/raid1/www/Hosts/bankrupt/TCR_Public/220406.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, April 6, 2022, Vol. 26, No. 95
Headlines
1917 HEIGHTS: Asset Sale Proceeds to Fund Plan
3200 MYERS STREET: Seeks Approval to Hire Special Arkansas Counsel
635 NORFOLK LLC: Seeks Chapter 11 Bankruptcy Protection
AGILE THERAPEUTICS: Incurs $74.9 Million Net Loss in 2021
AGILON ENERGY: Court OKs Cash Collateral Deal Thru April 10
ALACRITY HOLDINGS: Case Summary & Five Unsecured Creditors
AMERICAN WORKERS: Unsecureds Will Get 25% of Claims in 48 Months
ASTORIA ENERGY: S&P Lowers Senior Secured Debt Rating to 'B+'
ASTROTECH CORP: All Three Proposals Passed at Annual Meeting
AVINGER INC: Regains Compliance With Nasdaq Listing Requirements
AZ TOWING: Seeks Approval to Hire Grossbart as Bankruptcy Counsel
AZ TOWING: Seeks to Hire The Weiss Law Group as Co-Counsel
BROWNIE'S MARINE: Needs More Time to File Form 10-K
BURFORD CAPITAL: S&P Rates New $350MM Senior Unsecured Notes 'BB-'
BUYK CORP: Gets Approval to Hire Michael Amodeo as Auctioneer
BUYK CORP: Gets OK to Tap National Property Solutions as Auctioneer
BUYK CORP: Wins Interim Cash Collateral Access
CARNIVAL BEVERAGES: Seeks to Hire Steidl and Steinberg as Counsel
CASTLEROCK DEVELOPMENT: Exclusivity Period Extended to Aug. 2
CEN BIOTECH: Delays Filing of 2021 Annual Report
CLEAN ENERGY: Delays Filing of 2021 Annual Report
CLUBHOUSE MEDIA: Incurs $22.2 Million Net Loss in 2021
COUZINS FOOD: Wins Final Cash Collateral Access
CPM HOLDINGS: S&P Alters Outlook to Positive, Affirms 'B-' ICR
CRYSTAL PACKAGING: Seeks Cash Collateral Access
CUSHMAN & WAKEFIELD: S&P Upgrades ICR to 'BB', Outlook Positive
DATZKO CAPITAL: Seeks to Hire Steidl and Steinberg as Legal Counsel
DAYCO LLC: S&P Upgrades ICR to 'B-', Outlook Stable
DERBY MOBILE: Seeks Cash Collateral Access Thru April 30
DIOCESE OF CAMDEN: Unsecureds Will be Paid 75% Dividend in 5 Years
DOOSAN BOBCAT: Moody's Rates New Senior Secured Term Loan 'Ba3'
EAST/ALEXANDER HOLDINGS: Seeks Chapter 11 Bankruptcy
ENTEGRIS INC: Fitch Gives First Time 'BB' LT IDR, Outlook Stable
ENTEGRIS INC: S&P Rates New $1BB Sr. Secured Notes Due 2029 'BB+'
ENVEN ENERGY: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
ENVISION HEALTHCARE: Lenders Taps Kasowitz to Fight Financing Plans
ENVISION HEALTHCARE: S&P Downgrades ICR to 'CCC' on Watch Neg.
EVE & CO INCORPORATED: Obtains CCAA Initial Stay Order
EW SCRIPPS: Moody's Hikes CFR to B1 & Senior Unsecured Notes to B3
FANNIE MAE: Kimberly Johnson to Quit as EVP, COO
FORE MACHINE: May 10 Hearing on Disclosures and Plans
FOX SUBACUTE: Wins Cash Collateral Access Thru June 24
FREDDIE MAC: Hikes President's 2022 Target Compensation to $3.6M
GLOBAL INFRASTRUCTURE: S&P Affirms 'BB-' ICR, Outlook Stable
GOOD GUYZ INVESTMENTS: Seeks Approval to Hire Real Estate Broker
GWG HOLDINGS: Preps Up Bankruptcy Filing After Missing Payments
HERITAGE CHRISTIAN: Wins Cash Collateral Access Thru May 26
HIGHLANDS SENIOR: Voluntary Chapter 11 Case Summary
HOVNANIAN ENTERPRISES: All Four Proposals Passed at Annual Meeting
IRIDIUM COMMUNICATIONS: S&P Alters Outlook to Pos, Affirms B+ ICR
J AND M SUPPLY: Gets Court Nod to Use Cash Collateral
JAGUAR HEALTH: Board Approves Salary Increases for 3 Execs
JOHN KNOX VILLAGE: Fitch Affirms 'BB+' Rating on $109MM Bonds
KAYA HOLDINGS: Delays Filing of 2021 Annual Report
KR CITRUS: Wins Cash Collateral Access Thru May 4
KUEHG CORP: S&P Upgrades ICR to 'B-' on Good EBITDA Trends
LATAM AIRLINES: May 17 to 18 Hearings on Exit Plan
LATHAN EQUIPMENT: Wins Cash Collateral Access Thru May 31
LEARNING CARE: S&P Upgrades ICR to 'B-' on Good EBITDA Trends
LIMETREE BAY: Chapter 11 Deal Addresses Dismissal Move
LIQUIDMETAL TECHNOLOGIES: Incurs $3.4 Million Net Loss in 2021
LITTLE WASHINGTON: Taps Ciardi Ciardi & Astin as Bankruptcy Counsel
LITTLE WASHINGTON: Taps Eastburn and Gray as Special Counsel
LIVING FRESH: Ends Up in Chapter 11 Bankruptcy
LJF INC: Seeks to Hire Robert O Lampl Law Office LLC as Counsel
LTL MANAGEMENT: Mediation Order Faces Pushback From 40 States
MALLINCKRODT PLC: $1.75-Bil. Opioid Plan Takes Effect During Appeal
MARCO ENTERPRISES: Unsecureds to Split $52.5K in 3 Years
MD HELICOPTER: April 8 Deadline Set for Panel Questionnaires
MICROSTRATEGY INC: Unit Secures $205M Loan From Silvergate Bank
MOUNTAIN PROVINCE: Closes $50 Million Junior Credit Facility
MOUNTAIN PROVINCE: Files Technical Report for Gahcho Kue Mine
NEW MOUNTAIN LAUREL: Seeks Cash Collateral Access
NORTHERN MARIANA CPA: Fitch Affirms BB on 1998A/2005A Bonds
NOVABAY PHARMACEUTICALS: Reports $5.8 Million Net Loss in 2021
OLYMPIA SPORTS: Wins Cash Collateral Access Thru April 30
PARAISO LLC: Taps Nathaniel Peter Holzer as Bankruptcy Attorney
PARK SUPPLY: Wins Cash Collateral Access Thru June 27
PARS BRONX: Case Summary & Two Unsecured Creditors
PATH MEDICAL: May Use Cash Collateral Thru May 26
PATH MEDICAL: Plan Solicitation Period Extended to May 26
PERRIGO INVESTMENTS: Fitch Gives 'BB+(EXP)' Rating to Unsec. Notes
PERRIGO INVESTMENTS: S&P Rates New $500MM Sr Unsecured Notes 'BB-'
PINNACLE MULTI-ACQUISITIONS: Lender Seeks to Prohibit Cash Access
PRAIRIE ECI: Fitch Affirms and Withdraws Ratings
PRECIPIO INC: Incurs $8.5 Million Net Loss in 2021
PRO-DEMOLITION INC: Wins Cash Collateral Access
PROVECTUS BIOPHARMACEUTICALS: Incurs $5.5 Million Net Loss in 2021
PULMATRIX INC: Incurs $20.2 Million Net Loss in 2021
QUEEN ELIZABETH: Reaches Consensual Resolution with Landmark
QUICKER LIQUOR: Lender Seeks to Prohibit Cash Collateral Access
REPLICEL LIFE: Applies for New DermaPrecise Patent
REPLICEL LIFE: To Offer $1.5 Million Worth of Units
RKJ HOTEL: Debtor Will Amend Disclosure to Address Issues
ROCKWORX INC: Has Deal on Cash Collateral Access Thru Aug 28
ROCKWORX INC: Wins Cash Collateral Access Thru Aug 28
RUBY PIPELINE: Creditors Slam $460-Mil. Transfers to Owners
RUBY PIPELINE: Fitch Lowers LongTerm IDR to 'D' on Bankr. Filing
RUBY PIPELINE: Moody's Cuts PDR to D-PD Amid Bankruptcy Filing
S-TEK 1 LLC: Wins Cash Collateral Access Thru June 30
SCIENTIFIC GAMES: Fitch Assigns First Time 'BB(EXP)' LongTerm IDR
SCIENTIFIC GAMES: Moody's Raises CFR to B1, Outlook Positive
SCIENTIFIC GAMES: S&P Raises ICR to 'BB-', Outlook Stable
SEAFOOD JUNKIE: Has Deal on Cash Collateral Access
SOUTH SKY: Wins Cash Collateral Access Thru June 30
SPENGLER PLUMBING: Selling Certain Personal Property & Equipment
SUDBURY PROPERTY: Bid for Continued Cash Collateral Use Dropped
SUMMIT FINANCIAL: Has Deal on Cash Collateral Access Thru June 30
T-SHACK INC: Voluntary Chapter 11 Case Summary
TARINA TARANTINO: Case Summary & 12 Unsecured Creditors
TECTA AMERICA: Moody's Affirms 'B2' CFR & Alters Outlook to Stable
TEN OAKS FITNESS: Creditors to Recover 100% in Plan
TG INTEGRATION: Gets Cash Collateral Access Thru May 4
THOMAS M. COOLEY LAW SCHOOL: S&P Lowers 2014 Bond Rating to 'BB-'
TITAN IMPORTS: Seeks Cash Collateral Access
TLA TIMBER: Court OKs Cash Collateral Deal
TON REAL ESTATE: Wins Access to Concord Mall Cash Collateral
TOP LINE GRANITE: Seeks Cash Collateral Access
TOWN & COUNTRY: Trustee Taps Sanford Kahn as Special Counsel
TRANSPORTATION DEMAND: Wins Cash Collateral Access
TRILOGY INTERNATIONAL: Fitch Withdraws All Ratings
TRUE HEALTH: Ex-Lab. Execs, Staff Aces DOJ Kickback Lawsuit
VTV THERAPEUTICS: Incurs $13 Million Net Loss in 2021
VYANT BIO: Incurs $40.9 Million Net Loss in 2021
WESCO AIRCRAFT: Incora Recapitalization Stops Default Risk
WHITE RABBIT: Wins Cash Collateral Access Thru April 30
YUNHONG CTI: Delays Filing of 2021 Annual Report
*********
1917 HEIGHTS: Asset Sale Proceeds to Fund Plan
----------------------------------------------
1917 Heights Hospital, LLC, filed with the U.S. Bankruptcy Court
for the Southern District of Texas a Disclosure Statement regarding
Chapter 11 Plan dated March 31, 2022.
The Debtor is a Texas limited liability company. The Debtor was a
landlord, with its primary asset being the medial office building
located at 1917 Ashland Street, Houston, Texas 77008 (the "Medical
Office Building").
On July 22, 2021, following pre-petition and post-petition
marketing efforts of the Medical Office Building and extensive
negotiations with purchaser Platinum Heights, LLC ("Purchaser"),
the Debtor filed its motion seeking approval of the sale of the
Medical Office Building on a going concern basis.
In general, the proposed sale and settlement allowed the bankruptcy
estate to realize sufficient funds to pay the secured debt of
Arbitra and certain ad valorem real property taxes at closing, with
additional funds being available to later make a very substantial
distribution to allowed secured claims, allowed unsecured priority
claims and allowed general unsecured claims, pursuant to the Plan.
The Bankruptcy Court after hearing, approved the sale by a final
nonappealable order, and the sale has closed. The Debtor holds
certain net sales proceeds together with other funds and certain
claims and causes of action, which are proposed to be administered
as set forth in the Plan.
The Plan provides that the Debtor will be vest with certain
bankruptcy estate assets (including the Net Sale Proceeds) that
will be distributed to holders of Allowed Claims, by the Debtor
post-confirmation. The Plan provides that holders of Allowed
Administrative Claims and Allowed Priority Claims will be paid in
full by the Debtor post-confirmation on the Administrative and
Priority Claims Distribution Date (which is the date occurring as
soon as practical after the Effective Date) or the date when such
claim is allowed, or such other date as the Debtor and the claimant
may agree.
The Plan also provides that holders of Allowed Miscellaneous
Secured Claims, in the sole discretion of the Debtor post
confirmation, will receive either the proceeds of the Collateral
securing such Claimant's Allowed Secured Claim (up to the amount of
Claimant's Allowed Secured Claim) after satisfaction in full of all
superior liens or the Collateral securing such Claimant's Allowed
Secured Claim in full and final satisfaction of such Claim. The
Plan further provides that Allowed General Unsecured Claims will
receive payment of their Allowed Claims from Available Cash on one
or more Distribution Dates. It is presently anticipated that such
holder of Allowed General Unsecured Claims will receive payment of
the face dollar amount of such Allowed Claim.
Finally, the Plan provides that all Equity Interests will be
retained and not canceled, however holders of such Equity Interests
shall receive no Distribution under the Plan. The Debtor will be
vested with additional assets (primarily, causes of action) which
may facilitate a distribution of future profit to Equity Interest
in the future depending upon the success of such causes of action.
Future success of such litigation is presently unknown. The
following summary is general in nature. Creditors are referred to
the full Disclosure Statement and Plan for a full discussion of
these matters.
Class 3 consists of General Unsecured Claims. Class 3 Claims are
impaired under the Plan. The Debtor/Post-Confirmation Debtor shall
distribute Available Cash to holders of Allowed Claims in Class 3
and/or the Disputed Claims Reserve, if applicable, on one or more
Distribution Date(s). The Debtor shall have the right, but not the
obligation, to make interim distributions to holders of Allowed
General Unsecured Claims in Class 3 from Available Cash on such
Distribution Dates as the Debtor/Post-Confirmation Debtor
determines appropriate. It is presently anticipated based upon the
present Allowed claims that Class 3 General Unsecured Claims will
be paid the face dollar amounts of such allowed general unsecured
claims in a single, final distribution as soon as practical after
the Effective Date. According to its Schedules and currently
allowed proof of claim, the Debtor estimates its potential
liability for Class 3 Claims to be approximately $1,500,000.00.
Class 4 Equity Interests are impaired. Equity Interests will not
receive a distribution under the Plan. Equity Interest shall retain
their equity interest in the Debtor but shall not receive any
distributions of profit, if any, until all other Claims and Classes
of Claims are paid according to the Plan. Any such future
distributions of profit, if any, are most likely contingent on the
PostConfirmation Debtor successfully prosecuting certain Causes of
Action post-confirmation. Class 4 Equity Interest is comprised
solely of insiders. Class 4 Equity Interest is deemed to reject the
Plan and as such is not entitled to vote.
The transactions contemplated by the Plan shall be approved and
effective as of the Effective Date, without the need for any
further state or local regulatory approvals or approvals by any
non-Debtor party, and without any requirement for further action by
the Debtor, its managers, members, or any other person or entity.
All assets of the Debtor and its estate will vest in the Post
Confirmation Debtor on the Effective Date, including without
limitation the Causes of Action, Rights of Action and the Net Sales
Proceeds free and clear of any and all liens, claims, interest and
encumbrances including but not limited to any and all ad valorem
tax liens. The Post-Confirmation Debtor, shall be the sole owner of
all such property, Claims or interests and assets of the Debtor and
its estate (including without limitation, the Causes of Action,
Rights of Action and the Net Sales Proceeds) of every kind subject
only to its obligations under the Plan.
The Plan proposed by the Debtor provides for the liquidation of the
Debtor's remaining assets as appropriate and a distribution of cash
to creditors in accordance with the priority scheme of the
Bankruptcy Code and terms of the Plan. The Plan also provides for
appropriate reserves for payment of Miscellaneous Secured Claims
and administrative and priority claims and mechanisms for
consummation of distributions to holders of Allowed Claims entitled
to them. Thus, the Debtor believes in its business judgment that,
following consummation of the Plan, there will be no need for
further liquidation or reorganization.
A full-text copy of the Disclosure Statement dated March 31, 2022,
is available at https://bit.ly/3Jb8gH7 from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Steven D. Shurn TBN: 24013507
sshurn@hwallp.com
HUGHES WATTERS ASKANASE, L.L.P
1201 Louisiana, St., 28th Floor
Houston, Texas 77002
Telephone: (713) 759-0818
Facsimile: (713) 759-6834
Cell Phone: (713) 410-2139
About 1917 Heights Hospital
1917 Heights Hospital, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-31811) on June 1,
2021. In its petition, the Debtor listed $100 million to $500
million in assets and $10 million to $50 million in liabilities.
Dr. Dharmesh Patel, manager, signed the petition.
Judge Eduardo V. Rodriguez oversees the case.
Hughes Watters Askanase, LLP is the Debtor's bankruptcy counsel.
3200 MYERS STREET: Seeks Approval to Hire Special Arkansas Counsel
------------------------------------------------------------------
3200 Myers Street Partners, LLC seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Cross, Gunter, Witherspoon & Galchus, P.C. as its special Arkansas
counsel.
The firm will represent the Debtor in connection with the matters
entitled Process and Power, Inc., v. RPP Products, Inc., 3200 Myers
Street Partners, LLC, Case No. 60CV21-4985; and Hobby Electric
Inc. v. 3200 Myers Street Partners, LLC, RPP Products, Inc., f/k/a
Race Pro Products Company Inc. and Elliot Electric Supply Inc.,
Case No. 60CV-21-4935.
The firm will also assist in any pending matters that involve the
Debtor in Arkansas, including matters in which the Debtor is named
as a defendant.
The hourly rates charged by the firm's attorneys are as follows:
Laura D. Johnson $310
M. Stephen Bingham $340
Caitlin Campbell $185
Attorneys $185 to $340
The firm received a retainer in the amount of $10,000.
As disclosed in court filings, Cross is a disinterested person
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Laura Johnson, Esq.
Cross, Gunter, Witherspoon & Galchus, P.C.
500 President Clinton Ave Room to Grow
Little Rock, AR 72201
Phone: +1 501-371-9999
Email: ljohnson@cgwg.com
About 3200 Myers Street Partners
3200 Myers Street Partners, LLC, a company in Costa Mesa, Calif.,
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-10057) on Jan. 14,
2022, listing as much as $10 million in both assets and
liabilities. Robert P. Mosier, chief restructuring officer, signed
the petition.
Judge Scott C. Clarkson oversees the case.
The Debtor tapped Goe Forsythe & Hodges, LLP as bankruptcy counsel;
A. Lavar Taylor, LLP and Cross, Gunter, Witherspoon & Galchus, P.C.
as special counsels; and Mosier & Company, Inc. as restructuring
advisor. Robert Mosier, president and chief executive officer of
Mosier & Company, serves as the Debtor's chief restructuring
officer.
635 NORFOLK LLC: Seeks Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Real estate company 635 Norfolk LLC sought Chapter 11 bankruptcy
protection.
According to court documents, 635 Nrfolk LLC estimates between 1
and 49 unsecured creditors. The petition states that funds are not
available for unsecured creditors. The exclusive rights of Chapter
11 debtors to file a plan will expire on August 1, 2022.
A hearing is scheduled on April 26, 2022 at 10:00 AM at SLM -
Courtroom 3A, Newark.
About 635 Norfolk LLC
635 Norfolk is a Single Asset Real Estate Debtor (as defined in 11
U.S.C. Section 101(51B)). It is the fee simple owner of a real
property located at 635 Norfolk Street, Teaneck, New Jersey, having
a current value of $1 million.
635 Norfolk LLC sought Chapter 11 bankruptcy protection (Bankr.
D.N.J. Case No. 22-12643) on April 1, 2022. In the petition filed
by David Sadek, as authorized representative, 635 Norfolk LLC
listed estimated total assets amounting to $1,000,000 and total
liabilities of $3,518,200. The case is assigned to Honorable Judge
Stacey L. Meisel. Karina Lucid, Esq., of KARINA PIA LUCID, ESQ.
LLC, is the Debtor's counsel.
AGILE THERAPEUTICS: Incurs $74.9 Million Net Loss in 2021
---------------------------------------------------------
Agile Therapeutics, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$74.89 million on $4.10 million of net revenues for the year ended
Dec. 31, 2021, compared to a net loss of $51.85 million on $749,000
of net revenues for the year ended Dec. 31, 2020.
"2021 was our first full year of commercializing Twirla, and I am
proud of what our team was able to accomplish. We believe we
created a solid foundation for further Twirla growth in 2022
through targeted partnerships and allocation of our marketing spend
in key markets," said Agile Therapeutics Chairman and Chief
Executive Officer Al Altomari. "We ended 2021 with double digit
growth in demand quarter over quarter and expect to see that
continue in the first quarter of 2022. We are also excited to
launch our first CTV commercial in April 2022. We believe we can
continue to build momentum through 2022, with this targeted
business plan."
As of Dec. 31, 2021, the Company had $39.33 million in total
assets, $30.06 million in total liabilities, and $9.27 million in
total stockholders' equity.
Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 30, 2022, citing that the Company has generated losses
since inception, used substantial cash in operations, anticipates
it will continue to incur net losses for the foreseeable future,
requires additional capital to fund its operating needs and has
stated that substantial doubt exists about the Company's ability to
continue as a going concern.
Fourth Quarter Financial Results
* In the fourth quarter 2021, the Company realized net product
sales revenue of $1.5 million, which was at the high end of the
range guided by the Company in January 2022.
* Cost of product revenues for the fourth quarter 2021 was $5.7
million, which included a $4.5 million inventory obsolescence
charge for product not expected to be sold prior to its shelf-life
date, which is 12 months prior to expiry.
* Total operating expenses were $18.2 million for the quarter
ended Dec. 31, 2021, compared to $17.2 million for the comparable
period in 2020.
* As of Dec. 31, 2021, the Company had $19.1 million of cash and
cash equivalents, compared to $14.7 million of cash and cash
equivalents as of the end of the third quarter 2021. The increase
in cash on hand is related to a public offering completed in the
fourth quarter, netting $21.1 million, offset by working capital
burn during the quarter.
* Net loss was $23.4 million, or $0.20 per share, for the
quarter ended Dec. 31, 2021, compared to a net loss of $17.6
million, or $0.20 per share, for the comparable period in 2020.
* Agile had 121,396,033 shares of common stock outstanding at
year end 2021.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1261249/000155837022004758/agrx-20211231x10k.htm
About Agile Therapeutics
Agile Therapeutics, Inc. is a women's healthcare company dedicated
to fulfilling the unmet health needs of today's women. The
Company's product and product candidates are designed to provide
women with contraceptive options that offer freedom from taking a
daily pill, without committing to a longer-acting method. Its
initial product, Twirla, (levonorgestrel and ethinyl estradiol), a
transdermal system, is a non-daily prescription contraceptive.
AGILON ENERGY: Court OKs Cash Collateral Deal Thru April 10
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, has approved a stipulation and agreed bridge
order Agilon Energy Holdings II LLC, Victoria Port Power LLC, and
Victoria City Power LLC, entered into with their DIP lenders,
Prudential Insurance Company of America, Prudential Legacy
Insurance Company of New Jersey, and Prudential Retirement
Insurance and Annuity Company.
The parties agree the Debtors may use cash collateral to pay
critical expenses in accordance with the budget through and
including April 10, 2022, provided that the critical expenses will
not exceed $128,592 for the period from March 28 through April 10,
and a total amount of $892,617 when including the period covered by
the First Stipulation.
The Debtors will continue to provide adequate protection to the
Prepetition Secured Parties in accordance with the terms of the DIP
Order during the Interim Period, including without limitation
preservation of all liens, claims, and interests.
A hearing to consider continued use of cash collateral is scheduled
for April 8 at 10:30 a.m.
A copy of the order and the Debtor's two-week budget through April
10, 2022 is available at https://bit.ly/3iSGfcw from
PacerMonitor.com.
The Debtor projects $38,349,621 in beginning cash and $41,500 in
total disbursements.
About Agilon Energy Holdings II LLC
Texas-based power producer Agilon Energy Holdings II, LLC and its
affiliates, Victoria Port Power LLC and Victoria City Power LLC,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
21-32156) on June 27, 2021. At the time of the filing, Agilon had
between $100 million and $500 million in both assets and
liabilities.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Locke Lord, LLP as legal counsel, Grant
Thornton, LLP as financial advisor and Hugh Smith Advisors, LLC as
restructuring advisor. Hugh Smith of Hugh Smith Advisors serves as
the Debtors' chief restructuring officer. Stretto is the claims and
noticing agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on July 30,
2021.
Pachulski Stang Ziehl & Jones, LLP serves as the committee's legal
counsel and Conway MacKenzie, LLC, its financial advisor.
ALACRITY HOLDINGS: Case Summary & Five Unsecured Creditors
----------------------------------------------------------
Debtor: Alacrity Holdings 6, LLC
7530 Saint Marlo Country Club Pkwy
Duluth, GA 30097
Chapter 11 Petition Date: April 5, 2022
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 22-20284
Debtor's Counsel: William A. Rountree, Esq.
ROUNTREE, LEITMAN & KLEIN, LLC
Century Plaza I
2987 Clairmont Road, Ste 350
Atlanta, GA 30329
Tel: 404-584-1238
E-mail: swenger@rlklawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Stephen Klein as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/WZH7WUY/Alacrity_Holdings_6_LLC__ganbke-22-20284__0001.0.pdf?mcid=tGE4TAMA
AMERICAN WORKERS: Unsecureds Will Get 25% of Claims in 48 Months
----------------------------------------------------------------
American Workers Insurance Services, Inc. ("AWIS") and Association
Health Care Management, Inc. ("AHCM" and collectively with AWIS,
the "Debtors"), submitted a Disclosure Statement in Support of the
Joint Plan of Reorganization dated March 31, 2022.
AWIS and AHCM have worked together to facilitate the distribution
of insurance products and other benefits (the "Products") issued by
insurance carriers and other benefit providers (the "Vendors").
AWIS and AHCM together market and sell Products for the Vendors and
collect premiums from customers and pass those premiums along to
the Vendors.
The Debtors' filed the Bankruptcy cases because of a cash flow
crisis created by Insurety followed by litigation commenced by
Insurety against the Debtors. The Debtors contend that Insurety's
wanted to acquire a majority ownership position in the Debtors.
Jordan or an affiliate of Jordan shall transfer to the Debtors, as
a condition to the Effective Date, a sum of money (collectively,
the "Contribution"), the amount of which will be fixed in the
future. The Contribution may be treated by the Debtors and Jordan
as they may determine in the exercise of their sole discretion, as
a loan or capital contribution, either in whole or in part.
However, no part of the Contribution shall be returned or repaid to
Jordan or any other Person by the Reorganized Debtors until all
Allowed Claims subject to the Plan have received all Distributions
to which the holders of such Claims are entitled. Jordan has
executed the Plan to evidence his agreement to make the
Contribution, but is not a proponent of the Plan.
Class 6 shall include all General Unsecured Claims against AWIS.
Each holder of an Allowed 6 Claim shall receive Distributions equal
to 25% of any such Allowed Claims, payable in 48 substantially
equal monthly installments, with the first such installment being
due and payable on the Initial Distribution Date applicable to each
such Allowed Claim, and with a like installment being due on the
first day of each successive calendar month thereafter, until the
aggregate Distributions on account of each such Class 6 Allowed
Claim are equal to 25% of each such Class 6 Allowed Claim.
Estimated amount of claims total $392,977.68. Class 6 is impaired.
Class 7 shall include all General Unsecured Claims against AHCM.
Each holder of an Allowed 7 Claim shall receive Distributions equal
to 25% of any such Allowed Claims, payable in 48 substantially
equal monthly installments, with the first such installment being
due and payable on the Initial Distribution Date applicable to each
such Allowed Claim, and with a like installment being due on the
first day of each successive calendar month thereafter, until such
Distributions on account of each Allowed Claim are equal to 25% of
each Class 7 Allowed Claim. Estimated amount of claims total
$333,743.94 (not including insider claims). Class 7 is impaired.
Class 8 consists of Interests in the Debtor. Interests in the
Debtors shall be retained by the holders thereof, although subject
to the terms of this Plan. Class 8 is unimpaired.
The Reorganized Debtors' obligations under the Plan shall be funded
(a) by the Contribution, (b) the Assets, and (c) by operation of
the Reorganized Debtors' businesses.
The Debtors shall continue to exist, as Reorganized Debtors, after
the Effective Date, with all powers available to such legal
entities, in accordance with applicable law and pursuant to their
constituent documents. Upon the Effective Date, the Reorganized
Debtors may, within their sole and exclusive discretion, take such
action as permitted by applicable law and their constituent
documents as they determine is reasonable and appropriate.
A full-text copy of the Disclosure Statement dated March 31, 2022,
is available at https://bit.ly/3ucVvaJ from PacerMonitor.com at no
charge.
Attorney for Debtors:
J. Robert Forshey
State Bar No. 07264200
Laurie Dahl Rea
State Bar No. 00796150
FORSHEY & PROSTOK LLP
777 Main St., Suite 1550
Fort Worth, TX 76102
Telephone: 817-877-8855
Facsimile: 817-877-4151
bforshey@forsheyprostok.com
lrea@forsheyprostok.com
About American Workers Insurance Services
American Workers Insurance Services, Inc. is a Rockwall,
Texas-based health insurance agency while Association Health Care
Management, Inc. is a provider of health care services. AHCM
conducts its business under the name Family Care.
AWIS and AHCM sought Chapter 11 protection (Bankr. N.D. Texas Lead
Case No. 19-44208) on Oct, 14, 2019 in Fort Worth, Texas. At the
time of the filing, AWIS listed up to $100 million in assets and up
to $50 million in liabilities while AHCM listed up to $100 million
in assets and up to $50 million in liabilities.
Judge Mark X. Mullin oversees the cases.
The Debtors tapped Forshey & Prosto, LLP as bankruptcy counsel and
J. Alexander CPA, LLC as auditor. The law firms of Oxendine Law
Group P.C., The Verde Law Firm PLLC, and Spencer Fane LLP serve as
special counsel.
ASTORIA ENERGY: S&P Lowers Senior Secured Debt Rating to 'B+'
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S&P Global Ratings lowered its rating on Astoria Energy LLC's (AEI)
senior secured debt to 'B+' from 'BB-'. The '2' recovery rating is
unchanged, indicating its expectation for substantial (70%-90%;
rounded estimate: 80%) recovery in the event of default.
S&P said, "The downgrade largely reflects our expectation of weaker
forecast cash flows from the project in light of our updated
capacity price projections for New York Independent System Operator
(NYISO) Zone J.
"The stable outlook reflects our expectation of strong debt service
coverage during the remaining term loan B (TLB) period, as well as
debt service coverage ratios (DSCRs) of about 1.60x-1.70x during
the post-TLB period (2029-2038), based on our refinancing
assumptions, as well as our outlook on the energy and capacity
markets."
AEI is a nominal 615-megawatt (MW) combined-cycle natural gas-fired
power plant in Zone J (NYC), a highly constrained and competitive
electricity region in NYISO. The power plant commenced commercial
operations in mid-2006, supplying most of its power to Consolidated
Edison Inc. (ConEdison) under a 10-year power purchase agreement
through mid-2016, and it became a fully merchant generator when
that contract expired. The facility consists of two GE PG7241 (7FA)
combustion turbine generator (CTG) sets, two Alstom heat recovery
steam generators (HRSGs) with supplemental firing capability, and
one Alstom Model STF25 steam turbine generator (STG). Natural gas
is the primary fuel. Low sulfur distillate fuel oil is stored
onsite and serves as backup fuel. Astoria Power Partners Holding
LLC (APPH) owns the facility.
S&P said, "NYISO Zone J summer 2022 capacity prices have cleared at
levels similar to last year. S&P has also lowered its long-term
capacity price forecast, which reduces our expectation of the
project's cash flow and DSCRs post-TLB.
"In the most recent strip auction, NYISO's summer 2022 capacity
prices cleared at $5.16/kilowatt month (kW-month), about 6% lower
than in the previous year, which already registered a record low
price of $5.50/kW-month. We expected Zone J's summer 2022 auction
to clear at about $4.50/kW-month.
"The latest capacity auction results largely reflect a lower demand
outlook. The 2022 summer peak load forecast for Zone J, published
by NYISO, is almost 400 MW lower (at 10,906 MW) than the
corresponding forecast in the 2021 Gold Book. The 2022 peak load
forecast is also about 3% lower than NYISO's peak load forecast for
2021, which was 11,199 MW. In addition, the NYISO 2022/2023
installed reserve margin (IRM) value is 19.6%, compared with 20.7%
for 2021/2022. All else remaining equal, a lower IRM value
increases the need to carry capacity in the locality.
Correspondingly, Zone J's locational capacity requirement (LCR)
values have increased modestly, to 81.2% from 80.3%. In our view,
the combined effects of the still-low LCR and demand have kept
summer 2022 prices rangebound in the $5.00/kW-month area, compared
with $18.36/kW-month in summer 2020, when the LCR was 86.6%.
"Although the summer capacity prices have cleared at historically
low levels for two consecutive years, we also expect that Zone J
summer capacity prices will recover by the 2023-2024 auction year
under the New York State Department of Environmental Conservation's
peaker rule beginning in May 2023, along with an additional
increase in LCR due to ConEd's series reactors being brought back
online in response to local reliability issues associated with
these retirements. We expect higher prices
($12.00/kW-month-$16.00/kW-month) will prevail until the offshore
wind projects enter service mid-decade, which is when we forecast a
long-term summer price of $12.50/kW-month (versus our previous
expectation of $16.00/kW-month). We escalate prices by 2.5%
annually beyond 2026.
"Capacity payments constitute a large portion of AEI's gross
margin, at about 50%, and therefore we expect the project will
experience the effect of lower capacity prices throughout its life,
particularly from 2026 and beyond, which is when we have reduced
our annualized capacity price assumption by about 20% relative to
previous assumptions. This period also coincides with the project's
TLB maturity, beyond which we model a refinancing scenario for the
residual balance outstanding at the end of the TLB term. Under our
refinancing assumptions, we assume that the remaining TLB debt,
about $586 million, is repaid entirely by 2038 via an amortizing
structure, although these payments are sized to the strength of the
project's cash flows. Under these parameters, we forecast DSCRs of
about 1.60x-1.70x, between 2029-2038, and an average DSCR of about
2x through the debt term (2022-2038), including the refinancing
period.
"On Feb. 15, 2022, S&P Global Ratings revised its capacity price
assumptions for various merchant power markets in the U.S.,
including the NYISO Zone J. The updated forecast incorporates our
current view on Zone J's demand and supply dynamics, as well as our
outlook over the medium-to-long term."
AEI has hedged a large portion of its expected generation for 2022
and 2023 at attractive margins.
Energy markets across the U.S., particularly in the Northeast, have
been very strong due to the demand and supply imbalance in the
global natural gas market. Power prices have continued to exhibit
considerable strength since the second half of 2021, and forward
curves have also lifted meaningfully, providing generators with a
window to lock in attractive margins through forward sales and
hedges. Given this dynamic, AEI has also opportunistically hedged a
considerable amount of its expected generation through spark spread
hedges for 2022 and 2023. With another year of weaker summer
capacity pricing, we expect stronger energy margins will absorb
some of the cash flow loss from lower capacity revenues.
Forward hedges require periodic mark-to-market (MTM) adjustments to
minimize counterparty credit risk. This could result in AEI posting
collateral in favor of the hedging counterparties to satisfy the
MTM requirements, if for example, power prices exceed the hedged
price. The project manages these collateral postings via issuance
of letter of credits under its revolving credit facility (RCF),
which has a total capacity of $38 million. In addition, under the
terms of the credit agreement, AEI also is able to collateralize
its hedging counterparties through a lien on the project's assets,
for up to $200 million. S&P believes that these mechanisms are
sufficient for AEI to manage its hedging obligations.
AEII has recently modified the terms of its debt.
AEII has recently amended the terms of its debt, lowering the
interest rate on the loan to 1.125% from 1.5%, and extending the
maturity to Dec. 31, 2028, from Aug. 31, 2024. The transaction has
also reshaped the amortization payments to a higher DSCR,
effectively reducing the asset's debt service during the loan
period and consequently increasing the potential distributable cash
flow to AEI. Under the revised terms, S&P now forecasts average
distributions from AEII to AEI of about $31 million through AEI's
remaining TLB life (2022-2027), versus $23 million envisioned
previously. Finally, as a result of the lower amortization payments
during the term of AEII's loan, the asset is expected to have
residual debt outstanding at the end of its tolling agreement,
which will require refinancing and will therefore be exposed to
market conditions at that time.
S&P said, "Although we view the immediate impact of the refinancing
transaction as credit positive for AEI (as it increases the cash
flow that is received from AEII), the long-term effect on AEI's
cash flow available for debt service (CFADS) is slightly negative.
This is because of the residual debt amount that will now be
outstanding at AEII at the end of its tolling term, which will be
refinanced, ultimately leading to debt service payments and
consequently lower distributions to AEI in the post-PPA, or
merchant period. Under our previous assumptions, we assumed that
AEII's debt would be entirely repaid by the end of its contracted
term, and the asset would operate debt-free during its merchant
life (2031-2038)."
Generators in Zone J benefit from higher pricing due to their
location; however, this premium will be challenged as energy
transition goals progress and materialize.
Power generators serving New York City benefit from premium energy
and capacity pricing due to the city's concentrated demand (about a
third of NYISO's energy is consumed in Zone J), dependency on
higher-marginal-cost thermal generation, transmission constraints
(which limit transfers of cheaper renewable power from upstate
zones), and high barriers to entry that are a function of steep
development costs and limited technology choices due to
environmental restrictions. New York State, however, also has one
of the most ambitious clean energy goals in the U.S. under its
Climate Leadership and Community Protection Act (CLCPA), which
mandates achieving 100% zero-emissions electricity by 2040 and 70%
renewable electricity by 2030. Additional goals under the CLCPA
include 9 gigawatts (GW) of offshore capacity by 2035, 3 GW of
energy storage capacity by 2030, and 6 GW of solar capacity by
2025.
Currently, New York has five offshore wind projects under active
development, constituting about 4.3 GW in total capacity, and
approximately half of its offshore wind goal. Two of these
projects, Empire Wind 1 (816 MW) and Beacon Wind (1.2 GW), will be
interconnected to Zone J, with targeted completion dates in 2024
and 2028, respectively. In addition, two major transmission
projects are in the works that are expected to carry renewable
power from upstate New York and Canada to New York City. These
projects include the Clean Path New York project (CPNY), a 1.3 GW,
174-mile underground high-voltage transmission line that will
import renewable power from new projects in upstate New York, and
the Champlain Hudson Power Express (CHPE), which will be an
underground transmission line from Hydro-Quebec's wind and
hydropower resources. CPNY and CHPE are expected to be complete by
2027 and 2025, respectively, if the development remains on track
and the required permits and approvals are obtained.
Although the timeline on these projects is long-dated, and they
remain exposed to delays and other development risks (such as cost
overruns, permitting issues, and community opposition), they
nevertheless aim to deliver low-cost renewable power to New York
City, which will challenge the competitiveness and profitability of
higher-cost thermal generation that exclusively powers the city
today. The full financial impact on thermal generation as a result
of renewable entry is difficult to assess at this stage; however,
given the intermittency challenge associated with renewable assets,
and the lack of large-scale energy storage solutions available at
this stage, S&P believes that efficient dispatchable generation
assets such as AEI and AEII will provide value to the grid in some
form, likely in the shape of reliability, until permanent and
stable clean energy alternatives are available.
S&P said, "The stable outlook reflects our expectation of strong
debt service coverage during the TLB period, as well as a minimum
DSCR of about 1.6x in the refinancing period (2028-2038) based on
our refinancing assumptions, and our forward-looking view of the
energy and capacity markets.
"We would consider a negative rating action if we expect the
minimum DSCR will fall below 1.40x during the project's life
(including the refinancing period) on a sustained basis. This could
result from lower-than-expected capacity factors, weaker energy
margins, depressed capacity prices, and operational issues such as
forced outages and lower plant availability. We would also consider
a negative rating action if the project's cash flow sweeps were
materially lower than we expect, which would increase the residual
debt outstanding at TLB maturity, and potentially weaken the
projected DSCRs in the post-refinancing period, absent any
improvements in market conditions.
"We would consider an upgrade if we envisioned the project
achieving DSCRs above 1.80x throughout debt life, including the
post-refinancing period (2028-2035), or if the average DSCR
improved to above 2.5x with reasonable headroom. This could occur
if our long-term outlook for capacity prices improves, or if the
project's financial performance exceeds our forecast due to any
other factors (such as improved energy margins or higher dispatch),
leading to lower-than-expected debt outstanding at TLB maturity. We
would also consider a positive rating action if we believed that
market conditions for generators in Zone J had improved materially
and the improvement was sustainable in the long term."
ASTROTECH CORP: All Three Proposals Passed at Annual Meeting
------------------------------------------------------------
Astrotech Corporation held its Annual Meeting of shareholders at
which the stockholders:
(1) elected Thomas B. Pickens III, Daniel T. Russler, Jr.,
Ronald W. Cantwell, and Tom Wilkinson as directors to serve for the
respective terms prescribed by the Company's bylaws;
(2) ratified the appointment of Armanino, LLP as the Company's
independent registered public accounting firm for the fiscal year
ending June 30, 2022; and
(3) approved an advisory, non-binding resolution approving the
compensation of the Company's named executive officers as disclosed
in the Company's definitive proxy statement filed with the
Securities and Exchange Commission on Feb. 2, 2022.
About Astrotech
Astrotech Corporation (NASDAQ: ASTC) --
http://www.astrotechcorp.com-- is a mass spectrometry company that
launches, manages, and commercializes scalable companies based on
its innovative core technology through its wholly-owned
subsidiaries. 1st Detect develops, manufactures, and sells trace
detectors for use in the security and detection market. AgLAB is
developing chemical analyzers for use in the agriculture market.
BreathTech is developing a breath analysis tool to provide early
detection of lung diseases. Astrotech is headquartered in Austin,
Texas.
Astrotech reported a net loss of $7.60 million for the year ended
June 30, 2021, a net loss of $8.31 million for the year ended June
30, 2020, and a net loss of $7.53 million for the year ended June
30, 2019. For the six months ended Dec. 31, 2021, the Company
reported a net loss of $4.21 million. As of Dec. 31, 2021, the
Company had $60.38 million in total assets, $2.83 million in total
liabilities, and $57.55 million in total stockholders' equity.
AVINGER INC: Regains Compliance With Nasdaq Listing Requirements
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Avinger, Inc. has regained compliance with Nasdaq listing
requirements.
In a letter dated March 29, 2022, Nasdaq informed the Company that
it has achieved compliance with the minimum bid price rule required
for continued listing on the Nasdaq Capital Market.
About Avinger
Headquartered in Redwood City, California, Avinger --
http://www.avinger.com-- is a commercial-stage medical device
company that designs and develops image-guided, catheter-based
system for the diagnosis and treatment of patients with Peripheral
Artery Disease (PAD).
Avinger reported a net loss applicable to common stockholders of
21.59 million for the year ended Dec. 31, 2021, a net loss
applicable to common stockholders of $22.87 million for the year
ended Dec. 31, 2020, a net loss applicable to common stockholders
of $23.03 million for the year ended Dec. 31, 2019, and a net loss
applicable to common stockholders of $35.69 million for the year
ended Dec. 31, 2018. As of Dec. 31, 2021, the Company had $29.48
million in total assets, $19.76 million in total liabilities, and
$9.72 million in total stockholders' equity.
AZ TOWING: Seeks Approval to Hire Grossbart as Bankruptcy Counsel
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AZ Towing, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Maryland to hire Grossbart, Portney and Rosenberg,
P.A. to serve as legal counsel in its Chapter 11 case.
The firm's services include the filing of bankruptcy schedules,
statements and reports; settlement negotiations; legal advice
concerning administration of the Debtor's estate; preparation and
filing of legal papers; confirmation of the Debtor's Chapter 11
plan; and the prosecution of contested matters or adversary
proceedings.
Grossbart will charge $575 per hour for its services.
As disclosed in court filings, Grossbart does not represent
interests adverse to those of the Debtor's estate.
The firm can be reached through:
Robert N. Grossbart, Esq.
Grossbart, Portney and Rosenberg, P.A.
100 n. Charles St., 20th floor
Baltimore, Md 21201
Phone: +1 410-837-0590
Email: robert@grossbartlaw.com
About AZ Towing Inc.
AZ Towing, Inc. filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Md. Case No. 22-11460) on March 22,
2022, listing as much as $50,000 in both assets and liabilities.
Michael G. Wolff, Esq., at Wolff & Orenstein, LLC serves as
Subchapter V trustee.
Judge David E. Rice presides over the case.
Robert N. Grossbart, Esq., at Grossbart, Portney and Rosenberg,
P.A. and Brett Weiss, Esq., at The Weiss Law Group, LLC are the
Debtor's bankruptcy attorneys.
AZ TOWING: Seeks to Hire The Weiss Law Group as Co-Counsel
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AZ Towing, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Maryland to hire The Weiss Law Group, LLC to serve
as co-counsel with Grossbart, Portney and Rosenberg, P.A.
The firm will render these services:
(a) file the required bankruptcy schedules, statements and
reports;
(b) settle negotiations;
(c) advise the Debtor concerning administration of the
estate;
(d) file necessary motions;
(e) defend the Debtor in any contested matters or adversary
proceedings in this court; and
(f) confirm the Debtor's disclosure statement and
reorganization plan.
Brett Weiss, Esq., the primary attorney in this representation,
will be paid at his hourly rate of $595.
Mr. Weiss 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:
Brett Weiss, Esq.
The Weiss Law Group, LLC
8843 Greenbelt Road, Suite 299
Greenbelt, MD 20770
Telephone: (301) 924-4400
Facsimile: (240) 627-4186
Email: brett@BankruptcyLawMaryland.com
About AZ Towing Inc.
