/raid1/www/Hosts/bankrupt/TCR_Public/220218.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, February 18, 2022, Vol. 26, No. 48
Headlines
3100 WINIFRED: Seeks to Hire Butler Law Group as Bankruptcy Counsel
3310 WEST 1: U.S. Trustee Unable to Appoint Committee
ALTO MAIPO: Judge Refuses to Reopen Chapter 11 Claims Challenge
ARROWHEAD FINANCIAL: Seeks to Hire Mark J. Lazzo as Legal Counsel
AVERY ASPHALT: Seeks to Hire Business Broker Colorado as Broker
BANTEC INC: Incurs $853K Net Loss in First Quarter
BARENZ INVESTMENTS: Wins Cash Collateral Access
CAMP ENERGY: Taps Wick Phillips Gould & Martin as Legal Counsel
CAMP ENERGY: Taps William Patterson of HMP as Interim Manager
CAMP PIZZA: Wins Interim Cash Collateral Access
CCI BUYER: S&P Affirms 'B-' Issuer-Credit Rating, Outlook Stable
CHINOS INTERMEDIATE 2: Moody's Hikes CFR, Secured Term Loan to B2
CLUBHOUSE MEDIA: Extends Maturity of ProActive Note to Sept. 20
COEPTIS EQUITY: Trustee Taps Alvin Washington as Real Estate Broker
COMPENDIUM INTERNATIONAL: Has Deal on Cash Collateral Access
CORP GROUP: Itau Corpbanca Gets OK to Seek Plan Votes
COSMOS HOLDINGS: Grigorios Siokas Has 39.4% Stake as of Dec. 31
DGS REALTY: U.S. Trustee Unable to Appoint Committee
DIAMOND SPORTS: Moody's Rates New $635MM Secured Term Loan 'B2'
DIVERSIFIED HEALTHCARE: Moody's Cuts CFR to B2; Outlook Negative
DOCTOR DREDGE: Seeks to Hire Mickler & Mickler as Legal Counsel
ECOARK HOLDINGS: Posts $4.3 Million Net Income in Third Quarter
EKSO BIONICS: AZ Fund, Azimut Own 3.3% Equity Stake
ELWOOD ENERGY: S&P Places 'BB' Senior Notes Rating on Watch Neg.
EMPACADORA Y PROCESADORA: Seeks Cash Collateral Access
ENDO INTERNATIONAL: Renaissance Entities Hold 6.47% Ordinary Shares
ESSA PHARMA: BB Biotech, Unit Report 11.4% Stake as of Dec. 31
ESSA PHARMA: Janus Henderson Has 7.7% Equity Stake as of Dec. 31
ESSA PHARMA: Pfizer Has 3.8% Equity Stake as of Dec. 31
ESSA PHARMA: Vivo Opportunity Reports 1.4% Equity Stake
FR FLOW CONTROL: S&P Affirms 'B-' ICR, Outlook Positive
FULL HOUSE: Portolan Capital, George McCabe Report 5.37% Stake
GIGA-TRONICS INC: AWM Investment Reports 7.4% Equity Stake
GIRARDI & KEESE: Trustee Asks to Review Litigation Lenders Again
GROVEHAUS LLC: U.S. Trustee Unable to Appoint Committee
GUADALUPE REGIONAL MEDICAL CENTER: S&P Affirms 'BB' Bonds Rating
HELIUS MEDICAL: AIGH, Orin Hirschman Report 6.8% Stake
HERITAGE POWER: S&P Places 'B' Secured Debt Rating on Watch Neg.
HERTZ CORP: False Police Report Claimants Defend Counsel
HORIZON GLOBAL: Borrows $35M Under Amended Credit Agreement
HUACHEN ENERGY: U.S. Court Recognizes PRC Plan
HYPERVIBE INC: Court Set to Close Bankruptcy Case
IM SERVICES: Seeks to Hire Olsen Hendricks & Webster as Accountant
INSPIREMD INC: Lind Global, et al. Report 2.1% Equity Stake
INTERNATIONAL GAME: S&P Upgrades ICR to 'BB+' on Improved Leverage
IRONSIDE LLC: Seeks to Hire Tranzon Asset Advisors as Auctioneer
IRONSIDE LLC: Taps Compton & Wendler as Forensic Accountant
JAFFAN INTERNATIONAL: Seeks Cash Collateral Access
JOHNSON & JOHNSON: Has 'Perverse' Chapter 11 Incentive
K. ANTHONY INC: Case Summary & 20 Largest Unsecured Creditors
LAS VEGAS SANDS: S&P Downgrades ICR to 'BB+', Outlook Negative
MAGELLAN HOME-GOODS: Wins Interim Cash Collateral Access
MINOTAUR ACQUISITION: Moody's Alters Outlook on B3 CFR to Stable
MOON NURSERIES: DOJ Watchdog Names Don Beskrone as Ch. 11 Trustee
MYOMO INC: AIGH Capital, Orin Hirschman Report 9% Equity Stake
NAUTILUS POWER: S&P Places 'B+' Debt Rating on Watch Negative
NORDIC AVIATION: Affiliates Taps Klehr Harrison as Special Counsel
NUVISTA ENERGY: S&P Upgrades ICR to 'B' on Improving Cash Flows
OCEAN POWER: Hikes Available Shares Under Inducement Plan to 275K
OCEAN POWER: Registers Additional 2M Shares Under Equity Plans
OCEANEERING INTERNATIONAL: S&P Ups ICR to 'BB-', Outlook Stable
PACIFIC LINKS: Gets OK to Hire KDL CPAs as Accountant
PADDOCK ENTERPRISES: Gets Court Okay to Send Plan for Vote
PITNEY BOWES: Moody's Lowers CFR to B1, Alters Outlook to Stable
PLUS THERAPEUTICS: Mitchell Kopin, et al. Report 1.9% Equity Stake
PREMIER SERVICES: Seeks to Tap Berken Cloyes as Bankruptcy Counsel
QHC FACILITIES: Wins Cash Collateral Access on Final Basis
QUALTEK LLC: S&P Assigns 'B-' Issuer Credit Rating, Outlook Neg.
QUOTIENT LIMITED: Highbridge Reports 9.9% of Ordinary Shares
REMINGTON OUTDOOR: Case a Wake Up Call for Gunmakers, Says Koskoff
RESIDEO FUNDING: Moody's Hikes CFR to Ba2; Outlook Remains Stable
REYTECH SERVICES: Voluntary Chapter 11 Case Summary
RIVERSTREET VENTURES: Gets OK to Hire TMC Realty as Broker
ROCHESTER DRUG: Ex-CEO Doud Wants Opioid Conviction Tossed
SEANERGY MARITIME: Fir Tree Entities Report 0% Equity Stake
SEANERGY MARITIME: Lind Global, et al. Report Less Than 1% Stake
SEQUENTIAL BRANDS: US Trustee Says Ch. 11 Releases Unconfirmable
SMOKINKWR LLC: $260,000 DIP Loan from Dickey's Barbecue OK'd
SOLID BIOSCIENCES: Suvretta Capital, et al. Report 5.7% Stake
SOUTHMINSTER: Fitch Assigns 'BB' Issuer Default Rating
TELINTEL LTD: Wins Cash Collateral Access Thru March 17
VENCHUR INVESTMENTS: Files Emergency Bid to Use Cash Collateral
VYANT BIO: Mitchell Kopin, et al. No Longer Own Common Shares
WAYNE BARTON: Gets OK to Hire Sodl & Ingram as Special Counsel
WROE ENTERPRISES: Taps Eric A. Liepins as Bankruptcy Counsel
YORK PARKING: Seeks to Extend Exclusivity Period to July 14
[*] Colorado Bankruptcies Decline by 37% in January 2022
[*] Small Business Bankruptcy Rules Set To Be Extended by Congress
[*] U.S. Trustee Seeks Supreme Court Review of Chapter 11 Fee Hike
[*] Warren County Joins $26-Bil. Opioid Settlement
[^] BOOK REVIEW: Legal Aspects of Health Care Reimbursement
*********
3100 WINIFRED: Seeks to Hire Butler Law Group as Bankruptcy Counsel
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3100 Winifred, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Maryland to hire The Butler Law Group, PLLC to
serve as legal counsel in its Chapter 11 case.
The firm's services include the filing of bankruptcy schedules,
statements of financial affairs and reports; settlement
negotiations; legal advice concerning administration of the estate;
the preparation of legal papers; the prosecution or defense of any
contested matters or adversary proceedings; and confirmation of a
Chapter 11 plan.
The rates charged by the firm range from $125 per hour for
paralegal and legal assistants to $450 per hour for the most senior
lawyers. The hourly rate for Craig Butler, Esq., the lead
attorney, is $395.
The firm has requested a retainer in the amount of $6,000.
Mr. Butler disclosed in a court filing that the firm and its
attorneys do not represent interests adverse to the interests of
the Debtor's estate.
The firm can be reached through:
Craig A. Butler, Esq.
The Butler Law Group, PLLC
1455 Pennsylvania Avenue, NW, Suite 400
Washington, DC 20004
Phone: (202) 587-2773
Email: cbutler@blgnow.com
About 3100 Winifred
3100 Winifred, LLC filed a petition for Chapter 11 protection
(Bankr. D. Md. Case No. 22-10052) on Jan. 6, 2022, listing up to
$50,000 in assets and up to $500,000 in liabilities. Judge Maria
Ellena Chavez-Ruark oversees the case.
Craig A. Butler, Esq. at The Butler Law Group, PLLC serves as the
Debtor's legal counsel.
3310 WEST 1: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of 3310 West 1 Group, LLC, according to court dockets.
About 3310 West 1 Group
3310 West 1 Group, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-10083) on Jan. 5,
2022, listing as much as $500,000 in both assets and liabilities.
Judge Laurel M. Isicoff oversees the case.
Joel Aresty, Esq., at Joel M. Aresty PA serves as the Debtor's
legal counsel.
ALTO MAIPO: Judge Refuses to Reopen Chapter 11 Claims Challenge
---------------------------------------------------------------
Rick Archer of Law360 reports that a New York bankruptcy judge
Wednesday, February 16, 2022, denied a request by creditors of
Chilean hydroelectric venture Alto Maipo for more time to challenge
the claims of the company's secured lenders but did give them two
more weeks to file new claims against the company.
Following a virtual hearing, Judge Karen Owens said that pushing
the claims deadline back would not derail Alto Maipo's Chapter 11
schedule but that there was no legal justification for the
unsecured creditor committee's request to restart the
already-expired period for challenging the secured lenders' liens.
About Alto Maipo
Alto Maipo owns the Alto Maipo Hydroelectric Project, outside
Santiago, Chile, which is currently under construction. The project
comprises two run-of-the-river plants with a combined installed
capacity of 531 megawatts. The run-of-the-river project is a joint
venture between U.S. utility subsidiary AES Gener and Chilean
mining company Antofagasta Minerals (AMSA).
Alto Maipo Delaware LLC and Alto Maipo SpA sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-11507) on Nov. 17,
2021. Javier Dib, board president and chief restructuring officer,
signed the petitions. At the time of the filing, Alto Maipo
Delaware LLC estimated between $1 billion and $10 billion in both
assets and liabilities.
The cases are handled by Judge Karen B. Owens.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Cleary
Gottlieb Steen & Hamilton LLP as legal counsel; Nelson Contador
Abogados & Consultores SpA as local Chilean counsel; AlixPartners,
LLP as financial advisor; and Lazard Freres & Co. LLC and Lazard
Chile SpA as investment banker. Prime Clerk, LLC is the claims,
noticing and administrative agent.
ARROWHEAD FINANCIAL: Seeks to Hire Mark J. Lazzo as Legal Counsel
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Arrowhead Financial ICT, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Kansas to employ Mark J.
Lazzo, P.A. to serve as legal counsel in its Chapter 11 case.
The firm's services include assisting the Debtor in preparing
bankruptcy schedules, reorganization plan and other court papers;
reviewing claims; negotiating with creditors; arranging and
negotiating sales; and filing adversary actions.
Mark Lazzo, Esq., and Justin Balbierz, Esq., the firm's attorneys
who will assist the Debtor in all aspects of its bankruptcy case,
will charge $300 per hour and $275 per hour, respectively.
As disclosed in court filings, the firm is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Mark J. Lazzo, Esq.
Mark J. Lazzo, P.A.
3500 N. Rock Road
Bldg. 300, Suite B
Wichita, KS 67226
Phone: (316) 263-6895
Email: mark@lazzolaw.com
About Arrowhead Financial ICT
Arrowhead Financial ICT, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No.
22-10066) on Feb. 1, 2022, listing as much as $1 million in both
assets and liabilities. Judge Mitchell L. Herren oversees the
case.
Mark Lazzo, Esq., and Justin Balbierz, Esq., at Mark J. Lazzo, P.A.
serves as the Debtor's bankruptcy attorneys.
AVERY ASPHALT: Seeks to Hire Business Broker Colorado as Broker
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Avery Asphalt, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Colorado to hire Business
Broker Colorado, LLC as their business and real estate broker.
The firm will list, market and sell Avery Asphalt's business as a
going concern, Avery Holdings, LLC's Denver real estate, and any
remaining personal property of the debtor-affiliates.
The firm will be compensated as follows:
-- A commission not to exceed 6 percent of the purchase price
will be earned upon the sale of Avery Asphalt's business and the
remaining assets of the Debtors.
-- A commission not to exceed 5 percent of the purchase price
will be earned upon the sale of Avery Holdings' Denver real estate
with an address of 1770 E. 69th Ave., Denver, CO 80229.
Jeff Chapman Eisnaugle of Business Broker Colorado disclosed in a
court filing that his firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeff Chapman Eisnaugle
Business Broker Colorado, LLC
999 18th St. Suite 3000
Denver, CO 80202
Phone: 303-905-7607
Email: jce@companybroker.com
About Avery Asphalt
Avery Asphalt, Inc. is the main operating company and installs,
maintains, and improves roadways, parking lots, and other outdoor
surfaces. Avery Equipment, LLC owns the equipment used in Avery
Asphalt's business. Avery Holdings, LLC owns the real estate used
in Avery Asphalt's business. LBLA Ventures, Inc. is the holding
company for a non-operating Arizona asphalt company and 1401 S.
22nd Ave., LLC owns the real estate that was formerly used by
Regional Pavement Maintenance of Arizona, Inc. in its business.
Avery Asphalt and its affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No.
21-10799) on February 19, 2021. The bankruptcy was filed after a
receiver was appointed for all the Debtors. The receivership
hampered Avery Asphalt's ability to operate profitably.
In the petition signed by CEO Aaron Avery, the Debtors disclosed up
to $50,000 in assets and up to $10 million in liabilities.
Judge Michael E. Romero oversees the case.
David J. Warner, Esq., at Wadsworth Garber Warner Conrardy, P.C. is
the Debtor's counsel, while SL Biggs serves as the Debtor's
financial advisor.
BANTEC INC: Incurs $853K Net Loss in First Quarter
--------------------------------------------------
Bantec, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $852,972 on
$402,117 of sales for the three months ended Dec. 31, 2021,
compared to net income of $20,546 on $747,008 of sales for the
three months ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $1.22 million in total assets,
$16.39 million in total liabilities, and a total stockholders'
deficit of $15.18 million.
As of Dec. 31, 2021 the Company had $977,369 in current assets,
including $781,741 in cash, compared to $1,205,058 in current
assets, including $985,953 in cash, at Sept. 30, 2021. Current
liabilities at Dec. 31, 2021, totalled $16,069,822 compared to
$15,914,650, at Sept. 30, 2021. The decrease in current assets
from Sept. 30, 2021 to Dec. 31, 2021 is primarily due to decreases
in: cash of $204,212, and prepaid expenses $21,767. The increase
in current liabilities from Sept. 30, 2021 to Dec. 31, 2021, of
approximately $154,000, is primarily due to the increases in:
accounts payable and accrued expenses of approximately $290,000.
While the Company has revenues from UAV sales as of this date, no
significant UAV revenues are anticipated until the Company has
implemented its full plan of operations, specifically, initiating
sales campaigns for its UAV internet and social media platforms.
The Company said it must raise cash to implement its strategy to
grow and expand per its business plan. The Company anticipates
over the next 12 months the cost of being a reporting public
company will be approximately $250,000.
Bantec is currently issuing shares under the S-1 offering but
expects to raise additional proceeds with debt securities, and/or
more loans, however if sufficient funding is not available, the
Company would be required to cease business operations. As a
result, investors would lose all of their investment. Under the
terms of the Company's credit agreement with TCA, all potential new
investments must first be reviewed and approved by TCA, which may
constrain its options for new fundraising. However, the Company
has been in contact with the receiver for the TCA management
companies and funds and does not expect any such objections over
investment opportunities. The Company is currently in discussion to
undertake a second S1 offering.
"We anticipate our short-term liquidity needs to be approximately
$5,000,000 which will be used to satisfy certain of our existing
current liabilities and we expect gross profits of approximately
$1,000,000. To meet these needs, we intend to complete our equity
financing and refinance or restructure certain existing
liabilities. Once this is completed, and we implement our sales and
marketing plan to sell UAV products, we anticipate minimal
long-term liquidity needs which we expect to meet through equity
financing or short-term borrowings," Bantec said.
"Additionally, we will have to meet all the financial disclosure
and reporting requirements associated with being a publicly
reporting company. Our management will have to spend additional
time on policies and procedures to make sure it is compliant with
various regulatory requirements, especially that of Section 404 of
the Sarbanes-Oxley Act of 2002. This additional corporate
governance time required of management could limit the amount of
time management has to implement the business plan and may impede
the speed of its operations," the Company said.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1704795/000121390022006905/f10q1221_bantecinc.htm
About Bantec
Bantec, Inc., a product and service company, through its
subsidiaries and divisions, sells drones and related products
manufactured by third parties to various parties, including
facility managers, engineers, maintenance managers, purchasing
managers and contract officers who work for hospitals,
universities, manufacturers, commercial businesses, local and state
governments and the US Government. The Company also offers
technical services related to drone utilization.
Bantec reported a net loss of $1.88 million for the year ended
Sept. 30, 2021, compared to a net loss of $4.33 million for the
year ended Sept. 30, 2020. As of Sept. 30, 2021, the Company had
$1.46 million in total assets, $16.25 million in total liabilities,
and a total stockholders' deficit of $14.80 million.
Boca Raton, Florida-based Salberg & Company, P.A., the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated Jan. 7, 2022, citing that the Company has a net loss
and cash used in operations of $1,882,071 and $1,576,648
respectively, in fiscal 2021, and has a working capital deficit,
stockholders' deficit and accumulated deficit of $14,709,592,
$14,796,078 and $32,956,840 at Sept. 30, 2021. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
BARENZ INVESTMENTS: Wins Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, has authorized Barenz Investments LLC to use cash
collateral on a final basis.
Debt Relief Legal Group, LLC, attorney for the Debtor, is directed
to serve a copy of the order on interested parties who do not
receive service by CM/ECF and file a Proof of Service within three
days of entry of the Order.
A copy of the order is available at https://bit.ly/355qcV1 from
PacerMonitor.com.
About Barenz Investments, LLC
Barenz Investments, LLC operates a boutique beach guest house and a
hotel. The company filed a Chapter 11 petition (Bankr. M.D. Fla.
Case No. 21-02682) on May 24, 2021.
On the Petition Date, the Debtor reported $3,009,800 in total
assets and $1,427,953 in total liabilities. The petition was
signed by David Alan Barenz, manager.
Judge Caryl E. Delano oversees the case.
Debt Relief Legal Group, LLC represents the Debtor as counsel.
CAMP ENERGY: Taps Wick Phillips Gould & Martin as Legal Counsel
---------------------------------------------------------------
Camp Energy, Ltd. seeks approval from the U.S. Bankruptcy Court for
the Western District of Texas to hire Wick Phillips Gould & Martin,
LLP to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor on the conduct of its bankruptcy
case;
(b) attending meetings and negotiating with representatives of
creditors and other parties-in-interest;
(c) taking all necessary actions to protect and preserve the
Debtor's estate;
(d) preparing legal papers;
(e) representing the Debtor in connection with obtaining
post-petition financing;
(f) advising the Debtor in connection with any potential sale
of estate assets;
(g) analyzing and, as appropriate, challenging the validity of
liens against assets of the estate;
(h) appearing before the bankruptcy court and any other court
to represent the interests of the estate;
(i) formulating, drafting and seeking confirmation of a
Chapter 11 plan and all documents related thereto; and
(j) all other legal services.
The hourly rates of the firm's attorneys and staff are as follows:
Jason M. Rudd, Partner $615
Lauren Drawhorn, Partner $515
Scott D. Lawrence, Partner $490
Catherine A. Curtis, Associate $455
Brenda Ramirez, Paralegal $180
In addition, the firm will seek reimbursement for expenses
incurred.
Jason Rudd, Esq., a partner at Wick Phillips Gould & Martin,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Jason M. Rudd, Esq.
Scott D. Lawrence, Esq.
Catherine A. Curtis, Esq.
Wick Phillips Gould & Martin, LLP
3131 McKinney Avenue, Suite 500
Dallas, TX 75204
Telephone: (214) 692-6200
Facsimile: (214) 692-6255
Email: jason.rudd@wickphillips.com
scott.lawrence@wickphillips.com
catherine.curtis@wickphillips.com
About Camp Energy Ltd.
San Antonio, Texas-based Camp Energy, Ltd. filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Texas Case No. 22-50058) on Jan. 22, 2022, listing as much as
$10 million in both assets and liabilities.
The Debtor tapped Catherine A. Curtis, Esq., at Wick Phillips Gould
& Martin, LLP as its legal counsel and William R. Patterson,
executive vice president of HMP Advisory Holdings, LLC, as its
interim manager.
CAMP ENERGY: Taps William Patterson of HMP as Interim Manager
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Camp Energy, Ltd. seeks approval from the U.S. Bankruptcy Court for
the Western District of Texas to hire William
R. Patterson of HMP Advisory Holdings, LLC as its interim manager
and to utilize additional personnel as needed.
Mr. Patterson will render these services:
a) assist the Debtor and his counsel with general matters
related to a restructuring;
c) assist the Debtor in the preparation of any bankruptcy
required reporting, including monthly operating reports;
d) assist the Debtor and its counsel to obtain court approval
for debtor-in-possession financing;
e) assist the Debtor to develop and maintain a 13-week cash
forecasts and any budget-to-actual reporting or other reporting as
may be required by potential debtor-in-possession financing;
f) assist in the formulation of a plan of reorganization,
including financial projections, liquidation analysis, claims
analysis and reconciliation and other analysis, as needed;
g) assist the Debtor and counsel, as requested, to complete
questionnaire and related information for the initial interview,
complete and file schedules of assets and liabilities and statement
of financial affairs, and prepare for 341 meeting of creditors;
h) if requested, negotiate with various stakeholders of the
Debtor; and
i) other activities approved by the Debtor or its counsel.
The hourly rates charged by the firm for its services are as
follows:
President /EVP/ COO $500 - $600
Managing Director $400 - $500
Senior Manager / Director $300 - $400
Manager $250 - $350
Senior Consultant $175 - $300
Support Staff $80 - $200
The firm received a retainer in the amount of $100,000.
Mr. Patterson, executive vice president of HMP, disclosed in a
court filing that he and his firm are "disinterested persons"
within the meaning of Bankruptcy Code Section 101(14).
HMP can be reached through:
William R. Patterson
HMP Advisory Holdings, LLC
d/b/a Harney Partners
Trammell Crow Center
2001 Ross Ave, Suite #700-122
Dallas, TX 75201
Phone: 214-501-0468
Email: bpatterson@harneypartners.com
About Camp Energy Ltd.
San Antonio, Texas-based Camp Energy, Ltd. filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Texas Case No. 22-50058) on Jan. 22, 2022, listing as much as
$10 million in both assets and liabilities.
The Debtor tapped Catherine A. Curtis, Esq., at Wick Phillips Gould
& Martin, LLP as its legal counsel and William R. Patterson,
executive vice president of HMP Advisory Holdings, LLC, as its
interim manager.
CAMP PIZZA: Wins Interim Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky,
Pikeville Division, has authorized Camp Pizza, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 20% variance.
As adequate protection, the Debtor will account for all cash
collateral expended. A replacement lien is also granted to all
creditors with an interest in the Debtor's cash collateral, in the
same fashion, manner and priority as their pre-petition liens, if
any.
The Court says the relief granted by the Order is interim in
nature, and any party in interest may object to its terms within 14
days of entry by the Court. Any objection will be noticed for
hearing on March 15, 2022 at 10 a.m.
A copy of the order is available at https://bit.ly/350wnK8 from
PacerMonitor.com.
About Camp Pizza, LLC
Camp Pizza, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. E.D. Ky. Case No. 2-70037) on February 3,
2022. In the petition signed by Renee Music, manager, the debtor
disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Gregory R. Schaaf oversees the case.
Noah Friend, Esq. at Noah R Friend Law Firm is the Debtor's legal
counsel.
CCI BUYER: S&P Affirms 'B-' Issuer-Credit Rating, Outlook Stable
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S&P Global Ratings affirmed its 'B-' issuer-credit rating on
U.S.-based mobile virtual network operator (MVNO) CCI Buyer Inc.
(doing business as Consumer Cellular).
S&P also affirmed its 'B-' issue-level rating on its senior secured
first-lien debt, and its 'CCC' issue-level rating on its senior
secured second-lien debt.
The stable outlook reflects S&P's expectation that a low-single
digit percent increase in Consumer Cellular's subscriber count and
favorable pricing on its new wholesale agreement with AT&T will
support a mid-single digit percent expansion in its top line
revenue and stable margins, enabling it to reduce its leverage to
the low-7x area by the end of 2023.
Despite raising additional debt to fund a dividend to its
shareholders, pro forma leverage of about 8x is still supportive of
the current rating. Solid operating and financial performance in
2021 enabled Consumer Cellular to reduce its debt to EBITDA to
about 6.1x from about 8.0x when it was acquired by GTCR in December
2020. S&P said, "We include the company's $311 million of perpetual
preferred stock (following the proposed $95 million add-on) in our
adjusted debt calculation, which constrains leverage improvement
due to the 12% payment-in-kind (PIK) interest on the preferred
shares. While Consumer Cellular's operating trends will likely
remain favorable over the next couple of years, we expect it to
maintain an aggressive financial policy that will cause its
leverage to remain elevated over the longer term."
Consumer Cellular's new exclusive 10-year MVNO agreement with AT&T
will provide cost savings that support a more favorable view of its
business.The company currently provides its service through two
MVNO agreements with T-Mobile and AT&T. However, its current
contracts with T-Mobile (which expires in 2023) and AT&T feature
less favorable pricing that contributes to its low EBITDA margins
(in the high-teen percent area). It recently signed a new 10-year
MVNO agreement with AT&T (with a 7-year initial term and three
1-year renewal options) to be its exclusive provider of network
services. S&P believes the terms on this new non-cancellable
contract are more favorable and will provide Consumer Cellular with
near-term cost savings and long-term stability that support its
improved view of its business.
The company's operating and financial performance were solid in
2021 and S&P believes that new retail and online distribution
agreements will drive top line growth and margin expansion. In
2021, Consumer Cellular increased its service revenue by about 10%
despite modestly higher churn and staffing issues at distribution
outlets, which contributed to a slower pace of subscriber growth
during the year. At the same time, the company's reported EBITDA
increased by about 43% during the year because of renegotiated
vendor contracts and improved carrier and handset pricing.
S&P said, "We believe Consumer Cellular has good prospects to
expand its revenue and EBITDA over the next couple of years due to
its new agreement with Walmart, which will expand its distribution
capabilities (with plans for an initial launch this month in about
500 stores), as well as its new marketing agreement with AARP that
will provide material cost savings. We believe these developments
will likely lead to improved penetration in its niche market which
caters to low-data users over the age of 50.
