduled to future dates. As a result,
Vivid Seats will benefit from an outsized number of shows booked in
the latter half of 2021 and in 2022 that will support higher
marketplace GOV. In addition, we believe that average order size
will remain elevated through 2022, supported by pent-up demand and
excess savings. While the current trend in COVID-19 case counts is
high, driven by the omicron variant, we believe the risk that local
governments impose harsher restrictions that curtail event activity
is low. Additionally, we believe that as long as hospitalization
rates remain tolerable, consumers will continue to feel safe enough
to return to larger social gatherings.
"The stable outlook reflects our expectation that Vivid Seats will
maintain S&P Global Ratings' adjusted leverage of approximately 3x
and for strong FOCF to debt for the current rating in the 10%-15%
range through 2022. The stable outlook also reflects our confidence
that adjusted debt to EBITDA will remain under 5x incorporating any
potential liabilities arising from its tax receivable agreement
over the year.
"We could lower the rating if we expected Vivid Seats to sustain
leverage above 5x for an extended period, likely resulting from a
combination of the reimplementation of operating restrictions that
impede revenue and EBITDA growth in 2022, if COVID hospitalization
rates increase substantially causing reversal in reopening and a
change in consumer behavior, significant tax receivable liabilities
placed on its balance sheet, and an aggressive financial policy
such that the company used its cash and placed incremental debt to
fund high-priced acquisitions that caused leverage to remain above
5x for a prolonged period.
"We could raise the rating if we became confident that the company
would sustain S&P Global Ratings' adjusted debt to EBITDA
comfortably below our 4x upgrade threshold while maintaining FOCF
to debt of 10%-15% incorporating any impact resulting from the
company's tax receivable agreement and modest amounts of leveraging
M&A activity. For an upgrade, we would also look for a smaller
concentration of sponsor ownership with an expectation that the
sponsors will relinquish control within two to three years. We
could also raise the rating if we came to view the business more
favorably due to market share gains or increased scale that we
believe aligns Vivid Seats closer to its competitors."
HR NORTH DALE: Gets OK to Hire Citrus Capital as Real Estate Broker
-------------------------------------------------------------------
HR North Dale Mabry, LLC received approval from the U.S. Bankruptcy
Court for the Middle District of Florida to employ Citrus Capital
Corp., LLC to market and sell its property located at North Dale
Mabry Highway in Lutz, Fla.
The firm will charge its customary 6 percent commission.
As disclosed in court filings, Citrus Capital is a disinterested
person within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Saxon Evans
Citrus Capital Corp. LLC
7875 Broken Arrow Trail
Winter Park, FL 32792
Phone: 239-384-1432
Email: Saxonrowdyevans@gmail.com
About HR North Dale Mabry
HR North Dale Mabry, LLC, a company based in Tampa, Fla., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 21-01958) on April 21, 2021, listing as much as $10
million in both assets and liabilities. Claire Clement, manager,
signed the petition.
Judge Michael G. Williamson oversees the case.
Johnson Pope Bokor Ruppel & Burns, LLP, led by Angelina E. Lim,
Esq., is the Debtor's legal counsel.
ITZHAK MEIR SHTARK: $1.34-Mil. Sale of Sanford Homestead Approved
-----------------------------------------------------------------
Judge Grace E. Robson of the U.S. Bankruptcy Court for the Middle
District of Florida authorized Itzhak Meir Shtark and Ayala Shtark
to sell their homestead located at 334 Savta Point, in Sanford,
Florida 32771, free and clear of any liens, claims, or encumbrances
(including any lis pendens) to Kenneth Eggert and Stacy-Ann Eggert
for $1.34 million, as outlined in the Sale Contract.
A hearing on the Motion was held on Jan. 13, 2022, at 10:30 a.m.
The proposed addendum to the Sale Contract, announced in open court
at the Hearing, providing for a repair credit of $61,250 to the
Buyers in lieu of repairs is also approved.
The Debtors are authorized to close on the sale by Jan. 31, 2022,
or as soon thereafter as may be reasonably practicable, and to take
whatever steps may be necessary to consummate the sale. Any
extension of the closing date must be agreed to in writing by SMRF
Trust II by Select Portfolio Servicing, Inc., its mortgage
servicer.
With respect to SMRF Trust II, serviced by Select Portfolio
Servicing, Inc. ("SMRF") the authorization to sell the Property is
conditioned upon:
a. SMRF's mortgage lien, inclusive of post petition interest,
attorney's fees, costs and advances must be paid in full at closing
from the sale proceeds based on a written payoff statement from
SMRF for the full contract debt. SMRF is an oversecured creditor
under 11 U.S.C. Section 506.
b. SMRF's mortgage lien recorded in Official Records Book 9321
at Page 125 of the Public Records of Seminole County, Florida, will
be paid in first priority before any other lienholder or secured
claimant (other than for outstanding taxes) and such lien will
attach to the sale proceeds in first order of priority.
c. The Debtors must request a written payoff statement from
SMRF at least seven days prior to closing.
d. The payoff statement must not be expired at the time of
closing.
e. The payoff funds must be wired to SMRF as instructed in its
written payoff statement.
f. SMRF must have an opportunity to review the proposed HUD-1
at least 48 hours prior to closing.
With respect to WP Underground Utilities, Inc.:
a. Immediately upon entry of this order, the automatic stay
will be deemed terminated to allow WP Underground to recover the
$93,899.51 replacement bond currently on deposit with the Seminole
County Clerk of Court. The Debtors consent to WP Underground’s
Motion to Release Funds from the Clerk, which will be filed in
Seminole County Court.
b. Upon entry of this Order, WP Underground may submit an
order granting its motion to approve the settlement reached between
WP Underground and the Debtors under Rule 9019 of the Federal Rules
of Bankruptcy Procedure, and SMRF's objection thereto will be
deemed withdrawn with the caveat that no part of the real property
encumbered by SMRF's Mortgage, and its first mortgage priority, are
adversely affected or altered by the Settlement Agreement approved
by the 9019 Motion. To facilitate the Section 363 Sale by way of
the Order, and approval of the 9019 Motion, WP Underground agrees
to subordinate any claim or lien it has upon the Debtors' homestead
property to the SMRF Mortgage with respect to the property as
described therein. Such subordination is ratified by the Order.
c. At closing, and after payment of SMRF, WP Underground will
be paid $150,445.60 from the sale proceeds, in accordance with the
Payoff Letter provided by WP Underground to the Debtor on Jan. 14,
2022.
d. Once WP Underground recovers the $93,899.51 on deposit with
the Seminole County Clerk of Court, described in subparagraph a.
above, and $150,445.60 from the sale proceeds, described in
subparagraph c. above, all of its claims against the Debtors will
be deemed paid in full. At such time, the parties agree to dismiss
the Seminole County Court case.
e. To the extent there is any deficiency claim with WP
Underground after closing, the terms of the settlement described in
subparagraph b. will remain in effect for any such deficiency. In
the event there is a deficiency claim, WP Underground will retain
its lien on the Debtors' non-homestead property.
The 14-day stay pursuant to Rule 6004(h) is waived and the Order
will be enforceable immediately upon entry.
A copy of the Contract is available at https://tinyurl.com/2p9dvp5e
from PacerMonitor.com free of charge.
Itzhak Meir Shtark and Ayala Shtark sought Chapter 11 protection
(Bankr. M.D. Fla. Case No. 21-03936) on Aug. 30, 2021. The Debtors
tapped Melissa Youngman, Esq., as counsel.
J. HUNTER PROPERTIES: Case Summary & 13 Unsecured Creditors
-----------------------------------------------------------
Debtor: J. Hunter Properties, LLC
314 Lafayette Road, Suite 3
Hampton, NH 03842
Chapter 11 Petition Date: January 21, 2022
Court: United States Bankruptcy Court
District of New Hampshire
Case No.: 22-10025
Judge: Bruce A. Harwood
Debtor's Counsel: Eleanor Wm. Dahar, Esq.
VICTOR W. DAHAR PROFESSIONAL ASSOCIATION
20 Merrimack Street
Manchester, NH 03101
Tel: (603) 622-6595
Fax: (603) 647-8054
E-mail: vdaharpa@att.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jessica Lapa, manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/L5INH5Y/J_Hunter_Properties_LLC__nhbke-22-10025__0001.0.pdf?mcid=tGE4TAMA
JAMES PATRICK DOYLE: Sale of Washington County Property Approved
----------------------------------------------------------------
Judge William T. Thurman of the U.S. Bankruptcy Court for the
District of Utah authorized James Patrick Doyle's sale of
approximately 85 total acres of his real property located in
Washington County, Utah, as follows:
1) approximately 29 acres to Kent Heideman; and
2) approximately 56 acres to Dustland Fairytale, LLC.
The proceeds from the sale of the Real Property, minus any closing
costs and sale proceeds used to pay off unpaid taxes and prorations
related to the Real Property, if any, are to be deposited into the
Kirton McConkie Trust account at the closing of the sale of the
Real Property, with the sale proceeds to be distributed as follows:
a. All U.S. Trustee quarterly fees to be paid in full;
b. The claim of Stephens & Klinge, LLP, which has been
assigned to Richard M. Stephens, to be paid in full;
c. The second application of Kirton McConkie to be paid in
full;
d. The second application of Barbara M. Smith Accounting to be
paid in full; and
e. The balance of all remaining funds to be distributed to the
Debtor.
The sale is free and clear of all interests.
The Order constitutes a final order within the meaning of 28 U.S.C.
Section 158(a).
James Doyle sought Chapter 11 protection (Bankr. D. Utah Case No.
20-25049) on Aug. 19, 2020. The Debtor tapped Jeremy Sink, Esq., as
counsel.
K&L AG GROUP: Seeks to Hire Vice & Henley as Litigation Counsel
---------------------------------------------------------------
K&L Ag Group, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Texas to employ Vice & Henley, PLLC as its
special litigation counsel.
The firm will represent the Debtor in non-bankruptcy legal matters,
including a pending mechanic lien claim.
The firm received a retainer in the amount of $2,000. Dale Henley,
Esq., a member of Vice & Henley, will charge $300 per hour for his
services.
Mr. Henley disclosed in a court filing that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Dale Henley, Esq.
Vice & Henley, PLLC
5368 TX-276 West
Royse City, TX 75189
Phone: 469-402-0450
Fax: 469-402-0461
Email: kvice@vicehenleylaw.com
About K&L Ag Group
K&L Ag Group, LLC, a Royce City, Texas-based company engaged in the
business of highway, street, and bridge construction, sought
Chapter 11 protection (Bankr. N.D. Texas Case No. 20-32930) on Nov.
25, 2020. Karen Mynar, authorized officer and member, signed the
petition. At the time of the filing, the Debtor listed as much as
$10 million in both assets and liabilities.
Judge Michelle V. Larson oversees the case.
The Rossini Law Firm, led by William P. Rossini, Esq., and Vice &
Henley, PLLC serve as the Debtor's bankruptcy counsel and special
litigation counsel, respectively.
KB HOME: S&P Alters Outlook to Positive, Affirms 'BB' ICR
---------------------------------------------------------
S&P Global Ratings revised its outlook on Los Angeles-based
homebuilder KB Home (KBH) to positive from stable. S&P also
affirmed its 'BB' issuer credit and issue-level ratings. The
recovery rating on KBH's debt remains '3'.
The positive outlook reflects the likelihood that debt to EBITDA
finishes 2022 at about 1.5x, even as KBH pays for sizable land and
development increases largely through funds from operations (FFO),
which S&P expects to approach $1 billion.
S&P expects another significant jump in EBITDA for 2022. After
climbing an estimated more than 50% in 2021, KB Home's EBITDA
should trend above 40% against this year. These improvements, about
evenly split between revenue and margin gains, support total EBITDA
of $1.2 billion in 2022, more than double from 2020.
Net debt should rise only modestly in 2022, despite much higher
investment spending. An ongoing surge in housing demand will
require $950 million in incremental outlays for land and
development (inventories). FFO, also forecast at nearly $1 billion,
should combine with cash on hand to absorb the vast majority of
these land, development and construction outlays.
KB Home must address a few key challenges. First, the company must
deliver homes from a backlog that's grown 35% in the past year. At
the same time, management intends to boost its count of active
selling communities by 20% to 25%, up close to 20%, absent
substantial changes in leverage.
S&P said, "The positive outlook reflects revenue improvements in
2021 that we expect to generate close to $1.2 billion in EBITDA,
amid robust overall demand. KBH should pay for visible growth
largely through FFO, which we expect to approach $1 billion. Absent
significant changes in net debt, we look for debt to EBITDA of 1.5x
in 2022.
"We could raise our rating on KB to 'BB+' over the next 12 months
if the company sustains debt to EBITDA below 2x while maintaining
at least an adequate liquidity assessment.
"We could revise the outlook to stable if debt to EBITDA trends
back above 2x or debt to capital increases above 35%. That could
occur if expected EBITDA gains fail to materialize or net debt
increases at least $500 million."
Environmental, Social And Governance
S&P said, "Environmental factors are a modestly negative
consideration in our credit rating analysis of KB Home. The company
is subject to a variety of local, state, and federal statutes,
ordinances, rules, and regulations concerning health and
environmental protection. We view KB Home's ESG exposure as broadly
in line with that of industry peers."
KEEPITSIMPLE.US LLC: Initial Order on Assets Sale Procedures Issued
-------------------------------------------------------------------
Judge D. Sims Crawford of the U.S. Bankruptcy Court for the
Northern District of Alabama issued an initial order authorizing
KeepITSimple.us, LLC's sale procedures in connection with the sale
of substantially all assets to Aligned Holdings, Inc., free and
clear of any interests.
The Sale Hearing will be held on Jan. 26, 2022, at 9:30 a.m. (CT),
or as soon thereafter as the counsel may be heard. At the Sale
Hearing, the Debtor will seek entry of the Sale Order. The Sale
Hearing may be adjourned from time to time without further notice
other than an announcement by the Debtor in the Court on the date
scheduled for the Sale Hearing.
The form of the Sale Notice is approved. The Debtor will serve
within two business day after entry of the Initial Order ("Mailing
Deadline"), the Sale Notice upon the Sale Notice Parties. The Sale
Objection Deadline was Jan. 21, 2022, at 4:00 p.m. (CT) or such
later date and time as the Debtor may agree.
The following Assignment Procedures will govern the assumption and
assignment of the Assumed Contracts and Assumed Leases in
connection with the Sale of the Purchased Assets to Aligned
Holdings:
a. The Debtor was to file the completed Assignment Notice with
the intended cure amount 10 days prior to the Sale Hearing, which
was Jan. 16, 2022.
b. The Debtor will serve the Assignment Notice on all
counter-parties to such executory contracts on the date that it
files the Assignment Notice with the Court.
c. If any counter-party to an executory contract fails to
object to the cure amounts included in the Assignment Notice at
least three (3) days prior to the Sale Hearing, which was Jan. 23,
2022, then such counter-party's cure will be finally determined to
be the cure amount in the Assignment Notice at the Sale Hearing.
The form of notice of the Assignment Notice is approved in all
respects.
The notice provided in the Assignment Procedures of (a) the Assumed
Contracts and Assumed Leases and the amounts necessary to cure
defaults under each of such Assumed Contracts and Assumed Leases
determined by the Debtors and (b) the deadline for objecting to the
proposed cure amounts, will constitute adequate and sufficient
notice and no additional notice need be provided.
Notwithstanding the possible applicability of Bankruptcy Rules 6003
and 6004(h), or otherwise, the Court, for good cause shown, orders
that the terms and conditions of the Initial Order will be
immediately effective and enforceable upon its entry.
About KeepITSimple.us LLC
KeepITSimple.us, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No.
21-02986) on Dec. 31, 2021, listing up to $500,000 in assets and
up
to $1 million in liabilities. Thomas A. Kane, manager and member,
signed the petition.
Judge D. Sims Crawford oversees the case.
Daniel D. Sparks, Esq., and Bill D. Bensinger, Esq., at Christian
&
Small, LLP serve as the Debtor's bankruptcy attorneys.
KENNETH A. BERDICK: Court Denies Proposed Sale of Alva Property
---------------------------------------------------------------
Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle
District of Florida denied Kenneth Allen Berdick's sale of the real
property described as 15830 N River Rd., in Alva, Florida 33920,
free and clear of all Liens.
After review, the Court determined that the motion is deficient as
follows: $188.
Accordingly, the Court denied the Motion to allow the Debtor to
file an amended motion. No additional filing fee will be assessed
for the filing of any amended motion filed for the purpose of
correcting the noted deficiency.
The Clerk's Office is directed to serve a copy of the Order on
interested parties.
Kenneth Allen Berdick sought Chapter 11 protection (Bankr. M.D.
Fla. Case No. 20-01107) on Feb. 10, 2020. The Debtor tapped
Charles Phoenix, Esq., as counsel.
KENNETH A. BERDICK: Deficient Proposed Sale of Alva Property Denied
-------------------------------------------------------------------
Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle
District of Florida issued an amended order denying Kenneth Allen
Berdick's sale of his interest in the real property located at
15830 N River Rd., in Alva, Florida 3392, free and clear of liens.
After review, the Court determined that the Motion is deficient as
the prescribed filing fee of $188 was not paid as required by the
Bankruptcy Court Schedule under 28 U.S.C. Section 1930.
Accordingly, the Motion is denied to allow the Debtor to file an
amended motion. No additional filing fee will be assessed for the
filing of any amended motion filed for the purpose of correcting
the noted deficiency.
The Clerk's Office is directed to serve a copy of the Order on
interested parties.
Kenneth Allen Berdick sought Chapter 11 protection (Bankr. M.D.
Fla. Case No. 20-01107) on Feb. 10, 2020. The Debtor tapped
Charles Phoenix, Esq., as counsel.
LINDBLAD EXPEDITIONS: Moody's Affirms B3 CFR & Rates New Notes B3
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Lindblad
Expeditions, LLC's planned senior secured note issuance and senior
secured committed revolver. At the same time, Moody's affirmed
Lindblad's B3 corporate family rating and upgraded its probability
of default rating to B3-PD from Caa1-PD. There is no change to the
B3 rating on the company's existing senior secured bank credit
facility which will be withdrawn when the transaction closes. The
company's speculative grade liquidity rating of SGL-3 remains
unchanged. The outlook remains unchanged at negative.
Lindblad plans to issue $340 million senior secured 5-year notes to
refinance the $283 million outstanding under its current senior
secured term loan, $45 million of outstandings under its existing
committed revolver and pay fees and expenses. The new $45 million
senior secured revolver expires in 2027, a four year extension from
the current revolver's maturity date.
"The affirmation of the B3 corporate family rating reflects Moody's
expectation that Lindblad's debt/EBITDA will exceed 10x at the end
of 2022 as the company continues to ramp up operations following
more than a year of suspended operations," stated Pete Trombetta,
Moody's cruise analyst. The affirmation also reflects the company's
adequate liquidity which provides the company a runway to get to
the stronger summer months in 2022 when Moody's expect the majority
of the company's fleet to be on the water with occupancy levels
returning to near 2019 levels. The upgrade of the probability of
default rating reflects the proposed transaction's benefits to
Lindblad's liquidity including full access to the committed $45
million revolver and the extension of its nearest debt maturity to
2027.
Upgrades:
Issuer: Lindblad Expeditions, LLC
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Assignments:
Issuer: Lindblad Expeditions, LLC
Gtd Senior Secured Revolving Credit Facility, Assigned B3 (LGD4)
Gtd Senior Secured Global Notes, Assigned B3 (LGD4)
Affirmations:
Issuer: Lindblad Expeditions, LLC
Corporate Family Rating, Affirmed B3
RATINGS RATIONALE
Lindblad's credit profile continues to reflect the unprecedented
impact the global spread of COVID-19 has had on the cruise industry
and Moody's expectation that earnings will not return to
pre-pandemic levels until 2023 at the earliest. Despite the
resumption in cruise operations in the second half of 2021,
Lindblad will continue to generate free cash flow deficits until
its operations reach a certain scale. Lindblad's adequate liquidity
offsets the near term cash burn concerns. The company reported cash
of $185 million, including restricted cash of $29 million, at
September 30, 2021 which is sufficient to cover more than a year of
its previously reported approximate $10 million monthly cash burn
(this level fluctuates with proceeds from new bookings). In
addition, Lindblad's credit metrics will remain weak through the
end of 2023. The normal ongoing credit risks include its small
scale in terms of absolute level of earnings and number of vessels.
Lindblad's credit profile benefits from its partnerships with
National Geographic and the World Wildlife Fund (through its
Natural Habitats brand), as well as its strong brand name
recognition in the expedition travel segment of the travel
industry. Once health safety concerns have been addressed, Moody's
believe the historically strong demand for high end expedition
cruises given their unique destinations will return as will the
corresponding high net yields relative to other luxury cruise
lines.
The negative outlook reflects the risk of potential new variants or
updated CDC guidance that limits the return of capacity and
occupancy improvements into the summer months of 2022 resulting in
leverage remaining above 6.5x through 2023.
The B3 rating on the company's planned secured note issuance and
the secured revolver, the same as the corporate family rating,
reflect that secured debt makes up a preponderance of the company's
capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The outlook could be revised to stable if operations resumed at
levels that indicated that over time the company could lower its
debt/EBITDA to below 6.5x. Although not likely in the near term,
ratings could be upgraded if debt/EBITDA were to improve and be
sustained below 5.5x with EBITA/interest coverage of above 2.0x.
The ratings could be downgraded if the company's liquidity
deteriorated or if occupancy restrictions remain in place in 2022.
Headquartered in New York, New York, Lindblad Expeditions, LLC and
its consolidated subsidiaries (Nasdaq: LIND) is a provider of tour
and adventure travel related services to over 40 destinations on
six continents. The company owns and operates 10 expedition ships
and five seasonal charter vessels with capacities ranging from 48
to 148 passengers. Lindblad generated sales of about $82 million
for the 12 months ended September 30, 2021.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
LINDBLAD EXPEDITIONS: S&P Rates New $340MM Sr. Secured Notes 'B-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '3'
recovery rating to Lindblad Expeditions Holdings Inc.'s proposed
$340 million senior secured notes due 2027. The '3' recovery rating
indicates its expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery for noteholders in the event of a payment
default. The notes are being issued by Lindblad's subsidiary,
Lindblad Expeditions LLC. The company plans to use the proceeds
from these notes to fully repay all of the outstanding borrowings
under its term loan (including its Main Street Loan), term out the
borrowings under its $45 million revolving credit facility, and pay
call premiums, fees, and expenses.