AZ Towing, Inc. filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Md. Case No. 22-11460) on March 22,
2022, listing as much as $50,000 in both assets and liabilities.
Michael G. Wolff, Esq., at Wolff & Orenstein, LLC serves as
Subchapter V trustee.
Judge David E. Rice presides over the case.
Robert N. Grossbart, Esq., at Grossbart, Portney and Rosenberg,
P.A. and Brett Weiss, Esq., at The Weiss Law Group, LLC are the
Debtor's bankruptcy attorneys.
BROWNIE'S MARINE: Needs More Time to File Form 10-K
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Brownie's Marine Group, Inc. filed a Form 12b-25 with the
Securities and Exchange Commission stating that it is unable to
file its Annual Report on Form 10-K for the year ended Dec. 31,
2021 by the prescribed date without unreasonable effort or expense,
because the Company needs additional time to complete certain
disclosures and analyses to be included in the Report.
In accordance with Rule 12b-25 promulgated under the Securities
Exchange Act of 1934, as amended, the Company intends to file the
Report on or prior to the 15th calendar day following the
prescribed due date.
About Brownie's Marine
Headquartered in Pompano Beach, Florida, Brownie's Marine Group,
Inc., is the parent company to a family of innovative brands with a
unique concentration in the industrial, and recreational diving
industry. The Company, together with its subsidiaries, designs,
tests, manufactures, and distributes recreational hookah diving,
yacht-based scuba air compressors and nitrox generation systems,
and scuba and water safety products in the United States and
internationally. The Company has three subsidiaries: Trebor
Industries, Inc., founded in 1981, dba as "Brownie's Third Lung";
BLU3, Inc.; and Brownie's High-Pressure Services, Inc., dba LW
Americas. The Company is headquartered in Pompano Beach, Florida.
Brownie's Marine reported a net loss of $1.35 million for the year
ended Dec. 31, 2020, a net loss of $1.42 million for the year ended
Dec. 31, 2019, and a net loss of $1.30 million for the year ended
Dec. 31, 2018. As of Sept. 30, 2021, the Company had $5.11 million
in total assets, $2.40 million in total liabilities, and $2.71
million in total stockholders' equity.
BURFORD CAPITAL: S&P Rates New $350MM Senior Unsecured Notes 'BB-'
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S&P Global Ratings assigned its 'BB-' debt rating to Burford
Capital Global Finance LLC's proposed issuance of $350 million
senior unsecured notes due 2030. Burford Capital Global Finance LLC
is a financing subsidiary of Burford Capital Ltd. (Burford). S&P
expects Burford's leverage, measured by debt to adjusted total
equity (ATE), will be about 0.93x after the transaction, assuming
the company will use some of the proceeds to repay the senior
unsecured notes due in August. S&P excludes the $388.9 million of
non-controlling interest in our calculation of ATE because those
are investments in Burford-managed funds from third-party
investors; Burford is unable to use those funds for general
corporate purposes like paying off debt.
S&P said, "The stable outlook reflects our expectation that as
Burford continues to grow its balance sheet and asset management
segment, successful investments will continue to provide more than
sufficient returns to offset the relatively high number of failed
investments because of their asymmetric return profile. The stable
outlook also reflects our expectation that the company will
maintain leverage below 1.0x over the next 12 months.
"We could lower our ratings on Burford if, in our view, its
investment performance weakens considerably, which could be
indicated by a decline in investment realizations over a six- to
12-month period, or by an increase in the ratio of cases that are
concluded with a return less than the invested principal. We could
also lower the ratings if leverage increases above 1.0x on a
sustained basis or if liquidity becomes strained owing to higher
draws on commitments or reduced realizations.
"Over the longer term, we could upgrade the company if its
portfolio reaches a maturity and diversification that would reduce
potential lumpiness of revenues and provide a more stable and
predictable flow of earnings while maintaining leverage sustainably
below 1.0x."
BUYK CORP: Gets Approval to Hire Michael Amodeo as Auctioneer
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Buyk Corp. received approval from the U.S. Bankruptcy Court for the
Southern District of New York to hire Michael Amodeo & Co Inc., a
New York-based auction firm, in connection with the sale of its
personal property.
As part of its restructuring, the Debtor has determined to sell by
auction its personal property, excluding perishable items from the
following locations: 304-312 East 204th St. and 190 West 231st St.,
Bronx, N.Y.
Michael Amodeo will receive a total fee equal to 15 percent of the
gross sale price of the assets sold. The firm is not entitled to
expense reimbursement.
As disclosed in court filings, Michael Amodeo is disinterested
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael Amodeo
Michael Amodeo & Co Inc.
111 E. 14th St., Suite 207
New York, NY 10003
Phone: +1 212-473-6830
Email: mamodeoauctions@gmail.com
About Buyk Corp.
Buyk Corp. is a retail grocery delivery service that was launched
in September 2021. It operated a network of 39 stores in New York
and Chicago.
Buyk filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case
No. 22-10328) on March 17, 2022, listing as much as $10 million in
both assets and liabilities. James Walker, chief executive officer,
signed the petition.
Judge Michael E. Wiles oversees the case.
Mark S. Lichtenstein, Esq., at Akerman, LLP and Dmitriy Goykhman,
CPA PC serve as the Debtor's legal counsel and accountant,
respectively.
BUYK CORP: Gets OK to Tap National Property Solutions as Auctioneer
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Buyk Corp. received approval from the U.S. Bankruptcy Court for the
Southern District of New York to hire National Property Solutions,
Inc., an auction firm in Northbrook, Ill., in connection with the
sale of its personal property.
As part of its restructuring, the Debtor has determined to sell by
auction its personal property from the following locations:
Retail Locations:
3545 W. Armitage Ave., Chicago, Ill.
2121 N. Clybourn, Chicago, Ill.
4819 W. Irving Park Rd., Chicago, Ill.
1956 W. Lawrence Ave., Chicago, Ill.
4838 S. Cicero Ave., Chicago, Ill.
1860 N. Milwaukee Ave., Chicago, Ill.
2774 N. Milwaukee Ave., Chicago, Ill.
2717 N. Clark Street, Chicago, Ill.
111 Third Ave., New York
976 Amsterdam Ave., New York
315 W. 35th St., New York
47 E. 34th St., New York
5-15 W. 135th St., New York
6241 Forest Ave., Ridgewood, N.Y.
635 4th Ave., Brooklyn, N.Y.
869 Myrtle Ave., Brooklyn, N.Y.
83 Third Ave., Brooklyn, N.Y.
5216-5224 Fifth Ave., Brooklyn, N.Y.
1805-1807 Church Ave., Brooklyn, N.Y.
83 Gardner Ave., Brooklyn, N.Y.
1938 Coney Island Ave., Brooklyn, N.Y.
29-28 41st Ave., Long Is. City, N.Y.
28-12 21st Street, Long Island City, N.Y.
2721 Bronxwood, Ave., Bronx, N.Y.
610 Exterior St., Bronx, N.Y.
107-12 Queens Blvd., Forest Hills, N.Y.
2269 First Avenue, New York, N.Y.
Warehouse Locations:
111 Asia Place, Carlstadt, N.J.
101 Alexander Ave, Pequannock, N.J.
2 Howard Place, Ledgewood, N.J.
10 Park Place, Butler, N.J.
National Property Solutions will be compensated as follows:
a. For assets located at the Debtor's retail stores, the
auctioneer will be paid a 15 percent commission at the time of an
auction or sale (including an arranged sale) based on the gross
sale price of individually sold assets or individual lots.
b. For assets stored at the Debtor's warehouses, the
auctioneer will be paid a commission as follows:
-- 10 percent of the gross sales price up to $1,000,000
dollars
-- 9 percent of the gross sales price from $1,000,001 to
$2,000,000
-- 8 percent of the gross sales price from $2,000,001 to
$3,000,000
-- 7 percent of the gross sales price from $3,000,001 to
$4,000,000
-- 6 percent of the gross sales price from $4,000,001 to
$5,000,000
-- 5 percent of the gross sales price from $5,000,001 to
$6,000,000
-- 4 percent of the gross sales price from $6,000,001 and
above, at the time of an auction or sale (including an arranged
sale) based on the gross sale price of individually sold assets or
individual lots.
National Property Solutions is disinterested within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Renee Y. Jones
National Property Solutions, Inc.
899 Skokie Blvd., Suite 100
Northbrook, IL 60062
Phone: 312-278-0600
About Buyk Corp.
Buyk Corp. is a retail grocery delivery service that was launched
in September 2021. It operated a network of 39 stores in New York
and Chicago.
Buyk filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case
No. 22-10328) on March 17, 2022, listing as much as $10 million in
both assets and liabilities. James Walker, chief executive officer,
signed the petition.
Judge Michael E. Wiles oversees the case.
Mark S. Lichtenstein, Esq., at Akerman, LLP and Dmitriy Goykhman,
CPA PC serve as the Debtor's legal counsel and accountant,
respectively.
BUYK CORP: Wins Interim Cash Collateral Access
----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York has
authorized Buyk Corp. to use cash collateral on an interim basis in
accordance with the budget, with a 7.5% variance and provide
adequate protection.
The Debtor is a borrower under a Prepetition Term Loan Credit
Agreement, dated March 11, 2022, between the Debtor and Legalist
DIP GP, LLC. The Prepetition Term Loan Agreement is secured by
substantially all assets of the Debtor.
The Debtor's authorization, and the Secured Party's consent, to use
cash collateral will terminate without further notice or action by
the Court on the earliest to occur of any of the following:
a. the first business day that is 40 days after the Petition
Date if the Final Order with respect to the Motion has not been
entered by the Court on or before such date;
b. following five business days' written notice to the Debtor,
the failure of the Debtor to comply with any provision, covenant or
agreement in the Interim Cash Collateral Order;
c. the Debtor will grant, create, incur or suffer to exist any
postpetition liens or security interests other than (i) those
granted pursuant to the Interim Cash Collateral Order; (ii)
carriers', mechanics', operator's, warehousemen's, repairmen's or
other similar liens arising in the ordinary course of business for
amounts outstanding as of the Petition Date; (iii) pledges or
deposits in connection with workers' compensation, unemployment
insurance and other social security legislation; and (iv) deposits
to secure the payment of any postpetition statutory obligations,
surety bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
d. the entry of an order dismissing the Chapter 11 Case or
converting the Chapter 11 Case to a case under chapter 7 of the
Bankruptcy Code;
e. the entry of an order in the Chapter 11 Case appointing a
chapter 11 trustee;
f. the Court will terminate or reduce the period pursuant to
section 1121 of the Bankruptcy Code during which the Debtor have
the exclusive right to file a plan and solicit acceptances
thereof;
g. the entry of an order in the Chapter 11 Cases modifying,
staying, reversing or vacating any part of the Interim Cash
Collateral Order, without the prior consent of the Secured Party;
h. except as expressly allowed in the Interim Cash Collateral
Order, an order of the Court will be entered granting any lien on,
or security interest in, any Prepetition Collateral in favor of any
party other than the Secured Party, or granting an administrative
claim payable by a Debtor to any party other than the Secured
Party, that is senior to, or pari passu with, the Adequate
Protection Superpriority Claim, without the express written consent
of the Secured Party;
i. the Debtor file or support a motion challenging the
validity, extent or priority of any of the Prepetition Liens or
Secured Obligations; or
j. the entry of an order granting relief from any stay of
proceeding (including, without limitation, the automatic stay) so
as to allow a third party to proceed with foreclosure (or granting
a deed in lieu of foreclosure).
As adequate protection for the Debtor's use of cash collateral,
Legalist is granted additional and replacement valid, binding,
enforceable non-avoidable, and automatically perfected postpetition
security interests in and liens, without the necessity of the
execution by the Debtor.
To the extent of any Diminution in Value, as further adequate
protection, and to the extent provided by sections 503(b),
507(a)(2) and 507(b) of the Bankruptcy Code, the Secured Party is
granted an allowed superpriority administrative expense claim
against the Debtor ahead of and senior to any and all other
administrative expense claims and all other claims asserted against
the Debtor.
The final hearing on the matter is scheduled for April 19, 2022 at
10 a.m.
A copy of the order is available at https://bit.ly/3LyiDpQ from
PacerMonitor.com.
About Buyk
Buyk is a real-time retail grocery delivery service that was
launched in September 2021 with the mission of giving back time to
American consumers. Buyk operated a network of 39 stores in New
York and Chicago. The company delivers groceries and essential
items to customers' doorsteps in 15 minutes or faster -- with no
minimum spend and no delivery fee.
Buyk Corp. filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y.
Case No. 22-10328) on March 17, 2022.
Mark S. Lichtenstein, Esq. at Akerman LLP is the Debtor's counsel.
CARNIVAL BEVERAGES: Seeks to Hire Steidl and Steinberg as Counsel
-----------------------------------------------------------------
Carnival Beverages Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire Steidl and
Steinberg, P.C. to handle its Chapter 11 case.
The rate charged by Steidl and Steinberg for legal services is $300
per hour.
The firm received a retainer in the amount $5,000.
As disclosed in court filings, Steidl and Steinberg is a
disinterested person within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Christopher M. Frye, Esq.
Steidl and Steinberg, P.C.
2830 Gulf Tower, 707 Grant Street
Pittsburgh, PA 15219
Phone: 412- 391-8000
Email: chris.frye@steidl-steinberg.com
About Carnival Beverages
Carnival Beverages Inc., a manufacturer of crafted beer based in
Mittlin, Pa.,
Carnival Beverages filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-20472) on March
15, 2022, listing as much as $500,000 in both assets and
liabilities. Steidl and Steinberg, P.C., led by Christopher M.
Frye, Esq., is the Debtor's legal counsel.
CASTLEROCK DEVELOPMENT: Exclusivity Period Extended to Aug. 2
-------------------------------------------------------------
Judge James Sacca of the U.S. Bankruptcy Court for the Northern
District of Georgia extended the exclusivity period for Castlerock
Development Services, LLC to file a Chapter 11 plan to Aug. 2 and
to solicit acceptances for the plan to Sept. 29.
The extension will give Castlerock more time to resolve disputes
with its suppliers and to investigate the possibility of avoidance
actions before it can file a plan of reorganization, according to a
motion filed by the company in court.
About Castlerock Development Services
Castlerock Development Services, LLC provides land development and
erosion control services as well as related construction site
maintenance work like grading, grubbing, utility installation,
detention pond clean-outs, and concrete work. The company is based
in Cumming, Ga.
Castlerock filed a Chapter 11 petition (Bankr. N.D. Calif. Case No.
21-20848) on Aug. 5, 2021, listing as much as $10 million in both
assets and liabilities. Jody Lewis, president and managing member,
signed the petition.
Judge James R. Sacca oversees the case.
Rountree, Leitman & Klein, LLC serves as the Debtor's legal
counsel.
CEN BIOTECH: Delays Filing of 2021 Annual Report
------------------------------------------------
CEN Biotech, Inc. has determined that it was unable to file its
Annual Report on Form 10-K for the year ended Dec. 31, 2021 on or
before March 31, 2022, the original due date for such filing,
without unreasonable effort or expense because it requires
additional time to complete its financial statements. This delay
principally relates to completing the consolidated reporting of the
Company's recent acquisition of Clear Com Media Inc., an Ontario,
Canada corporation.
On July 9, 2021, the Company closed on a Share Exchange Agreement
with CCM, each of the shareholders of CCM as set forth on the
signature pages of the Agreement and Lawrence Lehoux as the
representative of the CCM Shareholders, pursuant to which the
Company acquired all of the common shares of CCM, in exchange for
the issuance by the Company to the CCM Shareholders of 4,000,000
restricted shares of the Company's common stock, pursuant to which
CCM became a wholly owned subsidiary of the Company. The Company
expects that it will file the Form 10-K no later than the fifteenth
calendar day following the prescribed filing date.
The Company anticipates that there will be a significant change in
results of operations from the corresponding period for the last
fiscal year that will be reflected by the financial statements to
be included in the Form 10-K. This change relates to the
acquisition by the Company of Clear Com Media. As a result of the
recently completed acquisition of CCM, the most significant change
in the results of operations from the corresponding period for the
last fiscal year relates to the recognition of revenue of
approximately $634,783 for the year ended Dec. 31, 2021, as
compared to $0 for year ended Dec. 31, 2020.
About CEN Biotech Inc.
CEN Biotech, Inc. -- tp://www.cenbiotechinc.com -- is focused on
the manufacturing, production and development of Light Emitting
Diode lighting technology and hemp products. The Company intends
to explore the usage of hemp, which it intends to cultivate for
usage in industrial, medical and food products. Its principal
office is located at 300-3295 Quality Way, Windsor, Ontario,
Canada.
CEN Biotech reported net income of $14.25 million for the year
ended Dec. 31, 2020, compared to a net loss of $5.65 million for
the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had
$8.40 million in total assets, $11.48 million in total
liabilities, and a total shareholders' deficit of $3.08 million.
Mazars USA LLP, in New York, New York, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
March 12, 2021, citing that the Company has incurred significant
operating losses and negative cash flows from operations since
inception. The Company also had an accumulated deficit of
$27,060,527 at Dec. 31, 2020. The Company is dependent on
obtaining necessary funding from outside sources, including
obtaining additional funding from the sale of securities in order
to continue their operations. The COVID-19 pandemic has hindered
the Company's ability to raise capital. These conditions raise
substantial doubt about its ability to continue as a going concern.
CLEAN ENERGY: Delays Filing of 2021 Annual Report
-------------------------------------------------
Clean Energy Technologies, Inc. filed a Form 12b-25 with the
Securities and Exchange Commission notifying the delay in the
filing of its Annual Report on Form 10-K for the year ended Dec.
31, 2021. The Company is unable to file its Annual Report due to
its difficulty in completing and obtaining required financial and
other information without unreasonable effort and expense date.
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com-- designs, produces and markets
clean energy products and integrated solutions focused on energy
efficiency and renewables.
Clean Energy reported a net loss of $3.44 million for the year
ended Dec. 31, 2020, compared to a net loss of $2.56 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$5.84 million in total assets, $8.23 million in total liabilities,
and a total stockholders' deficit of $2.39 million.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2015, issued a "going concern"
qualification in its report dated April 15, 2021, citing that the
Company has an accumulated deficit, net losses, negative working
capital, and has utilized significant net cash in operations. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
CLUBHOUSE MEDIA: Incurs $22.2 Million Net Loss in 2021
------------------------------------------------------
Clubhouse Media Group, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$22.25 million on $4.25 million of total net revenue for the year
ended Dec. 31, 2021, compared to a net loss of $2.58 million on
$1.01 million of total net revenue for the period from Jan. 2, 2020
(inception) to Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $1.52 million in total assets,
$10.67 million in total liabilities, and a total stockholders'
deficit of $9.15 million.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2020, issued a "going concern"
qualification in its report dated March 29, 2022, citing that the
Company has an accumulated deficit, net losses, and negative
working capital. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
Management Commentary
"For the fiscal year 2021, net revenues grew 321% versus the prior
year to $4.3 million. Influencer/creator brand sponsorship deals
contributed significantly to the growth, and we continue to see a
tremendous opportunity in this space going forward in 2022 and
beyond," said Dmitry Kaplun, chief financial officer of Clubhouse
Media Group.
"Operationally, while we reported higher expenses in 2021 versus
the previous year, we reduced our consecutive quarterly net loss
each quarter beginning with the quarter ended September 30, 2021,
we closed our physical content houses, and we significantly reduced
our monthly cash burn, especially in the last two months of 2021.
We believe that this will be fully reflected in a lower expense
base in 2022 and beyond," Mr. Kaplun added.
On the funding side, Clubhouse Media Group secured new sources of
long-term financing, such as the $15 million equity line, and
short-term debt so that it can continue to expand in its
operations.
"Since Dmitry joined us as the CFO in the fourth quarter of 2021,
he has been instrumental in positioning the company financially for
the growth ahead. Additionally, we added full time ex-CAA sales
executives who are starting to produce larger scale brand deals.
We have also been witnessing the growth of our Honeydrip.com
creator platform, which we expect to grow exponentially in 2022,"
added Amir Ben-Yohanan, chief executive officer of Clubhouse Media
Group.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1389518/000149315222008044/form10-k.htm
About Clubhouse Media
Las Vegas, Nevada-based Clubhouse Media Group, Inc. 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.
COUZINS FOOD: Wins Final Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York has
authorized Couzins Food II Corp. dba Associated Fresh Supermarket,
to use the cash collateral of Associated Supermarket Group LLC/AFS
Capital LLC and the U.S. Small Business Administration on final
basis pursuant to the budget.
The Debtor requires the use of cash collateral to sustain its
operations and meet its current necessary and integral business
obligations.
As of the Petition Date, Associated asserts the total amount the
Debtor owes is at least $625,000, and the SBA asserts the total
amount the Debtor owes is at least $484,000.
As adequate protection, the Lenders are granted: (a) replacement
liens and security interests in all of the Debtor's assets acquired
post-petition including cash to the extent the said liens were
valid, perfected and enforceable as of the Petition Date in the
continuing order of priority of its pre-petition liens without
determination as to the nature, extent a nd validity of said
pre-petition liens and claims and solely to the extent Collateral
Diminution occurs during the bankruptcy case, subject to (i) the
claims of Chapter 11 professionals duly retained and to the extent
awarded pursuant to 330 and 331 of the Bankruptcy Code including
the fees incurred by the Subchapter V Trustee, (ii) United States
Trustee fees pursuant to 28 U.S.C. section 1930 and interest
pursuant to 31 U.S.C. Section 3717, and (iii) the payment of any
allowed claim of any subsequently appointed Chapter 7 trustee to
the extent of $30,000; and will not extend to estate causes of
action and the proceeds of any recoveries of estate causes of
action under Chapter 5 of the Bankruptcy Code.
A copy of the order is available at https://bit.ly/3NA5bnc from
PacerMonitor.com.
About Couzins Food II Corp.
Couzins Food II Corp. owns and operates a full-service grocery
store located at 3579 Victory Blvd., Staten Island, NY 10314. The
Grocery Store operates under Associated Supermarket Group LLC/AFS
Capital LLC. Associated has assigned store no. 16207 to the Grocery
Store.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. E.D.N.Y. Case No. 22-40405) on March 1,
2022. In the petition signed by Mazin Farraj, president, the Debtor
disclosed $597,022 in assets and $1,496,233 in liabilities.
Judge Elizabeth S. Stong oversees the case.
Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP is the
Debtor's counsel.
CPM HOLDINGS: S&P Alters Outlook to Positive, Affirms 'B-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook to positive from stable and
affirmed its 'B-' issuer credit rating on CPM Holdings Inc. S&P
also affirmed its 'B-' ratings on its first-lien credit facilities
with a recovery rating of '3' (rounded estimate: 50%), which
consist of a revolving credit facility and a first-lien term loan,
and 'CCC+' on its second-lien term loan with a recovery rating of
'5' (rounded estimate: 10%).
The positive outlook reflects the potential that S&P will raise the
rating if the company can maintain S&P Global Ratings-adjusted
leverage below 6x and sustain good FOCF generation in the coming 12
months.
S&P said, "We expect healthy revenue growth in 2022 driven by solid
demand across the majority of CPM's end markets and geographies. We
expect strong growth in the company's Thermal and Crown segments,
along with more modest growth in the Extrusion and California
Pellet Mill segments, all supported by record levels of backlog at
calendar year-end 2021. We believe the Crown segment will benefit
from strong demand for oil processing equipment in 2022, driven
primarily by the renewable diesel end market. In the Thermal
segment, we expect demand for aluminum can processing equipment to
remain exceptionally strong, driven by growing demand for
carbonated waters and hard seltzers, along with steady growth in
demand for industrial roasting and drying equipment, which are
primarily used for production of ready-to-eat food. In the
Extrusion segment, we expect growth to be driven primarily by
pent-up demand in the market following a pandemic-related slow-down
in capital spending by customers. Lastly, in the California Pellet
Mill segment, we expect modest growth, primarily driven by the
Americas region, partly offset by the Russia/Ukraine conflict and
the continued, strict approach to the COVID-19 pandemic in Asia
such as lockdowns. In total, we expect organic revenue growth in
2022 in the 15% area.
"We believe EBITDA will grow moderately in 2022, driven by top-line
performance, partially offset by cost pressure, less-favorable
product mix, and labor challenges. We believe CPM's margins will be
somewhat pressured, in part by global cost inflation. Although the
company aims to hedge costs on an order level by simultaneously
entering into contracts with customers and suppliers to the extent
possible, we believe some risk remains of margin degradation in a
portion of the company's backlog. Additionally, we expect labor
availability to remain tight and labor costs to remain high,
especially in North America. Lastly, we also expect a slight,
unfavorable shift in product mix, primarily due to nonrepeating,
high-margin orders that took place in 2021. As a result, we expect
a decline in S&P Global Ratings-adjusted EBITDA margin by
approximately 200-300 basis points (bps) in 2022. However, this
decline in margin is more than offset by the company's strong
revenue performance, resulting in growth in S&P Global
Ratings-adjusted EBITDA in the high-single-digit-percent area in
2022.
"We expect CPM to continue generating positive FOCF in 2022,
supported by continuing inflows from working capital. We expect the
company's backlog of orders to continue growing faster than its
revenue in 2022, resulting in a net working capital inflow driven
by down payments on new orders. We expect this inflow to be largely
offset by a significant increase capital expenditure from
approximately $3.5 million in 2021 to approximately $17 million-$20
million in 2022, as the company supports growth in various
initiatives, including continued investment in the Crown segment's
laboratory and testing facility, growth of California Pellet Mill's
presence in Asia, and expansion of aftermarket capabilities in the
U.S. Consequently, we expect CPM will generate FOCF of
approximately $80 million-$100 million in 2022.
"Uncertainty around financial policy--most notably potential for
debt-funded acquisitions or shareholder returns--is a key rating
consideration. We acknowledge that leverage declined over the past
year, partly driven by debt paydown, and that the company elected
to fund a dividend using cash rather than debt. However, we see
some risk that the company could take an aggressive approach to
financial policy, increasing leverage above 6x. Still, we forecast
continued improvement in operating performance will allow the
company to build a leverage cushion that could support a higher
rating, even while incorporating moderate acquisition activity. We
also expect to get additional clarity to the company's capital
structure and overall debt quantum based on the company's approach
to refinancing its revolving credit facility, which matures in
November 2023."
The positive outlook reflects our expectation that CPM's S&P Global
Ratings-adjusted debt to EBITDA will remain well below 6x and that
the company will generate healthy, positive FOCF over the next 12
months. This would provide the company with sufficient cushion to
absorb moderate acquisitions or a decline in backlog from currently
strong levels.
S&P could raise the rating over the next 12 months if:
-- The company maintains S&P Global Ratings-adjusted leverage
below 6x, accounting for potential debt-funded acquisitions,
dividends and backlog variability, and we expect the company to
maintain such leverage through an economic cycle;
-- The company maintains positive free cash flow generation; and
-- S&P believes the company will successfully complete a timely
refinancing of its revolving credit facility, which has an upcoming
maturity in November 2023.
S&P could revise the outlook to stable over the next 12 months if:
-- The company's leverage rises above 6x, for example due to weak
operating performance or large, debt-funded acquisitions or
dividends;
-- S&P expects the company to pursue an aggressive financial
policy that could result in leverage rising above 6x;
-- The company is unable to generative positive FOCF; or
-- The company does not refinance its revolving credit facility in
a timely manner.
ESG credit indicators: E-2, S-2, G-3
CRYSTAL PACKAGING: Seeks Cash Collateral Access
-----------------------------------------------
Crystal Packaging, Inc. asks the U.S. Bankruptcy Court for the
District of Colorado for authority to use cash collateral and
provide adequate protection. The Debtor requires immediate use of
its cash in order to maintain operations.
The Debtor proposes to use potential cash collateral on an interim
basis until such time as the Court schedules a final hearing on the
use of cash collateral. At the final hearing, the Debtor will seek
relief to use funds that may be deemed cash collateral over six
months pursuant to the Budgets. The Debtor proposes to meet the
Budgets subject to the ability to deviate from the Budgets by up to
15% per line item, per month.
On the Petition Date, the Debtor maintained two bank accounts at
Cache Bank with a total balance of $176,845. The Debtor is the
process of opening one or more debtor in possession accounts to
hold the funds. The Debtor contends the funds in the Deposit
Accounts on the Petition Date are not cash collateral as that term
is defined in 11 U.S.C. section 363(a).
Seven creditors assert liens on various assets of the Debtor. Rocky
Mountain Petroleum and Navitas Credit Corporation assert liens on
specific equipment and other personal property assets. These
creditors cannot claim an interest in the Debtor's cash or future
cash collateral.
Direct Capital, a division of CIT Bank, has a first priority
perfected purchase money security interest in various equipment and
materials purchased by the Debtor pre-petition. A financing
statement Direct Capital recorded in 2016 that extends to other
assets expired pre-petition. Accordingly, Direct Capital does not
have an interest in the Debtor's cash or any potential cash
collateral.
The remaining four creditors could conceivably assert that some
portion of the Debtor's current and future cash is or will be "cash
collateral" which are Associated Receivables Funding, Inc., Power
Assist Company, Olympic Distribution Center LLC, and Zimmerman
Family Trust.
A/R Funding may assert a first priority lien, Power Assist may
assert a second priority lien, Olympic may assert a third priority
lien, and ZFT may assert a fourth priority lien. With respect to
respect to any "cash collateral" relating to the raw materials,
finished good s and general intangibles, Power Assist may assert a
first priority lien and Olympic may assert a second priority lien.
To provide adequate protection for the Debtor's use of cash
collateral, to the extent any secured creditor is properly
perfected in cash collateral, the Debtor proposes the following:
a. The Debtor will provide a replacement lien on the proceeds
of all post-petition accounts to the extent that the use of the
cash collateral results in a decrease in the value of the
collateral pursuant to 11 U.S.C. section 361(2);
b. The Debtor will maintain adequate insurance coverage on all
personal property assets and adequately insure against any
potential loss;
c. The Debtor will provide periodic reports and information
filed with the Bankruptcy Court, including debtor-in-possession
reports;
d. The Debtor will only expend cash collateral pursuant to the
Budgets subject to reasonable fluctuation by no more than 15% for
each expense line item per month; and
e. The Debtor will pay all post-petition taxes.
A copy of the motion is available at https://bit.ly/3IXsBj4 from
PacerMonitor.com.
About Crystal Packaging, Inc.
Crystal Packaging, Inc. is a specialty chemical and petroleum
contract packager and private label manufacturer in the Rocky
Mountain Region.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 22-10990) on March 26,
2022. In the petition signed by C. Scott Vincent, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Elizabeth E. Brown oversees the case.
David V. Wadsworth, Esq., at Wadsworth Garber Warner Conrardy, PC
is the Debtor's counsel.
CUSHMAN & WAKEFIELD: S&P Upgrades ICR to 'BB', Outlook Positive
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Cushman &
Wakefield (C&W) to 'BB' from 'BB-'. The outlook is positive.
S&P also raised its debt rating to 'BB' from 'BB-'. Its recovery
expectation of '3' remains unchanged.
The one-notch upgrade reflects stronger than expected operating
performance that led to 2021 year-end leverage of 3.3x versus more
than 5.0x in 2020. The rebound in operating performance was driven
by stronger than expected performance from higher margin capital
market and leasing activity, which led to S&P Global Rating's
adjusted EBITDA improving to $898 million from $471 million in
2020. S&P Global Ratings adjusted EBITDA consists of $136 million
related to operating leases and does not add back integration and
merger related costs of $32 million for 2021.
As of Dec. 31, 2021, C&W had $770.7 million in cash on its balance
sheet, which we net against gross debt. S&P's net debt calculation
consists of $2.6 billion of first lien loan due 2025, $650 million
of notes due 2028, $418 million in operating and finance leases,
about $40 million of deferred business obligations, and $42 million
in short-term debt netted against cash on balance sheet. The
company is targeting to operate with net leverage in the mid-two
range, which equates to the lower end of 3.0x-4.0x in our
calculation.
For year-end December 2021, fee revenue increased by 26% year over
year, to about $6.9 billion. The growth was primarily driven by its
higher margin capital markets and leasing businesses that grew 75%
and 45%, respectively. Of the total $6.9 billion fee revenue, the
company generates about 46% or $3.2 billion from lower margin,
recurring steady cash flow property, facilities and project
management.
For full-year 2022, Cushman expects brokerage fee revenue to grow
by upper single digit, property and facilities management to grow
by mid-single digit, and EBITDA margin to improve by 100 basis
points on a sustained basis (including contributions from the
Greystone joint venture), which S&P views as feasible.
S&P's base-case forecast assumes:
-- Net debt to adjusted EBITDA at the lower end of 3.0x-4.0x;
-- Leasing and capital markets fee revenue to be +7% to +10% in
2022, compared with an increase of 45% and 75%, respectively, in
2021;
-- Property and facilities management fee revenue to grow by
low-to-mid single digits in 2022, compared with growth of about 7%
in 2021; and
-- EBITDA margins, based on fee revenue, will be 10%-15%.
S&P said, "The positive outlook on C&W over the next 12 months
reflects our expectation for stabilizing macroeconomic conditions
for CRE services, sustained leverage (net debt/adjusted EBITDA) at
the lower end of 3.0x-4.0x, and EBITDA margin of 10%-15%. The
outlook also factors in the company's market position, ample
liquidity, and prudent financial management.
"We could revise our outlook to stable over the next 12 months if
the company embarks on a large debt-financed acquisition or
operating performance materially weakens and leverage approaches
4.0x.
"We could raise the ratings over the next 12 months if leverage
remains well below 3.0x or EBITDA margin is comfortably above 15%
on a sustained basis. An upgrade would also be predicated on the
firm maintaining its existing market position and stable operating
performance."
DATZKO CAPITAL: Seeks to Hire Steidl and Steinberg as Legal Counsel
-------------------------------------------------------------------
Datzko Capital, LLC seeks approval from the U.S. Bankruptcy Court
for the Western District of Pennsylvania to hire Steidl and
Steinberg, P.C. to handle its Chapter 11 case.
The rate charged by Steidl and Steinberg for legal services is $300
per hour.
The firm received a retainer in the amount $5,000.
As disclosed in court filings, Steidl and Steinberg is a
disinterested person within the meaning of Sec 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Christopher M. Frye, Esq.
Steidl and Steinberg, P.C.
2830 Gulf Tower, 707 Grant Street
Pittsburgh, PA 15219
Phone: 412- 391-8000
Email: chris.frye@steidl-steinberg.com
About Datzko Capital
Datzko Capital, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-20473) on March
15, 2022, listing up to $50,000 in assets and up to $1 million in
liabilities.
Steidl and Steinberg, P.C., led by Christopher M. Frye, Esq., is
the Debtor's legal counsel.
DAYCO LLC: S&P Upgrades ICR to 'B-', Outlook Stable
---------------------------------------------------
S&P Global Ratings upgraded Dayco LLC's issuer credit rating to
'B-' from 'CCC+'.
Simultaneously, S&P has upgraded the issue level rating for the
term loan facility to 'B-', representing an average recovery
(rounded recovery 35%).
The stable outlook reflects its expectation that Dayco will
maintain adequate liquidity and improved FOCF in the forecast
period.
Dayco's financial performance has steadily improved since the onset
of the COVID-19 pandemic as EBITDA margins rebounded and
contributed to free operating cash flow (FOCF) generation during
the fiscal year ended Feb. 28, 2022.
The company is seeking an amendment with the asset-based lending
(ABL) facility and term loan bank groups to extend maturity of the
credit facilities through May 2025 in addition to other
modifications.
The upgrade to 'B-' reflects Dayco's financial performance
improvement that benefitted from EBITDA margin expansion and FOCF
generation during fiscal year 2022. EBITDA margin expansion during
fiscal 2022 was driven by the rebound in higher margin aftermarket
sales volumes and partial recovery in Dayco's core original
equipment manufacturer (OEM) business segment. S&P expects that OEM
volumes will remain volatile amid ongoing shortages of
semiconductor chip supplies and broader macroeconomic
uncertainties, particularly given recent developments in the
conflict between Russia and Ukraine. Despite these uncertainties,
it is still forecasting recoveries in the latter half of calendar
year 2022 and into 2023.
EBITDA margins are forecast to moderately improve as Dayco offsets
inflationary cost pressures through pricing actions with OEM and
aftermarket customers alike, and the company realizes benefits from
restructuring initiatives during both fiscal 2021 and 2022.
S&P's forecast assumes that working capital outflows remain
manageable and capital spending returns to pre-pandemic levels as
Dayco expands into new product categories to supply components for
the electric vehicle power train. It expects that FOCF to debt will
gradually improve from 2% in fiscal 2022 to 5.5% by fiscal 2024.
Dayco's liquidity of approximately $130 million is sufficient to
support the company's operations to the extent production
disruptions and higher working capital needs lead to moderately
negative cash flows during the first half of its fiscal year.
S&P said, "While the planned two-year maturity extension of the ABL
and term loan credit facilities through May 2025 is credit
enhancing, we will continue to monitor Dayco's capital structure.
The short-duration extension of the credit facilities provides
management additional time to execute on the commercial strategy;
however, weaker financial performance relative to our forecast
could pose refinancing challenges, particularly in a tightening
credit market and prospect of higher borrowing costs.
"The stable outlook reflects our expectation that Dayco will
maintain adequate liquidity in the forecast period and improved
free cash flow over the next 12 months.
"We could consider a downgrade for Dayco within the next 12 months
if EBITDA margins dropped below 10%, resulting in sustained
negative FOCF that weakens liquidity and increases leverage to
levels we view as unsustainable. The decline in EBITDA margin could
occur because of challenges passing through inflationary cost
pressures in the OEM channel, macroeconomic disruptions impacting
volumes in Dayco's European business, or loss of top customer
relationships.
"We would consider an upgrade for Dayco to the extent that debt to
EBITDA sustainably remained below 5.5x in addition to FOCF to debt
of at least 5%. An upgrade for Dayco would also consider extension
of the credit facilities beyond May 2025, which we would view as
credit enhancing."
ESG credit indicators: E-3 S-2 G-3
S&P said, "Environmental factors are a moderately negative
consideration in our rating analysis on Dayco LLC as the automotive
industry must comply with increasingly stringent greenhouse gas
regulations. More than 50% of Dayco's revenues are tied to OEM
products and many of its major product lines, including timing
belts, rely on sales of internal combustion engine (ICE) or hybrid
vehicles. An acceleration in electric vehicles could reduce Dayco's
sales and margins. Governance is a moderately negative
consideration. Our assessment of the company's financial risk
profile as highly leveraged reflects corporate decision-making that
prioritizes the interests of the controlling owners, in line with
our view of the majority of rated entities owned by private-equity
sponsors. Our assessment also reflects their generally finite
holding periods and a focus on maximizing shareholder returns."
DERBY MOBILE: Seeks Cash Collateral Access Thru April 30
--------------------------------------------------------
Derby Mobile Home Park, LLC d/b/a Desert Oasis RV Park, asks the
U.S. Bankruptcy Court for the District of Colorado to approve a
proposed stipulated order authorizing the Debtor's use of cash
collateral for the period from March 24 to April 30, 2022.
Prior to the Petition Date, the Debtor entered into a loan
agreement or various loan agreements with the Small Business
Administration and/or First Guaranty Bank.
The Debtor entered into security instruments to grant the SBA
and/or the Bank a security interest in the Debtor's real and
personal property in connection with the Loan. The SBA filed a UCC
Financing Statement with the Colorado Secretary of State on July 7,
2022 in an attempt to perfect any security interests granted to the
SBA and/or Bank in connection with the Loan.
The Bank asserts a claim in the approximate amount of $6,169,140
against the Debtor. The Bank asserts it has a valid, perfected
pre-petition lien and security interest in all "intangible personal
property" of the Debtor, among other things. The Bank also asserts
its security interest was perfected through the filing of a UCC
Financing Statement with the Colorado Secretary of State on July 7,
2020 at validation number 20222077402.
The Debtor intends to use the post-petition proceeds from
pre-petition accounts receivable and/or post-petition payments made
for use of the Debtor's lodging property to preserve and maintain
its business as a going concern and in accordance with the budget.
To facilitate the Debtor's goal of retaining its business as a
going concern and reorganizing its financial affairs for the
benefit of its creditors, the Debtor and the Bank have agreed to a
stipulated order authorizing the Debtor's use of Cash Collateral
from March 24, 2022 through April 30, 2022.
Under the proposed stipulated order:
a. The Debtor will be authorized to use cash collateral for
the period from March 24, 2022 through April 30, 2022 in accordance
with the Budget with a 15% variance.
b. The Debtor will pay $10,000 to the Bank within three
business days of Court approval of the Stipulated Cash Collateral
Order.
c. The Bank is granted a replacement lien and security
interest upon the Debtor's post-petition assets with the same
priority and validity and in the same amount as its pre-petition
liens and security interests to the extent of the Debtor's
post-petition use of cash collateral, if any.
d. The Bank's Adequate Protection Lien will be limited to the
extent of value of the Bank's, interest, if any, in the bankruptcy
estate's interest in the Debtor's pre-petition personal property as
set forth under Section 506(a) of the Bankruptcy Code.
e. To the extent that the Adequate Protection Lien proves to
be insufficient, the Bank, as may be applicable, will be granted
superpriority administrative expense claims under section 507(b) of
the Bankruptcy Code but only to the extent that the Bank has a
valid allowed secured claim under section 506(a) in the cash
collateral used.
f. The Debtor will maintain insurance coverage on the
pre-petition personal and real property for the full replacement
value of any such assets and will cause the Bank to be named as a
loss payee for the insurance policies.
g. The Debtor will pay all post-petition federal and state
payroll, withholding, sales, use, personal property, real property,
and other taxes and assessments of any kind when due and owing
under applicable law in the amounts as set forth in the Budget, if
any.
h. The Debtor will provide the Bank with a copy of its monthly
operating report by the 20th of each month for the prior month. The
Debtor will also provide the Bank with a budget summary showing the
projected budget, actual expenditures, and any variance broken out
by line item on or before the 10th of each month for the prior
month.
A copy of the motion is available at https://bit.ly/3qN2h4U from
PacerMonitor.com.
About Derby Mobile Home Park, LLC
Derby Mobile Home Park, LLC owns and operates the Desert Oasis RV
Park located in Eunice, NM having an appraised value of $1.5
million. Derby Mobile sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 22-10966) on March
24, 2022. In the petition signed by Brian Tanner, managing member,
the Debtor disclosed $1,519,563 in assets and $6,029,019 in
liabilities.
Judge Elizabeth E. Brown oversees the case.
David J. Warner, Esq., at Wadsworth Garber Warner Conrardy, P.C. is
the Debtor's counsel.
DIOCESE OF CAMDEN: Unsecureds Will be Paid 75% Dividend in 5 Years
------------------------------------------------------------------
The Diocese of Camden, New Jersey, submitted a First Modified
Fourth Amended Disclosure Statement.
The Plan proposes to create a Trust to fund payments for Class 5
and Class 6 Claims pursuant to the guidelines in the Plan and Trust
Agreement annexed hereto as Exhibit D with the following link:
https://bit.ly/3Nttd3d. The Trust will be funded by $50,000,000 in
cash from the Debtor and $10,000,000 in cash from the Other
Catholic Entities. As of the date of this Disclosure Statement, 324
non-duplicative Class 5 Claims have been filed, which will share
collectively in the funds contributed to the Trust.
The Debtor has reached a proposed settlement with its insurers
whereby the insurers will contribute $30,000,000 to the Trust for
the benefit of holders of Class 5 and Class 6 Claims in exchange
for a release of all liability under the Debtor's insurance
policies. This settlement has not yet been approved by the Court,
and the Tort Committee intends to object to the proposed settlement
on the basis that this contribution is inadequate in light of,
among other things, the claims held by the Debtor against its
insurers and the value of claims in Class 5 and Class 6. If the
settlement with the insurers is not approved by the Court, the Plan
provides that the insurance policies shall be assigned to the Trust
for the benefit of holders of Class 5 and Class 6 Claims. The Trust
will then have the responsibility for litigating the claims against
the insurers at its sole cost and expense. There is no guarantee
that the Trust will be successful in this litigation in light of
the defenses that the insurance companies have to these claims.
Litigation may be long and costly.
The Plan proposes that the Diocese, and all of its affiliated
entities and persons including, but not limited to, the Parishes,
Missions, Schools, and Catholic Ministry Entities, including
employees and agents of each, other than accused perpetrators of
abuse, and all Settling Insurers will be released, and all
currently pending and future causes of action against these parties
will be forever barred.
The Tort Committee asserts that treatment of Tort Claims under the
Plan is inadequate, and that the Plan should not be approved. As
set forth in the Tort Committee Statement, the Tort Committee
recommends that Tort Claimants vote to reject the Plan.
Class 3 Non-Abuse General Unsecured Claims. The Diocese shall pay
Allowed Class 3 Claims a 75% dividend over 5-years. Allowed Class 3
Claimants shall have the option to elect to receive a payment of
50% of their claim within 60 days after the Effective Date in full
satisfaction of their respective Claims. Class 3 is impaired.
Counsel to The Diocese of Camden, New Jersey:
Richard D. Trenk, Esq.
Robert S. Roglieri, Esq.
TRENK ISABEL SIDDIQI & SHAHDANIAN P.C.
290 W. Mt. Pleasant Ave., Suite 2350
Livingston, New Jersey 07039
Tel: (973) 533-1000
E-mail: rtrenk@trenkisabel.law
rroglieri@trenkisabel.law
A copy of the Disclosure Statement dated March 25, 2022, is
available at https://bit.ly/3IJv00v from PacerMonitor.com.
About The Diocese of Camden
The Diocese of Camden, New Jersey is a non-profit religious
corporation organized pursuant to Title 16 of the Revised Statutes
of New Jersey. It is the secular legal embodiment of the Roman
Catholic Diocese of Camden, a juridic person recognized under Canon
Law.
The Diocese of Camden sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020.
Reverend Robert E. Hughes, vicar general and vice president, signed
the petition. In the petition, the Debtor disclosed total assets of
$53,575,365 and liabilities of $25,727,209.