"In addition to elevated leverage, our rating reflects the
company's business risk profile, which is constrained by its
dependence on incumbent wireless operators to provide service to
its customer base.Consumer Cellular depends on incumbent mobile
operators to provide service to its customers, which significantly
limits its operating flexibility. As an MVNO, the company lacks
spectrum and network infrastructure and cannot provide cellular
service on its own. Instead, it relies on AT&T and T-Mobile (and
AT&T solely beginning in 2024) to provide it with network access,
which results in weak margins.
"The stable outlook on Consumer Cellular reflects our expectation
that a low-single digit percent increase in its subscriber count
and favorable pricing on its wholesale agreement with AT&T will
support a mid-single digit percent expansion in its top line and
stable margins, enabling it to reduce its leverage to the low-7x
area by the end of 2023."
S&P could lower our rating on Consumer Cellular if:
-- The company faces increased competition from nationwide
carriers and cable MVNOs in the senior demographic category or if
AT&T and T-Mobile demand higher rates for access to their networks,
which pressure its margins and causes its leverage to remain
elevated at about 8x with limited prospects for deleveraging over
the longer term;
-- The company pursues additional debt-financed shareholder
returns or acquisitions that are not immediately accretive; or
-- S&P believe the company will face a near-term liquidity
crisis.
Although unlikely given its private-equity ownership, S&P could
consider raising its rating on Consumer Cellular if:
-- Its leverage falls below 5x; and
-- S&P is confident that financial policy considerations will not
lead it to increase its leverage in the future.
CHINOS INTERMEDIATE 2: Moody's Hikes CFR, Secured Term Loan to B2
-----------------------------------------------------------------
Moody's Investors Service upgraded Chinos Intermediate 2 LLC's
(J.Crew) ratings, including the corporate family rating to B2 from
B3, probability of default rating to B2-PD from B3-PD, and senior
secured term loan rating to B2 from B3. The outlook was changed to
stable from positive.
The upgrade reflects J.Crew's earnings recovery and significant
deleveraging in 2021, as the company benefited from a low level of
promotions across the apparel sector due to constrained inventory
and strong consumer demand. Coming out of the 2020 bankruptcy and
pandemic, J.Crew has also operated with significantly lower
overhead and rent expense, driven by the closure of over 20% of
J.Crew stores and rent concessions. These factors allowed J.Crew to
slightly exceed 2019 profitability, despite high shipping costs and
still-depressed store traffic.
"There are still risks to the earnings recovery from high input
costs in the near term and a return of promotional activity in the
sector over time, as well as an expectation for continued increases
in investment spending primarily on marketing and headcount," said
Moody's Vice President and lead analyst Raya Sokolyanska. "However,
we expect J.Crew's credit metrics and liquidity to remain solid
given its improved balance sheet."
Moody's took the following rating actions for Chinos Intermediate 2
LLC:
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Senior Secured Term Loan, Upgraded to B2 (LGD4) from B3 (LGD4)
Outlook, Changed to Stable from Positive
RATINGS RATIONALE
J.Crew's B2 CFR is constrained by the company's relatively small
scale, high fashion risk, and the highly competitive nature of the
apparel retail sector. In addition, the ratings are constrained by
governance considerations, including ownership by its former
lenders, which increases the risk of aggressive financial strategy
actions. The challenging turnaround of the J.Crew business over the
past several years also remains a key credit negative.
At the same time, the rating is supported by J.Crew's solid credit
metrics relative to similarly rated peers, with Moody's-adjusted
debt/EBITDA of 2.2x and EBIT/interest expense of 2.4x, based on
preliminary fiscal year-end 2021 results. Moody's expects the
company to have very good liquidity over the next 12-18 months,
including solid cash balances, positive free cash flow, access to
an undrawn $400 million asset-based revolving credit facility and
the lack of near-term debt maturities. The rating also benefits
from the company's ownership of the Madewell business, which
demonstrated sustained growth prior to the pandemic.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company demonstrates a
transparent and strong commitment to conservative financial
policies. An upgrade would also require a sustained period of solid
operating performance in both the Madewell and J.Crew businesses.
Quantitatively, the ratings could be upgraded if debt/EBITDA is
maintained below 3 times and EBIT/interest expense above 3 times.
An upgrade would also require a sustained period of solid operating
performance in both the Madewell and J.Crew businesses.
Quantitatively, the ratings could be upgraded if debt/EBITDA is
maintained below 3 times and EBIT/interest expense above 3 times.
The ratings could be downgraded if operating performance at either
brand weakens or liquidity deteriorates. Quantitatively, the
ratings could be downgraded with expectations that debt/EBITDA will
be sustained above 4 times or EBIT/interest expense below 2 times.
Chinos Intermediate 2 LLC (J.Crew) is a retailer of women's, men's
and children's apparel, shoes and accessories under the J.Crew and
Madewell brands. For the fiscal year ended January 31, 2021, the
company generated $2.3 billion of sales through its stores,
websites, and retail partners. The company is majority owned by
Anchorage Capital Group, L.L.C. following the 2020 bankruptcy
emergence.
The principal methodology used in these ratings was Retail
published in November 2021.
CLUBHOUSE MEDIA: Extends Maturity of ProActive Note to Sept. 20
---------------------------------------------------------------
Clubhouse Media Group, Inc., and ProActive Capital SPV I, LLC had
entered into Amendment No. 1 to Convertible Promissory Note, dated
as of Feb. 4, 2022, pursuant to which the maturity date of the
ProActive Note was extended to Sept. 20, 2022.
On Jan. 20, 2021, the Company issued to ProActive a convertible
promissory note in the aggregate principal amount of $250,000 for a
purchase price of $225,000, reflecting a $25,000 original issue
discount. The ProActive Note had a maturity date of Jan. 20,
2022.
As consideration for ProActive's agreement to extend the maturity
date, the principal amount of the ProActive Note was increased by
$50,000, to be a total of $300,000. As of Feb. 4, 2022, the
indebtedness under the ProActive Note was $275,000, comprised of
$250,000 of principal and $25,000 of accrued interest. Following
Feb. 4, 2022, interest will continue to accrue on the principal
amount of $300,000 at an interest rate of 10%.
The parties further agreed that to the extent the indebtedness
under the ProActive Note has not been earlier repaid or converted
to common stock as set forth therein, in the event that the Company
completes a firm commitment underwritten public offering of its
common stock that results in the common stock being successfully
listed on the Nasdaq Global Market, the Nasdaq Capital Market, the
New York Stock Exchange or the NYSE American prior to the maturity
date of the ProActive Note, as amended by the Note Amendment, then,
following completion of the initial public offering, the Company
will use the proceeds to repay indebtedness under the ProActive
Note in full.
About Clubhouse Media
Las Vegas, Nevada-based Clubhouse Media Group, Inc. operates a
global network of professionally run content houses, each of which
has its own brand, influencer cohort and production capabilities.
The Company offers management, production and deal-making services
to its handpicked influencers, a management division for individual
influencer clients, and an investment arm for joint ventures and
acquisitions for companies in the social media influencer space.
Its management team consists of successful entrepreneurs with
financial, legal, marketing, and digital content creation
expertise.
Clubhouse Media reported a net loss of $2.58 million for the year
ended Dec. 31, 2020, compared to a net loss of $74,764 for the year
ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $1.70
million in total assets, $7.95 million in total liabilities, and
$6.25 million in total stockholders' deficit.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2020, issued a "going concern"
qualification in its report dated March 15, 2021, citing that the
Company has net losses and negative working capital, which raise
substantial doubt about its ability to continue as a going concern.
COEPTIS EQUITY: Trustee Taps Alvin Washington as Real Estate Broker
-------------------------------------------------------------------
Gina Klump, Subchapter V trustee for Coeptis Equity Fund LLC,
received approval from the U.S. Bankruptcy Court for the Northern
District of California to hire Alvin Washington Realty to sell the
property located at 2211 Augusta Lane, Denham Springs, La.
The firm will receive a broker's commission of 6 percent of the
purchase price.
As disclosed in court filings, Alvin Washington Realty is a
disinterested person with the meaning of Sections 101 (14) and 327
of the Bankruptcy Code.
The firm can be reached through:
Alvin Washington
Alvin Washington Realty
16845 Highland Club Ave.
Baton Rouge, La 70817
Phone: (225) 755-1877
About Coeptis Equity
Coeptis Equity Fund, LLC filed a petition for Chapter 11 protection
(Bankr. N.D. Calif. Case No. 21-30726) on Oct. 27, 2021, listing as
much as $10 million in both assets and liabilities. Marc Voisenat,
Esq., serves as the Debtor's bankruptcy attorney.
Gina R. Klump is the Subchapter V trustee appointed in the Debtor's
bankruptcy case. The case is assigned to Judge Dennis Montali.
COMPENDIUM INTERNATIONAL: Has Deal on Cash Collateral Access
------------------------------------------------------------
Compendium International, Inc. asks the U.S. Bankruptcy Court for
the Central District of California, Santa Ana Division, for entry
of an order approving the Stipulation for Adequate Protection and
Use of Cash Collateral between the Debtor and the U.S., on behalf
of its agency, the U.S. Small Business Administration.
The Debtor requires the use of cash collateral in order to pay
timely, on a daily basis, its operating expenses, including its
payroll obligations, to continue operations of the Debtor's
business.
As of the Petition Date, the Debtor owes the SBA $511,000. The SBA
asserts that its claim is secured by a first-priority lien
encumbering virtually all of the Debtor's assets, including any
cash collateral.
On February 16, 2021, the Debtor executed an SBA Note, pursuant to
which the Debtor obtained an Economic Injury Disaster Loan in the
amount of $150,000. The terms of the Note require the Debtor to pay
principal and interest payments of $731 every month beginning 12
months from the date of the Note over the 30 year term of the SBA
Loan, with a maturity date of February 19, 2051. The SBA Loan has
an annual rate of interest of 3.75% and may be prepaid at any time
without notice of penalty.
As evidenced by a Security Agreement executed on or about February
16, 2021 and a validly recorded UCC-1 filing on March 2, 2021 as
Filing Number U210027482435, the SBA Loan is secured by all
tangible and intangible personal property.
On April 27, 2021, the Debtor executed a First Modification of
Note, pursuant to which the Debtor increased the SBA Loan to the
amount of $500,000. The Modified Note, in pertinent part, requires
the Debtor to pay principal and interest payments of $2,493 every
month, beginning 18 months from the date of the original Note over
the 30 year term of the SBA Loan. The first SBA Loan payment is due
in August 2022.
On April, 27, 2021, the Debtor executed an Amended Security
Agreement to reflect the increased loan amount stated in the
Modified Note.
Pursuant to the SBA Proof of Claim, $511,661 is the cumulative
balance owing on the SBA Loan.
The SBA consents to the Debtor's use of cash collateral. The Debtor
represents to the SBA that it will make no additional or
unauthorized use of the Cash Collateral retroactive from the
earlier of the SBA Loan date until entry of an Order Confirming the
Debtor's Plan of Reorganization, or April 30, 2022, whichever
occurs earlier, for ordinary and necessary expenses as set forth in
the projections.
The Debtor's use of Cash Collateral may be renewed upon subsequent
stipulation with SBA or by order of the Court.
As adequate protection, SBA will receive a replacement lien to the
extent that the automatic stay, pursuant to 11 U.S.C. section 362,
as well as the use, sale, lease or grant results in a decrease in
the value of the SBA's interest in the Personal Property Collateral
on a post-petition basis. The replacement lien is valid, perfected
and enforceable and will not be subject to dispute, avoidance, or
subordination, and this replacement lien need not be subject to
additional recording.
The SBA's claim under the SBA Loan will be allowed as a secured
claim in the amount of $511,661, plus all ongoing accrued interest
due thereunder.
A copy of the motion and the stipulation is available at
https://bit.ly/3gPqgek from PacerMonitor.com.
About Compendium International, Inc.
Compendium International, Inc. provides engineering and
environmental construction, and consulting services. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. Case No. 22-10142) on January 28, 2022. In the
petition signed by Mohamood Entezar, president, the Debtor
disclosed $5,999,007 in total assets and $11,267,142 in total
liabilities.
Judge Scott C. Clarkson oversees the case.
Michael Jones, Esq., and Sara Tidd, Esq., at M Jones and
Associates, PC is the Debtor's legal counsel.
CORP GROUP: Itau Corpbanca Gets OK to Seek Plan Votes
-----------------------------------------------------
Maria Chutchian of Reuters reports that the part owner of Chilean
bank Itaú Corpbanca, Corp Group Banking SA, on Wednesday, February
15, 2022, obtained court approval to begin soliciting votes from
creditors for its proposed Chapter 11 plan after a judge overruled
a government attorney's concerns over the plan's legal protections
for non-bankrupt people and entities.
The judge overrules concerns about plan's legal shields and the
junior creditors are in line for minimal recoveries.
About Corp Group Banking SA
Corp Group Banking SA is a Chilean financial holding company
controlled by billionaire Alvaro Saieh. Corp Group Banking SA is
the part owner of the Chilean bank Itau Corpbanca.
Corp Group Banking SA and and Inversiones CG Financial Chile Dos
SpA sought voluntary Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 21-10969) on June 25, 2021 to restructure nearly $2
billion in debt.
At the time of the filing, Corp Group Banking disclosed $500
million to $1 billion in assets and $1 billion to $10 billion in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Simpson Thacher & Bartlett, LLP and Young
Conaway Stargatt & Taylor, LLP as legal counsel. Prime Clerk, LLC
is the Debtors' claims and noticing agent and administrative
advisor.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on July 20, 2021. The committee tapped Morgan,
Lewis & Bockius, LLP as lead bankruptcy counsel, Robinson & Cole
LLP as Delaware counsel, and NLD Abogados as special Chilean
counsel. FTI Consulting, Inc. serves as the committee's financial
advisor.
COSMOS HOLDINGS: Grigorios Siokas Has 39.4% Stake as of Dec. 31
---------------------------------------------------------------
Grigorios Siokas disclosed in a Schedule 13G/A filed with the
Securities and Exchange Commission that as of Dec. 31, 2021, he
beneficially owns 6,834,167 shares of common stock of Cosmos
Holdings Inc., representing 39.4 percent of the shares outstanding.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1474167/000147793222000680/cosm_sc13ga.htm
About Cosmos Holdings
Cosmos Holdings Inc. is a multinational pharmaceutical wholesaler.
The Company imports, exports and distributes pharmaceutical
products of brand-name and generic pharmaceuticals,
over-the-counter (OTC) medicines, and a variety of dietary and
vitamin supplements. Currently, the Company distributes products
mainly in the EU countries via its two wholly owned subsidiaries
SkyPharm SA, Decahedron Ltd. and (iii) Cosmofarm.
Cosmos Holdings reported net income of $820,786 for the year ended
Dec. 31, 2020, compared to a net loss of $3.30 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $47.68
million in total assets, $43.03 million in total liabilities, and
$4.65 million in total stockholders' equity.
San Francisco, California-based Armanino 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 has a net accumulated deficit
that raises substantial doubt about its ability to continue as a
going concern.
DGS REALTY: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The U.S. Trustee for Region 1 on Feb. 15 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of DGS Realty, LLC.
About DGS Realty
DGS Realty, LLC is a real estate limited liability company based in
Concord, N.H. Formed around May 10, 2017, the company is owned by
David H. Booth, Manager, Stephen W. Booth, and Gregory A. Booth,
each having a one-third interest.
DGS Realty filed a Chapter 11 petition (Bankr. D.N.H. Case No.
22-10028) on Jan. 24, 2022. In the petition signed by David H.
Booth, the manager, the Debtor estimated assets and debts between
$1 million and $10 million.
Judge Bruce A. Harwood oversees the case.
Representing the Debtor as counsel is Eleanor Wm Dahar, Esq., at
Victor W. Dahar Professional Association.
DIAMOND SPORTS: Moody's Rates New $635MM Secured Term Loan 'B2'
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Diamond Sports
Group, LLC's proposed $635 million senior secured term loan. The
Caa2 corporate family rating, the Caa2-PD probability of default
rating, the Caa1 on the senior secured credit notes and senior
secured credit facilities and the Ca rating on the senior unsecured
notes and negative outlook are unchanged. The speculative grade
liquidity rating (SGL) is maintained at SGL-4.
The new senior secured term loan is being raised as part of a
proposed exchange transaction whereby holders of existing term
senior secured debt are being offered the opportunity to exchange
their existing senior secured debt into new senior secured
second-priority debt. Existing senior secured lenders who do not
consent to the exchange will see their holdings granted third lien
priority security. If raised, $33 million of the new facility will
be used to repay the company's 12.75% senior secured notes due
December 2026, and the remainder will be kept on balance sheet.
Assignments:
Issuer: Diamond Sports Group, LLC
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD2)
RATINGS RATIONALE
The B2 on the proposed $635 million term loan reflects its first
lien priority ranking, ahead of the senior secured debt facilities
which, if the exchange goes through, will be granted second or
third lien security and ahead of the unsecured notes.
Given the very high leverage, expected between 15-20x in 2023 and
the uncertainty over the planned direct to consumer ("DTC")
product's success, Moody's does not expect to upgrade the corporate
family rating at transaction close, however the improvement in
liquidity -- from the newly raised term loan and the deferral of
the Sinclair management fee -- alleviates immediate concerns of a
liquidity shortfall and could result in a stabilization of the
outlook. If the transaction closes as expected, Moody's expects to
withdraw the ratings on the existing senior secured debt
instruments which will have been exchanged into new debt
instruments..
As previously communicated by Moody's in January, should the
transaction be executed as per the outlined plans, it would likely
be treated as a distressed exchange, which is a default under
Moody's definition. Moody's also expects that Diamond's SGL-4
rating could be upgraded on the back of the exchange to reflect the
new funding being kept on balance sheet.
The credit profile continues to be supported by Diamond's position
as the largest holder of RSNs, with 15 sports networks all carrying
at least one basketball, one hockey and one baseball team. The
company's current plans to launch a DTC product for its RSNs, have
the potential to drive material growth in the long term but
execution risk remains and delays could, again, put the company's
liquidity and its capital structure at risk.
The negative outlook continues to reflects Moody's concerns over
the sustainability of the company's current capital structure
should the exchange not conclude as discussed.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded with a meaningful improvement in
operating performance, liquidity and in Moody's assessment of the
sustainability of the capital structure.
Further downward pressure on the ratings could ensue should
operating performance or liquidity continue to weaken or should
Moody's assessment of the likelihood of a default increase.
The principal methodology used in this rating was Media published
in June 2021.
Headquartered in Hunt Valley, MD, Diamond Sports Group, LLC was
formed on March 11, 2019 and is the entity through which Sinclair
Broadcast Group, Inc. ("SBGI") executed the acquisition of the
RSNs. Diamond owns and operates 21 RSNs that broadcast NBA, NHL and
MLB games on pay-TV platforms.
DIVERSIFIED HEALTHCARE: Moody's Cuts CFR to B2; Outlook Negative
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Diversified
Healthcare Trust (DHC) including its corporate family rating to B2
from Ba3, its guaranteed senior unsecured notes to B2 from Ba3, and
its senior unsecured notes to B3 from B1. The speculative grade
liquidity (SGL) rating was downgraded to SGL-4 from SGL-3. The
rating outlook remains negative.
The ratings downgrades reflect the ongoing weak performance of the
REIT's senior housing operations which has raised Net Debt/EBITDA
to exceedingly high levels. DHC's financial flexibility also
remains limited until it is able to resume compliance with certain
covenants in its unsecured bonds and secured credit facility. The
REIT's high leverage and covenant violations raise concerns about
financial policy and governance.
Downgrades:
Issuer: Diversified Healthcare Trust
Corporate Family Rating, Downgraded to B2 from Ba3
Gtd Senior Unsecured Regular Bond/Debenture, Downgraded to B2 from
Ba3
Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B1
Speculative Grade Liquidity (SGL), Downgraded to SGL-4 from SGL-3
Outlook Actions:
Issuer: Diversified Healthcare Trust
Outlook, Remains Negative
RATINGS RATIONALE
DHC's B2 CFR reflects its modest book leverage, as well as
portfolio diversification that includes stable income from medical
office buildings (MOBs) and life science assets. The rest of the
REIT's portfolio is mostly comprised of senior housing operating
assets which experienced substantial cash flow declines over the
course of the coronavirus pandemic driven by falling occupancy and
rising expenses, particularly labor. The REIT has a sizable
unencumbered asset pool, although the size and quality has
diminished with recent joint venture (JV) transactions that reduced
its ownership stakes in some of the highest quality buildings in
its portfolio.
Key credit concerns include weak cash flows related to DHC's senior
housing operating business. Moody's expect the REIT will face
significant challenges as it seeks to recoup lost income and reduce
leverage as measured by Net Debt/EBITDA. DHC's recent transition of
a large portion of its senior housing operating assets from Five
Star to new managers potentially improves their growth outlook but
execution risks remain amidst an improving, but still challenging
senior housing environment.
DHC's ratings also consider governance risks associated with its
financial policy given its very high leverage and breach of certain
bond and bank facility covenants. The violation of certain bank
covenants drove the REIT's execution of an amendment that converted
its revolver to a secured facility in exchange for a waiver on
certain covenants through the second quarter of 2022 among other
terms.
DHC's SGL-4 rating reflects its limited financial flexibility until
it is able to resume compliance with its bond and bank facility
covenants. The REIT drew down the full amount available on its $800
million secured credit facility in early 2021, in advance of
breaching a bond covenant in 2Q21 which now prohibits it from
incurring debt. DHC had about $800mm of cash as of 3Q21 and further
enhanced its liquidity with the execution of two subsequent JV
transactions that raised about $1 billion of capital. Moody's
expect cash will be used to fund cap ex, as the REIT is working to
improve the positioning of its senior living portfolio, as well as
potentially debt prepayments. DHC has a large unencumbered
portfolio but the size and quality of this pool has diminished in
recent years as it has executed JVs with some of its highest
quality assets in order to raise capital. Positively, DHC has no
material debt maturities until $250mm matures in 2024. The revolver
comes due in January 2023 and has a one year extension option.
DHC's negative outlook reflects the steep cash flow declines it has
experienced within its senior housing business, which has resulted
in very high Net Debt/EBITDA. Moody's expect a long and protracted
recovery in senior housing will make it challenging for DHC to
reduce debt levels. The outlook also reflects the REIT's limited
financial flexibility as a large portion of its higher quality
assets are encumbered by mortgages and its bank revolver.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
DHC's ratings could be downgraded should the REIT fail to maintain
ample liquidity as upcoming debt maturities approach. Fixed charge
coverage below 1.25x or Net Debt/EBITDA above 10x on a sustained
basis, as well as lack of material improvement in senior housing
cash flows for 2022 could also result in a downgrade.
DHC's ratings could be upgraded if the REIT were to resume
compliance and maintain good cushion with all bank and bond
covenants, as well as retain ample liquidity. Refinancing its
secured revolver with an unsecured facility, as well as reducing
Net Debt/EBITDA below 8x and generating positive NOI growth from
all business segments on a sustained basis would also support an
upgrade.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms Methodology published in July 2021.
DOCTOR DREDGE: Seeks to Hire Mickler & Mickler as Legal Counsel
---------------------------------------------------------------
Doctor Dredge, LLC seeks approval from the U.S. Bankruptcy Court
for the Middle District of Florida to hire the Law Offices of
Mickler & Mickler, LLP to serve as legal counsel in its Chapter 11
case.
The firm will charge $250 to $300 per hour for its services.
As disclosed in court filings, Mickler neither holds nor represents
any interest adverse to the Debtor or its estate.
The firm can be reached through:
Bryan K. Mickler, Esq.
Law Offices of Mickler & Mickler, LLP
5452 Arlington Expy.
Jacksonville, FL 32211
Tel: 904-725-0822
Fax: 904-725-0855
Email: court@planlaw.com
About Doctor Dredge
Doctor Dredge, LLC specializes in underwater excavation projects
throughout the Southeastern United States, covering the states of
Alabama, Georgia and Florida. Founded in 2006, the company provides
both Mechanical and Hydraulic Dredging Services.
Doctor Dredge filed its voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
22-00192) on Jan. 31, 2022, listing $217,557 in assets and
$1,640,512 in liabilities. Phillip G. Wilson, managing member,
signed the petition.
Judge Jacob A. Brown presides over the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP represents the Debtor as legal counsel.
ECOARK HOLDINGS: Posts $4.3 Million Net Income in Third Quarter
---------------------------------------------------------------
Ecoark Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $4.28 million on $6.14 million of revenues for the three months
ended Dec. 31, 2021, compared to net income of $532,000 on $4.47
million of revenues for the three months ended Dec. 31, 2020.
For the nine months ended Dec. 31, 2021, the Company reported net
income of $983,000 on $19.13 million of revenues compared to a net
loss of $11.66 million on $10.06 million of revenues for the nine
months ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $43.51 million in total
assets, $12.57 million in total liabilities, and $30.94 million in
total stockholders' equity.
The Company has a working capital deficit of $6,020,000 and
$11,845,000 as of Dec. 31, 2021 and March 31, 2021, and has an
accumulated deficit as of Dec. 31, 2021 of $147,635,000. As of
Dec. 31, 2021, the Company has $864 in cash and cash equivalents
from continuing operations.
Ecoark stated, "The Company alleviated the substantial doubt
regarding this uncertainty as of March 31, 2020 which continues to
be alleviated at December 31, 2021 as a result of the Company's
acquisition of Banner Midstream on March 27, 2020, coupled with the
raising of funds through the exercise of warrants and options and
the sale of common stock and warrants during the year ended March
31, 2021 and through the nine months ended December 31, 2021.
If the Company raises additional funds by issuing equity
securities, its stockholders would experience dilution. Additional
debt financing, if available, may involve covenants restricting its
operations or its ability to incur additional debt. Any additional
debt financing or additional equity that the Company raises may
contain terms that are not favorable to it or its stockholders and
require significant debt service payments, which diverts resources
from other activities. If the Company is unable to obtain
additional financing, it may be required to significantly scale
back its business and operations. The Company's ability to raise
additional capital will be impacted by the heightened societal and
regulatory focus on climate change and may also be impacted by the
COVID-19 pandemic including the current supply chain shortages.
The Company believes that the current cash on hand and anticipated
cash from operations is sufficient to conduct planned operations
for one year from the issuance of the consolidated financial
statements."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1437491/000121390022006986/f10q1221_ecoarkholdings.htm
About Ecoark Holdings
Rogers, Arkansas-based Ecoark Holdings, Inc., founded in 2011, is a
diversified holding company. Through its wholly-owned
subsidiaries, the Company has operations in three areas: (i) oil
and gas, including exploration, production and drilling operations
and transportation services, (ii) post-harvest shelf-life and
freshness food management technology, and (iii) financial services
including consulting, fund administration and asset management.
Ecoark Holdings reported a net loss of $20.89 million for the year
ended March 31, 2021, a net loss of $12.14 million for the year
ended March 31, 2020, and a net loss of $13.65 million for the year
ended March 31, 2019. As of Sept. 30, 2021, the Company had $45.50
million in total assets, $21.73 million in total liabilities, and
$23.77 million in total stockholders' equity.
EKSO BIONICS: AZ Fund, Azimut Own 3.3% Equity Stake
---------------------------------------------------
AZ Fund 1 AZ Allocation – Trend and Azimut Investments S.A.
disclosed in a Schedule 13G/A filed with the Securities and
Exchange Commission that as of Dec. 31, 2021, they beneficially
owned 423,000 shares of common stock of Ekso Bionics Holdings,
Inc., representing 3.34 percent based on 12,663,717 Common Shares
outstanding, as reported on Form 10-Q, Quarterly Report Pursuant To
Section 13 or 15(d) of The Securities Exchange Act of 1934, filed
on Oct. 29, 2021.
Azimut Investments S.A. is a Luxembourg corporation that manages
the affairs of AZ Fund 1 - AZ Allocation - Trend. Claudio Basso is
the chief investment officer of the Management Company. The
Management Company and Claudio Basso may be deemed to share voting
and dispositive control over the shares held by AZ Fund 1 AZ
Allocation – Trend.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1549084/000121390022006643/ea155049-13ga1azimut_ekso.htm
About Ekso Bionics
Ekso Bionics -- http://www.eksobionics.com-- is a developer of
exoskeleton solutions that amplify human potential by supporting or
enhancing strength, endurance and mobility across medical and
industrial applications. Founded in 2005, the Company continues to
build upon its expertise to design some of the most cutting-edge,
innovative wearable robots available on the market. The Company is
headquartered in the Bay Area and is listed on the Nasdaq
CapitalMarket under the symbol EKSO.