S&P said, "The proposed transaction increases the amount of secured
debt in the capital structure under our default analysis and
modestly reduces recovery prospects for secured lenders, but not
enough to lower the recovery rating or the debt rating. In
addition, because this is largely a debt-for-debt transaction, it
does not affect our 'B-' issuer credit rating or negative outlook
on Lindblad. However, the transaction will modestly improve the
company's maturity profile. We continue to expect that Lindblad's
S&P Global Ratings-adjusted leverage will remain high (above 8x) in
2022. Although the company has returned nine of its 10 ships to
service, the emergence of new coronavirus variants and the
imposition of additional travel restrictions could negatively
affect consumers' willingness and ability to travel over the next
few months. Lindblad's first and third quarters are its seasonally
strongest quarters and accounted for 34% and 37% of its full-year
EBITDA in 2019, respectively. While we believe pent-up demand for
the company's unique travel and leisure experiences and new ships
added since the start of the pandemic will likely increase its
revenue in 2022, the emergence of the omicron variant will likely
cause some consumers to further delay their travel plans into late
2022 and beyond, which would lengthen its recovery curve.
Therefore, we believe there remains a high degree of variability in
our contemplated recovery path for 2022 and the potential for
EBITDA to underperform our forecast due to detrimental
repercussions from the emergence of additional coronavirus
variants."
Nevertheless, the company's bookings for the second half of 2022
and into 2023 remain strong and significantly ahead of pre-pandemic
levels because it is benefitting from a significant increase in its
capacity following the additions of the National Geographic
Endurance and National Geographic Resolution vessels to its fleet.
These new ships also target higher-yielding geographies, including
Antarctica. As of Jan. 10, 2022, Lindblad reported that its
bookings for the second half of 2022 were nearly 30% ahead of its
bookings in the second half of 2020. It also stated that its
bookings for 2023 are more than 50% ahead of where its bookings for
2021 were as of Jan. 10, 2020. Furthermore, S&P believes Lindblad
has sufficient liquidity to support a gradual recovery.
Specifically, the company ended 2021 with about $173 million of
cash on its balance sheet and will have access to a new undrawn $45
million revolver pro forma for this refinancing transaction.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'B-' issue-level rating and '3' recovery
rating to Lindblad's proposed $340 million senior secured notes due
2027. The '3' recovery rating indicates its expectation for
meaningful (50%-70%; rounded estimate: 50%) recovery for
noteholders in the event of a payment default.
-- Concurrent with the notes offering, Lindblad plans to enter
into a new credit agreement for a $45 million revolver due February
2027 (not rated). The revolver will rank pari passu with its
secured notes.
Simulated default assumptions
-- S&P assumes Lindblad would reorganize as a going concern in the
event of a default. Our simulated default scenario contemplates a
default occurring in 2024 stemming from a material decline in its
cash flows following a pandemic-related, weather-related,
geopolitical, or other high-impact, low-probability event that
forces some ships out of service over an operating season or
following a material pull-back in discretionary spending in the
U.S., particularly among Lindblad's target demographic.
-- S&P used a combined enterprise value and discrete asset value
approach to value Lindblad given that it financed its polar ice
class vessels (Endurance and Resolution) with separate senior
secured export credit facilities (not rated).
-- The export credit facilities are guaranteed up to 70% by the
official export credit agency of Norway.
-- To value the polar ice class vessels (Endurance and
Resolution), S&P applies a 20% discount to the cost of the ships.
-- The value from the vessels first satisfies the outstanding
claims under the export credit facility for which they serve as
collateral. Any residual value or deficiency is then allocated
toward the recovery of Lindblad's senior secured revolver and
notes. In our analysis, there is a modest amount of residual value
available for the secured revolver and notes.
-- S&P assume Lindblad's new $45 million revolver is 85% drawn at
default.
Simplified waterfall
-- Emergence EBITDA from collateral available to secured lenders,
which excludes the polar ice class vessels: $33 million
-- EBITDA multiple: 6x
-- Gross recovery value: $195 million
-- Net recovery value after administrative expenses (5%): $185
million
-- Residual value from polar ice class vessels: $29 million
-- Obligor/nonobligor valuation split: 100%/0%
-- Total value available for secured debt: $214 million
-- Estimated secured debt at default: $392 million
--Recovery expectations: 50%-70% (rounded estimate: 50%)
Note: All debt amounts include six months of prepetition interest.
LONG VALLEY: Unsecureds to Get Remaining Proceeds From Refinancing
------------------------------------------------------------------
Long Valley Real Estate LLC submitted a Disclosure Statement
explaining a Plan of Reorganization.
In its hybrid reorganization plan, the Debtor intends to
reorganize, while continuing to operate its business and seeking to
accomplish payment under the Plan by obtaining refinancing on the
Debtor's real property, and arranging for a sale of its membership
interest to a proposed purchaser, who has invested significant
funds towards Debtor's obligations and will provide an infusion of
capital by procuring personal financing. In the event that
refinancing is not possible, the Debtor will generate funding
through new value procured by the proposed purchaser, and in the
event the funding is insufficient, Debtor will conduct a private
sale of its real property. As such, the Effective Date of the Plan
is the first date upon which Debtor's real property is refinanced
or sold in accordance with the Plan.
Under the Plan, holders of Class 6 Class General Unsecured Claims
total 94,612. After payment to Allowed Secured Claims and
customary closing costs, including property, transfer, mansion
taxes, payment of Administrative Expenses including administrative
tax claims, any remaining proceeds from the refinancing of the
Property shall be paid on a pro rata basis to holders of claims in
this class within 30 days following the refinancing of the
Property.
General Unsecured Creditors may seek dismissal or conversion of
this case to Chapter 7 should the Debtor default with its
obligation to make payment.
The Plan will be funded by a combination of the following: the
Debtor has secured an investor, Roshni Patel, who has procured
funding commitments from BCB Bank for (i) Line of Credit in the
amount of $600,000, (ii) Line of Credit in the amount of $900,000,
and (iii) Commercial Mortgage Loan in the amount of $2,500,000 by
leveraging her various business assets and providing personal
guaranties.
Counsel for the Debtor:
David L. Stevens, Esq.
SCURA, WIGFIELD HEYER, STEVENS & CAMMAROTA, LLP
1599 Hamburg Turnpike
Wayne, New Jersey 07470
Tel: 973-696-8391
E-mail: Dstevens@scura.com
A copy of the Disclosure Statement dated Jan. 15, 2021, is
available at https://bit.ly/3tHfBKk from PacerMonitor.com.
About Long Valley Real Estate
Long Valley, New Jersey-based Long Valley Real Estate LLC is
primarily engaged in renting and leasing real estate properties.
Long Valley Real Estate LLC filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 21-17015) on Sept. 2, 2021. In the petition signed
by Bhavesh B. Patel as managing member, the Debtor estimated assets
and debt of $1 million to $10 million. David L. Stevens of SCURA,
WIGFIELD, HEYER, STEVENS & CAMMAROTA, LLP is the Debtor's counsel.
LTL MANAGEMENT: Court Disbands 2 Talc Committees
------------------------------------------------
On Jan. 20, 2022, Judge Michael Kaplan of the U.S. Bankruptcy Court
for the District of New Jersey wrote an opinion that granted a
motion by Johnson & Johnson's LTL Management to (i) invalidate the
U.S. Trustee's move to create 2 talc committees, and (ii)
reinstating the original Talc Claimants Committee appointed by
order of the United States Bankruptcy Court for the Western
District of North Carolina.
To recall, on Nov. 8, 2021, at the behest of the Bankruptcy
Administrator for the Western District of North Carolina, the
Bankruptcy Court for the Western District of North Carolina filed
an Order Appointing the Official Committee of Talc Claimants. On
Nov. 16, 2021, an order was entered transferring venue of this case
to the District of New Jersey. On Dec. 23, 2021, Andrew R. Vara,
the United States Trustee for Region 3, reconstituted and amended
the Official Committee of Talc Claimants and appointed the Official
Committee of Talc Claimants I and the Official Committee of Talc
Claimants II. Seven members of the North Carolina Committee
remained on Committee I, joined by two additional members. The
remaining four members of the North Carolina Committee were placed
on Committee II, joined by three additional members.
"It is manifestly evident that Judge Whitley's TCC Order
establishes a single official talc claimants committee and fixes
its composition by identifying its members by name. Quite simply,
the U.S. Trustee’s Notice of Appoi ntment is inconsistent with
the TCC Order in that it adds an additional committee and shifts
membership between the two. Thus, the Notice of Appointment
violates law of the case doctrine and this Court is obligated to
vacate same and re-establish the force and effect of the TCC
Order," Judge Kaplan said in his Jan. 20 opinion.
Judge Kaplan noted that the Court is not making any de terminations
as to the appropriateness of two committees, nor is it ruling that
the U.S. Trustee is without authority to seek the reconstitution of
the TCC and the formation of an additional talc committee. Indeed,
such actions may be warranted and prudent. However -- absent a
showing of circumstances that warrant modification of an existing
order -- he said that the Court cannot ignore the TCC Order, nor
can the U.S. Trustee use Sec. 1102 to overrule Judge Whitley's
findings therein.
"The Court understands and appreciates that its decision today may
well be disruptive to the administration of the case, including the
on-going merry-go-round retention process for committee
professionals. In this regard, it may make sense for those
affected, interested parties to consider forming an ad hoc
committee, which may come before the Court at a later date to seek
recognition as an official committee if the facts and law so
warrant. See In re Budd Co., Inc., 512 B.R. 910 (Bankr. N.D. Ill.
2014)," Judge Kaplan said in his opinion.
A copy of the opinion is available at:
https://document.epiq11.com/document/getdocumentbycode?docId=4054274&projectCode=LLC&source=DM
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of 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 filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D. N.J. Case No. 21-30589) on
Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At
the time of the filing, the Debtor was estimated to have $1 billion
to $10 billion in both assets and liabilities.
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.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S.
Trustee for Regions 3 and 9 reconstituted the talc claimants'
committee and appointed two separate committees: (i) the official
committee of talc claimants I, which represents ovarian cancer
claimants, and (ii) the official committee of talc claimants II,
which represents mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
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 in 2020.
MABEL SRIDHAR: Sale of Interest in Stock Options & Cars Approved
----------------------------------------------------------------
Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the
Northern District of California authorized Mabel Sridhar's sale of
the estate's community property interest in the stock options and
in the cars, as outlined in the Motion.
A videoconference on the Motion was held on Jan. 13, 2022, at 10:00
a.m.
Mabel Sridhar sought Chapter 11 protection (Bankr. N.D. Cal. Case
No. 21-50865) on June 25, 2021.
MANHATTAN STUDENT: Seeks to Hire Krigel & Krigel as Legal Counsel
-----------------------------------------------------------------
Manhattan Student Housing, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Kansas to hire Krigel &
Krigel, P.C. to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor with respect to its powers and duties
in the continued management and operation of its business;
(b) attending meetings and negotiating with representatives of
creditors and other parties in interest;
(c) taking all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on its
behalf, the defense of any actions commenced against the estate,
and objections to claims filed against the estate;
(d) preparing legal papers;
(e) negotiating and prosecuting on the Debtor's behalf all
contracts for the sale of its assets, plan of reorganization and
all related agreements, and taking any action that is necessary for
the Debtor to obtain confirmation of the plan;
(f) appearing before the court and the U.S. trustee; and
(g) performing all other necessary legal services.
The firm's hourly rates are as follows:
Sanford P. Krigel $350
Erlene W. Krigel $300
Paul Hentzen $300
Ivan L. Nugent $300
SJ Moore $300
Karen Rosenberg $250
Dana Wilders $250
Lara Pabst $250
Benjamin P. Varenhorst $250
Legal assistants $100
As disclosed in court filings, Krigel & Krigel neither neither
holds nor represents any interest adverse to that of the Debtor or
the estate.
The firm can be reached through:
Erlene W. Krigel, Esq.
Krigel & Krigel, P.C.
4520 Main Street, Suite 700
Kansas City, MO 64111
Tel: (816) 756-5800
Fax: (816) 756-1999
Email: ekrigel@krigelandkrigel.com
About Manhattan Student Housing
Manhattan Student Housing, LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case
No. 22-20010) on Jan. 10, 2022, listing $6,221,752 in assets and
$4,209,215 in liabilities. Gary L. Robben, managing member, signed
the petition.
Judge Robert D. Berger oversees the case.
Erlene W. Krigel, Esq., at Krigel & Krigel, P.C. serves as the
Debtor's legal counsel.
NAKED JUICE: Moody's Assigns First Time B1 Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Naked
Juice LLC, including a B1 Corporate Family Rating, B1-PD
Probability of Default Rating, Ba3 ratings on the first lien term
loan and delayed draw term loan, and B3 rating on the second lien
term loan. A stable outlook was assigned. This is the first time
Moody's has rated Naked Juice. This debt, as well as a healthy
amount of cash and rollover equity, will support Naked Juice's
partial spin off from Pepsi by PAI Partners, with Pepsi retaining a
39% ownership stake. Ratings are predicated on receipt and
satisfactory review of final documents.
"The actions recognize the initially high out of the box leverage,
with debt/EBITDA approaching 7x , though EBIT-to-interest coverage
of over 2x is a partial quantitative mitigant," stated Moody's Vice
President -- Senior Credit Officer Charlie O'Shea. "Moody's
considers Naked Juice's competitive position, led by solid brands
such as Tropicana and Naked Juice, as well as distribution
contracts with Pepsi that will continue post-closing, as a key
rating plus, with the expectation that financial strategy will be
balanced between shareholders and debtholders to ensure
deleveraging," continued O'Shea.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Naked Juice LLC
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
GTD Senior Secured 1st Lien Delayed Draw Term Loan, Assigned Ba3
(LGD3)
GTD Senior Secured 1st Lien Term Loan, Assigned Ba3 (LGD3)
GTD Senior Secured 1st Lien Multi-Currency Revolving Credit
Facility, Assigned Ba3 (LGD3)
GTD Senior Secured 2nd Lien Term Loan, Assigned B3 (LGD5)
Outlook Actions:
Issuer: Naked Juice LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The B1 CFR considers Naked Juice's high leverage, with debt/EBITDA
at closing of around 6.8x as of September 2021 and pro forma for
the LBO, mitigating EBIT-to -interest coverage of over 2x, good
liquidity, and a solid competitive position with well-known brands
in key categories. The sizable revenue base supported by recurring
demand drives good negotiating leverage with retailers and
operating cash flow that can be used to fund reinvestment including
in faster growing products within the portfolio, as well as debt
service. The retention by Pepsi of a 39% stake in Naked Juice is
beneficial on multiple fronts, including ensuring maintenance of
pre-existing contracts, and also provides somewhat of a "halo
effect" which, despite the lack of any guarantees from Pepsi,
ensures Pepsi will remain supportive. Moody's projects the company
will utilize more than $80 million of free cash flow in 2022 for
reinvestment and to bolster liquidity, and that the company will
refrain from material acquisitions until the stand-alone operations
are well-established. The ratings reflect Moody's projection that
debt-to-EBITDA will decline to 6.0x or lower by the end of 2023.
Moody's anticipates the initial transaction will include the North
American operations, and that the delayed draw term loan will be
used to fund the acquisition of the European operations once
regulatory and other necessary closing conditions are met with
minimal effect on leverage. Moody's views the bulk of the company's
products as mature and low growth that can make it challenging to
rapidly de-leverage, and Naked Juice will need to invest in product
development, marketing, and distribution to generate consistent
organic revenue and earnings growth. Products such as orange juice
also benefitted from increased at-home food consumption during the
coronavirus, and Moody's expects a gradual return to offices and
away-from-home food consumption will be a revenue headwind over the
next two years. Cost inflation, including energy, commodities and
transportation, as well as the need to establish stand-alone
operations, will be offset by price increases and cost saving
initiatives to keep margins flat in 2022 with modest margin
expansion expected thereafter.
Environmental, Social and Governance Risk
The coronavirus outbreak and the government measures put in place
to contain it also continue to disrupt economies and credit markets
across sectors and regions. Although an economic recovery is
underway, it is tenuous, and its continuation will be closely tied
to containment of the virus. As a result, the degree of uncertainty
around forecasts is high. Moody's regard the coronavirus outbreak
as a social risk under Moody's ESG framework, given the substantial
implications for public health and safety. Volatility can be still
expected in 2022 due to uncertain demand characteristic, as well as
channel disruptions, and ongoing supply chain disruptions.
The company utilizes agricultural products, energy, water, a wide
array of packaging including plastics, and other raw materials that
present environmental risk. The company spends significant effort
and costs to responsibly source inputs and minimize the
environmental impact of its manufacturing operations and supply
chain. Governance risks include aggressive financial policies such
as the use of high leverage expected under majority control by a
private equity sponsor. Pepsi's minority ownership is a partial
governance mitigant because Pepsi would likely be motivated to
provide operational support if necessary to manage through periods
of earnings weakness.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that growth in
revenue and EBITDA will be modest in 2022 and then pick up in 2023
such that debt-to-EBITDA leverage will steadily, though potentially
slowly, decline to 6x by mid/late-fiscal 2023. Moody's also assumes
in the stable outlook that the company will generate more than $80
million of annual free cash flow beginning in 2022 and will
maintain good liquidity.
Ratings could be upgraded if the company establishes stand-alone
operations without losing market share or materially increasing
costs, and generates consistent organic revenue growth with a
stable to higher EBITDA margin. The company would also need to
maintain a more conservative financial strategy that results in
debt/EBITDA approaching 5x and EBIT-to-interest coverage
approaching 3x, with liquidity remaining at least good. Ratings
could be downgraded if establishing stand alone operations,
competitive issues, or cost pressures weaken market share or
margins, free cash flow is weaker than expected, debt/EBITDA is
sustained above 6.0x, or if EBIT-to-interest coverage approaches
2x. Acquisitions, shareholder distributions or a deterioration in
liquidity could also lead to a downgrade.
The principal methodology used in these ratings was Global Soft
Beverage Industry published in January 2017.
As proposed, the new first lien credit facilities are expected to
provide covenant flexibility that if utilized could negatively
impact creditors. Notable terms include the following: incremental
debt capacity up to the greater of $367 million and 100% of the
EBITDA Grower Amount, less any amount incurred under the
corresponding "fixed incremental amount" basket in the Second Lien
Facility, plus unlimited amounts subject to first lien net leverage
ratio not exceeding 5:00 to 1:00 (if pari passu secured). Amounts
up to the Fixed Incremental Amount may be incurred with an earlier
maturity date than the initial term loans. There are no express
"blocker" provisions which prohibit the transfer of specified
assets to unrestricted subsidiaries; such transfers are permitted
subject to carve-out capacity and other conditions.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, with no
explicit protective provisions limiting such guarantee releases.
The proposed terms and the final terms of the credit agreement may
be materially different.
Naked Juice LLC is the entity resulting from a spin-off from
PepsiCo, with PAI Partners owning 61% and Pepsi retaining a 39%
stake. Naked Juice, LLC owns the Tropicana, Naked Juice, KeVita and
other select juice brands.
NORTHERN LIGHT: Moody's Alters Outlook on Ba1 Rating to Positive
----------------------------------------------------------------
Moody's Investors Service revised the outlook for Northern Light
Health (NLH) (ME) to positive from negative and affirmed the Ba1
revenue rating. NLH had approximately $530 million in outstanding
debt at fiscal year end 2021.
RATINGS RATIONALE
The positive outlook reflects Moody's expectation that margin
improvement will likely be durable, driven by ongoing initiatives
to grow volumes and reduce costs as well as benefits from the
completion of a sizable project in Portland. The revised outlook
also reflects a reduction in debt structure risks and increase in
covenant headroom due to the refinancing of bank-related debt last
year.
The affirmation of the Ba1 is supported by NLH's strategies to
increase patient access and growing brand awareness, which will
help offset the impact of the pandemic on volumes. A new multi-year
improvement plan, building on the successful completion in 2021 of
the prior program, as well as efficiencies from the consolidation
of its Portland locations, will help sustain cashflow. The system's
dominant market position over a broad geography will limit
competitive challenges. The most significant margin challenge will
be escalating costs to recruit and retain staff, which will be
particularly pronounced in NLH's rural locations. Days cash on hand
will likely remain modest, although stable as capital spending is
expected to moderate.
RATING OUTLOOK
The positive outlook reflects Moody's expectation that margins in
fiscal 2022 will likely be relatively close to fiscal 2021 levels
as continued improvement initiatives will offset pandemic-related
and labor challenges. The outlook further reflects anticipated
maintenance of better cashflow and stable investments, which would
result in leverage metrics that are more favorable than
pre-pandemic levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
Operating cashflow margin in fiscal 2022 that is close to fiscal
2021 level
Improvement in leverage metrics
Growth in days cash on hand
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
Sustained decline in margins
Meaningful increase in leverage
Notable decline in days cash on hand
Dilutive acquisition or merger
LEGAL SECURITY
The bonds are secured by a pledge of gross receipts of the
obligated group (represents virtually all system revenue) as well
as a mortgage lien on facilities. There are additional indebtedness
tests and a debt service reserve fund.
PROFILE
Northern Light Health is comprised of 10 hospitals located across
Maine, including the flagship Eastern Maine Medical Center located
in Bangor. The system employs a large number of physicians and has
the largest geographic footprint in the state.
METHODOLOGY
The principal methodology used in these ratings was Not-For-Profit
Healthcare published in December 2018.
NUFARM LIMITED: Fitch Assigns BB Rating on New USD Unsecured Notes
------------------------------------------------------------------
Fitch Ratings has assigned ratings of 'BB' to the proposed US
dollar senior unsecured notes to be issued by Nufarm Limited's
(Nufarm, BB/Stable) wholly owned subsidiaries Nufarm Australia
Limited and Nufarm Americas Inc. under a dual tranche structure.
The proposed notes will be guaranteed by Nufarm and several
operating subsidiaries, which together contribute approximately 90%
of the group's consolidated EBITDA. The proceeds from the issue
will be used to redeem Nufarm's outstanding USD475 million senior
unsecured notes due 2026.
The notes are rated at the same level as Nufarm's Long-Term Issuer
Default Rating because they represent its direct, unconditional,
unsecured and unsubordinated obligations.
Fitch notes that Nufarm's capital structure includes a receivables
securitisation facility and supply chain financing. The outstanding
amount under the securitisation facility is reported as secured
debt. The supply chain financing is an off-balance-sheet
arrangement, but Fitch treats a portion of the amount outstanding
as secured debt to adjust for reverse factoring under Fitch's
criteria. However, Fitch does not believe that the level of this
prior-ranking debt will impair Nufarm's ability to pay senior
unsecured creditors.
KEY RATING DRIVERS
Ninth-Largest Market Share: Nufarm has a top-10 market position in
terms of overall crop-protection and seed product sales globally.
The company is ranked second in Australia, and is the leader in New
Zealand and has strong positions in segments such as European
cereal herbicides, turf and ornamental crop protection in the US,
and phenoxy herbicides globally. Nufarm also benefits from the sale
of products sourced from Japan's Sumitomo Chemical, the
eighth-largest industry player and Nufarm's single-largest
shareholder, under a strategic alliance.
Growth-Related Spending Likely: Nufarm's scale remains small
compared with the industry's leaders, with revenue less than half
of those in the top-five positions, although it is well-positioned
within the 'BB' category. The ability to provide a comprehensive
set of product solutions to farmers with the help of an extensive
portfolio is a key competitive advantage, and Fitch thinks Nufarm
is likely to invest in expanding its scale and product range in the
next few years through organic as well as inorganic means.