Judge Jerrold N. Poslusny Jr. oversees the case.
The Debtor tapped McManimon, Scotland & Baumann, LLC, as its
bankruptcy counsel, Eisneramper, LLP, as financial advisor, Cooper
Levenson P.A. and Duane Morris LLP as special counsel. Prime Clerk
LLC is the Debtor's claims and noticing agent and administrative
advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured trade creditors in the Debtor's Chapter 11
case. The committee is represented by Porzio, Bromberg & Newman,
P.C.
DOOSAN BOBCAT: Moody's Rates New Senior Secured Term Loan 'Ba3'
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to the proposed
backed senior secured term loan B facility that will be borrowed by
Clark Equipment Company and guaranteed by Doosan Bobcat Inc. (DBI,
Ba3 stable).
The outlook remains stable.
The proceeds from the term loan B will be used for the refinancing
of the company's existing term loan facility and general corporate
purposes.
RATINGS RATIONALE
"The Ba3 rating reflects DBI's dominant position in the compact
farm and construction equipment market in North America, healthy
financial leverage, consistently positive free cash flow and very
good liquidity profile," says Sean Hwang, a Moody's Assistant Vice
President and Analyst.
"These strengths are counterbalanced by the cyclical nature of the
compact farm and construction equipment industry, DBI's moderate
market position in Europe and the risks related to the weak credit
quality of Doosan Group's affiliates," adds Hwang.
The proposed term loan B, and the revolving facility to be entered
into concurrently, will be secured by a first lien on substantially
all of the assets of the borrower — except for its fee-owned real
property — and also guaranteed by DBI.
Despite the secured status, the proposed term loan B is rated at
the same level as DBI's Ba3 corporate family rating, because the
company's proposed term loan and revolving facilities rank pari
passu with each other and will likely constitute the preponderance
of DBI's debt, which implies limited junior cushions in its
liability structure.
DBI's reported EBITDA (its own measure) increased 51% to $657
million in 2021 from the previous year, mainly reflecting strong
demand for construction equipment in its key markets and the
contributions from its forklift business, which it acquired in the
middle of 2021.
Moody's expects DBI's annual EBITDA to remain strong at around $650
million-$700 million in 2022-23 because of continued robust demand,
a full-year contribution from its forklift business, and hikes in
product prices in response to increasing raw material and logistics
costs.
Moody's further projects DBI to reduce its adjusted debt –
including pension and guarantee obligations – to around $1.6
billion this year from $1.9 billion at the end of 2021. This
forecast incorporates Moody's expectation that DBI will repay $300
million debt using mostly its large cash balance of $819 million at
the end of 2021.
Consequently, DBI's adjusted debt/EBITDA should improve to around
2.3x in 2022-23 from 2.9x in 2021. The adjusted net debt/EBITDA
will likely fall slightly to 1.6x from around 1.7x in the same
period. This level of financial leverage positions DBI strongly at
the Ba3 rating category and provides adequate headroom against
earnings cyclicality and the future investment needs of the
company.
In terms of environmental, social and governance (ESG) factors,
Moody's factors in Doosan Group's control over DBI and the weaker
credit quality of key Doosan Group affiliates compared with DBI,
which constrains DBI's credit quality and ratings. That said, this
risk is mitigated by DBI's reasonably conservative financial
strategy, as reflected by its moderate leverage and dividend
payments. Doosan Group's credit quality is also gradually improving
because of significant equity raisings and asset sales by its key
affiliates in the past two years.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The stable outlook mainly reflects Moody's expectation that DBI
will maintain a broadly stable business profile and healthy
financial metrics over the next 12-18 months.
Moody's could upgrade the ratings if (1) DBI's financial profile
remains strong, such that its adjusted debt/EBITDA remains below
3.0x on a sustained basis; and at the same time, (2) Doosan Group's
overall credit quality improves meaningfully.
Moody's could downgrade the ratings if DBI's earnings remain weak
or its debt increases further, such that its adjusted debt/EBITDA
exceeds 4.0x on a sustained basis. The ratings could also be
strained if Doosan Group's credit quality deteriorates
meaningfully. In addition, material cash outlays to Doosan Group's
affiliates would also be negative for the rating.
The principal methodology used in this rating was Manufacturing
published in September 2021.
Doosan Bobcat Inc. is the leading manufacturer of compact farm and
construction equipment mainly in North America and EMEA. It engages
in the design, manufacture, sale and service of compact farm and
construction equipment under the Bobcat brand, and of portable
power and forklift products.
EAST/ALEXANDER HOLDINGS: Seeks Chapter 11 Bankruptcy
----------------------------------------------------
Real estate company East/Alexander Holdings LLC, owner of three
commercial buildings in Rochester, New York, filed for Chapter 11
bankruptcy protection.
The commencement of the case resulted from a downturn in business
related to the Covid-19 pandemic, which caused the Debtor to become
delinquent on real estate secured debt. The Debtor believes that
the initiation of the Chapter 11 case will permit it to restructure
secured debt in order to bring the Debtor back to profitability and
provide a dividend to unsecured creditors.
The Debtor is a New York Limited Liability Company, which owns and
operates three residential/commercial buildings and associated
parking lots situated on East Avenue in the City of Rochester, New
York, located at or in proximity to the corners of East Avenue and
Alexander Streets (the "Properties"). The Properties are commonly
known as the "Sibley Building", the "Fitch Building" and the
"Valley Building".
The Sibley Building is comprised of eight commercial/retail units
and 14 apartments, with a parking lot. The Fitch Building is
comprised of 10 commercial rental units, with a parking lot. The
Valley Building is comprised of 25 commercial/office/retail units,
with four parking lots.
The Properties are subject to a first mortgage interest held by
M360
Community Development Fund, LLC, securing a debt in the approximate
amount of $14,000,000, inclusive of additional charges.
The Debtor estimates that the current value of the Properties is
approximately $10,000,000, based on purchase offers that the Debtor
has recently received. The Debtor is in default on its obligation
to make mortgage payments to M360 and pay real property taxes.
About East/Alexander Holdings
East/Alexander Holdings LLC, a Single Asset Real Estate (as defined
in 11 U.S.C. Section 101(51B)), sought Chapter 11 bankruptcy
protection (Bankr. W.D. N.Y. Case No. 22-20151) on April 2, 2022.
In the petition filed by Louis R. Masaschi, as managing member,
East/Alexander Holdings LLC listed estimated assets between $1
million and $10 million and estimated liabilities between $10
million and $50 million. David H. Ealy, Esq., of CRISTO LAW GROUP
LLC, is the Debtor's counsel.
ENTEGRIS INC: Fitch Gives First Time 'BB' LT IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned a first-time 'BB' Long-Term Issuer
Default Rating (IDR) to Entegris, Inc. The Rating Outlook is
Stable. In addition, Fitch has assigned a 'BBB-'/'RR1' issue rating
to the company's senior secured revolving credit facility (RCF) and
term loan and a 'BB'/'RR4' issue rating to the company's existing
notes. Fitch also expects to rate the company's planned other
senior secured issuance 'BBB-(EXP)'/'RR1' and planned other senior
unsecured issuance 'BB(EXP)'/'RR4'.
In December 2021, Entegris announced the entry into an agreement to
acquire CMC Materials, Inc. In pursuit of the transaction, Entegris
has upsized and extended its RCF to $575 million and has priced a
$2.495 billion senior secured term loan B to be funded at the close
of the acquisition. The company is also seeking to issue $1.6
billion of additional senior secured debt and $800 million of
additional unsecured debt, the form of which is to be determined.
Fitch's actions affect approximately $6.7 billion of committed
debt, pro forma for the issuance.
KEY RATING DRIVERS
Strategic Fit: Fitch believes the industrial logic for the CMC
acquisition is sound as the increasing cost and complexity of
producing leading edge semiconductors creates the need for scaled
suppliers with sufficient resources to fund investments in
technology advancement. The combination enables greater capture of
wallet share as it vertically integrates the capability set and
positions Entegris as a leader in chemical material planarization
(CMP), a critical step in preparing wafers for manufacturing.
In addition, the combination serves to address customer challenges
such as use of new materials, growing complexity of circuit
architectures and increasing sensitivity to contamination. The
synergistic aspects in the respective product portfolios will also
accelerate time to market as technological development will no
longer be dependent on the use of third parties in an often
cumbersome and iterative process. Fitch believes these aspects of
the combination improve the credit profile through deeper
collaboration with customers and increased competitive advantages.
Cyclicality: Fitch believes the acquisition of CMC reduces the
levels of cyclicality experienced by Entegris historically, as
exposure to semiconductor capital equipment demand will decline to
20% of pro forma revenue from 31% previously on a standalone basis.
Semicap equipment demand, measured by aggregate semiconductor
industry capex, has experienced periods of excessive volatility
with two-year declines of approximately 50% in both 2001-2002 and
2008-2009, while mid-teens rates of decline are typical of more
moderate down cycles.
The addition of CMC increases direct exposure to approximately 80%
to semiconductor manufacturing unit volumes, which have experienced
significantly less volatility than capex with a median decline of
6.6% in down years and with the deepest trough producing a decline
of 22% during the financial crisis. As a result, Fitch expects the
new revenue mix will result in moderation of future declines during
cyclical downturns relative to history.
Customer Concentration: Similar to most suppliers to semicap and
foundry markets, which have consolidated significantly, Entegris
experiences high customer concentration. Fitch estimates pro forma
revenue exposure to the company's top three customers will remain
near 30%, due to an overlapping customer base with CMC. Fitch
typically views material customer concentration as representative
of the 'BB' rating category. However, Fitch believes risks of
material revenue loss are mitigated due to deepening partnerships
with clients as Entegris serves an essential role to fulfill
technology roadmaps.
FCF: Entegris generated FCF margins averaging 12% over the most
recent four years and has demonstrated strong cash flow resiliency
during adverse environments with a 2019 margin of 14% in a period
that saw semiconductor production volumes and aggregate industry
capex declines of 3% and 8.5%, respectively. Fitch forecasts pro
forma FCF margins of 5% in fiscal 2022, excluding transactional
costs, gradually expanding to 9% over the ratings horizon.
Fitch expects FCF to be constrained by elevated capital intensity
reaching 15% in fiscal 2022 as Entegris invests in R&D centers in
APAC to support its largest customers. While management expects
capital intensity to decline to historical levels of high-single
digits, Fitch believes additional investment may be required to
support the U.S.-based capacity expansion and geographic
realignment plans announced by foundry customers. Fitch believes
that the decreased near-term FCF and elevated leverage raises risks
during a period of global conflict, rising rates, and rapid
semiconductor capacity growth.
Financial Policies: The company has demonstrated a willingness to
utilize elevated financial leverage in pursuit of strategic M&A,
but management has historically prioritized debt repayment to
quickly reduce debt levels thereafter. Management has stated that
they will maintain a similar policy post the CMC acquisition,
targeting post-close gross leverage of 3.0x, but did not provide a
time frame or explicit commitment for debt repayment. Fitch
estimates pro forma fiscal 2022 gross leverage of 4.7x and assumes
the company will dedicate cash balances above $500 million towards
debt repayments, leading to Fitch's forecast for total repayments
of $565 million over the ratings horizon, reducing leverage to 3.3x
by fiscal 2024. Fitch notes potential sales of non-strategic
segments belonging to CMC may provide additional funds that Fitch
expects would be used to accelerate debt reduction.
Previously, after Entegris had historically operated with no debt,
the 2014 acquisition of ATMI, Inc. was financed with the issuance
of a $460 million term loan and $360 million of senior unsecured
notes. The company prepaid $153 million in the first subsequent
year with an additional $73 million in prepayments in the following
year.
Secular Tailwinds: Entegris benefits from strong secular tailwinds
as leading edge development within the semiconductor industry is
faced with increasing cost and complexity of new design
architectures, requiring advanced materials with higher quality
structural and electrical properties. As a result, larger suppliers
to foundries and capital equipment makers such as Entegris are
extending their competitive advantage as scale becomes increasingly
critical to fund R&D and continually refine production standards
and capabilities in order fulfil client technology roadmaps.
DERIVATION SUMMARY
Fitch evaluates Entegris pending its acquisition of CMC and
compares the combined company against MKS Instruments (BB+/Stable),
Amkor Technology, Inc. (BB/Stable), TTM Technologies, Inc.
(BB/Stable), and II-VI Incorporated (BB/Stable) given similar
product segments, operating profile characteristics or underlying
secular trends.
Fitch believes Entegris's technological capabilities in consumable
inputs and process control equipment for semiconductor
manufacturing positions the combined company well to extend its
leadership position as one of the few suppliers capable of
leveraging R&D scale and a global footprint to serve the
increasingly complex demands of fab and semiconductor equipment
customers. Despite strong technological capability, the company has
historically been challenged by elevated cyclicality and
constrained pricing power, similar to the noted peers, due to
highly volatile end-market demand and weaker bargaining positions
relative to customers. However, also similar peers, Fitch believes
Entegris benefits from secular trends including, growing complexity
of circuit architectures, challenges in sustaining Moore's law, use
of new materials, and increasing sensitivity to contamination that
enable scaled companies such as the combined Entegris-CMC to extend
technology leadership, increase product differentiation and deepen
partnerships with customers, benefiting the credit profile over
time.
Entegris has mixed scores across operating metrics. Fitch expects a
continuation of the constructive demand environment to result in
consistent EBITDA margins of 30%-32% over the rating horizon, which
compares well to the to the 23% peer median. However, due to a
robust capital spending plan with capital intensity poised to reach
nearly 15%, Fitch forecasts subdued FCF margins of 5% in fiscal
2022, excluding transactional costs, gradually expanding to high
single digits as the capital intensity returns to historical
levels. FCF margins below 10% are close to the peer median of 7%,
but below the mid-teens levels of peers at the 'BB+' rating. Fitch
notes that EBITDA and FCF margins are consistent with the 'A'
rating category. However, Fitch believes that the overall credit
profile is weighed down by potential volatility of profitability
and a high fixed cost burden given a limited ability to even
temporarily reduce R&D and capital spending.
Entegris has demonstrated a willingness to utilize elevated
financial leverage in pursuit of strategic M&A opportunities, but
management has historically prioritized debt repayment to quickly
reduce debt levels thereafter. Fitch expects that management will
maintain the policy post the CMC acquisition and forecasts debt
repayments of $565 million over the ratings horizon, resulting in a
decline in opening pro forma leverage of 4.7x to 3.3x, in line with
the peer median of 3.2x, but above the levels of peers at the 'BB+'
rating that are below 3.0x. However, Fitch believes the company has
capacity to accelerate debt reduction through potential sales of
non-strategic segments belonging to CMC that Fitch expects would
provide additional funds to be applied to debt repayments.
Fitch believes factors consistent with the 'BB' rating include a
leverage profile that is in line with similarly rated peers, mixed
operating metrics, growing competitive advantages, historical
volatility of profitability, customer concentration and a
debt-funded acquisitive strategy. In addition, Fitch believes the
company's elevated leverage, lack of explicit commitment on debt
repayment or timeframe for achieving leverage reduction to 3.0x,
aggressive capital spending plan, high fixed cost base and
acquisitive strategy leave it weakly positioned relative to more
highly rated peers to weather a potential downturn during a period
that is experiencing increased global conflict, rising rates, and
the potential for rapid semiconductor manufacturing capacity
growth. However, Fitch believes that material operating
outperformance or increased debt reduction versus Fitch's forecasts
may lead to positive rating action.
No country-ceiling, parent/subsidiary or operating environment
aspects impacted the rating.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Acquisition of CMC Materials closes in late 2022, funded by
the issuance of a $2.495 billion term loan B, $1.6 billion of
other secured debt, $800 million of other unsecured debt with
the balance funded by equity issued to CMC shareholders;
-- Pro forma organic revenue growth of 13% in fiscal 2022 and 14%
in fiscal 2023, returning to mid-cycle growth of 5%
thereafter;
-- EBITDA margin of 30.5% in fiscal 2022 with expansion to 32.1%
by fiscal 2024 due to gradual realization of $75 million in
synergies;
-- Capital intensity of 15% in fiscal 2022, due to geographical
investments to support largest customers, gradually declining
to 9%, in line with historical average;
-- Dividends of $60 million per annum and share repurchases on
pause until gross leverage of 3.0x is attained;
-- Voluntary debt repayments of approximately $550 million in
aggregate over two years following close of the acquisition,
funded with cash balances above $500 million; potential asset
sale proceeds used to repay debt.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Total debt with equity credit/operating EBITDA sustained below
3.25x;
-- (Cash flow from operations - capex)/total debt with equity
credit sustained below 10%;
-- FCF margin sustained above 15%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross leverage averaging above 3.75x through a cycle;
-- FCF margin sustained below 5%;
-- (Cash flow from operations - capex)/total debt with equity
credit sustained below 7.5%.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Liquidity: Fitch expects sufficient liquidity for Entegris over the
rating horizon. Pro forma for the transaction, liquidity will be
comprised of nearly $400 million of readily available cash and an
undrawn $575 million senior secured RCF. Liquidity is further
supported by Fitch's expectation for over $750 million of aggregate
FCF over the rating horizon following the transaction. Fitch
believes that liquidity is partially constrained by a high interest
expense burden, an accelerated capital spending plan, and high
running R&D costs that are fixed in nature, which leaves the
company vulnerable to a potential downturn in its end-markets.
However, Fitch believes the company can access additional sources
of contingent liquidity through potential asset sales of
non-strategic segments.
ISSUER PROFILE
Entegris is a leading supplier of advanced materials and process
control solutions for the semiconductor manufacturing and capital
equipment industries.
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.
ENTEGRIS INC: S&P Rates New $1BB Sr. Secured Notes Due 2029 'BB+'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '3'
recovery rating to Entegris Inc.'s proposed $1 billion senior
secured notes due 2029, which it is issuing as part of the
financing for its previously announced acquisition of CMC Materials
Inc. The '3' recovery rating indicates S&P's expectation for
meaningful (50%-70%; rounded estimate: 65%) recovery in the event
of a payment default.
S&P said, "Our 'BB+' issuer credit rating and stable outlook on
Entegris are unchanged and reflect our expectation that it will
continue to benefit from the strong demand in the semiconductor
industry over at least the next 12 months. We anticipate it will
maintain revenue growth while modestly improving profitability such
that it is able to delever over the 12-24 months following the
close of the acquisition."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's 'BB+' issue-level rating and '3' recovery rating on the
company's senior secured credit facilities reflect its expectation
for meaningful (50%-70%; rounded estimate: 65%) recovery in the
event of a payment default.
-- S&P's 'BB' issue-level rating on Entegris' existing senior
unsecured notes indicates our expectation for modest (10%-30%;
rounded estimate: 20%) recovery in the event of a payment default.
-- S&P's simulated default scenario assumes a default occurring in
2027 due to a significant decline in wafer production and
semiconductor capital equipment spending, which negatively affects
Entegris' operating performance.
-- S&P uses a 6x multiple to value the company, which is
consistent with the multiples we use for other modest-size
semiconductor companies.
Simulated default assumptions
-- Simulated year of default: 2027
-- Emergence EBITDA: $601 million
-- EBITDA multiple: 6x
Simplified waterfall
-- Gross recovery value: $3,604 million
-- Net enterprise value (after 5% administrative costs): $3,423
million
-- Obligor/nonobligor valuation split: 30%/70%
-- Estimated first-lien claim: $4,591 million
-- Value available for first-lien claim: $3,047 million
--Recovery expectations: 50%-70% (rounded estimate: 65%)
Note: All debt amounts include six months of prepetition interest.
Ratings List
ENTEGRIS INC.
Issuer Credit Rating BB+/Stable/--
NEW RATING
ENTEGRIS INC.
Senior Secured
US$1 bil notes due 2029 BB+
Recovery Rating 3(65%)
ENVEN ENERGY: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed the 'B-' Long-Term Issuer Default
Ratings (IDRs) for EnVen Energy Corporation (EnVen), Energy
Ventures GoM LLC and EnVen Finance Corporation. The Rating Outlook
is Stable. Fitch also affirmed EnVen's first lien reserve-based
lending credit facility (RBL) at 'BB-'/'RR1' and its senior secured
second lien notes at 'B-'/'RR4'.
EnVen's rating reflects its low decline, oil-weighted assets in the
Gulf of Mexico (GOM), and advantaged offshore pricing that supports
unhedged realized prices. The ratings also reflect EnVen's
credit-conscious financial policy resulting in sub-1.5x leverage
metrics, a disciplined rolling hedge strategy that protects and
funds the development program, adequate liquidity, and
Fitch-forecasted positive annual mid-cycle FCF.
Offsetting factors include lack of diversification and a small
operational scale, relatively short proved reserve life and just
over five years on a strip reserves basis, a limited subsea tieback
track record, offshore environmental remediation obligations, and
heightened offshore regulatory risks. However, EnVen's asset
retirement obligations (AROs) are long-dated and well covered via
restricted cash in escrow and surety bonds.
KEY RATING DRIVERS
Offshore Gulf of Mexico E&P: EnVen fully operates as an offshore
E&P in the GoM. As a result, the company's asset base differs
materially from that of an onshore producer. GoM assets can
typically be acquired at relatively lower costs, experience lower
decline rates and benefit from extensive midstream infrastructure
providing direct access to gulf coast refineries, which brings
higher price realizations. These strengths are offset by
significantly higher plugging and abandonment (P&A) obligations,
exploration projects that require substantial capital requirements,
higher environmental remediation costs, a current moratorium on new
federal leases, and additional environmental production and cost
risks.
Declining Asset Base Brings Execution Risk: Fitch believes
management's shifting strategy to extend inventory and reserve life
through subsea exploration and development heightens execution
risk. EnVen's 1P reserve base has been declining since 2018 and has
a remaining asset life (1P reserves/production) of 5.9 years based
on 2021 production. This is a year-on-year increase from 4.6 years
due to performance revisions at its core operated fields,
improvement in drilling activities, and the reserves from the
Neptune acquisition.
With no additional M&A activity from management in the near term
and a lack of access to new leases in the gulf, EnVen plans to
expand its production and reserve profile through subsea tiebacks.
These projects have longer development cycles than U.S. onshore
projects and additional dry hole risk with a 15-30 month timeline
from development to first production. Although EnVen has hired
experienced personnel within the subsea space to de-risk the
transition, Fitch views the company's ability to enhance its proved
reserves as a top credit concern.
Medium-Term Liquidity and Refinancing Risk: Historically, EnVen has
had strong liquidity, keeping plenty of cash on the balance sheet
and leaving the revolver undrawn since 1Q18. As production
continues to decline and the asset base is slowly depleted, there
is risk that the liquidity profile could deteriorate as the company
utilizes its cash and relies on its shrinking revolver to cover
operational and financial obligations. While this is not a
short-term concern with no maturities until 2026, if 1P reserves
continue to decline through the medium term, elevated credit
metrics and impaired liquidity would lead to substantial
refinancing risk.
Positive FCF, Sub-1.5x Leverage: Fitch's base case forecasts
positive FCF generation of between $60 million-$180 million with
cash flows supported by profitable, low decline assets, a stable
PHA segment and EnVen's proactive hedging policies.
Fitch-calculated total debt/EBITDA is forecast to remain at or
around 1.0x through the rating horizon based on the company's
conservative financial policy.
Manageable Decommissioning Costs: Fitch believes that management
has demonstrated an ability to manage its ARO cost and funding
risks. At Dec. 31, 2021, EnVen's AROs totaled approximately $325
million. Through 2030, the majority of P&A activity will target
remaining shelf assets and annual spend is expected to be less than
10% of annual average EBITDA. Fitch believes that management has
largely mitigated ARO funding risk with the fully funded
Lobster/Petronius acquisition P&A escrow account, over $66 million
of notes receivable from investment grade counterparties and 2.1x
coverage of future P&A obligations through surety bonds.
12-Month Hedging Strategy: EnVen has 67% of expected 2022 oil
production hedged and 33% of gas production. Per the amended RBL
agreement, its leverage ratio is below a defined threshold
resulting in the required hedging minimum reducing to 50% of PDP
production for 12 months. The agreement also limits hedging to 85%
of projected production for December through July ("non-wind
months") and 70% of 1P reserves for August through November ("wind
months"). The company is currently about 10% hedged for 2023 and
will likely continue to layer on positions as market opportunities
present themselves. Fitch views the company's hedging strategy
through the forecast as a credit positive as it supports the
capital program and reduces cash flow volatility.
Convertible Series A Preferred Shares Receive 100% Equity Credit:
Fitch has assigned 100% equity credit (EC) to the EnVen Series A
Preferred Stock based on the security's structural features. The
instrument is subordinated to all outstanding debt, has no material
covenants or change of control clause, and lacks coupon step-ups
and a call date. The company also retains the ability to defer
coupon payments and pay dividends with additional preferred stock.
DERIVATION SUMMARY
EnVen operates on a much smaller scale than Fitch-rated offshore
E&Ps. With 2021 production at 23.4 mboe/d (84% oil), the company
produces significantly less than Talos Energy Inc. (B-/Stable) with
2021 exit rate of 64.4 mboe/d (69% oil) and Murphy Oil Corporation
(BB+/Stable) with 167.4 mboe/d (57% oil).
The company has higher unhedged netbacks compared to peers due to
relatively lower operating costs and an ability to realize positive
regional price differentials to WTI due to GoM infrastructure and
access to multiple markets. The company's conservative financial
policy has also led to Fitch-calculated leverage sustained around
1.4x at YE 21 which is lower than Murphy (1.8x) and SM Energy
(1.7x).
Compared to the peer group, EnVen has relatively low remaining
proved reserves. At 4Q21, the company's 1P/production was 5.9 which
is materially lower than Talos (9.7) and Murphy (11.2).
Additionally, the company's offshore operations expose it to
significantly higher remediation (P&A) costs than onshore peers,
and operationally disruptive event risks.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- WTI oil price of $95/bbl in 2022, $76/bbl in 2023, $57/bbl in
2024 and $50/bbl thereafter;
-- Henry Hub natural gas price of $4.25/mcf in 2022, $3.25/mcf in
2023, $2.75/mcf in 2024 and $2.50/mcf thereafter;
-- Premium differentials to WTI and Henry Hub throughout the
forecast;
-- Production is volatile over the forecast driven by timing of
capex spend;
-- Average annual capex of around $160 million throughout the
forecast period;
-- Cash cost of P&A obligations at about 10% of mid-cycle EBITDA
throughout the forecast period;
-- No material M&A activity;
-- FCF allocated toward cash build due .to conservative financial
policy.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch does not expect a positive rating action without a
material increase in production and reserve size.
-- Greater than 100% reserve replacement leading to reserve life
approaching 8-10 years and PDP/1P at 60-80%;
-- Increased size and scale evidenced by production trending
towards 75 mboe/d;
-- Adherence to management's financial policy that prioritizes
FCF and liquidity as well as maintenance of a rolling hedging
program;
-- Mid-cycle debt/EBITDA at or below 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Sustained decline in proved reserves with reserve life
approaching three years;
-- Loss of operational momentum evidenced by production trending
below 20 mboe/d;
-- Inability to generate FCF and allocate capital that heightens
liquidity and refinancing risk or access to the capital
markets;
-- Mid-cycle debt/EBITDA approaching 3.0x heightening covenant
risk;
-- Unfavorable regulatory changes and/or extended moratorium on
new oil & gas leases.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: EnVen maintains a conservative financial
policy and consistently keeps material unrestricted cash on the
balance sheet. Additionally, the company rarely utilizes its RBL
facility with the last draw occurring in Q1 2018. With these
characteristics and consistently neutral to positive free cash flow
generation, Fitch expects that EnVen will maintain adequate
liquidity throughout the rating case.
Simple Debt Structure and long-dated Maturities: The company's debt
consists of a senior secured RBL facility and 11.75% second lien
senior secured notes. The floating rate RBL facility closed with a
$165 million borrowing base that is subject to semi-annual
redeterminations. This facility currently only has $3.6 million
letters of credit outstanding. At the most recent redetermination,
the company had the ability to increase the borrowing base to $200
million however elected to keep it at $165 million. The second lien
notes have an annual repayment of $30 million per annual with a
bullet repayment at maturity. No near-term maturities exists; the
RBL maturity is in 2024, and the second lien notes maturity is in
2026.
ISSUER PROFILE
EnVen is an independent oil and natural gas company engaged in the
development, exploitation, exploration and acquisition of primarily
crude oil properties in the deepwater GoM.
ENVISION HEALTHCARE: Lenders Taps Kasowitz to Fight Financing Plans
-------------------------------------------------------------------
Erin Hudson and Rachel Butt of Bloomberg Law report that a group of
Envision Healthcare Corp. lenders seeking to provide the embattled
company new financing is working with legal advisers as it looks to
stave off competing offers that could see the group lose access to
assets and be pushed down in the repayment order.
The term loan holders are tapping Kasowitz Benson Torres for
potential litigation, according to people with knowledge of the
situation. They join previously hired Guggenheim Partners and
Gibson Dunn & Crutcher, said the people, who asked not to be
identified because the talks are private.
About Envision Healthcare
ENVISION HEALTHCARE CORPORATION provides health care services. The
Hospital offers surgery, pharmacy, medical imaging, emergency care,
and other related health care services. Envision Healthcare serves
patients in the United States.
ENVISION HEALTHCARE: S&P Downgrades ICR to 'CCC' on Watch Neg.
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Envision
Healthcare Corp. to 'CCC' from 'CCC+', its issue-level rating on
its first-lien term loans to 'CCC' from 'CCC+', and our issue-level
rating on its senior unsecured notes to 'CC' from 'CCC-'. S&P's '3'
recovery rating on the first-lien term loans and '6' recovery
rating on the senior unsecured notes remain unchanged.
S&P said, "At the same time, S&P place our ratings on the company
on CreditWatch with negative implications to reflect the
probability of further downgrades if it becomes increasingly likely
that Envision will face a payment default or undertake a
refinancing or restructuring transaction, we consider distressed.
"We expect the company's liquidity position to meaningfully
deteriorate over the next 12 months under the existing capital
structure.
"As of Sept. 30, 2021, Envision had about $765 million of cash on
its consolidated balance sheet, of which we estimate $200 million -
$300 million was held at joint ventures and not available to the
company. We forecast the company will utilize much of that
accessible cash over the next 12 months, based on our assumption
that it will generate a discretionary cash flow deficit that will
leave it with less than $100 million of cash (excluding cash held
at joint ventures) at the end of 2022. While we expect
discretionary cash flow generation to be positive in 2023 and
sufficient to cover scheduled annual debt amortization, we do not
believe the company will have enough cash to repay the asset-based
lending (ABL) and revolving credit facilities (about $700 million
outstanding) when they come due in October 2023."
The company failed to deliver financial statements and projections
within 90 days of its 2021 year end.
Envision notified its lenders on April 1, 2021, that it failed to
comply with the a requirement under its credit agreement to provide
financial statement and updated projections within 90 days of its
year end. S&P said, "This constitutes a default under the terms of
its credit agreement but does not meet our definition of a default
and we expect the company will deliver the statements and
projections, within the 30-day grace period. Failure to do so,
could result in an acceleration of its debt obligations and a
payment default, but we do not expect that to occur. More
importantly, we believe the company's failure to comply with this
requirement, may indicate that it is exploring financing options
that may include a distressed exchange or restructuring transaction
well within the next 12 months. Our view incorporates our
expectation for its liquidity position to deteriorate under its
existing capital structure and that its debt is currently trading
at distressed levels."
The CreditWatch with negative implications reflects the probability
of further downgrades within the next 90 days if it appears
inevitable that Envision will face a payment default or undertake
an exchange offer or similar restructuring we consider distressed.
This could occur if the company fails to provide financial
statements and updated projections within the 30-day grace period
provided under its credit agreement or if the company announces its
intention to undertake an exchange offer or similar restructuring,
which may include a subpar redemption of its notes or term loans.
EVE & CO INCORPORATED: Obtains CCAA Initial Stay Order
------------------------------------------------------
The Ontario Superior Court of Justice (Commercial List) granted an
initial order the proceedings that, among other things,
* appointed BDO Canada Limited as monitor of Eve & Co.
Incorporated and its affiliates in their CCAA proceedings,
* approved a stay of proceeding until April 4, 2022, approved
certain court-ordered charges, and
* approved the interim financing facility to be provided by
Deans Knight Private Credit GP Inc. as General Partner of Deans
Knight Private Credit Limited Partnership and DK Strategic Yield
U.S. GP LLC, as General Partner of DK Strategic Yield Master Trust
Limited Partnership.
Pursuant to the CCAA order, the Companies are to continue to carry
on business in a manner consistent with the commercially reasonable
preservation of its business and assets while it engages in a
court-supervised sale and investment solicitation process ("SISP").
The SISP seeks offers to purchase some or all of the assets of the
Companies or an investment in the Companies enabling it to
restructure its affairs.
The CCAA order provides that claims against the Companies for
payment of goods and services supplied to the Companies prior to
March 25, 2022, are suspended and creditors are prohibited from
continuing or taking any actions or exercising any rights the
Companies, or the Monitor, except with leave of the Court.
A copy of the CCAA initial order an can be accessed at
https://www.bdo.ca/en-ca/extranets/eve-co-incorporated-and-natural-medco-ltd/
or by contacting the Monitor at:
BDO Canada Limited
100-633 Colborne Street
London, ON N6B 2V3
David Flett
Tel: 519-660-2671
Email: dflett@bdo.ca
Stephen Cherniak
Tel: 519-660-2666
Email: scherniak@bdo.ca
Further information, contact:
Melinda Rombouts
Eve Group
Email: melinda@evecannabis.ca
Maxine Finnegan
Monitor
Tel: 519-953-0753
Email: mfinnegan@bdo.ca
Counsel for the Companies:
Miller Thomson LLP
Scotia Plaza
400 King Street West, Suite 5800
PO Box 1011
Toronto, Ontario M5H 3S1
David S. Ward
Tel: 416-595-8625
Email: dward@millerthomson.com
Larry Ellis
Tel: 416-595-8639
Email: lellis@millerthomson.com
Erin Craddock
Tel: 416-595-8631
Email: ecraddock@millerthom
Eve & Co Incorporated (TXS: EVE) -- https://www.evecannabis.ca --
cultivates and produces dried cannabis flower, which along with
certain additionally processed products such as topicals and
edibles, are sold to recreational and medical consumers in several
Canadian provinces.
EW SCRIPPS: Moody's Hikes CFR to B1 & Senior Unsecured Notes to B3
------------------------------------------------------------------
Moody's Investors Service upgraded The Scripps (E.W.) Company's (EW
Scripps) corporate family rating to B1 from B2 and probability of
default rating to B1-PD from B2-PD. Moody's affirmed the Ba3 rating
on the company's senior secured facilities and upgraded the rating
on the company's senior unsecured notes to B3 from Caa1. The
speculative grade liquidity rating was upgraded to SGL-1 from
SGL-2. The outlook is stable.
The upgrade reflects the improvement in the company's leverage on
the back of EBITDA growth and material voluntary debt repayment in
2021. The upgrade also reflects the large free cash flow the
company is expected to generate in 2022 which Moody's expects will
be used for further deleveraging in line with the company's stated
guidance.
Affirmations:
Issuer: Scripps (E.W.) Company (The)
Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3)
Senior Secured Regular Bond/Debenture, Affirmed Ba3 (LGD3)
Upgrades:
Issuer: Scripps (E.W.) Company (The)
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD from B2-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Unsecured Regular Bond/Debenture, Upgraded to B3 (LGD5)
from Caa1 (LGD5)
Outlook Actions:
Issuer: Scripps (E.W.) Company (The)
Outlook, Remains Stable
RATINGS RATIONALE
EW Scripps' B1 CFR reflects the company's high exposure to core
advertising, which continues to be pressured by digital advertising
market share gains and prone to volatility. The B1 rating also
takes into account the challenges faced by the wider broadcast
sector, with cord-cutting trends pressuring retransmission fee
revenue growth in the medium term.
EW Scripps' B1 CFR also reflects the company's large scale and
national reach. The rating also reflects Moody's expectations that
EW Scripps' leverage (Moody's adjusted and on a two year average
EBTIDA) will decline to around 4.5x in 2022 from 5.3x in 2021 as
the company continues to apply free cash flow to repay outstanding
debt. The B1 CFR is also supported by expectations that the company
will maintain good liquidity in the coming 18 months.
EW Scripps completed the acquisition of ION Media in January 2021,
which it funded by a combination of debt, cash and preferred
equity. The acquisition strengthened the business profile but came
on the back of large acquisitions for Cordillera and
Nexstar/Tribune channels which had left the company with a high
leverage in the midst of the 2020 covid-related advertising
decline. In 2021 EW Scripps applied $400 million of cash
accumulated through free cash flow and non-core asset sales to
repaying senior unsecured notes and the company has publicly stated
its commitment to continue applying free cash flow to reducing debt
in 2022, in line with its publicly stated net leverage target of
mid 3x.
Moody's expects 2022 to deliver a strong improvement in EW Scripps'
leverage on the back of high political advertising spending
expectations. With tight gubernatorial and senate races in a few of
its markets, EW Scripps is well positioned to benefit from the
election spending. Moody's expects the company's leverage (Moody's
adjusted and on a two year average EBTIDA) to decline to around
4.5x by year-end 2022 as a combination of both EBITDA growth and
voluntary debt repayment.
With the ION acquisition, EW Scripps exposure to cord cutting was
reduced but retransmission fees remain an important revenue stream
and generated around 27% of total 2021 revenue. Moody's cautions
that fee increases at the time of carriage renewal is becoming less
certain in the context of higher cord cutting rates. In 2023, 75%
of EW Scripps' subscribers come due for renewal.
EW Scripps' maintains a very good liquidity profile, supported by
around $66 million of unrestricted cash on hand at the end of 2021,
and full availability under its $400 million revolving credit
facility. In 2021 the company generated free cash flow of around
$190 million and Moody's expects this figure to increase materially
to more than $350 million in 2022 as political advertising fuels
higher EBITDA. The company is prevented from paying dividends or
engaging in share repurchases while the preferred shares remain
outstanding. The revolver has a net first lien debt to EBITDA
maintenance covenant to be tested quarterly, it is set at 4.75x
until Q2 2022 and then steps down to 4.5x, Moody's expects the
company to maintain material headroom under that covenant.
The stable outlook reflects Moody's expectations that EW Scripps'
leverage will trend to around 4.5x in 2022 as a result of both
strong EBITDA growth and voluntary debt repayments. The outlook
also assumes that the company will be successful in renewing
expiring MVPD contracts in 2022 and 2023.
The Ba3 (LGD3) rating on the company's senior secured facilities
reflects their priority ranking ahead of the B3 (LGD5) rated senior
notes. The instrument ratings reflect the probability of default of
the company, as reflected in the B1-PD PDR, an average expected
family recovery rate of 50% at default given the mix of secured and
unsecured debt in the capital structure, and the particular
instruments' rankings in the capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward ratings pressure could develop should the company's revenue
and EBITDA growth be sustained leading to leverage (Moody's
adjusted and on a two year average EBTIDA) declining to below 4.25x
on a sustainable basis.
The ratings could be downgraded should the company's free cash flow
generation ability deteriorate or should leverage (Moody's adjusted
and on a two year average EBTIDA) be sustained materially above
5.25x.
The principal methodology used in these ratings was Media published
in June 2021.
Headquartered in Cincinnati, OH and founded in 1878, Scripps (E.W.)
Company (The) owns and operates 61 stations in 41 markets that
reach about 25% of U.S. households. The company's operations also
include Scripps Networks which are comprised of nine news and
entertainment networks - ION, Bounce, Court TV, Defy TV, Grit, ION
Mystery, Laff, Newsy and TrueReal. The company is publicly traded
with the Scripps family controlling effectively all voting rights
(93%) and an estimated 28% economic interest with remaining shares
being widely held. The company reported $2.284 billion in revenue
in 2021.
FANNIE MAE: Kimberly Johnson to Quit as EVP, COO
------------------------------------------------
Kimberly H. Johnson, executive vice president and chief operating
officer of Fannie Mae (formally, the Federal National Mortgage
Association) is resigning from her position effective April 25,
2022, as disclosed in a Form 8-K filed with the Securities and
Exchange Commission.
About Fannie Mae and Freddie Mac
Federal National Mortgage Association (OTCQB: FNMA), commonly known
as Fannie Mae, is a government-sponsored enterprise (GSE) that was
chartered by U.S. Congress in 1938 to support liquidity, stability
and affordability in the secondary mortgage market, where existing
mortgage-related assets are purchased and sold. Fannie Mae helps
make the 30-year fixed-rate mortgage and affordable rental housing
possible for millions of Americans. The Company partners with
lenders to create housing opportunities for families across the
country. Visit -- http://www.FannieMae.comFannie Mae has been
under conservatorship, with the Federal Housing Finance Agency
("FHFA") acting as conservator, since Sept. 6, 2008. As
conservator, FHFA succeeded to all rights, titles, powers and
privileges of the company, and of any shareholder, officer or
director of the company with respect to the company and its assets.
The conservator has since provided for the exercise of certain
authorities by the Company's Board of Directors. The Company's
directors do not have any fiduciary duties to any person or entity
except to the conservator and, accordingly, are not obligated to
consider the interests of the company, the holders of the Company's
equity or debt securities, or the holders of Fannie Mae MBS unless
specifically directed to do so by the conservator.
A brother organization of Fannie Mae is the Federal Home Loan
Mortgage Corporation (FHLMC), better known as Freddie Mac Freddie
Mac (OTCBB: FMCC) -- http://www.FreddieMac.com-- was established
by Congress in 1970 to provide liquidity, stability and
affordability to the nation's residential mortgage markets.
Freddie Mac supports communities across the nation by providing
mortgage capital to lenders.
As of Dec. 31, 2021, the Company had $4.23 trillion in total
assets, $4.18 trillion in total liabilities, and $47.36 billion in
total stockholders' equity.
FORE MACHINE: May 10 Hearing on Disclosures and Plans
-----------------------------------------------------
Judge Mark X. Mullin has entered an order conditionally approving
the Disclosure Statements of Fore Machine, LLC, et al.
A chapter 11 plan was filed by reorganizing debtor Aero Components,
LLC.
A separate Chapter 11 plan was filed by liquidating debtors Fore
Machine, LLC's, Fore Aero Holdings, LLC's, and Fore Capital
Holding, LLC's.
The Combined Hearing, at which time this Court will consider, among
other things, the adequacy of the Disclosure Statements and
confirmation of the Plans, will be held on May 10, 2022, at 9:00
a.m. (CDT).
Any objections to approval the Disclosure Statements or
confirmation of the Plans must be filed by 4:00 p.m., prevailing
Central Time on April 29, 2022.
Any brief in support of confirmation of the Plans and in reply to
any objections must be filed on or before 4:00 p.m. (CDT) on May 2,
2022.
The Voting Deadline of April 8, 2022, are approved.
Proposed Counsel for Debtors:
Katherine A. Preston, Esq.
WINSTON & STRAWN LLP
800 Capitol St., Suite 2400
Houston, TX 77002
Telephone: (713) 651-2600
Facsimile: (713) 651-2700
Email: kpreston@winston.com
- and -
Timothy W. Walsh, Esq.
James T. Bentley, Esq.
Emma Fleming, Esq.
200 Park Avenue
New York, New York 10166
Telephone: (212) 294-6700
Facsimile: (212) 294-4700
Email: twalsh@winston.com
jbentley@winston.com
efleming@winston.com
About Fore Machine
Fore Machine, LLC is a manufacturer of aircraft engines and engine
parts in Haltom City, Texas.
Fore Machine and its affiliates, Aero Components, LLC and Fore Aero
Holdings, LLC, sought Chapter 11 protection (Bankr. N.D. Texas Lead
Case No. 22-40487) on March 7, 2022. In the petition signed by Jens
Verloop, chief financial officer, Fore Machine listed as much as
$50 million in both assets and liabilities.
The Debtors tapped Winston & Strawn, LLP as legal counsel and
Alvarez and Marsal North America, LLC as financial advisor.
Bankruptcy Management Solutions, Inc., doing business as Stretto,
is the claims and noticing agent.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on March 18, 2022. The committee is
represented by Cantey Hanger, LLP.
FOX SUBACUTE: Wins Cash Collateral Access Thru June 24
------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Pennsylvania
has authorized Fox Subacute at Mechanicsburg, LLC and its
affiliated debtors to use cash collateral on an interim basis
through and including the earlier of June 24, 2022, or the
occurrence of an event of default.
The Debtors will use cash collateral only:
i. for the purposes specified in the Budget;
ii. to pay United States Trustee's fees;
iii. to pay contingent fees to Weltman, Weinberg & Reis Co, LPA
in accordance with the Order Approving Employment of Weltman,
Weinberg & Reis Co., LPA As Special Counsel To The Debtor entered
on January 27, 2021; and
iv. to pay professional fees and reimbursement for expenses
allowed by the Court that the Bank and Sabra consent to being paid
from cash collateral or for which the Bank's and/or Sabra's
collateral is surcharged pursuant to 11 U.S.C. section 506(c).
On or before the fifth day of each month during the 17th interim
period, the Debtors will remit to PeoplesBank, A Codorus Valley
Company, the amount of all accrued and unpaid interest under the
Note, and $50,000, which amount will be applied to the principal
balance outstanding under the Note.
On or before the fifth day of each month during the 17th Interim
Period, Warrington will pay $146,472 to Sabra Health Care
Pennsylvania, LLC and Clara Burke will pay $165,171 to Sabra as
payment of the contractual base rent due pursuant to the terms of
that Master Lease dated effective as of March 30, 2012, the First
Amendment to Master Lease dated effective as of March 30, 2012,
Second Amendment to Master Lease dated as of October 6, 2016, and
Third Amendment to Master Lease dated effective as of April 20,
2018. Warrington and Clara Burke do not concede that the base rent
amounts represent fair market rents for the respective facilities
and reserve all rights as to whether such base rent amounts
constitute market rents. In each calendar month during the term of
the Order, Clara Burke and Warrington will each deposit 1/12 of the
estimated annual School and Real Estate Taxes for each facility
into one or more escrow accounts maintained by Sabra.