Ekso Bionics reported a net loss of $15.83 million for the year
ended Dec. 31, 2020, a net loss of $12.13 million for the year
ended Dec. 31, 2019, and a net loss of $26.99 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2021, the Company had $50.73
million in total assets, $11.67 million in total liabilities, and
$39.06 million in total stockholders' equity.
ELWOOD ENERGY: S&P Places 'BB' Senior Notes Rating on Watch Neg.
----------------------------------------------------------------
S&P Global Ratings placed its 'BB' rating on Elwood Energy LLC's
senior notes on CreditWatch with negative implications.
S&P said, "The CreditWatch reflects that we could lower our rating
on the project's senior debt by at least one notch when we have a
greater understanding of its ability to service the debt amid lower
capacity prices. We expect to resolve the CreditWatch in the coming
weeks as the effects of our capacity price revision on Elwood's
credit metrics becomes clear."
Elwood Energy, a simple-cycle peaking power plant located in
Elwood, Ill., will face declining capacity revenue following the
revision of our capacity price assumptions for the
Pennsylvania-Jersey-Maryland Interconnection (PJM). S&P now
anticipates that capacity prices in the PJM ComEd zone for
2023/2024 will be significantly lower than S&P previously expected,
which will negatively affect the project's cash flow profile and
credit metrics.
S&P said, "The CreditWatch placement reflects our expectation that
the future clearing prices in the PJM ComEd zone will be
substantially lower than we previously anticipated. We now expect
capacity prices in the ComEd zone for the 2023/2024 delivery years
to clear at $45 per megawatt day (/MW-day), which compares with
$68.96/MW-day for the 2022/2023 delivery years. Given that Elwood
derives 60%-70% of its operating revenue from capacity payments, we
expect a material decline in the project's cash generating ability.
While we have not determined the magnitude of the revision's rating
impact on Elwood, we anticipate concluding our assessment and
resolving the CreditWatch in the next few weeks."
EMPACADORA Y PROCESADORA: Seeks Cash Collateral Access
------------------------------------------------------
Empacadora y Procesadora del Sur, Inc. asks the U.S. Bankruptcy
Court for the District of Puerto Rico for authority to use cash
collateral and provide adequate protection to secured creditor,
Banco Popular de Puerto Rico.
The Debtor requires the use of cash collateral to preserve the
value of the estate.
BPPR pursuant to certain UCC filings has a first rank lien over the
Debtor's account receivables and cash collateral. As of petition
date, the Debtor owes BPPR $2,932,601.
The value of the collateral as of the Filing Date was estimated to
be $2,502,354.
The Debtor will use cash collateral during the interim period for
its post-petition operational and restructuring obligations.
As adequate protection, the Debtor will make a monthly payment of
$13,896 to the Secured Creditor, which is based on the original
contractual interest rate over the value of the collateral as
detailed in the Budget.
To the extent there is a diminution in the value of the Secured
Creditor's interests in the Prepetition Collateral, the Secured
Creditor, is granted replacement liens in post petition
receivables, which Replacement Liens are valid, binding,
enforceable and fully perfected as of the Petition Date without the
necessity of the execution, filing or recording by the Debtor or
the Secured Creditor.
The Secured Creditor will also be granted an allowed administrative
claim under Bankruptcy Code Section 507(b) with respect to all
Adequate Protection obligations, to the extent that the Replacement
Liens do not adequately protect the diminution in the value of the
Secured Creditor's interests in the Collateral from the Petition
Date.
The total dollar amount requested as per the Budget is $4,685,201,
up until May 15, 2022. There is also a carve-out for U.S.
Trustee's fees of $10,963.
A copy of the motion is available at https://bit.ly/3I1hPZm from
PacerMonitor.com.
About Empacadora Y Procesadora Del Sur, Inc.
Empacadora Y Procesadora Del Sur, Inc. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No.
22-00354) on February 15, 2022. In the petition signed by Carlos C.
Rodriguez Alonso, president, the Debtor disclosed $11,604,565 in
assets and $10,598,204 in liabilities.
Alexis Fuentes Hernandez, Esq., at Fuentes Law Office represents
the Debtor as counsel.
ENDO INTERNATIONAL: Renaissance Entities Hold 6.47% Ordinary Shares
-------------------------------------------------------------------
Renaissance Technologies LLC and Renaissance Technologies Holdings
Corporation disclosed in a Schedule 13G/A filed with the Securities
and Exchange Commission that as of Dec. 31, 2021, they beneficially
owned 15,109,161 ordinary shares of Endo International plc,
representing 6.47 percent of the shares outstanding. A full-text
copy of the regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1593034/000103738922000130/endp-13g_20211231.txt
About Endo International plc
Endo International plc -- www.endo.com -- is a holding company that
conducts business through its operating subsidiaries. The
Company's focus is on pharmaceutical products and it targets areas
where it believes it can build leading positions.
As of Sept. 30, 2021, the Company had $9.24 billion in total
assets, $1.55 billion in total current liabilities, $22.52 million
in deferred income taxes, $8.05 billion in long-term debt (less
current portion), $35.15 million in operating lease liabilities
(less current portion), $274.06 million in other liabilities, and a
total shareholders' deficit of $690.32 million.
* * *
As reported by the TCR on Sept. 6, 2021, S&P Global Ratings lowered
its long-term issuer credit rating on Endo International PLC to
'CCC+' from 'B-' and removed the rating from CreditWatch, where S&P
placed it with negative implications on Aug. 25, 2021. The outlook
is negative. The negative outlook reflects the potential for an
event of default within the next 12 months stemming from
opioid-related litigation or the possibility of a distressed
exchange.
ESSA PHARMA: BB Biotech, Unit Report 11.4% Stake as of Dec. 31
--------------------------------------------------------------
BB Biotech AG and Biotech Growth N.V., a wholly-owned subsidiary of
BB Biotech, disclosed in a Schedule 13G/A filed with the Securities
and Exchange Commission that as of Dec. 31, 2021, they beneficially
own 5,015,814 shares of common stock of ESSA Pharma Inc.,
representing 11.4 percent of the shares outstanding. A full-text
copy of the regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1633932/000119312522037237/d283406dsc13ga.htm
About Essa
Vancouver, BC-based Essa Pharma, Inc. -- www.essapharma.com -- is a
clinical stage pharmaceutical company, focused on developing novel
and proprietary therapies for the treatment of prostate cancer in
patients whose disease is progressing despite treatment with
current standard of care therapies, including second-generation
anti-androgen drugs such as abiraterone, enzalutamide, apalutamide,
and darolutamide.
ESSA Pharma reported a loss and comprehensive loss of $36.81
million for the year ended Sept. 30, 2021, a loss and comprehensive
loss of $23.45 million for the year ended Sept. 30, 2020, and a net
loss and comprehensive loss of $12.75 million for the year ended
Sept. 30, 2019. As of Dec. 31, 2021, the Company had $191.49
million in total assets, $3.95 million in total liabilities, and
$187.54 million in shareholders' equity.
ESSA PHARMA: Janus Henderson Has 7.7% Equity Stake as of Dec. 31
----------------------------------------------------------------
Janus Henderson Group plc disclosed in a Schedule 13G filed with
the Securities and Exchange Commission that as of Dec. 31, 2021, it
beneficially owns 3,404,707 shares of common stock of ESSA Pharma
Inc., representing 7.7 percent of the shares outstanding. A
full-text copy of the regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1633932/000127417322000063/epix2102022.txt
About Essa
Vancouver, BC-based Essa Pharma, Inc. -- www.essapharma.com -- is a
clinical stage pharmaceutical company, focused on developing novel
and proprietary therapies for the treatment of prostate cancer in
patients whose disease is progressing despite treatment with
current standard of care therapies, including second-generation
anti-androgen drugs such as abiraterone, enzalutamide, apalutamide,
and darolutamide.
ESSA Pharma reported a loss and comprehensive loss of $36.81
million for the year ended Sept. 30, 2021, a loss and comprehensive
loss of $23.45 million for the year ended Sept. 30, 2020, and a net
loss and comprehensive loss of $12.75 million for the year ended
Sept. 30, 2019. As of Dec. 31, 2021, the Company had $191.49
million in total assets, $3.95 million in total liabilities, and
$187.54 million in shareholders' equity.
ESSA PHARMA: Pfizer Has 3.8% Equity Stake as of Dec. 31
-------------------------------------------------------
Pfizer Inc. disclosed in a Schedule 13G/A filed with the Securities
and Exchange Commission that as of Dec. 31, 2021, it beneficially
owns 1,675,000 shares of common stock of ESSA Pharma Inc.,
representing 3.81 percent of the shares outstanding.
The percentage is based on 44,015,870 shares of Common Stock
outstanding as set forth in the Issuer's Quarterly Report on Form
10-Q for the quarter ended on Dec. 31, 2021, filed with the SEC on
Feb. 3, 2022. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/1633932/000007800322000014/essa_sc13ga1222f.htm
About Essa
Vancouver, BC-based Essa Pharma, Inc. -- www.essapharma.com -- is a
clinical stage pharmaceutical company, focused on developing novel
and proprietary therapies for the treatment of prostate cancer in
patients whose disease is progressing despite treatment with
current standard of care therapies, including second-generation
anti-androgen drugs such as abiraterone, enzalutamide, apalutamide,
and darolutamide.
ESSA Pharma reported a loss and comprehensive loss of $36.81
million for the year ended Sept. 30, 2021, a loss and comprehensive
loss of $23.45 million for the year ended Sept. 30, 2020, and a net
loss and comprehensive loss of $12.75 million for the year ended
Sept. 30, 2019. As of Dec. 31, 2021, the Company had $191.49
million in total assets, $3.95 million in total liabilities, and
$187.54 million in shareholders' equity.
ESSA PHARMA: Vivo Opportunity Reports 1.4% Equity Stake
-------------------------------------------------------
In a Schedule 13G/A filed with the Securities and Exchange
Commission, these entities reported beneficial ownership of shares
of common stock of ESSA Pharma Inc. as of Dec. 31, 2021:
Shares Percent
Beneficially of
Reporting Person Owned Class
---------------- ------------ --------
Vivo Capital IX, LLC 119,156 0.3%
Vivo Opportunity, LLC 624,902 1.4%
The percentages are based on 44,015,870 shares of Common Stock of
the Issuer outstanding as of Feb. 3, 2022, as reported in the
Issuer's Quarterly Report on Form 10-Q filed with the SEC on Feb.
3, 2022.
The 119,156 shares of Common Stock are held of record by Vivo
Capital Fund IX, L.P. Vivo Capital IX, LLC is the general partner
of Vivo Capital Fund IX, L.P. The voting members of Vivo Capital
IX, LLC are Frank Kung, Edgar Engleman, Shan Fu, Hongbo Lu,
Mahendra Shah, Jack Nielsen and Michael Chang, none of whom has
individual voting or investment power with respect to these shares
and each of whom disclaims beneficial ownership of those shares.
The 624,902 shares of Common Stock are held of record by Vivo
Opportunity Fund Holdings, L.P. Vivo Opportunity, LLC is the
general partner of Vivo Opportunity Fund Holdings, L.P. The voting
members of Vivo Opportunity, LLC are Gaurav Aggarwal, Hongbo Lu,
Kevin Dai, Frank Kung and Michael Chang, none of whom has
individual voting or investment power with respect to these shares
and each of whom disclaims beneficial ownership of those shares.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1633932/000121390022007087/ea155475-13ga1vivo9_essa.htm
About Essa
Vancouver, BC-based Essa Pharma, Inc. -- www.essapharma.com -- is a
clinical stage pharmaceutical company, focused on developing novel
and proprietary therapies for the treatment of prostate cancer in
patients whose disease is progressing despite treatment with
current standard of care therapies, including second-generation
anti-androgen drugs such as abiraterone, enzalutamide, apalutamide,
and darolutamide.
ESSA Pharma reported a loss and comprehensive loss of $36.81
million for the year ended Sept. 30, 2021, a loss and comprehensive
loss of $23.45 million for the year ended Sept. 30, 2020, and a net
loss and comprehensive loss of $12.75 million for the year ended
Sept. 30, 2019. As of Dec. 31, 2021, the Company had $191.49
million in total assets, $3.95 million in total liabilities, and
$187.54 million in shareholders' equity.
FR FLOW CONTROL: S&P Affirms 'B-' ICR, Outlook Positive
-------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on FR
Flow Control Midco Ltd. The outlook remains positive.
S&P assigned a 'B-' issue-level rating and '3' recovery rating to
FR Flow Control CB LLC's incremental $75 million term loan B. S&P
also affirmed its 'B-' issue-level rating and '3' recovery rating
on its revolving credit facility and term loan B.
The positive outlook reflects the potential for a higher rating in
the next 12 months if the company can recover and maintain its S&P
Global Ratings-adjusted EBITDA margins, for example by successfully
navigating cost inflation and supply chain challenges, realizing
benefits of operational initiatives, and reining in restructuring
costs.
S&P said, "We expect a return to revenue growth in 2022, driven by
recovery in the company's original equipment business and continued
growth in its aftermarket business. Organic revenues declined
slightly in 2021, driven by a sizable drop in OE sales, partially
offset by growth in aftermarket sales. Fewer new projects, partly
due to supply chain constraints and a roll-off of large orders,
decreased original equipment sales revenue an estimated 14% in
2021, and we expect a partial recovery in 2022. We expect
aftermarket sales to continue growing in 2022 following a recovery
in 2021 from a slight decline in 2020 related to the COVID-19
pandemic. We believe industry-wide supply chain challenges and cost
inflation, coupled with continued costs from operational
initiatives, are likely to persist in 2022, depressing S&P Global
Ratings-adjusted EBITDA margins.
"We expect the proposed acquisition will strengthen FR Flow
Control's position in a core product line, while increasing
leverage. We believe the proposed acquisition of Termomeccanica
Pompe will improve scale in the company's API610 product line due
to increased breadth of offerings and potential for complementary
applications. We expect the debt-funded acquisition will result in
S&P Global Ratings-adjusted leverage in 2022 in the high-5x area.
"We believe cost inflation will continue to pressure gross margins
in both the OE and aftermarket businesses. In 2021, the company's
mix shifted from OE to aftermarket sales, driven primarily by a
decline in OE sales, resulting in a higher overall gross margin due
to the greater relative contribution of the higher-margin
aftermarket business. However, gross margins in the individual OE
and aftermarket businesses declined in 2021 primarily due to cost
inflation and mix, and we expect cost inflation to continue in
2022.
"We expect FR Flow Control's earnings and cash flows to remain
highly sensitive to costs associated with operational initiatives.
The company's S&P Global Ratings-adjusted EBITDA is highly
sensitive to changes in operating leverage due to its relatively
low margins, with one-time costs having an outsize impact on
earnings and cash flow. It incurred approximately $12 million of
restructuring costs in 2021, contributing to an estimated decline
in S&P Global Ratings-adjusted EBITDA of double-digit percentages
and S&P Global Ratings-adjusted EBITDA margins of approximately
100-150 basis points. Due to its ongoing operational initiatives
and integration with Termomeccanica Pompe, we expect additional
costs in 2022--albeit lower than in 2021--supporting a recovery in
S&P Global Ratings-adjusted EBITDA margins to the high-7% to low-8%
area from an estimated low-7% area in 2021.
"We expect free operating cash flow (FOCF) to be positive in 2022
and liquidity to remain adequate. FR Flow Control generated
approximately $5 million of FOCF in 2021, driven in part by a
favorable movement in working capital. The company had
higher-than-normal capital expenditures in 2021 to support one-time
projects, and we expect capital expenditure to decline to
approximately $11 million-$13 million in the coming year. We expect
lower restructuring costs and capital expenditures will increase
FOCF in 2022 to the $5 million-$10 million range. We expect
liquidity to remain adequate over the coming 12 months, supported
by an undrawn revolving credit facility, over $60 million cash on
hand at year-end 2021, and the company's track record of
maintaining ample cash balances."
The positive outlook reflects the potential for a higher rating in
the next 12 months if FR Flow Control can recover and maintain S&P
Global Ratings-adjusted EBITDA margins, improving S&P Global
Ratings-adjusted leverage and generating sufficient positive FOCF.
S&P could raise the rating if the company:
-- Recovers and maintains S&P Global Ratings-adjusted EBITDA
margin to its historical 8.5%-9.0%, for example by managing cost
inflation and supply chain challenges, realizing benefits of
operational initiatives, and lowering restructuring costs;
-- Maintains S&P Global Ratings-adjusted leverage comfortably
below 6x; and
-- Generates consistently positive FOCF.
S&P could revise the outlook to stable if the company:
-- Maintains or reduces its S&P Global Ratings-adjusted margin,
for example due to cost inflation pressure or continued
restructuring costs;
-- Engages in large, debt-funded acquisitions or dividends,
raising S&P Global Ratings-adjusted leverage to 6x or higher; or
-- Cannot sustain positive FOCF.
FULL HOUSE: Portolan Capital, George McCabe Report 5.37% Stake
--------------------------------------------------------------
Portolan Capital Management, LLC and George McCabe disclosed in a
Schedule 13G/A filed with the Securities and Exchange Commission
that as of Dec. 31, 2021, they beneficially owned 1,838,714 shares
of common stock of Full House Resorts, Inc., representing 5.37
percent of the shares outstanding. A full-text copy of the
regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/891482/000110465922020299/tm226177d10_sc13ga.htm
About Full House Resorts Inc.
Headquartered in Las Vegas, Nevada, Full House Resorts --
www.fullhouseresorts.com -- owns, leases, develops and operates
gaming facilities throughout the country. The Company's properties
include Silver Slipper Casino and Hotel in Hancock County,
Mississippi; Bronco Billy's Casino and Hotel in Cripple Creek,
Colorado; Rising Star Casino Resort in Rising Sun, Indiana; and
Stockman's Casino in Fallon, Nevada. The Company also operates the
Grand Lodge Casino at the Hyatt Regency Lake Tahoe Resort, Spa and
Casino in Incline Village, Nevada under a lease agreement with the
Hyatt organization. The Company is currently constructing a new
luxury hotel and casino in Cripple Creek, Colorado, adjacent to its
existing Bronco Billy's property.
Full House reported net income of $147,000 for the year ended Dec.
31, 2020, compared to a net loss of $5.82 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $470.09
million in total assets, $362.77 million in total liabilities, and
$107.32 million in stockholders' equity.
* * *
As reported by the TCR on Feb. 9, 2021, Moody's Investors Service
assigned a Caa1 Corporate Family Rating and Caa1-PD Probability of
Default Rating to Full House Resorts Inc. (FHR). The Caa1 CFR
reflects the long, approximately 24 months, Bronco Billy's
construction period, uncertainty related to the level of visitation
and earnings at the redesigned property, FHR's modest scale, and
exposure to cyclical discretionary consumer spending.
GIGA-TRONICS INC: AWM Investment Reports 7.4% Equity Stake
----------------------------------------------------------
AWM Investment Company, Inc. disclosed in a Schedule 13G/A filed
with the Securities and Exchange Commission that as of Dec. 31,
2021, it beneficially owns 237,383 shares of common stock of
Giga-tronics Incorporated, representing 7.4 percent of the shares
outstanding.
AWM Investment Company, is the investment adviser to Special
Situations Technology Fund, L.P. and Special Situations Technology
Fund II, L.P. As the investment adviser to the Funds, AWM holds
sole voting and investment power over 36,781 shares of common stock
of the issuer held by TECH and 200,602 shares held by TECH II.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/719274/000153526422000006/giga13g123121t.txt
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-tronics is a publicly
held company, traded on the OTCQB Capital Market under the symbol
"GIGA". Giga-tronics -- http://www.gigatronics.com-- produces
RADAR filters and Microwave Integrated Components for use in
military defense applications as well as sophisticated RADAR and
Electronic Warfare (RADAR/EW) test products primarily used in
electronic warfare test & emulation applications.
Giga-Tronics reported a net loss attributable to common
shareholders of $407,000 for the year ended March 27, 2021,
compared to a net loss attributable to common shareholders of $2.03
million for the year ended March 28, 2020. As of Dec. 25, 2021,
the Company had $8.13 million in total assets, $3.47 million in
total liabilities, and $4.66 million in total shareholders' equity.
GIRARDI & KEESE: Trustee Asks to Review Litigation Lenders Again
----------------------------------------------------------------
Brandon Lowrey of Law360 reports that Girardi Keese's bankruptcy
trustee is trying to hire lawyers to investigate whether litigation
lenders improperly lent tens of millions of dollars to the firm,
seeking approval from a Los Angeles bankruptcy judge who rejected
her first -- and perhaps more expensive -- choice of counsel.
Trustee Elissa Miller of SulmeyerKupetz PC pitched a plan late
Tuesday to have her special counsel, Larry Gabriel of Jenkins
Mulligan & Gabriel LLP, pursue possible claims against the
companies. U.S. Bankruptcy Judge Barry Russell scrapped Miller's
previous request to hire San Francisco-based Girard Sharp LLP amid
creditors' complaints.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
GROVEHAUS LLC: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Grovehaus, LLC, according to court dockets.
About Grovehaus LLC
Miami-based Grovehaus, LLC filed a petition for Chapter 11
protection (Bankr. S.D. Fla. Case No. 22-10036) on Jan. 3, 2022,
listing as much as $10 million in both assets and liabilities.
Kelly Beam, owner of Grovehaus, signed the petition.
Judge Laurel M. Isicoff oversees the case.
Christina Vilaboa Abel, Esq., and Vanessa C. Angulo, Esq., at CAVA
Law, LLC serve as the Debtor's bankruptcy attorneys.
GUADALUPE REGIONAL MEDICAL CENTER: S&P Affirms 'BB' Bonds Rating
----------------------------------------------------------------
S&P Global Ratings revised its outlook to positive from stable and
affirmed its 'BB' long-term rating on the Joint Guadalupe
County-City of Seguin Hospital Board of Managers, doing business as
Guadalupe Regional Medical Center (GRMC), Texas' series 2015
revenue refunding and improvement bonds.
"The outlook revision reflects strong profitability in fiscal 2021
and through the interim period ended Dec. 31, 2021, albeit more in
line with historical profitability and less exceptional than fiscal
2021," said S&P Global Ratings credit analyst Alexander Nolan.
While fiscal 2020 operations would not have been profitable absent
recognized provider relief funds, profitability in fiscal 2021 was
even higher and would have been profitable without provider relief
funds, despite the pandemic's impact on the hospital and the
industry. S&P expects GRMC will also generate a healthy operating
gain through the remainder of fiscal 2022, but not as large as in
fiscal 2021. The outlook revision also reflects unrestricted
reserves growth tied to improved profitability which it expects
will be at least stable given the conservative investment
allocation and projected positive cash flows. Although certain
balance-sheet metrics remain below those of investment-grade peers,
operating cash flows have led to material improvement of most
balance-sheet metrics.
"The rating reflects another year of focus on building the
outpatient volumes in and around GRMC's primary service area while
navigating the pandemic, as well as recruiting physicians to align
with community needs," Mr. Nolan added. S&P continues to believe
that GRMC operates in a small but fast-growing market that is quite
fragmented and competitive in Texas. GRMC made some progress
towards limiting out-migration to San Antonio during the pandemic,
including in service lines such as obstetrics and orthopedic care.
This is reflected in the improved market share figure, which is
still low, in its view, given the fragmentation in the market.
S&P said, "The rating also reflects the high leverage, although we
recognize the favorable deleveraging trend, and a days' cash on
hand position that is favorable to the rating category when
expenses associated with participation in the nursing home quality
incentive improvement program are excluded." GRMC has one series of
public bonds outstanding, the series 2015 bonds, which are
amortizing and lead to a stable debt service payment schedule.
Management does not have any sizable debt plans in the outlook
period and GRMC has no acceleration risk in the form of contingent
debt, leading to a highly levered but manageable debt profile.
HELIUS MEDICAL: AIGH, Orin Hirschman Report 6.8% Stake
------------------------------------------------------
AIGH Capital Management, LLC and Orin Hirschman disclosed in a
Schedule 13G filed with the Securities and Exchange Commission that
as of Dec. 31, 2021, they beneficially own 255,400 shares of common
stock of Helius Medical Technologies, Inc., representing 6.8
percent of the shares outstanding. A full-text copy of the
regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1610853/000149315222003908/formsc13g.htm
About Helius Medical
Helius Medical Technologies -- http://www.heliusmedical.com-- is a
neurotech company focused on neurological wellness. Its purpose is
to develop, license or acquire non-invasive technologies targeted
at reducing symptoms of neurological disease or trauma.
Helius Medical reported a net loss of $14.13 million for the year
ended Dec. 31, 2020, compared to a net loss of $9.78 million for
the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company
had $7.88 million in total assets, $2.84 million in total
liabilities, and $5.04 million in total stockholders' equity.
Philadelphia, Pennsylvania-based BDO USA, LLP issued a "going
concern" qualification in its report dated March 10, 2021, citing
that the Company has incurred substantial net losses since its
inception, has an accumulated deficit of $118.9 million as of Dec.
31, 2020 and the Company expects to incur further net losses in the
development of its business. These conditions raise substantial
doubt about its ability to continue as a going concern.
HERITAGE POWER: S&P Places 'B' Secured Debt Rating on Watch Neg.
----------------------------------------------------------------
S&P Global Ratings placed its 'B' rating on Heritage Power LLC's
senior secured debt on CreditWatch with negative implications.
S&P expects to resolve the CreditWatch in the coming weeks as it
assesses the impact of its capacity price revision on Heritage's
credit metrics.
S&P has lowered its future capacity price assumptions for various
power markets, including the Pennsylvania-Jersey-Maryland
Interconnection (PJM).
S&P expects Heritage will generate materially less cash flow from
capacity payments than previously expected.
The CreditWatch placement reflects the possibility of a negative
rating action. S&P said, "We anticipate future clearing prices in
select capacity markets, particularly Pennsylvania-Jersey-Maryland
Interconnection (PJM), will be materially lower than previously
expected. We are making some significant revisions to our
assumptions, including Eastern MAAC (EMAAC) and Mid-Atlantic Area
Council (MAAC), which are Heritage's main zones. For EMAAC, we now
expect it will clear at about $95/megawatt (MW)-day in 2023-2024
and $110/MW-day in the 2024-2025 delivery years. We previously
assumed $140/MW-day starting in the 2023-2024 auction. For MAAC, we
assume a price of $80/MW-day for 2023-2024 and $90/MW-day for the
2024-2025 delivery years, compared with $120/MW-day starting in the
2023-2024 auction. Lower capacity prices should result in
meaningfully lower near-term cash flow generation at Heritage. We
estimate that Heritage generates more than 80% of its gross margin
from capacity payments; therefore, it lacks a significant level of
energy margin to mitigate against volatility in capacity prices."
HERTZ CORP: False Police Report Claimants Defend Counsel
--------------------------------------------------------
PJ D'Annunzio of Law360 reports that a group of rental car
customers alleging Hertz filed false police reports against them
told a Delaware bankruptcy judge that an effort by Hertz to
disqualify their out-of-state counsel is the company's latest
attempt to discourage them from pursuing their claims.
In court papers filed late Monday supporting the admission of
attorneys Francis Malofiy and Alfred J. Fluehr of Francis Alexander
LLC to Hertz's bankruptcy case, the claimants argued Hertz wants to
block the lawyers from the false police report case because they've
previously represented people who sued Hertz for falsely accusing
them of theft.
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com/--
operate a worldwide vehicle rental business under the Hertz,
Dollar, and Thrifty brands, with car rental locations in North
America, Europe, Latin America, Africa, Asia, Australia, the
Caribbean, the Middle East, and New Zealand. They also operate a
vehicle leasing and fleet management solutions business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases.