Robust Industry Fundamentals: The industry has high barriers to
entry as significant expertise and investment are needed for
registrations, sales and distribution, and manufacturing. The
market is highly regulated and registrations usually take several
years. Crop protection chemicals are characterised by higher R&D
intensity, better profitability and lower price volatility than
commodity chemicals. Industry players also have pricing power,
which lowers risks from foreign-exchange and raw-material cost
swings, although there is often a lag in cost pass-through.
Limited Vertical Integration: Nufarm has reduced its manufacturing
footprint in the past couple of years, and reliance on external
purchases has increased. Manufacturers in China contribute a
majority of the company's raw-material requirements and supply from
the country has been affected in the past few years by issues such
as a reduced number of suppliers due to stricter enforcement of
environmental regulations.
Raw Material Risks: Fitch expects Nufarm's reliance on external
suppliers in general, and Chinese supply in particular, to remain
in place over the medium term and this presents significant risk of
volatility in raw-material availability and cost. The company has
sought to mitigate risks with the help of long-term agreements,
local procurement teams and established relationships with
suppliers.
Moderate Product and Geographical Diversification: Herbicides,
whose demand is prone to significant impact from dry weather,
contribute two-thirds of Nufarm's revenue. The skew towards
herbicides weakens the diversification of the company's portfolio,
which includes a variety of insecticide, pesticide and seed-related
products.
Nufarm derived 35% of its crop-protection chemical revenue from
North America in the financial year ended September 2021 (FY21),
27% from APAC and 25% from Europe. However, its geographical
diversification is limited by a lack of presence in LatAm, which is
one of the world's largest crop-protection chemical markets, and
significant revenue exposure of over 15% to the relatively small
Australian market.
Improved Financial Profile: Nufarm's total debt/EBITDA leverage,
after Fitch's adjustments, declined to 3.8x in FY21 (FY20: 7.1x)
while net debt/EBITDA decreased to 1.8x (FY20: 3.5x). The
improvement was mainly driven by a 52% jump in reported underlying
EBITDA on improved weather conditions, robust prices and cost
reduction. The company's free cash flow (FCF) also turned positive
in FY21, supported by a decline in reported average net working
capital/sales ratio to 34% (FY20: around 45%), due to better
receivable collections and lower inventory levels.
Fitch expects the company to use a portion of its cash balance for
debt reduction and total debt/EBITDA should decline further to 2.8x
in FY22. While leverage could increase in the next few years due to
spending on bolt-on acquisitions, Fitch expects Nufarm will
maintain leverage at below 3.5x, or near the lower-end of its own
target range of 1.5x-2.0x.
DERIVATION SUMMARY
Nufarm is rated two notches below crop-protection chemical industry
peers UPL Corporation Limited (BBB-/Stable), whose rating is based
on the consolidated profile of its parent UPL Limited (UPL), and
the Standalone Credit Profile (SCP) of 'bbb-' of Syngenta AG
(BBB/Stable), whose rating incorporates a one-notch uplift for
parental support. The rating differential between the peers and
Nufarm is on account of its weaker business profile.
UPL is the largest company in the post-patent segment of the crop
protection market, with revenue more than 2x and EBITDA more than
4x that of Nufarm. UPL's higher margins reflect benefits from
better vertical integration, underscored by large manufacturing
operations in India where it gains from low costs. UPL's
geographical diversification is also better on account of it having
operations across most markets, including LatAm, and its product
portfolio is more balanced with no category constituting more than
35% of the total.
Syngenta is the industry leader and an innovator, with a large
portfolio of patented crop-protection chemicals that result in
higher margins compared with Nufarm. Syngenta's better business
profile is supported by its significantly larger scale, with
revenue more than 5x that of Nufarm, healthy product and
geographical diversification, and market leadership across key
segments.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Revenue CAGR of 4% over FY22-FY25;
-- Average EBITDA margin, after deducting capitalised development
costs and lease-related expenses, of 9% over FY22-FY25 (FY21:
8%);
-- Average annual capex, after adjusting for capitalized
development costs, of around AUD115 million over FY22-FY25;
-- Total spending on acquisitions of around AUD550 million until
FY25. The valuations for potential acquisitions remain
uncertain; however, Fitch has factored in the likely earnings
contribution in Fitch's revenue growth and EBITDA margin
assumptions.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action appears unlikely in the next two to
three years, although Nufarm's rating could be upgraded if
total debt with equity credit/operating EBITDA leverage is
sustained below 2.5x, or there is a material improvement in
its business profile, potentially through better product and
geographical diversification and/or improved vertical
integration.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Total debt with equity credit/operating EBITDA leverage above
3.5x on a sustained basis;
-- Sustained negative FCF;
-- Evidence of weakening competitiveness and business profile,
possibly through persistent revenue decline or margin erosion.
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: Fitch estimates Nufarm's readily available cash
at around AUD560 million as of end-September 2021, lower than the
reported cash and cash equivalents of AUD724 million after
adjustment for working capital seasonality. By comparison, Nufarm's
short-term debt (including adjustment for supplier financing) was
lower at around AUD375 million. Long-term debt comprised almost
entirely of USD475 million senior unsecured notes due in 2026,
which the company expects to refinance with the help of the
proposed notes.
Fitch expects Nufarm to use its substantial cash balance to repay a
portion of its debt, aside from seeking growth opportunities from
bolt-on acquisitions. Nufarm's cash balance is likely to decrease,
but Fitch does not expect a material impact on its liquidity
position as short-term debt, which is for working capital, should
be rolled over or refinanced unless operations deteriorate
drastically.
ISSUER PROFILE
Nufarm is among the 10 largest crop-protection chemical companies
globally, with revenue of USD2.4 billion in FY21. Originating in
New Zealand in 1916, Nufarm is now present in about 95 countries
across the world and has its headquarters in Australia.
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.
PDG PRESTIGE: Enters Purchase & Sale Agreement with Paul Rothbard
-----------------------------------------------------------------
PDG Prestige Inc. submitted a First Amended Disclosure Statement in
support of First Amended Plan of Reorganization dated Jan. 17,
2022.
This First Amended Plan of Reorganization proposes to pay creditors
of PDG Prestige from cash flow from future operations and/or sales
of property, and replaces and supersedes any Plan(s) of prior
date(s) filed by the Debtor.
PDGP owns and is the developer of a ±3.29 acre tract of real
property in Las Cruces, Dona Ana County, New Mexico and sometimes
referred to as Mesilla Valley Mall Subdivision, Replat No. 5 (the
"Subject Property"). The Subject Property is divided into two lots,
Lot 3A and Lot 1A, as depicted in Exhibit PDG306 (with Lot 2A being
a different tract of property under different ownership on the same
block).
PDGP also owns the majority of the equity interest in a second real
estate development entity, The Gateway Ventures, LLC, which is the
subject of a separate bankruptcy case currently pending in this
Court. As of the filing of this Disclosure Statement, the amount
and/or timing of any net distribution from TGV to PDGP is uncertain
as to amount and/or timing, and the Debtor does not anticipate a
final resolution of the Legalist loan against the TGV property in
time to materially benefit the funding of this Plan. Conversely,
should TGV realize any profits from TGV, then those proceeds would
be available to assist with the funding of this Plan.
On April 21, 2021, Dennis Crimmins removed to this Court Case No.
D-307-CV-2020-01698, Dennis Crimmins, Plaintiff v. Michael J.
Dixson, PDG, Inc., and PDG Prestige, Inc., Defendants from the
Third Judicial District Court of the County of Dona Ana, New Mexico
(the "Crimmins Lawsuit"). As of November 3, 2021, this litigation
is still pending under Adversary No. 21-03007. Dennis Crimmins also
has filed a void, voidable, and/or disputed notice of lis pendens.
On November 18, 2021, the Court entered judgment in favor of PDGP
and voided the Crimmins Lis Pendens as a final disposition of the
Crimmins Lawsuit.
Bubba's Lease and Sale of Lot 1A
On or about November 8, 2019, the Debtor originally entered into a
ground lease with Strategic Restaurant Concepts, LLC (Bubba's 33)
(the "TR-Lease") with respect to Lot 1A, which lease was not in
effect as of the Petition Date but which since has revived
following the Petition Date. On or about December 20, 2021 the
Debtor entered into a Purchase and Sale Agreement with The Paul
Rothbard Revocable Living Trust Dated August 23, 2006, as Amended
and/or Assigns for the sale of Lot 1A and the assignment of the
TR-Lease for a purchase price in the amount of $2,615,000.00.
Closing is expected to occur before March 31, 2022. NMREA/Colliers
holds a contingent lien with respect to the TR-Lease and thus will
be paid approximately $48,000 at closing. PDGP estimates that cash
in the approximate amounts of $2,000,000 to $1,800,000 will result
from this sale for use with respect to the Plan.
Class 4 consists of the claim of Dennis Crimmins ("Crimmins"). This
class was resolved by the disposition of the Crimmins Adversary.
Crimmins holds no claim or interest and will receive no
distribution.
Like in the prior iteration of the Plan, Class 6 general unsecured
creditors will receive the full payment of the allowed amount of
each such claim in 60 equal installments paid on or before the 15th
day of each month commencing with the first full month following
the Effective Date.
Sale Motion
To the extent necessary, this Plan also constitutes a sale motion
under Code §363(f) to sell Lot 1A free and clear and all liens,
claims, and encumbrances, with the proceeds of such sale being used
to fund the Plan.
On or about November 8, 2019, the Debtor originally entered into a
ground lease with Strategic Restaurant Concepts, LLC (Bubba's 33)
(the "TR-Lease") with respect to Lot 1A, which lease was not in
effect as of the Petition Date but which since has revived
following the Petition Date. On or about December 20, 2021 the
Debtor entered into a Purchase and Sale Agreement with The Paul
Rothbard Revocable Living Trust Dated August 23, 2006, as Amended
and/or Assigns for the sale of Lot 1A and the assignment of the
TR-Lease for a purchase price in the amount of $2,615,000.00.
Source of Payments
Payments and distributions under the Plan will be funded by the
continued development, refinance, and/or sale of the Subject
Property.
The Debtor believes that the sale of Lot 1A will result in cash of
approximately $1,800,000 to $2,000,000 to fund the Plan, almost all
of which will go to reduce the claim of Legalist. PDGP believes
that the Various Leases will be revived following the Effective
Date, and upon such revival will permit a sale of Lot 3A and/or
refinancing of the remaining indebtedness following the sale of Lot
1A.
PDGP is also seeking exit financing from a more traditional asset
based and/or real estate lenders which financing would be used to
reduce the remaining balance of the Legalist debt and to pay an
additional costs of development. If the exit financing is achieved
prior to the Confirmation Hearing, the Plan may be amended and/or
modified to address the exit financing.
A full-text copy of the First Amended Disclosure Statement dated
Jan. 17, 2022, is available at https://bit.ly/3IlR7u4 from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Jeff Carruth, Esq.
Weycer Kaplan Pulaski & Zuber, P.C.
3030 Matlock Rd., Suite 201
Arlington, TX 76015
Telephone: (713) 341-1058
Facsimile: (866) 666-5322
Email: jcarruth@wkpz.com
About PDG Prestige
PDG Prestige, Inc., a real estate developer in El Paso, Texas,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Tex. Case No. 21-30107) on Feb. 15, 2021. Michael Dixson,
president, signed the petition.
At the time of the filing, the Debtor estimated assets of between
$1 million and $10 million and liabilities of the same range.
Weycer Kaplan Pulaski & Zuber, P.C., is the Debtor's legal counsel.
PG&E CORP: 5-Year Probation Ends for 'Continuing Menace'
--------------------------------------------------------
Robert Burnson and Mark Chediak of Bloomberg News report that PG&E
Corp. is ending a five-year felony probation as a "continuing
menace to California," a judge supervising the company said in his
parting observations, noting the company went on a "crime spree"
even as he tried to rehabilitate it.
"I must acknowledge failure," U.S. District Judge William Alsup
wrote in a scathing report Wednesday, January 19, 2022.
Alsup has overseen the utility's probation since its conviction in
2016 of crimes tied to a 2010 natural gas pipeline explosion that
killed eight people in a San Francisco suburb. The probation term
is set to expire Jan. 25., 2022.
"While on probation, PG&E has set at least 31 wildfires, burned
nearly one and one-half million acres, burned 23,956 structures,
and killed 113 Californians," Alsup wrote.
While some victims and company critics have urged the judge to
extend the probation, Alsup said the U.S. Attorney hasn't asked for
an extension and he will not do it on his own.
"In probation, with a goal of rehabilitation in mind, we always
prefer that criminal offenders learn to accept responsibility for
their actions," Alsup wrote. "Sadly, during all five years of
probation, PG&E has refused to accept responsibility for its
actions until convenient to its cause or until it is forced to do
so."
PG&E said in a statement that it "has become a fundamentally safer
company over the course of our probation." The utility
acknowledged that it had more work to do and said a new leadership
team is committed to safety. PG&E added that state regulators have
set up a process to continue monitoring the company for five more
years.
State fire officials have blamed the company's power lines for
sparking many of the largest wildfires in the state's history,
including the Camp, Butte, Kincade, Zogg and Dixie fires.
"We remain trapped in a tragic era of PG&E wildfires because for
decades it neglected its duties concerning hazard-tree removal and
vegetation clearance, even though such duties were required by
California's Public Resource Code," the judge wrote.
Alsup said that PG&E's practice of outsourcing tree trimming and
vegetation clearance to independent contractors was one of the main
reasons why the utility continued to spark wildfires. He
recommended the company restrict or outlaw outsourcing, finding it
lead to sloppy inspection and clearance work.
Alsup also said the company should be broken up into two separate
utilities, one to service high fire threat districts and the other
for the rest of the state.
"Less sprawling utilities would be easier to train and to instill
practices and procedures that truly put safety first," Alsup said.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, faced extraordinary challenges relating to a
series of catastrophic wildfires that occurred in Northern
California in 2017 and 2018. The utility faced an estimated $30
billion in potential liability damages from California's deadliest
wildfires of 2017 and 2018.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). As of Sept.
30, 2018, the Debtors, on a consolidated basis, had reported $71.4
billion in assets on a book value basis and $51.7 billion in
liabilities on a book value basis.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP served
as PG&E's legal counsel, Lazard as its investment banker and
AlixPartners, LLP as the restructuring advisor to PG&E. Prime Clerk
LLC is the claims and noticing agent.
PG&E has appointed James A. Mesterharm, a managing director at
AlixPartners, LLP, and an authorized representative of AP Services,
LLC, to serve as Chief Restructuring Officer. In addition, PG&E
appointed John Boken also a Managing Director at AlixPartners and
an authorized representative of APS, to serve as Deputy Chief
Restructuring Officer.
Morrison & Foerster LLP served as the Debtors' special regulatory
counsel. Munger Tolles & Olson LLP also served as special counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
PIPELINE FOODS: Gets Court Okay to Seek Liquidation Plan Vote
-------------------------------------------------------------
Daniel Gill of Bloomberg Law reports that Pipeline Foods LLC, a
bankrupt organic food supplier in Minnesota, won court permission
to seek creditor votes on its liquidation plan.
The plan proposes to pay unsecured creditors an estimated 1% to
1.9% of their claims totaling between $80 million and $84 million.
Rabobank U.A., a secured creditor, would recover an estimated 65%
of a $44.3 million claim, according to the plan's disclosures.
Judge Karen B. Owens of the U.S. Bankruptcy Court for the District
of Delaware Thursday, January 20, 2022, approved the disclosures,
which are sent to creditors along with ballots to vote.
About Pipeline Foods
Pipeline Foods, LLC -- https://www.pipelinefoods.com/ -- is the
first U.S.-based supply chain solutions company focused exclusively
on non-GMO, organic, and regenerative food and feed. It is based in
Fridley, Minn.
Pipeline Foods and its affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11002) on July 8, 2021. The
affiliates are Pipeline Holdings, LLC, Pipeline Foods Real Estate
Holding Company, LLC, Pipeline Foods, ULC, Pipeline Foods Southern
Cone S.R.L., and Pipeline Foods II, LLC. In the petition signed by
CRO Winston Mar, Pipeline Foods disclosed between $100 million and
$500 million in both assets and liabilities.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Saul Ewing Arnstein & Lehr, LLP as legal
counsel; Ocean Park Securities, LLC as investment banker; Baker
Tilly US, LLP and Baker Tilly Windsor, LLP as tax consultants; and
The Finley Group, Inc. as financial advisor. Matthew Smith,
managing director at Finley Group, serves as chief restructuring
officer. Stretto is the claims, noticing and administrative agent.
Bryan Cave Leighton Paisner, LLP serves as legal counsel to the
Board of Directors.
On July 22, 2021, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors. The committee tapped
Barnes & Thornburg, LLP as its legal counsel and Dundon Advisers,
LLC as its financial advisor.
Bryan Cave Leighton Paisner LLP serves as special counsel to the
board of managers of Pipeline Holdings, LLC, one of the affiliated
debtors.
PLAMEX INVESTMENT: Auction of Plaza Mexico Set for April 11
-----------------------------------------------------------
Judge Erithe A. Smith of the U.S. Bankruptcy Court for the Central
District of California issued an order modifying the bidding
procedures previously entered by the Court in connection with sale
by Plamex Investment, LLC, and 3100 E. Imperial Investment, LLC, of
the following real property free and clear of all liens, claims,
encumbrances, and other interests to secured creditor Quarry Head
2017-1 Grantor Trust for $162.5 million, subject to overbid: Plaza
Mexico, a 403,242 square-foot community shopping center offering
specialty retail and dining located in Lynwood, California, just
north of the 105 freeway, approximately 20 minutes from LAX.
The Modification Motion is granted subject to the terms and
conditions set forth in the Order, and any and all objections to
the Modification Motion, to the extent not resolved by the Order,
are overruled in their entirety. Without limiting the generality
of the foregoing, the Original Bidding Procedures Order, including
the incorporated Original Bidding Procedures and form of related
exhibits, are modified as expressly set forth.
The following schedule will govern proceedings relating to the
Amended Bidding Procedures which, only to the extent expressly set
forth herein or in the separately filed exhibits to the Order, will
and hereby does amend and supersede the schedule as provided for
under the Original Bidding Procedures Order and Original Bidding
Procedures:
A. The Bid Deadline, previously set for Feb. 17, 2022, at 5:00
p.m. (PT), is extended to April 7, 2022, at 5:00 p.m. (PT).
B. The Auction, previously scheduled for Feb. 21, 2022, at
10:00 a.m. (PT), if one is to be held, is rescheduled for April 11,
2022, at 10:00 a.m. (PT).
C. The Sale Hearing, previously set for Feb. 24, 2022, at
10:30 a.m. (PT), is reset for April 14, 2022, at 10:30 a.m. (PT).
D. The deadline to file supplemental pleadings in support of
the Sale, previously set for Feb. 3, 2022 under Paragraph 10 of the
Original Bidding Procedures Order, is extended to March 24, 2022.
E. The deadline to file Sale Objections, previously set for
Feb. 10, 2022, is extended to March 31, 2022; provided, however,
that the deadline for filing objections, if any, to the conduct of
the Auction or selection of the Successful Bid or Back-Up Bid, will
be in writing, filed with the Clerk, together with proof of
service, and served so as to be received by the Notice Parties on
or before April 13, 2022, at 5:00 p.m. (PT), rather than the Feb.
23, 2022 deadline set forth in the Original Bidding Procedures
Order.
F. The deadline for any party to reply to any Sale Objection,
previously set for Feb. 17, 2022, is extended to April 7, 2022.
G. The deadline for Plamex to file and serve the Amended Cure
Notice, previously set for Feb. 3, 2022, with respect to the
Original Cure Notice, is extended to March 24, 2022.
H. The deadline filing objections to any Cure Amount or the
assumption and assignment of the applicable contract(s) and/or
lease(s) is extended such that such objections must be filed with
the Clerk and served on the Notice Parties so as to be received on
or before March 31, 2022 at 5:00 p.m. (PT), rather than the Feb.
10, 2022 deadline set forth in the Original Bidding Procedures
Order.
I. The deadline for the SH Bidder to provide the SH Bidder
Designated Contracts list, previously, previously set for Feb. 11,
2022, at 5:00 p.m. (PT), is extended to April 1, 2022, at 5:00 p.m.
(PT).
J. The deadline for Plamex to establish and maintain the
Designated Contracts Website Post, previously set for Feb. 15,
2022, at 5:00 p.m. (PT), is extended to April 5, 2022, at 5:00 p.m.
(PT).
K. To the extent that any non-Debtor counterparty wishes to
object to the adequate assurance of future performance by the SH
Bidder or another Qualified Bidder under the applicable executory
contract(s) or unexpired lease(s), then such non-Debtor
counterparty will file a written objection with the Court and serve
on the Notice Parties and the applicable Qualified Bidder(s) so
that such objection is received on or before 24 hours prior to the
commencement of the Sale Hearing.
The Amended Bidding Procedures are approved and, accordingly, will
supersede the Original Bidding Procedures in all respects. Plamex
is authorized to take any and all actions necessary or appropriate
to implement the Amended Bidding Procedures. The failure to
specifically include or reference any particular provision of the
Amended Bidding Procedures in this Order will not diminish or
impair the effectiveness of such Amended Bidding Procedures, it
being the intent of the Court that the Amended Bidding Procedures
be authorized and approved in their entirety.
The Amended Sale Notice (i) is approved, (ii) will supersede the
Original Sale Notice in all respects, and (iii) service or
publication thereof (as applicable) as set forth below satisfies
the requirements of Rule 2002 of the Federal Rules of Bankruptcy
Procedure. The Debtors are authorized to provide such Amended Sale
Notice to prospective buyers and other known parties in interest.
The Amended Cure Notice is approved, and will supersede the
Original Cure Notice in all respects.
The Debtors are authorized and directed to enter into and perform
their obligations under the Amendment to Plan Support Agreement.
Plamex is authorized and directed and to enter into and perform its
obligations under an amendment to the SH PSA, in form and substance
satisfactory to the parties, which will amend the SH PSA to reflect
the new dates and deadlines set forth in the Amended Bidding
Procedures, and the SH PSA as amended thereby, is and will be
deemed appropriate and reasonably calculated to enable Plamex and
other parties in interest to easily compare and contrast differing
terms of the bids presented at the Auction and is otherwise
approved and, accordingly, will supersede the Original SH PSA in
all respects.
The Original Bidding Procedures Order will remain in full force and
effect, and will continue to govern all matters set forth therein,
except to the extent expressly set forth and in the Order Exhibits.
Notwithstanding the possible applicability of Bankruptcy Rules
6004(h), 6006(d), 7052, 9014, or otherwise, the terms and
conditions of the Order will be immediately effective and
enforceable upon its entry.
A telephonic hearing on the Motion via ZoomGov was held on Jan. 13,
2022, at 10:00 a.m. (PT).