The Debtors will maintain Eligible Accounts Receivable and cash on
deposit in concentration accounts maintained with the Bank such
that the sum of 70% of the Eligible Accounts Receivable plus 90% of
cash on deposit in such accounts is at all times equal to or
greater than 1.8 times the principal balance outstanding under the
Note and the Loan Agreement.
On or before the fifth day of each month during the 17th interim
period, the Debtors will remit to the Bank a $500 fee to compensate
the Bank for the personnel time required to monitor the Debtors'
compliance with the interim cash collateral order.
The Bank is granted a replacement lien on the Debtors'
post-petition assets, and Sabra will have a replacement lien on the
post-petition assets of Clara Burke and Warrington with the same
respective priorities as their pre-petition lien to the same extent
that the Bank and Sabra would have had perfected liens on such
assets absent the filing of the petition.
Moreover, the Bank and Sabra are each granted a claim against the
Debtors, which claim have: (a) the same priority as United States
Trustee's fees and professional fees and reimbursement for expenses
allowed by the Court that are authorized to be paid from cash
collateral; and (b) priority over any other administrative expenses
of any kind including, the administrative expenses described in
Sections 503(b) and 507(b) of the Bankruptcy Code.
These events constitute an "Event of Default:
1. The failure of the Debtors to maintain the Required
Balance;
2. Use by any Debtor of cash collateral for purposes other
than those specified in the Approved Budget or to pay the Weltman
Fees, without the Bank's and Sabra's written consent;
3. Use by any Debtor of cash collateral for any purpose (other
than payment of the Weltman Fees) in an amount in excess of the
amount specified in the Approved Budget subject to the Acceptable
Variance, without the Bank's and Sabra's written consent;
4. The failure of the Debtors to make the payments and/or
escrow deposits to the Bank and/or Sabra provided for in the order
when and as due;
5. The failure of any Debtor to pay any obligation arising on
or after the Petition Date under any unexpired lease of
nonresidential property, including without limitation, the Sabra
lease, by the later of: (a) the date payment of such obligation is
due under the applicable lease; or (b) such date, if any, as may be
set by the Court pursuant to 11 U.S.C. section 365(d)(3); or
6. Sabra obtaining an order for possession of one or both of
the properties that are the subject of the Sabra Lease;
7. Clara Burke or Warrington surrendering possession of
property that is the subject of the Sabra Lease to Sabra; or
8. The violation by any Debtor of any other term or condition
of the Order.
The final hearing on the cash collateral request is continued to
June 14, 2022 at 9:30 a.m.
A copy of the order and the Debtors' budgets for May 2022 to July
2022 is available at https://bit.ly/3wTatEz from PacerMonitor.com
free of charge.
The budget for Fox Subacute at Warrington provided for $1,326,247
in total cash out for May 2022.
The budget for Fox Subacute at Clara Burke provided for $1,326,477
in total cash out for May 2022.
The budget for Fox Subacute at South Philadelphia provided for
$1,059,188 in total cash out.
About Fox Subacute at Mechanicsburg, LLC
Fox Subacute At Mechanicsburg, LLC is a skilled nursing facility in
Pennsylvania that specializes in pulmonary, neurological, and
rehabilitative care for patients with degenerative neurological and
neuromuscular disease; and pulmonary care and ventilator
requirements with an emphasis on vent weaning. Its facilities are
located in Plymouth Meeting, Warrington, Mechanicsburg and
Philadelphia, Pa., and are licensed by the PA Department of
Health.
On Nov. 1, 2019, Fox Subacute at Mechanicsburg and its affiliates
sought Chapter 11 protection (Bankr. M.D. Pa. Lead Case No.
19-04714). Fox Subacute at Mechanicsburg was estimated to have $1
million to $10 million in assets and liabilities as of the
bankruptcy filing.
Judge Henry W. Van Eck oversees the cases.
The Debtors tapped Cunningham, Chernicoff & Warshawsky, P.C. as
their legal counsel, Kennedy P.C. as special counsel, Isdaner &
Company, LLC as accountant, and Three Twenty-One Capital Partners,
LLC as investment banker.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Dec. 11, 2019. The committee is represented
by Flaster/Greenberg P.C.
FREDDIE MAC: Hikes President's 2022 Target Compensation to $3.6M
----------------------------------------------------------------
Freddie Mac (formally the Federal Home Loan Mortgage Corporation)
has increased the compensation of Michael T. Hutchins, president,
under the Executive Management Compensation Program, according to a
Form 8-K filed with the Securities and Exchange Commission. His
base salary remains unchanged at $600,000, his fixed deferred
salary increased to $1,920,000, and his at-risk deferred salary
increased to $1,080,000 resulting in a target total direct
compensation of $3,600,000 for 2022. This compensation increase
was approved by the Federal Housing Finance Agency, as Conservator,
on March 23, 2022.
About Freddie Mac
Federal National Mortgage Association (Freddie Mac) is a GSE
chartered by Congress in 1970. The Company's public mission is to
provide liquidity, stability, and affordability to the U.S. housing
market. Freddie Mac does this primarily by purchasing residential
mortgage loans originated by lenders. In most instances, it
packages these loans into guaranteed mortgage-related securities,
which are sold in the global capital markets and transfer
interest-rate and liquidity risks to third-party investors. In
addition, the Company transfers mortgage credit risk exposure to
third-party investors through its credit risk transfer programs,
which include securities- and insurance-based offerings. The
Company also invests in mortgage loans and mortgage-related
securities. The Company does not originate loans or lend money
directly to mortgage borrowers.
Since September 2008, Freddie Mac has been operating under
conservatorship with FHFA as Conservator. The support provided by
Treasury pursuant to the Purchase Agreement enables the company to
maintain access to the debt markets and have adequate liquidity to
conduct its normal business operations. The amount of funding
available to Freddie Mac under the Purchase Agreement was $140.2
billion at Dec. 31, 2021.
Pursuant to the Purchase Agreement, Freddie Mac will not be
required to pay a dividend to Treasury on the senior preferred
stock until it has built sufficient capital to meet the capital
requirements and buffers set forth in the Enterprise Regulatory
Capital Framework. As a result, the company was not required to
pay a dividend to Treasury on the senior preferred stock in
December 2021. As the company builds capital during this period,
the quarterly increases in its Net Worth Amount have been, or will
be, added to the aggregate liquidation preference of the senior
preferred stock. The liquidation preference of the senior
preferred stock increased to $98.0 billion on December 31, 2021
based on the $2.9 billion increase in the Net Worth Amount during
the third quarter of 2021, and will increase to $100.7 billion on
March 31, 2022 based on the $2.7 billion increase in the Net Worth
Amount during the fourth quarter of 2021.
GLOBAL INFRASTRUCTURE: S&P Affirms 'BB-' ICR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
Global Infrastructure Solutions Inc. (GISI), a U.S.-based
engineering and construction service provider.
S&P said, "At the same time, we assigned our 'BB-' issue-level
rating and '4' recovery rating to the proposed $300 million senior
unsecured notes and affirmed the rating on the existing $400
million notes. The '4' recovery ratings indicate our expectation
for average (30%-50; rounded estimate: 45%) recovery in the event
of a payment default.
"The stable outlook reflects our view that GISI will achieve
topline and profitability growth from a strong backlog and
acquisitions over the next 12 months. We anticipate its adjusted
debt to EBITDA will remain below 4x pro forma for the
transactions."
GISI is seeking to issue $300 million of 10-year senior unsecured
notes to fund acquisitions.
S&P said, "We expect the company's adjusted pro forma debt to
EBITDA will remain below 4x and funds from operations (FFO) to debt
to be more than 20% over the next 12 months. We anticipate GISI's
revenue and profitability will continue expanding over the next 12
months, benefiting from the proposed acquisitions and strong
end-market demand. We forecast organic revenue growth this year, in
the double-digit percentage area. As of September 2021, GISI
reported about $14 billion project backlog, more than a 20%
increase compared with September 2020. We expect it will convert
more than 70% of the backlog to revenues in the next 12 months,
generally in line with the company's historical rates. We expect
the company to maintain relatively steady profitability, with
adjusted EBITDA margins in the 2%-3% area over the next 12 months.
As such, we anticipate that GISI will maintain the credit metrics
in line with our expectations for the current rating and generate
good cash flows, aided by its low capital expenditure requirements.
Like its peers in the engineering and construction (E&C) industry,
we believe GISI faces cyclicality, price competition, and operating
risks, whereby operating performance could deteriorate during the
periods of stress.
"We expect the company will maintain high cash balances to
accommodate shareholder returns and business growth purposes. As an
employee-owned company, GISI is obligated to repurchase its common
stock from stockholders. Additionally, we assume the company will
continue to pay dividends or other distributions on its common
stock. As such, we expect the company will keep sufficient cash on
hand for these shareholders returns. In addition, we assume GISI
will continue to make internal investments to drive organic growth
and could pursue future merger and acquisition (M&A)
opportunities.
"The stable outlook reflects our view that GISI will achieve
topline and profitability growth from a strong backlog and
acquisitions over the next 12 months. We anticipate its adjusted
debt to EBITDA will remain below 4x pro forma for the
transactions.
"We could lower our ratings on GISI over the next 12 months if its
operating performance unexpectedly weakens such that its debt
leverage increases above 4x or its discretionary cash flow (DCF) to
debt falls below 5% on an average and sustained basis over the
cycle. Although not something we currently expect, this could occur
if it faces significant project delays, integration issues,
unexpected margin erosion, or outsized shareholder returns.
"We could raise our ratings on GISI over the next 12 months if it
demonstrates a strong operating performance such that it sustains
debt to EBITDA of less than 3x and DCF to debt higher than 10% on a
sustained basis and we expect this ratio to remain as such on
average over time. At the same time, we would expect the company to
demonstrate financial policies that are in line with a higher
rating by continuing to pursue disciplined M&A and shareholder
return strategies."
GOOD GUYZ INVESTMENTS: Seeks Approval to Hire Real Estate Broker
----------------------------------------------------------------
Good Guyz Investments, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Richard
Feldman, a real estate broker at Miami Waterfront Realty, LLC.
The Debtor needs a real estate broker to market for sale two
residential properties located at 1920 NE 208 Terrace and 1925 NE
208 Terrace, Miami, Fla.
Mr. Feldman has agreed to reduce his commission to 5 percent, which
is below the customary 6 percent charged in the market. In case
there is a cooperating broker, the commission will be split equally
between Mr. Feldman and the cooperating broker.
In court filings, Mr. Feldman disclosed that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Richard Feldman
Miami Waterfront Realty, LLC
13205 NE 16th Ave
North Miami, FL 33181
Phone: +1 305-970-2884
Email: richardtoddfeldman@gmail.com
About Good Guyz Investments
Good Guyz Investments, LLC, a company in Sunny Isles Beach, Fla.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Fla. Case No. 22-10728) on Jan. 30, 2022, listing up to $1
million in assets and up to $10 million in liabilities. Bryan
Goldstein, manager, signed the petition.
Judge Laurel M. Isicoff oversees the case.
The Law Offices of Richard R. Robles, P.A. serves as the Debtor's
legal counsel.
GWG HOLDINGS: Preps Up Bankruptcy Filing After Missing Payments
---------------------------------------------------------------
Alexander Gladstone of The Wall Street Journal reports that GWG
Holdings Inc., a company known for selling life-insurance bonds, is
preparing to file for bankruptcy in the coming days after
accounting issues and the resignation of its auditor prevented it
from selling its products, according to people familiar with the
matter.
Dallas-based GWG created financial instruments called L Bonds,
which pooled money from bond investors to purchase life-insurance
policies on the secondary market, and then used payouts from the
policies when people died to repay the investors. The company sold
the bonds through a network of regional broker-dealers, who pitched
the products to individual investors, the people said.
About GWG Holdings Inc.
Headquartered in Dallas Texas, GWG Holdings, Inc., conducts its
life insurance secondary market business through a wholly-owned
subsidiary, GWG Life, LLC and GWG Life's wholly-owned
subsidiaries.
HERITAGE CHRISTIAN: Wins Cash Collateral Access Thru May 26
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
approved a sixth stipulation between Heritage Christian Schools of
Ohio, Inc. and Heritage Canton LLC that extends the terms of the
interim order authorizing the Debtor to continue using cash
collateral through May 26, 2022.
Except as otherwise provided in the Ninth Stipulation and Order,
the terms of the Interim Order will be valid and binding upon the
Debtor, all creditors of the Debtor and all other
parties-in-interest from and after the date of the Interim Order
and the Ninth Stipulation and Order.
The Court will consider the Debtor's further use of cash collateral
on May 24 at 2 p.m. Eastern Time. Objections are due May 20.
A copy of the stipulation and order, as well as the budget, is
available for free at https://bit.ly/3iSe9yb from
PacerMonitor.com.
The budget filed with the Court provided for $499,461 in beginning
balance and $413,420 in ending balance for March 2022.
About Heritage Christian Schools of Ohio
Heritage Christian Schools of Ohio, Inc. --
https://heritagechristianschool.org/ -- is a tax-exempt private
Christian school located in Canton, Ohio. Heritage Christian
Schools of Ohio filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No.
21-60124) on Feb. 2, 2021. In the petition signed by Sharla Elton,
superintendent, the Debtor disclosed $1,206,968 in assets and
$626,431 in liabilities. Judge Russ Kendig presides over the
case.
The Debtor tapped Anthony J. DeGirolamo, Esq., as legal counsel and
Carolyn Valentine Co. Inc. as accountant and financial advisor.
Fredric P. Schwieg has been appointed as the Debtor's Subchapter V
Trustee.
Heritage Canton, LLC, as lender, is represented by Brennan, Manna &
Diamond as counsel.
HIGHLANDS SENIOR: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: The Highlands Senior Citizens Group, Jacumba, California
d/b/a Jacumba Community Center
f/d/b/a Highland Senior Citizens Group, Inc.
f/d/b/a The Highlands Senior Citizens' Group, a
non-profit
California corporation
44681 Old Highway 80
Jacumba, CA 91934
Case No.: 22-00910
Business Description: The Debtor is nonprofit organization that
provides services to senior citizens.
Chapter 11 Petition Date: April 5, 2022
Court: United States Bankruptcy Court
Southern District of California
Debtor's Counsel: Bruce R. Babcock, Esq.
BRUCE R. BABCOCK, ATTORNEY
4808 Santa Monica Ave.
San Diego, CA 92107
Tel: (619) 222-2661
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Greg A. Curran as president.
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/ZAVNPMA/The_Highlands_Senior_Citizens__casbke-22-00910__0001.0.pdf?mcid=tGE4TAMA
HOVNANIAN ENTERPRISES: All Four Proposals Passed at Annual Meeting
------------------------------------------------------------------
Hovnanian Enterprises, Inc. held its 2022 Annual Meeting at which
the stockholders:
(1) elected A. Hovnanian, R. Coutts, M. Hernandez-Kakol, E.
Kangas, J. Marengi, V. Pagano Jr., R. Sellers, and J. Sorsby as
directors to hold office until the next annual meeting of
stockholders and until their respective successors have been duly
elected and qualified;
(2) ratified the selection of Deloitte & Touche LLP as the
Company's independent registered public accounting firm for the
fiscal year ending Oct. 31, 2022;
(3) approved the Second Amended and Restated 2020 Hovnanian
Enterprises, Inc. Stock Incentive Plan; and
(4) approved, on a non-binding advisory basis, the compensation
of the Company's named executive officers.
About Hovnanian Enterprises
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian
and headquartered in Matawan, New Jersey, designs, constructs,
markets, and sells single-family detached homes, attached townhomes
and condominiums, urban infill, and active lifestyle homes in
planned residential developments. The Company is a homebuilder
with operations in Arizona, California, Delaware, Florida, Georgia,
Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina,
Texas, Virginia, Washington, D.C. and West Virginia. The Company's
homes are marketed and sold under the trade names K. Hovnanian
Homes, Brighton Homes.
As of Jan. 31, 2022, the Company had $2.31 billion in total assets,
$2.11 billion in total liabilities, and $196.89 million in total
equity.
* * *
In August 2021, Moody's Investors Service upgraded Hovnanian
Enterprises, Inc.'s Corporate Family Rating to Caa1 from Caa2.
Moody's said the Corporate Family Rating upgrade to Caa1 reflects
the reduced risk of restructuring activity given the improvement in
Hovnanian's operating and financial performance and the extension
of the company's debt maturity profile given the recent debt
redemptions.
As reported by the TCR on July 28, 2021, S&P Global Ratings
affirmed its ratings on U.S.-based homebuilder Hovnanian
Enterprises Inc., including its 'CCC+' issuer credit rating, and
S&P revised its outlook to positive. The positive outlook
indicates that S&P could raise the rating to 'B-' if the company
reduces debt and EBITDA to interest coverage is sustained above 2x
over the next 12 months, amid further profit improvements.
IRIDIUM COMMUNICATIONS: S&P Alters Outlook to Pos, Affirms B+ ICR
-----------------------------------------------------------------
S&P Global Ratings affirmed all ratings, including its 'B+' issuer
credit rating on Iridium Communications Inc., and revised the
outlook to positive from stable.
The positive outlook reflects good prospects to reduce leverage
below 4x over the next 12 months, S&P's threshold for a higher
rating, based on favorable trends across all Iridium's business
segments, particularly maritime broadband and IoT.
S&P believes increased earnings and FOCF will enable Iridium to
reduce S&P Global Ratings-adjusted leverage below its upgrade
threshold of 4x, despite higher returns of capital to shareholders
through buybacks. Strong internet of things (IoT) and broadband
subscriber growth will likely result in healthy service revenue
growth in the 6%-7% range over the next couple years. Satellite
mobility services are poised for higher growth driven by increasing
penetration of connected maritime vessels and aircraft as operating
conditions improve from the pandemic.
Iridium's commercial IoT subscribers and revenue grew 24% and 14%,
respectively in 2021. S&P said, "We expect Iridium to continue its
solid growth trajectory in IoT with new and competitively priced
products given the strong demand for consumer personal
communications devices. Meanwhile, Iridium's broadband service grew
its subscriber count by 13% and its revenue by 19% in 2021 as the
company continued to take market share in maritime with new
lower-cost and higher-speed data offerings. We expect Iridium to
continue to take meaningful share in the L-Band maritime market,
which is often used for VSAT backup. Iridium has adopted a more
agile approach than Inmarsat whose organizational focus appears to
be on growing its higher-speed Ka-band service. We believe Iridium
benefits from a clean wholesale strategy that is reseller friendly
with key OEM relationships, in addition to lower prices and a
superior lower-latency secure constellation design." Finally, its
voice and data business, which has historically been viewed as a
mature segment with stable trends, is benefiting from ongoing
adoption of higher quality products such as Iridium's push-to-talk
service.
Iridium will be on a capital expenditure (capex) holiday until at
least 2030 following the completion of its NEXT satellite
constellation in 2019. S&P said, "Therefore, we expect consistent
top-line growth and margin expansion from increased operating
leverage to result in a long runway of solid FOCF generation of
$300 million-$400 million annually through 2025. However, we
believe the company will ramp up stock repurchases over the next
couple of years, reducing its capacity to repay debt. Still, we
believe higher EBITDA will enable the company to bring its S&P
Global Ratings-adjusted gross leverage below 4x by year-end 2022."
Iridium could boost share repurchases to keep net leverage within
its target range. In March 2022, Iridium authorized an additional
$300 million share repurchase program, increasing the total
authorization to $600 million by the end of 2023. As of Dec. 31,
2021, the company had $137 million remaining under the initial $300
million program, which expires at the end of 2022. Given S&P's
expectation for higher earnings and FOCF, S&P believes it is likely
that Iridium increases stock repurchases over time to maintain net
leverage in its target range of 2.5x-3.5x. The company's net
leverage was 3.3x as of Dec. 31, 2021.
Global supply chain issues continue to be a headwind, although
conditions have improved. Iridium was unable to fulfill some of its
equipment orders in 2021 due to supply shortages for key IoT
components. Despite these constraints, the company grew equipment
revenue by 7% in 2021. With supply chain pressures likely to ease
this year, S&P expects higher levels of equipment sales in 2022 due
to broad-based demand from Iridium's partner network and the
clearing of its backlog, even as some parts availability issues
persist.
Joint venture partner Aireon is benefiting from the recovery in
global air travel, although a refinancing is not expected until
2024. Aireon is generating positive cash flow as aviation traffic
rebounds from the pandemic, although the company is not expected to
refinance its debt until 2024. As a result, it is unlikely that
Iridium will receive the $150 million prepayment owed for hosting
fees until then. S&P said, "This may also delay Aireon's $120
million payment to Iridium to redeem part of its ownership in the
joint venture, which we previously expected in 2023. Aireon is
expected to pay its minimum contractual hosting fees of $16 million
to Iridium in 2022. Due to the uncertainty around timing of the
lump sum payments, we do not incorporate them into our base case.
However, we continue to believe Aireon will be the primary source
of growth for Iridium's aviation business as contractual step-ups
increase data service fees over time."
S&P said, "The positive outlook reflects good prospects to reduce
leverage below 4x over the next 12 months, our threshold for a
higher rating, based on favorable trends across all of Iridium's
business segments, particularly maritime broadband and IoT.
"We could raise the rating if Iridium reduced debt to EBITDA to
below 4x on a sustained basis, which is likely to occur by
mid-2023. Under this scenario, an upgrade would be contingent on
the company maintaining a financial policy that allows it to
sustain leverage comfortably below 4x.
"We could revise the outlook to stable if debt to EBITDA remained
above 4x over the next year. This could happen with significant
revenue compression due to a slowdown in demand for land-based and
maritime mobility services."
J AND M SUPPLY: Gets Court Nod to Use Cash Collateral
-----------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina has authorized J and M Supply of the Carolinas, LLC to use
cash collateral on an interim basis for its post-petition,
necessary and reasonable operating expenses.
The Debtor requires the use of cash collateral to maintain existing
operations and reorganize its obligations in the Chapter 11 case.
The entities that assert an interest in the Debtor's cash
collateral are Pearl Delta Funding, LLC, Cloudfund, LLC, ROC
Funding Group, LLC, and ROC Funding Group, LLC.
The Court ruled that the Secured Creditors will not retain a
continuing and replacement post-petition lien and security interest
in all property, receivables and assets of the Debtor and the
proceeds thereof, whether acquired pre-petition or post-petition.
A further hearing on the matter is scheduled for May 12, 2022 at 11
a.m.
A copy of the order is available at https://bit.ly/3Dokueh from
PacerMonitor.com.
About J and M Supply
J and M Supply of the Carolinas, LLC operates a sporting goods
retail store in Leland, N.C. It is a licensed Federal Firearms
dealer and specializes in the sale of firearms, ammunition and
related equipment. The company also provides firearm and first aid
training classes and is a North Carolina certified firearms
instructor.
J and M filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-00536) on March 11,
2022, listing as much as $500,000 in both assets and liabilities.
Jennifer Bennington serves as the Subchapter V trustee.
Judge David M. Warren oversees the case.
Richard P. Cook, Esq., at Richard P. Cook, PLLC is the Debtor's
legal counsel.
JAGUAR HEALTH: Board Approves Salary Increases for 3 Execs
----------------------------------------------------------
The Board of Directors of Jaguar Health, Inc., based on an analyses
by Radford, the Company's independent compensation consulting
company, and the recommendation of the Compensation Committee of
the Board, approved increases to the base salaries and payment of
cash bonuses and equity awards under the Company's 2014 Stock
Incentive Plan for the Company's named executive officers. The
increases to the base salaries are effective as of April 1, 2022
and are as follows: (i) an increase to the annual base salary of
Lisa A. Conte, president & CEO, from $535,700 to $576,374, (ii) an
increase in the base salary of Jonathan S. Wolin, chief of staff,
general counsel and chief compliance officer, from $344,800 to
$396,520 and (iii) an increase to the annual base salary of Ian
Wendt, chief commercial officer, from $338,900 to $350,100. These
increases bring the base pay of the Company's executive officers to
the 25th percentile of salaries for executive officers at
comparable companies as indicated in the Radford assessment.
The cash bonuses and equity awards paid to the Company's named
executive officers, which the Board approved based upon individual
as well as company performance, are as follows:
Performance
Time-Based Restricted
Restricted Stock
Name and Title Cash Bonus Stock Units Units
-------------- ---------- ----------- -----------
Lisa A. Conte $160,140 606,280 25,000
President, CEO and
Director
Jonathan S. Wolin $104,248 196,018
Chief of Staff,
General Counsel and
Chief Compliance
Officer
Ian Wendt $88,252 224,783
Chief Commercial Officer
The time-based restricted stock units and the performance-based
restricted stock units were granted under and in accordance with
the terms and conditions of the 2014 Plan and the Form of Notice of
Grant of Restricted Stock Units and Restricted Stock Unit
Agreement.
Pursuant to the terms of the Time-Based RSUs, the 2014 Plan and the
RSU Agreement, the Time-Based RSUs will vest ratably on an annual
basis over three years beginning on May 17, 2023, so long as the
executive remains employed by the Company, subject to the terms and
conditions of the severance agreement entered between the Company
and such executive as described in the Company's Current Report on
Form 8-K filed on June 26, 2020. Pursuant to the terms of the
Performance RSUs, the 2014 Plan and the RSU Agreement, the
Performance RSUs will vest upon (i) successful completion of the
pivotal trial of crofelemer (Mytesi) for cancer-therapy related
diarrhea and (ii) successful completion of the
investigator-initiated trials in support of the proof-of-concept
requirement for early access program for patient access in Europe.
In addition, the Board, based on the recommendation of the
Compensation Committee of the Board, approved a one-time payment of
cash by the Company to award recipients referenced in the table
above in an aggregate amount estimated to be $24,124 as
reimbursement for estimated taxes payable with respect to the
awards granted in April 2021 or the vesting of such awards.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss and comprehensive loss of $52.60
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $33.81 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss of $38.54 million for the year ended Dec. 31,
2019, and a net loss of $32.15 million for the year ended Dec. 31,
2018. As of Dec. 31, 2021, the Company had $53.27 million in total
assets, $41.41 million in total liabilities, and $11.85 million in
total stockholders' equity.
JOHN KNOX VILLAGE: Fitch Affirms 'BB+' Rating on $109MM Bonds
-------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on approximately $109
million of revenue bonds issued by The Industrial Development
Authority of The City of Lee's Summit, Missouri on behalf of John
Knox Village (JKV). Fitch has also affirmed JKV's 'BB+' Issuer
Default Rating (IDR).
The Rating Outlook is Stable.
ANALYTICAL CONCLUSION
The 'BB+' rating and Stable Outlook reflects census levels for the
independent living units (ILUs) and assisted living units (ALUs)
that have remained relatively stable through Q3 2022. Similar to
sector trends, JKV has experienced pressures in supply chains and
increased wages for employees, which management seems to be
addressing effectively as evidenced in their ability to keep
expenses well under budget, outperforming on ancillary revenue
streams such as home health, offsetting lost revenue in the care
center and remaining above budget on operating income (fiscal year
end is March 31).
JKV is on track with strategic plans to replace ageing units with
Meadows Phase I, II and the Villa initiatives. Phase I has
occupancy of over 95% with the remaining units presold. Phase II is
just under half way completed and is expected to be finished by
early mid-to-late October with about 30 of the 52 units presold.
Lastly, the Villa Initiative seeks to reposition older cottages
incrementally, using entrance fee proceeds and not incurring
additional debt.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Revenue Defensibility Lead
Independent Living Occupancy and Market Position are Stable
Revenue Defensibility
JKV's current ILU occupancy of about 86% is in line with its
four-year average of 87%. AL and SNF occupancy rates were
relatively similar to the last fiscal year. JKV has proceeded with
strategic initiatives in replacing ageing units with Meadows Phase
I and II. Phase I has occupancy of over 95% with the remaining
units presold. Phase II which is just under half way completed is
expected to be finished by mid-to-late October with about 30/52
units presold.
The community remains highly affordable with the average entrance
fee of about $270k and average resident net worth of $1.5 million.
JKV implemented a 3% increase in ILU entrance fees and a 4.4%
increase in ILU/ALU monthly service fees with little pushback from
residents of the increases.
Even with strong demand through the first nine months, management
decided to downsize the care center in response to staffing
shortages. However, SNF operations do not represent a high
percentage of JKV's overall revenue mix. In Q3 2022, ILU accounted
for over 40% of resident service revenue, ALU at 16%, SNF at 26%,
and Home and Community based services at 15%. Senior leadership has
successfully navigated this difficult period as management has
reported expenses far below budget and better than expected results
in their home health business.
Operating Risk: 'bb'
Operating Risk Lead
Core Operations Remain Sufficient
Operating Risk
JKV is a predominantly type B contract LPC. The community's
operating performance aligns with a 'weak' assessment but is
adequate at the current rating level. JKV's four-year averages plus
the most recent nine months figures for operating ratio, NOM and
NOMA are 107.5%, -0.9% and 12.2%, respectively.
JKV's recent strategic capital plans were funded with a combination
of operating cash flow and debt. Five-year average
capex-to-depreciation through 3Q22 has been approximately 93%. As
of December 2021, average age of plant is somewhat elevated at 12.1
years, which management is addressing through various initiatives
such as the Meadows and Villas projects. JKV's capex plans comprise
of the IL replacement project (Villas Initiative - Phase VI), as
well as the Meadows Phase II project, which Fitch believes will
further improve occupancy over time.
JKV posted a revenue-only MADS coverage of approximately 1.5 x in
through the first nine months of fiscal 2021, which included
proceeds from an approximately $7.1 million Paycheck Protection
Program (PPP) Loan that was forgiven in FY22. Without these
proceeds, revenue-only MADS coverage would have been 0.4x. This is
more consistent with JKV's previous four-year average of 0.2 x,
with MADS as a percentage of revenue and debt-to-net available are
10.2% and 5.9x, respectively.
Financial Profile: 'bb'
Financial Profile Lead
Stable Operations and New Project Support Sufficient Liquidity
Financial Profile
JKV reported cash to adjusted debt of 44.5% and a MADS coverage of
2.7x through the first nine months of FY22, which includes the
proceeds from the PPP loan. Fitch believes continued stable
operations and entrance fees could accelerate this positive trend.
JKV's leverage profile remains consistent with a 'bb' assessment
throughout Fitch's stress case scenario, which assumes a period of
economic and operational volatility followed by recovery. JKV had
248 days cash on hand as of the end of 3Q22, which is neutral to
Fitch's assessment of its financial profile.
Asymmetric Additional Risk Considerations
There are no asymmetric risk factors affecting this rating
determination.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Project completion and successful fill-up producing additional
cash flows and revenues, resulting in sustained NOM, NOMA and
operating ratio of 3% to 5%, 15% to 20% and 100% to 105%,
respectively;
-- Consistent IL occupancy of roughly 90% to 93% for existing
units.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Meadows Phase II construction and fill-up projections falling
short of Fitch's expectations, causing an increase in
operating expenses and deferral of cash flow generation to
satisfy pro forma aggregate debt service;
-- While Fitch believes sales of existing ILUs should improve in
the near term, any reversal of recent positive trends where
ILU occupancy dips to sustained levels less than 83% to 85%
would pressure the rating.
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.
JKV is located in Lee's Summit, MO, with 995 (947 marketable) ILUs,
164 ALUs and 430 (266 available) SNF beds. Additional operations
include a home health agency, hospice services, a 24-hour ambulance
and paramedic service and a foundation. JKV is one of the largest
single-site LPCs in the country by both acreage and number of units
and is the second largest single-site not-for-profit CCRC in the
2020 LeadingAge Ziegler 200. JKV offers both rental and type B
entrance fee contracts. JKV had total operating revenues of
$68,690,766 in FY21
Fitch's analysis is based on JKV's obligated group (OG). The John
Knox Village Foundation was removed from the OG in October 2017.
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.
KAYA HOLDINGS: Delays Filing of 2021 Annual Report
--------------------------------------------------
Kaya Holdings, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay in the filing of its Annual
Report on Form 10-K for the year ended Dec. 31, 2021.
The Company said it requires additional time to complete the
preparation of its financial statements for the year ended Dec. 31,
2021, have them properly certified by the executive officers and
have them reviewed by its independent auditors. The Company will
file the Form 10-K by the fifteenth calendar day following the
required filing date, as prescribed in Rule 12b-25.
About Kaya Holdings
Kaya Holdings, Inc. -- http://www.kayaholdings.com-- is a
vertically integrated legal marijuana enterprise that produces,
distributes, and/or sells a full range of premium cannabis products
including flower, oils, vape cartridges and cannabis infused
confections, baked goods and beverages through a fully integrated
group of subsidiaries and companies supporting highly distinctive
brands.
Kaya Holdings reported a net loss of $12.29 million for the 12
months ended Dec. 31, 2020, compared to net income of $7.52 million
for the 12 months ended Dec. 31, 2019. As of Sept. 30, 2021, the
Company had $2.20 million in total assets, $19.03 million in total
liabilities, and a net stockholders' deficit of $16.83 million.
Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
March 31, 2021, citing that the Company has suffered net losses
from operations and has a net capital deficiency, which raises
substantial doubt about its ability to continue as a going concern.
KR CITRUS: Wins Cash Collateral Access Thru May 4
-------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California,
Fresno Division, has authorized KR Citrus, Inc. to use cash
collateral in accordance with the budget for the period of March 30
to May 4, 2022.
As previously reported by the Troubled Company Reporter, the cash
collateral sought to be used are proceeds from sales of citrus
products and dragon fruit nursery products. The proceeds are held
by The Home Depot due to a "claimed" but disputed security interest
being asserted by Vox Funding, LLC.
As adequate protection for the Debtor's use of cash collateral,
affected Secured Creditors will have replacement liens in the
Debtor's pre- and post-petition assets of the same type and
validity as are subject to valid pre-petition liens and security
interest and with the same priority as the pre-petition liens and
interests.
The Secured Creditors' liens upon, and interests in, the
replacement collateral will be perfected without any other act or
filing upon entry of the Order.
A further hearing on the matter is scheduled for April 27 at 9:30
am.
A copy of the order is available at https://bit.ly/3NHw0pB from
PacerMonitor.com.
About KR Citrus, Inc.
KR Citrus, Inc. is a California corporation is engaged in the fruit
and vegetable preserving and specialty food manufacturing
business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Cal. Case No. 22-10416) on March 18,
2022. In the petition signed by James Reed, chief executive
officer, the Debtor disclosed $2,002,186 in assets and $1,590,819
in liabilities.
Judge Jennifer E. Niemann oversees the case.
Riley C. Walter, Esq., at Wanger Jones Helsley is the Debtor's
counsel.
KUEHG CORP: S&P Upgrades ICR to 'B-' on Good EBITDA Trends
----------------------------------------------------------
S&P Global Ratings raised all of its ratings on Oregon-based early
childhood education provider KUEHG Corp. by one notch, including
the issuer credit rating to 'B-' from 'CCC+'.
The positive outlook reflects the possibility that S&P could raise
its ratings on KUEHG in the next year if it continues to improve
operating performance and sustain S&P Global Ratings-adjusted
leverage below 6x because of a more conservative financial policy.
S&P said, "Operating performance has recovered more rapidly than we
expected and we now view the capital structure as sustainable. The
company's operating performance was better than we expected, and we
expect it to remain good over the next 12 to 24 months based on
tuition increases and enrollment growth as center occupancy levels
recovers to pre-pandemic occupancy levels of around 70%. The
company reported center occupancy of 62.5% in 2021, which was up
from 47% in 2020, and average weekly full-time enrollments
increased approximately 34%, but still 90% of 2019 levels. We
expect center occupancy of approximately 65% in 2022 and 70% in
2023. Additionally, we expect the company will increase its average
weekly tuition rate in 2022 in the mid-single-digit percentage area
because supply for childcare services remains low and demand trends
continue to strengthen with improving unemployment rates.
"As a result of these positive trends, we forecast revenue growth
in the 9%-10% range in 2022, and EBITDA to increase approximately
7%-9% in the same period based on operating leverage and benefits
from government funding. We believe the company could end 2022 with
leverage in the mid-5x area. We also expect good free-operating
cash flow (FOCF)-to-debt during the same period, in the
mid-single-digit percent area. Additionally, KUEHG had adequate
liquidity of $225 million as of Jan. 1, 2022, to support its
business investments and growth initiatives, and could absorb
potential setbacks.
"Like other childcare providers, KUEHG received significant
government funding throughout the pandemic that have allowed it to
improve its EBITDA margins and generate positive cash flow. The
company reported approximately $60 million of revenue from
government grants in 2021, and an offset to its cost of services of
approximately $160 million in 2021, compared to $61 million in the
prior year. We expect the company could report revenue of
approximately $30 million from government grants in 2022, and $130
million of government grants applied towards its cost of services
in the same period. These government grants are in addition to the
grant funding the company helps parents of its students apply
towards its tuition. Under our base-case forecast, a decrease in
government grants, partially offset by improved operating leverage,
could result in reported EBITDA margin that's flat-to-down slightly
in 2022 compared to approximately 16.7% in 2021, and further
reductions in government grants in 2023 could result in a margin in
the 14%-15% range. Under our base case forecast net of grants, we
believe that the company's gross margin could be in the 15-16% area
in 2022 before improving to around 20% in 2023. Net of grant
funding we also expect leverage could still be above 7x in fiscal
2022 and in the low 7x area in fiscal 2023. While we believe there
is a good amount of certainty around federal funding through 2024,
we would need to see credit metrics improve to our 6x threshold net
of stimulus before we would consider additional ratings upside.
"KUEHG's financial sponsor ownership constrains ratings upside, but
if the company's financial policy were to become less aggressive
following a successful IPO we may consider an upgrade. We believe
the company's financial sponsor ownership would be unlikely to
maintain leverage at the current level and would likely seek to
complete leveraging transactions (like dividend recapitalizations)
if it were to be unsuccessful in completing its IPO. Additionally,
the company has approximately $65.1 million 20% paid-in-kind
preferred equity, which we treat as debt because we believe its
sponsor could eventually seek to replace this equity with debt,
which would likely worsen its cash flow metrics. If the company
were to complete an IPO and use the funds to repay debt as planned,
we could potentially raise the rating.
"The positive outlook reflects our expectation that the company
could sustain S&P Global Ratings-adjusted leverage below our 6x
upgrade threshold through 2022. However, we are unlikely to upgrade
the company above 'B-' until we believe the company's financial
policy could support lower leverage in the long-term."
S&P could raise the rating on KUEHG one notch if it believed the
company could maintain leverage below 6x and generate meaningful
FOCF. This could occur if:
-- The company's center occupancy returns to historical levels;
or
-- The company completed an IPO and we no longer believed its
financial sponsor would prioritize shareholder returns ahead of
debt reduction.
S&P could revise its outlook to stable or lower its rating if S&P
believed the company could sustain leverage above 7x. This could
occur if:
-- Demand, revenue, and EBITDA trends were to reverse due to new
COVID-19 variants or increasing COVID-19 infection rates or a
recessionary environment with elevated levels of unemployment;
-- The level of government grant funding the company receives
decreases materially, resulting in significant margin compression;
or
-- The company's financial sponsor ownership completes a
leveraging transaction.
Environmental, social and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status
-- Social-Health and Safety
To E-2, S-3, G-3; From E-2, S-4, G-3
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of KUEHG (compared with a negative
influence previously). Center utilization is increasing, and KUEHG
benefits from funding in federal stimulus packages to stabilize the
child care industry. As a result we have revised our social factors
credit indicator to S-3 from S-4. However, there is elevated but
diminishing risk to the company's recovery to 2019 levels over the
next 12-24 months from new or extended restrictions because of
increasing infections from new COVID-19 variants. Governance is a
moderately negative consideration, as it is for most rated entities
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 controlling
owners. This also reflects private-equity sponsors' generally
finite holding periods and focus on maximizing shareholder
returns."
LATAM AIRLINES: May 17 to 18 Hearings on Exit Plan
--------------------------------------------------
LATAM Airlines Group S.A., et al., submitted a Plan and a
Disclosure Statement.
The Plan provides for a multi-billion-dollar capital infusion that
will further strengthen LATAM's balance sheet. As part of the Plan,
the Backstop Shareholders, CVL and the Eblen Group, as applicable,
shall, subject to various terms and conditions and the execution of
definitive documentation, make various contributions to the
Debtors' reorganization including, without limitation: (i) waiver
of certain preemptive rights under applicable Chilean law, (ii)
agreements to provide required shareholder approvals of certain
corporate actions required under Chilean law to implement the Plan
and related transactions, (iii) agreement to backstop a portion of
the ERO Rights Offering and issuance of the New Convertible Notes
Class B for an extended period of up to ten months without
requiring payment of a backstop payment (iv) agreement to subscribe
to the New Convertible Notes Class B, which upon conversion shall
be subject to a four-year lock-up that provides the benefits of
significant long-term ownership and potentially reduces share price
volatility in the years immediately following emergence, (v) entry
into the Shareholders' Agreement (as defined in the Restructuring
Support Agreement) and (vi) agreement to support certain amendments
to bylaws of LATAM Parent.
The terms of the Plan also further the Debtors' ability to
implement the Plan and successfully emerge from their Chapter 11
Cases, as the Plan construct contemplates distributions and rights
offerings that comply with the Bankruptcy Code and applicable
Chilean corporate law, including the offering of the New
Convertible Notes to Eligible Equity Holders during the New
Convertible Notes Preemptive Rights Offering Period, which can be
converted into common stock of Reorganized LATAM Parent (the "New
Convertible Notes Back-Up Shares"); provided that, solely with
respect to the New Convertible Notes Class A and the New
Convertible Notes Class C, to the extent not subscribed and
purchased by Eligible Equity Holders during such preemptive rights
offering period, each will be distributed to certain LATAM Parent
General Unsecured Creditors in accordance with the terms of the
Plan. Under applicable Chilean law, Holders of Existing Equity
Interests have certain preemptive rights to subscribe and purchase
their pro rata share of any newly issued equity and convertible
debt prior to such equity and debt being offered for sale to any
other party. In compliance with such laws, the Plan contemplates
that all Plan Securities issued pursuant to the Plan will first be
made available to all Eligible Equity Holders before being
distributed, offered or sold to other parties, and LATAM Parent
will obtain the requisite shareholder approvals for such capital
raises from Holders of Existing Equity Interests at a shareholders'
meeting prior to the Effective Date. Pursuant to the Restructuring
Support Agreement, the Backstop Shareholders, CVL and the Eblen
Group, who collectively hold approximately 51% of the outstanding
equity of LATAM Parent, have agreed to vote in favor of approving
all capital increases, stock issuances and convertible debt
issuances and/or bylaw amendments as may be contemplated as part of
the Restructuring Transactions, including the issuance of all Plan
Securities.
Additional key components of the Plan include:
-- Payment in full of all Allowed Administrative Expense Claims,
Priority Tax Claims, Other Priority Claims, and DIP Claims;
-- A rights offering (the "ERO Rights Offering") in an amount of
$800 million of new common stock of Reorganized LATAM Parent (the
"ERO New Common Stock"), which:
* shall be open to all Holders of Existing Equity Interests
registered on the shareholders' registry of LATAM Parent as of
midnight on the Equity Record Date except for any Holders of
Existing ADS Interests (the "Eligible Equity Holders"), during the
ERO Preemptive Rights Offering Period (as defined herein); and
* $400 million of which shall be backstopped by the Commitment
Creditors in their capacity as ERO New Common Stock Backstop
Parties in exchange for an aggregate 20% backstop payment payable
in cash on the Effective Date and the remaining $400 million shall
be backstopped by the Backstop Shareholders (up to the Backstop
Shareholders Cap, as described in the Restructuring Support
Agreement) without a fee;
-- The issuance of three series of convertible notes by
Reorganized LATAM Parent, each with a maturity date of Dec. 31,
2121 (collectively, the "New Convertible Notes"). Eligible Equity
Holders will have the right to subscribe and purchase the New
Convertible Notes during the New Convertible Notes Preemptive
Rights Offering Period, in compliance with applicable Chilean law.
As set out in more detail in the New Convertible Notes Offering
Procedures, the New Convertible Notes comprise:
* the New Convertible Notes Class A in the principal amount of
$1.4677 billion which, to the extent not subscribed and purchased
by Eligible Equity Holders during the New Convertible Notes
Preemptive Rights Offering Period, shall be distributed to Holders
of General Unsecured Claims against LATAM Parent Pro Rata based on
their Allowed Claims except those with respect to Holders that
elect to participate in the alternative treatment available to
Class 5b and to the extent they provide the new money Class 5b
consideration (together with the New Convertible Notes Class C
Backstop Parties, the "Participating Holders of General Unsecured
Claims");
* the New Convertible Notes Class B in the principal amount
of $1.373 billion which, to the extent not subscribed and purchased
by Eligible Equity Holders during the New Convertible Notes
Preemptive Rights Offering Period, shall be subscribed and
purchased by the New Convertible Notes Class B Backstop Parties.
The New Convertible Notes Class B shall be backstopped by the New
Convertible Notes Class B Backstop Parties, who shall agree to
exercise all their preemptive rights to subscribe and purchase the
New Convertible Notes Class B, and backstop the remainder of the
New Convertible Notes Class B not subscribed and purchased; and
* the New Convertible Notes Class C in the principal amount
of $6.816 billion which, to the extent not subscribed and purchased
by Eligible Equity Holders during the New Convertible Notes
Preemptive Rights Offering Period, shall be subscribed by the New
Convertible Notes Class C Backstop Parties and those New
Convertible Notes Class C Unsecured Creditors that elect to receive
New Convertible Notes Class C in full satisfaction, settlement
discharge and release of their Claims by providing consideration of
$0.921692 of new money for each $1 of Allowed General Unsecured
Claims held against LATAM Parent, and is fully backstopped by the
New Convertible Notes Class C Backstop Parties.
The Debtors believe that the Plan will give the Debtors appropriate
leverage and liquidity to allow LATAM to execute its business plan,
maintain flexibility and capture market opportunities on a
go-forward basis.
The Bankruptcy Court has scheduled a hearing to consider
confirmation of the Plan for May 17-18 at 10:00 a.m., prevailing
Eastern Time, before the Honorable James L. Garrity, Jr., United
States Bankruptcy Court for the Southern District of New York, One
Bowling Green, New York, NY 10004.