The Debtors have tapped White & Case LLP as their bankruptcy
counsel, Richards, Layton & Finger, P.A., as local counsel, Moelis
& Co. as investment banker, and FTI Consulting as financial
advisor. The Debtors also retained the services of Boston
Consulting Group to assist the Debtors in the development of their
business plan. Prime Clerk LLC is the claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a Committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
Committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC, as financial advisor. Ernst & Young
LLP provides audit and tax services to the Committee.
* * *
Hertz Global and its subsidiaries emerged from Chapter 11
bankruptcy at the end of June 2021. Hertz won approval of a Plan
of Reorganization that unimpaired all classes of creditors (who are
legally deemed to have accepted it) and was approved by more than
97% of voting shareholders. The Plan provided for the existing
shareholders to receive more than $1 billion of value.
Recovery by shareholders of close to $8 a share was made possible
after a fierce competition among bidders for control in the
company. Initial offers from potential bidders for Hertz in its
bankruptcy offered nothing for equity. Hertz in May 2021 selected
investment firms Knighthead Capital Management LLC and Certares
Management LLC, joined by joined by other investors including
Apollo Global Management Inc. and a group of existing shareholders,
as the winning bidders for control of the bankrupt company. A
rival group that included Centerbridge Partners LP, Warburg Pincus
LLC and Dundon Capital Partners LLC was outbid at auction.
Hertz's Plan eliminated over $5 billion of debt, including all of
Hertz Europe's corporate debt, and will provide more than $2.2
billion of global liquidity to the reorganized Company. Hertz also
emerged with (i) a new $2.8 billion exit credit facility consisting
of at least $1.3 billion of term loans and a revolving loan
facility, and (ii) an $7 billion of asset-backed vehicle financing
facility, each on favorable terms.
HORIZON GLOBAL: Borrows $35M Under Amended Credit Agreement
-----------------------------------------------------------
Horizon Global Corporation entered into a Consent and First
Amendment to Credit Agreement, which amends the Term Loan Credit
Agreement, dated as of Feb. 2, 2021, with Atlantic Park Strategic
Capital Fund, L.P., as administrative agent and collateral agent,
and the lenders party thereto. The Amendment provides for a
delayed draw term loan facility in the aggregate principal amount
of $35,000,000, which may be drawn by the Company in one
installment through June 30, 2022. A ticking fee in the amount of
25 basis points per annum will accrue on the undrawn portion of the
delayed draw term loan commitments. The Company has borrowed the
First Amendment Delayed Draw Term Loan in full.
All amounts drawn under the delayed draw term loan facility are
governed by the existing terms of the Company's term loan agreement
with Atlantic Park. In connection with the term loan agreement
amendment, the Company issued Atlantic Park warrants to purchase up
to 975,000 shares of the Company's common stock at an exercise
price of $9.00 per share.
Series B Preferred Commitment Letter
The Company also executed a commitment letter with Corre to issue,
solely at the Company's option, up to $40.0 million of Series B
Preferred Stock. To the extent issued, the net proceeds of the
Series B Preferred may be used to repay up to $35.0 million of the
Company's outstanding convertible senior notes at maturity on
July 1, 2022 and, following such repayment, for general corporate
purposes. If needed and issued, the Series B Preferred Stock would
accrue dividends in kind at a rate of 11.0% per annum. The Series
B Preferred Stock would be perpetual, but subject to voluntary
redemption by the Company at its option and subject to mandatory
redemption upon a change in control or the one-year anniversary of
the maturity of the term loans. Additionally, if issued, if the
Series B Preferred Stock is not redeemed after the occurrence of
certain events, it would be convertible into common stock, at the
option of Corre and subject to shareholder approval. The
commitment letter expires on July 1, 2022.
"We'd like to thank two of our largest stakeholders, Corre and
Atlantic Park, for their continued support of our long-term
strategic plan as we addressed macroeconomic headwinds through the
fourth quarter of 2021 and into early 2022," stated Terry Gohl,
Horizon Global's president and chief executive officer.
"Increasing supply chain constraints throughout the quarter and
persistent microchip shortages leading to sudden OE production
shutdowns throttled our ability to invoice against an otherwise
historically strong open order book. Inventories significantly
increased given delays in logistics from an abnormally high level
of port traffic and we experienced significant operational
inefficiencies in many jurisdictions where we are unable to rapidly
flex our labor force to match our ability to produce. We expect
this funding to support our temporary working capital needs as we
improve our inventory turns, allowing us to better and more
reliably fill open orders and service continued heightened demand
levels during the upcoming selling season."
Gohl continued, "Additionally, the funds will also support our
strategy to benefit from a continued expansion of our low-cost
country manufacturing facility in Eastern Europe. Despite
industry-wide supply chain headwinds, we continue to take actions
to improve the foundation of our business, and we expect this
investment to solidify the Company as a best-in-class,
cost-competitive supplier to our major OEM customers in Europe."
Preliminary Fourth Quarter and Full Year Financial Results
The preliminary financial results announced today cover the fourth
quarter and full year results for the period ended Dec. 31, 2021:
* Net sales for the fourth quarter of 2021 of approximately
$164.3 million, an approximate $11.6 million decrease compared to
fourth quarter of 2020
* Loss from continuing operations before income tax for the
fourth quarter of 2021 of approximately $19.4 to $20.9 million, an
approximate $11.9 to $13.4 million deterioration compared to fourth
quarter of 2020
* Adjusted EBITDA(1) for the fourth quarter of 2021 of
approximately $(8.3) to $(9.8) million, an approximate $15.6 to
$17.1 million deterioration from the fourth quarter of 2020
* Net sales for the full year 2021 of approximately $782.1
million, an approximate $120.9 million increase compared to prior
year
* Loss from continuing operations before income tax for the full
year 2021 of approximately $33.6 to $35.1 million, an approximate
$4.0 to $5.5 million improvement compared to prior year
* Adjusted EBITDA(1) for the full year 2021 of approximately
$33.9 to $35.4 million, an approximate $7.5 to $9.0 million
improvement compared to prior year
Gohl commented, "We are disappointed with our fourth quarter 2021
financial performance, which was adversely affected by short-term,
industry-wide supply chain headwinds. We remain focused on
long-term value creation and continue to identify and execute
operational improvement initiatives across our global operations.
Further, with our iconic brands and strong open order book of
approximately $58.8 million in North America at the end of 2021,
which reflects a 17.4% increase over the end of 2020, we expect to
progress against our long-term financial objectives in 2022 and
beyond. When we release our fourth quarter and full year 2021
earnings in March, we will give a more detailed outlook on our
positive view of 2022 and why we remain confident in achieving our
long-term financial targets, including double-digit adjusted EBITDA
margins."
About Horizon Global
Horizon Global -- http://www.horizonglobal.com-- is a designer,
manufacturer, and distributor of a wide variety of
custom-engineered towing, trailering, cargo management and other
related accessory products in North America, Australia and Europe.
The Company serves OEMs, retailers, dealer networks and the end
consumer.
Horizon Global reported a net loss attributable to the Company of
$36.56 million for the 12 months ended Dec. 31, 2020, compared to
net income attributable to the company of $80.75 million for the 12
months ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had
$468.33 million in total assets, $494.26 million in total
liabilities, and a total shareholders' deficit of $25.93 million.
HUACHEN ENERGY: U.S. Court Recognizes PRC Plan
----------------------------------------------
Huachen Energy Co., Ltd., one of the largest privately-owned power
generating companies in the People's Republic of China (PRC),
disclosed that following a substantive hearing of the bankruptcy
administrator's application, the US Bankruptcy Court granted
recognition of Huachen's PRC reorganization plan under Chapter 15
of the US Bankruptcy Code, together with other ancillary relief
sought by the administrator.
The Bankruptcy Court entered an Order Recognizing Foreign
Proceeding and Granting Related Relief, and as a result, the
reorganization plan in respect of the company (including the
releases set out in the plan), as well as the order of the No. 1
Intermediate People's Court of Beijing approving the plan, are now
recognized and given full force and effect in the United States and
are binding and fully enforceable in accordance with their terms.
Latham & Watkins advised Huachen Energy Co., Ltd. on the successful
restructuring of its New York law-governed US$500 million senior
notes, through a PRC bankruptcy reorganization proceeding, coupled
with a consent solicitation exercise, and the first-ever Chapter 15
recognition of a PRC reorganization plan in the US. At the end of
the hearing, the Honorable Judge Beckerman remarked that she was
happy to see another PRC case as there are "not so many of them."
The company will now proceed with remaining steps for implementing
the restructuring of the notes, which upon completion will result
in the noteholders receiving a restructured note that remains
tradable via the clearing systems and the Singapore Exchange,
rather than just a (heavily discounted) cash payout.
Latham represented Huachen Energy Co., Ltd. with a cross-border
deal team led by Hong Kong partner Howard Lam, with Hong Kong
counsel Tingfei Fan, and associates Flora Innes and Kevin Chow. The
US team advising on the Chapter 15 application was led by
Chicago/New York partner Caroline Reckler, with associates Jeramy
Webb and Jon Weichselbaum.
About Huachen Energy
Huachen Energy Co., Ltd. is a private thermal power generator in
the PRC, owning and operating thermal coal and gas-fired plants as
well as renewable energy photovoltaic power plants. Its power
generation business is primarily located in the Jiangsu and Henan
provinces of the PRC.
On Jan. 4, 2022, Huachen Energy Co. filed a Chapter 15 petition
(Bankr. S.D.N.Y. Case No. 22-10005) on Jan. 4, 2022, to seek U.S.
recognition of its restructuring proceedings No. 1 Intermediate
People's Court of Beijing. The Hon. Lisa G. Beckerman is the U.S.
judge.
Ernst & Young Hua Ming LLP is the foreign representative. LATHAM &
WATKINS LLP, led by Caroline A. Reckler, Jonathan J. Weichselbaum,
Alexandra M. Zablocki, Jeramy D. Webb, and Andrew J. Miller, is the
U.S. counsel.
HYPERVIBE INC: Court Set to Close Bankruptcy Case
-------------------------------------------------
WHBY reports that a federal judge is set to close the bankruptcy
case involving the promoters of Country and Rock U-S-A in Oshkosh.
Hypervibe Incorporated of Neenah shut down operations in the fall
of 2020 after canceling both of that year's festivals due to the
pandemic. Hypervibe had debts totaling $4.5 million -- with assets
of just $708,000. In closing the case, the executor notes that
they were unable to provide refunds to several hundred people
totaling more than $8300.
About Hypervibe Inc.
Hypervibe Inc. is located in Neenah, Wisconsin and is part of the
promoters of sports, performing arts, Sports, and similar events.
Hypervibe Inc. filed for voluntary Chapter 7 bankruptcy protection
(Bankr. E.D. Wis. Case No. 20-27367) on Nov. 10, 2020. In its
petition, Hypervibe Inc. listed assets of $707,876 and liabilities
of $4,469,877. Paul G. Swanson is the Debtor's counsel.
IM SERVICES: Seeks to Hire Olsen Hendricks & Webster as Accountant
------------------------------------------------------------------
IM Services Group, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Idaho to hire Olsen Hendricks & Webster
as its accountant.
The firm's services include:
a. providing as-needed financial accounting services,
including ongoing financial accounting entries, reports and
statements;
b. preparing federal and state income tax returns with
supporting schedules and related tax report filings, and performing
related research as necessary;
c. consulting and assisting with tax liability projections;
d. assisting with the preparation of monthly operating reports
and other financial reporting and analyses; and
e. attending conference calls, meetings and hearings.
The firm received a retainer in the amount of $5,000.
As disclosed in court filings, Olsen does not hold any interest
adverse to the Debtor's estate upon which it is to be engaged.
The firm can be reached through:
Tony Hendricks, CPA
Olsen, Hendricks, & Webster CPAS
132 SW 5th Ave. Suite 100
Meridian, ID 83642
Phone: (208) 888-1595
Fax: (208) 888-1596
About IM Services Group
IM Services Group, LLC is an engineering company that provides
turn-key engineering, design and construction management services
to clients in a range of industries, including the pipeline
construction industry. The company is based in Boise, Idaho.
IM Services Group filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No.
21-00737) on Dec. 28, 2021, listing $20,479,785 in assets and
$21,829,475 in liabilities. Judge Noah G. Hillen presides over the
case.
Matthew T. Christensen, Esq., at Johnson May and Olsen, Hendricks,
& Webster CPAS serve as the Debtor's legal counsel and accountant,
respectively.
INSPIREMD INC: Lind Global, et al. Report 2.1% Equity Stake
-----------------------------------------------------------
Lind Global Macro Fund LP, Lind Global Partners LLC, and Jeff
Easton disclosed in a Schedule 13G/A filed with the Securities and
Exchange Commission that as of Dec. 31, 2021, they beneficially own
177,333 shares of common stock of InspireMD, Inc., representing 2.1
percent of the shares outstanding.
Lind Global Partners LLC, the general partner of Lind Global Macro
Fund, LP, may be deemed to have sole voting and dispositive power
with respect to the shares held by Lind Global Macro Fund, LP.
Jeff Easton, the managing member of Lind Global Partners LLC, may
be deemed to have sole voting and dispositive power with respect to
the shares held by Lind Global Macro Fund, LP.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1433607/000092963822000422/sc13g.htm
About InspireMD Inc.
Headquartered in Tel Aviv, Israel, InspireMD --
http://www.inspiremd.com-- is a medical device company focusing on
the development and commercialization of its proprietary MicroNet
stent platform technology for the treatment of complex vascular and
coronary disease. A stent is an expandable "scaffold-like" device,
usually constructed of a metallic material, that is inserted into
an artery to expand the inside passage and improve blood flow. Its
MicroNet, a micron mesh sleeve, is wrapped over a stent to provide
embolic protection in stenting procedures.
InspireMD reported a net loss of $10.54 million for the year ended
Dec. 31, 2020, a net loss of $10.04 million for the year ended Dec.
31, 2019, and a net loss of $7.24 million for the year ended Dec.
31, 2018. As of Sept. 30, 2021, the Company had $42.61 million in
total assets, $5.54 million in total liabilities, and $37.06
million in total equity.
INTERNATIONAL GAME: S&P Upgrades ICR to 'BB+' on Improved Leverage
------------------------------------------------------------------
S&P Global Ratings raised its ratings, including its issuer credit
rating, one notch to 'BB+' from 'BB' on global lottery operator and
gaming technology provider International Game Technology PLC
(IGT).
S&P said, "The stable outlook reflects our forecast for adjusted
FFO to debt in the high-teens percent area and leverage in the
3.5x-4x area through 2023, which provides some cushion relative to
our downgrade thresholds to absorb modest underperformance or
higher than expected investments in new contracts.
“We forecast IGT's EBITDA generation will support adjusted
leverage below 4.5x.Our forecast for adjusted leverage incorporates
our assumption that IGT's 2022 EBITDA is about flat year over year
as revenue growth in the company's gaming, and digital and betting
segments, is largely offset by our assumption that revenue in IGT's
lottery segment may decline between 5% and 10% in 2022. IGT's 2021
lottery revenue grew about 30% year over year and about 22%
relative to 2019, based on estimated 2021 year-end results. The
strong growth in 2021 was driven in part by a lack of many leisure
options and higher levels of consumer discretionary income, in
addition to incentive payments IGT received related to certain
contracts. We believe some of this strong demand may wane in 2022
as more leisure options are available and consumers deplete their
accumulated savings. In addition, we do not expect IGT to receive
similar incentive payments in 2022.
"Nevertheless, and notwithstanding our assumed revenue decline in
lottery, we expect lottery revenue to remain above pre-pandemic
levels through 2023. We believe IGT's lottery segment, which
comprises the majority of its operating income, will continue to
benefit from good levels of demand driven by the roll out of new
product offerings (such as new price point games, game add-ons, new
jackpots), improved market analytics, an expansive customer base,
and the relatively low cost and ease of convenience for lottery
play.
"We believe revenue in IGT's gaming segment will continue to grow
but remain below pre-pandemic levels through 2022 and into 2023. We
assume gaming service revenue growth in 2022 will be driven by
having about 100% of the company's installed base units active,
compared to around 85% active, on average, in 2021. Furthermore, we
believe casinos will continue to experience good gaming demand,
albeit at reduced levels compared to 2021 because we believe the
strong gaming demand experienced at most U.S. casinos in 2021 may
subside modestly in 2022 as consumers deplete accumulated savings
and government stimulus funds and resume broader travel and leisure
activities. We also assume gaming operators will increase
investments in gaming equipment over the next several quarters
given the recovery in their cash flows. However, given the
potential for some revenue variability resulting from less consumer
demand, possible fallout from virus variants, and the ongoing high
cost of service-related labor, we believe operators may remain
cautious in the next few quarters and limit their investment
spending on gaming equipment."
Furthermore, S&P believes IGT will maintain the cost reductions it
achieved over the past several quarters and realize incremental
cost savings over the next few quarters, which should help offset
our assumption of increased input and other costs due to inflation.
IGT achieved about $150 million in cost savings in 2021, and the
company is planning about another $50 million in operating expense
savings through 2023. These cost reductions are incremental to
those achieved and planned for capital expenditures (capex).
IGT's financial policy is aligned with maintaining adjusted
leverage under 4.5x. IGT's publicly articulated net leverage
forecast for 2022 is 3.5x to 4.0x, and its long-term net leverage
target is 2.5x-3.5x over the investment cycle. IGT's measure of net
leverage is about 0.25x to 0.75x lower compared to our measure of
adjusted leverage. S&P said, "As a result, we believe the company's
net leverage target fits within the threshold for IGT at the 'BB+'
rating. Furthermore, IGT has reinstated its quarterly dividend to
shareholders and has launched a $300 million multiyear share
repurchase program. Our forecast for adjusted leverage to remain
under 4.5x incorporates annual dividends of around $165 million and
our assumption for modest levels of share repurchases."
The resiliency of IGT's lottery segment has supported its cash flow
recovery and leverage improvement. IGT's good position in U.S. and
international lottery markets provided some stability during the
pandemic and softened the blow from significantly lower revenue in
the gaming segment. IGT is the largest provider of lottery services
and solutions globally and has leading market positions in Italy
(more than 90% market share in terms of wagers) and the U.S. (more
than 75%). S&P views the segment as less volatile than its gaming
operations even in an economic downturn since lotteries have
relatively low prices and customers have easier access given the
number of retailers who sell lottery products, including grocery
stores, gas stations, and convenience stores. The segment also
accounts for about two-thirds of IGT's profits, despite a
relatively even split historically between lottery and gaming
revenues.
IGT's lottery segment benefits from multiyear service contracts and
extensions, which typically last five-10 years, and high contract
retention rates, which supports its strong market position.
Municipalities face high switching costs and risks when they change
providers. Typically the new operator would need to install new
technology, including systems and point-of-sale terminals, which
could disrupt sales and tax revenue. The industry also benefits
from high barriers to entry given the complex regulatory and
licensing requirements and substantial upfront capital investment
and expertise needed to secure new contracts. Notwithstanding high
barriers to entry, competition for lottery contracts and renewals
remains high among a small number of competitors. Intense
competition for contracts, as well as governments' needs for
additional funding to support their budgets, can result in pricing
pressure. In addition, securing new contracts or renewals can be
capital intensive because jurisdictions may require upfront
payments, and lottery operators typically incur new contract or
renewal capex to install or upgrade any required technology
equipment.
S&P said, "The stable outlook reflects our forecast for adjusted
FFO to debt to remain in the high-teens percent area and adjusted
leverage to remain in the 3.5x-4x range through 2023, which
provides some cushion relative to our 4.5x downgrade threshold to
absorb modest underperformance or higher-than-expected investments
in new contracts.
"We could lower ratings if IGT sustains adjusted leverage above
4.5x or FFO to debt below 15%. This could occur if EBITDA is about
15% lower, or capex is materially higher than what we are
forecasting.
"Higher ratings are unlikely within the next few years given our
forecasted leverage and the company's stated financial policy
around leverage. However, we could consider higher ratings if the
company maintains adjusted leverage below 3.75x over the investment
cycle."
ESG Credit Indicators: E-2; S-3; G-2
IRONSIDE LLC: Seeks to Hire Tranzon Asset Advisors as Auctioneer
----------------------------------------------------------------
Ironside, LLC seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to employ Tranzon Asset Advisors to
auction its personal property consisting of equipment, machinery
and inventory.
The auction will be conducted in two phases. In phase one, Tranzon
will attempt to auction the personal property as a sale for the
Debtor's entire business. The reserve price for such sale is $1
million, which means that the Debtor has the option to refuse to
sell its business to a qualified bidder who offers less than the
reserve amount.
If the personal property cannot be sold as a single business, then
Tranzon will proceed with the second phase, which involves an
absolute auction (without any minimum or reserve) to be held on or
before May 5.
Tranzon will receive a "buyer's premium" of 15 percent, which means
that 15 percent of the purchase price will be added to the winning
bidder's purchase price. Moreover, the firm will receive expense
reimbursement as follows: (i) up to $5,500 for expenses incurred
during the first phase of the auction; and (ii) up to $10,500 for
expenses incurred during the second phase of the auction.
As disclosed in court filings, Tranzon is a disinterested person
within the meaning of Section 101(14) of the Bankruptcy.
The firm can be reached through:
Kelly D. Toney, CAI
Tranzon Asset Advisors
Houston, TX
Office: 270-769-0284
Mobile: 713-816-1123
Email: ktoney@tranzon.com
About Ironside
Ironside, LLC -- https://ironsidemfg.com -- designs and builds a
line of thru-tubing mud motors and other components for the
oilfield industry. Its products include bearings, transmissions,
components, motors, agitator, and dual flapper valve.
Ironside, LLC and its affiliate, Ironside Lubricants, LLC, filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-34222) on Aug.
20, 2020. Randy Riney, managing member, signed the petitions. At
the time of the filing, Ironside, LLC listed up to $10 million in
assets and up to $1 million in liabilities.
Judge Eduardo V. Rodriguez oversees the cases.
Pendergraft & Simon, LLP and Funderburk, Funderburk, Courtois, LLP
serve as the Debtors' bankruptcy counsel and special litigation
counsel, respectively. Compton & Wendler, P.C. is the Debtor's
forensic accountant.
IRONSIDE LLC: Taps Compton & Wendler as Forensic Accountant
-----------------------------------------------------------
Ironside, LLC and Ironside Lubricants, LLC seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Compton & Wendler, P.C. to perform forensic accounting services,
and Jeffrey Compton to act as expert consultant and potential
expert witness.
The firm's services include:
a. rebutting the opinions of the damages expert employed by
Lubechem with respect to the Debtors' objection to Lubechem's
claim; and
b. providing forensic accounting services and potential expert
witness testimony needed by the Debtors to rebut Lubchem's motion
to appoint a Chapter 11 trustee or to convert the Debtors' cases to
Chapter 7 cases.
Compton & Wendler will charge $90 to $515 per hour for the services
of Mr. Compton and his associates and employees. The firm will
also seek reimbursement for expenses.
The retainer fee requested by the firm is $40,000.
As disclosed in court filings, Compton & Wendler is disinterested
except the firm continues to provide professional services to
Fulkerson & Lotz, a creditor of the Debtors.
The firm can be reached through:
Jeffrey Compton, CPA
Compton & Wendler, P.C.
Two Houston Center 909 Fannin, Ste 3275
Houston, TX 77010
Phone: 713-351-7110
Fax: 713-659-8730
Email: jeff@cw-cpa.com
About Ironside
Ironside, LLC -- https://ironsidemfg.com -- designs and builds a
line of thru-tubing mud motors and other components for the
oilfield industry. Its products include bearings, transmissions,
components, motors, agitator, and dual flapper valve.
Ironside, LLC and its affiliate, Ironside Lubricants, LLC, filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-34222) on Aug.
20, 2020. Randy Riney, managing member, signed the petitions. At
the time of the filing, Ironside, LLC listed up to $10 million in
assets and up to $1 million in liabilities.
Judge Eduardo V. Rodriguez oversees the cases.
Pendergraft & Simon, LLP and Funderburk, Funderburk, Courtois, LLP
serve as the Debtors' bankruptcy counsel and special litigation
counsel, respectively. Compton & Wendler, P.C. is the Debtor's
forensic accountant.
JAFFAN INTERNATIONAL: Seeks Cash Collateral Access
--------------------------------------------------
Jaffan International, LLC asks the U.S. Bankruptcy Court for the
Middle District of Florida, Tampa Division, for authority to use
cash collateral, retroactive to the petition date, in accordance
with the budget, with a 10% variance and provide adequate
protection.
The Debtor requires the use of cash collateral to fund its
operating expenses and costs of administration in the Chapter 11
case for the duration of the chapter 11 case.
The creditors that may assert blanket liens against the Debtor's
assets are US Foods, Inc. and Syndimate 2017 LP.
The Debtor estimates the collective claims of the Secured Creditors
are secured by $71,924. The Secured Creditor Assets include $19,899
in inventory, cash, and accounts receivables which the Debtor
expects to collect.
As adequate protection for the use of cash collateral, the Debtor
offers the Secured Creditors a post-petition replacement liens on
the Secured Creditor Assets to the same extent, validity, and
priority as existed pre-petition.
A copy of the motion is available at https://bit.ly/3uUaMOv from
PacerMonitor.com.
About Jaffan International, LLC
Jaffan International, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00459) on
February 4, 2022. In the petition signed by Ahmad Maher AlJaffan,
managing member, the Debtor disclosed up to $500,000 in both assets
and liabilities.
Buddy D. Ford, Esq., at Buddy D. Ford, P.A. is the Debtor's
counsel.
JOHNSON & JOHNSON: Has 'Perverse' Chapter 11 Incentive
------------------------------------------------------
Bloomberg News reports that a restructuring expert testified in
court Wednesday, February 16, 2022, that Johnson & Johnson's
"perverse incentive" have tainted the company's strategy to use
bankruptcy to force a negotiated end to more than 38,000 lawsuits
claiming the consumer giant's iconic baby powder caused cancer.
The company is using the Chapter 11 case of a small unit J&J
created last 2021 to resolve billions of dollars in legal claims
without facing any of the stigma or court restrictions of filing
for bankruptcy itself, said Saul Burian, a managing director at
investment bank Houlihan Lokey Howard & Zukin Inc.
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.
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.
K. ANTHONY INC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: K. Anthony, Incorporated dba K. Anthony Pre-School Inc.
8420, 8440, 8702, 8708 Crenshaw Blvd.
Inglewood, CA 90301
Business Description: The Debtor operates a pre-school educational
facility in Inglewood, California.
Chapter 11 Petition Date: February 16, 2022
Court: United States Bankruptcy Court
Central District of California
Case No.: 22-10852
Judge: Hon. Sandra R. Klein
Debtor's Counsel: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9805
E-mail: michael.berger@bankruptcypower.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Margaret Johnson as CEO.
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/DGD27RY/K_Anthony_Incorporated_dba_K_Anthony__cacbke-22-10852__0001.0.pdf?mcid=tGE4TAMA
LAS VEGAS SANDS: S&P Downgrades ICR to 'BB+', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Las Vegas
Sands Corp. (LVS) and its subsidiaries, including Sands China Ltd.
(SCL), to 'BB+' from 'BBB-'.
S&P said, "We also lowered our issue-level ratings on SCL's and
LVS's unsecured debt to 'BB+' from 'BBB-', and we assigned a '3'
recovery rating to LVS's debt. We also removed LVS's unsecured debt
from CreditWatch where we placed it with negative implications on
March 5, 2021." The negative outlook reflects the continued
significant stress on the group's revenue and cash flow as well as
our forecast for high leverage in 2022.
S&P said, "A slower recovery in Macau in 2022 will cause LVS's
leverage to reach about 7x at the end of 2022, which is above our
4x downgrade threshold at the previous 'BBB-' rating. We revised
our base-case forecast for Macau because we believe that the
resumption of travel between Macau and Mainland China in 2022 will
be slower than we initially anticipated amid rising Omicron cases
and tightening junket activity. We believe the mass gaming segment
will recover over the long term given China's growing middle
class's high propensity to game, improving infrastructure between
Mainland China and Macau, and expanding hotel supply." However, the
predictability of the recovery timeline is less certain because
it's difficult to assess if China will maintain its policies for
zero tolerance of COVID-19 throughout the pandemic's third year.