About Plamex Investment
Plamex Investment, LLC, is a privately held company whose
principal
assets are located at 3100 E. Imperial Highway Lynwood, Calif.
Plamex Investment and its affiliate, 3100 E. Imperial Investment,
LLC, sought protection under Chapter 11 of the U.S. Bankruptcy
Code
(Bankr. C.D. Calif. Lead Case No. 21-10958) on April 14, 2021.
Donald Chae, designated officer, signed the petitions. Judge
Erithe A. Smith oversees the cases.
At the time of the filing, Plamex Investment disclosed assets of
between $100 million and $500 million and liabilities of the same
range. 3100 E. Imperial Investment had between $10 million and $50
million in both assets and liabilities.
Levene, Neale, Bender, Yoo & Brill LLP serves as the Debtors'
legal
counsel.
PLANET HOME: Moody's Rates New 1st Lien Loans 'B1', Outlook Stable
------------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Planet Home
Lending LLC's planned $300 million senior secured GNMA term loan
and $175 million GNMA revolving credit facility, both with a
five-year tenor. Planet Home also plans to issue a $200 million
FNMA/FHLMC revolving credit facility (unrated), which will also be
due in 2027. The company plans to draw on both revolving credit
facilities over time as needed, and has indicated that the proceeds
will be used to redeem its existing senior secured revolving
facility due April 2024, to fund the acquisition of mortgage
servicing rights (MSRs) and for general corporate purposes. At the
same time, Moody's affirmed Planet Home's B2 corporate family
rating.
Assignments:
Issuer: Planet Home Lending, LLC
Senior Secured 1st Lien Term Loan (GNMA), Assigned B1
Senior Secured 1st Lien Revolving Credit Facility (GNMA), Assigned
B1
Affirmations:
Issuer: Planet Home Lending, LLC
Corporate Family Rating, Affirmed B2
Outlook Actions:
Issuer: Planet Home Lending, LLC
Outlook, Remains Stable
RATINGS RATIONALE
The B2 CFR reflects the company's solid profitability and adequate
capitalization, but also takes into consideration the risks to
creditors from its evolving funding structure, operational risks
related to its rapid growth, and a developing franchise in the US
residential mortgage market.
Planet Home's profitability as measured by net income to total
managed assets in the first nine months of 2021 was solid at 2.9%,
although down from the exceptionally high profitability in the
sector in 2020. Profitability for the company improved materially
in 2020 from 2019, driven by the increase in gain on sale margins
and residential mortgage origination volumes as a result of the
significant decline in interest rates.
The company's capitalization, as measured by adjusted tangible
common equity to tangible assets (adjusted TCE to TMA), increased
to approximately 14.8% as of 30 September 2021 from 12.8% as of
year-end 2020, which Moody's views as adequate for its rating
level.
However, the company's rapid growth is credit negative due to the
associated operational risks, which may lead to stress on
liquidity, management, controls and system resources. In addition,
Moody's believes that sacrificing profitability or increasing
operating risks to continue rapid growth could further increase
credit risk.
Moody's said the company's funding structure is evolving. Planet
Home has primarily relied on short-term (mostly one-year
maturities) repurchase facilities to finance new originations and a
secured mortgage servicing rights (MSR) facility to finance its
MSRs. However, the company issued $50 million in senior unsecured
notes in December 2021 (unrated) to partially finance growth in its
correspondent origination channel, which Moody's views as credit
positive because it enhanced the company's funding profile by
diversifying its funding sources and, together with the planned
senior secured issuance, extends its debt maturities. The company
has indicated that it is committed to increasing its reliance on
senior unsecured notes.
The B1 rating assigned to the planned senior secured GNMA term loan
and GNMA revolving credit facility reflects the company's B2 CFR
and the senior secured term loan's first lien priority interest in
the company's GNMA MSRs. The rating is based on the application of
Moody's Loss Given Default (LGD) for Speculative-Grade Companies
methodology and model, which incorporate their priority of claim
and strength of asset coverage.
Plant Home's stable outlook reflects Moody's expectation that the
company will maintain its leverage as well as solid, but lower
profitability over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's said that Planet Home's ratings could be upgraded if the
company continues to demonstrate solid financial performance, such
as achieving and maintaining capitalization as measured by tangible
common equity to tangible managed assets of 17.5% or higher as well
as maintaining net income to total assets of more than 2.5%. In
addition, further strengthening of the funding structure that would
reduce refinancing risk, such as through continued, further
diversification of the company's funding sources, and increasing
the percentage of warehouse facilities with maturities beyond the
typical 364 days would be positive for the ratings.
Moody's said that the ratings could be downgraded if the company's
financial performance materially deteriorates, for example, if
capitalization decreased to and remained 11.0% or lower as measured
by tangible common equity to tangible managed assets, if net income
to assets fell to less than and remained below 1.0% for an extended
period of time, or if the company's liquidity position deteriorates
beyond an adequate buffer to its debt covenants. Planet Home's
long-term senior secured debt rating could be downgraded if its
ratio of secured debt to unsecured debt remains above 6 to 1
following the closing and funding of its senior secured issuance,
planned for May 2022.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
PMHC II: Moody's Raises CFR to 'B3' & Rates New 1st Lien Debt 'B3'
------------------------------------------------------------------
Moody's Investors Service has upgraded PMHC II, Inc.'s (dba Prince
International Corporation) Corporate Family Rating to B3 from Caa1
and its Probability of Default Rating to B3-PD from Caa1-PD.
Moody's also upgraded the existing $85 million senior secured
revolving credit facility and $515 million senior secured first
lien term loan to B3 from Caa1 and the $150 million senior secured
second lien term loan to Caa2 from Caa3. Moody's expects to
withdraw the ratings on the existing debt once the acquisition of
Ferro Corporation (Ferro, Ba3 negative) and merger with ASP
Chromaflo Holdings II, LP (Chromaflo, B2 negative) is closed and
the debt has been repaid.
Moody's has assigned B3 ratings to PMHC II's new secured capital
structure consisting of a proposed $325 million senior secured
first lien revolving credit facility due 2027 and $1.945 billion
senior secured first lien term loan due 2029. The rating agency
also assigned a B3 rating to the proposed $500 million senior
secured notes due 2029 and Caa2 rating to the $756 million senior
unsecured notes due 2030. The company plans to fund the acquisition
of Ferro and Chromaflo merger with the proceeds from the term loan,
issuance of senior secured notes and unsecured notes, along with
$390 million of cash on the balance sheet. The rating outlook is
stable.
The assigned ratings are subject to the transaction closing as
expected and review of the final documents.
"The upgrade reflects Prince's continued operational and financial
improvement that have exceeded our expectations and restored credit
metrics more commensurate with the B3 rating category," said
Domenick R. Fumai, Moody's Vice President -- Senior Analyst and
lead analyst for PMHC II. "However, while the acquisition of Ferro
Corp and subsequent merger with Chromaflo increases scale and
clearly improves its business profile, it also adds a substantial
amount of debt and entails significant integration risk," Fumai
added.
Upgrades:
Issuer: PMHC II, Inc.
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Gtd Senior Secured Revolving Credit Facility, Upgraded to B3
(LGD3) from Caa1 (LGD3)
Gtd Senior Secured First Lien Term Loan, Upgraded to B3 (LGD3)
from Caa1 (LGD3)
Gtd Senior Secured Second Lien Term Loan, Upgraded to Caa2 (LGD5)
from Caa3 (LGD5)
Assignments:
Issuer: PMHC II, Inc.
Gtd Senior Secured First Lien Term Loan, Assigned B3 (LGD3)
Gtd Senior Secured First Lien Revolving Credit Facility, Assigned
B3 (LGD3)
Senior Secured 1st Lien Regular Bond/Debenture, Assigned B3
(LGD3)
Senior Unsecured Regular Bond/Debenture, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: PMHC II, Inc
Outlook, Remains Stable
RATINGS RATIONALE
On May 11, 2021, Prince announced it will acquire Ferro for $22.00
per share in an all-cash transaction valued at approximately $2.1
billion, including the assumption of debt, net of cash. In
conjunction with the closing of the transaction, which is expected
in the first quarter of 2022 subject to regulatory approval, the
company plans to merge with Chromaflo, which is also owned by the
same private equity sponsor as Prince - American Securities.
The upgrade reflects Prince's improved financial and operating
performance that have exceeded Moody's previous expectations.
Prince has been able to successfully achieve cost savings, volume
growth and a more favorable product mix resulting in significantly
improved credit metrics. Strong demand in key end markets such as
battery, electronics, appliances and sanitaryware (A&S) and
metallurgical have resulted in EBITDA growth and margin expansion.
As a result, standalone Debt/EBITDA, including Moody's standard
adjustments, has declined from approximately 10.5x at the end of
2019 to 6.4x as of September 30, 2021.
The B3 rating incorporates Moody's view that the pending
acquisition of Ferro and Chromaflo will strengthen Prince's
business profile as it will add significant scale, increase end
market exposure and has the ability to realize meaningful cost
synergies of $110 million. The transaction creates a combined
company that generates sales of approximately $2 billion with a
global footprint. The new company will combine core competencies in
particle engineering, glass technology and color science. For
example, the ability to leverage Prince's expertise in sourcing and
processing raw materials such as manganese, lithium, chromium and
cobalt with Ferro's electronics coatings and materials business is
a potential benefit. Prince's breadth of product offerings will be
enhanced and its customer base will be expanded to over 11,000 with
a number of well-known brand names. Furthermore, the deal increases
penetration in several higher growth potential end markets
including EVs, the Internet of Things (IoT) and semiconductors.
The B3 CFR is constrained by leverage that will remain roughly
unchanged on a pro forma basis, but will add a significant amount
of debt to the balance sheet without any new equity contribution
from the sponsor. Moody's estimates that over $2.5 billion in gross
debt will be incurred once the transaction closes. Moody's projects
pro forma Debt/EBITDA, including standard adjustments, of about
6.5x in FY 2022 with further deleveraging in FY 2023 towards 6.0x,
but does not anticipate any meaningful debt reduction over the
medium-term horizon and the company's inability to realize cost
synergies in a timely fashion could reduce free cash flow
generation and delay deleveraging. Moreover, the size and
complexity of the transaction introduces significant integration
risk in terms of IT systems, accounting and finance functions and
logistics though this is somewhat mitigated by a detailed
integration plan given the long lead time from when the deal was
announced until closing. Moody's also believes that while
management's estimated cost synergies of $110 million are
realizable, the costs to achieve the synergies of $110 million are
substantial.
ESG CONSIDERATTIONS
Moody's evaluates environmental, social and governance factors in
its rating assessment. The company does not have any material
environmental litigation and is not experiencing substantial
ongoing remediation costs. Both the environmental and social risks
are roughly average for a chemical company. Governance risk is a
contributing factor to the rating and is considered high due to
private equity ownership by American Securities. Aggressive
financial policies, including high levels of debt and lack of a
majority of independent board of directors, which is required for
public companies, are factors contributing to Moody's governance
risk assessment.
LIQUIDITY
Prince has good liquidity with available cash on the balance sheet,
a $325 million revolving credit facility that is expected to be
undrawn at closing and solid, consistent free cash flow generation
given its asset-light business model. The revolving credit facility
contains a springing first lien net leverage ratio covenant once
outstanding borrowings exceed 35% at the end of the quarter. Based
on the draft documentation received, Moody's does not anticipate
the covenant to be tested over the next 12-18 months.
STRUCTURAL CONSIDERATIONS
The B3 rating on the company's proposed senior secured credit
facilities, consisting of a $325 million revolving credit facility
and $1.945 billion senior secured term loan, equivalent to the B3
CFR, reflects the priority interest in substantially all of the
company's domestic assets. The B3 rating assigned to the senior
secured notes also incorporates their security interest in the
collateral, though the notes lack a downstream guarantee from
parent company, ASP Prince Intermediate Holdings, Inc. The Caa2
rating on the senior unsecured notes consider the preponderance of
secured debt in the capital structure with priority ranking that
weakens recovery prospects in the event of a default.
As proposed, the new first lien credit facilities are expected to
provide covenant flexibility that if utilized could negatively
impact creditors. Notable terms include the following:
The new credit facilities allow for incremental first lien debt
capacity up to the greater of $504 million and 100% of consolidated
EBITDA, plus unused amounts under the general debt basket, plus an
additional uncapped amount subject to the first lien net leverage
ratio equal to or less than 4.85x (secured by the collateral on a
pari passu basis with the first lien). Amounts up to the greater of
$504 million and 100% of consolidated EBITDA may be incurred with
an earlier maturity date than the initial term loans. The borrower
is permitted to designate any existing or subsequently acquired or
organized subsidiary as an "unrestricted subsidiary." There are no
express "blocker" provisions which prohibit the transfer of
specified assets to unrestricted subsidiaries. Non-wholly-owned
subsidiaries are not required to provide guarantees; dividends or
transfers resulting in partial ownership of subsidiary guarantors
could jeopardize guarantees, with no explicit protective provisions
limiting such guarantee releases. There are no express protective
provisions prohibiting an up-tiering transaction.
The stable outlook assumes that Prince successfully integrates the
operations of Ferro and Chromaflo without any major operational
setbacks and that it will be able to achieve targeted cost
synergies within 24-36 months. The stable outlook also includes
expectations that financial leverage improves over the next 12-18
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if adjusted Debt/EBITDA is
sustained below 5.5x, the company is able to successfully integrate
operations and deliver the cost synergies with 24 months from close
and free cash flow-to-debt (FCF/Debt) is above 10% for a sustained
period.
Moody's would likely downgrade the ratings if the company has
delays in achieving the cost synergies, adjusted Debt/EBITDA
exceeds 7.0x on a sustained basis, or free cash flow is negative
for a prolonged time. The ratings could also be downgraded if the
company completes a large-debt-financed acquisition or shareholder
return.
PMHC II, Inc. is a manufacturer of customized, value-added,
mineral-based specialty additives with a focus on manganese,
chromium, iron oxide, lithium, cobalt and zircon based products.
The company serves a wide range of end markets including
electronics, construction, appliances and sanitaryware,
agriculture, consumer, oil & gas, brick & tile and the automotive
sector. The company reports its revenues in two business segments:
Advanced Minerals and Electronics. PMHC II had revenues of
approximately $572 million for the twelve months ended September
30, 2021, and is majority owned by American Securities.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
PRECISELY SOFTWARE: $230MM Loan Add-ons No Impact on Moody's B3 CFR
-------------------------------------------------------------------
Moody's Investors Service said that Precisely Software
Incorporated's $200 million fungible first lien and $30 million
fungible second lien add-ons have no impact on the company's
ratings, including the B3 Corporate Family Rating, B2 rating on the
senior secured first lien credit facilities, and Caa2 rating on the
senior secured second lien debt. In addition, the outlook remains
stable.
Nevertheless, the debt raise signals the continuation of aggressive
financial strategies as net proceeds will be used to effectively
fund two acquisitions: 1) PlaceIQ, a provider of location data and
analytics and 2) CedarCX, a provider of customer communication
services. In December 2021, Precisely utilized $55 million from its
revolver to fund the purchase of CedarCX, the outstanding balance
of which will be repaid with proceeds from the add-ons. Although an
increase in total debt amount is credit negative, pro forma
leverage will remain largely unchanged, at around 7.5x Moody's
adjusted debt/EBITDA, including add-backs for integration expenses
and planned synergies (or 8.5x if excluding these add-backs).
While these transactions will not increase adjusted leverage,
Moody's notes that Precisely has been highly acquisitive since its
LBO by Clearlake and TA Associates in 2021. The acquisition of
PlaceIQ represents Precisely's fifth acquisition, and the fourth
funded with debt since the LBO. Frequent and sizable M&A
transactions result in heightened integration risks and
restructuring expenses, and limit free cash flow generation.
At the same time, Precisely has a solid track record of
successfully integrating acquisitions, which supports its credit
profile. The company also benefits from strong recurring revenue
growth in the low teens percentage range, solid profitability and
good liquidity.
Headquartered in Burlington, MA, Precisely is a global provider of
data integrity software to enterprise customers. Precisely's
products include data integration, data quality, data governance,
process automation and data enrichment software and services. The
company is majority-owned by Clearlake and TA Associates, with
remaining ownership stakes held by Centerbridge and management. Pro
forma revenue was approximately $860 million in 2021.
PUTHENVEETIL K. BOBBY: March 29 Auction of Arlington Heights Asset
------------------------------------------------------------------
Judge LaShonda A. Hunt of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Puthenveetil K. Bobby's
bidding procedures in connection with the auction sale of the real
property located at 1907-29 S. Arlington Heights Rd., in Arlington
Heights, Illinois.
The Debtor's selling officer has compiled certain materials that
includes information about the Property, its current condition,
existing leases, and its financial performance. To obtain access to
these materials, prospective bidders must execute and deliver an
NDA in form and substance acceptable to the Debtor and his selling
officer.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: March 24, 2022, at 5:00 p.m. (CST)
b. Initial Bid: To increase the competitive nature of the sale
process, the Bidding Procedures provide that the Debtor, in his
discretion, in consultation with Romspen, CCU, and the Subchapter V
Trustee, may designate a Qualified Bidder as a "Stalking Horse
Bidder" and award it so-called stalking horse protections,
including a break-up fee not to exceed 2.5% of the cash purchase
price, plus an expense reimbursement in an amount not to exceed
$10,000 ("Bid Protections").
c. Deposit: 10% of the cash purchase price
d. Auction: If the Debtor receives more than one Qualified
Bid, the Debtor will conduct an Auction on March 29, 2022, at 10:00
a.m. (CST). The Auction may be conducted in-person or by Zoom or
similar videoconferencing method (based on the selling officer's
judgment in consultation with the Debtor and key parties), based on
instructions to be provided by theD ebtor's selling officer to
Auction participants in advance of the Auction.
e. Bid Increments: $25,000
f. Sale Hearing: March 31, 2022, at 11:00 a.m
g. Sale Objection Deadline: March 29, 2022, at 5:00 p.m.
(CST)
h. Credit Bid Rights: CCU will have the right to Credit Bid
for the Property in accordance with and pursuant to section 363(k)
of the Bankruptcy Code, except as otherwise limited by the
Bankruptcy Court for cause.
The Property will be transferred on an "as-is, where-is" basis,
with all faults, and without representations or warranties of any
kind, nature or description.
The Bidding Procedures Notice is approved as adequate and
appropriate under the circumstances and the Debtor is directed and
authorized to serve the Bidding Procedures Notice by no later than
Jan. 21, 2022.
Puthenveetil K. Bobby sought Chapter 11 protection (Bankr. N.D.
Ill. Case No. 20-18444) on Oct. 8, 2020. The Debtor tapped Ariel
Weissberg, Esq., as counsel.
QHC FACILITIES: CEO's Son Takes Over, Says Trustee Moot
-------------------------------------------------------
That the CEO of bankrupt QHC Facilities LLC, has died and her son
has taken over. Mark Hidlebaugh said in a court filing that the
incapacitation of Nancy Voyna "is now moot and no longer a valid
and legally tenable basis" for the U.S. Trustee's effort to appoint
a steward in the case.
"I am the son of Nancy Voyna, and with her recent passing, am one
of her heirs and now the Executor of her probate estate pursuant to
Letters of Appointment issued by the Iowa District Court for Dallas
County. Prior to her death, I have been Director of Physical Plant
and a member of senior management of QHC Facilities, LLC, and its
sister and affiliated corporate entities (hereinafter referred to
as the "QHC Entities") for close to ten (10) years, along with my
wife, Angie Hidlebaugh, who has also been a member of senior
management. In addition to my role as Successor Chief Executive
Officer and successor fiduciary of the QHC Entities as Debtors in
Possession, I am the sole designated Successor Trustee and sole
designated beneficiary of the ownership interests of the QHC
Entities under The Nancy Voyna Revocable Trust. I make this
declaration in support of my status and ascension as successor to
Nancy Voyna as Chief Executive Officer, as successor fiduciary of
the several Debtors in Possession and the sole designated successor
of the ownership interests of the QHC Entities currently operating
under Chapter 11 of the Bankruptcy Court, and in opposition to the
Office of the U.S. Trustee's Motion for the Appointment of a
Chapter 11 Trustee ("UST Motion") and in support of the Debtor's
pending motion for Gibbins Advisors to be the Chief Restructuring
Officers for the QHC Entities," Mr. Hidlebaugh said.
"To the extent the primary premise of the UST's Motion was the
incapacitation of Nancy Voyna prior to her death, such premise is
now moot and no longer a valid and legally tenable basis for the
relief sought by the UST:
* By operation of my acquisition of the ownership interests of
the QHC Entities, I duly accept the responsibilities and assert my
qualifications of being the successor fiduciary for the QHC
Entities under the Bankruptcy Code and Rules.
* Additionally, my active role for close to ten (10) years in
the operations of both the physical plants of the several skilled
nursing and assisted living facilities and as senior management of
their operations (in each case on both an individual and on a
consolidated basis) qualifies me to continue acting in those
capacities, and now as Successor Chief Executive Officer and
successor fiduciary of the Debtors in Possession."
About QHC Facilities LLC
QHC Facilities, LLC, based in Clive, Iowa, operates eight skilled
nursing facilities. The facilities include Crestview Acres in
Marion as well as in Tama, Madison, Humboldt, Jackson, Webster and
Polk counties and two assisted living centers. Collectively, the
facilities have a maximum capacity of more than 700 residents. The
company employs roughly 300 full-time and part-time workers.
QHC Facilities and its affiliates filed petitions for Chapter 11
protection (Bankr. S.D. Iowa Lead Case No. 21-01643) on Dec. 29,
2021. The affiliates are QHC Management LLC, QHC Mitchellville
LLC, QHC Crestridge LLC, QHC Humboldt North LLC, QHC Winterset
North LLC, QHC Madison Square LLC, QHC Humboldt South LLC, QHC
Villa Cottages LLC, QHC Fort Dodge Villa LLC, and QHC Crestview
Acres Inc.
The Company claimed $1 million in assets and $26.3 million in
liabilities as of the bankruptcy filing.
Judge Anita L. Shodeen oversees the cases.
Jeffrey D. Goetz, Esq., and Krystal R. Mikkilineni, Esq., at
Bradshaw Fowler Proctor & Fairgrave, PC, are the Debtors'
bankruptcy attorneys. Gibbins Advisors, LLC serves as QHC
Facilities' financial advisor.
R & R TRUCKING: Court Approves Cantus' $110K Sale of Pasco Property
-------------------------------------------------------------------
Judge Frederick L. Corbit of the U.S. Bankruptcy Court for the
Eastern District of Washington authorized Ricardo and Rosa Cantu,
affiliates of R&R Trucking, Inc., to sell their real property
commonly known as TBD 20thAvneue, Pasco, WA 99301, Tax Parcel ID
Number 113-333-287, together with the personal property located
thereon to Claudia Cisneros for $110,000, cash, pursuant to a
written Purchase and Sale Agreement.
The earnest money deposit is $1,000.
The closing of the sale will be on Jan. 25, 2022, or as directed by
the Court.