The Bankruptcy Court has directed that objections, if any, to
confirmation of the Plan be served and filed so that they are
received on or before April 29, 2022 at 4:00 p.m., prevailing
Eastern Time.
Counsel for the Debtors:
Richard J. Cooper, Esq.
Lisa M. Schweitzer, Esq.
Luke A. Barefoot, Esq.
Thomas S. Kessler, Esq.
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, New York 10006
Telephone: (212) 225-2000
Facsimile: (212) 225-3999
A copy of the Disclosure Statement dated March 25, 2022, is
available at https://bit.ly/3tI3oEV from Primeclerk, the claims
agent.
About LATAM Airlines
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise.
LATAM Airlines Group S.A. is the largest passenger airline in South
America. Before the onset of the COVID-19 pandemic, LATAM offered
passenger transport services to 145 different destinations in 26
countries, including domestic flights in Argentina, Brazil, Chile,
Colombia, Ecuador and Peru, and international services within Latin
America as well as to Europe, the United States, the Caribbean,
Oceania, Asia and Africa.
LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25,
2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United
States are part of the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as general
bankruptcy counsel; FTI Consulting as restructuring advisor; and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. Prime Clerk LLC is the claims agent.
LATHAN EQUIPMENT: Wins Cash Collateral Access Thru May 31
---------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Lathan Equipment Co., LLC to use cash collateral in the
ordinary course of business in accordance with the budget, with a
10% variance through May 31, 2022.
The Debtor is directed to deposit cash collateral immediately on
the Debtor's receipt into one or more accounts which will be
established and maintained at an insured and acceptably bonded
financial institution of the Debtor's choice.
Channel Partners Capital LLC asserts a valid and properly perfected
security interest in inter alia the Debtor's accounts receivable.
As adequate protection for use of the cash collateral, Channel
Partners will receive a perfected continuing and rollover security
interest (deemed perfected as of the filing date) in and to all of
its collateral, to the extent the secured creditor's cash
collateral and other collateral, is used and to the same extent and
with the same priority in the Debtor's post-petition collateral and
proceeds thereof that the creditor held pre-petition, including but
not limited to all after acquired collateral and the proceeds and
products thereof, retroactive to the filing date.
Unless otherwise ordered by the Court, the Debtor's authority to
use the pre-petition cash collateral terminates on the earlier of
(i) June 5, 2022; or (ii) the fifth business day following written
notice to the Debtor and its counsel via email that an Event of
Default has occurred.
These events constitute an "Event of Default:"
(a) Failure to timely provide the financial information and
reports required by the Bankruptcy Code;
(b) Failure to comply with the budget; and
(c) The conversion or dismissal of the Debtor's Chapter 11
case, or application or motion by or against the Debtor for such
conversion or dismissal, unless Channel Partners consents to the
dismissal or conversion.
A further hearing on the matter is scheduled for June 6 at 10:30
a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3tUP3F1 from PacerMonitor.com.
The Debtor projects $58,864 in total expenses for March 2022.
About Lathan Equipment Co., LLC
Lathan Equipment Co., LLC provides tree services, roll-off services
and equipment sales.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. N.Y. Case No. 22-10186) on March 4,
2022. In the petition signed by Andrew J. Lathan, sole
member/president, the Debtor disclosed $1,240,890 in assets and
$675,575 in liabilities.
Judge Carl L. Bucki oversees the case.
David H. Ealy, Esq., at Cristo Law Group LLC is the Debtor's
counsel.
LEARNING CARE: S&P Upgrades ICR to 'B-' on Good EBITDA Trends
-------------------------------------------------------------
S&P Global Ratings raised all of its ratings on Michigan-based
early childhood operator Learning Care Group (US) No. 2 Inc. by one
notch, including the issuer credit rating to 'B-' from 'CCC+'.
The stable outlook reflects S&P's expectation that the company's
leverage is likely to be in the mid- to high-6x area in fiscal 2022
and that it will likely continue to generate positive free
operating cash flow over the next 12 to 24 months.
S&P said, "Learning Care's operating performance recovered more
rapidly than we expected and we now view the capital structure as
sustainable. The company's operating performance was better than we
expected, and we expect it to remain good over the next 12 to 24
months based on tuition increases and enrollment growth as center
occupancy levels recover to around 70% as COVID-19 restrictions
loosen. We expect center occupancy levels to return to the 70% area
by the end of fiscal 2023 (ending June 2023). Additionally, we
expect the company will be able to increase its average weekly
tuition rate in calendar 2022 in the mid-single-digit percentage
area because supply for childcare services remains low and demand
trends continue to strengthen.
"As a result of these positive trends, we forecast revenue growth
in the 35% area in fiscal 2022, and EBITDA growing approximately
two times in the same period. We expect the company to end its
fiscal 2022 with leverage the in mid-6x area in fiscal 2022 and
2023, which is good compared to our 7x upgrade threshold at the
'CCC+' rating. We also expect good free-operating cash flow
(FOCF)-to-debt during the same period, in the mid-single-digit
percent area. Additionally, Learning Care had adequate liquidity of
approximately $15.9 million in cash as of Dec. 31, 2021 and an
undrawn $80 million sponsor facility added in its third quarter of
fiscal 2022, to support its business investments and growth
initiatives, and could absorb potential setbacks.
"Like other childcare providers, Learning Care received significant
government grants throughout the pandemic that have allowed it to
maintain its EBITDA margins and reduce cash burn. We expect the
company will have received government grants of approximately $150
million-$170 million during fiscal 2022, and will receive grants in
the $70 million-$90 million range in fiscal 2023. Under our
base-case forecast, we expect these grants will decrease in
quantity over time, resulting in reported EBITDA margin declining
from the 14%-15% area in fiscal 2022 to the 13%-14% area in fiscal
2024. Net of grants, we believe the company's gross margin will be
in the 13%-15% range in fiscal 2022 (compared to 27%-28% including
grants) before improving to around 20% in fiscal 2023. Excluding
the grant funding, leverage is high at above 10x in fiscal 2022 and
in the low-8x area in fiscal 2023. While we have a good amount of
certainty around federal funding through 2024, we would need to see
credit metrics improve to our 6x threshold net of grants before we
would consider additional ratings upside.
"The company is likely to continue its acquisitive growth strategy
and could use its $80 million undrawn sponsor facility to fund M&A.
Our base-case forecast incorporates capital expenditures (capex)
and mergers and acquisitions (M&A) of approximately $200 million in
fiscal 2022 and 2023. While we expect cash flow could cover the
majority of these transactions, we believe that if the company
needed additional sources of liquidity it would likely draw on the
sponsor facility, which is junior to the company's first and second
lien debt.
"The stable outlook reflects our expectation that the company's
leverage is likely to be in the mid- to high-6x range in fiscal
2022 and that it will likely generate positive free operating cash
flow over the next 12 to 24 months."
S&P could lower its rating if it believed the company would sustain
leverage above 7x or were likely to generate negative cash flow.
This could occur if:
-- Demand, revenue, and EBITDA trends were to reverse due to new
COVID-19 variants or increasing COVID-19 infection rates or a
recessionary environment with elevated levels of unemployment; or
-- The level of government grant funding the company receives
decreases significantly enough to offset demand growth and margin
compresses significantly.
S&P could raise the rating on Learning Care one notch if it
believes the company could maintain leverage below 6x, including an
expectation for leveraging transactions and generate meaningful
FOCF. This could occur if:
-- The company's center occupancy appears likely to return to
historical levels; and
-- Revenue and EBITDA growth outpace its spending on center
acquisitions and new builds.
Environmental, social and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status
-- Social-Health and Safety
To E-2, S-3, G-3; From E-2, S-4, G-3
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of Learning Care Group (compared with
a negative influence previously). Center utilization is increasing
and the company benefits from funding in federal stimulus packages
to stabilize the child care industry. As a result we have revised
our social factors credit indicator to S-3 from S-4. However, there
is risk to the company's recovery to 2019 levels over the next
12-24 months from new or extended restrictions because of
increasing infections from new COVID-19 variants. Governance is a
moderately negative consideration, as it is for most rated entities
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 controlling
owners. This also reflects private-equity sponsors' generally
finite holding periods and focus on maximizing shareholder
returns."
LIMETREE BAY: Chapter 11 Deal Addresses Dismissal Move
------------------------------------------------------
Vince Sullivan of Law360 reports that bankrupt former refinery
owner Limetree Bay Services Ltd. told a Texas judge late Sunday,
April 3, 2022, that it has resolved all material issues among its
secured and unsecured creditors as it pursues a Chapter 11 plan,
rendering moot a motion by the creditors committee seeking a
dismissal of the case.
In its response to the court's order to show cause why the case
shouldn't be dismissed, Limetree Bay said that disagreements among
the parties about how to treat avoidance actions under a plan of
liquidation had been worked out and are awaiting final
documentation.
About Limetree Bay
Limetree Bay Energy is a large-scale energy complex strategically
located in St. Croix, U.S. Virgin Islands. The complex consists of
Limetree Bay Refining, a refinery with peak processing capacity of
650 thousand barrels of petroleum feedstock per day, and Limetree
Bay Terminal, a 34-million-barrel crude and petroleum products
storage and marine terminal facility serving the refinery and
third-party customers.
Limetree Bay Refining, LLC, restarted operations in February 2021,
and is capable of processing around 200,000 barrels per day. Key
restart work at the site began in 2018, including the 62,000
barrels per day modern, delayed Coker unit, extensive
desulfurization capacity, and a reformer unit to produce clean,
low-sulfur transportation fuels. The restart project provided much
needed economic development in the U.S.V.I. and created more than
4,000 construction jobs at its peak.
Limetree Bay Refining, LLC and its affiliates sought Chapter 11
protection on July 12, 2021. The lead case is In re Limetree Bay
Services, LLC (Bankr. S.D. Texas Case No. 21-32351).
Limetree Bay Terminals, LLC did not file for bankruptcy.
In the petitions signed by Mark Shapiro, chief restructuring
officer, Limetree Bay Services disclosed up to $10 million in
assets and up to $50,000 in liabilities. Limetree Bay Refining,
LLC, estimated up to $10 billion in assets and up to $1 billion in
liabilities.
The Debtors tapped Baker & Hostetler LLP as bankruptcy counsel,
Beckstedt & Kuczynski LLP as special counsel, and GlassRatner
Advisory & Capital LLC, doing business as B. Riley Advisory
Services, as restructuring advisor. Mark Shapiro of GlassRatner is
the Debtors' chief restructuring officer.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' cases on July 26, 2021.
Pachulski Stang Ziehl & Jones, LLP and Conway MacKenzie, LLC serve
as the committee's legal counsel and financial advisor,
respectively.
405 Sentinel, LLC serves as administrative and collateral agent for
the DIP lenders.
LIQUIDMETAL TECHNOLOGIES: Incurs $3.4 Million Net Loss in 2021
--------------------------------------------------------------
Liquidmetal Technologies Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $3.38 million on $811,000 of total revenue for the year
ended Dec. 31, 2021, compared to a net loss of $2.64 million on
$989,000 of total revenue for the year ended Dec. 31, 2020. The
Company reported a net loss of $7.43 million for the year ended
Dec. 31, 2019.
As of Dec. 31, 2021, the Company had $35.61 million in total
assets, $1.31 million in total liabilities, and $34.29 million in
total shareholders' equity.
Cash used in operating activities totaled $2,730,000 for the year
ended Dec. 31, 2021 and $2,330,000 for the year ended Dec. 31,
2020. The cash was primarily used to fund operating expenses
related to the Company's business and product development efforts.
Cash provided by investing activities totaled $5,307,000 for the
year ended Dec. 31, 2021 and cash used in investing activities
totaled $15,799,000 for the year ended Dec. 31, 2020. Cash used in
investing activities primarily consist of purchases of debt
securities in line with the Company's investment strategy.
Cash provided by financing activities totaled $0 for the year ended
Dec. 31, 2021 and $0 for the year ended Dec. 31, 2020.
Liquidmetal stated, "The Company has a relatively limited history
of selling bulk amorphous alloy products and components on a
mass-production scale. Furthermore, the ability of contract
manufacturers to produce the Company's products in desired
quantities and at commercially reasonable prices is uncertain and
is dependent on a variety of factors that are outside of the
Company's control, including the nature and design of the
component, the customer's specifications, and required delivery
timelines. These factors have previously required that the Company
engage in equity sales under various stock purchase agreements to
support its operations and strategic initiatives."
As of Dec. 31, 2021, the Company had $4,091,000 in cash and
restricted cash, as well as $22,119,000 in investments in debt
securities. The Company views this total of $26,210,000 as readily
available sources of liquidity in the event needed to advance the
Company's existing strategy, and/or pursue an alternative strategy.
As such, the Company anticipates that its current capital
resources, when considering expected losses from operations, will
be sufficient to fund the Company's operations for the foreseeable
future.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1141240/000143774922007571/lqmt20211231_10k.htm
About Liquidmetal Technologies
Lake Forest, California-based Liquidmetal Technologies, Inc. --
http://www.liquidmetal.com-- is a materials technology company
that develops and commercializes products made from amorphous
alloys. The Company's family of alloys consists of a variety of
bulk alloys and composites that utilize the advantages offered by
amorphous alloys technology. The Company designs, develops and
sells products and custom parts from bulk amorphous alloys to
customers in a wide range of industries. The Company also
partners
with third-party manufacturers and licensees to develop and
commercialize Liquidmetal alloy products.
LITTLE WASHINGTON: Taps Ciardi Ciardi & Astin as Bankruptcy Counsel
-------------------------------------------------------------------
Little Washington Fabricators, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to hire
Ciardi Ciardi & Astin to serve as legal counsel in its Chapter 11
case.
The firm's hourly rates are as follows:
Albert A. Ciardi III, Esq. $575 per hour
Jennifer C. McEntee, Esq. $495 per hour
Daniel S. Siedman, Esq. $375 per hour
Stephanie Frizlen $120 per hour
Albert Ciardi III, Esq., the firm's attorney who will be providing
the services, disclosed in a court filing that he is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Albert A. Ciardi III, Esq.
Ciardi Ciardi & Astin
1905 Spruce Street
Philadelphia, PA 19103
Tel.: (215) 557-3550
Fax: (215) 557-3551
Email: aciardi@ciardilaw.com
About Little Washington Fabricators
Little Washington Fabricators, Inc., a company in Wagontown, Pa.,
filed its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Penn. Case No. 22-10695) on March 22,
2022, listing as much as $10 million in both assets and
liabilities. Douglas L. Howe, president, signed the petition.
Judge Patricia M. Mayer presides over the case.
Albert A. Ciardi III, Esq., at Ciardi Ciardi & Astin, and Eastburn
and Gray, PC serve as the Debtor's bankruptcy counsel and special
counsel, respectively.
LITTLE WASHINGTON: Taps Eastburn and Gray as Special Counsel
------------------------------------------------------------
Little Washington Fabricators, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to hire
Eastburn and Gray, PC as its special counsel.
The firm's services include:
a. initiating new litigation against non-paying vendors;
b. advising the Debtor with respect to the litigation;
c. preparing legal papers;
d. advising the Debtor relating to areas of construction law;
and
e. performing other necessary legal services for the Debtor.
The hourly rates charged by the firm's attorneys are as follows:
Robert R. Watson, Jr., Esq. $360
Michael T. Pidgeon, Esq. $360
The firm received a retainer in the amount of $7,000.
As disclosed in court filings, Eastburn and Gray is a disinterested
person within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Robert R. Watson, Jr., Esq.
Eastburn and Gray, PC
60 E. Court St.
Doylestown, PA 18901
Phone: (215) 461-1238
Email: rwatson@eastburngray.com
About Little Washington Fabricators
Little Washington Fabricators, Inc., a company in Wagontown, Pa.,
filed its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Penn. Case No. 22-10695) on March 22,
2022, listing as much as $10 million in both assets and
liabilities. Douglas L. Howe, president, signed the petition.
Judge Patricia M. Mayer presides over the case.
Albert A. Ciardi III, Esq., at Ciardi Ciardi & Astin, and Eastburn
and Gray, PC serve as the Debtor's bankruptcy counsel and special
counsel, respectively.
LIVING FRESH: Ends Up in Chapter 11 Bankruptcy
----------------------------------------------
Health and wellness company Living Fresh Men's Spa Corp. seeks
Chapter 11 bankruptcy protection in New York.
The Debtor owns and operates as a men's spa. The Debtor's office
is located at 314 Weatherly Place, Unit A College Point, NY 11356.
The Debtor's immediate need for relief in this Court stems from its
serious
cashflow difficulties resulting from defending an action in the New
York County Civil Court Landlord and Tenant Division captioned KD
22nd St. LLC v. Living Fresh 1\1/en's Spa Corp. et al, under case
number LT-301608-22/NY, as well as previous debt obligations and
underperfonnance
ofthe Debtor's operations of the Premises.
The Debtor does not have any publicly held shares, debentures, or
other
securities.
Living Fresh Men's Spa estimates between 1 and 49 unsecured
creditors. The petition states that funds will be available to
unsecured creditors.
The meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for
May 6, 2022 at 12:30 p.m.
Court filings state that the Chapter 11 plan and disclosure
statement are due on Aug. 1, 2022.
About Living Fresh Men's Spa Corp.
Living Fresh Men's Spa Corp. -- http://www.lfmensspa.com/-- is a
health and wellness spa for men in New York City.
Living Fresh Men's Spa Corp. sought Chapter 11 bankruptcy
protection (Bankr. E.D.N.Y. Case No. 22-40694) on April 1, 2022.
In the petition filed by Justin Chenxi Wu, as president, Living
Fresh Men's Spa estimated assets between $0 and $50,000 and
estimated liabilities between $100,000 and $500,000. The case is
assigned to Honorable Judge Elizabeth S. Stong. Lawrence Morrison,
of Morrison Tenembaum PLLC, is the Debtor's counsel.
LJF INC: Seeks to Hire Robert O Lampl Law Office LLC as Counsel
---------------------------------------------------------------
LJF, Inc. seeks approval from the U.S. Bankruptcy Court for the
Western District of Pennsylvania to terminate the employment of
Robert O Lampl Law Office and hire Robert O Lampl Law Office, LLC
to handle its Chapter 11 case.
Robert O Lampl Law Office is run by its sole proprietor, Robert O
Lampl, Esq., who passed away earlier this year. Since February, Mr.
Lampl's son Sy Lampl, who is practicing under the firm of Robert O
Lampl Law Office, LLC, has continued to represent the Debtor in its
bankruptcy case.
Robert O Lampl Law Office, LLC's services include:
a. assisting the Debtor in the administration of its estate;
b. representing the Debtor on matters involving legal issues
that are present or are likely to arise in its case;
c. preparing legal documentation;
d. reviewing reports for legal sufficiency; and
e. furnishing information and performing other services
connected with the Debtor's bankruptcy proceedings, including the
prosecution and defense of adversary proceedings.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Sy O. Lampl $300
Elsie R. Lampl, Of Counsel $350
Paralegal $150
The firm will also seek reimbursement for out-of-pocket expenses.
Mr. Lampl 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.
Robert O Lampl Law Office, LLC can be reached at:
Sy O. Lampl, Esq.
Robert O Lampl Law Office, LLC
223 Fourth Avenue, 4th Fl.
Pittsburgh, PA 15222
Tel: (412) 392-0330
Fax: (412) 392-0335
Email: slampl@lampllaw.com
About LJF Inc.
LJF, Inc. sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Pa. Case No. 20-70248) on May 15, 2020, listing up to
$1 million in assets and up to $10 million in liabilities. On Jan.
27, 2022, the court entered a default order converting the case to
a Subchapter V Chapter 11 case.
Judge Jeffery A. Deller oversees the case.
Sy O. Lampl, Esq., at Robert O Lampl Law Office, LLC serves as the
Debtor's legal counsel.
LTL MANAGEMENT: Mediation Order Faces Pushback From 40 States
-------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that a group of 40 states and
the District of Columbia is vying to limit the scope of mediation
in a Johnson & Johnson talc liability spinoff's bankruptcy.
The states -- which were left out of the cour's mediation order --
have "significant" consumer claims that are independent from
individuals' claims, and "could in principle run into the trillions
of dollars," the group said in an April 1, 2022 court filing.
The U.S. Bankruptcy Court for the District of New Jersey should
limit mediation to issues solely affecting the parties involved --
the company, official tort claimant committees, and a
representative for future tort claimants -- the states said.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee
for Regions 3 and 9 reconstituted the talc claimants' committee and
appointed two separate committees: (i) the official committee of
talc claimants I, which represents ovarian cancer claimants, and
(ii) the official committee of talc claimants II, which represents
mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
About Johnson & Johnson
Johnson & Johnson is an American multinational corporation founded
in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. It is the world's largest and most broadly
based healthcare company.
Johnson & Johnson is headquartered in New Brunswick, New Jersey,
the consumer division being located in Skillman, New Jersey. The
corporation includes some 250 subsidiary companies with operations
in 60 countries and products sold in over 175 countries.
The corporation had worldwide sales of $82.6 billion in 2020.
MALLINCKRODT PLC: $1.75-Bil. Opioid Plan Takes Effect During Appeal
-------------------------------------------------------------------
Daniel Gill, writing for Bloomberg Law, reports that opioid
manufacturer Mallinckrodt PLC's $1.75 billion Chapter 11 bankruptcy
plan will go forward while the courts hash out appeals from its
confirmation.
Pharmaceutical company Sanofi-Aventis U.S. LLC -- one of
Mallinckrodt's creditors -- and a group of insurance companies that
includes Attestor Ltd. and Humana Inc. had asked to put the plan on
hold while they appealed. Under the Plan, initially approved in
February, Mallinckrodt agreed to pay $125 million more than
originally proposed and hand the company over to creditors.
Judge John T. Dorsey of the U.S. Bankruptcy Court for the District
of Delaware April 1, 2022, entered an order (i) denying the motions
of SANOFI-AVENTIS U.S. LLC AND THE ACTHAR INSURANCE CLAIMANTS for
stay pending appeal , and (ii) DEFERRING TO THE DISTRICT COURT THE
MOTIONS OF SANOFI-AVENTIS U.S. LLC AND THE ACTHAR INSURANCE
CLAIMANTS FOR CERTIFICATION OF
DIRECT APPEAL UNDER 28 U.S.C. Sec. 158(D)(2).
About Mallinckrodt PLC
Mallinckrodt -- http://www.mallinckrodt.com/-- is a global
business consisting of multiple wholly-owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics; and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case
No. 20-12522) to seek approval of a restructuring that would reduce
total debt by $1.3 billion and resolve opioid-related claims
against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC, is the claims agent.
The official committee of unsecured creditors retained Cooley LLP
as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon
Advisers LLC as its financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid related claimants. The OCC tapped Akin
Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz as
Delaware co-counsel, Province Inc. as financial advisor, and
Jefferies LLC as investment banker.
On April 20, 2021, the Debtors jointly filed a Chapter 11 plan of
reorganization and disclosure statement. Judge Dorsey confirmed
the plan on March 2, 2022.
MARCO ENTERPRISES: Unsecureds to Split $52.5K in 3 Years
--------------------------------------------------------
Marco Enterprises, LLC, a Minnesota limited liability company,
filed with the U.S. Bankruptcy Court for the District of Minnesota
a Second Modified Plan of Reorganization dated March 31, 2022.
The Debtor previously sought confirmation of its First Modified
Plan of Reorganization in May 2021. The Court denied confirmation
based on an objection of creditor Commercial Credit Group Inc.
("CCG") to the treatment of its claim, including to the value of
its collateral. Subsequently, the Debtor and CCG were unable to
agree on the value of CCG's collateral, but they agreed on a
process to select a neutral appraiser.
The Court selected the Debtor's recommended appraiser, Rouse
Appraisals, to conduct a valuation of CCG's collateral. Rouse
Appraisals' valuation serves as the basis for calculating CCG's
secured claim in this Plan. The Debtor and CCG disagree, however,
on the appropriate effective date of the valuation. This Plan
reflects the Debtor's view that the valuation should be as of May
2021, the date of the first confirmation hearing.
The Plan is premised upon Debtor's belief that unsecured creditors
will receive more under the Plan, than under a forced liquidation
of Debtor, regardless of whether CCG's collateral is valued as of
May 2021 or March 2022. Payments to unsecured creditors using the
projections (where CCG's collateral is valued as of May 2021) total
$52,500. In the event that the valuation of CCG's collateral were
as of the date of the Plan, payments to unsecured creditors under
the Plan would be $37,500. In a liquidation, unsecured creditors
would receive nothing.
Debtor, cognizant of the consequences to its creditors in the event
a plan of reorganization is not confirmed, developed its Plan to
provide realistic and acceptable recoveries for each class of
claims. Debtor believes that creditors will receive more from the
performance of the Plan than by liquidating the company.
Creditors holding allowed secured claims will receive the full
amount of their allowed secured claims with interest. Creditors
without security, who would likely receive nothing from a
liquidation of the company, have, under the Plan, a vested interest
in the survival of Debtor and may receive their Pro Rata Share
portion of the projected disposable income over time. Debtor
believes that the Plan enables each class of claims to maximize its
recovery and, at the same time, permits Debtor to be reorganized
and to continue in business.
Class V shall consist of allowed unsecured claims not entitled to
priority and not treated in any other class in the Plan. The holder
of a Class V Allowed Claim shall be paid the Pro Rata Share of
$52,500.00. The payment of such sum will be made in 3 annual
installments, paid as follows: (i) the first payment in the amount
of $13,000 on the first anniversary of the Effective Date, (ii)
$18,500 on the second anniversary of the Effective Date, and (iii)
$21,000 on the third anniversary of the Effective Date.
In the event that the Court determines that the valuation as of
March 2022 establishes CCG's secured claim, holders of Class V
Allowed Claims shall be paid the Pro Rata Share of $37,500, as
follows: (i) the first payment in the amount of $10,000.00 on the
first anniversary of the Effective Date, (ii) $12,500 on the second
anniversary of the Effective Date, and (iii) $15,000 on the third
anniversary of the Effective Date. Such payments, under either
scenario, shall be in full satisfaction of each unsecured Allowed
Claim in Class V.
Class VI shall consist of all the equity or ownership Interests of
Debtor. The Debtor's shares and Interests will be cancelled. The
Company shall issue 100 new shares or Interest in the name of
Patrick Marotz, who shall remain as the sole shareholder of the
Company post-confirmation.
Debtor, after confirmation of the Plan, will continue to manage its
affairs and assets. If the plan is confirmed as a consensual plan
under 11 U.S.C. § 1191(a), Debtor shall implement the plan and
will remain responsible for paying its expenses and making
distributions to creditors as set forth in the Plan, and 11 U.S.C.
§ 1194 shall not apply. Debtor will provide or pay out of
operating funds, including accounts receivable for all of Debtor's
administrative expenses and business debts in the ordinary course
of business. The Debtor will file and serve a notice of substantial
consummation not later than 14 days after the Plan is substantially
consummated, in accordance with 11 U.S.C. § 1183(c)(2).
If the plan is confirmed under 11 U.S.C. § 1191(b), a portion of
the Debtor's future earnings will be submitted to the supervision
and control of the Subchapter V trustee as necessary for the
execution of the Plan. In that case, creditors will be paid through
Trustee Dennis O'Brien, c/o Manty & Associates, P.A., 150 South
Fifth Street, Suite 3125, Minneapolis, Minnesota 55402,
dennis@mantylaw.com.
The combination of building cash reserves during the case, the
reduction and restructuring of debt, the elimination of staff,
reduction or elimination of unnecessary equipment, downsizing
operations, and the other steps, all enhance the feasibility of the
Plan and its likelihood of success.
A full-text copy of the Second Modified Plan dated March 31, 2022,
is available at https://bit.ly/36VWC5G from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Gregory S. Otsuka
Thomas J. Flynn
Larkin Hoffman Daly & Lindgren, Ltd.
8300 Norman Center Drive, Ste. 1000
Minneapolis, MN 55437-1060
gotsuka@larkinhoffman.com
tflynn@larkinhoffman.com
Tel: (952) 835-3800
About Marco Enterprises
Marco Enterprises, LLC operates a family-owned trucking business
that has been in operation for more than 30 years and provides
over-the-road refrigerated trucking services. It sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Minn. Case
No. 20-32694) on Nov. 25, 2020. In the petition signed by Linda
Marotz, president, the Debtor disclosed up to $50,000 in assets and
up to $500,000 in liabilities.
Judge Kathleen H. Sanberg oversees the case.
Larkin, Hoffman, Daly & Lindgren, Ltd. represents the Debtor.
MD HELICOPTER: April 8 Deadline Set for Panel Questionnaires
------------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy case of MD Helicopters, Inc.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a Questionnaire
available at https://bit.ly/3DBlDiA and return by email it to
Joseph McMahon -- joseph.mcmahoncudia@usdoj.gov -- at the Office of
the United States Trustee so that it is received no later than 4:00
p.m., on April 8, 2022.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About MD Helicopters
MD Helicopters Inc are a global manufacturer and supplier of
commercial and military helicopters, spare parts, and related
services with their sole manufacturing facility located in Mesa,
Arizona.
MD Helicopters LP sought Chapter 11 bankruptcy protection (Bankr.
D. Del. Case No. 22-10263) on March 30, 2022.
MD Helicopters estimated assets between $100 million to $500
million and liabilities between $100 million to $500 million.
Suzzanne Uhland, Esq., Adam S. Ravin, Esq., Brett M. Neve, Esq.,
Tianjiao (TJ) Li, Esq., Alexandra M. Zablocki, Esq., of LATHAM &
WATKINS LLP are the Debtors' counsel. Moelis & Company LLC are the
Debtors' investment bankers. Alixpartners, LLP is the restructuring
advisor. Prime Clerk LLC is the Notice, Claims, & Balloting Agent.
MICROSTRATEGY INC: Unit Secures $205M Loan From Silvergate Bank
---------------------------------------------------------------
Silvergate Bank, a subsidiary of Silvergate Capital Corporation, a
provider of innovative financial infrastructure solutions and
services for the growing digital currency industry, has issued a
$205 million term loan under its Silvergate Exchange Network (SEN)
Leverage program to MacroStrategy LLC, a subsidiary of
MicroStrategy Incorporated.
The interest-only term loan is secured by certain bitcoin held in
MacroStrategy's collateral account with a custodian mutually
authorized by Silvergate and MacroStrategy. Under the terms of the
agreement, MacroStrategy will use the loan proceeds (i) to purchase
bitcoins, (ii) to pay fees, interest, and expenses related to the
loan transaction, or (iii) for MacroStrategy's or MicroStrategy's
general corporate purposes.
"We're thrilled to add MicroStrategy to our growing list of SEN
Leverage borrowers," said Alan Lane, chief executive officer of
Silvergate. "Their innovative approach to treasury management is
an exceptional example of how institutions can utilize their
bitcoin to support and grow their business."
SEN Leverage, which launched in 2020, provides secure,
institutional-grade access to capital through U.S. dollar loans
collateralized by bitcoin. As of Dec. 31, 2021, SEN Leverage had
grown to approximately $570.5 million in commitments, demonstrating
the increased need for access to capital in the digital currency
industry.
"The SEN Leverage loan gives us an opportunity to further our
position as the leading public company investor in bitcoin," said
Michael Saylor, chairman and chief executive officer of
MicroStrategy. "Using the capital from the loan, we've effectively
turned our bitcoin into productive collateral, which allows us to
further execute against our business strategy."
About MicroStrategy
MicroStrategy is an enterprise analytics software and services
company. Since its founding in 1989, MicroStrategy has been
focused on empowering organizations to leverage the immense value
of their data. Its vision is to enable Intelligence Everywhere by
delivering world-class software and services that empower
enterprise users with actionable intelligence.
MicroStrategy reported a net loss of $535.48 million for the year
ended Dec. 31, 2021, and a net loss of $7.52 million for the year
ended Dec. 31, 2020. For the nine months ended Sept. 30, 2021, the
Company reported a net loss of $445.50 million.
* * *
As reported by the TCR on June 15, 2021, S&P Global Ratings
assigned its 'CCC+' issuer credit rating to Tysons Corner,
Va.-based MicroStrategy Inc. S&P said, "The stable outlook
reflects our expectation that MicroStrategy's operating results
will remain consistent over the next 12 given its good recurring
revenue base and the low interest expense on its convertible debt,
which will allow it to maintain good EBITDA interest coverage and
generate positive free operating cash flow. We expect these
factors to enable the company to sustain its capital structure over
the subsequent 12 months."
MOUNTAIN PROVINCE: Closes $50 Million Junior Credit Facility
------------------------------------------------------------
Mountain Province Diamonds Inc. has closed its previously announced
transactions, consisting of: (i) the entry into a new US$50 million
junior secured term loan credit facility with a lender ultimately
beneficially owned by Dermot Desmond, and (ii) the issuance to the
Lender of warrants to purchase up to 41,000,000 common shares of
the Company for an aggregate exercise price of approximately
US$25,000,000. The Warrants are exercisable in whole or in part at
any time up to December 15, 2027 at an exercise price of US$0.60975
per common share. The Warrants, and any common shares issuable
upon exercise thereof, are subject to a statutory four-month hold
period under Canadian securities laws that will expire on July 29,
2022.
Closing of Junior Credit Facility
The Loan Agreement matures on Dec. 15, 2027 and is secured by
substantially all of the properties and assets of the Company and
its subsidiaries on a junior basis to the Company's existing second
lien notes. The Loan Agreement bears interest at a rate of 8% per
annum until Dec. 15, 2022, after which the interest rate will be 2%
per annum greater than the interest rate on the debt that replaces
or refinances the Company's existing second lien notes, payable on
a semi-annual basis. The Company is entitled to prepay the Loan
Agreement at any time prior to the Maturity Date without penalty.
The Company issued the Warrants, as partial consideration for the
extension of credit under the Loan Agreement. The exercise price
and number of common shares underlying the Warrants are each
subject to customary anti-dilution adjustments.
Dermot Desmond is an insider and a related party of Mountain
Province. The Transactions therefore each constitute a "related
party transaction" within the meaning of Multilateral Instrument
61-101 Protection of Minority Shareholders in Special
Transactions.
In accordance with MI 61-101 and the rules of the Toronto Stock
Exchange, the disinterest shareholders of the Company approved the
Transactions at a special meeting of shareholders held on Feb. 28,
2022.
The Loan Agreement constitutes the borrowing of money from, or the
entering into of, a credit facility with a related party.
Accordingly, pursuant to Section 5.4(1) of MI 61-101, a formal
valuation in respect of the Loan Agreement was not required.
In respect of the Warrants, Section 6.3(1) of MI 61-101 provides
the subject matter of a formal valuation are the non-cash assets
involved in a related party transaction. Pursuant to Section
6.3(2) of MI 61-101, because the non-cash assets, being the
Warrants, are securities of a reporting issuer, a formal valuation
in respect of the Warrants is also not required.
On Nov. 9, 2021, the board of directors of the Company established
a special committee of independent directors in connection with the
consideration and oversight of options to improve the Company's
capital structure and its short and long-term liquidity, including
by way of a restructuring or refinancing of its outstanding
indebtedness.
The review, direction and supervision of the Transactions fell
within the mandate of the Special Committee. Each member of the
Special Committee was independent of the Company's management and
the Lender and unrelated to the Transactions. The Special
Committee was advised by independent legal counsel and an
independent financial advisor, Eight Capital, in connection with
the Transactions.
The Special Committee reviewed and considered the Transactions and,
giving due consideration to the best interests of the Company and
the impact on shareholders and the Company's other stakeholders,
unanimously concluded that the Transactions were in the best
interests of the Company and that the terms of the Transactions are
reasonable in the circumstances of the Company.
About Mountain Province
Mountain Province is a Canadian-based resource company listed on
the Toronto Stock Exchange under the symbol 'MPVD'. The Company's
registered office and its principal place of business is 161 Bay
Street, Suite 1410, P.O. Box 216, Toronto, ON, Canada, M5J 2S1.
The Company, through its wholly owned subsidiaries 2435572 Ontario
Inc. and 2435386 Ontario Inc., holds a 49% interest in the Gahcho
Kue diamond mine, located in the Northwest Territories of Canada.
De Beers Canada Inc. holds the remaining 51% interest. The Joint
Arrangement between the Company and De Beers is governed by the
2009 amended and restated Joint Venture Agreement.
Mountain Province reported net income of C$276.17 million for the
year ended Dec. 31, 2021, compared to a net loss of C$263.43
million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the
Company had C$877.49 million in total assets, C$413.31 million in
total current liabilities, C$336,000 in lease obligations, C$92.39
million in decommissioning and restoration liability, C$20.72
million in deferred income tax liabilities, and C$350.73 million in
total shareholders' equity.
Toronto, Canada-based KPMG LLP, the Company's auditor since 1999,
issued a "going concern" qualification in its report dated March
28, 2022, citing that the Company faces liquidity challenges as a
result of liabilities with maturity dates through December 2022 and
short-term financial liquidity needs that raises substantial doubt
about its ability to continue as a going concern.
MOUNTAIN PROVINCE: Files Technical Report for Gahcho Kue Mine
-------------------------------------------------------------
Mountain Province Diamonds Inc. has filed a technical report for
the Company's Gahcho Kue Mine entitled, Gahcho Kue Mine NI 43-101
Technical Report, with effective date of Dec. 31, 2021.
Highlights of the updated Gahcho Kue NI 43-101 technical report
filed include:
* Pre-Tax/Royalty NPV 7.5% attributable to Mountain Province
Diamonds of $1,233M
* Post-Tax/Royalty NPV 7.5% attributable to Mountain Province
Diamonds of $964M
* Net 2.6M Carats in Reserve additions, before depletion
* Resource additions offsetting depletion
* 42.6 Million Carats of Reserves grading 1.51 Carats per Tonne.
* 3.0 Million Carats of Indicated Resources grading 1.25 carats
per tonne and 20.3 Million Carats of Inferred Resources grading
1.72 carats per tonne, exclusive of Reserves at Dec. 31, 2021.
* New Life-of-Mine plan featuring 3.6Mtpa processing rate,
improving Net-Present Value
* Eleven-percent increase in reserve grade of the Tuzo Kimberlite
to 1.33 carats/tonne at year-end 2021, vs 1.20 carats/tonne at
year-end 2020.
Mark Wall, the Company's president and chief executive officer,
commented:
"This technical report represents an important step of the process
to unlock value for all Mountain Province Diamonds stakeholders.
The strong economics shown in this technical report, combined with
the recently announced impairment reversal and favorable supply and
demand dynamics in the market are all strong signals of the
significant value opportunity the Company represents at current
levels."
The Report is effective Dec. 31, 2021, is dated March 28, 2022 and
was prepared in compliance with National Instrument 43-101 -
Standards for Disclosure of Mineral Projects. The Report is
available under Mountain Province Diamonds' profile on SEDAR at
www.sedar.com and on the Company's website at
www.mountainprovince.com. The Report was prepared by Michael
Makarenko, P. Eng., and Dino Pilotto, P. Eng., from JDS Energy &
Mining Inc., both of whom are "qualified persons" defined by
National Instrument 43-101 Standards of Disclosure for Mineral
Projects. The Report was also completed under the supervision of
Matthew MacPhail, P.Eng, MBA, and Tom E. McCandless, Ph.D., P.Geo.,
both employees of the Company and Qualified Persons as defined by
National Instrument 43-101 Standards of Disclosure for Mineral
Projects.
About Mountain Province
Mountain Province is a Canadian-based resource company listed on
the Toronto Stock Exchange under the symbol 'MPVD'. The Company's
registered office and its principal place of business is 161 Bay
Street, Suite 1410, P.O. Box 216, Toronto, ON, Canada, M5J 2S1.
The Company, through its wholly owned subsidiaries 2435572 Ontario
Inc. and 2435386 Ontario Inc., holds a 49% interest in the Gahcho
Kue diamond mine, located in the Northwest Territories of Canada.
De Beers Canada Inc. holds the remaining 51% interest. The Joint
Arrangement between the Company and De Beers is governed by the
2009 amended and restated Joint Venture Agreement.
Mountain Province reported net income of C$276.17 million for the
year ended Dec. 31, 2021, compared to a net loss of C$263.43
million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the
Company had C$877.49 million in total assets, C$413.31 million in
total current liabilities, C$336,000 in lease obligations, C$92.39
million in decommissioning and restoration liability, C$20.72
million in deferred income tax liabilities, and C$350.73 million in
total shareholders' equity.
Toronto, Canada-based KPMG LLP, the Company's auditor since 1999,
issued a "going concern" qualification in its report dated March
28, 2022, citing that the Company faces liquidity challenges as a
result of liabilities with maturity dates through December 2022 and
short-term financial liquidity needs that raises substantial doubt
about its ability to continue as a going concern.
NEW MOUNTAIN LAUREL: Seeks Cash Collateral Access
-------------------------------------------------
New Mountain Laurel Resort & Spa, LLC asks the U.S. Bankruptcy
Court for the Eastern District of New York for authority to use the
cash collateral of Hanover Bank, LEAF Capital Funding LLC, and
Dexter Financial Services, Inc.; and provide adequate protection.
The Debtor has significant and immediate cash needs to continue
paying its ongoing obligations as a debtor-in-possession, propose a
plan, and emerge from bankruptcy.
The Debtor seeks to use cash collateral in accordance with the
budget.
As adequate protection for any diminution in the value of Hanover's
interest in its collateral resulting from:
(a) the Debtor's use of cash collateral;
(b) use, sale or lease of Hanover's collateral; or
(c) the imposition of the automatic stay under Bankruptcy Code
section 362(a),
Hanover will receive the following adequate protection: (i)
replacement liens under Bankruptcy Code section 361(2) on all
property of the Debtor and its estate, whether now owned or
hereafter acquired; and (ii) to the extent required by the
pre-petition loan documents to the same extent and validity as its
pre-petition liens.
Furthermore, Hanover will receive, on a monthly basis from the
Debtor, payments in the amount of $27,709, without prejudice to the
characterization of said payments.
As adequate protection for any diminution in the value of LEAF's
interest in its collateral resulting from:
(a) the Debtor's use of cash collateral;
(b) use, sale or lease of LEAF's collateral; or
(c) the imposition of the automatic stay under Bankruptcy Code
section 362(a) (the aggregate amount of such diminution being the
Adequate Protection Lien),
LEAF will receive the following adequate protection: (i)
Replacement Liens under Bankruptcy Code section 361(2) on all
property of the Debtor and its estate, including Post-petition
Collateral; and (ii) to the extent required by the pre-petition
accounts receivable purchase and sale agreement to the same extent
and validity as its pre-petition liens.
Furthermore, LEAF will receive, on a monthly basis from the Debtor,
payments in the amount of $6,230, without prejudice to the
characterization of said payments.
As adequate protection for any diminution in the value of Dexter
Financial's interest in its collateral resulting from:
(a) the Debtor's use of cash collateral;
(b) use, sale or lease of Dexter Financial's collateral; or
(c) the imposition of the automatic stay under Bankruptcy Code
section 362(a) (the aggregate amount of such diminution being the
Adequate Protection Lien),
Dexter Financial will receive the following adequate protection:
(i) Replacement Liens under Bankruptcy Code section 361(2) on all
property of the Debtor and its estate, including Post-petition
Collateral; and (ii) to the extent required by the pre-petition
accounts receivable purchase and sale agreement to the same extent
and validity as its pre-petition liens.
Furthermore, Dexter Financial will receive, on a monthly basis from
the Debtor, payments in the amount of $1,582, without prejudice to
the characterization of said payments.
The Adequate Protection Liens will be subject to the carve outs
consisting of fees required to be paid to the Clerk of the Court
and the Subchapter V Trustee, as allowed by the Court, the
Bankruptcy Code and the Bankruptcy Rules, reasonable fees and
expenses up to, and not to exceed $7,500 incurred by a trustee
under Bankruptcy Code section 726(b), all accrued and unpaid fees
and expenses incurred by persons or firms retained by Debtor under
Bankruptcy Code sections 327, 328, or 363 and any statutory
committee appointed under Bankruptcy Code sections 328 or 1103, and
allowed Professional Fees of Professional Persons incurred on and
after the first business day following delivery of the Carve Out
Trigger Notice will be subject to an aggregate cap of $50,000.
A copy of the motion is available at https://bit.ly/3tOY56x from
PacerMonitor.com.
About New Mountain Laurel Resort & Spa, LLC
New Mountain Laurel Resort & Spa, LLC is a Delaware limited
liability company with its corporate office located at 139-27
Queens Blvd., Jamaica, New York 11435. New Mountain Laurel is a
management company operating and managing the Mountain Laurel
Resort, which is a 145-guest room hotel, resort and spa, and which
includes 94 timeshare units located in the Pocono Mountains. The
Resort's address is 81 Treetop Drive, White Haven, Pennsylvania
18661.
New Mountain Laurel sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-40620) on March 25,
2022. In the petition signed by Ana Olson, independent manager, the
Debtor disclosed $728,783 in assets and $6,712,758 in liabilities.
Judge Jil Mazer-Marino oversees the case.
Avrum J. Rosen, Esq., at Law Offices of Avrum J. Rosen, PLLC is the
Debtor's counsel.
NORTHERN MARIANA CPA: Fitch Affirms BB on 1998A/2005A Bonds
-----------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on approximately $18.3
million of outstanding Commonwealth Ports Authority (CPA),
Commonwealth of the Northern Mariana Islands (CNMI) senior series
1998A and 2005A seaport revenue bonds. The Rating Outlook is
Stable.
RATING RATIONALE
The rating reflects the essentiality of the ports to a small,
island economy amidst high exposure to economic volatility from
tourism and a nearly 100% import-based cargo operation. The rating
also considers CPA's sustained revenue performance and history of
controlled expenses. Despite recent adverse impacts on operational
performance, CPA is expected to maintain financial metrics
supportive of the current rating level. Under Fitch's rating case
scenario, coverage levels average 1.7x through the forecast period.
CPA further benefits from robust liquidity levels that provide some
mitigation to a prolonged softening of cargo demand.