S&P's current base case assumes Macau's GGR will be 30%-40% of the
2019 level in 2022, down from the 60%-70% its forecast previously.
The company's Macau resorts are heavily weighted toward mass market
play, and GGR in this segment should improve to 45%-55% of
pre-pandemic levels from about 35% in the fourth quarter of 2021,
benefiting SCL. SCL generated over 90% of its profits in 2019 from
mass tables and slots and non-gaming revenue. The mass market could
recover closer to pre-pandemic levels in 2023 if travel
restrictions ease gradually throughout 2022.
LVS relies heavily on a recovery in Macau to support leverage
improvement, as Macau contributes about two-thirds of its overall
cash flow. LVS will now be dependent on a recovery in cash flow in
2023 to meaningfully improve its credit measures. Based on our
revised forecasts for Macau's GGR, S&P estimates LVS's EBITDA could
be 35%-50% of the 2019 level in 2022 and above 80% in 2023. As a
result, the company's leverage will be high at about 7x in 2022 and
could improve below 4x in 2023, a year later than under our
previous forecast.
S&P said, "We believe LVS's high-quality gaming assets in the
world's deepest gaming markets will eventually recover. In 2022, we
expect LVS's leverage to be above our 4.5x downgrade threshold for
the 'BB+' issuer credit rating. We are willing to look out to 2023
for LVS to restore credit measures because of the company's
high-quality asset portfolio and our belief that its gaming markets
and assets will eventually recover along with leisure, business,
and group travel. LVS has a good presence in Macau, which is the
largest global gaming market." Macau has good long-term growth
prospects and limited licenses, and it typically caters to a large
number of visitors with high propensities to game. In addition, the
company maintains a strong market position in the Singapore market,
which is a duopoly.
Despite high leverage, LVS should have strong liquidity to navigate
a gradual recovery, and asset sale proceeds will enhance liquidity
and support leverage improvement. LVS's cash and revolver
availability totaled $5.5 billion as of Dec. 31, 2021, and the
company had a further $2.73 billion of availability under a
delayed-draw term loan to fund planned expansion capex in
Singapore. S&P said, "We expect the company's liquidity position
will be further bolstered by the sale of its Las Vegas resorts for
gross proceeds of $6.25 billion, a 12.8x multiple compared to Las
Vegas property EBITDA in 2019. The sale proceeds received at close
will be net of $1.2 billion in seller financing as well as fees,
taxes, and closing costs. We expect the sale to close by the end of
February 2022." The Nevada Gaming Control Board recently
recommended approval of the sale, and the Nevada Gaming Commission
is expected to consider final approval of the sale at its Feb. 17
meeting.
While the high multiple at which the company is selling its Las
Vegas resorts should support leverage improvement this year, it's
not enough to offset a slower recovery in Macau. S&P expects the
company will initially keep asset sale proceeds on the balance
sheet as a liquidity buffer until cash flow and credit measures
have sustainably recovered. However, over the longer term it might
use them for new development projects, though these are likely
several years away at the earliest. As a result, asset sale
proceeds are a key component of our forecasted leverage improvement
in 2022 and 2023. If the company were to use these asset-sale
proceeds this year or next in a manner that delays deleveraging
below our downgrade threshold, for example for shareholder returns
or acquisitions, we could lower the rating again.
S&P said, "We believe the company's financial policy supports the
rating and the company will prioritize restoring credit measures
before resuming any level of dividends. LVS operated with
relatively modest leverage in the years prior to the pandemic, and
its S&P Global Ratings-adjusted net leverage was 1.8x as of Dec.
31, 2019. Early in the pandemic, the company took steps to preserve
its strong liquidity and protect its balance sheet, including
suspending its quarterly dividend program in the U.S. and not
paying a final dividend for 2019 from SCL. We considered this
prudent because it preserved the company's liquidity, which
provided it with financial flexibility to navigate the significant
deterioration in its operating performance in 2020 and slow
recovery. In addition, the dividend suspension enabled LVS to
continue its ongoing development projects, particularly in Macau,
which we believe will strengthen its portfolio over the longer
term.
"We believe LVS will be prudent in its decision to resume paying
dividends from SCL and when to restart its dividend program in the
U.S. We do not expect it to do so until its cash flow is recovering
and it has clear visibility around the sustainability of that
recovery. As a result, we have assumed in our base case that the
company does not restart dividends before 2023 given our forecast
for lower cash flow and higher leverage this year. Prior to
resuming dividends, we believe the company will focus on
significantly reducing leverage and rebuilding its sizable cash
balances, which have been somewhat depleted as a result of the
pandemic. Furthermore, we believe LVS will prioritize investing in
the quality of its asset base over restarting its dividends until
credit measures have substantially improved. We expect it will
focus investments primarily on finishing the redevelopment of
certain of its assets in Macau and beginning its Singapore
expansion. Although the timing and capital expenditures (capex) for
the Singapore project are subject to revision based on the impact
of the COVID-19 pandemic and have already been delayed, the company
has a committed delayed-draw term loan in place to fund the
development."
Macau's proposed gaming bill moderates license renewal risks. S&P
continues to believe that all six current concessionaires or
sub-concessionaires, including SCL, are well-positioned to maintain
their licenses through a new rebidding process. The government
plans to grant up to six licenses with a 10-year term under the new
framework. The regulatory measures proposed in the gaming bill are
largely within expectations. Overall, they are moderately negative,
but the immediate credit impact is limited for now.
How these changes are implemented is more critical, particularly
any social or economic conditions attached to the rebidding process
that could affect leverage and profitability. These include
additional investment in non-gaming amenities or safeguards for
local employees, such as enhanced benefits. S&P does not expect the
requirements to be onerous for the industry in its base case
because the proposed gaming bill signals no fundamental change in
the government's support to the industry and the gaming
concessionaires. Any implementation details that suggest otherwise
could trigger a rating review.
The negative outlook reflects continued significant stress on
revenue and cash flow as well as our forecast for high leverage in
2022. This places heavy reliance on a significant recovery in cash
flow in 2023 to support leverage improving below our downgrade
threshold. The negative outlook also reflects S&P's view that risks
to a recovery in Macau's EBITDA remain, given the uncertain
recovery of tourism in Macau and the potential for heightened
travel restrictions because of COVID-19 cases.
S&P said, "We could lower ratings again if we no longer believe
that LVS is on track to reduce our measure of adjusted net debt to
EBITDA below 4.5x in 2023. This could occur if the EBITDA recovery
in 2022 and 2023 is much weaker than we currently assume, likely
because travel restrictions hampering Macau's recovery and China's
zero tolerance COVID-19 policy remain in place longer than we
assume in our base case. We could also lower the rating if LVS
pursues a more aggressive financial policy and resumes paying
dividends or makes share repurchases prior to improving leverage
well below our 4.5x downgrade threshold so that it has a cushion to
absorb potential future operating volatility.
"We could revise the outlook to stable if we become more certain
that recovery in LVS's cash flow in Macau and Singapore would
improve leverage below 4.5x. This would likely result from travel
restrictions affecting Macau easing faster than we anticipate. We
could raise the rating if we believe leverage will improve and be
sustained below 4x, incorporating potential development spending
and operating volatility."
ESG credit indicators: E-2, S-4, G-2
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Health and safety
MAGELLAN HOME-GOODS: Wins Interim Cash Collateral Access
--------------------------------------------------------
Judge Marc Barreca of the U.S. Bankruptcy Court for the Western
District of Washington authorized Magellan Home-Goods Ltd to use
cash collateral pursuant to the Fifth Budget, pending a final
hearing on the request.
The Debtor requires the use of Cash Collateral to continue its
ongoing operations in the ordinary course of business, and to avoid
disruption of operations.
The Debtor owed First Savings Bank under two prepetition loans in
the principal amounts of $998,000 and $150,000, secured by
perfected security interests in certain of the Debtor's property
consisting of inventory, equipment, chattel paper, accounts,
instruments and general intangibles.
As partial adequate protection for the diminution of its interest
in the Prepetition Collateral, FSB is granted a replacement lien in
the Debtor's postpetition assets of the same kind, type, and nature
as the Prepetition Collateral in which FSB held a lien. FSB will
retain its rights under Section 507(b) of the Bankruptcy Code to
the extent of any diminution in interest not otherwise protected by
the postpetition lien.
As additional adequate protection to FSB, the Debtor will:
a. continue to maintain insurance on its assets as the same
existed as of the
Petition Date;
b. provide the following to FSB, on or before the 15th day of
each month: (i) a report reflecting actual revenues and expenses,
as well as inventory and account receivable balances for the prior
month, as compared to the Fifth Budget for that month, (ii) a
borrowing base certificate for the prior month within 45 days of
the end of such month, and (iii) the Debtor will confer with FSB,
to the extent requested, regarding any material variances;
c. with advance written notice to the Debtor of at least seven
business days, FSB will have the right to audit and inspect its
respective collateral;
d. during the fifth interim cash collateral period, on or
before February 28, 2022, the Debtor will pay to FSB the
outstanding principal payments for the months of December 2021 and
February 2022, and, on or before March 5, 2022, a full principal
and interest payment at the non-default rate designated in the
applicable loan documents for the month of March 2022;
notwithstanding payment of the non-default rate of interest, such
payment will not affect or waive the rights of FSB to seek recovery
of default interest;
e. provide to FSB the additional following financial
information, if not previously provided: (i) monthly financial
statements on or before the 30th day of the following month; (ii)
thirteen week cash flow projections to be updated by the 30th day
of the end of each month; and (iii) confer with FSB, if requested,
regarding material variances;
f. hire an appraiser to complete a valuation of the Debtor's
intellectual property and provide to FSB by March 3, 2022: (i) the
written report(s) reflecting the appraiser's findings and (ii)
confer with FSB, if requested, regarding material variances from
the Debtor's previous projections;
g. limit any salary paid to the Debtor's President, Mr. Andre
Cloutier, and Vice President, Ms. Debra Sasken-Duff, to no more
than $5,000 each for the months of February and March 2022 unless
or until FSB receives loan payments and an appraiser's valuation
report is provided; and
h. limit any reimbursement of short-term loans made to the
Debtor or payment of deferred salary to Mr. Cloutier and Ms.
Sasken-Duff, unless or until FSB receives loan payments and an
appraiser's valuation report is provided.
A final hearing on the matter is scheduled for March 17 at 9:30
a.m.
A copy of the fifth agreed order is available for free at
https://bit.ly/3gPy1Ru from PacerMonitor.com.
About Magellan Home-Goods Ltd
Magellan Home-Goods Ltd, doing business as Magellan Home Goods,
sells patented home goods and small appliances manufactured
off-shore to retail consumers located in the US.
Magellan Home-Goods sought protection under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-11413) on
July 24, 2021, listing $2,324,758 in total assets and $2,063,752 in
total liabilities. Judge Marc Barreca oversees the Debtor's
bankruptcy case while Geoffrey Groshong is the Subchapter V trustee
appointed in the case.
Neeleman Law Group, P.C. serves as the Debtor's legal counsel.
Cairncross & Hempelmann, P.S. is counsel for First Savings Bank,
the secured creditor.
MINOTAUR ACQUISITION: Moody's Alters Outlook on B3 CFR to Stable
----------------------------------------------------------------
Moody's Investors Service affirmed Minotaur Acquisition, Inc.'s B3
corporate family rating, B2 backed senior secured first lien term
loan and revolving credit facility ratings and affirmed its Caa2
backed senior secured second lien term loan rating. Minotaur is the
debt-issuing entity of Millennium Trust Company, LLC (Millennium).
At the same time, Moody's has changed Minotaur's outlook to stable
from negative.
Affirmations:
Issuer: Minotaur Acquisition, Inc.
Corporate Family Rating, Affirmed at B3
Backed Senior Secured First Lien Revolving Credit Facility,
Affirmed at B2
Backed Senior Secured First Lien Term Loan, Affirmed at B2
Backed Senior Secured Second Lien Term Loan, Affirmed at Caa2
Outlook Actions:
Issuer: Minotaur Acquisition, Inc.
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
Moody's said the ratings' affirmation reflects Minotaur's strong
growth in customer accounts and client cash, high EBITDA margin and
market leadership in the automatic rollover individual retirement
account (IRA) market. The ratings' affirmation also reflects
Minotaur's prudent approach to its cash sweep program, which is
laddered over a number of years and benefits from fixed deposit
arrangements across a number of partner banks. The ratings also
reflect the firm's small scale, weak (albeit improving) pretax
earnings, sensitivity to interest rates, and its ownership by a
financial sponsor which could result in aggressive financial
management actions over time such as increases in debt leverage.
The change in Minotaur's outlook to stable from negative reflects
improvements in Minotaur's trailing-12-months Moody's-adjusted debt
/ EBITDA ratio to around 4.9x at September 30, 2021, compared to
5.6x at December 31, 2020 and 6.3x at December 31, 2019. Moody's
expects Minotaur's leverage ratio to worsen slightly in 2022
(assuming no changes to the firm's capital structure) but remain at
a level consistent with its current ratings.
The change in outlook also reflects reduced erosion of Minotaur's
service and administrative revenue from a changed interest rate
environment. Moody's expects three US interest rate increases in
2022 and four more increases in 2023 which will benefit Minotaur's
service and administrative fee revenue. Although a large portion of
high-yielding deposit contracts had expired in 2021, higher
interest rates and strong account growth will reduce the overall
negative impact on this source of revenue. Based on the laddering
and expiration of Minotaur's existing cash sweeps, Moody's still
expects a moderate decline in interest-rate-linked revenue during
2022. However, Minotaur's strong growth in customer accounts and
client cash, as well as its ability to generate positive operating
leverage will eventually offset these declines.
In accordance with Moody's Loss Given Default (LGD) for
Speculative-Grade Companies methodology and model, the B2 ratings
on Minotaur's $595 million first lien term loan and $90 million
revolving credit facility reflect their priority ranking in
Minotaur's capital structure. The Caa2 rating on Minotaur's $245
million second lien term loan reflects the facility's secondary
ranking in Minotaur's capital structure.
Minotaur Acquisition, Inc. is the acquisition vehicle through which
entities of Abry Partners acquired Millennium Trust Company, LLC,
which operates as a trust company under the laws of the state of
Illinois. Millennium is based in Oak Brook, Illinois and provides
administration and custodial services for retirement accounts to
individuals, advisors and institutions as well as other
institutional services.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Minotaur's ratings could be upgraded should it expand its revenue
streams or develop new revenue sources within the self-directed IRA
or fund custody activities that would reduce reliance on interest
rates.
The demonstration of a more creditor-friendly financial policy,
such as paying-down debt or organically deleveraging to levels
below 5.0x on a sustained basis, could also result in an upgrade.
Minotaur's ratings could be downgraded should it demonstrate
increasingly aggressive financial policies through a further
increase in debt leverage to fund shareholder dividends or
acquisitions.
The ratings could also be downgraded should interest rates remain
very low and result in significant profitability erosion not offset
by cost management or other revenue streams, or with indication
that the firm is willing to take on more interest rate risk.
A significant deterioration in franchise value from legal,
regulatory, compliance or other issues that would reduce revenue,
increase costs, and damage relations with record-keepers and plan
sponsors could also result in a downgrade.
The principal methodology used in these ratings was Securities
Industry Service Providers Methodology published in November 2019.
MOON NURSERIES: DOJ Watchdog Names Don Beskrone as Ch. 11 Trustee
-----------------------------------------------------------------
Andrew R. Vara, the United States Trustee for Region 3, has
appointed Don A. Beskrone as the Chapter 11 Trustee for Moon
Nurseries, Inc.
The appointment was made pursuant to the February 9, 2022 Order
directing the United States Trustee to appoint a Chapter 11 trustee
for the Debtor.
Prior to the appointment of the trustee, the U.S. Trustee's counsel
has consulted with (i) William Hazeltine, of Sullivan Hazeltine
Allinson LLC, counsel to the Debtor and its Debtor-affiliates; (ii)
Lucian Murley, of Saul Ewing Arnstein & Lehr LLP, counsel to the
Official Committee of Unsecured Creditors; (iii) Michael Busenkell,
of Gellert Scali Busenkell & Brown, LLC, and David Musgrave, of
Gordon Feinblatt LLC, counsel to Kore Capital Corp; (iv) Lawrence
J. Kotler, of Duane Morris, LLP, counsel to StoneMor Operating LLC;
(v) Lisa Tancredi, of Womble Bond Dickinson (US) LLP, counsel for
North Avenue Capital, LLC; and (vi) Ronald Drescher, of Drescher &
Associations P.A., counsel for Newtek Small Business Finance, LLC;
and (vii) Don A. Beskrone, who is the Proposed Trustee, regarding
the Chapter 11 trustee appointment.
To the best of the U.S. Trustee's knowledge, Mr. Beskrone has no
connections with the Debtor, creditors, any other
parties-in-interest, their respective attorneys and accountants,
the United States Trustee, or persons employed in the Office of the
United States Trustee.
About Moon Nurseries, Inc.
Moon Nurseries, Inc. and its affiliates filed their voluntary
petitions for Chapter 11 protection (Bankr. D. Del. Lead Case Case
No. 21-11140) on Aug. 12, 2021, listing up to $50 million in assets
and liabilities. John D. Pursell, Jr. chief executive officer,
signed the petition.
Judge Christopher S. Sontchi oversees the case.
About Moon Group
Moon Group, Inc. and its affiliates filed their voluntary petitions
for Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11140)
on Aug. 12, 2021. John D. Pursell, Jr., chief executive officer,
signed the petitions. In its petition, Moon Group listed up to
$50,000 in assets and up to $50 million in liabilities.
Judge Christopher S. Sontchi oversees the cases.
The Debtors tapped Sullivan Hazeltine Allinson, LLC and Kurtzman
Steady, LLC as bankruptcy counsel; and Silverang Rosenzweig &
Haltzman, LLC as special litigation counsel. The Debtors also hired
SC&H Group, Inc. as investment banker but later terminated the
firm. Stretto is the claims and noticing agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Aug. 30, 2021. Lucian Borders Murley, Esq.,
at Saul Ewing Arnstein & Lehr, LLP and Gavin/Solmonese, LLC serve
as the committee's legal counsel and financial advisor,
respectively.
MYOMO INC: AIGH Capital, Orin Hirschman Report 9% Equity Stake
--------------------------------------------------------------
AIGH Capital Management, LLC and Orin Hirschman disclosed in a
Schedule 13G/A filed with the Securities and Exchange Commission
that as of Dec. 31, 2021, they beneficially own 617,179 shares of
common stock of Myomo, Inc., representing 9 percent of the shares
outstanding. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/1369290/000149315222003951/formsc13ga.htm
About Myomo
Headquartered in Cambridge, Massachusetts, Myomo, Inc. --
http://www.myomo.com-- is a wearable medical robotics company that
offers expanded mobility for those suffering from
neurologicaldisorders and upper limb paralysis. Myomo develops and
markets the MyoPro product line. MyoPro is a powered upper limb
orthosis designed to support the arm and restore function to the
weakened or paralyzed arms of patients suffering from CVA stroke,
brachial plexus injury, traumatic brain or spinal cord injury, ALS
or other neuromuscular disease or injury.
Myomo reported a net loss of $11.56 million for the year ended Dec.
31, 2020, a net loss of $10.71 million for the year ended Dec. 31,
2019, and a net loss of $10.32 million for the year ended Dec. 31,
2018. As of Sept. 30, 2021, the Company had $17.46 million in
total assets, $4.31 million in total liabilities, and $13.15
million in total stockholders' equity.
NAUTILUS POWER: S&P Places 'B+' Debt Rating on Watch Negative
-------------------------------------------------------------
S&P Global Ratings placed its 'B+' rating on Nautilus Power LLC's
debt on CreditWatch with negative implications.
S&P expects to resolve the CreditWatch during the next 90 days as
it assesses the impact of its capacity price revision on Nautilus'
credit metrics.
S&P has lowered its future capacity price assumptions for various
power markets, including the Pennsylvania-Jersey-Maryland
Interconnection (PJM) and ISO New England.
In light of S&P's revised assumptions, it believes Nautilus cash
flow will be adversely affected due to lower-than-expected capacity
payments.
The CreditWatch placement reflects the possibility of a negative
rating action. S&P said, "We anticipate future clearing prices in
select capacity markets, particularly PJM, will be materially lower
than previously expected. We are making some significant revisions
to our assumptions, including EMAAC which is Nautilus' main zone.
We now expect EMAAC will clear at about $95/megawatt (MW)-day in
2023-2024 and $110/MW-day in the 2024-2025 delivery years. We
previously assumed a $140/MW-day clearing price starting in the
2023-2024 auction. Given that Nautilus generates more than 60% of
its gross margin from capacity payments, we believe that an erosion
in capacity revenues will affect its cash flow generation and debt
service coverage ratio (DSCR)."
NORDIC AVIATION: Affiliates Taps Klehr Harrison as Special Counsel
------------------------------------------------------------------
NAC Aviation 17 Limited and NAC Aviation 20 Limited, affiliates in
the Chapter 11 cases of Nordic Aviation Capital Designated Activity
Company, seek approval from the U.S. Bankruptcy Court for the
Eastern District of Virginia to hire Klehr Harrison Harvey
Branzburg, LLP as special counsel.
The firm will advise the Debtors, at the sole direction of their
disinterested directors, Roger Meltzer and Tim Regan, with respect
to any matters that arise in connection with their restructuring
efforts in which a conflict exists between the Debtors Debtors and
their shareholders, affiliates, directors or officers.
The hourly rates charged by the firm's attorneys and
paraprofessionals are as follows:
Partners $420 - $1,035
Of Counsel $420 - $530
Associates $330 - $430
Paraprofessionals $160 - $315
In response to the request for additional information set forth in
Paragraph D.1 of the Revised U.S. Trustee Guidelines, Klehr
Harrison disclosed the following:
a. Question: Did Klehr Harrison agree to any variations from,
or alternatives to, Klehr Harrison's standard billing arrangements
for this engagement?
Answer: No. Klehr Harrison and the Debtors have not agreed
to any variations from, or alternatives to, the firm's standard
billing arrangements for this engagement. The rate structure
provided by Klehr Harrison is appropriate and is not significantly
different from (a) the rates that the firm charges for other
comparable non-bankruptcy representations
or (ii) the rates of other comparably skilled professionals.
b. Question: Do any of the Klehr Harrison professionals in
this engagement vary their rate based on the geographic location of
the Debtors’ chapter 11 cases?
Answer: No. The hourly rates used by Klehr Harrison in
representing the Debtors are consistent with the rates that it
charges other comparable chapter 11 clients, regardless of the
location of the Chapter 11 case.
c. Question: If Klehr Harrison has represented the Debtors in
the 12 months prepetition, disclose Klehr Harrison's billing rates
and material financial terms for the prepetition engagement,
including any adjustments during the 12 months prepetition. If
Klehr Harrison's billing rates and material financial terms have
changed post-petition, explain the difference and the
reasons for the difference.
Answer: Klehr Harrison did not represent the Debtors during
the 12-month period before the petition date.
d. Question: Have the Debtors approved Klehr Harrison's budget
and staffing plan, and, if so, for what budget period?
Answer: Yes, for the period from January 1, 2022 through
March 31, 2022.
As disclosed in court filings, Klehr Harrison neither represents
nor holds any interest adverse to the Debtors or their respective
estates with respect to matters on which it is to be retained.
The firm can be reached through:
Morton R. Branzburg, Esq.
Klehr Harrison Harvey Branzburg, LLP
1835 Market Street, Suite 1400
Philadelphia, PA 19103
Telephone: (215) 569-3007
Facsimile: (215) 568-6603
Email: MBranzburg@klehr.com
About Nordic Aviation
Nordic Aviation Capital is the leading regional aircraft lessor
serving almost 70 airlines in approximately 45 countries. Its fleet
of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8,
Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family
aircraft.
On Dec. 17, 2021, Nordic Aviation Capital Pte. Ltd., NAC Aviation
17 Limited, NAC Aviation 20 Limited, and Nordic Aviation Capital
A/S each filed petitions seeking relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Va.). On Dec. 19, 2021, Nordic
Aviation Capital Designated Activity Company and 112 affiliated
companies also filed petitions seeking Chapter 11 relief. The lead
case is In re Nordic Aviation Capital esignated Activity Company
(Bankr. E.D. Va. Lead Case No. 21-33693).
Judge Kevin R. Huennekens oversees the cases.
The Debtors tapped Kirkland & Ellis and Kutak Rock, LLP as
bankruptcy counsels and the law firms of Clifford Chance, LLP,
William Fry, LLP and Gorrissen Federspiel as corporate counsels.
N.M. Rothschild & Sons Limited, Ernst & Young, LLP and
PricewaterhouseCoopers, LLP serve as the Debtors' financial
advisor, restructuring advisor and tax advisor, respectively. Epiq
Corporate Restructuring, LLC is the claims and noticing agent.
NUVISTA ENERGY: S&P Upgrades ICR to 'B' on Improving Cash Flows
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on NuVista
Energy Ltd. to 'B' from 'B-'. At the same time, S&P raised its
issue-level rating on the C$230 million of senior unsecured notes
to 'B+' from 'B'. S&P's '2' recovery rating on the notes is
unchanged.
S&P said, "The stable outlook incorporates our expectation that
supportive commodity prices and lower absolute debt should ensure
the company's FFO-to-Debt will remain well above 60% over the next
12 months.
"We expect NuVista to generate significantly improved cash flow
metrics over our forecast period primarily led by favorable
commodity prices. Natural gas prices have remained on an upward
trajectory since early 2021, with both Henry Hub and AECO prices
benefitting from strong demand, a robust liquefied natural gas
(LNG) export market, and reduced associated gas production in the
U.S. At the same time, condensate prices (about 30% of NuVista's
production) have been trending close to West Texas Intermediate
(WTI), benefitting from reduced import volumes and lower domestic
supply, while demand from oil sands producers has remained
relatively stable.
"Based on our favorable near-term view, we forecast improving cash
flows and leverage metrics over the next two years. Specifically,
we project adjusted FFO to debt to average well above 60% and
adjusted debt to EBITDA below 1x in 2022 and 2023. The improvement
in credit measures is also supported by meaningful repayment under
the credit facility during 2021 (about C$170 million) and our
expectation for higher production (50% growth by 2023 relative to
2021 levels).
"We believe lower gross debt levels should enable the company to
better manage commodity price volatility. We expect NuVista to
generate meaningfully improved cash flows in 2022 and 2023 with
adjusted FFO estimated to average about C$500 million. Based on its
three-rig drilling program in 2022 (capital spend of about C$300
million), we project the company to generate free cash flows of
more than C$200 million this year. We believe it will continue to
lower debt (the credit facility was about 45% drawn at year-end
2021), but at a slower pace relative to 2021 once it achieves its
absolute debt target of C$400 million, estimated in the first half
of the year. We assume distributions to shareholders over our
forecast period, but believe management will remain disciplined and
limit discretionary spending within internally generated cash
flows.
"Accordingly, we believe absolute debt is unlikely to increase from
current levels, which should support credit measures and liquidity
commensurate with the rating on a sustained basis. For instance,
all else equal, if Henry Hub prices averaged US$2.50 per million
British thermal unit (mmBtu), and WTI prices averaged US$55 per
barrel in 2022, adjusted FFO to debt would fall to close to 40% but
remain well above our downside threshold. The company has also
hedged more than 30% of its 2022 production, which provides for
further downside cushion.
"The upgrade is also supported by our expectation of meaningful
production growth. We expect NuVista's production to rise steadily
from an average 52,200 barrels of oil equivalent (boe) per day in
2021 to about 80,000 boe per day in 2023. We expect most of the
growth to come from the Pipestone asset, which has relatively
better well economics, with the Wapiti asset growing at a slower
pace and continuing to support free cash flow generation. Although
the growth projections are aggressive, we believe execution risk is
low as the company has had good success in drilling in Pipestone,
where production has gradually increased and is currently about
33,000 boe per day, an almost 40% increase from third-quarter 2021.