The sale is contingent upon approval of the Court in the
proceeding.
The provisions of FRBP 6004(h) are waived, and the sale may close
immediately upon entry of the Order.
The real property is encumbered by the following liens:
1. Delinquent general taxes due and owing to Franklin County
for 2019 in the approximate amount of $905.76 plus penalties and
interest.
2. Delinquent general taxes due and owing to Franklin County
for 2020 in the approximate amount of $973.36 plus penalties and
interest.
3. Deed of Trust in which the Grantor is Ricardo Cantu, the
Trustee is Cascade Title Co., and the beneficiary is Bank of
Eastern Washington. The Deed of Trust was dated February 8, 2018,
and recorded February 16, 2018, under Franklin County Auditor's
recording number 1874733. The balance as of the date of filing of
Debtors Cantus’ bankruptcy was $1,306285.28. The payoff through
Jan. 25, 2022, is approximately $1,124,720.65 plus interest and
penalties, if any, to date of closing.
The liens of the secured creditors set forth will attach to the
sale proceeds.
From the sale proceeds, the closing agent will pay the following:
1. Professional Realty Services/Maria Valdez & Teresa Reents -
a sum equal to 4% of the sale price, which commission may be split
with 2% going to Professional Realty Services/Isabel Quiroz, which
computes to $2,200, to Maria Valdez and Teresa Reents and $2,200 to
Isabel Quiroz.
2. Normal and customary closing costs attributable to Seller.
3. Delinquent general taxes due and owing to Franklin County
for 2019 and 2020. The Debtors have not paid the general taxes for
2019 in the approximate amount of $905.76 plus penalties and
interest. Additionally, they have not paid the general taxes for
2020 in the approximate amount of $973.36 plus penalties and
interest.
4. Deed of Trust in which the Grantor is Ricardo Cantu, the
Trustee is Cascade Title Co., and the beneficiary is Bank of
Eastern Washington. The Deed of Trust was dated Feb. 8, 2018, and
recorded Feb. 16, 2018, under Franklin County Auditor's recording
number 1874733. The balance as of the date of filing of Debtors
Cantus' bankruptcy was $1,306,285.28. The payoff through Jan. 25,
2022, is approximately $1,124,720.65 plus interest and penalties,
if any, to date of closing. The remainder of the sale proceeds in
the approximate amount of $98,000, will be paid to Bank of Eastern
Washington. The unpaid balance of the Deed of Trust will remain
due and owing with the same validity and priority as the lien
existed prior to this sale. There are no federal income tax
consequences expected from the sale of the property.
Any disputes concerning the amount of the payoff to any creditor,
which will include attorney's fees, costs or disbursement of any
kind, will be resolved by the Court.
About R & R Trucking
R & R Trucking, Inc., based in Pasco, WA, filed a Chapter 11
petition (Bankr. E.D. Wash. Case No. 19-00473) on March 1, 2019.
In the petition signed by Ricardo Cantu, president, the Debtor
estimated $1 million to $10 million in both assets and
liabilities.
On April 26, 2019, Ricardo and Rosa Cantu, owners of R&R Trucking,
and personal guarantors on many of R&R Trucking's obligations,
filed a Chapter 11 bankruptcy proceeding (Bankr. E.D. Wash. Case
No. 19-01089).
The two cases are administratively consolidated.
The Hon. Frederick P. Corbit oversees the case.
William L. Hames, Esq., at Hames Anderson Whitlow & O'Leary,
serves
as bankruptcy counsel to the Debtors.
RYAN C. WENZEL: $1M Sale of Estero Property to Arands Approved
--------------------------------------------------------------
Judge Jimmy L. Croom of the U.S. Bankruptcy Court for the Western
District of Tennessee authorized Ryan C. Wenzel's sale of the real
property located at 20600 Slalom Course Court, in Estero, Florida,
to Dale and Joyce Arand for $1,005,000.
The Property is encumbered by the following liens:
A. Mortgage to The Mortgage Firm in Instrument No.
2018000243872, as assigned in Instrument No. 2021000012358, both of
record in Lee County, Florida. The mortgage is serviced by Selene
Finance and the amount necessary to satisfy the mortgage through
Feb. 7, 2022, is $891,497.33.
B. Code Enforcement Liens of record in Instrument No.
2019000099009 and 2019000291082, both of record in Lee County,
Florida.
C. Claim of Lien in favor of Homeowners Association of record
in Instrument No. 2020000256860, as amended in Instrument No.
2020000310503, both of record in Lee County, Florida.
D. Judgment Lien in favor of Tana Shirk in Instrument No.
2021000061105 of record in Lee County, Florida.
E. Judgment Lien in favor of Alchemy Spetec, LLC in Instrument
No. 2021000274383 of record in Lee County, Florida.
The sale will be free and clear of all liens and encumbrances,
including, but not limited to, the liens and encumbrances
referenced.
The closing agent is authorized and directed to make the following
disbursements at closing from the sale proceeds:
A. Payment of usual, customary and normal closing expenses
assessed to the Seller;
B. Pay commission to the realtors of $50,000 to be divided
between the listing realtor and selling realtor as they may agree;
C. Payment of any delinquent ad valorem real property taxes;
D. Payment of any delinquent water, sewer and/or gas, garbage
removal service charges due and payable to Lee County, Florida;
E. Payment of water, sewer and/or gas, garbage removal service
charges due to Lee County, Florida;
F. Proration of ad valorem real property taxes for tax year
2022;
G. Pay Selene Finance the sum of $891,497.33 or such other sum
as may be necessary to satisfy the mortgage referenced;
H. Pay all sums necessary to satisfy the Code Enforcement
Liens referenced;
I. Pay all sums necessary to satisfy the Homeowners
Association Lien referenced;
J. To the extent funds remain after payment of items
described, pay the lesser of any remaining funds or the amount
necessary to satisfy the judgment lien of Tana Shirk referenced;
and
K. Pay any remaining proceeds to Teel & Gay, P.L.C. escrow
account to be held pending further orders of the Court.
The Order will have immediate effect.
Ryan C. Wenzel sought Chapter 11 protection (Bankr. W.D. Tenn. Case
No. 21-10952) on Oct. 21, 2021.
RYAN SPECIALTY: Moody's Rates $400MM Senior Secured Notes 'B1'
--------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to $400 million
of eight-year senior secured notes being issued by Ryan Specialty
Group, LLC (RYAN, corporate family rating B1), the operating
company for Ryan Specialty Group Holdings, Inc. The notes are being
offered to qualified institutional investors under Rule 144A of the
Securities Act of 1933, and will rank pari passu with existing
senior secured credit facilities. RYAN intends to use net proceeds
of the offering for general corporate purposes, including future
acquisition opportunities and investments, and to pay related fees
and expenses. The rating outlook for RYAN is unchanged at stable.
RATINGS RATIONALE
According to Moody's, RYAN's ratings reflect its strong presence in
specialty insurance brokerage, broad diversification across clients
and carriers, healthy EBITDA margins and good free cash flow. RYAN
has reported strong organic growth, helped by rising rates in
commercial property & casualty and professional liability
insurance, especially within specialty excess & surplus lines.
These strengths are offset by the company's elevated financial
leverage, integration risk associated with acquisitions, and
potential liabilities arising from errors and omissions, a risk
inherent in professional services.
RYAN reported revenues of $1.1 billion for the first nine months of
2021, including strong organic growth in all three of the company's
specialties: wholesale brokerage, binding authority and
underwriting management. Moody's expects the organic growth to
remain strong into 2022 and that the company will maintain its
EBITDA margins, as calculated by Moody's.
Giving effect to the proposed transaction, Moody's estimates RYAN's
s pro forma debt-to-EBITDA ratio to be around 5x, interest coverage
to be in the low to mid-single digits, and the
free-cash-flow-to-debt ratio in the mid to high single digits.
These metrics incorporate Moody's accounting adjustments for
operating leases, deferred earnout obligations and run-rate
earnings from completed acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to an upgrade of RYAN's ratings include:
(i) continued profitable growth, (ii) debt-to-EBITDA ratio below
4.5x, (iii) (EBITDA - capex) coverage of interest exceeding 3.5x,
and (iv) free-cash-flow-to-debt ratio exceeding 8%.
Factors that could lead to a downgrade of RYAN's ratings include:
(i) debt-to-EBITDA ratio remaining above 6x, (ii) (EBITDA - capex)
coverage of interest below 2.5x, (iii) free-cash-flow-to-debt ratio
below 5%, or (iv) delay or disruption of acquired operations.
Moody's has assigned the following rating to RYAN:
$400 million eight-year senior secured notes at B1 (LGD3).
RYAN's rating outlook is unchanged at stable.
The principal methodology used in this rating was Insurance Brokers
and Service Companies published in June 2018.
Founded in 2010 and based in Chicago, Illinois, RYAN is a specialty
insurance broker providing wholesale brokerage, binding authority
and managing general underwriting services for retail brokers,
agents and insurance carriers mainly in the US and also in Canada,
the UK and Europe. The company generated revenue of $1.4 billion
during the twelve months ended September 30, 2021.
RYAN SPECIALTY: S&P Assigns 'BB-' Long-Term ICR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' long-term issuer credit
rating to Ryan Specialty Group Holdings Inc. The outlook is
stable.
S&P said, "At the same time, we affirmed our 'BB-' long-term issuer
credit rating on Ryan Specialty Group LLC (Ryan Specialty), with a
recovery rating of '3' reflecting the expectation of meaningful
recovery on the existing $2.25 billion first-lien credit facility
($600 million revolver due 2025 and $1.65 billion term loan due
2027). We assigned a 'BB-' issue rating to Ryan Specialty's
proposed $400 million senior secured notes due 2030 with a recovery
rating of '3', reflecting our expectation of meaningful recovery
(50%)."
As part of the recently completed IPO, Ryan Specialty Group, LLC
changed its organizational structure, adding the public company
Ryan Specialty Group Holdings Inc. (Ryan Holdings) whose only
operations are its holdings in Ryan Specialty. The group will
continue to issue debt out of Ryan Specialty, which S&P views as
the financing subsidiary of the enterprise, with all notes being
guaranteed by most wholly-owned subsidiaries.
Ryan Specialty achieved strong underlying performance in 2021
through September, benefiting from favorable insurance pricing, a
growing non-admitted market, retail broker consolidation, wholesale
panel consolidation, and a strong macroeconomic recovery (measured
by GDP growth). This led to the company achieving organic growth of
over 20%, with growing EBITDA margins allowing the company's EBITDA
to expand and ultimately lowering leverage since the company did
not resume merger and acquisition (M&A) activity until December
2021. Since the company has successfully completed most of its
integration with All Risks Ltd. (All Risks), Ryan Specialty has
returned to supporting business expansion from M&A, closing two
transactions in December and adding approximately $34 million in
pro forma revenue. S&P expects strong organic trends and a healthy
M&A pipeline will allow the company to sustain its position as the
second-largest wholesale property/casualty broker in the U.S.
S&P said, "For the 12 months ended September 2021, pro forma net
financial leverage per our calculations was 3.8x (3.2x excluding
liabilities attributable to the tax receivable agreement). Leverage
improved materially over the previous 12 months as the company
increased cash to over $400 million, completed no acquisitions
after All Risks until December, reduced liability for its long-term
incentive plan related to All Risks, eliminated its preferred units
with the completion of the IPO, and grew S&P calculated pro forma
EBITDA to over $450 million. The new issuance of $400 million is
expected to be held in cash on the balance sheet for general
corporate purposes, which we ultimately expect to be deployed for
M&A over time. We continue to expect net financial leverage
(excluding liabilities attributable to the tax receivable
agreement) to be 3.5x-4.5x for the projected period.
"The stable outlook reflects our expectation that Ryan Specialty
will continue to grow its revenue base with above-average organic
growth while maintaining stable EBITDA margins and reinitiating its
acquisition pace as it has digested most of the All Risks
transaction. For 2021, we expect Ryan Specialty to achieve organic
revenue growth in the low 20% range, EBITDA margins of 30%-32% per
our calculations, and pro-forma debt to EBITDA (excluding
liabilities attributable to the tax receivable agreement) of
3.2x-3.7x with EBITDA coverage above 5.0x. We also expect Ryan
Specialty to maintain its position as the second-largest wholesale
property/casualty broker in the U.S.
"We could lower our ratings in the next 12 months if earnings or
debt levels consistently result in debt to EBITDA above 5.0x
(excluding liabilities attributable to the tax receivable agreement
liability) or coverage below 3.0x per our calculations. This could
occur if earnings fall due to negative growth, compressed margins,
or if the company adopts a more aggressive financial policy.
"We could raise our ratings in the next 12 months if the company
continues to expand its footprint profitably, and we believe it
will maintain debt to EBITDA comfortably below 4.0x (excluding
liabilities attributable to the tax receivable agreement) on a
sustained basis with coverage above 6.0x per our calculations
through a less aggressive financial policy. Additionally, we would
look for the company to continue to enhance scale while improving
EBITDA margins closer to larger peers.
"There are no changes to our '3' first-lien recovery rating
(meaningful; 50%-70% in the lower half of the range) to the $2.65
billion first-lien loan facilities ($400 million new high yield
senior secured notes, $600 million revolving credit facility and
$1.65 billion term loan).
"We have valued the company on a going concern basis using a 6.0x
multiple over our projected emergence EBITDA.
"Our simulated default scenario contemplates a default in 2025
stemming from intense competition in the brokerage market leading
to significantly lower commission and margins.
"We believe lenders would achieve the greatest recovery value
through reorganization rather than liquidation of the business."
-- Year of default: 2025
-- EBITDA at emergence after recovery adjustment: $226.4 million
-- Implied enterprise value (EV) multiple of 6.0x
-- Emergence EBITDA: $ 226.4 million
-- Multiple: 6.0x
-- Obligor/nonobligor valuation split: 100%/0%
-- Gross recovery value: $1.358 billion.
-- Net recovery value (after 5% administrative expenses):$1.290
billion.
-- Collateral value available for first-lien claims:$1.290
billion
-- Estimated first-lien claims: $2.566 billion
-- Total first-lien recovery: 50%
SARACEN DEVELOPMENT: Moody's Withdraws B3 CFR on Debt Repayment
---------------------------------------------------------------
Moody's Investors Service has withdrawn Saracen Development, LLC's
ratings including the B3 Corporate Family Rating, the B3-PD
probability of default rating, and the B3 rating on the senior
secured notes on January 14, 2022. The positive outlook has also
been withdrawn. The rating action follows the full repayment and
cancellation of the notes.
Withdrawals:
Issuer: Saracen Development, LLC
Corporate Family Rating, Withdrawn, previously rated B3
Probability of Default Rating, Withdrawn, previously rated B3-PD
Senior Secured Regular Bond/Debenture, Withdrawn, previously rated
B3 (LGD3)
Outlook Actions:
Issuer: Saracen Development, LLC
Outlook, Changed To Rating Withdrawn From Positive
RATINGS RATIONALE
Moody's has withdrawn the ratings because Saracen Development,
LLC's debt previously rated by Moody's has been fully repaid
following a refinancing transaction.
Saracen is a wholly-owned unrestricted subsidiary of Downstream
Development Authority with its own independent financing structure.
Saracen was established to develop, own and operate Saracen Casino
Resort in Pine Buff, Arkansas, located 45 minutes from Little Rock,
Arkansas. A 300-slot annex opened in September 2019 and the main
casino resort with 2,000 slots plus table games opened in October
2020. Downstream Development Authority is an instrumentality of the
Quapaw Tribe of Oklahoma, owner of Downstream Casino Resort located
in Northeast Oklahoma. Net revenue for the 30-Jun-2021 LTM period
was $114 million.
ST ANNE'S RETIREMENT: Fitch Affirms BB+ Rating on 2012/2020 Bonds
-----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on the following bonds
issued by the Lancaster County Hospital Authority on behalf of
Saint Anne's Retirement Community (SARC):
-- $36.3 million revenue bonds, series 2020;
-- $14.4 million revenue bonds, series 2012.
Fitch has also assigned an Issuer Default Rating (IDR) of 'BB+' to
SARC.
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a pledge of gross revenues of the
obligated group, mortgage interest in certain properties and a
master debt service reserve fund.
ANALYTICAL CONCLUSION
The 'BB+' rating reflects Fitch's expectations for continued fill
of SARC's newly constructed independent living units (ILUs), which
should contribute to improvement in the community's currently slim
financial profile. SARC's Phase II ILUs apartments opened on
schedule in February 2021 and are currently about 80% occupied,
with expectations for additional move ins throughout the balance of
FY22 (year-end June 30). SARC's newly constructed ILU cottages have
stabilized at 90% occupancy.
SARC's business profile attributes are midrange, with 'bbb' revenue
defensibility, characterized by its single site nature and track
record of stable demand, despite operating in a competitive market
area and a heavy reliance on its SNF for net revenues. Fitch also
assesses SARC's operating risk at 'bbb', reflecting SARC's solid
core operating performance as a predominantly fee-for-service life
plan community (LPC), despite a historically high exposure to
Medicaid in its SNF and offset by an elevated debt burden as a
result of its robust capital plan that was implemented over the
last five fiscal years.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Solid Occupancy, Moderately Competitive Market Area
SARC is a single site LPC with a track record of solid demand,
operating in a competitive market area of Lancaster County. An
average of approximately 90% of SARC's ILUs were occupied from FY17
to FY21. ILU occupancy dipped to 78% in FY21; however, this was
primarily attributable to the new Phase II units coming online, as
well as the challenges related to the coronavirus pandemic. ILU
occupancy recovered to 89% as of the quarter-ended Sept, 30, 2021
and just under 90% as of year-end 2021.
The Phase II ILUs opened in February 2021 and are currently about
80% occupied and management is reporting favorable marketing
results for the remaining units. SARC's existing ILU cottages are
currently 90% occupied, with four additional duplexes to be built
in 2022, which will be 100% presold prior to construction start.
SARC has a waiting list of 169 prospective residents that is
updated monthly.
Similar to industry-wide trends, SARC's SNF occupancy has been
pressured by the coronavirus pandemic, although it has not had a
COVID-19 positive resident in the SNF since January 2021. SARC is
limiting external admissions to its SNF to manage to current
staffing pressures, which explains sustained soft occupancy, but
Fitch expects stable to improving SNF occupancy over the next two
years.
With the opening of its new ILUs, SARC is making strides toward
improving its revenue mix to be less reliant on its SNF beds,
although SARC still derives the majority of its net revenues from
its SNF. In FY21, SARC derived approximately 60.4% of its net
revenues from its SNF in 2021, with 16.6% derived from its ALUs and
22.3% from its ILUs, compared with 63.0%, 20.9% and 14.9%,
respectively, in FY20.
SARC's primary market area (PMA) is a 20-mile radius in Lancaster
County, PA, from which it draws the majority of its residents. The
PMA's economic and demographic characteristics are mixed, which
makes its modest entrance fee and rental component affordable and
appealing to a broad base of prospective residents and supportive
of a moderate degree of pricing flexibility. The competitive
landscape in Lancaster County is varied and mature. In addition to
SARC, there are five other longstanding type-C LPCs in the PMA that
provide a full scope of services.
Operating Risk: 'bbb'
Solid Operations, Elevated Debt Burden
As a predominantly fee-for-service LPC, SARC maintains solid core
operations, with five-year average operating ratio of 93.8% and net
operating margin (NOM) of 12.4%. Given the prevalence of rental
contracts in its ILU apartments, SARC's cash flow metrics have
trended weaker, with a five-year average NOM-adjusted of 15.2%, but
this ratio has shown considerable improvement since the opening of
SARC's ILU expansions. SARC's performance in FY20 and FY21 was
supported by about $1.3 million of CARES Act relief funds and a
fully forgiven $2.2 million PPP loan.
SARC's capital spending has been robust over the last five fiscal
years, as it completed a two-phased ILU expansion project that
added a total of 84 new ILUs (54 in Phase I, 30 in Phase II) and
four new ILU duplex cottages, resulting in an improved average age
of plant of 13.5 years in FY21 compared with about 18.0 years in
FY17. SARC has plans to build an additional 12 duplexes on its
campus, including the four scheduled for 2022, for a total of 70
cottage units once the project is complete.
SARC's capex has resulted in a somewhat elevated debt burden, with
debt-to-net available and revenue-only MADS coverage that averaged
13.8x and 0.8x, respectively, from FY19 to FY21 and MADS
representing 15.7% of FY21 revenues. However, Fitch expects SARC's
capital-related metrics to moderate as the new ILUs fill and
accrete to revenues.
Fitch considers SARC's historically high exposure to Medicaid as an
asymmetric constraint on its rating. Medicaid averaged 35.5% of
SARC's SNF net revenues from fiscal 2017 to fiscal 2020, well above
Fitch's 25% threshold for a neutral assessment. However, Medicaid
dropped to 21.0% of SARC's SNF net revenues in fiscal 2021, which
Fitch attributes to the limitation of admissions into the SNF, as
well as the construction and fill of its new ILUs, which over time
should help to diversify SARC's SNF payor mix as residents age
through the continuum of care. Fitch will monitor SARC's Medicaid
exposure and would consider stabilized levels of below 25% of SNF
net revenues as no longer having negative implications for the
rating.
Financial Profile: 'bb'
Expected Improvement in Currently Slim Financial Cushion
SARC has a slim financial cushion with 29.5% cash-to-adjusted debt
and 1.4x MADS coverage as of June 30, 2021. However, given Fitch's
midrange assessments of SARC's revenue defensibility and operating
risk and expectations for project performance in Fitch's
forward-looking scenario analysis, Fitch expects SARC's key
leverage metrics to improve from these levels over the next five
years, as the new ILU apartments and cottages fill.
Cash-to-adjusted debt and MADS coverage grow to levels consistent
with a 'BB+' rating in the recovery years of Fitch's stress case
scenario.
Asymmetric Additional Risk Considerations
No asymmetric risk considerations are relevant to the rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Continued fill of the newly constructed ILUs, resulting in
improved cash flow metrics and sustained MADS coverage in
excess of 2.0x;
-- Improvement in cash-to-adjusted debt to sustained levels of
50% to 55%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch expects liquidity to continue to improve, but if days
cash on hand falls below 200 or cash-to-adjusted debt declines
to sustained levels below 25%, it would pressure the rating;
-- Stagnated fill of new ILUs that impair SARC's ability to
sufficiently cover and improve debt service coverage at least
at 1.2x.
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
SARC is a fee-for-service life plan community (LPC) located outside
of Columbia, PA in the Township of West Hempfield, approximately 35
miles southwest of Harrisburg and 10 miles west of Lancaster. SARC
is sponsored by the Religious Congregation of Sisters of the
Adorers of the Blood of Christ, United States Region (ASC).