KEY RATING DRIVERS
Concentrated but Vital Cargo Base - Revenue Risk (Volume): Weaker
The seaports remain essential for the import of goods to an island
economy; however, there is potential for stagnant operational
trends, due to CNMI's exposure to macroeconomic factors, and its
elevated dependence on a limited tourist base. Volume stability is
expected, given that food and fuel related cargos account for
approximately 50% of import-dependent revenue tonnage.
Limited Pricing Power - Revenue Risk (Price): Weaker
CNMI's narrow economy and exposure to economic volatility limit
management's economic flexibility to raise rates on seaport system
tenants and users. Following the last increase in 2009, the
authority's focus has instead been on effective containment of
operating expenses.
Modest Capital Improvement Plan - Infrastructure Development &
Renewal: Midrange
The ports once handled nearly twice as much cargo, and are in
satisfactory condition to deal with current and forecasted demand.
The authority's capital improvement plan (CIP) is manageable and
funded with grants and internally generated funds. No additional
debt is anticipated in the near to medium term.
Conservative Capital Structure - Debt Structure: Stronger
The authority maintains 100% fixed-rate, fully amortizing debt with
a level debt service profile and a 2031 final maturity. Structural
features and reserves are sufficient and consistent with other
Fitch-rated ports.
Financial Profile
CPA maintained favorable leverage and liquidity metrics offset by a
modest coverage ratio of 1.4x in fiscal 2021 (unaudited). Estimated
fiscal 2021 net debt-to-cash flow available for debt service
(CFADS) is negative, reflecting cash balances exceeding debt
outstanding. The CPA maintains strong balance sheet cash and
reserves available for operating expenses, with days cash on hand
(DCOH) currently exceeding 1,800. These liquidity and leverage
metrics provide the CPA with some degree of flexibility to meet
financial commitments in weak performing periods. Rating case
coverages are expected to average 1.7x through the projection
period.
PEER GROUP
Paita (Peru) (BB+/Stable) serves as a global peer with a similar
coverage level and regionally focused importance. Both ports have
weaker volume risk attributes, with CPA relying nearly 100% on
import-based cargo. The Hawaii Department of Transportation
(AA-/Stable) is a U.S. port with a similar operational profile,
strong financial metrics and island economy structure. However,
Hawaii's operations are on a much larger scale, the service area is
seen as less economically volatile, and tariff increases are
increased annually by the greater of 3% or CPI, resulting in
stronger volume assessment and midrange price assessment all
contributing to Hawaii's much higher rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A severely weakened underlying service area economy that
results in the seaports' inability to maintain cargo levels at
or near current levels for a sustained period;
-- Depressed debt service coverage levels resulting from
declining operating revenues;
-- A shift in the seaports' balance sheet liquidity and financial
flexibility resulting from changes in operating expense
management or pricing power.
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Given the ports' limited operating profile and significant
exposure to local economic factors, positive rating migration
is not anticipated at present.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
CREDIT UPDATE
Revenue trends have been volatile in the past few years, attributed
to the reduction in inbound revenue tonnage and damage from storms
such as Super Typhoon Yutu that have passed through the CNMI, and
also the pandemic. While the ports are located in an island economy
with exposure to tourism, CPA also has a mix of non-operating
revenues (grants and interest income) to help offset declines in
operating revenue.
Seaport operations at all three ports (Saipan, Tinian, and Rota)
have continued throughout the pandemic. Although operations have
not ceased, incoming revenue tonnage has remained depressed,
resulting in a 18% decline in overall seaport revenues in estimated
fiscal 2021 relative to 2019. Total tonnage in fiscal 2021 has
recovered to 80% of pre-pandemic total tonnage in fiscal 2019.
The decrease in revenue tonnage is due to the decreased shipping
activity caused by the pandemic. Fitch views positively the U.S.
military divert airfield project that has been contracted for the
island of Tinian, which CPA expects to drive an increase in
construction materials tonnage for fiscal 2022. The project is
anticipated to be completed in 2025.
Coverage in fiscal 2021 is estimated at approximately 1.4x, and
leverage remains negative, benefitting from strong balance sheet
cash and reserves. Though coverage is expected to remain depressed
over the next 1-2 years, the reductions in seaport operations and
revenue are offset by stable non-operating income and a low debt
service obligation of just over $3 million through 2028 before
stepping down to 540k through maturity in 2031.
FINANCIAL ANALYSIS
Given that the port system has not yet returned to normal
operations and recovered to historical cargo volumes due to the
current operating environment, Fitch's rating case is also
considered the base case. Fiscal 2021 revenue performance is based
on preliminary actual performance. The differences for each case
focus on the level and speed of cargo revenue recovery starting in
2022 and through the next several years.
Fitch's rating case reflects the budget for fiscal 2022, followed
by conservative expectations of future performance thereafter.
Fitch assumes revenue recovery to 95% in fiscal 2023 and a full
recovery to 2019 levels by fiscal 2024, followed by low growth of
1.5% per year thereafter. Under the rating case, DSCR averages 1.7x
through 2026 and 4.3x through debt maturity in 2031. The leverage
profile remains negative through the projection period.
Fitch's downside case reflects a prolonged recovery back to 2019
levels. Revenues are expected to recover to 80% in fiscal 2022, 90%
in fiscal 2023, 95% in fiscal 2024, and 100% of 2019 levels by
fiscal 2025. Similar to the base case, Fitch assumes low annual
growth of 1.5% thereafter through maturity. Under these
assumptions, DSCR averages 1.6x through 2026 and 3.7x through
maturity. Leverage remains negative through the projection period.
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.
NOVABAY PHARMACEUTICALS: Reports $5.8 Million Net Loss in 2021
--------------------------------------------------------------
Novabay Pharmaceuticals, Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss and comprehensive loss of $5.82 million on $8.42 million of
net total sales for the year ended Dec. 31, 2021, compared to a net
loss and comprehensive loss of $11.04 million on $9.93 million of
net total sales for the year ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $23.98 million in total
assets, $13.81 million in total liabilities, and $10.17 million in
total stockholders' equity.
As of Dec. 31, 2021, the Company's cash and cash equivalents were
$7.5 million, compared to $12.0 million as of Dec. 31, 2020. Based
primarily on the funds available at Dec. 31, 2021, management
believes that the Company's existing cash and cash equivalents and
cash flows generated from product sales will be sufficient to
enable the Company to meet its planned operating expenses at least
through March 29, 2023. However, changing circumstances may cause
the Company to expend cash significantly faster than currently
anticipated, and the Company may need to spend more cash than
currently expected because of circumstances beyond its control that
impact the broader economy such as the COVID-19 pandemic and the
conflict between Russia and Ukraine.
Net cash used in operating activities was $9.2 million for the year
ended Dec. 31, 2021, which consisted primarily of a net loss of
$5.8 million, adjusted primarily by non-cash gain of $4.6 million
on the change in fair value of warrant liability, stock-based
compensation expenses of $0.9 million, and a net decrease of
$38,000 in its net operating assets and liabilities.
Net cash used in operating activities was $4.7 million for the year
ended Dec. 31, 2020, which consisted primarily of a net loss of
$11.0 million, adjusted primarily by non-cash loss of $5.2 million
on the change in fair value of warrant liability, stock-based
compensation expenses of $0.5 million, issuance of RSUs for
services of $0.2 million, non-cash interest expense related to
amortization of debt issuance cost and debt discount of $0.2
million, and a net increase of $0.2 million in our net operating
assets and liabilities.
For the years ended Dec. 31, 2021, cash used in investing
activities was $12.0 million which was primarily the result of
$12.0 million, net of cash, paid at closing of the DERMAdoctor
Acquisition. Capital expenditures were $52,000 and $26,000 for the
years ended Dec. 31, 2021 and 2020, respectively, for the purchase
of property and equipment.
Net cash provided by financing activities was $17.0 million for the
year ended Dec. 31, 2021. The Company received net proceeds of
$14.9 million from the 2021 Private Placement. Additionally, the
Company received net proceeds of $1.8 million from an at-the-market
offering and equity program with Ladenburg Thalmann & Co. Inc.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1389545/000143774922007543/nby20211231b_10k.htm
About Novabay
Headquartered in Emeryville, California, NovaBay Pharmaceuticals,
Inc. -- http://www.novabay.com-- is a biopharmaceutical company
focusing on commercializing and developing its non-antibiotic
anti-infective products to address the unmet therapeutic needs of
the global, topical anti-infective market with its two distinct
product categories: the NEUTROX family of products and the
AGANOCIDE compounds. The Neutrox family of products includes
AVENOVA for the eye care market, CELLERX for the aesthetic
dermatology market, and NEUTROPHASE for wound care market.
Novabay reported a net loss and comprehensive loss of $9.66 million
for the year ended Dec. 31, 2019, and a net loss and comprehensive
loss of $6.54 million for the year ended Dec. 31, 2018. As of Sept.
30, 2021, the Company had $12.24 million in total assets, $2.88
million in total liabilities, and $9.36 million in total
stockholders' equity.
OLYMPIA SPORTS: Wins Cash Collateral Access Thru April 30
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
has authorized Olympia Sports, Inc. to use cash collateral on an
interim basis in accordance with the budget through April 30,
2022.
The Debtor requires immediate authority to use cash collateral to
continue its business operations without interruption toward the
objective of formulating an effective plan of reorganization.
The Small Business Administration asserts a security interest in,
among other things, accounts receivable, equipment, inventory, and
proceeds thereof, to secure its liens. The SBA has filed a UCC-1
Financing Statement.
The Debtor is permitted to use cash collateral for these purposes:
a. maintenance and preservation of its assets;
b. the continued operation of its business, including but not
limited to payroll, payroll taxes, employee expenses, and insurance
costs;
c. the completion of work-in-process; and
d. the purchase of replacement inventory.
The motion as relates to determining whether Adidas is designated
as a Critical Vendor is dismissed without prejudice.
As adequate protection for use of cash collateral, the Secured
Creditor is granted a replacement perfected security interest under
Section 361(2) of the Bankruptcy Code to the extent the Secured
Creditor's cash collateral is used by the Debtor.
To the extent the adequate protection provided proves insufficient
to protect the Secured Creditor's interest in and to the cash
collateral, the Secured Creditor will have a superpriority
administrative expense claim, pursuant to Section 507(b) of the
Bankruptcy Code, senior to any and all claims against the Debtor
under Section 507(a) of the Bankruptcy Code.
The Debtor is also directed to make $731 in monthly payments to the
SBA. The payments are to be made the first of every month beginning
April 1.
The final hearing on the matter is scheduled for April 6 at 12:30
p.m.
A copy of the order and is available for free at
https://bit.ly/3qVneL8 from PacerMonitor.com.
About Olympia Sports, Inc.
Olympia Sports, Inc. owns and operates a shoes and clothing retail
store. Olympia Sports sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 22-10535) on March
2, 2022. In the petition signed by Jae Ko, president, the Debtor
disclosed $426,214 in assets and $1,001,666 in liabilities.
Judge Ashely M. Chan oversees the case.
Robert N. Braverman, Esq., at McDowell Law, PC is the Debtor's
counsel.
PARAISO LLC: Taps Nathaniel Peter Holzer as Bankruptcy Attorney
---------------------------------------------------------------
Paraiso, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire
Nathaniel Peter Holzer, Esq., an attorney serving Corpus Christi,
Texas, to handle their Chapter 11 cases.
Mr. Holzer will render these services:
a. take all necessary action to ensure compliance with the
U.S. trustee's guidelines, the court's local rules, and the
Bankruptcy Code provisions applicable to Chapter 11 filings;
b. take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on the
Debtors' behalf, the defense of any actions commenced against the
Debtors, the negotiation of disputes in which the Debtors are
involved, and the analysis and preparation of objections to claims
filed against the estates;
c. prepare legal papers;
d. take all necessary actions, including drafting and
negotiations in connection with a Chapter 11 plan and related
documents;
e. challenge the extent, validity or priority of claims
against the estates, and liens claimed on property of the estates;
f. analyze or prosecute any Chapter 5 cause of action; and
g. perform all other necessary legal services for the
Debtors.
Mr. Holzer will charge $450 per hour for attorney's services and
$200 per hour for paralegal time. He received a security retainer
in the sum of
Mr. Holzer received a security retainer in the sum of $25,000.
As disclosed in court filings, Mr. Holzer does not represent
interests adverse to the Debtors and their estates.
Mr. Holzer holds office at:
Nathaniel Peter Holzer, Esq.
4102 Ocean Drive
Corpus Christi, TX 78411
Tel: 361-563-6175
Email: pete@npholzerlaw.com
About Paraiso LLC
Paraiso, LLC filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Case No. 22-60011) on March 8,
2022, listing as much as $1 million in both assets and liabilities.
Brendon D. Singh serves as Subchapter V trustee.
Judge Christopher M. Lopez oversees the case.
Nathaniel Peter Holzer, Esq., a practicing attorney in Corpus
Christi, Texas, handles the Debtor's Chapter 11 case.
PARK SUPPLY: Wins Cash Collateral Access Thru June 27
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota has
authorized Park Supply of America, Inc. to use cash collateral on a
final basis and provide adequate protection.
The Debtor is permitted to use cash, including cash collateral that
may be subject to Sunrise Banks, N.A.'s lien, through June 27,
2022. The Debtor is not authorized to use cash to pay: (a) any
pre-petition debts except those authorized by a Court order on the
Debtor's Motion for Expedited Hearing and For Order (I) Authorizing
the Debtors to Pay Prepetition Wages, Salaries and Employee
Benefits; (II) Authorizing the Debtors to Continue the Maintenance
of Employee Benefit Programs; and (III) Directing All Banks to
Honor Prepetition Payments of Employee Obligations; or (b) any
professional fees.
The Court said the Debtor's cash access is conditioned upon:
a. The Debtor's continued retention of Alliance Management
as a chief restructuring officer, with the following
powers:
1. Any expense over $10,000 must be pre-approved by
the CRO;
2. The CRO will have final authority for the Debtor
(subject to Bankruptcy Court approval) with respect
to a sale of the Debtor's business and assets under
Section 363;
3. The CRO will have final authority for the Debtor to
determine whether a sale of the Debtor's business
and assets under Section 363 or any plan of
reorganization is in the best interest of the
estate.
b. The Debtor making adequate protection payments to
Sunrise Banks, N.A. in the amount of $10,000 per month.
The Debtor agreed to make the adequate protection
payments by the 5th of each month. The application of
these payments to the amounts due to the Bank is
reserved for later determination.
c. The Debtor providing the Bank with accounts receivable
aging reports, on a weekly basis;
d. The Debtor providing the Bank with weekly borrowing
base certificates, using the BBC Form;
e. The Debtor providing the Bank with a weekly comparison
of the Petition Date borrowing base certificate with
the current borrowing base certificate;
f. The Debtor providing the Bank with any other financial
reports and other supporting documentation reasonably
requested by the Bank within three business days of
request;
g. The Debtor providing monthly financial information,
including but not limited to, balance sheet and
income statement, by the 20th of the following month;
h. The Debtor maintaining combined collateral values at
or above the petition date values;
i. The Debtor opening a debtor in possession account at
U.S. Bank;
j. The Debtor providing the Bank with copies of bank
statements showing all activity in the DIP Account, as
well as any pre-petition account which remains open,
each week and other backup requested by the Bank
(including but not limited to, all checks over $500);
k. The CRO and the Debtor diligently pursuing the sale of
the Debtor's business and assets and complying with
the following deadlines:
1. On or before April 1, 2022, obtain letters of
intent or indications of interest in connection
with the sale of the Debtor's business and assets.
2. Upon request, the CRO providing the Bank with
periodic updates on the status of its efforts.
As adequate protection, the Bank is granted a valid, perfected
replacement security interest in and lien on all pre-petition and
post-petition property and assets of the Debtor and its estate
(including but not limited to the DIP Account), in an amount equal
to the diminution in value of the interests in the pre-petition
collateral from and after the filing of the petition. The
replacement liens and security interests will have the same
dignity, priority and effect as the Bank's liens and security
interests on pre-petition assets of the Debtor.
The Bank will not be required to file any financing statement,
notice of lien or similar instrument in any jurisdiction or take
any other action in order to perfect the post-petition security
interests and liens granted by the Order (including but not limited
to the security interest in the DIP Account).
The Bank has consented to a carve-out of up to $100,000 for payment
of professional expenses related to pursuing a sale process.
Subject to this carveout, absent further Court order, the Debtor is
not permitted to use cash to pay any professional fees.
A copy of the order is available at https://bit.ly/35toxta from
PacerMonitor.com.
About Park Supply of America, Inc.
Park Supply of America, Inc. is a merchant wholesaler of hardware,
and plumbing and heating equipment and supplies.
Park Supply of America sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Minn. Case No. 22-40003) on January
3, 2022. In the petition signed by James Dada, COO/CFO, the Debtor
disclosed $1,706,019 in assets and $2,593,406 in liabilities.
Judge William J. Fisher oversees the case.
Cameron A. Lallier, Esq., at Foley and Mansfield PLLP is the
Debtor's counsel.
PARS BRONX: Case Summary & Two Unsecured Creditors
--------------------------------------------------
Debtor: Pars Bronx Realty LLC
75-27 196th Street
Fresh Meadows, NY 11366
Business Description: Pars Bronx Realty is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: April 5, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-40714
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Gus Michael Farinella, Esq.
LAW OFFICES OF GUS MICHAEL FARINELLA, PC
110 Jericho Turnpike
Suite 100
Floral Park, NY 11001
Tel: (212) 675-6161
Fax: (212) 675-4367
E-mail: gmf@lawgmf.com
Total Assets: $0
Total Liabilities: $1,794,435
The petition was signed by Pari Keyhani Shojae, owner/president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/MJCCW7Y/Pars_Bronx_Realty_LLC__nyebke-22-40714__0001.0.pdf?mcid=tGE4TAMA
PATH MEDICAL: May Use Cash Collateral Thru May 26
-------------------------------------------------
At the behest of Path Medical LLC and Path Medical Center Holdings,
Inc., the U.S. Bankruptcy Court for the Southern District of
Florida, Fort Lauderdale Division, issued an agreed order
authorizing the Debtors to continue using cash collateral of Sound
Point Agency, LLC, from April 1 through May 26, 2022.
Sound Point is the successor to lender Medley Capital, LLC.
On October 11, 2016, the Debtors entered into a Credit Agreement,
by and among Medley Capital LLC, as Administrative Agent and
Collateral Agent and the lenders party thereto. The Credit
Agreement provides for a senior secured first lien credit facility
in the aggregate principal amount of $82,500,000 comprised of (a) a
term loan in the aggregate principal amount of $42,500,000 and (b)
delayed draw term loans in the aggregate principal amount of up to
$40,000,000.
Path is the borrower under the Credit Agreement. Pursuant to the
Guaranty and Security Agreement, dated as of October 11, 2016, by
and among the Debtors and the Agent, Holdings agreed to guaranty
Path's obligations under the Credit Agreement. In accordance with
the Security Agreement, the Debtors granted the Lenders first
priority liens on and security interests in all of the Debtors’
personal property and other assets.
As of the Petition Date, the obligations outstanding under the
Credit Agreement are not less than $75,000,000, plus interest,
costs and attorneys' fees.
The Debtors have developed a Renewed Budget for further use of cash
collateral through and including May 26, 2022. The Debtors believe
the Renewed Budget provides the Debtors with adequate liquidity
during the interim period. The Renewed Budget contains line items
for cash flows anticipated to be received and disbursed during the
time period for which the Renewed Budget is prepared.
As adequate protection for the use of cash collateral, the Debtors
propose to provide the Secured Parties with:
a. valid, binding, continuing, enforceable, fully-perfected,
non-avoidable first priority liens and/or replacement liens on, and
security interests in all of Prepetition Collateral, and all
post-petition assets of the Debtors of the same type and nature,
and the proceeds thereof.
b. valid, binding, continuing, enforceable, fully perfected,
non-avoidable first priority liens, and security interest in all
unencumbered property of the Debtors and all post-petition assets
of the Debtors of the same type and nature, and the proceeds
thereof.
c. an allowed super-priority administrative expense claim
against the Debtors and the Debtors' estate as provided in and
subject to the provisions of section 507(b) of the Bankruptcy
Code.
The Debtors agree to maintain at all times liquidity in the minimum
amount of $125,000.
A copy of the motion and the Debtors' 13-week budget for the period
from March 14 to June 6, 2022 is available at
https://bit.ly/3LrudTE from PacerMonitor.com. A copy of the Agreed
Order is available at https://bit.ly/3x1jCuV from
PacerMonitor.com.
The Debtors project $11,103,800 in total cash collections and
$12,144,000 in total cash disbursements for the period.
About Path Medical
Path Medical Center Holdings, Inc., is the 100% owner and sole
member of Path Medical, LLC. In addition to its ownership of Path,
Holdings is an employee leasing company for Path. Path is a
healthcare company with 24 clinics across the state of Florida.
Path Medical, LLC, and Path Medical Center Holdings filed their
voluntary petitions for Chapter 11 protection (Bankr. S.D. Fla.
Lead Case No. 21-18338) on Aug. 28, 2021. Manual Fernandez, chief
executive officer, signed the petitions.
At the time of filing, Path Medical listed $30,047,477 in assets
and $86,494,715 in liabilities while Path Medical Center listed
$220,060 in assets and $76,988,419 in liabilities.
Judge Scott M. Grossman oversees the cases.
Brett Lieberman, Esq., at Edelboim Lieberman Revah Oshinsky, PLLC,
is the Debtor's legal counsel. The Official Committee of Unsecured
Creditors tapped Greenberg Traurig, P.A., to serve as its counsel,
and Province Inc. to serve as its financial advisor.
PATH MEDICAL: Plan Solicitation Period Extended to May 26
---------------------------------------------------------
Judge Scott Grossman of the U.S. Bankruptcy Court for the Southern
District of Florida extended to May 26 the exclusivity period for
Path Medical, LLC and Path Medical Center Holdings, Inc. to solicit
acceptances for their joint Chapter 11 plan.
The extension will give the companies sufficient time after court
hearing on their disclosure statement to provide notice for, among
other things, filing objections and the hearing to consider
confirmation of the plan as required by Rule 2002 of the Federal
Rules of Bankruptcy Procedure, according to their attorney, Brett
Lieberman, Esq., at Edelboim Lieberman Revah, PLLC.
The companies filed their joint plan earlier this year, which
provides for the sale of substantially all of their assets and the
formation of a liquidating trust for the benefit of creditors.
Currently, the companies are negotiating with their creditors and
other concerned parties. They have also engaged an investment
banker to help facilitate the potential sale of their assets to a
prospective buyer.
About Path Medical
Path Medical Center Holdings, Inc. is the 100% owner and sole
member of Path Medical, LLC, a healthcare company with 24 clinics
across Florida. It is also an employee leasing company for Path
Medical.
Path Medical and Path Medical Center filed their voluntary
petitions for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No.
21-18338) on Aug. 28, 2021. Manual Fernandez, chief executive
officer, signed the petitions.
At the time of the filing, Path Medical listed $30,047,477 in
assets and $86,494,715 in liabilities while Path Medical Center
listed $220,060 in assets and $76,988,419 in liabilities.
Judge Scott M. Grossman oversees the cases.
Brett Lieberman, Esq., at Edelboim Lieberman Revah, PLLC, is the
Debtors' legal counsel. The official committee of unsecured
creditors tapped Greenberg Traurig, P.A. as its legal counsel and
Province Inc. as its financial advisor.
On Jan. 26, 2022, the Debtors filed a joint Chapter 11 plan and
disclosure statement, which provide for the sale of substantially
all of their assets and the formation of a liquidating trust for
the benefit of creditors.
PERRIGO INVESTMENTS: Fitch Gives 'BB+(EXP)' Rating to Unsec. Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+(EXP)'/'RR4'rating to Perrigo
Investments LLC's and Perrigo Investments Capital, Inc.'s
(co-issuers) proposed senior unsecured notes. The net proceeds will
partly fund the roughly $2.1 billion cash acquisition of HRA
Pharma. The acquisition will result in leverage (total debt/EBITDA)
remaining above 3.5x beyond 18-24 months after the acquisition. The
notes are guaranteed by Perrigo Company plc (BB+/Stable) and rated
in line with its senior unsecured debt.
KEY RATING DRIVERS
Acquisition and Elevated Leverage: The acquisition of HRA Pharma
will add three category-leading self-care brands in blister care,
women's health and scar care to Perrigo's product portfolio. These
platforms offer higher growth and margins relative to Perrigo's
base business. Fitch expects that the company will be able to
generate around $46 million in annual cost synergies during the
next three years. There are likely some attainable revenue
synergies, but Fitch has not incorporated any into its forecast.
The acquisition will consume balance sheet cash, which will prevent
Perrigo from reducing debt in the near term, causing leverage to
remain above 3.5x for more than 18-24 months.
Business Transformation/Restructuring: The company has largely
completed its effort to transform its business. In 2019, the
company initiated a reorganization plan in order to refocus on
priorities, increase efficiencies and improve growth, targeting
$100 million in net savings by 2022. Perrigo divested its generic
prescription pharmaceuticals business for $1.55 billion, including
$1.5 billion in cash in 2021. In addition, the company divested its
animal health, international prescription drug businesses and other
businesses. On the growth side, the company completed a number of
targeted acquisitions in existing or adjacent product categories,
and Fitch expects this strategy to continue.
Pandemic Challenging but Manageable: The company has been able to
sustain operations during the coronavirus pandemic. Adjustments to
scheduling modestly challenged operating efficiency, but Perrigo
has largely satisfied consumer demand. Alternative sourcing helped
to mitigate any supply constraints. E-commerce revenues grew
rapidly during the pandemic as consumers increased their level of
online shopping.
Scale and Diversification: Perrigo is by far the largest
manufacturer of private label over-the-counter (OTC) medicines. The
company's significant scale positions it well to serve a broad
range of customers, including large retailers. Perrigo serves
Walmart, Target, Walgreens, CVS, Sam's Club, Amazon and Costco.
Walmart is Perrigo's largest customer and accounts for roughly 14%
of sales, and no other customer comprises 10% or greater of sales.
In addition, no product category accounts for more than 10% of
total sales. The company generates roughly 68% of its revenues in
the U.S., 27% in Europe and 5% in other geographies.
Contingent Tax Liability Reduced: The company has resolved its
Irish Tax Assessment risk for EUR266 million in cash. Perrigo plc
funded it with the proceeds of a EUR355 million Belgian arbitration
award. The Irish Office of the Revenue Commissioners issued a
Notice of Amended Assessment on in November 2018 that assesses a
tax liability against Perrigo of EUR1,636 million and subsequently
reduced it by EUR600 million.
Consistently Positive FCF: Perrigo is a consistent generator of
positive FCF. The company benefits from relatively reliable demand,
generally stable margins and manageable capital expenditures. Fitch
expects the company to generate roughly $250 million in annual FCF
during the forecast period. However, contingent liability and tax
disputes could offset the expected results at some point in the
future.
Dependable Demand: Consumer health care products and prescription
medicines benefit from relatively reliable demand. Sales tend to be
recession-resistant as most people prioritize health care needs.
OTC medicines can be purchased without a physician's prescription
and offer relief for some non-critical medical issues. In addition,
private label brands offer less costly alternatives to brand-name
products, attracting cost-conscious consumers, while at the same
time offering higher margins to retailers. Consumers have been
gradually switching to private-label alternatives.
DERIVATION SUMMARY
Perrigo's most relevant peer is P&L Development Holdings, LLC's
(B-/Stable), as both manufacture and market private label OTC
health care products. Perrigo is significantly larger and more
diverse in terms of products and geographies. Nevertheless, P&L
Development Holdings, LLC offers an alternative to retailers as the
second-largest player in the space. In addition, Perrigo operates
with leverage (total debt/EBITDA) significantly lower than P&L
Development Holdings. Both companies' products are mainly paid for
by large retailers with meaningful negotiating power.
Perrigo divested its prescription generic drug business in 2021 and
now focuses on consumer health care. It also has a portfolio of
branded products. However, Perrigo and generic prescription drug
manufacturers have some similar manufacturing processes and offer
lower cost private label/generic products compared to branded
products. Viatris (fka Mylan N.V; BBB/Stable) and Teva
Pharmaceutical Industries Limited (BB-/Stable) are much larger than
Perrigo in terms of size and scope of operations in the generic
prescription drug market. Both companies' products are mainly paid
for by large commercial and public payers with significant
negotiating power.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- The company completes its acquisition of HRA Pharma for
roughly $2.1 billion cash with roughly $46 million in annual
cost synergies by 2024;
-- Revenues grow organically about 3% annually driven by
digestive health products and nutritional products in CSCA
segment;
-- Moderately increasing margins;
-- Annual FCF of roughly $200 million-$300 million;
-- Small tuck-in acquisitions targeting OTC products;
-- Near-term debt maturities to be refinanced;
-- Total debt with equity credit/EBITDA remains above 3.5x during
the next 24 months.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage (total debt/EBITDA) is sustained below 3.5x,
driven by EBITDA growth and some debt reduction;
-- Near-term M&A is targeted and doesn't negatively affect
Perrigo's deleveraging ability.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross leverage (total debt/EBITDA) sustainably above 4.0x 18-
24 months post acquisition;
-- Integration issues with HRA that would materially and durably
stress FCF;
-- Additional leveraging M&A in the near term.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Fitch expects Perrigo to maintain adequate liquidity throughout the
forecast period. At Dec. 31, 2021, PRGO had balance sheet cash of
approximately $1.86 billion, $1.7 million of current assets held
for sale and full availability on its revolving credit agreement
and Fitch's expectation of $200 million to $300 million of FCF per
year. At Dec. 31, 2021, debt maturities were manageable with $600
million due in 2022, $369 million in 2023, $700 million in 2024 and
$1.84 billion thereafter.
Recovery Assumptions
Fitch applies a generic approach to rate and assign RRs to
instruments for issuers rated 'BB-' or above. Perrigo Investments
LLC's first liens security on its bank facility are considered
Category 1 first liens as they are not contractually, structurally
or practically junior to ABL facilities and warrant a 'BBB-'/'RR1',
one notch above the Issuer Default Rating (IDR). The unsecured debt
is rated 'BB-'/RR4', the same as the IDR.
ISSUER PROFILE
Perrigo is the largest manufacturer of private label OTC medicines.
The company focuses on the quality and affordability of its
products. P&L Development, the second-largest firm in the space is
significantly smaller and less diversified than Perrigo.
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.
PERRIGO INVESTMENTS: S&P Rates New $500MM Sr Unsecured Notes 'BB-'
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '5'
recovery rating to Perrigo Investments LLC's proposed $500 million
senior unsecured notes due 2030. The '5' recovery rating indicates
its expectation that noteholders would receive modest (10%-30%;
rounded estimate: 20%) recovery in the event of a payment default.
The recovery prospects for the senior unsecured noteholders reflect
the significant amount of priority senior secured debt ranking
ahead of the unsecured notes in the company's capital structure.
Perrigo will use the net proceeds from the offering, together with
borrowings from its new $2.1 billion senior secured credit
facilities, in part to finance its acquisition of Hera SAS (HRA).
The proposed notes will be guaranteed on a senior unsecured basis
by parent Perrigo Co. PLC and its subsidiaries that provide
guarantees under the new credit facilities. Perrigo's existing
$2.54 billion of senior unsecured notes, which will remain
outstanding after the transaction closes, will concurrently receive
substantially the same guarantee package as the proposed notes.
Therefore, S&P views the proposed and existing senior unsecured
notes as pari passu.
All of S&P's existing ratings on Perrigo, including its 'BB' issuer
credit rating and stable outlook, are unchanged.
S&P said, "Our ratings on the company reflect its re-positioning as
a pure-play global consumer self-care company following the
divestiture of its generic prescription drug business, as well as
our belief that its supply chain management expertise--historically
a credit strength, particularly in its U.S. store brand
operation--will return following widespread inefficiencies across
the global economy in 2021. They also reflect our expectation that
Perrigo's financial policy will become less aggressive.
Specifically, we expect its S&P Global Ratings-adjusted leverage,
which at 5.5x pro forma for the HRA transaction is high, will
decline to about 5.0x over the next year and to the low-4x area
thereafter." Nevertheless, Perrigo faces tough competition from
branded competitors that have gained market share over the past
year. In addition, it must manage its relationships with its large
retail customers that possess significant bargaining power,
particularly with respect to the pricing of its store brand
offerings.
PINNACLE MULTI-ACQUISITIONS: Lender Seeks to Prohibit Cash Access
-----------------------------------------------------------------
BLC Prime Lending Fund II, LLC asks the U.S. Bankruptcy Court for
the Northern District of Illinois, Eastern Division, to prohibit
Pinnacle Multi-Acquisitions Holdings LLC, from using cash
collateral.
On February 7, 2022, BLC filed a Verified Complaint against
Pinnacle, seeking, inter alia, to foreclose its Mortgage against
the real property commonly known as 7456 S. South Shore Drive,
Chicago Illinois 60649.
It is BLC's understanding Pinnacle is an Illinois limited liability
company and that the Property is its only real property owned.
According to Pinnacle's Schedules, it only has $1,000 cash on hand.
Pinnacle has also represented that it has a contract to sell the
Property.
According to the Schedules filed, Pinnacle has failed to pay any of
the utility services for the Property, including water, gas and
electric service. Pinnacle has also failed to pay the real estate
taxes for the Property. Pinnacle also did not pay its loan to BLC,
hence the Foreclosure Proceeding.
BLC is Pinnacle's only identified secured creditor. Indeed, BLC
holds a first lien position against Pinnacle's only owned real
estate, the Chicago Property. BLC also holds a senior security
interest in all rents and proceeds related to the Property.
Pinnacle has not approached BLC to discuss if and how Pinnacle is
to use any of BLC's collateral for any purposes, including the
Property's rents, nor has Pinnacle represented how BLC is to be
adequately protected.
Pinnacle has represented that it is using BLC's cash collateral to
manage its business affairs. BLC, however, contends Pinnacle is not
providing BLC with adequate protection. Pinnacle has failed to pay
utilities and taxing authorities. Pinnacle is not even identifying
having leases for the Property or having collected rents or
submitted a budget for maintaining the Property. BLC also has
learned that Pinnacle failed to pay its insurance premium due by
March 28, 2022.
A copy of the motion is available at https://bit.ly/3iTdAUO from
PacerMonitor.com.
* * *
On March 31, 2022, the Court entered an order granting the Lender's
motion to prohibit the Debtor from using cash collateral.
The Court said that, for the reasons stated on the record in open
court, the Debtor is prohibited from using any cash collateral
pending further court order or the express approval of BLC Prime
Lending Fund II, LLC.
A copy of the order is available at https://bit.ly/3DtMahC from
PacerMonitor.com.
About Pinnacle Multi-Acquisitions
Pinnacle Multi-Acquisitions Holdings LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill Case No.
22-02669) on March 8, 2022. In the petition signed by G. Estevein
Perkins independent manager. The Debtor disclosed up to $10 million
in both assets and liabilities.
Judge Lashonda A. Hunt oversees the case.
Kevin Benjamin, Esq., at Benjamin Legal Services is the Debtor's
counsel.
PRAIRIE ECI: Fitch Affirms and Withdraws Ratings
------------------------------------------------
Fitch Ratings has affirmed and withdrawn the ratings of Prairie ECI
Acquiror LP's (Prairie ECI Acquiror LP, as borrower under the term
loan B, and Tallgrass Energy, LP, as pledgor in the term loan B
structure are referred to collectively as, Holdco). Ratings
affirmed and withdrawn are the Long-Term Issuer Default Rating
(IDR) of Holdco 'B+' and the senior secured rating at 'B-'/'RR6'.
The Rating Outlook is Stable.
Holdco owns Tallgrass Energy Partners, LP (Opco; BB-/Stable), which
in turn owns and operates a variety of midstream assets, most of
which are in, loosely speaking, certain Great Plains states. Opco's
largest natural gas pipeline asset also spans the Midwest.
Holdco's ratings have been withdrawn for commercial reasons.
KEY RATING DRIVERS
Counterparty Credit Risk: In 2020 and 2021, the operating pipeline
Pony Express pipeline did not have any bankruptcies by material
customers. The operating pipeline Rockies Express LLC (BB+/Stable)
did have 2020 bankruptcies, but has seen credit quality rise since
that year. In aggregate, the Rockies Express LLC bankruptcies
played a part in a one-notch downgrade of the company in early
2021. The Outlook on Rockies Express LLC was revised from Negative
to Stable at June 2021 due to a better-than-expected outcome from
the Gulfport Energy Corporation bankruptcy. Gulfport Energy
Corporation (B/Positive) remains an important customer.
Distributions: Distributions to the owners by Tallgrass Energy
Partners, LP are in line with Fitch's forecast, including the
declaration of a dividend in 2022 with respect to the fourth
quarter of 2021. The owners of Opco in 2020 initiated a financial
policy of reducing debt at Opco. Distributions by Opco are
sufficient for the needs of Holdco.
DERIVATION SUMMARY
Like Holdco, The Williams Companies, Inc. (WMB; BBB/Stable) is
comprised of two long-distance pipelines regulated by the U.S.
Federal Energy Regulatory Commission (FERC). WMB has a much larger
gathering and processing business than Holdco. Leverage drives the
rating difference between the two companies.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Fitch price deck;
-- Distributions from Opco to Holdco consistent with recent
pattern;
-- Minimal Opco growth capex and growth joint venture
investments.
RATING SENSITIVITIES
Rating Sensitivities are not applicable, as the ratings have been
withdrawn.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Adequate: Liquidity needs at Prairie ECI Acquiror LP in
the medium-term are expected to be limited to interest payments and
relatively small debt amortizations. Fitch expects distributions
from Tallgrass Energy Partners, LP to be supportive of Prairie ECI
Acquiror, LP's ability to meet its debt service obligations and its
minimum debt service coverage ratio covenant of 1.1x.
ISSUER PROFILE
Prairie ECI Acquiror LP is an investment vehicle with a holding in
a U.S. midstream company.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch evaluates Holdco relative to its proportionate
consolidation-based leverage, which includes pro rata EBITDA and
pro rata debt of joint ventures.
PRECIPIO INC: Incurs $8.5 Million Net Loss in 2021
--------------------------------------------------
Precipio, Inc. filed with the Securities and Exchange Commission
its Annual Report on Form 10-K disclosing a net loss of $8.52
million on $8.85 million of net sales for the year ended Dec. 31,
2021, compared to a net loss of $10.60 million on $6.09 million of
net sales for the year ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $30.44 million in total
assets, $5.84 million in total liabilities, and $24.60 million in
total stockholders' equity.
Hartford, CT-based Marcum LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
30, 2022, citing that the Company has incurred significant losses
and needs to raise additional funds to meet its obligations and
sustain its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1043961/000155837022004774/prpo-20211231x10k.htm
About Precipio
Omaha, Nebraska-based Precipio, formerly known as Transgenomic,
Inc. -- http://www.precipiodx.com-- is a healthcare solutions
company focused on cancer diagnostics. Its business mission is to
address the pervasive problem of cancer misdiagnoses by developing
solutions to mitigate the root causes of this problem in the form
of diagnostic products, reagents and services.
PRO-DEMOLITION INC: Wins Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, has authorized Pro-Demolition, Inc. to use cash
collateral nunc pro tunc to the petition date on an interim basis.
The Debtor is authorized to use cash collateral to pay: (a) amounts
expressly authorized by the Court; (b) the current and necessary
expenses set forth in the budget, plus an amount not to exceed 10%
for each line item; and (c) additional amounts as may be expressly
approved in writing by the Small Business Administration. The
authorization will continue six weeks, consistent with the budget,
however, the parties may jointly agree to extend the authorization
by submitting an agreed order reflecting such extension.
As adequate protection, the SBA will have replacement lien on its
post-petition cash collateral to the same extent and with the same
validity and priority as their prepetition lien, without the need
to file or execute any documents as may otherwise be required under
applicable non-bankruptcy law.
A continued hearing on the matter is scheduled for April 12 at 2:45
p.m.
A copy of the order is available at https://bit.ly/3tXgv5j from
PacerMonitor.com.
About Pro-Demolition, Inc.
Pro-Demolition, Inc. is a demolition company doing business since
1999. Pro-Demolition engages in building structure demolition, land
clearing, tree removal and excavation for residential and
commercial properties. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00267)
on January 26, 2022. In the petition signed by Mickey Grosman,
president, the Debtor disclosed up to $10 million in both assets
and liabilities.
Judge Lori V. Vaughan oversees the case.
Justin M. Luna, Esq., at Latham Luna Eden and Beaudine LLP is the
Debtor's counsel.
PROVECTUS BIOPHARMACEUTICALS: Incurs $5.5 Million Net Loss in 2021
------------------------------------------------------------------
Provectus Biopharmaceuticals, Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $5.54 million for the year ended Dec. 31, 2021, compared to
a net loss of $6.68 million for the year ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $3.51 million in total assets,
$7.70 million in total liabilities, and a total stockholders'
deficiency of $4.19 million.
Los Angeles, CA-based Marcum LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
29, 2022, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/315545/000149315222008016/form10-k.htm
About Provectus
Provectus Biopharmaceuticals, Inc. is a clinical-stage
biotechnology company developing immunotherapy medicines based on a
family of small molecules called halogenated xanthenes. The
Company's lead HX molecule is rose bengal sodium.
PULMATRIX INC: Incurs $20.2 Million Net Loss in 2021
----------------------------------------------------
Pulmatrix, Inc. filed with the Securities and Exchange Commission
its Annual Report on Form 10-K disclosing a net loss of $20.17
million on $5.17 million of revenues for the year ended Dec. 31,
2021, compared to a net loss of $19.31 million on $12.63 million of
revenues for the year ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $58.82 million in total
assets, $11.37 million in total liabilities, and $47.45 million in
total stockholders' equity.
Through Dec. 31, 2021, the Company has incurred an accumulated
deficit of $254.6 million, primarily as a result of expenses
incurred through a combination of research and development
activities related to its various product candidates and general
and administrative expenses supporting those activities. The
Company has financed its operations since inception primarily
through the sale of preferred and common stock, the issuance of
convertible promissory notes, term loans, and collaboration and
license agreements. The Company's total cash and cash equivalents
balance as of Dec. 31, 2021 was $53.8 million.
Pulmatrix stated, "We anticipate that we will continue to incur
losses, and that such losses will increase over the next several
years due to development costs associated with our iSPERSE pipeline
programs. We expect that our research and development and general
and administrative expenses will continue to increase and, as a
result, we will need additional capital to fund our operations,
which we may raise through a combination of equity offerings, debt
financings, other third-party funding and other collaborations and
strategic alliances."
"We expect that our existing cash and cash equivalents as of
December 31, 2021 will enable us to fund our operating expenses and
capital expenditure requirements for at least the next 12 months
following the date of this Annual Report on Form 10-K. We have
based our projections of operating capital requirements on
assumptions that may prove to be incorrect, and we may use all of
our available capital resources sooner than we expect. Because of
the numerous risks and uncertainties associated with research,
development and commercialization of pharmaceutical products, we
are unable to estimate the exact amount of our operating capital
requirements."
Research and development expense was $15.4 million for the year
ended Dec. 31, 2021, as compared to $15.6 million for the year
ended Dec. 31, 2020, a decrease of $0.2 million. The decrease was
primarily due to a decrease in spend of $2.5 million related to the
Company's PUR1800 program as well as a decrease in spend of $1.7
million related to the Phase 2 Pulmazole clinical trial due to its
COVID-19-related termination in 2020. This amount was then
partially offset by increased spend of $3.2 million on pre-clinical
and manufacturing costs related to the Company's PUR3100 program,
in addition to $0.8 million of operating costs in support of the
Company's overall clinical and pre-clinical programs.
General and administrative expense was $6.4 million for the year
ended Dec. 31, 2021, as compared to $6.9 million for the year ended
Dec. 31, 2020, a decrease of $0.5 million. The decrease was
primarily due to decreased employment costs of $0.5 million.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1574235/000149315222007957/form10-k.htm
About Pulmatrix
Pulmatrix, Inc. -- http://www.pulmatrix.com-- is a clinical stage
biopharmaceutical company developing innovative inhaled therapies
to address serious pulmonary and non-pulmonary disease using its
patented iSPERSE technology. The Company's proprietary product
pipeline includes treatments for serious lung diseases such as
allergic ronchopulmonary aspergillosis and lung cancer, as well as
neurologic disorders such as acute migraine. Pulmatrix's product
candidates are based on iSPERSE, its proprietary engineered dry
powder delivery platform, which seeks to improve therapeutic
delivery to the lungs by maximizing local concentrations and
reducing systemic side effects to improve patient outcomes.
Pulmatrix reported a net loss of $20.59 million for the year ended
Dec. 31, 2019, and a net loss of $20.56 million for the year ended
Dec. 31, 2018. As of Sept. 30, 2021, the Company had $55.75
million in total assets, $10.56 million in total liabilities, and
$45.19 million in total stockholders' equity.
QUEEN ELIZABETH: Reaches Consensual Resolution with Landmark
------------------------------------------------------------
Queen Elizabeth Realty Corp., submitted a Second Amended Disclosure
Statement for the Second Amended Chapter 11 Plan dated March 31,
2022.
The Plan provides for the refinance of the Debtor's interest in the
real property. As the Debtor's Plan proposes to pay creditors in
full, the Holders of Ownership Interests in the Debtor shall
continue post-confirmation.
Recoveries projected in the Plan shall be from the Debtor's
refinance of the real property. The amount generated by the
refinance of the real property shall be used to satisfy the claim
of BOA; the payment of any outstanding statutory fees due and owing
the United States Trustee; the payment of allowed costs of
administration of the case (the "Administrative Claims"); and a
distribution to the holders of Allowed Claims. The holders of
Allowed Claims shall be paid in full upon the Effective Date.
Class 3 consists of the Allowed General Unsecured Claims of the
Debtor. The Debtor believes that the following creditors as holding
general unsecured claims as against the Debtor:
* New York State Department of Taxation and Finance
(“NYS”) on November 6, 2020, timely filed Claim No. 1 in the
amount of $2,163.64 as a secured claim. On January 13, 2021, NYS
amended its claim to be a partial priority claim and a partial
general unsecured claim. The unsecured claim is in the amount of
$415.40. This claim shall be paid in full on the Effective Date.