In our view, the greater scale, while comparable with that of 'B'
rated peers, would also help capitalize on the existing
infrastructure, which can currently accommodate about 90,000 boe
per day of production. This should help the company achieve further
cost efficiencies and we estimate unit cash operating costs
declining by about 15% by 2023 relative to 2021 levels, even after
factoring in cost inflation expectations.
"Product and geographic concentration, and a low proved developed
(PD) reserves ratio limit upside to the rating. Our assessment of
NuVista's business risk reflects the company's high exposure to
natural gas (60% of production), concentration in one producing
region, the Montney basin, and low PD reserves ratio (41% of proved
reserves). In addition, the company's scale, although expanding,
remains smaller than that of higher-rated peers. While the company
has a competitive cost structure and we assess its profitability in
the midrange of the North American exploration and production group
(assessed based on unit earnings before interest and taxes), we
believe the profitability profile for gas-focused producers remains
weaker than for producers with an oil-focused product mix."
Partially offsetting these factors is the meaningful exposure to
Canadian condensate production, a natural gas liquid priced near
the WTI benchmark crude price. In addition, the company has good
end-market diversification through long-term contracts with
midstream companies and financial contracts, which reduces exposure
to spot AECO prices.
S&P said, "The stable outlook reflects our expectation that
NuVista's credit measures will remain strong over the next 12-24
months, with an adjusted FFO-to-debt ratio projected to average
well above 60% and an adjusted debt-to-EBITDA ratio below 1x. The
outlook also reflects our expectation for positive free cash flow
generation and assumption that management will continue to lower
borrowings under the credit facility.
"We could lower the rating if the company's FFO-to-debt ratio
dropped to below 20%, with limited prospects of improvement and
liquidity weakened. We believe this could occur if commodity prices
fall sharply and management fails to correspondingly reduce capital
spending, resulting in material negative free cash flow
generation.
"We could raise our rating on NuVista if it is able to improve its
PD reserves ratio and expand its operational scale to closely align
with that of higher-rated peers. In our view, these business
profile improvements would lessen the impact of an unanticipated
operational event in any of its producing areas or commodity price
volatility on cash flow generation. In this scenario, we would also
expect the company to maintain an FFO-to-debt ratio above 45% and
have the credit facility substantially undrawn, ensuring ample
liquidity cushion."
ESG credit indicators: E-4, S-2, G-2
Environmental factors are a negative consideration in our credit
rating analysis of NuVista Energy. Although NuVista is mostly
exposed to natural gas (60% of production) and condensate (30%),
risks from accelerating energy transition, declining profitability,
and adoption of renewable energy sources as well as environmental
risks inherent in hydrocarbon production are reflected in our
assessment of the rating. Since 2012 the company has reduced its
scope 1 and 2 greenhouse gas emissions intensity by over 45% and
has set a five-year target to further reduce emissions intensity by
20% by 2025. While S&P expects operating and full-cycle costs
associated with meeting environmental standards to increase, it
does not expect them to have a rating impact.
OCEAN POWER: Hikes Available Shares Under Inducement Plan to 275K
-----------------------------------------------------------------
The Board of Directors of Ocean Power Technologies, Inc. adopted an
amendment to the Ocean Power Technologies, Inc. Employment
Inducement Incentive Award Plan to increase the number of shares of
the Company's common stock available for issuance pursuant to
equity awards granted under the Inducement Plan from 25,000
(reflecting the 1-for-20 reverse stock split that became effective
March 11, 2019) to 275,000 shares.
In accordance with the applicable rules of the NYSE American,
awards under the Inducement Plan may only be made to individuals
not previously employees of the Company (or following such
individuals' bona fide period of non-employment with the Company),
as an inducement material to the individuals' entry into employment
with the Company.
About Ocean Power Technologies
Headquartered in Monroe Township, New Jersey, Ocean Power
Technologies, Inc. -- http://www.oceanpowertechnologies.com-- is a
marine power equipment, data solutions and service provider. The
Company controls the design, manufacture, sales, installation,
operations and maintenance of its solutions and services while
working closely with commercial, technical, and other development
partners that provide software, controls, mechatronics, sensors,
integration services, and marine installation services.
Ocean Power reported a net loss of $14.76 million for the 12 months
ended April 30, 2021, a net loss of $10.35 million for the 12
months ended April 30, 2020, and a net loss of $12.25 million for
the 12 months ended April 30, 2019. As of Oct. 31, 2021, the
Company had $75.82 million in total assets, $3.05 million in total
liabilities, and $72.77 million in total shareholders' equity.
OCEAN POWER: Registers Additional 2M Shares Under Equity Plans
--------------------------------------------------------------
Ocean Power Technologies, Inc. filed a Form S-8 registration
statement with the Securities and Exchange Commission to register
an additional 1,800,000 shares of its common stock related to the
2015 Omnibus Incentive Plan, as amended, and an additional 250,000
shares of its common stock related to the Employment Inducement
Incentive Award Plan, all of which are the same class as other
securities for which registration statements on Form S-8, File Nos.
333-208522, 333-214316, 333-224436, 333-232755, and 333-252372,
have been previously filed. A full-text copy of the prospectus is
available for free at:
https://www.sec.gov/Archives/edgar/data/1378140/000149315222004111/forms-8.htm
About Ocean Power Technologies
Headquartered in Monroe Township, New Jersey, Ocean Power
Technologies, Inc. -- http://www.oceanpowertechnologies.com-- is a
marine power equipment, data solutions and service provider. The
Company controls the design, manufacture, sales, installation,
operations and maintenance of its solutions and services while
working closely with commercial, technical, and other development
partners that provide software, controls, mechatronics, sensors,
integration services, and marine installation services.
Ocean Power reported a net loss of $14.76 million for the 12 months
ended April 30, 2021, a net loss of $10.35 million for the 12
months ended April 30, 2020, and and net loss of $12.25 million for
the 12 months ended April 30, 2019. As of Oct. 31, 2021, the
Company had $75.82 million in total assets, $3.05 million in total
liabilities, and $72.77 million in total shareholders' equity.
OCEANEERING INTERNATIONAL: S&P Ups ICR to 'BB-', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Oceaneering
International Inc. and its issue-level rating on its senior
unsecured notes to 'BB-' from 'B+'. The '3' recovery rating
reflects its expectation for meaningful (50%-70%; rounded estimate:
60%) recovery of principal to creditors in the event of a payment
default.
S&P said, "The stable outlook reflects our expectation that
Oceaneering's leverage will improve modestly in 2022 and 2023, with
average funds from operations (FFO) to debt of about 35% over the
next 12-24 months.
"The upgrade to 'BB-' reflects our expectation of improved credit
measures in 2022. We expect higher oil and gas prices will drive
increased investment by oil and gas producers in 2022 and beyond,
boosting demand for products and services offered by companies such
as Oceaneering. We now anticipate global E&P capital spending will
increase in the low-double-digit percentage area and that the
supportive price environment will also lead to an increase in
offshore activity and longer-term offshore project awards. This
will support a more sustained improvement in credit measures for
Oceaneering. About 75%-80% of Oceaneering's revenues are tied to
offshore oil and gas-related activity, with about 65% of that tied
to exploration and drilling activity, which we expect to benefit
from increased activity in the near to medium term. The company's
flagship remote operated vehicle segment continues to be the
largest revenue contributor and highest-margin business in the
portfolio.
"Oceaneering also derives revenues from aerospace and defense,
entertainment systems, and automated guided vehicles. We expect
Oceaneering will continue to leverage its core capabilities into
newer markets such as renewables and the energy transition, which
could become a growth driver in the medium to long term.
"We expect positive free operating cash flow (FOCF) and further
debt reduction to support metrics. In the nine months ended Sept.
30, 2021, Oceaneering repaid about $63 million of its senior
unsecured notes due in 2024, reducing the outstanding amount to
$437 million. We expect the company will continue to
opportunistically repurchase debt in the open market, given its
healthy cash balance and our expectation of continued positive FOCF
generation in 2022. We view the permanent debt reduction
positively, as it tends to reduce volatility in credit metrics in
weaker times. Based on management comments, we expect debt
reduction and growth spending will take priority over substantial
shareholder returns in the near term.
"We continue to view Oceaneering's liquidity as strong. As of Sept.
30, 2021, the company had $448 million cash on the balance sheet
and an undrawn unsecured revolving credit facility (RCF). The RCF,
which has a $450 million commitment, matures in January 2023. Our
liquidity analysis assumes the RCF will be renewed in a timely
manner.
"The stable outlook reflects our expectation that Oceaneering's
leverage metrics will improve modestly in 2022 and 2023, with
average FFO to debt of about 35%, and that it will generate
positive FOCF and maintain a strong liquidity position.
"We could lower the rating if Oceaneering's leverage metrics
deteriorate, such that FFO to debt approaches 20% on a sustained
basis without a clear path to recovery. This would most likely
result from prolonged oil price weakness, which would put downward
pressure on pricing and margins for Oceaneering's services.
"We could raise the rating if Oceaneering's leverage metrics
improve ahead of our expectations, such that FFO to debt is
comfortably above 45% for a sustained period. This would most
likely occur from a quicker than anticipated recovery in the
offshore drilling sector, increasing demand for offshore services
provided by Oceaneering."
ESG credit indicators: E-4, S-3, G-2
S&P said, "Environmental factors are a negative consideration in
our rating analysis due to our expectation that the energy
transition will result in lower demand from oil producers for
services and equipment as accelerating adoption of renewable energy
sources lowers demand for fossil fuels. Additionally, the industry
faces an increasingly challenging regulatory environment, both
domestically and internationally, that has included limits on
drilling activity in certain jurisdictions and the pace of new and
existing well permits. Given its material exposure to the offshore
market, Oceaneering faces higher environmental risks than onshore
service providers due to its susceptibility to operational
interruptions and damage to equipment from more challenging
operating conditions. Social factors are a moderately negative
consideration as offshore operations are, in our view, more prone
to fatal accidents given the inherent risks of operating in more
challenging environments."
PACIFIC LINKS: Gets OK to Hire KDL CPAs as Accountant
-----------------------------------------------------
Pacific Links U.S. Holdings, Inc. and its affiliates received
approval from the U.S. Bankruptcy Court for the District of Hawaii
to employ KDL CPAs, LLC as its accountant and consultant
The firm will assist the Debtors with the preparation of 2021
federal and state income tax returns.
The firm will be paid a flat fee of $17,000 upon completion of the
2020 income tax returns and reimbursed for out-of-pocket expenses
incurred.
As disclosed in court filings, KDL CPAs is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Alan Kobayashi, CPA
KDL CPAs, LLC
745 Fort Street, Suite 1415
Honolulu, HI 96813
Tel: (808) 784-3757
Fax: (808) 784-3755
Email: alan@kdlcpa.com
About Pacific Links U.S. Holdings
Pacific Links US Holdings, Inc. is a golf club that offers global
reciprocal programs to members and participating clubs.
Pacific Links US Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Hawaii Case No. 21-00094) on Feb. 1,
2021. Wei Zhou, director, signed the petition. Affiliates that also
sought Chapter 11 protection are Hawaii MVCC LLC, Hawaii MGCW LLC,
MDRE LLC, MDRE 2 LLC, MDRE 3 LLC, MDRE 4 LLC, and MDRE 5 LLC. On
Feb. 2, 2021, Judge Robert J. Faris authorized the jointly
administration of the cases.
At the time of filing, Pacific Links disclosed assets of between
$50,000 and $100,000 and liabilities of between $50 million and
$100 million.
Choi & Ito and KDL CPAs, LLC serve as the Debtors' legal counsel
and accountant, respectively.
PADDOCK ENTERPRISES: Gets Court Okay to Send Plan for Vote
----------------------------------------------------------
James Nani of Bloomberg Law reports that Paddock Enterprises LLC, a
bankrupt subsidiary of glass bottle maker O-I Glass Inc., received
bankruptcy court approval to solicit votes for its Chapter 11
reorganization plan, proposing to fund a $610 million trust to pay
current and future asbestos claims.
The disclosure statement, approved on Wednesday, February 16. 2022.
by U.S. Bankruptcy Judge Laurie Selber Silverstein, also proposes
terms that would permanently resolve claims against O-I Glass and
Paddock, which was created by O-I to absorb litigation stemming
from its insulation products that contained asbestos.
About Paddock Enterprises
Paddock Enterprises, LLC's business operations are exclusively
focused on (i) owning and managing certain real property and (ii)
owning interests in, and managing the operations of, its non-debtor
subsidiary, Meigs, which is developing an active real estate
business. It is the successor-by-merger to Owens-Illinois, Inc.,
which previously served as the ultimate parent of the company.
Paddock Enterprises is a direct, wholly-owned subsidiary of O-I
Glass.
Paddock Enterprises sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-10028) on Jan. 6, 2020,
to address $722 million in asbestos liability claims.
At the time of the filing, the Debtor disclosed assets of between
$100 million and $500 million and liabilities of the same range.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Richards, Layton & Finger P.A. and Latham &
Watkins LLP as legal counsel, Alvarez & Marsal North America LLC as
a financial advisor, Riley Safer Holmes & Cancila, LLP as special
counsel, and David J. Gordon of DJG Services, LLC as a chief
restructuring officer. Prime Clerk, LLC is the claims, noticing,
and solicitation agent and administrative advisor.
PITNEY BOWES: Moody's Lowers CFR to B1, Alters Outlook to Stable
----------------------------------------------------------------
Moody's Investors Service downgraded Pitney Bowes Inc.'s Corporate
Family Rating to B1 from Ba3 and the Probability of Default Rating
to B1-PD from Ba3-PD. As part of the rating actions, Moody's also
downgraded the following instrument ratings: the senior secured
revolver and term loans to Ba2 from Ba1, the guaranteed senior
unsecured notes to B2 from B1, and the unguaranteed senior
unsecured notes to B3 from B1. The Speculative Grade Liquidity
(SGL) rating of SGL-2 is unchanged, and the outlook was revised to
stable from negative.
The downgrades reflect Moody's view that more time and investment
will be needed for Pitney Bowes to bring shipping and ecommerce
operations to profitability following weak results for the
seasonally important 4Q21. As a result, Moody's expects the Global
Ecommerce segment will report negative EBIT through most of 2022
with adjusted leverage remaining elevated.
Rating actions are summarized below:
Downgrades:
Issuer: Pitney Bowes Inc.
Corporate Family Rating, Downgraded to B1 from Ba3
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Senior Unsecured Shelf, Downgraded to (P)B2 from (P)B1
Senior Secured Revolving Credit Facility, Downgraded to Ba2 (LGD2)
from Ba1 (LGD2)
Senior Secured Term Loan A, Downgraded to Ba2 (LGD2) from Ba1
(LGD2)
Senior Secured Term Loan B, Downgraded to Ba2 (LGD2) from Ba1
(LGD2)
Gtd Senior Unsecured Regular Bond/Debenture, Downgraded to B2
(LGD4) from B1 (LGD5)
Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD5)
from B1 (LGD5)
Outlook Actions:
Issuer: Pitney Bowes Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The downgrade of Pitney Bowes' CFR to B1 is driven by Moody's
expectation of further delays before the company produces positive
and sustainable EBIT for the higher growth shipping and ecommerce
operations. Accordingly, Moody's believes that debt to EBITDA will
remain elevated above 4.5x (Moody's adjusted) for most of 2022.
More time and financial investment by Pitney Bowes will be required
to achieve operating efficiencies for shipping and ecommerce
businesses and deliver the company's targeted profit margins for
Global Ecommerce.
Pitney Bowes has invested significantly over the last few years to
build out shipping and ecommerce capabilities serving primarily
middle market companies and indicated that its Global Ecommerce
network is largely complete with the ability to handle over 200
million packages annually. In 4Q21, however, U.S. parcel volumes
were approximately 20% below what the company had anticipated.
Weak results for the Global Ecommerce segment in 4Q21 reversed
positive reported segment EBITDA in 4Q20, and more than doubled
reported segment EBIT losses to ($41 million) from ($15 million) in
4Q20. Underperformance for Global Ecommerce more than offset
improved results for remaining segments for the year. Presort
Services reported 10% growth in segment revenue and 22% growth in
EBITDA in 2021, while SendTech performed better than prior years
with a revenue decline of (1%) compared to (9%) and (7%) reductions
in 2019 and 2020, respectively. Given underperformance during the
seasonally important 4QQ21, Moody's expects cash flow and other
credit metrics (Moody's adjusted) will remain under pressure for
most of 2022. Although Moody's expects adjusted EBITDA margins will
improve by 1% - 2% over the next year, free cash flow growth will
be muted by ongoing investments, albeit at reduced levels, in
shipping and ecommerce to achieve needed efficiencies.
Pitney Bowes' B1 CFR is supported by the company's leading market
presence, long standing customer relationships under multi-year
contracts in the highly regulated mail metering market, and growth
opportunities in the shipping and ecommerce businesses. The
transition to higher growth shipping could prove beneficial over
the long term given the growth potential for shipping-related
offerings, in contrast to the secular decline in mail volumes.
Profit margins, however, will continue to suffer from investments
to optimize shipping and ecommerce capabilities, and there are
execution risks related to growing market share among more
diversified and deeper-pocketed shipping providers. Pitney Bowes
will need to maintain good financial flexibility to support
investments to realize operating efficiencies and provide a cash
cushion to address unexpected challenges in a competitive
environment.
A good portion of Pitney Bowes' cash flow is exposed to declining
trends for traditional mail delivery in the U.S. and abroad. The
ongoing substitution of electronic mail for physical delivery
represents a social risk. Pitney Bowes has partially mitigated this
risk by adding shipping capabilities to its equipment and service
offerings resulting in overall topline growth for the past two
years. Pitney Bowes has generally adhered to its financial policies
while investing in the transformation of its business model. Debt
balances have declined over each of the past three years and
quarterly dividends were cut by 73% since 1Q19. Pitney Bowes is
publicly traded with its two largest shareholders, Vanguard and
Blackrock, owning 9.5% - 11% of common shares, respectively, as of
the end of December 2021, followed by other investment management
companies holding less than 4%. Good governance is supported by a
board of directors with nine of the company's ten board seats being
held by independent directors.
The SGL-2 rating reflects good liquidity supported by available
cash of more than $500 million as of year-end December 2021
(excludes estimated amounts held by The Pitney Bowes Bank, Inc.)
and an undrawn $500 million revolver expiring in 2026. The nearest
significant debt maturity is in two years when $243 million of
notes come due in March 2024. Moody's expects ongoing investments
to optimize operations and expand third party equipment financing
will limit free cash flow generation.
The Ba2 instruments rating on the senior secured credit facilities
is two notches above the CFR reflecting their position ahead of the
unsecured notes and incorporating the B1-PD Probability of Default
Rating, Moody's expectation for an average recovery in a distressed
scenario, and expectations for redemption of near term note
maturities. The B2 rating on the guaranteed senior unsecured notes
is one notch below the CFR reflecting their position behind the
secured debt, but ahead of the unguaranteed unsecured notes which
are rated B3.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook for Pitney Bowes reflects good demand for
shipping and ecommerce offerings by middle market customers which
will continue to support overall topline growth with volume and
price increases. After several years of significant investment in
expansion, Pitney Bowes indicates the capacity of its global
ecommerce network is well beyond current volumes being handled
which allows for reduced capital spending in 2022 versus 2021 and
future investments being focused on realizing efficiencies.
Although leverage is elevated and Global Ecommerce will not be
meaningfully profitable over the next year, Moody's expects total
revenues will grow in the low to mid-single digit percentage range
over the next year with gradually improving overall profit margins.
Moody's believes that Pitney Bowes will continue to adhere to
disciplined financial policies and remain committed to reducing
adjusted leverage as well as maintaining strong credit protection
measures for its equipment financing operations.
Ratings could be upgraded if Pitney Bowes demonstrates consistent
revenue and EBITDA growth with operating margins (Moody's adjusted)
in the low-teen percentage range. Adjusted debt/EBITDA would need
to be in the mid 3x range with adjusted free cash flow to debt
approaching 5%. Moody's would also need to be comfortable with the
execution and financial policies related to expanding third party
equipment financing. Ratings could be downgraded if Moody's expects
consolidated revenues will decline reflecting greater than expected
weakness in mature mailing operations or competitive pressures for
shipping or ecommerce businesses. Ratings could also be downgraded
if adjusted debt to EBITDA does not improve consistently in 2022 or
if Moody's expects adjusted leverage will be sustained above 4.5x
beyond 2023. There would be downward pressure on ratings if EBITDA
margins or free cash flow deteriorate reflecting underperformance
in core operations or with expanding third party equipment
financing.
Based in Stamford, CT, Pitney Bowes Inc. is a global provider of
ecommerce fulfillment, shipping and returns, cross-border
ecommerce, office mailing and shipping, presort services, as well
as related services and financing. Moody's expects revenues will
exceed $3.8 billion over the next year.
The principal methodology used in these ratings was Diversified
Technology published in August 2018.
PLUS THERAPEUTICS: Mitchell Kopin, et al. Report 1.9% Equity Stake
------------------------------------------------------------------
Mitchell P. Kopin, Daniel B. Asher, and Intracoastal Capital LLC
disclosed in a Schedule 13G/A filed with the Securities and
Exchange Commission that as of Dec. 31, 2021, they beneficially
owned 300,000 shares of common stock issuable upon an exercise of a
warrant held by Intracoastal, and all those shares of common stock
in the aggregate represent beneficial ownership of approximately
1.9% of the common stock, based on (1) 15,360,025 shares of common
stock outstanding as of Oct. 15, 2021 as reported by the issuer,
Plus Therapeutics, Inc., plus (2) 300,000 shares of common stock
issuable upon an exercise of the Intracoastal Warrant.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1095981/000121390022006707/ea155278-13ga3intra_plusther.htm
About Plus Therapeutics
Headquartered in Austin, Texas, Plus Therapeutics, Inc. --
http://www.plustherapeutics.com-- is a clinical-stage
pharmaceutical company focused on the discovery, development, and
manufacturing scale up of complex and innovative treatments for
patients battling cancer and other life-threatening diseases.
Plus Therapeutics reported a net loss of $8.24 million for the year
ended Dec. 31, 2020, compared to a net loss of $10.89 million for
the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had
$24.75 million in total assets, $9.99 million in total liabilities,
and $14.76 million in total stockholders' equity.
BDO USA, LLP, in San Diego, Calif., the Company's auditor since
2016, issued a "going concern" qualification in its report dated
Feb. 22, 2021, citing that the Company has suffered recurring
losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going concern.
PREMIER SERVICES: Seeks to Tap Berken Cloyes as Bankruptcy Counsel
------------------------------------------------------------------
Premier Services, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Colorado to employ Berken Cloyes P.C. to
serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. providing legal advice to the Debtor with respect to its
powers and duties;
b. advising the Debtor with respect to its responsibilities to
comply with the U.S. Trustee's Operating Guidelines and Reporting
Requirements as well as the rules of the court;
c. preparing legal documents;
d. protecting the interests of the Debtor in all matters
pending before the court;
e. representing Debtor in negotiation with its creditors to
prepare a plan of reorganization or other exit plan;
f. negotiating with third parties expressing interest in
purchasing the assets of the Debtor as a going-concern; and
g. assisting the Debtor in the preparation of reports of
operation and other relevant financial disclosures.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Stephen Berken $350
Sean Cloyes $350
Joshua Sheade $350
Paralegals $125
On Dec. 29, 2021, the firm received the sum of $5,000 as a
retainer.
As disclosed in court filings, Berken Cloyes is "disinterested"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Sean Cloyes, Esq.
Stephen E. Berken, Esq.
Berken Cloyes PC
1159 Delaware St.
Denver, CO 80204
Phone: (303) 623-4357
Fax: (720) 554-7853
Email: sean@berkencloyes.com
stephenberkenlaw@gmail.com
About Premier Services Inc.
Premier Services, Inc. is part of the water, sewage and other
systems industry. It is headquartered in Parker, Colo.
Premier Services filed a petition for Chapter 11 protection (Bankr.
D. Colo. Case No. 21-14900) on Sept. 24, 2021, listing as much as
$10 million in both assets and liabilities. James F. Bauer, Jr.,
president of Premier Services, signed the petition.
Judge Michael E. Romero oversees the case.
Berken Cloyes PC serves as the Debtor's bankruptcy counsel.
QHC FACILITIES: Wins Cash Collateral Access on Final Basis
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Iowa, has
authorized QHC Facilities, LLC, and affiliates to use cash
collateral on a final basis in accordance with the budget.
The Court says the cash collateral will be used by the Debtors
solely to (i) fund (x) post-petition operating expenses and general
corporate and working capital requirements, and (y) the expenses of
the Chapter 11 cases, (ii) make any prepetition payments expressly
permitted by Court orders, and (ii) pursue, negotiate, document,
and implement a sale process.
On February 11, 2022, the Debtors and Lincoln Savings Bank entered
into a Senior Secured, Super-Priority Debtor-In-Possession Credit
and Security Agreement. The Debtors' entry into the DIP Credit
Agreement is pending approval of the Court on a final basis.
Prior to the Petition Date, Debtors (a) QHC Facilities, LLC, (b)
QHC Madison Square LLC, (c) Crestridge, Inc., (d) QHC Humboldt
North, LLC, and (e) QHC Humboldt South, LLC entered into a series
of secured notes, security agreements, mortgages, and guaranties in
favor of the Bank.
The Debtors will make post-petition monthly, interest-only payments
to the Bank at the rate of 4.25% per annum of the Prepetition
Secured Loan Claim.
Subject to the Investigation Period and Potential Lien Challenge,
each of the Debtors acknowledges, admits and stipulates that as of
the Petition Date: (a) each Debtor is unconditionally obligated to
the Bank, as of the Petition Date, in the amount; and (b) $370,220
of billed, or unbilled, receivables existed as of the Petition Date
in favor of the Bank.
As adequate protection for the Debtor's use of cash collateral, the
Bank will receive a validly perfected first priority lien on a
security interest in the Debtors' post-petition cash collateral.
The Bank will also have a super-priority claim that will have
priority in each of the Debtors' bankruptcy cases over all priority
claims (except for the Carve-Out and DIP Liens) and unsecured
claims against the Debtors and their estates.
A copy of the order is available at https://bit.ly/3LRKZg3 from
PacerMonitor.com.
About QHC Facilities
Clive, Iowa-based QHC Facilities, LLC, 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.
QHC Facilities reported $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. Newmark Real Estate of Dallas, LLC, and
Gibbins Advisors, LLC, serve as the Debtors' investment banker and
restructuring advisor, respectively.
The U.S. Trustee for Region 12 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases. Troutman
Pepper Hamilton Sanders, LLP and Cutler Law Firm, P.C. serve as the
committee's lead bankruptcy counsel and local counsel,
respectively.
Lincoln Savings Bank, as lender, is represented by:
Jeffrey W. Courter, Esq.
Nyemaster Goode, P.C.
700 Walnut Street, Suite 1600
Des Moines, IA 50309
Tel: (515) 283-8048
Fax: (515) 283-8045
Email: jwc@nyemaster.com
QUALTEK LLC: S&P Assigns 'B-' Issuer Credit Rating, Outlook Neg.
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
QualTek Services Inc., parent company to QualTek LLC. The outlook
is negative.
At the same time, S&P affirmed its 'B-' rating on the company's
term loan and revised its recovery rating to '3' (50%-70%; rounded
estimate: 60%) from '4', indicating an expectation of meaningful
recovery in the event of default.
S&P said, "The negative outlook incorporates downside risk to our
current forecast, with high debt leverage and potential negative
free cash flows over the next 12 months. We also note QualTek's
upcoming asset-based loan (ABL) maturity in July 2023."
QualTek Services completed its merger with Roth CH Acquisition III
Co. on Feb. 14, 2022. The company proposed to issue up to $125
million of convertible notes to support the transaction and fund
future growth.
Pro forma for the transaction, S&P Global Ratings expects the
company's adjusted debt to EBITDA will be above 10x in 2022.
S&P said, "The rating continues to reflect QualTek's elevated debt
leverage. On a pro forma basis, we anticipate the company's
profitability will expand through organic growth and acquisitions.