SARC consists of 163 ILUs (119 apartments, 44 cottages), 51
assisted living units (ALUs), 51 memory care units and 61 skilled
nursing facility (SNF) beds. SARC offers type-C contracts for its
villas and cottages, with 30% refundable, 60% refundable and fully
amortizing entrance fee plans available. For its ILU apartments,
SARC offers primarily type-D (rental) contracts, which require a
one-time community fee upon entry. Fitch calculates SARC's total
operating revenues at about $21.6 million in FY21 (year-end June
30), including CARES Act relief funds and proceeds from a Paycheck
Protection Program (PPP) loan that was forgiven in FY21.
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.
STONE CLINICAL: Taps Gordian Seaport Advisors as Investment Banker
------------------------------------------------------------------
STONE Clinical Laboratories, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Louisiana to employ
Gordian Seaport Advisors, LLC as its investment banker.
The firm's services include:
(a) assisting the Debtor in the general formulation and
evaluation of various options for effecting a possible
transaction;
(b) assisting the Debtor in preparing and compiling the
information to be provided to prospective purchasers in a possible
transaction and in maintaining such information in a data room and
controlling access to such information;
(c) assisting the Debtor in identifying and, to the extent
agreed by the Debtor, contacting and soliciting proposals from
potential parties to any possible transaction;
(d) if a transaction is pursued, assisting in the structuring
and implementation thereof, including, if requested by the Debtor,
and assisting in negotiations with the parties participating in
such transaction;
(e) if a transaction is being negotiated or has been agreed,
assisting with making presentations to the Debtor and its governing
body regarding such potential transaction, its participating
parties or other sale issues related thereto;
(f) assisting the Debtor, if applicable, in seeking court
approval for all aspects of the transaction, including providing
bankruptcy court testimony; and
(g) rendering other financial advisory and investment banking
services mutually agreed upon by the firm and the Debtor.
The firm will be compensated as follows:
(a) A cash fee in the amount of $50,000 upon execution of an
engagement letter;
(b) Additional cash fees in the amount of $30,000 per month,
payable every 30 days after the date of the engagement letter for a
minimum of six months, and, if applicable, continuing thereafter
until the later of (i) the expiration of the term of the parties'
agreement pursuant to the engagement letter, or (ii) such term as
extended by court order; and
(c) A cash fee equal to 4 percent of the aggregate
consideration in connection with the consummation of any
transaction in which the aggregate consideration is $3 million or
more, payable concurrently with and as a condition to consummation
of such transaction.
As disclosed in court filings, Gordian Seaport Advisors is a
"disinterested person" within the meaning of Bankruptcy Code
Section 101(14).
The firm can be reached through:
Michael H. Schmidt
Gordian Seaport Advisors LLC
90 State St Suite 700, Office 40
Albany, NY 12207
About STONE Clinical Laboratories
STONE Clinical Laboratories, LLC is a full-service clinical
reference laboratory that specializes in preventative and molecular
diagnostics testing. The company is based in New Orleans, La.
On July 15, 2021, Whale Capital, L.P., Hologic, Inc. and Woman's
Hospital Foundation filed an involuntary Chapter 11 petition
against the Debtor. On Jan. 10, 2022, the court entered the order
for relief, thereby, commencing the Chapter 11 case (Bankr. E.D.
La. Case No. 21-10923). The petitioning creditors are represented
by The Derbes Law Firm LLC, Jaffe Raitt Heuer & Weiss P.C., and The
McCarthy Law Firm.
Judge Meredith S. Grabill presides over the case.
Heller, Draper & Horn, LLC and Gordian Seaport Advisors, LLC serve
as the Debtor's legal counsel and investment banker, respectively.
STRIKE LLC: Akin Gump Represents Unsecured Claimants
----------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Akin Gump Strauss Hauer & Feld LLP submitted a
verified statement to disclose that it is representing the
unsecured claimants in the Chapter 11 cases of Strike, LLC, et al.
On December 15, 2021, pursuant to section 1102 of title 11 of the
United States Code, the United States Trustee for the Southern
District of Texas appointed the following entities as members of
the Committee: (a) Ardent Services, LLC; (b) Aspen American
Insurance Company; (c) CBK Transport, LLC; (d) Jones Transport,
LLC; and (e) Mears Group, Inc. [Docket No. 174]. On December 17,
2021, the Committee selected Akin Gump Strauss Hauer & Feld LLP to
serve as its counsel in connection with the Debtors’ chapter 11
cases.
The Committee members hold unsecured claims against the Debtors'
estates arising from a variety of relationships.
As of Dec. 15, 2021, each Committee member and their disclosable
economic interests are:
Ardent Services, LLC
170 New Camellia Blvd., Suite 200
Covington, LA 70433
* Ardent Services, LLC holds claims in the amount of no less than
$1,821,630.18 arising from its position as a trade creditor.
Aspen American Insurance Company
855 Winding Brook Dr.
Glastonbury, CT 06033
* Aspen America Insurance Company holds contractual and common law
indemnity and other claims for undetermined amounts. The
aggregate penal amount of active bonds issued by Aspen is
approximately $29,300,000.00.
CBK Transport, LLC
28130 Ascot Farms Rd.
Magnolia, TX 77354
* CBK Transport, LLC holds general unsecured claims in the amount
of no less than $611,472.50 arising from its position as a trade
creditor.
Jones Transportation, LLC
6184 Hwy 98 W, Suite 210
Hattiesburg, MS 39402
* Jones Transportation, LLC holds general unsecured claims in the
amount of no less than $1,245,767.70 arising from its position
as a trade creditor and provider of freight transportation
services.
Mears Group, Inc.
1606 Eastport Plaza Drive, Suite 110
Collinsville, IL 62234
* Mears Group, Inc. holds a claim in the amount of no less than
$4,280,000.00, arising under that certain Project Service
Agreement dated August 1, 2020 for time and material provided by
Mears on the KM Crossover II-Project near Hungerford, Texas.
Mears asserts that all or a portion of its aggregate claim may
be subject to payment from funds held in trust under the Texas
Construction Fund Act.
The Committee reserves the right to amend or supplement this
Verified Statement in accordance with the requirements set forth in
Bankruptcy Rule 2019.
Proposed Counsel to the Official Committee of Unsecured Creditors
of Strike, LLC, et al. can be reached at:
AKIN GUMP STRAUSS HAUER & FELD LLP
Marty L. Brimmage, Jr., Esq.
Lacy M. Lawrence, Esq.
2300 N. Field Street, Suite 1800
Dallas, TX 75201-2481
Telephone: (214) 969-2800
Facsimile: (214) 969-4343
E-mail: mbrimmage@akingump.com
llawrence@akingump.com
- and -
Philip C. Dublin, Esq.
Meredith Lahaie, Esq.
Gary A. Ritacco, Esq.
One Bryant Park
New York, NY 10036
Telephone: (212) 872-1000
Facsimile: (212) 872-1002
E-mail: pdublin@akingump.com
mlahaie@akingump.com
gritacco@akingump.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/33EaUGA
About Strike LLC
Strike, LLC -- http://www.strikeusa.com/-- is a full-service
pipeline, facilities, and energy infrastructure solutions provider.
Headquartered in The Woodlands, Texas, Strike partners closely
with clients all across North America, safely and successfully
delivering a full range of integrated engineering, construction,
maintenance, integrity, and specialty services that span the entire
oil and gas life cycle.
Strike and its affiliates sought Chapter 11 protection (Bankr.
S.D.
Texas Lead Case No. 21-90054) on Dec. 6, 2021. In the petitions
signed by CFO Sean Gore, Strike listed as much as $500 million in
both assets and liabilities.
The cases are handled by Judge David R. Jones.
The Debtors tapped Jackson Walker LLP and White & Case LLP as legal
counsels; Opportune, LLP as financial advisor; and Opportune
Partners, LLC as investment banker. Epiq Corporate Restructuring,
LLC is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors on Dec. 15, 2021. The committee is represented
by Marty Brimmage, Esq.
TECT AEROSPACE: Owner Challenges Legal Releases for Boeing
----------------------------------------------------------
The owner of bankrupt Tect Aerospace Group Holdings Inc. said it
plans to vote against the 737 MAX supplier's chapter 11 liquidation
plan if Boeing Co. would receive broad legal releases.
Stony Point Group Inc., the family-office owner of privately-held
Tect, said on Jan. 18, 2022, that Boeing's suspension of 737 MAX
jetliner production was culpable for the aircraft parts maker's
April 2021 bankruptcy filing.
Utica Realty Park City, LLC, Utica Realty Wellington, LLC, Utica
Realty Holdings V, LLC, SPEF Carriage Assembly, LLC, SPEF
Monolithic, LLC, Office Support Services, LLC and Stony Point
Group, Inc. ("Glass Parties") filed an objection to approval of the
Disclosure Statement explaining the Debtors' Plan of Liquidation.
The Debtors' business operations, pre-bankruptcy, were heavily tied
to the Boeing 737 MAX program, and the orders drove the Debtors to
invest nearly $100 million dollars in necessary equipment and other
costs.
But in October, 2018, and March, 2019, two Boeing 737 MAX planes
crashed in Indonesia and Ethiopia, respectively, resulting in 346
fatalities. As a direct result of these crashes, Boeing resolved
criminal charges with a $2.5 billion settlement with the United
States Department of Justice. As a direct result of the issues
related to the Boeing 737 MAX program, after requiring the Debtor's
to produce at rates of 53 737 MAX program planes per month, Boeing
abruptly announced in a press release on Dec. 16, 2019 that the
company would "suspend production on the 737 program beginning next
month [January 2020]," causing massive financial constraints for
the Debtors due to the Debtors' agreement to design its operations
based on assumptions (provided by Boeing) of approximately 60 737
MAX program planes per month (the "Boeing Projected MAX Production
Rate").
Given Boeing's culpability for the 737 MAX program and direct
engagement with the Debtors about the Debtors capital structure,
real estate leases, operations, etc. in Boeing's capacity as a
major customer consulted for years and successor to the Debtors'
prepetition lender (ultimately the Court-approved
debtor-in-possession lender to the Debtors and the Court-approved
purchaser of the Debtors' Kansas assets), the Glass Parties assert
that Boeing has culpability for the Debtors' ultimate financial
demise, as opposed to the Glass Parties.
The Glass Parties said they cannot and will not vote in favor of
the Plan in its current form due, in large part, to the release
provision that triggers a release by a Holder of a Claim with
respect to Boeing, its affiliates and representatives for any and
all claims, causes of action, contribution, cross-claims or other
bases for the financial demise of the Debtors -- a previously
valuable and solvent asset of the Glass Parties.
Although the Disclosure Statement provides, "[T]he Debtors are
informed and believe that the Non-Released Parties disclaim any and
all liability for the applicable Retained Causes of Action, and
that the Non-Released Parties intend to defend vigorously any
Retained Cause of Action and to prosecute their Claims against the
Estates", the Glass Parties submit additional language is necessary
and appropriate in the Disclosure Statement, advising the Debtors'
creditors and parties in interest that the Non-Released Parties
reserve all rights to assert any and all claims, causes of action,
contribution or any other available remedy at law and equity
against Boeing and its affiliates for their direct and indirect
harm of the Debtors with respect to any of the Retained Causes of
Action.
About TECT Aerospace Group
TECT Aerospace Group Holdings, Inc., and its affiliates manufacture
high precision components and assemblies for the aerospace
industry, specializing in complex structural and mechanical
assemblies and machined components for various aerospace
applications. TECT produces assemblies and parts used in flight
controls, fuselage/interior structures, doors, wings, landing gear,
and cockpits.
TECT operates manufacturing facilities in Everett, Washington, and
Park City, and Wellington, Kansas, and their corporate headquarters
are located in Wichita, Kansas. TECT currently employs
approximately 400 individuals nationwide.
TECT and its affiliates are privately held companies owned by Glass
Holdings, LLC and related Glass-owned or Glass-controlled
entities.
TECT Aerospace Group Holdings, Inc., and six affiliates sought
Chapter 11 protection (Bankr. D. Del. Case No. 21-10670) on April
6, 2021.
TECT Aerospace estimated assets of $50 million to $100 million and
liabilities of $100 million to $500 million as of the bankruptcy
filing.
The Debtors tapped RICHARDS, LAYTON & FINGER, P.A., as counsel;
WINTER HARBOR, LLC, as restructuring advisor; and IMPERIAL CAPITAL,
LLC, as an investment banker. KURTZMAN CARSON CONSULTANTS LLC is
the claims agent.
The Boeing Company, as DIP Agent, is represented by Alan D. Smith,
Esq. and Kenneth J. Enos, Esq.
As reported by Troubled Company Reporter on June 2, 2021, Judge
Brendan Linehan Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized the bidding procedures proposed by
TECT Aerospace Group Holdings Inc. and affiliates in connection
with the auction sale of their Everett, Washington assets.
TELIGENT INC: $14.42MM Cash Sale of Assets to PAI Holdings Approved
-------------------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized Teligent, Inc. and affiliates to
sell their assets identified in the Asset Purchase Agreement, dated
as of Nov. 23, 2021, to PAI Holdings, LLC, for $14.42 million,
cash, plus the assumption of Assumed Liabilities.
A hearing on the Motion was held on Jan. 18, 2022.
The PAI Purchase Agreement, all of the terms and conditions
thereof, and the PAI Transaction contemplated therein are approved
in all respects.
The sale is free and clear of all Claims and Liens. All Liens,
Claims, and interests will attach to the proceeds, subject to the
terms and conditions set forth in the Final DIP Order.
The assumption and assignment of the Assumed Contracts is approved.
The requirements set forth in Bankruptcy Rules 6003(b), 6004, and
6006 have been satisfied or are otherwise waived.
As provided by Bankruptcy Rules 7062 and 9014, the terms and
conditions of the Order will be effective immediately upon entry
and will not be subject to the stay provisions contained in
Bankruptcy Rules 6004(h) and 6006(d). Time is of the essence in
closing the sale and the Debtors and the Purchaser intend to close
the sale as soon as possible.
A copy of the Agreement is available at
https://tinyurl.com/ycvbnz2s from PacerMonitor.com free of charge.
About Teligent Inc.
Teligent, Inc., a specialty generic pharmaceutical company,
develops, manufactures, markets, and sells generic topical,
branded
generic, and generic injectable pharmaceutical products in the
United States and Canada. The company was formerly known as IGI
Laboratories, Inc. and changed its name to Teligent, Inc. in
October 2015. Teligent, Inc. was founded in 1977 and is based in
Buena, New Jersey.
Teligent Inc. and three affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11332) on Oct. 14, 2021. The
cases
are handled by Honorable Judge Brendan Linehan Shanno.
The Debtor disclosed total assets of $85.0 million and total debt
of $135.8 million as of Aug. 31, 2021.
Young Conaway Stargatt & Taylor, LLP and K&L Gates LLP are the
Debtors' attorneys. Portage Point Partners, LLC, is the Debtors'
restructuring advisor. Raymond James & Associates, Inc., is the
Debtors' investment banker. Epiq Corporate Restructuring, LLC, is
the claims agent.
Latham & Watkins LLP, serves as co-counsel to the Prepetition
First
Lien Parties and the Senior DIP Parties. Morgan Lewis & Bockius
LLP
serves as co-counsel to the DIP Junior Term Loan Parties and
Prepetition Second Lien Parties. Morris, Nichols, Arsht & Tunnell
LLP serves as co-counsel to the DIP Parties and Prepetition
Secured
Parties. Jenner & Block LLP serves as co-counsel to the
Creditors'
Committee. Osler, Hoskin & Harcourt LLP, serves as Canadian
counsel to both the DIP Junior Term Loan Parties and the Senior
DIP
Parties. NautaDutilh Avocats Luxembourg S.a r.l., as Luxembourg
serves as counsel to both the DIP Junior Term Loan Parties and the
Senior DIP Parties. TGS Baltric is the Estonian counsel to both
the
DIP Junior Term Loan Parties and the Senior DIP Parties.
TELIGENT INC: $27-Mil. Sale of Buena Assets to Leiters Approved
---------------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized Teligent, Inc., and affiliates to
sell their assets in Buena, New Jersey, to Leiters, Inc., for $27
million, cash, plus the assumption of Assumed Liabilities.
A hearing on the Motion was held on Jan. 18, 2022.
The Leiters Purchase Agreement, all of the terms and conditions
thereof, and the Leiters Transaction contemplated therein are
approved in all respects.
The sale is free and clear of all Claims and Liens. All Liens,
Claims, and interests will attach to the proceeds, subject to the
terms and conditions set forth in the Final DIP Order.
The assumption and assignment of the Assumed Contracts is approved.
The requirements set forth in Bankruptcy Rules 6003(b), 6004, and
6006 have been satisfied or are otherwise waived.
As provided by Bankruptcy Rules 7062 and 9014, the terms and
conditions of the Order will be effective immediately upon entry
and will not be subject to the stay provisions contained in
Bankruptcy Rules 6004(h) and 6006(d). Time is of the essence in
closing the sale and the Debtors and the Purchaser intend to close
the sale as soon as possible.
A copy of the Agreement is available at
https://tinyurl.com/47s5jnhu from PacerMonitor.com free of charge.
About Teligent Inc.
Teligent, Inc., a specialty generic pharmaceutical company,
develops, manufactures, markets, and sells generic topical,
branded
generic, and generic injectable pharmaceutical products in the
United States and Canada. The company was formerly known as IGI
Laboratories, Inc. and changed its name to Teligent, Inc. in
October 2015. Teligent, Inc. was founded in 1977 and is based in
Buena, New Jersey.
Teligent Inc. and three affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11332) on Oct. 14, 2021. The
cases
are handled by Honorable Judge Brendan Linehan Shanno.
The Debtor disclosed total assets of $85.0 million and total debt
of $135.8 million as of Aug. 31, 2021.
Young Conaway Stargatt & Taylor, LLP and K&L Gates LLP are the
Debtors' attorneys. Portage Point Partners, LLC, is the Debtors'
restructuring advisor. Raymond James & Associates, Inc., is the
Debtors' investment banker. Epiq Corporate Restructuring, LLC, is
the claims agent.
Latham & Watkins LLP, serves as co-counsel to the Prepetition
First
Lien Parties and the Senior DIP Parties. Morgan Lewis & Bockius
LLP
serves as co-counsel to the DIP Junior Term Loan Parties and
Prepetition Second Lien Parties. Morris, Nichols, Arsht & Tunnell
LLP serves as co-counsel to the DIP Parties and Prepetition
Secured
Parties. Jenner & Block LLP serves as co-counsel to the
Creditors'
Committee. Osler, Hoskin & Harcourt LLP, serves as Canadian
counsel to both the DIP Junior Term Loan Parties and the Senior
DIP
Parties. NautaDutilh Avocats Luxembourg S.a r.l., as Luxembourg
serves as counsel to both the DIP Junior Term Loan Parties and the
Senior DIP Parties. TGS Baltric is the Estonian counsel to both
the
DIP Junior Term Loan Parties and the Senior DIP Parties.
TELIGENT INC: $45.75-Mil. Sale of Canadian Assets to Hikma Approved
-------------------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized Teligent, Inc., and affiliates to
sell their assets in Canada identified in the Asset Purchase
Agreement, dated as of Jan. 11, 2022, to Hikma Canada Limited for
the sum of the following: (i) $45.75 million cash; plus (ii) the
amount, if any, by which the Closing Date Working Capital is
greater than the Target Working Capital; minus (iii) the amount, if
any, by which the Closing Date Working Capital is less than the
Target Working Capital; plus (iv) the assumption of Assumed
Liabilities.
A hearing on the Motion was held on Jan. 18, 2022.
The Hikma Purchase Agreement, all of the terms and conditions
thereof, and the Hikma Transaction contemplated therein are
approved in all respects.
The sale is free and clear of all Claims and Liens. All Liens,
Claims, and interests will attach to the proceeds, subject to the
terms and conditions set forth in the Final DIP Order.
The assumption and assignment of the Assumed Contracts is approved.
The requirements set forth in Bankruptcy Rules 6003(b), 6004, and
6006 have been satisfied or are otherwise waived.
As provided by Bankruptcy Rules 7062 and 9014, the terms and
conditions of the Order will be effective immediately upon entry
and will not be subject to the stay provisions contained in
Bankruptcy Rules 6004(h) and 6006(d). Time is of the essence in
closing the sale and the Debtors and the Purchaser intend to close
the sale as soon as possible.
A copy of the Agreement is available at
https://tinyurl.com/3ub9nb23 from PacerMonitor.com free of charge.
About Teligent Inc.
Teligent, Inc., a specialty generic pharmaceutical company,
develops, manufactures, markets, and sells generic topical,
branded
generic, and generic injectable pharmaceutical products in the
United States and Canada. The company was formerly known as IGI
Laboratories, Inc. and changed its name to Teligent, Inc. in
October 2015. Teligent, Inc. was founded in 1977 and is based in
Buena, New Jersey.
Teligent Inc. and three affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11332) on Oct. 14, 2021. The
cases
are handled by Honorable Judge Brendan Linehan Shanno.
The Debtor disclosed total assets of $85.0 million and total debt
of $135.8 million as of Aug. 31, 2021.
Young Conaway Stargatt & Taylor, LLP and K&L Gates LLP are the
Debtors' attorneys. Portage Point Partners, LLC, is the Debtors'
restructuring advisor. Raymond James & Associates, Inc., is the
Debtors' investment banker. Epiq Corporate Restructuring, LLC, is
the claims agent.
Latham & Watkins LLP, serves as co-counsel to the Prepetition
First
Lien Parties and the Senior DIP Parties. Morgan Lewis & Bockius
LLP
serves as co-counsel to the DIP Junior Term Loan Parties and
Prepetition Second Lien Parties. Morris, Nichols, Arsht & Tunnell
LLP serves as co-counsel to the DIP Parties and Prepetition
Secured
Parties. Jenner & Block LLP serves as co-counsel to the
Creditors'
Committee. Osler, Hoskin & Harcourt LLP, serves as Canadian
counsel to both the DIP Junior Term Loan Parties and the Senior
DIP
Parties. NautaDutilh Avocats Luxembourg S.a r.l., as Luxembourg
serves as counsel to both the DIP Junior Term Loan Parties and the
Senior DIP Parties. TGS Baltric is the Estonian counsel to both
the
DIP Junior Term Loan Parties and the Senior DIP Parties.
TENTLOGIX INC: Amends Plan to Include United Leasing Claim Details
------------------------------------------------------------------
Tentlogix Inc. submitted a Third Amended Plan of Reorganization
accompanying Disclosure Statement dated Jan. 17, 2022.
Class One consists of the claim of State of Florida Department of
Revenue. The State of Florida Department of Revenue's secured claim
in the amount of $18,148.88 shall be paid over a period ending not
later than 5 years after the date of the order for relief (which is
45 months after the projected Effective Date) in an amount of
$445.19 per month. The State of Florida Department of Revenue filed
a Proof of Claim in this matter. This claim is unimpaired.
Class Two consists of the Internal Revenue Service Priority Claim.
The Internal Revenue Service's Priority claim initially filed on
January 19, 2021 in the amount of $251,098.01 was amended on
December 30, 2021 to $0.00. The general unsecured claim shall be
paid in Class Twelve. This claim is unimpaired.