Class 4 consists of Other General Unsecured Claims. Landmark
Portfolio on December 23, 2020, timely filed Claim No. 3 in the
amount of $24,876,385.05. Landmark Portfolio has reached a
consensual resolution regarding its claim which is treated in the
case of Jeffrey Wu. Creditors are directed to the Wu chapter 11
plan which provides for the treatment of the Landmark Portfolio
claim. Landmark Portfolio shall not receive any distribution under
the Debtor's Plan.
Class 5 consists of the Ownership Interest of Jeffrey Wu in the
stock of the Debtor. Class 5 is impaired under the Plan but shall
not be entitled to vote to accept or reject the Plan.
The Debtor shall have obtained the necessary refinancing of the
Real Property.
The Debtor, along with Lucky Star-Deer Park, LLC, Flushing Landmark
Realty LLC and Wu (as sponsor), have entered into the Term Sheet.
In connection with confirmation of the Plan, the Debtor shall seek
Bankruptcy Court approval of the Exit Facility. The Debtor
currently anticipates that the Exit Facility will be funded in the
gross principal amount of $170,000,000.00 (such Exit Facility being
intended to fund this Plan as well as the plans in the chapter 11
cases of Wu, Lucky Star-Deer Park LLC and Flushing Landmark Realty
LLC. The Effective Date of the Plan is expressly conditioned upon,
inter alia, the closing on the Exit Facility having occurred and
there being sufficient proceeds allocated from the Exit Facility to
fully fund the Plan.
A full-text copy of the Second Amended Disclosure Statement dated
March 31, 2022, is available at https://bit.ly/3ucuPqt from
PacerMonitor.com at no charge.
Attorneys for Queen Elizabeth Realty Corp.
Fred S. Kantrow, Esq.
The Kantrow Law Group, PLLC
6901 Jericho Turnpike, Suite 230
Syosset, New York 11791
Tel: 516 703 3672
E-mail: fkantrow@thekantrowlawgroup.com
About Queen Elizabeth Realty Corp.
Queen Elizabeth Realty Corp. is primarily engaged in renting and
leasing real estate properties.
Queen Elizabeth Realty Corp. filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y.
Case No. 20-73327) on Nov. 3, 2020. At the time of the filing, the
Debtor estimated assets of less than $50,000 and liabilities of
between $10 million and $50 million. Judge Robert E. Grossman
oversees the case. Rosen & Kantrow, PLLC represents the Debtor.
QUICKER LIQUOR: Lender Seeks to Prohibit Cash Collateral Access
---------------------------------------------------------------
The Ernest W. Moody Revocable Trust asks the U.S. Bankruptcy Court
for the District of Nevada to prohibit Quicker Liquor, LLC and
Nevada Wine Cellars, Inc. from using its cash collateral.
The Lender asserts Quicker Liquor, LLC and Nevada Wine Cellars,
Inc. have not satisfied either condition under Section 363(c)(2) of
the Bankruptcy Code, because the Trust has not consented to the
Debtors' use of its cash collateral and the Court has not
authorized the use of the same. However, the Debtors continue to
operate their company, have failed to provide the Creditor with a
detailed budget of their use of the cash collateral.
On January 7, 2019, the Moody Trust loaned to Debtor QL, the
original principal amount of $6,956,271. The Loan is evidenced by a
Security Agreement, executed by Kathy Trout for the Debtor QL and
Ernest W. Moody for the Creditor.
Given the "common scheme" of the Debtors relationship, all cash
received by the Debtors in the operation of their business is the
Moody Trust's cash collateral which the Debtors cannot use without
the Creditor's consent or an order from the Court after notice and
a hearing. However, the Creditor has not and does not consent to
the Debtors' use of its cash collateral and in fact, raised its
objection to the Debtors' use of its cash collateral and reserved
all rights to the Debtors' use of the same on the record before the
Court at the February 9, 2022 hearing on the Debtors' First Day
Motions. Additionally, there is no order from the Court authorizing
the use of cash collateral, and the Debtors have not sought such a
Court order despite the fact that the case has been pending for
nearly two months. Further, the Debtors continue to operate their
business, as evidenced by their First Day Motions seeking the
Court's authorization for Debtor NWC to pay wages to employees, to
pay reimbursable business expenses and to pay worker's compensation
policy insurance (ECF No. 8). Given that the Debtors' business
operations are clearly ongoing, the status of the cash collateral
while in the hands of the Debtors is of paramount concern to the
Creditor.
The Moody Trust does not consent to the use of its cash collateral
to pay insiders or professionals. The Trust says it has not been
presented with a detailed budget for the use of its cash
collateral. Debtor QL MORs for the month of February 2022 reflect
zero employees, no cash at the beginning or end of the month, no
income, expenses or disbursements. Debtor NWC's MOR for February
2022, reflect 34 employees, inconsistent with the number of
employees identified in Debtor's wage motion, where Debtor NWC
identified 31 employees.
Further, to the extent the Trust may be unable to fully recover any
cash collateral consumed by the Debtors, the Trust seeks and Order
that it be awarded a super-priority administrative claim.
A copy of the motion is available at https://bit.ly/3LsA6Ab from
PacerMonitor.com.
About Quicker Liquor
Quicker Liquor, LLC and its affiliate, Nevada Wine Cellars, Inc.,
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Lead Case No. 22-10331) on Jan. 31,
2022. At the time of the filing, the Debtors listed as much as $10
million in both assets and liabilities. Kathy Trout, managing
member, signed the petitions.
Judge Mike K. Nakagawa oversees the cases.
Larson & Zirzow, LLC and The Law Offices of Timothy Elson serve as
the Debtors' bankruptcy counsel and special counsel, respectively.
REPLICEL LIFE: Applies for New DermaPrecise Patent
--------------------------------------------------
RepliCel Life Sciences Inc. has filed a new patent application
covering novel aspects of the DermaPrecise product portfolio. The
Company also announced the granting or allowance of three patent
applications in key markets.
The DermaPrecise Injector is an electronic injection system
designed to offer new levels of control over any injection into the
dermal and subcutaneous layers for which precision of depth, dose
or delivery matters. The new provisional patent application, filed
on Nov. 11, 2021 covers new commercial embodiments of certain
technologies related to its dermal injector product portfolio which
are not covered in previous patent applications.
"As we continue to innovate the DermaPrecise injector, control unit
and consumables, we will continue to file patents protecting all
aspects of this product portfolio," stated RepliCel President and
CEO, R. Lee Buckler. "The testing being conducted on the
DermaPrecise injection system is generating new ideas, innovations,
and specifications which will lead to more patent filings covering
new technologies and applications as we march toward
commercialization of the DermaPrecise(TM) product line."
With respect to the newly granted and allowed patents, RepliCel has
been issued a key patent in Japan related to the Company's RCT-01
cell therapy for the treatment of chronic tendinopathy and two
patents, one in Brazil and another in Mexico, relating to its
RCS-01 regenerative cell therapy for skin rejuvenation.
About Replicel
RepliCel is a regenerative medicine company focused on developing
cell therapies for aesthetic and orthopedic conditions affecting
what the Company believes is approximately one in three people in
industrialized nations, including aging/sun-damaged skin, pattern
baldness, and chronic tendon degeneration. These conditions, often
associated with aging, are caused by a deficit of healthy cells
required for normal tissue healing and function. These cell
therapy product candidates are based on RepliCel's innovative
technology, utilizing cell populations isolated from a patient's
healthy hair follicles.
Replicel reported a net loss and comprehensive loss of C$1.58
million for the year ended Dec. 31, 2020, compared to a net loss
and comprehensive loss of C$3 million for the year ended Dec. 31,
2019.
Vancouver, British Columbia-based BDO Canada LLP, the Company's
auditor since 2010, issued a "going concern" qualification in its
report dated April 30, 2021, citing that the Company has
accumulated losses of $38,158,327 since its inception and incurred
a loss of $1,580,285 during the year ended Dec. 31, 2020. These
events or conditions, along with other matters, indicate that a
material uncertainty exists that may cast substantial doubt about
its ability to continue as a going concern.
REPLICEL LIFE: To Offer $1.5 Million Worth of Units
---------------------------------------------------
RepliCel Life Sciences Inc. announced a non-brokered private
placement financing of up to 8,333,333 units at a price of $0.18
per Unit for gross proceeds of up to $1,500,000. Each Unit
consists of one common share of the Company and one-half of one
share purchase warrant. Each whole Warrant entitles the holder
thereof to purchase one additional Share of the Company at a price
of $0.40 per Share for a period of three years from closing of the
Offering. The Offering is anticipated to close in two tranches,
the first tranche to be completed quickly and the second tranche to
be completed within 90 days, subject to the approval of the TSX
Venture Exchange. Insiders may participate in the Offering.
"Based on commitments already expressed, we anticipate this
Offering will be largely subscribed by a small number of insiders
and existing shareholders who understand and believe in the
progress we are making," stated RepliCel President and CEO, R. Lee
Buckler, "We are pleased with the support this represents and the
opportunity for others to participate alongside investors who have
done significant due diligence."
Finders' fees may be payable in connection with the Offering in
accordance with the policies of the Exchange.
All securities issued in connection with the Offering will be
subject to a statutory hold period expiring four months and one day
after closing of the Offering. Completion of the Offering is
subject to the approval of the Exchange. Any participation by
insiders in the Offering will constitute a related party
transaction under Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions but is expected
to be exempt from the formal valuation and minority shareholder
approval requirements of MI 61-101.
The aggregate gross proceeds from the sale of the Offering will be
used for general working capital.
About Replicel
RepliCel is a regenerative medicine company focused on developing
cell therapies for aesthetic and orthopedic conditions affecting
what the Company believes is approximately one in three people in
industrialized nations, including aging/sun-damaged skin, pattern
baldness, and chronic tendon degeneration. These conditions, often
associated with aging, are caused by a deficit of healthy cells
required for normal tissue healing and function. These cell
therapy product candidates are based on RepliCel's innovative
technology, utilizing cell populations isolated from a patient's
healthy hair follicles.
Replicel reported a net loss and comprehensive loss of C$1.58
million for the year ended Dec. 31, 2020, compared to a net loss
and comprehensive loss of C$3 million for the year ended Dec. 31,
2019.
Vancouver, British Columbia-based BDO Canada LLP, the Company's
auditor since 2010, issued a "going concern" qualification in its
report dated April 30, 2021, citing that the Company has
accumulated losses of $38,158,327 since its inception and incurred
a loss of $1,580,285 during the year ended Dec. 31, 2020. These
events or conditions, along with other matters, indicate that a
material uncertainty exists that may cast substantial doubt about
its ability to continue as a going concern.
RKJ HOTEL: Debtor Will Amend Disclosure to Address Issues
---------------------------------------------------------
RKJ Hotel Management, LLC, submitted a reply to the objection of
RSS WFCM2020-C55-MI RHM, LLC to Debtor's Disclosure Statement to
Accompany Debtor's Second Amended Plan of Reorganization, filed by
RSS WFCM2020-C55-MI RHM, LLC ("RSS") on March 21, 2022.
The Debtor points out that most of RSS' objections are to be
considered at confirmation:
* The Debtor intended to file its declarations in support of
confirmation of the Second Amended Plan, including its expert
declaration addressing the Second Amended Plan's feasibility among
other things, on April 25, 2022, as proposed in the Motion and
Disclosure Statement Order, which is consistent with confirmation
procedures approved by this and other Nevada Bankruptcy Courts.
Thus, RSS' inclusion of objections to confirmation of the Second
Amended Plan, including feasibility and classification, is not
cause to deny approval of the Disclosure Statement.
* The Debtor further points out that RSS' complaint that the
Disclosure Statement includes no information regarding the amount
of claims, treatment of claims, timing and amounts of plan
payments, and risk factors is without merit.
* There is no merit to RSS' objection in this regard because the
Disclosure Statement clearly provides all this detail.
* With respect to the treatment of the RSS Secured Claim,
Debtor's proposed treatment under the Second Amended Plan is
described in detail in the Disclosure Statement, including
specifics regarding the RSS Secured Claim principal balance, lien,
interest, monthly payments, amortization, reserves, and maturity
date, among other things. The Disclosure Statement also provides
the estimated amount of the RSS Unsecured Claim, the return that
the Second Amended Plan provides to the RSS Unsecured Claim, and
the timing of the payments on the RSS Unsecured Claim. And, of
course, the Disclosure Statement includes a copy of the Second
Amended Plan at Exhibit 1 which provides further detail on all
these matters.
Moreover, the Debtor asserts that RSS' objection to the exculpation
provision of the Second Amended Plan is without merit. While the
exculpation clause of the Second Amended Plan is not violative of
Ninth Circuit law in any respect, Debtor would agree to amend the
Disclosure Statement to make clear that the exculpation clause is
not intended to release Mr. Katofsky's guaranty to RSS and include
the same in the order confirming the Second Amended Plan.
The Debtor complains that RSS' complaints about the separate
classification of the RSS Unsecured Claim are without merit. RSS
has long known the basis of Debtor's separate classification of the
RSS Unsecured Claim. It was discussed at length by Debtor's counsel
during argument at the evidentiary hearing on the Stay Motion and
Valuation Motion. The RSS Unsecured Claim is guaranteed by Mr.
Katofsky, and RSS commenced a lawsuit against Mr. Katofsky upon the
filing of the Chapter 11 Case in which RSS is actively pursuing Mr.
Katofsky to pay the same debt that RSS asserts against Debtor in
the Chapter 11 Case. Thus, there is a secondary source of payment
on the RSS Unsecured Claim that may materially reduce the RSS claim
against Debtor. As RSS knows, the Ninth Circuit has recognized the
pendency of a litigation outcome that will affect creditor
recoveries is a legitimate basis for separately classifying one
group of general unsecured claims from a class of creditors whose
recoveries from debtor are not directly predicated upon the outcome
of litigation under 11 U.S.C. Section 1122(a).
In any event, despite RSS knowing full-well the above and the
frivolous nature of this objection, Debtor is prepared to amend the
Disclosure Statement to make clear what RSS already knows – the
factual and legal basis of Debtor's separate classification of the
RSS Unsecured Claim.
As to the RSS objection to the stated RSS Secured and RSS Unsecured
Claims:
* The Debtor disputes RSS' contention that it is entitled to as
part of the Allowed RSS Claims any post-petition interest, charges,
and fees (other than attorneys' fees and expenses). As the value of
Hotel was $19,800,000 as of July 1, 2021 (and RSS contends in the
RSS Objection that the value of the Hotel was also $19,800,000 as
of the Petition Date), RSS is not entitled to any post-petition
interest, charges, or fees under Section 506.
* Because the RSS POC was filed to include amounts up to June
10, 2021, and not the Petition Date, it improperly included, for
instance post-petition interest at the note rate of $336,774.48 and
at the default rate of $380,041.46. Debtor used RSS' February 22,
2021 Demand Statement, which set forth amounts due to RSS as of the
Petition Date, then subtracted the disallowed Yield Maintenance,
the Liquidation Fee, and Payoff Fee to determine the RSS Allowed
Claims for purposes of the Second Amended Plan and Disclosure
Statement. Debtor submits that its calculation of the RSS Unsecured
and RSS Secured Claims was appropriate under applicable bankruptcy
law. However, to the extent that the Court determines that the
Disclosure Statement should include RSS' calculation subject to
Debtor's disagreement, Debtor will do so.
* The Court should reject RSS' self-serving and inappropriate
argument that Debtor must guess the amount of the amended claim
that RSS apparently intends to file sometime between the filing of
this Reply and the Confirmation Hearing and include a detailed
discussion regarding the impact of RSS' not filed amended claim
upon the RSS Unsecured Claim or the RSS Secured Claim if the
1111(b) Election is made, or the Second Amended Plan's feasibility.
It is clear that RSS is focused on the May 5 deadline, and will
argue that its amended proof of claim must be determined by the
Court as a condition to prove feasibility.
Attorneys for the Debtor:
Gerald M. Gordon, Esq.
Mark M. Weisenmiller, Esq.
GARMAN TURNER GORDON LLP
7251 Amigo Street, Suite 210
Las Vegas, Nevada 89119
Telephone: (725) 777-3000
Facsimile: (725) 777-3112
E-mail: ggordon@gtg.legal
mweisenmiller@gtg.legal
About RKJ Hotel Management
RKJ Hotel Management, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Case No. 21-10593) on Feb. 9, 2021.
Jeff Katofsky, member and authorized representative, signed the
petition. In the petition, the Debtor disclosed assets of between
$10 million and $50 million and liabilities of the same range.
Judge Natalie M. Cox oversees the case. The Debtor tapped Garman
Turner Gordon, LLP as its legal counsel.
ROCKWORX INC: Has Deal on Cash Collateral Access Thru Aug 28
------------------------------------------------------------
Rockworx, Inc. and the Colorado Department of Revenue advised the
U.S. Bankruptcy Court for the District of Colorado they have
reached an agreement regarding the Debtor's use of cash collateral
and now desire to memorialize the terms of this agreement into an
agreed order.
The parties agree CDOR asserts a first and prior lien under section
39-26-117(1)(a) and/or section 39-22-604(7)(a), C.R.S., on all
assets of the Debtor and the estate, including cash collateral, as
that term is defined in 11 U.S.C. section 363(a), to secure its
claim in the estimated amount of $3,340, or as subsequently
amended.
Previously, the Debtor agreed to provided monetary adequate
protection payments to CDOR at $64 per month. As monetary adequate
protection for the Motion, the Debtor will make a lump sum payment
to CDOR of $448, representing the $64 monthly adequate protection
payments for the months of March through August -- the end of the
period through which the Debtor has sought use of cash collateral.
The lump sum payment will be due within seven calendar days of the
entry of an Order by the Court approving the Stipulation.
CDOR will have a first priority replacement lien on all property of
the Debtor and the estate, including without limitation, on all
post-petition accounts and accounts receivable, in and securing
such amounts as lawfully set forth as secured claims in the proof
of claim filed by Colorado Department of Revenue and any amendments
thereto. Such lien will not attach to causes of action under
Chapter 5 of the Bankruptcy Code. CDOR will not be required to file
or otherwise take any action to perfect such first priority lien,
which will be perfected by Court approval thereof.
The Debtor will maintain adequate insurance coverage on all
personal property assets (with adequacy to be measured by the
requirements of the United States Trustee) against any potential
loss and provide proof thereof at least annually with the first
proof due on December 1, 2021, upon the request of the CDOR.
The Debtor will expend cash collateral only for the purpose and in
the amounts specified in the budget, including fees under 28 U.S.C.
section 1930.
The agreement will terminate and the Debtor will cease access to
cash collateral, absent further Court order, upon August 28, 2022,
confirmation of a plan of reorganization, appointment of a trustee
in Chapter 11, conversion of the Debtor's bankruptcy case to
Chapter 7, or dismissal of the Debtor's bankruptcy case.
A copy of the motion is available at https://bit.ly/38d2HLv from
PacerMonitor.com.
About Rockworx Inc.
Rockworx, Inc., an aggregate supplier in Pueblo, Colo., filed its
voluntary petition for Chapter 11 protection (Bankr. D. Colo. Case
No. 21-14527) on Aug. 31, 2021, listing $1,310,706 in assets and
$1,310,706 in liabilities. Rockworx President Sean Dudley signed
the petition.
Judge Kimberley H. Tyson oversees the case.
The Fox Law Corporation, Inc. and Kutner Brinen Dickey Riley, P.C.
serve as the Debtor's lead bankruptcy counsel and local counsel,
respectively. Lucove Say & Co. is the Debtor's accountant.
ROCKWORX INC: Wins Cash Collateral Access Thru Aug 28
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado has
authorized Rockworx, Inc. to use cash collateral and provide
adequate protection through August 28, 2022.
The Debtor requires the use of cash collateral to preserve the
value of its assets and continue business operations.
As of the Petition Date, Midwest Regional Bank, pursuant to a UCC 1
financing statement; Amur Equipment & Finance, pursuant to what
appears to be a recorded purchase money security interest; Mr.
Advance; and the Small Business Administration appear to hold
security interests in the Debtor's cash collateral as does the
Colorado Department of Revenue, pursuant to its statutory lien,
hold what appear to be the senior liens against the Debtor's assets
that generate cash collateral.
The Court held that the Debtor's budget of anticipated gross
receipts, costs of goods sold, disbursements, cash flow and
receivables, depending on whether a remote job is awarded, are
reasonable. The Debtor's financial performance since June 30, 2021,
indicates the Debtor has reduced its costs of goods sold and its
expenses and that it is moving toward consistent net monthly
income. In particular, for the months of November 2021 through
January 2022, the Debtor's slow season, the Debtor has recognized
lowered costs of goods sold, lowered expenses and positive net
income each month as opposed to considerable losses in the one year
prepetition. The Debtor has provided adequate evidence of its
ability to obtain sufficient business through the proposed period
through the week ending August 28, 2022.
In exchange for the preliminary use of cash collateral by the
Debtor, and as adequate protection for the Secured Creditors'
interests, the Secured Creditors are granted replacement and/or
substitute liens, 11 U.S.C. section 361(2), in all post-petition
assets of the Debtor and proceeds thereof, excluding any avoidance
causes of action. The replacement liens shall have the same
validity, extent and priority that the Secured Creditors possessed
as to said liens on the Petition Date.
A copy of the order is available at https://bit.ly/3K1yzk7 from
PacerMonitor.com.
About Rockworx Inc.
Rockworx, Inc., an aggregate supplier in Pueblo, Colo., filed its
voluntary petition for Chapter 11 protection (Bankr. D. Colo. Case
No. 21-14527) on Aug. 31, 2021, listing $1,310,706 in assets and
$1,310,706 in liabilities. Rockworx President Sean Dudley signed
the petition.
Judge Kimberley H. Tyson oversees the case.
The Fox Law Corporation, Inc. and Kutner Brinen Dickey Riley, P.C.
serve as the Debtor's lead bankruptcy counsel and local counsel,
respectively. Lucove Say & Co. is the Debtor's accountant.
RUBY PIPELINE: Creditors Slam $460-Mil. Transfers to Owners
-----------------------------------------------------------
Jeremy Hill of Bloomberg News reports that Ruby Pipeline LLC
bondholders are taking aim at more than $400 million of cash
transfers made to the company's owners in recent years, saying the
company could have avoided filing for bankruptcy had the money
stayed with the firm.
The company, which owns a natural gas pipeline that runs from
Wyoming to Oregon, filed for Chapter 11 protection last week after
it couldn't repay a $475 million bond maturity. But a lawyer for
some of the bondholders said the bankruptcy would never have
happened had Ruby's owners -- Pembina Pipeline Corp. and Kinder
Morgan Inc. -- not paid themselves.
About Ruby Pipeline
Ruby Pipeline, LLC, is owned equally by Kinder Morgan, Inc. (Baa2
stable), one of the largest midstream energy companies in North
America, and Pembina Pipeline Corporation (unrated), a diversified
energy infrastructure company based in Calgary, Alberta. A
subsidiary of Kinder Morgan, Inc., operates the company's sole
asset, the Ruby Pipeline, a 1,500 MMcf per day natural gas pipeline
that entered service in July 2011 and runs 680 miles from Opal,
Wyoming to Malin, Oregon.
Ruby Pipeline LLC sought Chapter 11 bankruptcy protection (Bankr.
D. Del. Case No. 22-10278) on March 31, 2022. In the petition
filed by Will W. Brown, as commercial vice-president, Ruby Pipeline
estimated assets and liabilities between $500 million and $1
billion each.
Richards, Layton & Finger, P.A., is the Debtor's bankruptcy
counsel. PJT Partners LP, is the investment banker. Prime Clerk,
LLC, is the claims and noticing agent and administrative advisor.
RUBY PIPELINE: Fitch Lowers LongTerm IDR to 'D' on Bankr. Filing
----------------------------------------------------------------
Fitch Ratings has downgraded Ruby Pipeline LLC's Long-Term Issuer
Default Rating (IDR) to 'D' from 'CC'. In addition, the long-term
rating for the senior unsecured notes was affirmed at 'CC' and the
recovery rating revised to 'RR3' from 'RR4'.
The 'D' IDR rating reflects Ruby Pipeline's announcement that it
has voluntarily filed for relief under Chapter 11 of the U.S.
Bankruptcy Code on March 31, 2022. The 'CC'/'RR3' senior unsecured
note rating reflects Fitch's expected recovery.
KEY RATING DRIVERS
Voluntary Chapter 11 Filing: On March 31, 2022, Ruby Pipeline
announced it filed for bankruptcy relief under Chapter 11 of the
U.S. Bankruptcy Code. The company faced a significant cashflow
shortage when two-thirds of the long-term contracts expired in
mid-2021 without any substantive replacements. Ruby's owners lacked
a plan to address the April 1, 2022 note maturity in a timely
manner.
Cash Balance Provides Some Liquidity: The estimated cash balance at
March 2022 was approximately $110 million. The cash balance is the
primary source of liquidity, as the company does not have a
revolving credit facility. Outside of the April 1 note maturity,
additional funding needs are limited. The pipeline is relatively
new and has minimal capital needs and the owners stopped taking
dividends after 2020 (cash paid in 1Q21).
Depressed Supply/Demand Outlook: Fitch believes Ruby remains
negatively affected by abundant and competitive pressure from
Canadian gas. A collapsed basis differential and weak utilization
trends approximating 40% of total pipeline capacity underscores a
challenging operating environment for Ruby. Seasonal needs drive
current demand, on a short-term (less than 12 months) basis.
The proposed LNG plant at Jordon Cove, a major demand driver, was
cancelled by Pembina in 2021 after years of delay in securing local
and federal approvals driven by environmental concerns. These
challenges are further highlighted by the 2021 impairments for the
majority of the pipeline's book value by Ruby's owners, Kinder
Morgan, Inc. (BBB/Stable) and Pembina Pipeline Corp.
Challenged Re-Contracting: Re-contracting remains challenged as
regional market conditions have not improved. Approximately 65% of
Ruby's contracted capacity rolled off in July 2021. The largest
remaining contract is with Pacific Gas and Electric (BB/Stable),
maturing in 2026. PG&E is the anchor shipper, accounting for about
60% of the pipeline's remaining contracted capacity. However, its
contract has volume step-downs in the last five years, starting
this year, at PG&E's option, potentially reducing contracted
capacity and adding pressure to rates. The remaining capacity is
sold under short-term, seasonal contracts, to energy traders (24%)
and natural gas producers.
Subsequent to the large contract cliff in mid-2021, Fitch expects
that existing contracts will not be renewed and that the contract
with PG&E will account for nearly all of the pipeline's future
earnings and cash flows.
Expected Drop in Cash Flows: Given challenging market conditions
and the expiration of approximately two-thirds of contracted
capacity in July of 2021 without any substantive replacement
contracts, Fitch expects a significant contraction of cash flows.
Market conditions have not improved and the challenging supply and
weak demand dynamics at the Opal and Malin hubs remain.
Fitch assumes any future contracts signed with shippers will be at
significantly lower rates and volumes, which is projected to
significantly erode Ruby's profitability. Under Fitch's forecast,
Ruby's EBITDA declines precipitously to around $60 million in 2022
from $281 million in 2020, assuming cash flow from the only
long-term contract.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- Contracts that are currently in effect provide revenue in
accordance with their terms;
-- No dividends to the owners;
-- Minimal maintenance capex;
-- Junior subordinated notes have been given 100% equity
treatment.
KEY RECOVERY RATING ASSUMPTIONS:
The recovery rating Fitch assumes that Ruby would be reorganized as
a going concern (GC) in bankruptcy rather than liquidated given the
essentiality of the service. The GC EBITDA estimate reflects
Fitch's view of a sustainable, post-reorganization EBITDA level
upon which it bases the enterprise valuation. The GC EBITDA uses
2022 EBITDA from the PG&E, which reflects the first year of PG&E's
contract roll-off and short-term seasonal contracts.
Fitch's corporate recovery analysis assumes that Ruby will be
unable to repay $475 million of maturing senior unsecured notes on
April 1, 2022 and that nearly all of the economic value of the
pipeline will be derived from revenues received from its existing
contract with PG&E that expires in October 2026. Short-term
seasonal contracts from natural gas producers and utilities, such
as Cascade Natural Gas, are also included. Fitch has assumed a
standard administrative claim of 10%.
An EV multiple of 5x is used to calculate a post-reorganization
valuation, lower than the 6x multiple used for recent
reorganization multiples for the energy sector, including three
cases in the last five years from the midstream sector in the U.S.
The lower multiple reflects the pipeline's challenging supply and
demand environment and weak pipeline utilization.
Fitch's GC assumptions lead to a valuation of $315 million, an
increase from the previous valuation due the assumption that the
pipeline reorganizes following bankruptcy, instead of liquidating.
Under this approach, the EV is derived from the EBITDA from the
PG&E contract in addition to seasonal short-term contracts, and not
the remaining value of the long-term PG&E contract used
previously.
RATING SENSITIVITIES
Rating sensitivities are no longer applicable given the bankruptcy
filing.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
ISSUER PROFILE
Ruby Pipeline is a Federal Energy Regulatory Commission regulated
interstate natural gas pipeline providing 1.5 billion cubic feet
per day of natural gas delivery capacity from the Opal Hub in
Wyoming to the Malin Hub in Oregon, on the California border.
RUBY PIPELINE: Moody's Cuts PDR to D-PD Amid Bankruptcy Filing
--------------------------------------------------------------
Moody's Investors Service downgraded Ruby Pipeline, LLC's
Probability of Default Rating to D-PD from Ca-PD. Ruby's Ca
Corporate Family Rating was affirmed. The rating outlook remains
negative. These actions follow the company's bankruptcy filing on
March 31, 2022[1]. Moody's will withdraw all ratings for the
company in the near future.
Downgrades:
Issuer: Ruby Pipeline, LLC
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Affirmations:
Issuer: Ruby Pipeline, LLC
Corporate Family Rating, Affirmed Ca
Outlook Actions:
Issuer: Ruby Pipeline, LLC
Outlook, Remains Negative
RATINGS RATIONALE
Ruby's Chapter 11 bankruptcy filing has resulted in a downgrade of
its PDR to D-PD. Moody's affirmed the company's Ca CFR, reflecting
the company's untenable capital structure that resulted in its
bankruptcy filing. Shortly following this rating action, Moody's
will withdraw all of Ruby's ratings, and no changes to the ratings
are expected prior to the withdrawal.
The principal methodology used in these ratings was Natural Gas
Pipelines published in July 2018.
Ruby Pipeline, LLC (Ruby) is owned equally by Kinder Morgan, Inc.
(Baa2 stable), one of the largest midstream energy companies in
North America, and Pembina Pipeline Corporation (unrated), a
diversified energy infrastructure company based in Calgary,
Alberta. A subsidiary of Kinder Morgan, Inc. operates the company's
sole asset, the Ruby Pipeline, a 1,500 MMcf per day natural gas
pipeline that entered service in July 2011 and runs 680 miles from
Opal, Wyoming to Malin, Oregon.
S-TEK 1 LLC: Wins Cash Collateral Access Thru June 30
-----------------------------------------------------
Judge Robert H. Jacobvitz of the U.S. Bankruptcy Court for the
District of New Mexico approved the motion of S-Tek 1 LLC for
authority to use cash collateral from April 1, 2022, through
September 30, 2022.
The Debtor is permitted to use cash collateral in the ordinary
course of business to pay expenses listed on the budget.
Surv-Tek, Inc. is a non-insider creditor that holds, claims, or may
claim liens against cash collateral by operation of a security
agreement dated December 28, 2018 between the Debtor and Surv-Tek.
The Court ruled Surv-Tek is granted a replacement lien in property
of the same type in which it held a lien on the Petition Date that
the Debtor acquires postpetition, to the extent that the combined
value of the cash collateral and eligible receivables is less than
the value of such collateral on the Petition Date.
Surv-Tek will continue to have a security interest in, and the
Debtor's obligations to Surv-Tek shall be secured by, a security
interest in all assets in which Surv-Tek had a lien or security
interest as of the Petition Date, and proceeds thereof, in the same
lien priority that existed at that time, which will be subject to
the same defenses and avoidance powers (if any) as existed on the
Petition Date.
If the amount of cash collateral and eligible receivables is less
than the required cash collateral base amount on the last day of
the calendar month, the Debtor must either pay Surv-Tek the
difference as adequate protection, or file a report with supporting
documentation showing that the combined value of cash collateral
and eligible receivables has been restored by the 21st day of the
following month to at least the required cash collateral base.
S-Tek's authority to use Cash Collateral will cease upon default
under the order. S-Tek will be in default of its authority to use
cash collateral if: (i) S-Tek fails to comply in a material respect
with any requirements of the Order and, if such failure is curable,
it is not cured within 10 days after written notice to S-Tek's
counsel, Nephi D. Hardman, Esq., sent via email to
nephi@turnaroundbk.com, and S-Tek does not within that time file a
motion with the Court to contest or excuse the alleged default; or
(ii) the case is converted to a case under chapter 7 or is
dismissed. Surv-Tek may waive any default.
A copy of the order and the Debtor's budget for the period from
April to June 2022 is available for free at https://bit.ly/3NwOLfs
from PacerMonitor.com.
The Debtor projects $160,000 in total cash and $108,690 in total
expenses for April 2022.
About S-Tek 1
Based in Albuquerque, N.M., S-Tek 1 LLC, also known as SurvTek --
https://www.survtek.com/ -- is a land surveying and consulting firm
providing services to both the private and public sectors
throughout New Mexico.
S-Tek 1 filed a Chapter 11 petition (Bankr. D.N.M. Case No.
20-12241) on Dec. 2, 2020. In its petition, the Debtor disclosed
$355,177 in assets and $2,251,153 in liabilities. Randy Asselin,
managing member, signed the petition.
Judge Robert H. Jacobvitz presides over the case.
The Debtor tapped Nephi D. Hardman Attorney at Law, LLC as its
bankruptcy counsel and FPM & Associates, LLC as its accountant.
SCIENTIFIC GAMES: Fitch Assigns First Time 'BB(EXP)' LongTerm IDR
-----------------------------------------------------------------
Fitch Ratings has assigned a first-time 'BB(EXP)' Issuer Default
Rating (IDR) to Scientific Games Corp. (dba Light & Wonder) and
Scientific Games International, Inc. (herein known collectively as
the company). Fitch assigned a 'BBB-(EXP)'/'RR1' rating to the
company's new senior secured credit facility, consisting of a $750
million revolver and $2.2 billion term loan B. Fitch assigned the
company's 2028 and 2029 existing unsecured notes a 'BB(EXP)'/'RR4'
rating. The Rating Outlook is Stable.
The company's 'BB(EXP)' rating reflects its improved credit profile
pro forma for the planned debt paydown with proceeds from the sale
of its lottery and sports betting segments. Gross leverage is
expected to decline to the low-3x range with FCF margin sustaining
in the high-teens percent, both solid for a gaming supplier and
mobile developer. The more conservative capital structure will
support the company's increased focus on casual mobile gaming,
which is extremely competitive and hit-driven in nature. The
company maintains a strong position in traditional slots and table
game business, as well as social gaming and iGaming.
Conversion of the expected ratings to final ratings are contingent
on the transactions closing as contemplated, and receipt of final
documents conforming materially to preliminary documentation
reviewed, including sizing of the new debt instruments.
KEY RATING DRIVERS
Good Mix ex-Lottery: Pro forma for the pending dispositions, the
company will be a diversified gaming supplier with exposure to
traditional gaming (slots, tables, systems), iGaming, social gaming
and casual mobile gaming. The divestiture of lottery removes a
stable and diversifying cash flow stream with healthy long-term
growth rates, although the debt paydown is viewed positively.
The company's digital adjacencies balance the traditional slot
industry's high competitiveness, tepid replacement cycle, and
unreliable new casino opening schedule. The company's leading slot
systems business (~10% of pro forma revenues) provides a relatively
reliable cash stream and its table game business (~9%) is shifting
more toward a lease model with operators.
A Leading Gaming Supplier: The company garners low-20% market share
for both slot sales and installed base of premium slots in North
America, which has come down considerably over the last decade as
peers aggressively entered the market. With this share, the company
comfortably remains a top three supplier, and the company
consistently rolls out attractive new content and cabinets that has
helped it maintain a leading competitive position.
There are signs of stabilizing market share shifts, with the
company registering three consecutive quarters of sequential
installed base growth in North America during 2021 (30,514 units as
of Dec. 31, 2021). The company's table game business is a
differentiator relative to its peers, and also has a strong systems
business.
Growing Digital Presence: The company operates social gaming and
casual mobile gaming through its unrestricted subsidiary, SciPlay,
of which it owns 81% economic interest and controls over 90% of
voting power. The social gaming business has grown materially over
the last seven years, with quarterly EBITDA in excess of $50
million in 2021, up from $10 million in 2015. While daily average
users (DAU) have been volatile, monthly payer users have been
stable around 500k the last three years with an 8% CAGR in
monetization. There is meaningful title concentration, with Jackpot
Party Casino generating roughly 50% of total SciPlay revenue.
The company's digital business tends to be hit driven and
competitive, especially within social gaming. The business also
requires considerable R&D investment and customer acquisition
costs. These factors may cause operating cashflows to be more
volatile than the traditional slot business; however, digital
provides the company increased product diversification and scale.
Fitch expects the company to pursue more casual mobile gaming
development as an avenue for revenue growth, which could lead to
increased R&D and tuck-in acquisitions for talent or proven game
titles. The casual mobile gaming industry is more competitive than
traditional slots given low barriers to entry and more formidable
publishing peers like Electronic Arts (A-/Stable).
Significantly Reduced Leverage: Fitch estimates gross leverage at
4.3x pro forma for divestitures and debt paydown and will improve
toward the low-3.0x in fiscal 2022 as the gaming segment's EBITDA
fully recovers. This is a significant improvement from the 6x-8x
level the legacy business was rangebound within during 2015-2019.
The exit of a controlling shareholder, new board and management
were the catalysts for rapid de-levering through asset sales
totaling roughly $6 billion. This level of leverage is more in line
with the company's 'BB' category supplier peers and will support
the company's ambitions to grow its digital segment, particularly
casual mobile gaming. The company will have meaningful leverage
headroom at the 'BB' level relative to Fitch's 4.0x downgrade
sensitivity. Management has a new net leverage target of 2.5x-3.5x,
which Fitch estimates will be on the lower end of by YE 2022.
Strong FCF Generation: Fitch expects the company's FCF generation
and margin will reach $500 million and 15%, respectively, by 2023
thanks to fully recovered EBITDA, reduced interest expense, and
reduced capital intensity following lottery's divestiture. FCF is
strong relative to the broader gaming industry and in line with
other 'BB' and 'BBB' category suppliers. However, capital intensity
is higher than casino operators given the company's premium slot
business and royalty payments on licenses that are capitalized.
The company's FCF benefits from management's preference for share
repurchases over dividends. Fitch expects a majority of FCF to be
allocated toward repurchases and tuck-in acquisitions to support
its Digital segment. Fitch does not anticipate any voluntary debt
paydown beyond the use of asset sale proceeds. The company is
expected to have high flexibility for restricted payments.
Parent Subsidiary Linkage: Fitch applied the strong subsidiary/weak
parent approach under its Parent and Subsidiary Linkage Rating
Criteria. Fitch views the linkage as strong across the company's
entities given the openness of access and control by the parent and
relative ease of cash movement throughout the structure. Fitch
views the entities on a consolidated basis and the IDRs are
linked.
DERIVATION SUMMARY
The company's rating reflects its conservative leverage profile pro
forma for the planned debt paydown from the lottery and sports
betting divestitures. The company's FCF profile will also
significantly improve as a result of less debt service and lower
capital intensity. The company remains a diversified gaming
supplier with strong market share, despite the sale of the less
cyclical lottery business. The company's leading market position in
the slot segment and greater diversification position it stronger
than peer Everi Holdings (BB-/Stable), despite similar leverage
levels.
The company has a similar business mix as peer Aristocrat Leisure
(BBB-/Stable); however, Aristocrat has a long track record of
managing gross leverage below 2.5x. International Game Technology
(NR) has a similar credit profile as the company, despite slightly
higher leverage, thanks to meaningful lottery exposure, which can
withstand higher leverage. In addition, Fitch views the company's
credit profile as stronger than Playtika Holdings (NR), a pure-play
digital peer that does not have exposure to the traditional slots,
table games, or systems businesses.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the company:
-- Gaming segment revenue growth is outsized in 2022 as the slot
sale, systems, and table games verticals recover to pre
pandemic levels. Fitch forecasts low single-digit growth
thereafter, supported by a stabilization in the company's
overall installed base in the 58,000-60,000 range and healthy
ADRPU;
-- SciPlay continues to grow in the high single-digits annually,
supported by increased R&D and tuck-in acquisitions;
-- iGaming experiences marginal growth each year and Fitch does
not assume any incremental jurisdictions legalizing (seven
U.S. states currently);
-- EBITDA margins in the high 30% range;
-- Capex is 10% of revenues in 2022 but declines to around 8%
annually thereafter given the divestiture of lottery. This
includes royalty payments on license obligations;
-- Lottery and sports betting asset sales close during FY2022 and
primarily are used to pay down debt. SciPlay funds Alictus
acquisition with cash;
-- Capital allocation is balanced between shareholder returns and
tuck-in M&A in the digital space. Fitch assumes share
repurchases are the primary avenue to return capital to
shareholders.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage sustaining below 3.0x;
-- Stable or growing slot share, particularly in North America;
-- Expanding footprint in casual gaming demonstrated by
successful launch of new games and or an increase in user-
based metrics (both paying and non-paying).
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross leverage sustaining above 4.0x;
-- Slots business suffering from market share loss or the
deterioration of operating fundamentals;
-- Greater revenue concentration in the more cyclical and hit-
driven casual mobile gaming business.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
The company has multiple sources of liquidity that will support its
growth strategy and fund shareholder returns. The company had $629
million of cash as of Dec. 31, 2021 ($265 million of which is at
SciPlay) and will have an untapped $750 million revolver pro forma
for the recapitalization. SciPlay also benefits from a $150 million
untapped revolver. Fitch forecasts the company to generate FCF of
around $100 million in 2022 and around $500 million annually
thereafter. This will fund continued tuck-in acquisitions in the
mobile segment and an increase in shareholder returns primarily in
the form of repurchases.
Capex is manageable in the context of the company's improved cash
flow from operations, which should remain around 8% of revenue.
This includes 'payments on license obligations' that get reported
in the company's cash flow from financing and is related to
requirement payments on brand licenses that are akin to operating
expenses.
SciPlay is an unrestricted subsidiary of the company and has no
outstanding debt given its revolver remains untapped. SciPlay is
subject to a 2.5x total leverage and 4.0x fixed charge coverage
financial covenant. Fitch expects SciPlay to retain its cash flow
to pursue growth but its credit agreement does provide flexibility
for cash movement up to the company via its restricted payments
carveouts (e.g. unlimited if total leverage is less than 1.5x).
ISSUER PROFILE
Scientific Games Corp. (together with Scientific Games
International, Inc.) is a gaming equipment supplier and digital
gaming company.
SUMMARY OF FINANCIAL ADJUSTMENTS
The company has no meaningful real-estate related leases thus
adjusted leverage (adjusted debt/EBITDAR) and traditional leverage
(debt/EBITDA) metrics are the same.
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.
SCIENTIFIC GAMES: Moody's Raises CFR to B1, Outlook Positive
------------------------------------------------------------
Moody's Investors Service upgraded Scientific Games International,
Inc.'s (subsidiary of Scientific Games Corporation dba "Light &
Wonder") Corporate Family Rating to B1 from B3 and Probability of
Default Rating to B1-PD from B3-PD. A Ba3 rating was assigned to
the company's proposed $750 million senior secured revolver and
proposed $2.2 billion first lien term loan B. The company's
existing 7.0% senior unsecured notes due 2028 and 7.25% senior
unsecured notes due 2029 were upgraded to B3 from Caa2. The
company's Speculative Grade Liquidity rating remains SGL-2 and the
outlook is positive.
The rating actions conclude the review for upgrade initiated on the
company on October 29, 2021 following the announced sale of the
company's lottery business for roughly $6 billion. The company's
existing B1 ratings on the company's senior secured revolving
credit facility, first lien term loan B5, 5% senior secured notes
due 2025, and Euro 3.375% senior secured notes due 2026 remain
unchanged. The Caa2 ratings on the company's existing 8.625% senior
unsecured notes due 2025, Euro 5.5% senior unsecured notes due 2026
and 8.25% senior unsecured notes due 2026 also remain unchanged.
These facilities and notes are expected to be repaid as part of the
refinancing and debt reduction transaction and will be subsequently
withdrawn.
Proceeds from the proposed term loan, along with anticipated net
proceeds from the sale of the company's lottery business and
OpenBet sports betting business will be used to refinance existing
facilities and reduce total outstanding debt by over $5.4 billion
as compared to year end 2021 levels, increase balance sheet cash by
nearly $300 million, as well as pay related breakage costs, fees
and related expenses.
The upgrade of the company's CFR to B1 and positive outlook
reflects the significant reduction in debt following the sale of
the company's lottery business and OpenBet sports betting business.
Moody's expects debt-to-EBITDA leverage to decline to 4.7x as of
December 2021 (pro forma for the asset sales) from near 7x. Moody's
projects a further decline in debt-to-EBITDA to below 4x (based on
continuing operations) for 2022, as the company's gaming operations
continue to recover, and growth continues in the company's digital
operations. The reduction in debt and associated cash interest
enhances the company's cash flow profile, allowing the company to
focus on its land-based and digital markets which have a large
total addressable market and opportunity for growth. Moody's
expects the company to focus on content franchises utilizing a
cross-platform gaming approach, leveraging content creation
investments and enabling player trends. Moody's also views
governance risk is declining with the company planning to maintain
lower leverage with a stated net leverage target of 2.5-3.5x (based
on the company's calculation; 3.0x as of December 2021 pro forma
for the asset sales).