However, we expect cash flows will be hurt by the significant
merger transaction fees and expenses this year. Overall, we
forecast QualTek's adjusted debt to EBITDA will be above 10x in
2022.
"Although we currently forecast the company's debt leverage will
improve over the longer term, downside risk remains. We believe the
business should benefit from the increased spending for 5G network
buildouts from its telecommunication customers, including AT&T,
T-Mobile and Verizon. We anticipate QualTek's EBITDA margins should
improve over time as revenues grow and the company reaps the
benefit of earning contributions from recent acquisitions.
Therefore, we expect its debt to EBITDA will improve in 2023.
Nevertheless, in our view, potential operational uncertainties
could present downside risks to our forecast, resulting higher debt
leverage than we currently anticipate.
"We expect QualTek's total liquidity will be adequate in the next
12 months. Pro forma for the merger and convertible notes issuance,
we assume QualTek will pay down a substantial portion of its ABL
borrowings, improving its liquidity position. The company's
near-term maturities include annual term loan amortization of about
$9.6 million and capital lease payments. We assume the company will
need about $30 million-$40 million of working capital to support
its ongoing projects, as well as annual capital expenditure of
about 1% of the revenues. The company's $103.5 million ABL credit
facility matures in July 2023.
"The negative outlook reflects the downside risk to our current
forecast, with high debt leverage and potential negative free cash
flows over the next 12 months.
"We could lower the rating if the company's liquidity becomes
strained. This could occur if the company is not able to address
its ABL maturity in a timely manner, experiences significant
working capital outflows, or generates sustained negative cash free
flows. We could also lower the rating if we believe QualTek's
capital structure is unsustainable over the longer term. This could
occur due to macroeconomic impacts, COVID-19-related uncertainties,
or weaker-than-expected operating performance that results
sustained high debt leverage.
"We could revise the outlook to stable over the next 12 months if
QualTek addresses the July 2023 ABL maturity in a timely manner and
maintains adequate liquidity. We would also look for QualTek to
decrease debt leverage toward 6.5x and sustain positive free
operating cash flow (FOCF) to debt. This could be caused by solid
execution on projects and accompanying strength in the company's
telecommunications end markets."
ESG credit indicators: E-2 S-2 G-3
S&P said, "Governance is a moderately negative consideration in our
credit rating analysis of QualTek LLC, as is the case for most
rated entities majority owned by private-equity sponsors. We
believe the company'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."
QUOTIENT LIMITED: Highbridge Reports 9.9% of Ordinary Shares
------------------------------------------------------------
Highbridge Capital Management, LLC disclosed in a Schedule 13G/A
filed with the Securities and Exchange Commission that as of Dec.
31, 2021, it beneficially owned 20,988,285 Ordinary Shares
(including 419,673 Ordinary Shares issuable upon exercise of
warrants and 13,227,509 Ordinary Shares issuable upon conversion of
convertible notes) of Quotient Limited, representing 9.9 percent of
the shares outstanding. A full-text copy of the regulatory filing
is available for free at:
https://www.sec.gov/Archives/edgar/data/1596946/000090266422001501/p22-0852sc13ga.htm
About Quotient Limited
Penicuik, United Kingdom-based Quotient Limited is a
commercial-stage diagnostics company committed to reducing
healthcare costs and improving patient care through the provision
of innovative tests within established markets. With an initial
focus on blood grouping and serological disease screening, Quotient
is developing its proprietary MosaiQTM technology platform to offer
a breadth of tests that is unmatched by existing commercially
available transfusion diagnostic instrument platforms. The
Company's operations are based in Edinburgh, Scotland; Eysins,
Switzerland and Newtown, Pennsylvania.
Quotient Limited reported a net loss of $108.47 million for the
year ended March 31, 2021, a net loss of $102.77 million for the
year ended March 31, 2020, and a net loss of $105.38 million for
the year ended March 31, 2019. As of Sept. 30, 2021, the Company
had $249.60 million in total assets, $334.92 million in total
liabilities, and a total shareholders' deficit of $85.33 million.
REMINGTON OUTDOOR: Case a Wake Up Call for Gunmakers, Says Koskoff
------------------------------------------------------------------
The firm Koskoff, Koskoff & Bieder announced Feb. 15, 2022, that
the families of five children and four adults killed in the 2012
shooting at Sandy Hook Elementary School reached a landmark victory
in their long-running case against Remington, the company that made
and marketed the AR-15 weapon used in the massacre.
The families have secured two key victories: first, they have
obtained and can make public thousands of pages of internal company
documents that prove Remington's wrongdoing and carry important
lessons for helping to prevent future mass shootings. Second, the
now-bankrupt Remington's four insurers have all agreed to pay the
full amount of coverage available, totaling $73 million.
"These nine families have shared a single goal from the very
beginning: to do whatever they could to help prevent the next Sandy
Hook. It is hard to imagine an outcome that better accomplishes
that goal," said Josh Koskoff, Lead Counsel and Partner at Koskoff,
Koskoff & Bieder.
"This victory should serve as a wake up call not only to the gun
industry, but also the insurance and banking companies that prop it
up. For the gun industry, it's time to stop recklessly marketing
all guns to all people for all uses and instead ask how marketing
can lower risk rather than court it. For the insurance and banking
industries, it's time to recognize the financial cost of
underwriting companies that elevate profit by escalating risk. Our
hope is that this victory will be the first boulder in the
avalanche that forces that change."
"My beautiful butterfly, Dylan, is gone because Remington
prioritized its profit over my son's safety. Marketing weapons of
war directly to young people known to have a strong fascination
with firearms is reckless and, as too many families know, deadly
conduct. Using marketing to convey that a person is more powerful
or more masculine by using a particular type or brand of firearm is
deeply irresponsible. My hope is that by facing and finally being
penalized for the impact of their work, gun companies, along with
the insurance and banking industries that enable them, will be
forced to make their business practices safer than they have ever
been," said Nicole Hockley, whose son Dylan was killed in the
shooting.
The families brought this case, first filed in December 2014, to
learn why and how Remington marketed the AR-15 specifically to
young, violence-prone men. The wrongful death lawsuit faced a
seemingly insurmountable legal hurdle: a protection for firearms
manufacturers, the Protection of Lawful Commerce in Arms Act
(“PLCAA”), that was believed to be a blanket immunity in mass
shooting cases. Legal experts called the case "a losing
proposition," "an extraordinary reach" and a "remote possibility."
Taking an innovative approach to the PLCAA problem, the families'
attorneys, Josh Koskoff and Alinor Sterling of Koskoff, Koskoff &
Bieder (‘KKB’), showed that Remington's aggressive and
violence-glorifying marketing of its AR-15s was an unfair trade
practice, a violation of Connecticut law. This ground-breaking
legal strategy meant that PLCAA’s protection for firearms
manufacturers did not apply and thus allowed the case to move
forward. The families’ case is often compared to the first cases
in the historic tobacco litigation, important both because it shows
that winning against a previously impervious industry is possible,
and because it lifts the veil of corporate secrecy.
Over the life of the case, the families have obtained thousands of
pages of internal documents and conducted multiple depositions of
Remington's leadership and marketing teams. Driven by profit goals
set by parent company Cerberus, Remington changed its previously
sober approach to marketing firearms in favor of an aggressive,
multi-media campaign that pushed sales of AR-15s through product
placement in first-person shooter videogames and by touting the
AR-15's effectiveness as a killing machine.
"Before we brought this case, gunmakers thought they could not be
held accountable for mass shootings. This case shows they can be,"
said Alinor Sterling, Lead Counsel and Partner at Koskoff, Koskoff
& Bieder. “It is already serving as a model for other gun cases
across the country. When an industry can be held accountable for
its behavior, that behavior becomes more responsible.”
In July 2021, Remington took the extraordinary step of offering $33
million to settle this "losing proposition" of a case. The families
did not accept because they wanted to ensure they had obtained
enough documents and taken enough depositions to prove Remington's
misconduct, a process that has continued over the last six months.
It was also important that the insurance carriers pay all available
coverage toward settlement to ensure the case's message to the
insurance industry was clear. The families were successful in that
respect as well—the settlement amount, $73 million, is all the
available coverage.
"Today is not about honoring our son Benjamin. Today is about how
and why Ben died. It is about what is right and what is wrong. Our
legal system has given us some justice today, but David and I will
never have true justice. True justice would be our fifteen-year-old
healthy and here with us. But Benny will never be 15. He will be 6
forever because he is gone forever. Today is about what is right
and what is wrong," said Francine Wheeler, whose son Ben was killed
in the shooting.
"Our loss is irreversible, and in that sense this outcome is
neither redemptive nor restorative. One moment we had this
dazzling, energetic 6-year-old little boy, and the next all we had
left were echoes of the past, photographs of a lost boy who will
never grow older, calendars marking a horrifying new anniversary, a
lonely grave, and pieces of Noah’s life stored in a backpack and
boxes," said Lenny Pozner and Veronique De La Rosa, whose son Noah
was killed in the shooting. "Every day is a realization that he
should be there, and he is not. What is lost remains lost. However,
the resolution does provide a measure of accountability in an
industry that has thus far operated with impunity. For this, we are
grateful."
Known as Soto Et Al v. Bushmaster Firearms International in
Connecticut Superior Court, the plaintiffs in the case include the
families of: Victoria Soto, Dylan Hockley, Mary Sherlach, Noah
Pozner, Lauren Rousseau, Benjamin Wheeler, Jesse Lewis, Daniel
Barden and Rachael D'Avino.
Since the case was first filed more than seven years ago, the
plaintiffs have been represented by Joshua D. Koskoff and Alinor C.
Sterling of Koskoff, Koskoff & Bieder. Former Koskoff attorney
Katie Mesner-Hage was instrumental in formulating the legal
strategy, and Koskoff attorneys Jeffrey Wisner and Lorena Thompson
worked tirelessly on the case.
The Koskoff team also received extraordinary pro bono support from
the greater legal community at various stages of the litigation.
Of particular note, in February 2020, the Koskoff team was joined
by Chris Boehning and Janus Schutte of Paul, Weiss as additional
counsel of record. Mr. Boehning and Mr. Schutte and their many
colleagues worked alongside the Koskoff firm contributing to
litigation strategy and to the families’ successful efforts to
secure critical evidence. They, along with their colleague Kyle
Kimpler, took the lead in protecting the case during Remington’s
second bankruptcy proceeding. Don Verrilli and his team at Munger
Tolles wrote the winning argument opposing SCOTUS review of the
Connecticut Supreme Court’s landmark decision allowing the
families’ case to continue after a state court dismissal.
About Remington Outdoor
Remington Outdoor Company, Inc., and its affiliates are
manufacturers of firearms, ammunition and related products for
commercial, military, and law enforcement customers throughout the
world. They operate seven manufacturing facilities located across
the United States. The companies' principal headquarters are
located in Huntsville, Alabama.
Remington Outdoor Company and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Lead Case
No. 20-81688) on July 27, 2020. At the time of the filing,
Remington disclosed assets of between $100 million and $500 million
and liabilities of the same range.
Judge Clifton R. Jessup Jr. oversees the cases.
The Debtors have tapped O'Melveny & Myers LLP as their bankruptcy
counsel, Burr & Forman LLP as local counsel, M-III Advisory
Partners LP as financial advisor, Ducera Partners LLC as investment
banker, and Prime Clerk LLC as notice, claims and balloting agent.
The U.S. Bankruptcy Administrator for the Northern District of
Alabama appointed a committee of unsecured creditors on Aug. 6,
2020. The committee is represented by Fox Rothschild, LLP and Baker
Donelson Bearman Caldwell & Berkowitz, PC.
RESIDEO FUNDING: Moody's Hikes CFR to Ba2; Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded Resideo Funding Inc.'s Corporate
Family Rating to Ba2 from Ba3 and Probability of Default Rating to
Ba2-PD from Ba3-PD. Moody's also upgraded the ratings on Resideo's
upsized first lien senior secured term loan and revolving credit
facility to Ba1 from Ba2, the rating on senior unsecured notes to
Ba3 from B1, and the company's Speculative Grade Liquidity Rating
to SGL-1 from SGL-2. The outlook remains stable.
The upgrade of Resideo's Corporate Family Rating reflects the
demonstrated strengthening of the company's credit metrics,
including debt leverage below 3.0x, EBITA margin improvement toward
8.5%, interest coverage in the high single digits and free cash
flow to debt in the mid teens. Moody's expects the achieved level
of improvement to be sustained over the next 12 to 18 months as the
company's operating performance benefits from the support of
favorable market demand conditions and growth prospects within its
Products & Solutions and ADI Global Distribution business
segments.
"The upgrade also reflects Resideo's meaningful operating scale,
and Moody's expectation that in addition to its disciplined
approach to leverage, Resideo will operate conservatively with
respect to acquisitions, investments and shareholder-friendly
actions, while continuing to generate robust free cash flow" says
Natalia Gluschuk, Moody's Vice President -- Senior Analyst.
The proceeds from Resideo's $200 million incremental term loan,
along with cash on hand, will be used to fund the acquisition of
First Alert, Inc. (First Alert), a provider of home safety products
operating in retail and commercial channels. Resideo has entered
into the agreement to purchase First Alert from Newell Brands Inc.
for $593 million, which includes $46 million in future tax benefit
for a net purchase price of $547 million. First Alert's product
portfolio includes fire and carbon monoxide detection and fire
suppression devices sold under First Alert, BRK and Onelink
brands.
The acquisition is complementary to Resideo's sensor and security
product portfolio and increases its revenue scale to roughly $6.2
billion (given First Alert's revenue of $395 million). Moody's
estimates Resideo's pro forma debt to EBTIDA of 2.7x (given the $55
million of EBITDA from First Alert and the $200 million of
incremental term loan incurred to finance this transaction), and
EBITDA to interest coverage of about 7.5x at December 31, 2021.
The following rating actions were taken:
Upgrades:
Issuer: Resideo Funding Inc.
Corporate Family Rating, Upgraded to Ba2 from Ba3
Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Secured 1st Lien Bank Credit Facility, Upgraded to Ba1
(LGD3) from Ba2 (LGD2)
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD5)
from B1 (LGD5)
Outlook Actions:
Issuer: Resideo Funding Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Resideo's Ba2 Corporate Family Rating is supported by: 1) its
significant revenue scale of over $6 billion considering the
acquisition and its global footprint; 2) strong market position as
a provider of products and solutions in residential HVAC markets
and a distributor of security and fire protection products in the
professional installation channel; 3) the value of the Honeywell
Home brand, and the technological expertise in manufacturing of
integrated home and security products; 4) conservative financial
strategy that focuses on deleveraging and a willingness to issue
equity; 5) the majority of revenue coming from the retrofit market,
which is generally less volatile than new construction; and 6) the
variety of distribution channels, including the proprietary ADI
Global Distribution business, and a diverse product offering.
At the same time, the credit profile is constrained by: 1) the
significant sensitivity of earnings and cash flows to variations in
demand and the resulting impact on leverage; 2) meaningful
quarterly reimbursement payments for Honeywell's environmental
obligations constraining free cash flow; 3) intense competition
within the company's product categories and the necessity of rapid
technological innovation; 4) the inherent low margin profile of the
distribution business; 5) the cyclicality of residential and
non-residential end markets; and 6) risks related to standalone
operations post spin-off.
The upgrade of Speculative Grade Liquidity Rating to SGL-1 reflects
the company's improved internal liquidity sources, including its
free cash flow generation and the resulting cash balances, which
are expected to remain solid over the next 12 -- 15 months. SGL-1
Speculative Grade Liquidity Rating reflects Moody's expectation
that Resideo will maintain very good liquidity, also supported by
the availability under its $500 million revolving credit facility
expiring in 2026, which is not expected to be utilized
significantly, and good room under financial covenants.
The stable outlook reflects Moody's expectation that Resideo will
continue to demonstrate sustained conservative credit metrics,
benefitting from end market tailwinds, while expanding its revenue
scale and successfully integrating the acquisition of First Alert.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company demonstrates a track
record of successful operation on a stand-alone basis, while
continuing to build stale, and improves EBITA margin sustainably
above 10%. Disciplined financial policies, strong credit metrics
during any industry cycle, including leverage sustained below 2.5x,
robust free cash flow generation with free cash flow to debt
consistently above 10%, good liquidity and favorable end market
trends will also be important considerations for a higher rating.
The ratings could be downgraded if weakness in end markets causes
revenue and operating margin to contract significantly, or if the
company adopts aggressive financial policies or experiences
challenges related to the separation from the legacy business.
Additionally, leverage sustained above 3.5x, EBITA to interest
coverage below 5.0x, free cash flow to debt below 7% or liquidity
deterioration could also result in a ratings downgrade.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Resideo is a provider of thermal, security and energy efficiency
products, software solutions and technologies for a connected home.
The company was spun off as the Homes business from Honeywell
International, Inc. in October 2018. In 2021, Resideo generated
about $5.8 billion in revenue.
REYTECH SERVICES: Voluntary Chapter 11 Case Summary
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Debtor: Reytech Services, LLC
PO Box 540252
Grand Prairie, TX 75054-0252
Business Description: Reytech Services, LLC is part of the
utility system construction industry.
Chapter 11 Petition Date: February 17, 2022
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 22-40334
Judge: Hon. Mark X. Mullin
Debtor's Counsel: Clayton L. Everett, Esq.
NORRED LAW, PLLC
515 E. Border
Arlington, TX 76010
Tel: (817) 704-3984
Email: clayton@norredlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Doug Patterson as company owner.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/FPNH43Y/Reytech_Services_LLC__txnbke-22-40334__0001.0.pdf?mcid=tGE4TAMA
RIVERSTREET VENTURES: Gets OK to Hire TMC Realty as Broker
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Riverstreet Ventures, LLC received approval from the U.S.
Bankruptcy Court for the Eastern District of Louisiana to hire TMC
Realty, LLC to market its property in Algiers, Orleans Parish, La.
The firm's services include:
(b) preparing a program, which may include marketing the
property through newspapers, magazines, journals, letters, flyers,
signs, telephone solicitation, the Internet or such other methods
as TMC Realty may deem appropriate;
(c) preparing advertising letters, flyers or similar sales
materials, which would include information regarding the property;
(e) circulating materials to interested parties regarding the
property after completing confidentiality documents;
(f) responding, providing information to, communicating and
negotiating with and obtaining offers from interested parties and
making recommendations to the Debtor as to whether or not a
particular offer should be accepted;
(g) communicating regularly with the Debtor in connection with
the status of TMC Realty's efforts with respect to the disposition
of the property;
(i) recommending to Debtor the proper method of handling any
specific problems encountered with respect to the marketing or
disposition of the property; and
(j) performing related services.
The Debtor has agreed to pay TMC Realty a 2 percent commission of
the gross sale if no bids are received and the property is sold to
a stalking Horse, or a 5 percent commission of the gross amount of
the sale if the property is sold at an auction.
As disclosed in court filings, TMC Realty neither holds nor
represents an interest adverse to the Debtor's estate.
The firm can be reached through:
S. Parkerson McEnery, MAI
TMC Realty, LLC
d/b/a The McEnery Company
810 Union St., Fourth Floor
New Orleans, LA 70112
Phone: (504) 274-2664
Email: parke@mceneryco.com
About Riverstreet Ventures
Metairie, La.-based Riverstreet Ventures, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No.
21-10818) on June 23, 2021, disclosing total assets of up to $10
million and total liabilities of up to $50 million. Philip J.
Spiegelman, president, signed the petition.
Judge Meredith S. Grabill oversees the case.
Simon Peragine Smith & Redfearn, LLP and Middleburg Riddle Group
serve as the Debtor's bankruptcy counsel and special counsel,
respectively.
ROCHESTER DRUG: Ex-CEO Doud Wants Opioid Conviction Tossed
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Jack Queen of Law360 reports that the first corporate leader to be
convicted of drug trafficking charges stemming from the opioid
crisis is asking a Manhattan federal court to reject the verdict,
arguing Wednesday, February 16, 2022, that prosecutors didn't prove
he schemed to boost revenue by selling to pill mills.
Attorneys for Laurence Doud, the former CEO of opioid distributor
Rochester Drug Co-Operative Inc., said there was no proof that he
conspired to break the law or knew customers were dispensing pills
illegally.
About Rochester Drug Co-Operative
Rochester Drug Cooperative, Inc., is an independently owned New
York cooperative corporation formed in 1905 and incorporated in
1948 with a principal office and place of business located at 50
Jet View Drive, Rochester, New York 14624. Its principal business
is to warehouse, merchandise, and then distribute, on a cooperative
basis, drugs, pharmaceutical supplies, medical equipment and other
merchandise commonly sold in drug stores, pharmacies, health and
beauty stores, and durable medical equipment business. It is a
wholesale regional drug cooperative that operates as both a buying
cooperative and a traditional drug distribution company created for
the purpose of helping independent pharmacies compete in the
current healthcare environment.
Rochester Drug Cooperative sought Chapter 11 protection (Bankr.
W.D.N.Y. Case No. 20-20230) on March 12, 2020.
The Debtor was estimated to have $50 million to $100 million in
assets and $100 million to $500 million in liabilities.
The Hon. Paul R. Warren is the case judge.
The Debtor tapped Bond, Schoeneck & King, PLLC, led by Stephen A.
Donato, as counsel and Epiq Corporate Restructuring, LLC, as claims
and noticing agent.
SEANERGY MARITIME: Fir Tree Entities Report 0% Equity Stake
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Fir Tree SPAC Holdings 2, LLC, Fir Tree Value Master Fund, L.P.,
and Fir Tree, Inc., disclosed in a Schedule 13G/A filed with the
Securities and Exchange Commission that as of Dec. 31, 2021, they
have ceased to be the beneficial owners of shares of common stock
of Seanergy Maritime Corp. A full-text copy of the regulatory
filing is available for free at:
https://www.sec.gov/Archives/edgar/data/0001390707/000136231009001898/c80868sc13gza.htm
About Seanergy Maritime
Greece-based Seanergy Maritime Holdings Corp. --
http://www.seanergymaritime.com-- is the only pure-play Capesize
ship-owner publicly listed in the US. Seanergy provides marine dry
bulk transportation services through a modern fleet of Capesize
vessels. The Company's operating fleet consists of 17 Capesize
vessels with an average age of 11.7 years and aggregate cargo
carrying capacity of approximately 3,011,083 dwt.
Seanergy Maritime reported a net loss of $18.35 million for the
year ended Dec. 31, 2020, a net loss of $11.70 million for the
year
ended Dec. 31, 2019, and a net loss of $21.06 million for the year
ended Dec. 31, 2018. As of Dec. 31, 2020, the Company had $295.24
million in total assets, $199.55 million in total liabilities, and
$95.69 million in total stockholders' equity.
SEANERGY MARITIME: Lind Global, et al. Report Less Than 1% Stake
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In a Schedule 13G/A filed with the Securities and Exchange
Commission, Lind Global Macro Fund LP, Lind Global Partners LLC,
and Jeff Easton disclosed that as of Dec. 31, 2021, they
beneficially own 1,000,000 shares of common stock of Seanergy
Maritime Holdings Corp., representing 0.6 percent of the shares
outstanding. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/1448397/000092963822000420/sc13g.htm
About Seanergy Maritime
Greece-based Seanergy Maritime Holdings Corp. --
http://www.seanergymaritime.com-- is the only pure-play Capesize
ship-owner publicly listed in the US. Seanergy provides marine dry
bulk transportation services through a modern fleet of Capesize
vessels. The Company's operating fleet consists of 17 Capesize
vessels with an average age of 11.7 years and aggregate cargo
carrying capacity of approximately 3,011,083 dwt.
Seanergy Maritime reported a net loss of $18.35 million for the
year ended Dec. 31, 2020, a net loss of $11.70 million for the year
ended Dec. 31, 2019, and a net loss of $21.06 million for the year
ended Dec. 31, 2018. As of Dec. 31, 2020, the Company had $295.24
million in total assets, $199.55 million in total liabilities, and
$95.69 million in total stockholders' equity.
SEQUENTIAL BRANDS: US Trustee Says Ch. 11 Releases Unconfirmable
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Jeff Montgomery of Law360 reports that the U.S. Trustee's Office
has opposed the confirmation of former Jessica Simpson fashion line
owner Sequential Brands Group Inc.'s liquidating Chapter 11 plan,
telling a U.S. Bankruptcy Court judge in Delaware that the plan's
nonconsensual, third-party releases are unjustified and
unsupportable.
In a filing with the court late Tuesday, February 15, 2022, the
U.S. Trustee's Office told Judge John T. Dorsey that the plan —
up for a confirmation hearing on February 22, 2022 — imposes
third-party liability releases on numerous nondebtors without their
consent, "merely because such parties are related in some fashion"
to the debtors or one of their secured debtors.
About Sequential Brands Group
Sequential Brands Group, Inc. (NASDAQ:SQBG), together with its
subsidiaries, owns various consumer brands. The New York-based
company licenses its brands for a range of product categories,
including apparel, footwear, fashion accessories, and home goods.
Sequential Brands Group and its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-11194) on Aug. 31,
2021. The company disclosed total assets of $442,774,937 and debt
of $435,073,539 as of Aug. 30, 2021.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Gibson, Dunn & Crutcher, LLP and Pachulski Stang
Ziehl & Jones, LLP as legal counsel. Miller Buckfire & Co. and its
affiliate, Stifel Nicolaus & Co., Inc., serve as financial advisor
and investment banker. Kurtzman Carson Consultants, LLC, is the
claims agent and administrative advisor.
King & Spalding, LLP, is counsel to the debtor-in-possession
lenders (and the consenting lenders under the restructuring support
agreement) while Morris, Nichols, Arsht & Tunnell, LLP serve as the
DIP lenders' local counsel.
SMOKINKWR LLC: $260,000 DIP Loan from Dickey's Barbecue OK'd
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The U.S. Bankruptcy Court for the Southern District of Texas has
authorized Smokinkwr, LLC to use cash collateral on a final basis
and obtain post-petition financing.
The Debtor is authorized to to obtain a postpetition financing
facility consisting of senior secured, superpriority, revolving
loan to be advanced and made available to the Debtor in the
aggregate maximum principal amount of $260,000 consistent with the
terms and conditions of a Senior Secured Debtor-in-Possession
Credit and Security Agreement, dated as of January 28, 2022, among
the Debtor, as borrower, and Dickey's Barbecue Restaurants, Inc.,
as lender, and the Approved Budget.
An immediate and ongoing need exists for the Debtor to use cash
collateral and obtain the DIP Facility in order for the Debtor to
pursue a chapter 11 plan of reorganization, and maximize the value
of its business and assets as debtor in possession under chapter 11
of the Bankruptcy Code.
The Debtor will repay Dickey's for prior extensions of credit in
the amount of $161,351, which amounts represent financing that was
extended to the Debtor after the Petition Date but prior to the
entry of the Interim DIP Order approving the DIP Facility.
The Debtor is permitted to use the cash collateral of any
Prepetition Secured Parties and proceeds of the DIP Loan(s) in
accordance with the budget approved by US Foods, Inc. and the DIP
Lender.
As security for the DIP Obligations, the DIP Lender will have
valid, perfected, enforceable, non-avoidable, first priority,
priming liens on and security interests in all now owned or
hereafter acquired assets and property of the Debtor, without the
necessity of any further action of any kind or nature by the DIP
Lender in order to claim or perfect such rents, issues, products,
offspring, proceeds and/or profits; and valid, perfected,
enforceable, non-avoidable, first priority or other junior liens on
and security interests in all now owned or hereafter acquired
assets and property of the Debtor.
The DIP Lender is not granted a lien superior to the landlord's
lien held under the Commercial Lease of Carolina Real Estate
Holdings, LLC; and the Court makes no findings as to the rights of
the parties to the Carolina Lease, which are reserved by all
parties.
Any liens granted pursuant to the Final DIP Order shall attach
solely to the proceeds of the Debtor's real property leasehold
resulting from its leases with Brixmor Operating Partnership and
KRG Kingwood LLC, and shall not attach to the leasehold interests
resulting from its leases with Brixmor and KRG. Following the
occurrence of an Event of Default, the DIP Lender may enter upon
the leased real property resulting from its leases with Brixmor and
KRG after providing five business days' written notice to Brixmor
and KRG, as applicable.