Class Three consists of St. Lucie County Tax Collector Secured
Claim. The St. Lucie County Tax Collector in the amount of
$14,098.06 shall be paid over a period ending not later than five
(5) years after the date of the order for relief (which is 45
months after the projected Effective Date) in an amount of $498.73
per month at the statutory 18% interest. This claim is unimpaired.
Class Five consists of Martin County Tax Collector Secured Claim.
The Debtor has filed an objection to this claim in the amount of
$278,103.36 (Claim #29) for real property taxes as the owner of the
property is not the Debtor, but a separate entity known as NAG
Properties, LLC. NAG Properties is owned by the Debtor's principal,
Gary Hendry. No distribution shall be made to this class under the
Plan; however, in the event this Court determines that claim must
be made by the Debtor after hearing on the intended objection, the
Debtor shall make appropriate accommodations to ensure this claim
is paid. This claim is impaired.
Class Eleven consists of the claim of the United Leasing & Finance.
The Debtor and United Leasing are party to an Equipment Lease
Agreement dated June 1, 2016 and an amendment thereto dated
December 19, 2016 (#0001). As of the filing of this Amended Plan,
there exists are arrears of $168,951.67, which figure represents
the entire remaining balance of the Lease. The remaining terms of
the lease remain unchanged. The Debtor shall pay this claim of
United Leasing over 12 months at $14,079.31 per month. The Debtor
shall be authorized to sell collateral to pay down this claim upon
approval by United Leasing & Finance. This claim is impaired.
Like in the prior iteration of the Plan, general unsecured claims
prior to the filing of any objections total the amount of
$3,777,233.26, which will be paid over the 5 year term of the Plan
at the rate of $26,000.00 per month on a pro-rata basis.
The creditors will be paid from the current and the projected
future income received of the Debtor. The Debtor submits that there
will be sufficient income to make all distributions pursuant to the
Plan on the secured claims and provide a reasonable dividend to
unsecured creditors.
A full-text copy of the Third Amended Plan of Reorganization dated
Jan. 17, 2022, is available at https://bit.ly/3nNF4xY from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Craig I. Kelley, Esq.
Kelley, Fulton & Kaplan, P.L.
1665 Palm Beach Lakes Blvd., Ste. 1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
Email: (561) 684-3773
About Tentlogix Inc.
Tentlogix Inc., a Florida corporation located in Indiantown, filed
for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
20-22971) on Nov. 27, 2020. CEO Gary Hendry signed the petition.
At the time of the filing, the Debtor disclosed $3,135,866 in
assets and $10,689,420 in liabilities.
Judge Mindy A. Mora oversees the case.
The Debtor tapped Kelley, Fulton & Kaplan, P.L., as its legal
counsel and Carr Riggs & Ingram as its accountant.
TRC FARMS: $90K Private Sale of Dover Property to Daniel Approved
-----------------------------------------------------------------
Judge Joseph N. Callaway of the U.S. Bankruptcy Court for the
Eastern District of North Carolina authorized TRC Farms, Inc.'s
private sale of its interest in the following property to Louis
Daniel for $90,000:
Approximately 34.4 acres and all improvements constructed
thereon located off Biddle Road, Dover, Craven County and more
particularly described in that certain deed description located at
Book 3425, Page 797, Tax Parcel 3-029-012, Craven County Registry,
North Carolina.
The Property will be conveyed free and clear of all claims, liens
and encumbrances that may be asserted against the Property, as
follows:
A. Any and all liens and/or security interests in favor of
Truist Bank (formerly known as Branch Banking and Trust Co.).
B. Any and all liens and/or security interests in favor of
Harvey Fertilizer and Gas Co.
C. Any and all real estate taxes due and owing to any City,
County or municipal corporation, and more particularly, to the
Craven County Tax Collector.
D. Any and all remaining interests, liens, encumbrances,
rights and claims asserted against the Property, which relate to or
arise as a result of a sale of the Property, or which may be
asserted against the buyer of the Property, including, but not
limited to, those liens and claims, whether fixed and liquidated or
contingent and unliquidated, that have or may be asserted against
the Property by the North Carolina Department of Revenue, the
Internal Revenue Service, and any and all other taxing and
government authorities.
The purported liens and interests of the creditors named attach to
the proceeds of the sale in their respective priorities, subject to
court-approved expense and fees pursuant to 11 U.S.C. Section
506(c).
The Property will be sold in an "As Is" condition, and no
warranties will be made as to the condition, use or fitness of the
Property for a particular purpose. The Buyer of the Property will
bear all costs associated with the transfer of the Property,
including registration fees, local transfer fees and taxes, and
North Carolina sales taxes, as applicable.
The Order will be effective immediately, as permitted by Rule
6004(h).
About TRC Farms Inc.
TRC Farms, Inc., a privately held company in the livestock farming
industry, filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. N.C. Case No. 20-00309) on Jan. 23,
2020. In the petition signed by Timmy R. Cox, president, the
Debtor disclosed $3,846,275 in assets and $5,412,282 in
liabilities. Judge Joseph N. Callaway oversees the case. The
Debtor tapped Ayers & Haidt, PA as its legal counsel, and Carr
Riggs & Ingram, LLC as its accountant.
TRIPLE CROWN KITCHEN: Files for Chapter 7 Bankruptcy
----------------------------------------------------
Haley Cawthon of Louisville Business First reports that Triple
Crown Kitchen and Bath LLC, a Louisville area remodeling company,
has filed for Chapter 7 bankruptcy.
Triple Crown Kitchen and Bath, solely owned by Michael Gaines,
reported a revenue of nearly $921,000 in 2021, but only $3,700 in
total assets. It has no physical office space in Louisville.
According to the bankruptcy filing, the company has 26 creditors,
the vast majority of which are individual Louisville residents.
Those individual claims range from $200 to nearly $24,000. Three
claims were tied to businesses, including Louisville Glass Experts
($852), HomeAdvisor ($2,400) and Hatch ($499).
In total, the claims against Triple Crown Kitchen and Bath add up
to $163,500. The company indicated all of the claims are
contingent and disputed.
About Triple Crown Kitchen
Triple Crown Kitchen and Bath LLC, a Louisville-based remodelling
company, sought Chapter 7 bankruptcy protection (Bankr. W.D. Ky.
Case No. 3:22-bk-30028) on Jan. 13, 2022. In its petition, it
disclosed total assets of $3,700 and liabilities up to $163,500.
The Debtor's counsel:
Nick C. Thompson
Tel: 502-625-0905
E-mail: office@bankruptcy-divorce.com
TWISTED OAK: Unsecured Creditors to Get 100%; Files Amended Plan
----------------------------------------------------------------
Twisted Oak Winery, LLC, submitted a First Amended Plan of
Reorganization for Small Business.
This Plan of Reorganization proposes to pay creditors of Twisted
Oak Winery from cash flow from future operations over a 60-month
period.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 2 consists of the Secured Claims of Mechanics Bank. Class 2
principal shall be paid in full with interest at 3.75% per annum on
25 years amortization with a January 1, 2033 maturity date,
beginning with interest only payments of $5,804 per month,
commencing January 1, 2022 and continuing for 12 months, then
interest and principal payments of $9,548 per month, commencing
January 1, 2023 and continuing for 132 months (11 years), then a
balloon payment for the remaining balance due January 1, 2033.
Class 3 consists of the Secured Claims of SBA. Class 3 is
unimpaired by this Plan, and Class 3 will be paid pursuant to the
terms of the original documents with no modification by this Plan.
The monthly payment is currently $0 and payments are current.
Class 4 consists of Noninsider nonpriority unsecured creditors.
Class 4 is unimpaired in this Plan. Class 4 consists of one
creditor: Stange/Matate. The claim of Stange/Metate is disputed,
but to the extent Stange/Metate has an allowed claim, Class 4 shall
be paid as follows:
To the extent Class 4 is entitled to any recovery, it shall first
be offset against any claim or recovery by the Debtor. If there is
no net recovery by Debtor, in equal installments commencing July 1,
2022, for a period of 6 months.
Class 5 consists of Insider non-priority unsecured creditors. Class
5 is unimpaired and will be paid only after all other allowed
claims have been paid in full, and then on such terms as the Debtor
and the holders of Class 5 agree.
Equity Holder will retain its current membership interest in
Debtor.
With the business assets and ongoing operations, Debtor will have
sufficient cash to pay all allowed unclassified claims, future
allowed expenses of administration, and all Class 1 claims
(nominal, if any), and to purchase the additional equipment and
supplies needed to continue the manufacture of wine and to maintain
operations.
The Debtor will have sufficient cash flow commencing in January
2022, and continuing thereafter, to make the monthly payments
required for Classes 2, 3, and 4.
The Plan is relatively simple as only one creditor is impaired.
Allowed unclassified claims and priority claims will be paid upon
confirmation of the Plan. Subsequent unclassified claims (such as
expenses of administration) will be paid as the Court allows them.
Only one of the claims of the two secured creditors will be
impaired: Mechanics Bank. SBA is not impaired and will receive
their usual monthly payments of $713 with no changes in interest
rate, monthly payment, or maturity. Non-priority unsecured
creditors will be paid 100 cents on the dollar over a 6 month
period.
A full-text copy of the First Amended Plan of Reorganization dated
Jan. 17, 2022, is available at https://bit.ly/3FRvkZV from
PacerMonitor.com at no charge.
About Twisted Oak
Twisted Oak, LLC, specializes in wines that are made from
Tempranillo, Grenache, Mourvedre, Viognier, and more. It filed a
Chapter 11 petition (Bankr. E.D. Cal. Case No. 21-90484) on Oct. 4,
2021. In the petition signed by Jeff Stai, managing member, the
Debtor disclosed $1 million to $10 million in assets and $1 million
to $10 million in liabilities. The Hon. Ronald H. Sargis oversees
the case. Brian S. Haddix, of HADDIX LAW FIRM, is the Debtor's
counsel.
UNIQUE CASEWORK: Unsecureds Will Get 5% of Claims in 60 Months
--------------------------------------------------------------
Unique Casework Installations, Inc., filed with the U.S. Bankruptcy
Court for the Northern District of Illinois a Second Amended Plan
of Reorganization dated Jan. 17, 2022.
The Debtor is an Illinois Corporation that operates a small
minority WBE/MBE, Construction Company out of its primary location
at 3936 W 16th Street Chicago, IL 60623.
The debtor required relief under Chapter 11 of the bankruptcy code
in order to release liens on its bank accounts pursuant to third
party citations issued by two of the Debtor's largest unsecured
judgment creditors. Further the Pandemic has had a catastrophic
effect on debtor's operations as debtor was precluded from working
on various projects assigned by CHA and CTA, which are the debtor's
largest contracts.
Business has since re-opened and the debtor commenced working on
several projects. The debtor has also changed its billing structure
to net 30 days in its contracts and created a training program for
its employees that reduces time spent on jobs for training and
correction to work. The Debtor estimates that the distribution to
unsecured creditors made after full payment to of administrative
and priority claims will be paid over 5 years and shall total
approximately 5%.
The debtor is the proponent and disbursing agent of this Plan. This
Plan provided for distribution to the holders of allowed claims
from the continued operation of the Debtor's Business. The debtor
has nominal physical assets of any monetary value. The debtor's
true value is measured int its good will, contracts and accounts
receivable.
Class 1 consists of Allowed Secured Claims that are Impaired:
* Class 1(a) Consists of the Allowed Secured Claim of
Department of the Treasury-Internal Revenue Service (hereinafter
"the IRS"), totaling $163,023.64. The IRS shall receive on account
of its secured tax claim payment 20% of its secured claim over the
60 months in the monthly amount of $543.41. The total paid to the
IRS over the life of the plan shall total $32,604.92.
* Class 1(b) The Illinois Department of Employment Security
(hereinafter the IDES) secured claim in the amount of $192,495.33.
The IDES shall receive on account of its secured claim payment of
20% of its secured claim over the 60 months in the monthly amount
of $641.65. The total paid to the IDES over the life of the plan
shall total $38,499.06.
* Class 1(c) consists of the Allowed Secured Claim of the U.S.
Small Business Administration (hereinafter "the SBA"), totaling
$152,943.49. The SBA shall receive on account of its secured claim
payment in full plus interest at 20% for a total of $30,588.66 over
a period of 60 months in aggregate monthly payments of $509.81.
Class 2 consists of Allowed Priority Tax Claims that are Impaired:
* 2a) Consists of allowed priority tax claims consists of
Department of the Treasury Internal Revenue Service (hereinafter
"the IRS"), totaling $1,123,878.09. The IRS shall receive on
account of its priority tax claim payment of 20%in the total amount
of $224,447.61 over a period of 60 months in the monthly payment
amount of $3,746.26 unless IRS agrees to different treatment under
the Plan.
* 2b) Consists of allowed priority tax claims consists of
Illinois Department of the Revenue (hereinafter "the IDOR"),
totaling $18,034.81. The IDOR shall receive on account of its
priority tax claim payment of 20% in the total amount of $3,606.96
over a period of 60 months in the monthly payment amount of $60.11
unless IDOR agrees to different treatment under the Plan.
Class 3 consists of the allowed nonpriority unsecured claims in the
total amount of $1,150,243.44 will receive identical treatment 5%
for a total of $57,512.17 over a 60-month period in aggregate
monthly payments of approximate $958.53, without interest. All
payments shall begin on the 10th day of the month following the
effective date of the Plan.
Class 4 consists of Shareholder Interest. The Debtor is a closely
held corporation. Patricia Davis is the sole shareholder of the
Debtor. Under the plan, Patricia Davis will retain her stock
interest in the Debtor. Class 4 is not impaired by the plan.
This Plan is self-executing. The Debtor shall not be required to
execute any newly created documents to evidence the claims, liens
or terms of repayment to the holder of any Allowed Claim.
Furthermore, upon the completion of the payments required under
this Amended Plan to the holders of Allowed Claims.
In the event of a forced liquidation, any proceeds realized from
the sale of the debtor's limited assets and liquidation of bank
accounts would be applied to the secured claim of the IRS. The
assets would be used for administration of the sale and then
entirely to the secured claim of the IRS. Under the plan as
presented the General Unsecured Creditors will receive
approximately 5% of their claims. The General Unsecured would
receive nothing if the debtor were liquidated. The unsecured
creditors are clearly getting more under the plan.
A full-text copy of the Second Amended Plan of Reorganization dated
Jan. 17, 2022, is available at https://bit.ly/3rGlTaA from
PacerMonitor.com at no charge.
Attorney for Debtor:
William E. Jamison, Jr., Esq.
William E. Jamison, Jr. & Associates
53 W. Jackson Blvd., Suite #309
Chicago, IL 60604
Tel: (312) 226-8500
Email: wjami39246@aol.com
About Unique Casework Installations
Unique Casework Installations, Inc., filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill.
Case No. 20-22262) on Dec. 31, 2020. Unique Casework President
Patricia Davis signed the petition. At the time of filing, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Jacqueline P. Cox oversees the case.
William E. Jamison, Jr., Esq., serves as the Debtor's legal
counsel.
US ACUTE CARE: Moody's Affirms B2 CFR Following Alteon Transaction
------------------------------------------------------------------
Moody's Investors Service affirmed U.S. Acute Care Solutions, LLC's
("USACS") B2 Corporate Family Rating, B2-PD Probability of Default
Rating and the B2 rating on the company's senior secured notes due
2026 following its announcement to acquire Alteon Health
("Alteon"). The outlook is stable.
USACS will fund the Alteon acquisition (valued at approximately
$560 million) with a $225 million add-on to its existing senior
secured notes, incremental $275 million in preferred equity from
existing investors including Apollo Management L.P(private equity
sponsor), $57 million internal cash and some USACS common equity.
Pro forma for the Alteon acquisition, USACS expects to increase its
revenue and EBITDA by $430 million and $32 million (excluding
synergies) respectively for the last 12 months ended September
2021.
Moody's estimates that the company's debt/EBITDA, including add-on
debt and pro forma contribution from Alteon acquisition, will be
approximately 4.7 times, calculated with September-end financials.
If the company successfully executes this acquisition, Moody's
expects leverage to reduce by up to 1x over the next 12-18 months.
However, Moody's will evaluate this deleveraging in the context of
increased event risk due to the additional funding of $275 million,
which will be raised from preferred equity.
The following ratings were affirmed:
Issuer: U.S. Acute Care Solutions, LLC
- Corporate Family Rating at B2
- Probability of Default Rating at B2-PD
- Gtd senior secured notes ($725 million, including the proposed
$225 million add-on) due 2026 at B2 (to LGD4 from LGD3)
Outlook action:
Issuer: U.S. Acute Care Solutions, LLC
Outlook remains stable.
RATINGS RATIONALE
The B2 CFR reflects USACS' strong market position as an emergency
department physician staffing provider, moderately high financial
leverage, and material execution risk associated with an active
debt-funded acquisition strategy. Further, USACS has some
geographic concentration with Texas, Maryland and Ohio representing
a significant portion of business volumes.
The B2 CFR is supported by USACS' strong competitive position in
the markets where it operates. The company has relationships with a
majority of the top ten health systems in the US. In USACSs rating,
Moody's incorporates the benefits of USACS' ownership model, in
which the physicians own a significant stake in the company. This
results in high alignment between the interests of the company and
its physician-owners. However, these benefits are partially offset
by the risk that the company (which is a non-public company) will
need to "buy out" physicians who seek to retire or otherwise leave
the organization, possibly by issuing debt.
Moody's notes that a very significant portion of USACS' capital
structure is provided by the $711 million (after additional
fundraising for the Alteon transaction) in perpetual, redeemable
preferred stock. These securities provide a strong loss-absorption
cushion to creditors in the event of default. However, if the
company's restricted payment capacity (as defined in the notes
offering memorandum) allows, the company has an option to redeem
its preferred shares between the third and fifth anniversaries from
the senior notes' original issuance date -- March 1, 2021.
Moreover, Apollo also has the right to request full redemption of
its preferred share investment beginning March 1, 2026. If USACS is
unable to redeem the preferred shares fully after March 1, 2026,
its cost of using the preferred capital provided by Apollo will
increase substantially, and Apollo can force the sale of the
company. Consequently, Moody's recognizes the likelihood of a
material change in the company's capital structure starting from
March 1, 2024 -- but more likely following March 1, 2026. The
company's B2 CFR incorporates this event risk. Depending on how the
company's financial policy and capital structure evolves, Moody's
will update its credit analysis accordingly.
The rating also reflects the company's good liquidity profile. This
liquidity assessment is supported by Moody's expectations of
approximately $50 million in free cash flow in the next 12 months
as well as cash balances of approximately $32 million when the
add-on transaction closes. It also reflects Moody's expectation of
full availability under the company's $75 million senior secured
first lien revolver (unrated).
The stable outlook reflects Moody's expectation that the company
will continue its expansion while employing a balanced growth
strategy and keeping leverage in 4.0-5.5 times range.
Social considerations are material to the rating, given the
substantial implications for public health and safety. The company
was moderately impacted by the coronavirus outbreak last year and
the recovery is still ongoing. As a provider of emergency medicine
physician staffing, USACS faces high social risk. The No Surprise
Act, which became effective in January 2022, takes the patient out
of the provider/payor dispute. The extent to which each company
will get impacted will depend on the percentage of out-of-network
patients they treat, specific billing and collections practices, as
well as arbitration process. Governance risk considerations are
also material to the rating. The company has grown rapidly in
recent years through an aggressive acquisition strategy. While the
company has experience in integrating acquired businesses, the
acquisition of Alteon will expand the company's scale to more than
1.5x and will involve material execution risks. Moreover, the
company is partially funding the acquisition through incremental
preferred capital, which could be replaced by either debt or common
equity in the next 2-4 years. The company's financial policies are
expected to remain aggressive reflecting the preferred equity
investment by private equity investor Apollo Management L.P.
However, since the physicians will control the vast majority of the
common equity stake in the company, they also have a material
influence in deciding the company's policies. Moody's does not
consider the environmental component of ESG material to the overall
credit profile of the issuer.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if USCAS successfully executes its
growth strategy, evidenced by expanded scale and diversity while
maintaining its current level of profitability. A demonstrated
track record of positive free cash flow and sustained debt/EBITDA
below 4.0 times would also support an upgrade. However, Moody's
decision to upgrade the company's rating will also consider the
company's plans to manage the preferred equity financing by either
swapping it into debt or paying it down through cash.
The ratings could be downgraded if USACS' operating performance
deteriorates, if the volume of its in-network relationships shrinks
materially, or if it becomes a target of adverse regulation in one
or more of its key markets. In addition, if at any point Moody's
anticipates that the company will prioritize payment of preferred
dividends in cash at the expense of debtholders' interest or if it
replaces preferred shares with debt, ratings could be downgraded.
Ratings could also be lowered if debt/EBITDA is sustained above 5.5
times, or if the liquidity weakens.
Headquartered in Canton, OH, U.S. Acute Care Solutions, LLC is a
provider of emergency medicine, hospitalist and observation
services in 20 US states. The company is approximately 98% owned by
physicians and 2% by health systems and its pro forma revenues
(including Alteon acquisition) are approximately $1.5 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
VACO HOLDINGS: $100MM Upsize Term Loan No Impact on Moody's B2 CFR
------------------------------------------------------------------
Moody's Investors Service said that the $100 million upsize to Vaco
Holdings, LLC's proposed senior secured term loan offering in
connection with a dividend recapitalization is a negative credit
development since it will raise pro forma closing debt to EBITDA to
approximately 5.7x (Moody's adjusted) from 4.9x as of September 30,
2021 and reduce Moody's expectation for free cash flow in 2022 by
about $5 million to $60 million because of the incremental interest
expense. However, the ratings, including the B2 corporate family
rating, and the stable outlook are unaffected at this time. The
senior secured term loan due 2029 will increase to $700 million
from $600 million. All other material terms and conditions under
the proposed credit facility will remain unchanged.
Moody's views the debt upsizing as indicative of a more aggressive
financial policy from the private equity sponsor, Olympus Partners,
because it demonstrates a higher tolerance for debt, delays Moody's
expectations for leverage reduction and limits Vaco's financial
flexibility for future debt-funded shareholder returns and
acquisitions. The increase in debt is also aggressive in
consideration of Vaco's limited operating history following the
transformative acquisition of Morgan Franklin in 2019 and the
company's status as a first time Moody's rated issuer. Nonetheless,
ratings are unchanged as Moody's anticipates leverage should
improve to around 5x by the end of 2022 from revenue growth in the
mid-single digits and mandatory debt repayment.
The incremental portion of the term loan will be used to increase
the dividend portion of Vaco's debt financing by $100 million
increasing the total dividend to $480 million from the originally
planned $380 million. The company's pro forma capital structure is
now comprised of a $700 million senior secured term loan due 2029
and $40 million senior secured revolving credit facility due 2027
(both rated B2).
Vaco Holdings, LLC, controlled by Olympus since 2017 and based in
Brentwood, Tennessee, is a provider of temporary, full-time and
project and consulting professionals specializing in IT, finance &
accounting, technology, and healthcare IT services. The company
operates out of over 50 offices across the United States. Revenue
for the year ending December 31, 2021 is expected to be
approximately $950 million.
VIANT MEDICAL: Moody's Alters Outlook on Caa1 CFR to Stable
-----------------------------------------------------------
Moody's Investors Service changed the rating outlook for Viant
Medical Holdings, Inc.'s to stable from positive. At the same time,
Moody's affirmed the company's Caa1 Corporate Family Rating,
Caa1-PD Probability of Default Rating, B3 rating of senior secured
first lien credit facilities and Caa3 rating of second lien term
loan.
The change of outlook to stable from positive reflects Moody's
updated expectation that the company will be unable to achieve
metrics that would support higher ratings within the next 12-18
months, including adjusted debt/EBITDA below 7.5x. While Moody's
expects Viant to continue its volume recovery from the impact of
the covid-19 pandemic, the company has experienced an earnings
decline year-to-date through October 1, 2021 relative to the
comparable period in 2020. The recent EBITDA decline partially
reflects challenging labor and supply chain conditions that have
negatively impacted profitability. While Moody's notes that the
company may return to EBITDA growth in the coming quarter(s) as
these challenges potentially moderate amidst an ongoing volume
recovery, the stable outlook at current ratings reflects heightened
uncertainty in the company's path to deleveraging.
The following rating actions were taken:
Affirmations:
Issuer: Viant Medical Holdings, Inc.
Probability of Default Rating, Affirmed Caa1-PD
Corporate Family Rating, Affirmed Caa1
Senior Secured 1st Lien Bank Credit Facility, Affirmed B3 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa3
(LGD5)
Outlook Actions:
Issuer: Viant Medical Holdings, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Viant's Caa1 Corporate Family Rating reflects the company's very
high financial leverage and slow pace of recovery from coronavirus
pandemic-related disruptions. Viant also faces high customer
concentration as three customers represent more than 40% of
revenues. Viant's financial policies are expected to remain
aggressive reflecting its ownership by private equity investors.
Moody's adjusted debt/EBITDA, was approximately 10.6x for the 12
months ended September 30, 2021.
The company's rating benefits from a diversified product portfolio
across multiple therapeutic areas and stable demand for contract
manufacturing services, notwithstanding delays in elective
procedures that impacted order volumes at the height of the
covid-19 pandemic. Given regulatory constraints, the switching
costs for the company's customers is high.
Moody's expects that Viant will maintain adequate liquidity over
the next 12 to 18 months. Liquidity is supported by $30 million of
cash on hand, and Moody's expectation for flat to slightly positive
free cash flow over the next 12 months. External liquidity is
supported by the company's $70 million revolving credit facility
expiring in July 2023, which is currently undrawn. Moody's notes
this facility is subject to a springing first lien leverage ratio
covenant of 6.5x at 30% utilization ($21 million). The company's
first lien leverage ratio was 7.1x at October 1, 2021, thereby
limiting liquidity from the revolver to the utilization threshold
at this time (to avoid an event of default). Alternative sources of
liquidity are limited as substantially all assets are pledged.
Social and governance considerations are material to the rating.
For Viant, the social risks are primarily associated with
responsible production including compliance with regulatory
requirements for the safety of medical devices as well as adverse
reputational risks arising from recalls associated with
manufacturing defects. These social risks are partially offset by
favorable demographic and societal trends, including an aging
population and the rise in chronic disease. Governance risk
considerations include the company's financial policies which
Moody's expect to remain aggressive, reflecting its ownership by a
private equity investors.
The stable outlook reflects Moody's expectation that the company
will be unable to achieve metrics that would support higher ratings
within the next 12-18 months. While Moody's expects that Viant's
financial leverage will remain very high, the risk is somewhat
tempered by liquidity that is currently adequate, but may weaken in
the near-term if the company is unable to successfully extend its
revolver expiring July 2023 or if it is unable to grow earnings and
generate positive free cash flow.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company improves its free cash
flow generation and reduces its leverage, likely driven by higher
earnings. Ratings upside is also contingent upon a successful
extension of the company's revolver, which expires in 2023.
Quantitatively, ratings could be upgraded if debt/EBITDA is
sustained below 7.5x, assuming liquidity remains adequate.
Ratings could be downgraded if the company's liquidity weakens,
and/or if Moody's expects the company to generate negative free
cash flow. Moody's could downgrade the ratings if the company
incurs meaningful contract losses or if operating performance
further weakens such that the sustainability of the capital
structure comes into question.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2021.
Headquartered in Foxborough, MA, Viant is an outsourced
manufacturer of medical devices serving a broad range of
therapeutic areas including cardiovascular, orthopedics and
advanced surgical. Viant is owned by affiliates of JLL Partners and
Water Street Healthcare Partners. The company's revenue in the LTM
period ending October 1, 2021 was $852 million.
WATSONVILLE COMMUNITY: Bill for New District Advanced
-----------------------------------------------------
Hillary Ojeda of Look Out Santa Cruz reports that California
Senator John Laird has advanced a bill to create a health care
district, another step in Watsonville Community Hospital's
transition.
Through Senate Bill 418, State Sen. Laird is pushing the creation
of a health care district which could be the eventual owner of the
Watsonville Community Hospital, if the sale is successful.
As Watsonville Community Hospital continues to undergo its
bankruptcy proceedings and possible sale to a local nonprofit, a
separate and significant part of that process is unfolding in the
state legislature.
Senate Bill 418, proposed as urgency legislation because of the
hospital's uncertain future, received unanimous bipartisan support
in the Assembly Local Government Committee and is now headed to the
Assembly Floor where it will need a two-thirds vote of the house.
If it passes in that body, it will need the same from the senate
before heading to the governor's office.
"The successful passage of SB 418 will ensure the continued
provision of vital services to the community and protect the jobs
of those who work tirelessly to keep Pajaro Valley residents and
their loved ones healthy," said Laird in a news release.
In November 2021, it appeared the hospital had run out of solutions
after years of financial struggles. CEO Steven Salyer told
employees that if a buyer didn't take over the hospital it would
need to suspend operations.
However, a recently formed coalition of local nonprofits and
government agencies known as the Pajaro Valley Healthcare District
Project said it secured funding and reached a tentative agreement
with the hospital in early December. Days later, the hospital filed
for chapter 11 bankruptcy and said the project planned to acquire
the hospital.
The noticing agent for the bankruptcy case, known as Stretto, lists
a bid deadline of Feb. 14 and a sale hearing on Feb. 23, 2022.
Until the health care district is officially created, the nonprofit
would be the entity purchasing the hospital. The plan is that once
it is formed, the nonprofit will transfer ownership to the
district, project member Mimi Hall previously told Lookout.
If the bill is adopted, it would give the Pajaro Valley Health Care
District five years to map the district into zones that are
representative of the community, according to the release. Once
formed, elections would be held to elect local board members who
would be responsible for making decisions affecting health care in
the district.
With the creation of the health care district, the Pajaro Valley
Healthcare District would join a list of more than 70 others across
the state. Nearby Salinas Valley Memorial Healthcare System is a
hospital within the health care district model. Not all health care
districts operate hospitals and some that previously operated a
hospital have closed them, according to a 2012 report by the
Legislative Analyst's Office.
The districts were created by the legislature in 1945 with the
enactment of the Local Hospital District Law. They were established
with the intention of giving special districts the ability to build
and operate hospitals and other health care facilities in
underserved areas. The name was eventually changed to the Local
Healthcare District Law.
The Pajaro Valley Health District Project, made up of the county of
Santa Cruz, the city of Watsonville, the Community Health Trust of
the Pajaro Valley and Salud Para La Gente, formed with the specific
intention of creating the health care district. Project members
hope that the health care district's public oversight model will
put the community's needs first.
"Given the hospital’s bankruptcy status, this legislation is the
only pathway to preserving access to health care, creating
accountability and addressing glaring health disparities for the
people of the Pajaro Valley," said project member Hall.
The hospital holds 106 beds and employs more than 620 employees and
200 physicians, according to its website. Currently, Alabama-based
Medical Properties Trust owns the land and the buildings of the
hospital, but the hospital has been managed by a Los Angeles-based
firm, Prospect Medical Holdings, since January.
In addition to Laird, several other local officials co-authored the
bill including Assemblymembers Robert Rivas and Mark Stone, and
Sen. Anna Caballero. Their districts include community members who
live in areas the hospital serves.
About Watsonville Community Hospital
Watsonville Community Hospital -- https://watsonvillehospital.com/
-- is your community healthcare provider that offers a
comprehensive portfolio of medical and surgical services to the
culturally diverse tri-county area along California's Central
Coast.
Watsonville Community Hospital sought Chapter 11 protection (Bankr.
N.D. Cal. Case No. 21-51477) on Dec. 5, 2021. The case is handled
by Honorable Judge Elaine Hammond. The Debtor's attorneys are
Debra Grassgreen, Maxim Litvak and Steven Golden of Pachulski Stang
Ziehl & Jones LLP. Force 10 Partners is the Debtor's financial
advisor.
YOUNGBLOOD SKIN: Auction of Assets Set for February 15
------------------------------------------------------
Judge Deborah J. Saltzman of the U.S. Bankruptcy Court for the
Central District of California authorized Youngblood Skin Care
Products, LLC's bidding procedures relating to the sale of the
assets described in the Asset Purchase Agreement, dated Dec. 21,
2021, to Youngblood Cosmetics LLC for $510,000, free and clear of
all liens, claims, interests, and encumbrances, subject to
overbid.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Feb. 8, 2022, by 5:00 p.m. (PST)
b. Initial Bid: $545,000 cash
c. Deposit: 10% of the Overbid
d. Auction: The auction and sale hearing sought by the Motion
will be held on Feb. 15, 2022, at 11:30 a.m. Appearances at the
auction and sale hearing may only be made via ZoomGov. The
information needed to connect to the ZoomGov hearing will be on the
Court's posted calendar, available on the Court's website.
e. Bid Increments: $25,000
f. Sale Hearing: Immediately following the Auction at the
Court
g. Break-Up Fee: $20,000
h. Expense Reimbursement: $10,000
The Debtor must serve notice of the hearing on the Motion and the
Order on all parties entitled to notice under the Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure, and the Local Bankruptcy
Rules no later than Jan. 21, 2022. The Debtor must also submit the
Notice of Sale of Estate Property required by LBR 6004-1(f) no
later than Jan. 21, 2022.
Any opposition to the Motion must be filed and served no later than
Feb. 1, 2022. Any reply to an opposition to the Motion must be
filed and served no later than Feb. 8, 2022.
As provided in the Bid Procedures, there will be no auction unless
one or more competing Qualified Bids is submitted by the Bid
Deadline. If no competing Qualified Bids are timely submitted, the
hearing to approve the sale to the Proposed Purchaser will proceed
as specified.
A hearing on the Motion Via ZoomGov was held on Jan. 18, 2022, at
11:30 a.m.
A copy of the Bidding Procedures is available at
https://tinyurl.com/2tnbfpm2 from PacerMonitor.com free of charge.
About Youngblood Skin Care Products
Youngblood Skin Care Products, LLC, a cosmetics company based in
Simi Valley, Calif., filed a petition for Chapter 11 protection
(Bankr. C.D. Calif. Case No. 21-10808) on Aug. 2, 2021, listing as
much as $10 million in both assets and liabilities. Jason Toth,
executive vice president, signed the petition.
Judge Deborah J. Saltzman oversees the case.
The Debtor tapped Hahn & Hahn, LLP as legal counsel and Cohen &
Freedman as accountant. Mike Paulsin is the chief financial
officer.
YUNHONG CTI: Receives Noncompliance Notice From Nasdaq
------------------------------------------------------
Yunhong CTI Ltd. received on Jan. 12, 2022, a notice of failure to
satisfy a continued listing standard from Nasdaq under Listing
Rules 5620 (a) and 5810(c)(2)(G). The Notice indicated that the
Company failed to hold an annual meeting of stockholders within the
required twelve-month period.
The company has 45 days to submit a plan to regain compliance. If
that plan is accepted, CTI may be granted up to 180 calendar days
from the date of the letter to evidence compliance. Failure to
regain compliance with standards for continued listing would result
in the ultimate de-listing of CTI's common stock, ticker symbol
"CTIB", from Nasdaq. The company intends to respond with a plan
designed to regain compliance.
About Yunhong CTI
Lake Barrington, Illinois-based Yunhong CTI Ltd. --
www.ctiindustries.com -- develops, produces, distributes and sells
a number of consumer products throughout the United States and in
over 30 other countries, and it produces film products for
commercial and industrial uses in the United States. Many of the
Company's products utilize flexible films and, for a number of
years, it has been a leading developer of innovative products which
employ flexible films including novelty balloons, pouches and films
for commercial packaging applications.
Yunhong CTI reported a net loss of $4.25 million for the 12 months
ended Dec. 31, 2020, compared to a net loss of $8.07 million for
the 12 months ended Dec. 31, 2019. As of Sept. 30, 2021, the
Company had $24.88 million in total assets, $19.59 million in total
liabilities, and $5.30 million in total shareholders' equity.
New York, NY-based RBSM LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated April
15, 2021, citing that the Company has suffered recurring losses
from operations and will require additional capital to continue as
a going concern. In addition, the Company is in violation of
certain covenants agreed to with PNC Bank which if not resolved
could result in PNC Bank initiating liquidation proceedings. This
raises substantial doubt about the Company's ability to continue as
a going concern.
ZIER PROPERTIES: Unsecured Creditors Out of Money in Plan
---------------------------------------------------------
Zier Properties Reverse LLC filed with the U.S. Bankruptcy Court
for the Western District of Washington a Plan of Reorganization and
a Disclosure Statement on Jan. 17, 2022.
The Debtor is a single asset real estate entity. The real estate
is located at 903 Deschutes Pkwy, SW Olympia WA 98502 ("The Real
Property"). The market value of the property as of July 31, 2021,
according to Thurston County's Cost Valuation Report the value of
The Real Property is $1,602,700.
Since the Petition Date, the Debtor has continued to manage the
Real Property and has been developing the plan of reorganization.
The Debtor's attorney was employed on January 3, 2022. The Debtor
has received income from tenants and has been paying expenses for
The Real Property, including the real property taxes and
insurance.
The Plan centers around the restructuring of the Debtors
obligations to B&P to allow the Debtor to make payments on the
principal owed as well as the arrearage with the balance of
arrearage being added to the loan with B&P at the end of the plan
period. B&P will be paid monthly from the rents received from
tenants on The Real Property.
Should rents increase because of the market rate increases, or if
additional renters are engaged, the increased profits from rents
will be applied to the B&P arrearage. In any event, B&P will be
paid at least $3,122.04 per month which will be applied to
principal and interest and a minimum of $800 per month toward
arrearages. Interest on the arrearage will accrue at zero percent.
The Plan anticipates that Thurston Counties taxes on The Real
Property which are due for the years 2015-2020 will be paid in
full, at the statutory interest rate. The Thurston County taxes
will be kept current during the pendency of the plan. All other
money received by the Debtor will be collected in a fund and used
to pay monthly expenses of the Debtor as needed and required.
General Unsecured creditors, which includes Sunwest Bank, will
likely not receive any payment from the Debtor, considering the
large amount of arrearage that is owed to B&P. This is true even if
the Debtor liquidates The Real Property, which the Debtor does not
anticipate will happen in this case. Therefore, Sunwest will be
classified in the general unsecured creditors.
It is anticipated that that Sunwest might attempt to make a §
1111(b)(2) election which would require the Debtor to pay the full
face amount of Sunwests claim. However, since, in Sunwests case,
there is no equity in the collateral securing the debt, the debt is
unsecured. Therefore, Sunwest will be prohibited from making such
election pursuant to § 1111(b)(1)(B)(i) which prohibits the
election if the secured creditors claim is of inconsequential
value.
B&P is estimated to have a claim in the amount of $2,427,928, which
was calculated from prior filed bankruptcy claim filed adding the
additional interest from the date of that filing. Real Property
Taxes with Thurston County in the amount of $134,933.23. That
amount was obtained from the Thurston County Assessors website.
General Unsecured Creditors have claims in the amount of
$747,631.73, which was obtained from the Debtor schedules. These
claims include the Sunwest Bank claim and the claim of the Debtor's
Principal, Donna Zier. Equity Interest. There is no equity in the
property, therefore no equity interests currently exist.
The Plan anticipates that the Debtor will retain the property after
the Plan is completed and B&P will have been paid its regular
payments and arrears during the Plan. In addition, The Real
Property taxes will be paid in full and any other voluntary or
involuntary lien holders will be lien stripped.
A full-text copy of the Disclosure Statement dated Jan. 17, 2022,
is available at https://bit.ly/33xVaFf from PacerMonitor.com at no
charge.
Attorney for Debtor:
David Smith, Esq.
Law Office of David Smith
201 Saint Helens Ave
Tacoma, WA 98402
Tel: (253) 272-4777
Fax: (253) 461-8888
E-mail: david@davidsmithlaw.com
About Zier Properties Reverse
Olympia, Wash.-based Zier Properties Reverse, LLC, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Wash. Case No. 20-42868) on Dec. 31, 2020, listing $1,000,300 in
assets and $2,862,193 in liabilities. Judge Mary Jo Heston
oversees the case. The Debtor is represented by the Law Offices of
David Smith, PLLC.
[*] Puerto Rico Restructuring Adviser Disclosure Bill Now a Law
---------------------------------------------------------------
Daniel Gill of Bloomberg Law reports that President Joe Biden
signed into law a measure that requires advisers in Puerto Rico
restructuring cases to make full disclosures of potential conflicts
of interest before they can be paid.
The House sent the Puerto Rico Recovery Accuracy in Disclosures Act
(H.R. 1192) to the president's desk Wednesday after passing it by
voice vote. The Senate passed the bill by unanimous consent in
December 2021 after making amendments to the original House
version.
In bankruptcy cases, lawyers, accountants, and other advisers must
file complete conflict disclosures in order to be paid by the
bankruptcy estate.
[*] U.S. Retail Bankruptcies on the Decline
-------------------------------------------
Retail bankruptcies dropped from 52 in 2020 to 21 last year, Axios
said Jan. 20, citing research by S&P Global Market Intelligence.
The 21 bankruptcies in 2021 matched the lowest number in the past
10 years, according to the report, according to PYMNTS.com.
"Retail bankruptcies plummeted by more than half in 2021, matching
the lowest level notched over the past decade," achieved both in
2013 and 2014, the report stated. The 52 bankruptcies in 2020
matched the number in 2010. There were 45 bankruptcies in 2011 and
41 in 2017.
The precipitous drop in bankruptcies could mean that we're at the
end of the decimation of the retail industry triggered by the
ongoing spread of the pandemic across the U.S. and around the
world, but it certainly shouldn't be taken as a sign that trouble
is completely over in that sector, according to the report.
Tailored Brands, J.Jill, Belk and other retail companies are still
on rating agency watch lists, the report stated.
Some of the drop in bankruptcies may have been a function of low
interest rates helping retailers pull themselves out of the depths
of debt, assuming they survived the early stages of the pandemic to
begin with, Digital Commerce 360 reported Tuesday (Jan. 18).
"Low interest rates meant struggling companies could borrow at
little cost, and strong consumer spending, helped by government
stimulus checks and an expanded child tax credit, boosted retail
sales," the report stated.
Digital Commerce 360 reported there were only six companies with
"sufficient online revenue" that filed for bankruptcy in 2021, down
from 25 in 2020: Belk Inc. and Christopher & Banks Corp. (January),
Solstice Marketing Concepts LLC (February), Paper Source (March),
The Collected Group (April) and Alex and Ani LLC (June).
Christopher & Banks and Paper Source were subsequently acquired
after declaring bankruptcy, according to the report.
Meanwhile, big-name retailers are expanding the definition of
"storefront" in an effort to stay relevant, especially as the
pandemic continues to rage on. That includes shop-in-shop
concepts, such as Apple products available in Target stores,
joining Disney, Ulta Beauty and Levi Strauss & Co.
[^] BOND PRICING: For the Week from January 17 to 21, 2022
----------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Basic Energy Services Inc BASX 10.750 7.355 10/15/2023
Basic Energy Services Inc BASX 10.750 7.355 10/15/2023
Buffalo Thunder
Development Authority BUFLO 11.000 50.000 12/9/2022
Diamond Sports Group LLC /
Diamond Sports Finance Co DSPORT 6.625 25.791 8/15/2027
Diamond Sports Group LLC /
Diamond Sports Finance Co DSPORT 6.625 26.671 8/15/2027
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 72.919 1/15/2023
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 72.919 1/15/2023
Energy Conversion Devices ENER 3.000 7.875 6/15/2013
GNC Holdings Inc GNC 1.500 0.488 8/15/2020
GTT Communications Inc GTTN 7.875 14.000 12/31/2024
GTT Communications Inc GTTN 7.875 12.750 12/31/2024
General Electric Co GE 4.000 90.125 N/A
Goodman Networks Inc GOODNT 8.000 45.000 5/11/2022
MAI Holdings Inc MAIHLD 9.500 19.601 6/1/2023
MAI Holdings Inc MAIHLD 9.500 19.601 6/1/2023
MAI Holdings Inc MAIHLD 9.500 19.601 6/1/2023
MBIA Insurance Corp MBI 11.501 8.838 1/15/2033
MBIA Insurance Corp MBI 11.501 8.838 1/15/2033
Nine Energy Service Inc NINE 8.750 43.273 11/1/2023
Nine Energy Service Inc NINE 8.750 45.395 11/1/2023
Nine Energy Service Inc NINE 8.750 45.405 11/1/2023
OMX Timber Finance
Investments II LLC OMX 5.540 0.836 1/29/2020
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Revlon Consumer Products REV 6.250 43.304 8/1/2024
Ruby Pipeline LLC RPLLLC 8.000 85.500 4/1/2022
Ruby Pipeline LLC RPLLLC 8.000 88.136 4/1/2022
San Diego Gas & Electric SRE 1.914 99.366 2/1/2022
Sears Holdings Corp SHLD 6.625 0.476 10/15/2018
Sears Holdings Corp SHLD 6.625 0.751 10/15/2018
Sears Roebuck Acceptance SHLD 7.000 1.064 6/1/2032
Sears Roebuck Acceptance SHLD 6.750 1.184 1/15/2028
Sears Roebuck Acceptance SHLD 7.500 0.861 10/15/2027
Sears Roebuck Acceptance SHLD 6.500 1.050 12/1/2028
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
Talen Energy Supply LLC TLN 9.500 85.124 7/15/2022
Talen Energy Supply LLC TLN 6.500 44.375 9/15/2024
Talen Energy Supply LLC TLN 6.500 44.375 9/15/2024
Talen Energy Supply LLC TLN 9.500 85.124 7/15/2022
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Trousdale Issuer LLC TRSDLE 6.500 33.150 4/1/2025
*********
Monday's edition of the TCR delivers a list of indicative prices
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then-ending.
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