The Debtor shall repay Dickey's for prior extensions of credit in
the amount of $161,351.37, which amounts represent financing that
was extended to the Debtor after the Petition Date but prior to the
entry of the Interim DIP Order approving the DIP Facility.
The Obligations under all Revolving Loans shall mature and be
payable in full at the earlier of: (1) the first business day that
is three months after the entry of the Interim Order; (2)
confirmation of a chapter 11 plan in the Chapter 11 Case; (3)
conversion of the Chapter 11 Case to chapter 7; (4) dismissal of
the Chapter 11 Case; or (5) appointment of a chapter 11 trustee in
the Chapter 11 Case.
A copy of the order and the Debtor's budget for the period from
January 8 to March 6, 2022 is available at https://bit.ly/3LD1igv
from PacerMonitor.com.
About Smokinkwr LLC
Smokinkwr LLC, a company based in Conroe, Texas, sought Chapter 11
protection (Bankr. S.D. Texas Case No. 21-33989) on Dec. 14, 2021,
listing up to $10 million in both assets and liabilities. Brian M.
Hubbard, sole member and managing member, signed the petition.
Judge Christopher M. Lopez oversees the case.
The Law Firm of Thomas F. Jones III serves as the Debtor's legal
counsel.
U.S. Foods, as secured creditor, is represented by Cozen O'Connor.
SOLID BIOSCIENCES: Suvretta Capital, et al. Report 5.7% Stake
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Suvretta Capital Management, LLC, Averill Master Fund, Ltd., and
Aaron Cowen disclosed in a Schedule 13G/A filed with the Securities
and Exchange Commission that as of Dec. 31, 2021, they beneficially
own 6,287,193 shares of common stock of Solid Biosciences Inc.,
representing 5.7 percent of the shares outstanding. A full-text
copy of the regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1707502/000091957422000933/d9171293_13g-a.htm
About Solid Biosciences
Headquartered in Cambridge, MA, Solid Biosciences --
www.solidbio.com -- is a life sciences company focused on advancing
transformative treatments to improve the lives of patients living
with Duchenne. Disease-focused and founded by a family directly
impacted by Duchenne, the Company's mandate is simple yet
comprehensive work to address the disease at its core by correcting
the underlying mutation that causes Duchenne with its lead gene
therapy candidate, SGT-001, as well as our recently announced
next-generation gene therapy candidate, SGT-003.
Solid Biosciences reported a net loss of $88.29 million for the
year ended Dec. 31, 2020, a net loss of $117.22 million for the
year ended Dec. 31, 2019, and a net loss of $74.80 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2021, the Company had
$248.99 million in total assets, $25.62 million in total
liabilities, and $223.36 million in total stockholders' equity.
Boston, Massachusetts-based PricewaterhouseCoopers LLP, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated March 15, 2021, citing that the
Company has incurred losses and negative cash flows from operations
since inception that raise substantial doubt about its ability to
continue as a going concern.
SOUTHMINSTER: Fitch Assigns 'BB' Issuer Default Rating
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Fitch Ratings has assigned Southminster (SM) a 'BB' Issuer Default
Rating (IDR), and has affirmed the 'BB' rating on the following
Public Finance Authority bonds issued on behalf of SM:
-- $86,200,000 retirement facilities first mortgage revenue bonds
(Southminster) series 2018.
The Rating Outlook is Stable.
SECURITY
A gross revenue pledge, mortgage on the facility and a debt service
reserve fund for the 2018 tax-exempt bonds.
ANALYTICAL CONCLUSION
The 'BB' rating reflects the expected resilience of SM's financial
profile through Fitch's forward-looking scenario analysis, within
the context of SM's business profile. SM's business profile is
characterized by a strong revenue defensibility as a single site,
Type 'B' life plan community (LPC) with solid demand in a good
service area, and weak operating risk, driven by an elevated
leverage position, due to the debt associated with SM's $140
million Master Facilities Plan (MFP) that was completed in November
2020.
The MFP included a two phase 66-unit independent living (IL)
expansion (The Terraces) and a new health center. SM is now moving
forward on 20-unit IL apartment expansion that is being built in
the space vacated by the former health center. The expansion
project, which will be built in three phases over the next year, is
expected to cost around $23 million and is being funded by a bank
borrowing.
SM borrowed $30 million in bank debt in June 2021 that is a draw
down loan. Approximately $6 million will pay off previous bank
debt, and approximately $12 million is expected to be paid down
with entrance fees from the IL expansion. The expansion units are
100% pre-sold.
Fitch's forward look shows SM's maintaining its current financial
profile through a moderate stress scenario, as revenues from the
MFP support an improved performance in the next two to four years,
and as SM funds and completes its stated capital plans, including
the 20-unit IL expansion.
KEY RATING DRIVERS
Revenue Defensibility: 'a'
Single Site LPC with Strong Demand Characteristics
The strong revenue defensibility is supported by IL occupancy that
averaged 99% over the last five years, and includes the fill up of
the two-phase 66-unit IL Terraces expansion, and is supported by a
good waitlist, with 668 members as of January 2022. Demand in the
other continuum of care service lines is also good. With the
opening of the new health center in October 2020, SM reports
stronger than historical demand for skilled nursing, which has
exceeded budgeted expectations in early fiscal 2022.
Competition for SM's Type 'B' contract is manageable in the primary
service area of Southeast Charlotte, NC. SM has a demonstrated
history of regular entrance fee and monthly rate increases, and
entrance fee pricing is consistent with area housing prices and
resident wealth indicators, which provides further support for the
strong market position. In addition, SM has a modest amount of
geographic diversity, as approximately 30% of entering residents in
fiscal 2021 originated from outside of NC.
Operating Risk: 'bb'
Improved Performance Expected; Highly Leveraged
The weak operating risk assessment largely reflects SM's elevated
leverage position. At FYE 2021, SM's maximum annual debt service
(MADS) as a percentage of revenue and debt to net available were
consistent with a weaker operating assessment at 23.3% and 10.1x,
respectively. With the additional borrowing for the 20-unit IL
expansion, Fitch expects these figures to remain elevated over the
next two to four years. However, with the additional revenues from
the MFP and additional revenues expected from the current
expansion, Fitch expect SM's operating performance to improve.
Prior to the MFP and the coronavirus pandemic, SM had operating
ratios in the mid to lower 90% range. Over the last few years, the
operating ratio has risen to above 100%. It was 112% in fiscal 2021
(Sept. 30 year-end). Fitch expects SM's operating ratio to show
improvement over the next few years supported by the additional
revenue from the expansion IL apartments. Fitch also expects
revenues from SM's new skilled nursing center to support the
improvement, as SM rebuilds the census in the unit.
Skilled nursing occupancy fell to 48% in fiscal 2020, but climbed
back to nearly 80% at the end of 1Q fiscal 2022. SM management
reports the census is ahead of budget, driven by a rise in external
admits. SM traditionally has taken a limited number of external
admits. The good census helped improve the operating ratio to 104%
at Dec. 31, 2021. Currently, SM's skilled nursing center is all
private pay.
SM's remains in a cycle of elevated capital spending. Over the last
five years capex averaged 476.1% of depreciation reflecting the
spending on the MFP. The capex spending supports a very good
average age of plant of 8.6 years (fiscal year-end 2021). With the
20 unit IL expansion capex spending remains robust and was 203.5%
of depreciation in 1Q fiscal 2022. Longer term, Fitch believes that
SM's investments will keep the campus very marketable, and that
over time, SM's leverage position will moderate, as cash flow grows
and debt amortizes.
Financial Profile: 'bb'
Financial Profile Stable Through a Moderate Stress
Given SM's strong revenue defensibility and weak operating risk,
and Fitch's forward-looking scenario analysis, Fitch expects key
leverage metrics to remain stable through the current economic and
business cycle. SM had unrestricted cash and investments of
approximately $33 million at Sept. 30, 2021, which represented
about 27.2% of total adjusted debt, when including a $9 million
debt service reserve fund. Days cash on hand and coverage of actual
at FYE 2021, were both good for the rating level at 381 days and
3.2x, respectively.
Coverage of the higher $9 million MADS was good at 1.7x (as
calculated by Fitch). Fiscal 2022 will be the first year SM is
tested on the higher MADS. Fitch's baseline scenario, which is a
reasonable forward look of financial performance over the next five
years, given current economic expectations, shows SM operating
ratio improving over the next few years to closer to 100%. After
the IL expansion is completed in fiscal 2023, capital spending is
expected to drop to below depreciation.
The forward look assumes an economic stress (to reflect both
operating and equity volatility); the equity stress is specific to
SM's asset allocation. SM's key leverage metrics (cash-to-adjusted
debt and MADS coverage) remain resilient through a stress scenario.
DCOH remains consistent with historical levels both in the base and
stress cases, which is neutral to the rating outcome.
Asymmetric Additional Risk Considerations
No asymmetric risks informed the rating assessments.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Growth in unrestricted liquidity such that cash to adjusted
debt stabilizes closer to 50% through Fitch's forward look:
-- Improved cash flow such that MADS coverage is consistently
around 2x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Failure to cover, per bond documents, the $9 million fiscal
2022 MADS, which is the first year SM will be tested on the
funds it borrowed for the MFP;
-- Deterioration in unrestricted liquidity or a debt issuance
such that cash to adjusted debt is expected to remain below
20%.
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.
SM is a North Carolina nonprofit corporation organized in 1984 that
owns and operates Southminster, a single site, Type 'B' contract,
senior living community. SM is the only member of the obligated
group. At Dec. 31, 2021, SM had 299 IL units, 25 AL units, 60
skilled nursing beds. Total operating revenues in fiscal 2021 was
$35.6 million.
SM residents are offered type 'B' modified residency agreements
with three options. Over 80% of residents are on the standard plan,
which amortizes the entrance fee paid at 5% per month for 20 months
and offers no refund. The other residents are divided between a 50%
refundable plan, which amortizes the entrance fee paid at 5% per
month for the first 10 months of occupancy, and a 90% refundable
plan where the plan is amortized at 5% per month for two months
following occupancy.
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.
TELINTEL LTD: Wins Cash Collateral Access Thru March 17
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The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, has authorized Telintel, Ltd. to use cash
collateral on an interim basis in the ordinary course of business
in accordance with the budget, with a 10% variance.
The Debtor is permitted to use cash collateral through the earlier
of March 17, 2022, or the occurrence of an Event of Default.
The Court says the Operating Budget may be modified at any time
during the cash collateral term without further court order, upon
written agreement between the Debtor and Decathlon Alpha III, L.P.
As adequate protection for the Debtor's use of cash collateral, the
Debtor grants in favor of the Alleged Secured Creditors, including
Decathlon, a post-petition security interest and lien in, to and
against any and all assets of the Debtor to the extent of the
diminution resulting from use of cash collateral.
The replacement liens and security interests granted will be deemed
attached, perfected, and enforceable against the Debtor and all
other persons including without limitation any subsequent Trustee
-- if appointed under Chapter 7 or Chapter 11 of the Bankruptcy
Code -- without the filing of any financing statements or other
compliance with non-bankruptcy law.
These events constitute an "Event of Default:"
a. failure of the Debtor to timely comply with any obligation
contained in this Order; or
b. entry of an order converting or dismissing this case or
appointing an operating trustee or examiner.
A further cash collateral hearing is scheduled for March 10 at 1:30
p.m. by video conference.
A copy of the order and the Debtor's budget for the period from
January to March 2022 is available at https://bit.ly/3LFTQBe from
PacerMonitor.com.
The Debtor projects $650,000 in total income and $194,904 in total
expenses for February 2022.
About Telintel Ltd
Telintel, Ltd., a Weston, Fla.-based provider of telecommunication
services, filed a petition for Chapter 11 protection (Bankr. S.D.
Fla. Case No. 21-22154) on Dec. 30, 2021, listing $751,038 in
assets and $4,996,862 in liabilities. Mario Acosta, chief executive
officer, signed the petition.
Judge Peter D. Russin oversees the case.
The Debtor tapped Thomas L. Abrams, Esq., at Gamberg & Abrams as
legal counsel and Kaufman Rossin & Co., PA as accountants.
VENCHUR INVESTMENTS: Files Emergency Bid to Use Cash Collateral
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Venchur Investments, LLC asks the U.S. Bankruptcy Court for the
Middle District of Florida, Orlando Division, for authority to use
cash collateral and provide adequate protection to Celtic Bank
Corporation and, to the extent necessary, Supersonic Funding.
The Debtor estimates it will require an initial monthly operating
reserve of $30,000 to continue to maintain monthly operations, and
depending on the month, a greater or lesser amount will be required
each comparable period thereafter.
The Debtor commenced the Chapter 11 case to stop an eviction action
filed by its landlord, Golfview MLD, LLC and to implement a
comprehensive restructuring, stabilize its operations for the
benefit of its customers, secured creditors, employees, vendors,
and other unsecured creditors; and to propose a mechanism to
efficiently address and resolve all claims.
As of the Petition Date, the Debtor has approximately $2,864 in
cash and cash equivalents, and the Debtor is owed approximately $0
in accounts receivable. The Debtor's earnings going forward may be
subject to the Creditor's alleged liens, and to the extent that
such future earnings may be deemed to be cash collateral, the
Debtor seeks authority to use same.
The Creditor holds a claim against the Debtor in the approximate
amount of $191,101, which is disputed and unliquidated.
Supersonic holds a claim against the Debtor in an unknown amount,
which is disputed and unliquidated.
As adequate protection for the use cash collateral, the Debtor
proposes to grant Celtic Bank and Supersonic replacement liens with
the same validity, extent, and priority as their prepetition
liens.
The Debtor also requests an emergency preliminary hearing.
A copy of the motion and the Debtor's budget for the period from
March to August 2022 is available for free at
https://bit.ly/3oXdDlM from PacerMonitor.com.
The Debtor projects $265,000 in gross sales and $140,200 in total
operating expenses for the period.
About Venchur Investments, LLC
Venchur Investments, LLC operates a restaurant, bar, and event
space at its principal location at premises located at 3231
Edgewater Drive, Orlando, Florida 32804.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 6:22-bk-00539) on
February 15, 2022. In the petition signed by Pasquale Semeraro,
managing member, the Debtor disclosed up to $50,000 in assets and
up to $500,000 in liabilities.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC, represents the
Debtor as counsel.
VYANT BIO: Mitchell Kopin, et al. No Longer Own Common Shares
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Mitchell P. Kopin, Daniel B. Asher, and Intracoastal Capital LLC
disclosed in a Schedule 13G/A filed with the Securities and
Exchange Commission that as of Dec. 31, 2021, they held no shares
of common stock of Vyant Bio, Inc. A full-text copy of the
regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1349929/000121390022006694/ea155272-13ga1intra_vyantbio.htm
About Vyant Bio
Vyant Bio, Inc. (formerly known as Cancer Genetics, Inc.) is
emerging as an advanced biotechnology drug discovery company.
Vyant Bio is rapidly identifying small and large molecule
therapeutics to treat central nervous system (CNS) and
oncology-related disorders.
Vyant Bio reported a net loss of $8 million for the year ended Dec.
31, 2020, a net loss of $6.71 million for the year ended Dec. 31,
2019, and a net loss of $20.37 million for the year ended Dec. 31,
2018. As of Sept. 30, 2021, the Company had $61.22 million in total
assets, $5.30 million in total liabilities, and $55.92 million in
total stockholders' equity.
WAYNE BARTON: Gets OK to Hire Sodl & Ingram as Special Counsel
--------------------------------------------------------------
Wayne Barton Study Center, Inc. received approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire Sodl
& Ingram, PLLC as its special counsel.
The Debtor requires legal assistance in transactional matters,
including the sale of its real property located at 269 NE 14th St.,
Boca Raton, Fla., to Cedar Holdings, LLC.
The firm will charge $425 per hour for its services, plus costs.
As disclosed in court filings, Sodl & Ingram does not represent any
interest adverse to the Debtor or its estate.
The firm can be reached through:
Andrew Sodl, Esq.
Sodl & Ingram, PLLC
233 E Bay Street, Suite 1113
Jacksonville, FL 32202
Phone: (904) 257-5777
Email: andrew.sodl@si-law.com
About Wayne Barton
Wayne Barton Study Center, Inc. is a tax-exempt entity in Boca
Raton, Fla., which was established to enhance the health, welfare,
and education of children in need in its community.
Wayne Barton Study Center filed a petition for Chapter 11
protection (Bankr. S.D. Fla. Case No. 22-10384) on Jan. 18, 2022,
listing up to $10 million in assets and liabilities. Wayne Barton,
president, signed the petition.
Judge Mindy A. Mora oversees the case.
The Debtor tapped Wernick Law, PLLC as bankruptcy counsel and Sodl
& Ingram, PLLC as special counsel.
WROE ENTERPRISES: Taps Eric A. Liepins as Bankruptcy Counsel
------------------------------------------------------------
Wroe Enterprises, LLC seeks seeks authority from the U.S.
Bankruptcy Court for the Northern District of Texas to employ Eric
A. Liepins, P.C. to serve as legal counsel in its Chapter 11 case.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Attorneys $275 per hour
Paralegals $30 to $50 per hour
The firm will also seek reimbursement for out-of-pocket expenses
incurred. It received from the Debtor a retainer in the amount of
$5,000, plus filing fee.
Eric Liepins, Esq., disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Eric Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Email: eric@ealpc.com
About Wroe Enterprises
Wroe Enterprises, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Texas Case No. 22-40218) on
Jan. 31, 2021, listing as much as $1 million in both assets and
liabilities. Eric A. Liepins, P.C. represents the Debtor as legal
counsel.
YORK PARKING: Seeks to Extend Exclusivity Period to July 14
-----------------------------------------------------------
York Parking, LLC asked the U.S. Bankruptcy Court for the Southern
District of New York to extend the exclusivity period to file a
Chapter 11 plan to July 14 from March 16.
The company also requested a 120-day extension of the period to
confirm the plan.
York Parking is currently focusing on increasing revenues and
possibly obtaining financing or a cash contribution in order to
assume its lease with York Avenue Commons, LLC. Moreover, the
company requires additional time to prepare itself for filing a
plan that takes into account critical business and operational
factors that it has not yet been able to evaluate, according to a
motion filed by its attorney, Peter Corey, Esq., at Macco Law
Group, LLP.
The exclusivity motion is on the court's calendar for March 8.
About York Parking
York Parking, LLC sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-11636) on Sept.
17, 2021, listing as much as $1 million in both assets and
liabilities. Judge James L. Garrity, Jr. oversees the case.
Peter Corey, Esq., at Macco Law Group, LLP represents the Debtor as
legal counsel.
[*] Colorado Bankruptcies Decline by 37% in January 2022
--------------------------------------------------------
Christopher Wood of BizWest reports that Colorado bankruptcy
filings dropped 37.6% in January 2022 compared to the same period a
year ago, continuing a pattern of declines seen throughout 2021.
Filings also dropped in Boulder, Larimer and Weld counties, with
only Broomfield recording a single filing more than in January
2021.
That's according to a BizWest analysis of U.S. Bankruptcy Court
data.
Numbers cited include all new filings, including open, closed and
dismissed cases. Colorado recorded 317 bankruptcy filings in
January, compared with 508 in January 2021.
Among counties in the Boulder Valley and Northern Colorado:
* Weld County bankruptcy filings totaled 30 in January, down from
38 recorded a year ago, down 21%.
* Boulder County recorded 14 bankruptcy filings in January,
compared with 23 in January 2021, down 39%.
* Broomfield recorded five bankruptcy filings in January, up from
four in January 2021.
* Larimer County filings totaled 15 in January, compared with 20
a year ago, down 25%.
[*] Small Business Bankruptcy Rules Set To Be Extended by Congress
------------------------------------------------------------------
Steven Church and Lauren Coleman-Lochner of Bloomberg News report
that in an era of hyper-partisanship, an obscure federal program
that makes it easier for small-business owners to shed debt in
bankruptcy has been embraced by Democrats and Republicans, who are
now weighing an extension of this rule.
So-called Subchapter V bankruptcy lets closely-held businesses move
through bankruptcy much more quickly and cheaply than a traditional
Chapter 11. There are no official creditor committees to fight,
just a government appointed trustee with limited powers who
assesses the company's finances and helps reach consensus with
debtholders. More importantly, company owners don’t risk losing
control of their companies to creditors.
A full-text copy of the article is available at
https://www.bloomberg.com/news/articles/2022-02-16/small-business-bankruptcy-rules-poised-for-extension-by-congress
[*] U.S. Trustee Seeks Supreme Court Review of Chapter 11 Fee Hike
------------------------------------------------------------------
Daniel Gill of Bloomberg Law reports that the U.S. Trustee, the
bankruptcy watchdog agency of the Justice Department, is seeking
Supreme Court review of a ruling that Chapter 11 quarterly fees
paid by some debtors in 2018 are unconstitutional.
The Feb. 14, 2022 petition to the high court seeks to overturn a
May 2021 ruling by the U.S. Court of Appeals for the Second Circuit
that the U.S. Trustee reimburse fees collected from debtor Clinton
Nurseries Inc.
The U.S. Trustee's Office, which oversees bankruptcy cases in most
of the country, is funded by quarterly fees charged to debtors
based on their disbursements during the case.
[*] Warren County Joins $26-Bil. Opioid Settlement
--------------------------------------------------
Josh Cotton of Times Observer (Warren, PA) reports that the final
status of a $26 billion opioid settlement with several of the
nation's largest pharmaceutical companies is still up in the air.
But county officials have signed on to a deal that could bring an
estimated $970,000 to Warren County for drug treatment and
education efforts.
Solicitor Nathaniel Schmidt told the Prison Board on Tuesday that
an attempt by district attorneys in Philadelphia and Allegheny to
stop the bankruptcy proceedings that are part of the settlement
process was rejected in state court but could be appealed.
He said all 67 counties have signed on to the settlement and noted
that the expectation is that the "bankruptcy settlement is going to
be approved."
Just when that might be is not yet clear.
Schmidt said he would not expect a final resolution within the next
six months.
Commissioner Jeff Eggleston raised the item during Tuesday's,
February 15, 2022, meeting, calling for the county to have a plan
in place for when the funds are available if the settlement goes
through. He called this an "opportunity to really think about how
to reconstruct the system" at the jail to provide more benefits to
inmates, such as specific spaces for therapy."
"It becomes clear the prison is the tip of the spear" for
addressing some serious mental health issues “and where it really
culminates," he said.
Eggleston said "from my perspective, everything is pointing to
moving forward" and stressed the importance of having a plan in
place for when the funding does come down the pike.
The discussion is anticipated to continue at a Human Services
meeting in April 2022.
There are seven companies involved in the settlement discussions,
highlighted by Janssen Pharmaceuticals and Johnson & Johnson.
A proposed order in the case indicates that in excess of $1 billion
will come to Pennsylvania over as many as 18 years. The funding
would initially go to the Pennsylvania Opioid Misuse and Addiction
Abatement Trust.
Funding will be awarded annually and should be spent equitably
across the county in a way that most effectively abates the effects
of the opioid misuse and addiction within the judgment of the
county commissioners, county executive and county council.
An exhibit to the order said county shares were developed based on
a four metric formula: Overdose deaths, related hospitalizations,
naloxone administration and what's called adjusted "morphine
milligram equivalents."
[^] BOOK REVIEW: Legal Aspects of Health Care Reimbursement
-----------------------------------------------------------
Authors: Robert J. Buchanan, Ph.D., and James D. Minor, J.D.
Publisher: Beard Books
Softcover: 300 pages
List Price: $34.95
Order your own personal copy at
http://www.beardbooks.com/beardbooks/legal_aspects_of_health_care_reimbursement.html
Review by Henry Berry
With Legal Aspects of Health Care Reimbursement, Buchanan, a
professor in the School of Public Health at Texas A&M, and Minor,
an attorney, have come up with an invaluable resource for lawyers
and anyone else seeking an introduction to the legal and social
issues related to Medicare and Medicaid. The administrative costs
of Medicare and Medicaid reimbursement have been a heated topic of
debate among public officials and administrators of provider
healthcare organizations, especially health maintenance
organizations. Although inflation and the use of costly medical
technology are key factors in the rise in Medicare and Medicaid
costs, some control can be gained through appropriate compliance,
using more efficient procedures and better detection of fraud. This
work is a major guide on how to go about doing this.
Though mostly a legal treatise, Legal Aspects of Health Care
Reimbursement, first published in 1985, also offers commentary
through legislative and regulatory analyses, thereby explaining how
healthcare reimbursement policies affect the solvency and
effectiveness of the Medicare and Medicaid programs.
In discussing how legislation and regulations affect the solvency
and effectiveness of government-provided healthcare, the authors
offer insight into the much-publicized and much-discussed issue of
runaway healthcare costs. Mr. Buchanan and Minor do not deny that
healthcare costs are out of control and are onerous for the
government and ruinous for many individuals. But healthcare
reimbursement policies are not the cause of this, the authors
argue. To make their case, they explain how the laws and
regulations in different areas of the Medicare and Medicaid
programs create processes that are largely invisible to the public,
but make the programs difficult to manage financially. The
processes are not well thought out nor subject to much quality
control, with the result that fraud is chronic and considerable.
The areas of Medicare covered in the book are inpatient hospital
reimbursement, long-term care, hospice care, and end-stage renal
disease. The areas of Medicaid covered are inpatient hospital and
long-term care plus abortion and family planning services. For
each of these areas, the authors discuss the conditions for
receiving reimbursement, the legislation and regulations regarding
reimbursement, the procedures for being reimbursed, the major areas
of reimbursement (for example, capital-related costs, dietetic
services, rental expenses); and court cases, including appeals.
Reimbursement practices of selected states are covered.
For each of the major areas of interest, the chapters are organized
in a manner that is similar to that found in reference books and
professional journals for attorneys and accountants. Laws and
regulations are summarized and occasionally quoted with expert
background and commentary supplied by the authors. With regard to
court cases and rulings pertaining to Medicare and Medicaid,
passages from court papers are quoted, references to legal records
are supplied, and analysis is provided. Though the text delves
into legal issues, it is accessible to administrators and other lay
readers who have an interest in the subject matter. Clear chapter
and subchapter titles, a table of cases following the text, and a
detailed index enable readers to use this work as a reference.
The value of this book is reflected in the authors' ability to
distill great amounts of data down to one readable text. It
condenses libraries of government and legal documents into a single
work. Answers to questions of fundamental importance to healthcare
providers -- those dealing with qualifications, compliance,
reimbursable costs, and appeals -- can be found in one place.
Timely reimbursement depends on proper application of the rules,
which is necessary for a provider's sound financial standing. But
the authors specify other reasons for writing this book, to wit:
"Providers should have a general knowledge of the law and should
not rely on manuals and regulations exclusively." By summarizing,
commenting on, and citing cases relating to principal provisions of
Medicare and Medicaid, the authors accomplish this objective.
The authors also cover the topic of fraud with respect to both
Medicare and Medicaid, offering both a legal treatment and
commentary. At the end of each chapter is a section titled
"Outlook," which contains a discussion of government studies,
changes in healthcare policy, or other developments that could
affect reimbursement. Although this work was published over two
decades ago, much of this discussion is still relevant today.
Finally, the book is a call for change. The authors remark in
their closing paragraph: "Given the increasing for-profit
orientation of the major segments of the health care industry,
proprietary providers should be particularly responsive to new
efficiency incentives" in reimbursement. In relation to this,
"policymakers [should] develop reimbursement methods that will
encourage providers to become more efficient."
Robert J. Buchanan was a professor in the Department of Health
Policy and Management in the School of Rural Public Health at the
Texas A&M University System Health Sciences Center. James D. Minor
was a former law professor at the University of Mississippi.
*********
Monday's edition of the TCR delivers a list of indicative prices
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insolvent balance sheets whose shares trade higher than $3 per
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the definitive compilation of stocks that are ideal to sell short.
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*********
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