The following ratings/assessments are affected by the actions:
Ratings Upgraded:
Issuer: Scientific Games International, Inc.
Corporate Family Rating, Upgraded to B1 from B3
Probability of Default Rating, Upgraded to B1-PD from B3-PD
Senior Unsecured Regular Bond/Debenture (notes due 2028 and 2029),
Upgraded to B3 (LGD5) from Caa2 (LGD5)
New Assignments:
Issuer: Scientific Games International, Inc.
GTD Senior Secured 1st Lien Term Loan B, Assigned Ba3 (LGD3)
GTD Senior Secured 1st Lien Revolving Credit Facility, Assigned
Ba3 (LGD3)
Outlook Actions:
Issuer: Scientific Games International, Inc.
Outlook, Changed To Positive From Rating Under Review
RATINGS RATIONALE
Scientific Games International, Inc.'s' B1 CFR reflects the
meaningful reduction in debt with the expectation of over $5.4
billion of debt repayment following the pending sale of the
company's lottery and sports betting businesses. Leverage is
expected to be below a 4x debt-to-EBITDA range in 2022 based on
continuing operations. Positive consideration is given to the
company's high level of recurring revenue at near 75%, with a
growing digital mix which the company is expecting to grow to 50%
over time. The company is also well positioned to benefit from the
growth of digital gaming products, as the market continue to expand
and mature, including in igaming and in casual games with SciPlay.
The company currently owns a large portfolio of complementary
gaming products and services, both digital and non-digital, that it
can utilize and cross-sell globally among its various distribution
platforms. Key credit concerns include the relatively flat outlook
for slot machine demand in the US, with the company's new games and
cabinets looking to help drive performance in the Gaming operating
segment. Revenues are largely tied to the volume of gaming machine
play and gaming machine sales and there is risk as gaming is
cyclical and dependent on discretionary consumer spending. The
company can reduce spending on game development and capital
expenditures when revenue weakens, but the need to retain a skilled
workforce to maintain competitive technology contributes to high
operating leverage.
The company's speculative-grade liquidity rating of SGL-2 reflects
good liquidity and a growing and sizable cash balance built in part
through continued positive free cash flow. As of December 31, 2021,
the company had unrestricted cash of $585 million and full
availability on its proposed $750 million revolving credit
facility. Following the sale of the company's lottery business,
sports betting business, and debt reduction, cash is expected to
increase by nearly $300 million from current levels. Moody's
anticipate the company will generate positive free cash flow over
the next twelve months of over $100 million. The company's proposed
$750 million revolver is to be subject to a net first lien leverage
ratio of 4.0x to be tested if revolver utilization is 30%. The
proposed term loan is not expected to have any financial
maintenance covenants. Moody's believe the company will maintain
compliance with its covenants and that the revolver covenant will
not be sprung or tested.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following: Incremental debt
capacity up to the sum of the greater of $850 million and 100% of
EBITDA plus unlimited amounts so long as consolidated net first
lien leverage does not exceed 3.50:1:00 (if pari passu). No portion
of the incremental may be incurred with an earlier maturity than
the initial term loans. The credit agreement permits the transfer
of assets to unrestricted subsidiaries, up to carve-out capacity
and other conditions, subject to "blocker " provisions which are
expected to prohibit the transfer of material intellectual property
to unrestricted subsidiaries other than in a bona fide transaction
for fair market value (as determined by the company in its
reasonable discretion). Non-wholly-owned subsidiaries are not
required to provide guarantees; dividends or transfers resulting in
partial ownership of subsidiary guarantors could jeopardize
guarantees, subject to protective provisions which only permit
guarantee releases if such transfers are part of bona fide
transactions with unaffiliated third parties. The credit agreement
provides some limitations on up-tiering transactions, including the
requirement that 100% of the lenders consent to subordinating, or
having the effect of subordinating (i) the obligations to any other
indebtedness; (ii) the liens securing the obligations to liens
securing any other indebtedness. The proposed terms and the final
terms of the credit agreement may be materially different.
The coronavirus outbreak and the government measures put in place
to contain it continue to disrupt economies and credit markets
across sectors and regions. Although an economic recovery is
underway, the recovery is tenuous, and continuation will be closely
tied to containment of the virus. As a result, a degree of
uncertainty around Moody's forecasts remains. Moody's regards the
coronavirus outbreak as a social risk under Moody's ESG framework,
given the substantial implications for public health and safety.
The gaming sector has been one of the sectors most significantly
affected by the shock given its sensitivity to consumer demand and
sentiment. More specifically, Scientific Games International
remains vulnerable to a renewed spread of the outbreak. Scientific
Games International also remains exposed to discretionary consumer
spending that leave it vulnerable to shifts in market sentiment in
these unprecedented operating conditions.
Governance risks are highly negative and linked primarily to
financial policy with high risk related to persistently elevated
leverage. The company's pending sale of its lottery and sports
betting businesses will result in meaningful debt repayment and
deleveraging in the near term. The company's previous large
shareholder, MacAndrew & Forbes Incorporated, significantly reduced
their holdings and Ronald Perelman is no longer the company's
chairman of the board. No shareholder holds more than 10% of the
company at this time, which contributes to low board structure and
policy risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook considers Moody's expectation that the
recovery in the company's business exhibited in 2021 will continue
over the next twelve months, with revenue growth and margin
expansion. The positive outlook also incorporates the company's
good liquidity and Moody's expectation for debt-to-EBITDA leverage
to be maintained at or below the 4x level.
Ratings could be downgraded if liquidity deteriorates, if Moody's
anticipates the company's revenue or earnings to decline or there
are reductions in discretionary consumer spending. Debt-to-EBITDA
leverage sustained over 5.0x could result in a downgrade.
The ratings could be upgraded if debt-to-EBITDA is sustained below
4.0x, with solid top line revenue growth, good liquidity, and a
commitment to maintaining a conservative financial policy with low
leverage levels. Consistent and meaningfully positive free cash
flow while maintaining good reinvestment levels that generate solid
returns would also be required for an upgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Scientific Games is a developer of technology-based products and
services and associated content for worldwide gaming, social and
digital gaming markets. Scientific Games Corporation (dba Light &
Wonder, Inc.) is the publicly traded parent company of Scientific
Games International, Inc., the direct borrower of over $8 billion
of rated debt. Consolidated revenue for the latest 12-month period
ended December 31, 2021 was $2.15 billion.
SCIENTIFIC GAMES: S&P Raises ICR to 'BB-', Outlook Stable
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating to 'BB-' from
'B', and its issue-level rating on Las Vegas, Nev.-based gaming
equipment and services provider, and digital gaming provider
Scientific Games Corp.'s (d/b/a Light & Wonder) unsecured notes
that it anticipates will remain in the capital structure to 'B+'
from 'B-'. S&P also removed the ratings from CreditWatch, where it
placed them with positive implications on Oct. 15, 2021.
S&P said, "In addition, we assigned our 'BB' issue rating and '2'
recovery rating to the new senior secured credit facility,
consisting of a $750 million revolving credit facility (RCF) and
$2.2 billion term loan, which the company plans to issue to
refinance existing debt.
"The stable outlook reflects our forecast that adjusted leverage
will remain below 4.5x, since we expect EBITDA growth will support
investments in capital expenditure (capex) and increasing returns
to shareholders."
Light & Wonder's use of substantial asset sale proceeds to repay
debt significantly reduces adjusted leverage below 4.5x, a level
aligned with the 'BB-' issuer credit rating. Light & Wonder will
complete the divestiture of its lottery business soon and plans to
use most of the about $5 billion in net proceeds to reduce debt.
The company also agreed to sell its sports betting business to
Endeavor Group Holdings Inc. for $1 billion in cash and $200
million in Endeavor stock. Endeavor expects to close the purchase
of OpenBet in the third quarter this year. S&P said, "We assume
Light & Wonder uses most of the cash proceeds from this sale to
further reduce debt by the end of the year. In addition to
improving leverage, Light & Wonder's planned debt repayment and the
proposed refinancing of its credit facility will extend its
maturity profile, reduce overall interest expense--especially since
we expect it to repay some of its higher cost notes--and improve
its cash flow in future quarters. The lottery divestiture, along
with the anticipated sports betting divestiture, will reduce Light
& Wonder's EBITDA base about 30%, based on 2019 levels. We believe
the 2019 EBITDA mix is the most relevant comparison because the
COVID-19 pandemic caused material declines in Light & Wonder's
gaming revenue due to the temporary closure of most U.S. casinos in
2020, subsequent operating restrictions that meant many gaming
machines were turned off through parts of 2020, and a pull-back in
demand for gaming machine purchases from gaming operators given
operating uncertainties due to the pandemic. Nevertheless, the
significant debt reduction, coupled with our forecast of about
20%-30% EBITDA growth in 2022 from the company's remaining
land-based gaming and digital segments, should translate to S&P
Global Ratings-adjusted leverage (pro forma excluding lottery and
sports betting EBITDA in 2022 and including anticipated debt
reduction) improving to 3.5x-4.0x in 2022, from the high-7x range
in 2021 (when including the contribution of lottery and sports
betting)."
S&P said, "We believe Light & Wonder will maintain adjusted
leverage below 4.5x given its financial policy.Light & Wonder's
recent publicly articulated financial policy with respect to
capital allocation is to first maintain its measure of net leverage
at 2.5x-3.5x, then return capital to shareholders through its $750
million share repurchase authorization, and lastly to invest
organically and potentially through acquisitions. We estimate our
adjustments add about 0.3x to management's measure. Light & Wonder
also lacks a track record of operating inside this much lower
leverage range. Nevertheless, under our base-case assumptions and
incorporating increased returns to shareholders over the next two
years, we forecast Light & Wonder's adjusted leverage will remain
well under 4.5x, which provides a good cushion relative to our
downgrade threshold.
"Although Light & Wonder's land-based gaming segment remains
solidly positioned in its market, we believe the lottery sale
increases business risks. In our view, the lottery business reduced
Light & Wonder's cash flow volatility, since lottery operations are
less volatile than the gaming segment, even during economic
downturns. Lottery products have a relatively low price point and
can be easily accessed via grocery stores, gas stations, and
convenience stores. In contrast, customers have to drive to a
casino to gamble. Light & Wonder's lottery business was not as
affected by the COVID-19 pandemic as its gaming segment, and
lottery recovered faster. Furthermore, the lottery segment was a
significant contributor to Light & Wonder's EBITDA, and therefore
the divestiture reduces its operating cash flow and ability to
self-fund investments and drive future potential debt reduction.
"Nevertheless, we believe Light & Wonder will maintain a leading
position in the global land-based gaming equipment market.We
anticipate this market will represent about 60%-65% of the
company's total revenue over the next two years." Furthermore, most
of Light & Wonder's land-based gaming revenue is derived from lease
and service contract related revenue. These revenue streams can
provide good revenue visibility, absent significant events like the
COVID-19 pandemic, and help mitigate the volatility of gaming
machine sales. Demand for gaming machines can be somewhat
unpredictable and depend in part on new casino openings or
expansions each year, and gaming operators' capital budgets, which
may be constrained during economic downturns or periods of
volatility.
Light & Wonder's digital social games segment, SciPlay, operates in
the highly competitive digital gaming space, which has low barriers
to entry and requires high levels of research and development (R&D)
spending to create games that resonate with customers and remain
competitive. Although SciPlay has been expanding into more casual
game play, its games are largely concentrated in casino style games
--a subset of the social games market. Compared to other social
gaming operators like Playtika Holding Corp. (BB-/Positive/--), or
Aristocrat Leisure Ltd. (BB+/Positive/--), SciPlay has
significantly fewer average daily users. S&P said, "We expect,
however, that SciPlay will continue to expand its user base over
time through the roll out of new games (particularly outside of
social casino gaming), and enhanced game features. Furthermore,
SciPlay's revenue per average daily user is on par with that of
Playtika and Aristocrat, indicating comparable levels of player
engagement. We anticipate SciPlay will represent about 25%-30% of
Light & Wonder's total revenue in the next two years."
Although a currently small contributor to revenue, Light & Wonder's
iGaming segment has a good market position in the U.S. and Canada
and has the leading global iGaming content aggregation platform.
Currently seven U.S. states authorize iGaming, and we expect that,
over time, more states will legalize iGaming to generate
incremental tax revenue.
S&P said, "The stable outlook reflects our forecast that adjusted
leverage will remain below 4.5x, since we expect EBITDA growth will
support investments in capex and increasing returns to
shareholders.
"We could lower our ratings if we expect Light & Wonder to maintain
adjusted leverage above 4.5x. This could occur if EBITDA is about
15% below our forecast this year, if the company embarks on higher
than anticipated returns to shareholders, or if it pursues a
leveraging acquisition. We could also revise the outlook or lower
the ratings if EBITDA is weaker than we expect and the sale of
OpenBet, and the associated debt reduction, does not occur.
"We could raise our ratings if we expect Light & Wonder to sustain
adjusted leverage below 3.5x, incorporating potential operating
volatility, increased investments or acquisitions, and shareholder
returns. This could occur if EBITDA is about 5% above our forecast
this year and management does not use significant levels of free
cash flow for share repurchases over the next year. However, we
would also need to see management demonstrate a longer track record
of operating inside its recently communicated leverage target."
ESG Credit Indicators: E-2; S-3; G-2
SEAFOOD JUNKIE: Has Deal on Cash Collateral Access
--------------------------------------------------
Seafood Junkie, LLC and the Colorado Department of Revenue have
advised the U.S. Bankruptcy Court for the District of Colorado that
they have reached an agreement regarding the Debtor's use of cash
collateral and now desire to memorialize the terms of this
agreement into an agreed order.
On November 9, 2021, the Court entered the Final Order Granting
Motion to Use Cash Collateral. Following the entry of the Order,
the Debtor was required to make monthly adequate protection
payments to CDOR in the amount of $1,000.
The Debtor was also required to timely file its sales tax and wage
withholding returns, and to pay those post-petition taxes and
withholdings. CDOR asserts the Debtor is in default of the Order.
The Debtor disputes it is in default and also asserts its right to
cure its obligations under the Order.
In order to resolve their dispute, the Debtor and CDOR stipulate
and agree as follows:
a. The Debtor will file all past due sales tax returns and
wage withholding returns by April 1, 2022;
b. The Debtor will commence all required payments under the
Order on April 1, 2022;
c. The Debtor will bring all post-petition tax obligations
current by April 15, 2022;
d. The Debtor will pay an additional $500 per month on the
15th day of every month, starting April 15, 2022, with such amounts
credited to the unpaid adequate protection payments for October
2021 through March 2022; and
e. The Debtor will fully cure any post-petition arrearages of
adequate protection payments on or before the first hearing on
confirmation of the Plan.
To induce CDOR to enter into the Stipulation, the Debtor waives its
cure rights. In the event of another default by the Debtor of the
Court Order or the Stipulation, the Debtor agrees CDOR may seek ex
parte relief from the Court to enforce the same and/or any remedies
at law and/or equity.
The Debtor asserts the Stipulation complies with the Kaiser Steel
factors in that it resolves a dispute in which the Debtor has
substantial risk on the merits; this Stipulation allows for
continued use of cash collateral and curing of the Debtor's
post-petition tax and adequate protection obligations; and serves
the best interests of creditors by permitting the Debtor to
continue with the case and proceed to confirmation of an amended
Chapter 11 Plan.
Colorado Department of Revenue is represented by:
Deanna Lee Westfall, Esq.
Assistant Attorney General
Colorado Department of Law
Ralph L. Carr Colorado Judicial Center
1300 Broadway, 8th Floor
Denver, CO 80203
Tel: 720-508-6342
Fax: 720-508-6038
Email: deanna.westfall@coag.gov
A copy of the stipulation is available at https://bit.ly/3DqDk4w
from PacerMonitor.com.
About Seafood Junkie LLC
Seafood Junkie LLC operates a restaurant known as Manzo's Lobster
and Oyster Bar located in Denver. The company filed a petition
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.
Colo. Case No. 21-15217) on October 14, 2021, listing $50,000 to
$100,000 in assets and $100,000 to $500,000 in liabilities. Richard
Manzo, member, signed the petition.
Judge Thomas B. McNamara presides over the case.
Buechler Law Office, L.L.C. serves as the Debtor's counsel.
SOUTH SKY: Wins Cash Collateral Access Thru June 30
---------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, has authorized South Sky Aviation0
Corporation D/B/A Florida Aviation Academy, to continue using cash
collateral in accordance with the budget on a final basis through
June 30, 2022.
The Debtor is permitted to use cash collateral in accordance with
the budget, with a 10% variance and additional amounts as may be
expressly approved in writing by the US Small Business
Administration or by further Court order.
As adequate protection to the extent of the Debtor's use of cash
collateral, the SBA will have effective as of the Petition Date:
(i) a replacement lien pursuant to 11 U.S.C. Section 361(2) on and
in all property acquired or generated post-petition by the Debtor
to the same extent and priority and of the same kind and nature as
the SBA's pre-petition liens and security interests in the cash
collateral. In addition, the Debtor will pay $400 per month to the
SBA (AP Payments). The Debtor will commence the AP Payments on the
1st day of April 2022 and each month thereafter during the term of
the Order, without waiver by any party as to the application of
said payments.
The term of the Budget is from April 1, 2022, through and including
June 30, 2022. Notwithstanding the foregoing, the Debtor, with the
express consent of the SBA and the Subchapter V Trustee, may extend
the term thereof without necessity of further Court order. In the
event an agreement is reached, the Debtor will file a notice of the
agreement including the proposed budget, which notice shall include
a bulletin advising interested parties that they may object to the
extended term by filing an object within seven days of service. If
the Debtor requires an extended term for use of cash collateral and
is unable to reach agreement with the SBA and the Subchapter V
Trustee, the Debtor may file a motion for continued use of cash
collateral and seek an expedited hearing thereon.
A copy of the order and the Debtor's budget for the period from
April to June 2022 is available at https://bit.ly/3tQOHiW from
PacerMonitor.com.
The Debtor projects $73,600 in total revenue and $82,890 for April
2022.
About South Sky Aviation Corporation
South Sky Aviation Corporation is an FAA-approved Part 141 flight
school that has been training professional pilots for 21 years.
South Sky Aviation is located in Pompano Beach, Florida, and
situated at a general aviation airport with three runways and an
air traffic control tower.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-11769-SMG) on March
3, 2022. In the petition signed by John Fitzgerald, president and
director, the Debtor disclosed up to $500,000 in assets and up to
$1 million in liabilities.
Judge Scott M. Grossman oversees the case.
Robert P. Charbonneau, Esq., at Agentis PLLC, is the Debtor's
counsel.
SPENGLER PLUMBING: Selling Certain Personal Property & Equipment
----------------------------------------------------------------
Spengler Plumbing Company, Inc., asks the U.S. Bankruptcy Court for
the Southern District of Illinois to authorize it to sell the
following items of personal property/equipment free and clear of
all liens claims and encumbrances:
a) Those items of equipment identified on Exhibit A to Sydney
C. Spengler for the sum of $36,200;
b) 2018 Bobcat E55 Compact Excavator (AJ913079) to Matt Fehr
for the sum of $62,000; and
c) 2015 Bobcat T590 T4 Skid Loader to Gateway Bobcat for the
sum of $38,500.
During the course of the case, the Debtor was forced to curtail its
operations, and has determined it is in the best interests of the
Debtor, creditors and the estate for the Debtor to sell
substantially all of its assets.
The Debtor has negotiated such a sale, but that sale does not
include certain "ancillary" personalty owned by the Debtor.
By the Motion, the Debtor seeks entry of an order approving the
sale of certain items of personal property/equipment free and clear
of all liens claims and encumbrances. In that respect, two items of
equipment are subject to security interests in favor of Bank of
Belleville and Wells Fargo Equipment Finance. Those debts secured
by those liens will be paid in concert with closing the subject
sales.
The Debtor has negotiated three separate sales of the assets. The
2018 Bobcat E55 Compact Excavator is subject to a security interest
in favor of Bank of Belleville in the approximate sum of $36,449,
and the balance due Bank of Belleville will be paid to said
creditor at the time the sale closes.
The 2015 Bobcat T590 Skid Loader is subject to a security interest
in favor of Wells Fargo Equipment Finance in the approximate sum of
$22,175, and the balance due Wells Fargo Equipment Finance will be
paid to said creditor at the time the sale closes.
Except for the direct payments to secured creditors described, the
Debtor requests that the Court authorizes the sale of the Acquired
Assets pursuant to Section 363 of the Bankruptcy Code free and
clear of any and all liens, claims, interests, and encumbrances,
with such liens, claims, interests and encumbrances to attach to
the sale proceeds.
The Debtor has determined that the assets described in the Motion
are not necessary to operation of its business, and those assets
are not included in the proposed sale of substantially all of its
business assets. The sales contemplated in the Motion will result
in the highest and best return for the Debtor, creditors and the
estate.
A copy of the Exhibit A is available at
https://tinyurl.com/3jtn4nnn from PacerMonitor.com free of charge.
About Spengler Plumbing Company
Founded in 1971, Spengler Plumbing Company, Inc., specializes in
plumbing and HVAC services.
Spengler Plumbing previously sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Ill. Case No. 19-30958) on July
19, 2019.
Spengler Plumbing recently sought Chapter 11 bankruptcy (Bankr.
S.D. Ill. Case No. 21-30409) on June 1, 2021. Silver Lake Group
Ltd., led by Steven M. Wallace, is the Debtor's counsel.
SUDBURY PROPERTY: Bid for Continued Cash Collateral Use Dropped
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts has
entered an order which rendered final, the Interim Order Approving
Use of Cash Collateral by Sudbury Property Management, LLC.
The Court said the counsel represented on the record that the sale
closed, the mortgagee was paid, and further use of cash collateral
was not needed. The interim order approving use of cash collateral
was approved on a final basis. The request for continuing use of
cash collateral in any future period was withdrawn on the record.
A copy of the order is available at https://bit.ly/3DnhPBu from
PacerMonitor.com.
About Sudbury Property Management
Sudbury Property Management, LLC is a privately held company in the
nonresidential building construction industry. The company is
headquartered in Marlborough, Mass.
Sudbury Property Management filed a petition for Chapter 11
protection (Bankr. D. Mass. Case No. 21-40913) on Dec. 14, 2021,
listing as much as $10 million in both assets and liabilities.
Padraig O'Beime, member, signed the petition.
Judge Christopher J. Panos oversees the case.
The Debtor tapped Francis C. Morrissey, Esq., at Morrissey, Wilson
& Zafiropoulos, LLP as legal counsel.
SUMMIT FINANCIAL: Has Deal on Cash Collateral Access Thru June 30
-----------------------------------------------------------------
Summit Financial, Inc. and CalPrivate Bank advised the U.S.
Bankruptcy Court for the District of California, Santa Ana
Division, they have reached an agreement regarding the Debtor's use
of cash collateral and now desire to memorialize the terms of this
agreement into an agreed order.
The Debtor borrowed funds from CalPrivate and entered into a loan
and security agreement that, among other things, contained a
provision that purported to grant CalPrivate a security interest in
all personal property of the Debtor. On October 9, 2018, CalPrivate
filed a UCC-1 Financing Statement with the California Secretary of
State. CalPrivate filed a proof of claim in the bankruptcy case,
asserting a secured claim in the amount of $650,033.
On May 17, 2020, the Debtor borrowed funds from the SBA and entered
into a loan and security agreement that, among other things,
contained a provision that purported to grant the SBA a security
interest in all tangible and intangible personal property of the
Debtor. On May 25, 2020, the SBA filed a UCC-1 Financing Statement
with the California Secretary of State. On September 27, 2021, the
SBA also filed a proof of claim in the bankruptcy case, asserting a
$157,505 secured claim.
As a result, CalPrivate holds a first priority lien against the
Debtor's cash collateral, and the SBA holds a second priority lien
against the Debtor's cash collateral.
The parties agree the Debtor may use cash collateral from April 1
through and including June 30, 2022 pursuant to the Revised Budget
and on the same terms and conditions that were approved by this
Court in its Second Cash Collateral Order.
As adequate protection, all secured creditors will receive
replacement liens in assets of the same kind, type, and nature as
the collateral in which the secured creditors held a lien that are
acquired after the Petition Date, and the proceeds thereof, to the
same extent, validity, and priority as any lien held by the secured
creditor in such Assets as of the Petition Date, though all rights
of the Debtor to challenge the extent, validity, and priority of
any asserted lien or liens are reserved.
The Debtor will pay CalPrivate Bank its contractual monthly
payment, which is approximately $8,950 per month.
Beginning in May 2022, the Debtor will pay the SBA its contractual
monthly payment, which is approximately $731 per month.
A copy of the order and the Debtor's budget for the period from
April to June 2022 is available at https://bit.ly/3qVHNH4 from
PacerMonitor.com.
The Debtor projects $153,381 in total revenue and $51,093 in total
operating expenses for April 2022.
About Summit Financial, Inc.
Summit Financial, Inc., which operates six high-end luxury nail
salons in Southern California, sought Chapter 11 protection (Bankr.
C.D. Cal. Case No. 21-12276) on September 18, 2021. On the
Petition Date, the Debtor estimated $100,000 to $500,000 in assets
and $1,000,000 to $10,000,000 in liabilities. The petition was
signed by Hao Tang as chief executive officer.
The Honorable Scott C. Clarkson presides over the case.
Arent Fox LLP is the Debtor's counsel.
T-SHACK INC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: T-Shack, Inc.
405 County Rd 25
Mantador, ND 58058-4026
Chapter 11 Petition Date: April 5, 2022
Court: United States Bankruptcy Court
District of Nevada
Case No.: 22-11197
Debtor's Counsel: Michael J. Harker, Esq.
LAW OFFICES OF MICHAEL J. HARKER
2901 El Camino Ave Ste #200
Las Vegas, NV 89102
Tel: 702-248-3000
E-mail: notices@harkerlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Raymond Zajac, registered agent.
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/6XU75ZQ/T-SHACK_INC__nvbke-22-11197__0001.0.pdf?mcid=tGE4TAMA
TARINA TARANTINO: Case Summary & 12 Unsecured Creditors
-------------------------------------------------------
Debtor: Tarina Tarantino Management, LLC
910 S. Broadway 7th Floor
Los Angeles, CA 90015
Business Description: Tarina Tarantino is the 100% owner of a
commercial real property located at 908-910
S. Broadway, Los Angeles, CA, having a
current value of $16 million.
Chapter 11 Petition Date: April 5, 2022
Court: United States Bankruptcy Court
Central District of California
Case No.: 22-11910
Judge: Hon. Barry Russell
Debtor's Counsel: David B. Golubchik, Esq.
LEVENE, NEALE, BENDER, YOO & GOLUBCHIK, L.L.P.
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Email: dbg@lnbyg.com
Total Assets: $18,181,129
Total Liabilities: $8,317,564
The petition was signed by Alfonso Campos as president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/TBVVZ5I/Tarina_Tarantino_Management_LLC__cacbke-22-11910__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 12 Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Allen Matkins Leck Professional $48,393
Gamble Mallory & Services
Natsis LLP
1900 Main St, 5th Floor
Irvine, CA 92614-7321
Ken Hennesay
Tel: (949) 851-5476
Email: KHennesay@allen
matkins.com
2. Sheppard Mullin Professional $27,572
Richter & Hampton L Services
333 South Hope
Street, 43rd
Los Angeles, CA
90071-1422
3. CBRE Leasing Fees $21,001
P.O. Box 740935
Location Code 2187
Los Angeles, CA
90074-0935
4. Law Offices of Professional $11,487
Sheldon J. Fleming Services
2030 Main St., Suite 1300
Irvine, CA 9261
5. Franchise Tax Board $4,015
Special Procedures
POB 2952
Sacramento, CA 95812
6. Continental Elevator Building Services $2,400
Services, Inc.
4209 Verdant St.
Los Angeles, CA 90039
7. Spectrum Cable/Internet $1,999
PO Box 60074
City of Industry, CA
91716-0074
8. Smith Mandel & Professional $1,132
Associates, LLP Servises
333 N. Glendoaks
Blvd., Suite 201
Burbank, CA 91502
9. LADWP Utility $814
P.O. Box 515407 Company
Los Angeles, CA
90051-6707
10. Carlsbad Certified Professional $650
Public Accountan Services
5741 Palmer Way,
Suite A
Carlsbad, CA 92010
11. WR Heating and Business Expense $99
Cooling Inc.
PO Box 670
CA 92890
12. U.S. SBA Substantially all Unknown
Office of Disaster personal Property
Assistance of Debtor
14925 Kingsport Rd
Fort Worth, TX 76155
TECTA AMERICA: Moody's Affirms 'B2' CFR & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service affirmed Tecta America Corp's B2
Corporate Family Rating, B2-PD Probability of Default Rating, B1
senior secured credit facility rating and a Caa1 second lien term
loan rating. The outlook has been changed to stable from negative.
Affirmations:
Issuer: Tecta America Corp
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Gtd. Senior Secured 1st Lien Bank Credit Facility, Affirmed B1
(LGD3)
Gtd. Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa1
(to LGD6 from LGD5)
Outlook Actions:
Issuer: Tecta America Corp
Outlook, Changed To Stable From Negative
The change in the outlook to stable from negative reflects the
company's improving debt/EBITDA leverage, estimated at 6.1x at
September 30, 2021 since integrating an M&A target and funding a
dividend distribution with incremental debt in March 2021. Moody's
now expects Tecta's leverage will decline towards 5.5x by the end
of 2022, driven by favorable demand trends for roofing maintenance
and replacement services. Moody's is not expecting aggressive
shareholder return activity. As a percentage of debt, Moody's
expects free cash to be in the high single digit range, relatively
strong for the B2 rating category.
RATINGS RATIONALE
Tecta's B2 CFR reflects the company's market position as one of the
leading providers of roofing maintenance and replacement services
to the commercial and industrial end markets, its diversified
customer base, and nationwide footprint. Tecta's solid operating
margins, predictable free cash flow and good liquidity also provide
support for the rating. The rating also reflects Tecta's
vulnerability to cyclical end markets. In addition, Moody's
considers governance characteristics, including its private equity
ownership and control, and aggressive financial policy actions.
The stable outlook reflects Moody's expectation for Tecta to
generate low single digit revenue growth amidst a favorable
environment for roofing maintenance and replacement services over
the next 12-18 months with mid double digit profit margins, leading
to leverage declining towards 5.5x. Moody's expects the company
will use free cash flow towards debt repayment and tuck-in M&A.
Tecta's good liquidity is supported by a $125 million revolving
credit facility through April 2026 and Moody's expectation for $60
and $70 million in free cash flow in 2022 and 2023, respectively.
Tecta's first lien senior secured revolving credit facility's
principal financial covenant is based on revolver usage. If the
revolver usage exceeds 35% of commitments, Tecta then must maintain
a first lien leverage ratio of no more than 8.15x until usage falls
below the maximum threshold. Moody's does not expect the net
leverage covenant ratio test to be triggered over the next 12
months. Tecta's senior secured term loan maturing in 2028 does not
have any financial covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Debt-to-EBITDA approaches 4.5x,
EBITA-to-interest expense is sustained above 3.0x, and the company
maintains good liquidity.
Alternatively, the ratings could be downgraded if Debt-to-EBITDA is
sustained above 6.0x, EBITA-to-interest expense is sustained below
2.0x, the company takes a very aggressive financial policy action
including shareholder dividends, or liquidity deteriorates.
Headquartered in Rosemont, IL, Tecta America Corp provides roofing
maintenance and replacement services to the commercial and
industrial end markets in the US.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
TEN OAKS FITNESS: Creditors to Recover 100% in Plan
---------------------------------------------------
Ten Oaks Fitness, Inc., filed with the U.S. Bankruptcy Court for
the District of Maryland a Disclosure Statement describing Plan of
Reorganization.
The Debtor is a Maryland corporation with its principal place of
business located at 3881 Ten Oaks Road, Ste. 1B, Glenelg, MD 21737.
Ten Oaks Fitness, Inc. was first formed on January 5, 2018 by its
principal, Kelvin Abrams.
The Debtor and Creditor Surbrook entered into a purchase agreement,
on or about January 5, 2018, whereby Debtor purchased the assets of
Surbrook's company. The assets included gym equipment and office
equipment. At that time, the gym equipment was valued at
approximatley $63,000.00. The purchase agreement was for
$65,000.00, and it was secured. The debt was perfected with the
filing of a UCC-1 with the State Department of Assessments and
Taxation. As of September 2020, the Debtor still owed $12,908.39.
With interest, costs and attorney fees, the District Court entered
a judgment of $14,439.04. The debt was settled post-petition.
The Debtor was in arrears with his landlord, Ten Oaks Management,
LLC, for approximately $44,747.00. The Debtor and Landlord reached
an agreement whereby the Landlord would (1) extend the lease term
to July 31, 2025; (2) reduced Debtor's rent to $2000.00 per month
from August 1, 2021 through July 31, 2022 and bi-annually raise the
rent by $500.00; and (3) allow the Debtor to satisfy the pre
petition arrears through the Chapter 11 Plan. The Debtor agreed to
assume the lease and pay the pre-petition arrears through its
Chapter 11 Plan.
The Debtor has proposed a Plan which would effectively reorganize
its unsecured debts and cure the arrears on the lease with the
Landlord. As far as the SBA loan is concerned, the Debtor intends
to pay the SBA outside of the Chapter 11. Further, it is the intent
of the Debtor to pay all of the Allowed Claims to be paid 100%
pursuant to the Plan.
It is the intent of the Debtor to pay all Class 1 and 2 creditors
100% through the Plan.
Class 1 consists of the Claim by the Landlord, Ten Oaks Management,
for pre-petition rent arrears of $44,747.00. In full payment of the
$44,747.00 owed to Landlord, the Debtor shall, upon the Effective
Date pay the sum of Five Hundred Dollars ($500.00) per month to the
Landlord for a period of 24 months. Beginning on the 25th Month,
the Debtor shall pay to the Landlord a total of One Thousand
Dollars ($1000.00) per month until the balance of the $44,747.00 is
paid in full. The claims of Ten Oaks Management are impaired.
Class 2 claims consist of the Allowed Unsecured Claims of Insiders.
Tiki's Playhouse, Clarence Fitzgerald and Juan Zakel are the only
Holders of Unsecured Insider Claims against the Debtor. The Claims
under Class 2 are impaired. In full, complete and final
satisfaction of the Allowed Claims under Class 2, the Debtor,
shall, subsequent to Month 13 after the Effective Date, pay a total
of $300.00 per month to be disbursed equally to each creditor under
Class 2, until said Claims are paid in full.
* Tiki's Playhouse. This is a business owned by the the
principal of the Debtor and said business has made prepetition
loans of money to the Debtor in the amount of $2,174.78.
* Clarence Fitzgerald and Joan Zakel. These individuals are
trainors in the gym and close friends of the Debtor's principal.
The Debtor owes each of them monies based upon prepetition loans
they made to the Debtor. Mr. Fitzgerald is owed $5,400.00 and Ms.
Zakel is owed $5,300.00.
Pursuant to the Plan, cash distributions will be made to Holders of
Allowed Administrative Claims, Priority Claims, Class 1 and 2
Claims and Claims arising from the curing of assumed leases on the
Effective Date from the cash flow of the Debtor.
During the term of this Plan, the Debtor shall submit the
disposable income (or value of such disposable income) necessary
for the performance of this plan to its Distribution Agent and
shall pay the sums set forth herein.
A full-text copy of the Disclosure Statement dated March 31, 2022,
is available at https://bit.ly/3NISnLz from PacerMonitor.com at no
charge.
The Debtor is represented by:
Marc A. Ominsky, Esq.
Law Offices of Marc A. Ominsky, LLC
10632 Little Patuxent Pkwy, Ste 249
Columbia, MD 21044
Tel.: (443) 539-8712
Email: info@mdlegalfirm.com
About Ten Oaks Fitness
Ten Oaks Fitness, Inc. filed a petition for Chapter 11 protection
(Bankr. D. Md. Case No. 21-10313) on Jan. 18, 2021, listing up to
$50,000 in assets and up to $500,000 in liabilities. Judge David
E. Rice oversees the case. The Debtor is represented by the Law
Offices of Marc A. Ominsky, LLC.
TG INTEGRATION: Gets Cash Collateral Access Thru May 4
------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan has
authorized TG Turnkey, LLC, TG Manufacturing, LLC, and TGM
Coatings, LLC to use cash collateral on an interim basis and
provide adequate protection.
The Debtor require the use of cash collateral to pay payroll,
purchase insurance and pay operating expenses.
Bank of America advanced funds or credit to the Debtors for the
purchase of inventory, equipment, fixtures, supplies and other
assets currently utilized in the DIP businesses. The Debtors
granted BofA a security interest in its cash, inventory, equipment,
fixtures, accounts, contract rights, chattel paper, general
intangibles and the proceeds therefrom.
BofA's advances, security interests and liens were evidenced by
various agreements, including, without limitation, these notes,
security agreements, and financing statements:
a. Loan 1- Line of Credit: $5,000,000 in original principal
amount; and
b. Loan 2- Term Loan: $2,000,000 in original principal
amount.
As adequate protection for the use of cash collateral, BofA and any
other secured parties will retain their security interests and
liens on all assets in their current rank, order and priority. BofA
is granted a perfected lien and security interest in and upon all
of the following created through the terms of the Motion
incorporated into the Order or any extension thereof to the extent
of any diminution in BofA's position because of the use of the cash
collateral.
All Indebtedness for adequate protection due to BofA will have
priority over any and all costs and expenses of administration or
other priority claims in the Chapter 11 proceeding, including those
administrative and priority expenses described in 11 USC section
503(b) and 507(a) except the statutory fees of the United States
Trustee and professional fees.
The Debtors will make or cause to be made a regular monthly payment
in the amount of $15,000 under all Notes to BofA, commencing on or
before April 1, 2022, as follows:
-- TG Turnkey, LLC: $9,000
-- TGM Coatings, LLC: $4,500
-- TG Manufacturing, LLC: $1,500
To the extent the provisions of the Order do not adequately protect
BofA from damage resulting from the continuance of the automatic
stay, the sale and/or consumption of inventory in the ordinary
course of business and the permission to use cash collateral, the
bank will have a claim in this proceeding for resulting damages,
which will have priority and payment over every other claim
entitled to priority under section 507(b) of the Bankruptcy Code.
The use of cash collateral authorized will terminate on the earlier
of:
a. The date of entry of an order terminating DIP's use of cash
collateral;
b. Other than for TG Manufacturing, the Debtors' cessation of
active business operations;
c. The date of dismissal of the bankruptcy proceedings or
conversion of the proceedings to a proceeding under another chapter
of the Bankruptcy Code;
d. The date of the entry of an order confirming the Debtors'
Chapter 11 Plan; or
e. May 4, 2022, unless the Order becomes a Final Order and
(a) BofA and the Debtors agree to a continuance of the use of cash
collateral on the same terms, or (b) BofA and the Debtors agree to
a continuation of the use of cash collateral on different terms
with the approval of the Court.
A final hearing on the matter is scheduled for May 4 at 10 a.m.
A copy of the order is available at https://bit.ly/3DrI49Q from
PacerMonitor.com.
About TG Integration, LLC
TG Integration, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. W.D. Mich. Case No. 22-00615-jtg) on March
27, 2022. In the petition signed by Kevin Kyle, president, the
Debtor disclosed up to $1 million in assets and up to $500,000 in
liabilities.
Judge John T. Gregg oversees the case.
A. Todd Almassian, Esq. at Keller & Almassian, PLC is the Debtor's
counsel.
THOMAS M. COOLEY LAW SCHOOL: S&P Lowers 2014 Bond Rating to 'BB-'
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term rating and issuer credit
rating (ICR) to 'BB-' from 'BB' on Michigan Finance Authority's
series 2014 limited obligation revenue bond issued for the Thomas
M. Cooley Law School (Cooley or TCLS). The outlook is negative.
"The lowered rating reflects our opinion of TCLS's substantial
enrollment pressure and corresponding very weak financial
performance," said S&P Global Ratings credit analyst Amber Schafer.
"Furthermore, we believe TCLS's severe enrollment declines and
operating losses are not sustainable, and that its accreditation
could be at risk of requiring an extension if the school cannot
improve its bar passage rate to comply with the new standards," Ms.
Schafer added.
S&P said, "While vaccine progress has helped alleviate some of the
health and safety social risk stemming from the pandemic, we
believe the higher-education sector remains at a greater risk than
others, given the importance of resumption in pre-pandemic
activities and the corresponding influence on operating revenue. We
believe management has taken prudent actions regarding the health
and safety of its students. In addition, we believe the school
faces elevated governance risk due to uncertainty whether it will
be able to meet updated American Bar Association (ABA)
accreditation standards, with respect to its two-year bar passage
rate. If TCLS is unable to increase its bar passage rate to comply
with the heighted standards, we believe its accreditation could be
at risk of requiring an extension to come into compliance. Despite
the elevated social and governance risk, we believe TCLS's
environmental risk factors are in line with our view of the
sector."
Thomas M. Cooley Law School is a private, independent law school
headquartered in Lansing, Mich. At the peak of its enrollment, it
operated five campuses (four in Michigan and one in Florida),
however, given enrollment pressure it has closed or is in the
process of closing campuses. The two remaining campuses are in
Lansing, Mich., and Tampa Bay, Fla. Total FTE enrollment was 507 in
fall 2021.
TITAN IMPORTS: Seeks Cash Collateral Access
-------------------------------------------
Titan Imports, Inc. asks the U.S. District Court of Guam, Territory
of Guam, Bankruptcy Division, for authority to use cash collateral
in accordance with the budget through the date of the final
hearing.
As of the Petition Date, the Debtor was holding approximately
$366,245 in cash in its bank account at the Bank of Guam and
approximately $1,113,758 in cash in its account at Merrill Lynch,
net of a $600,000 cashier's check issued to the DRT.
The Debtor seeks authority to continue to use the BOG's cash
collateral pursuant to a First Stipulation Authorizing Use of Cash
Collateral Stipulation between the Debtor and BOG. Among other
things, the Cash Collateral Stipulation authorized the Debtor to
use cash collateral to pay normal, operating expenses and certain
Chapter 11 expenses, including fees payable to the Standing
Trustee, the allowed fees and expenses of the Debtor's
professionals, and to make monthly interest payments of $10,328 in
accordance with the terms of the Promissory Note made by the Debtor
in favor of BOG.
The Debtor proposes to grant BOG replacement liens in all of the
estate's post-petition cash on hand and receivables, together with
other newly acquired assets of the Debtor, excepting only claims
which the Debtor has to avoid transfers and recover property by
means of "avoidance" and other "strong arm" powers under the
Bankruptcy Code, with the same priority and extent as BOG's
existing security interests in the cash collateral. The amount
secured by the Replacement Liens will be equal to any actual net
diminution of Bank's interest, existing as of the Petition Date, in
the Debtor's assets, due to the actual use thereof.
BOG's Adequate Protection Claim, if any, will be a super-priority
claim as provided by Section 507(b) of the Bankruptcy Code.
A copy of the motion is available at https://bit.ly/3JUyTBb from
PacerMonitor.com.
About Titan Imports, Inc.
Titan Imports, Inc. is a premium and luxury wines and spirits
distribution company in Guam and the Northern Marianas Islands. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Guam Case No. 22-00007) on March 25, 2022. In the
petition filed by John D. Antenorcruz, president, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Frances M. Tydingco-Gatewood oversees the case.
David W. Dooley, Esq., at Roberts Fowler and Visosky LLP is the
Debtor's counsel.
TLA TIMBER: Court OKs Cash Collateral Deal
------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Georgia
approved the stipulation TLA Timber, LLC entered into with
Commercial Credit Group Inc. authorizing the Debtor's use of cash
collateral to pay its post-petition expenses incurred in the
ordinary course of its business activities in accordance with the
budget.
As of the Petition Date, the Debtor was obligated to CCG on three
purchase-money commercial equipment loans, which are evidenced by a
Negotiable Promissory Note and Security Agreement payable to CCG
dated December 19, 2019, in the original face amount of $243,168, a
Negotiable Promissory Note and Security Agreement payable to CCG
dated August 28, 2020 in the original face amount of $324,231, and
a Negotiable Promissory Note and Security Agreement payable to CCG
dated December 30, 2020 in the original face amount of $337,655.
Pursuant to the Notes, which are cross-collateralized, the Debtor
granted to CCG security interests and liens in and upon
construction/logging equipment generally known as the Feller
Buncher, the log loader and the grapple skidder, all as more
particularly described in the Description of Property in each of
the Notes, as well as all of the Debtor's accounts, equipment,
contract rights, goods, inventory, the proceeds of the Equipment
Collateral, and other items of personal property, which constitute
"cash collateral" as defined in 11 U.S.C. section 363(a).
CCG properly perfected its pre-petition security interests in the
cash collateral and all of the Equipment Collateral by filing UCC-1
Financing Statements with the Georgia Secretary of State and having
its lien noted on the face of certificates of title, as
appropriate.
As of the Petition Date, the Debtor owed $617,693 on the Notes,
plus subsequently accruing interest at the contract rate of 11% per
annum and attorneys' fees, including legal expenses, recoverable
under the Loan Documents.
The Court ruled that the automatic stay is lifted as to all of
CCG's Equipment Collateral effective immediately as of the entry of
the Order. Moreover, the Debtor will generally cooperate with CCG
in turning over the Feller Buncher to CCG within 48 hours of the
entry of the Order.
CCG will forbear from seizing and recovering the Loader and the
Skidder provided the Debtor will:
(a) provide adequate protection payments to CCG in the amount
of $13,000 per month on or before the 25th day of the month
beginning on March 25, 2022; however, the March 25, 2022 payment
would be deferred until April 1;
(b) provide to CCG a certificate of adequate insurance on the
Loader and the Skidder on or before March 30, 2022 (and the
Buncher, to the extent the Debtor maintains possession thereof),
and continuously provide CCG with certificates of adequate
insurance within two business days upon request by CCG;
(c) make the Loader and the Skidder available for CCG's
inspection upon and within 48 hours of CCG's request; and
(d) file amended plans of reorganization in the bankruptcy
case and in In re Ross Davis No. 21-50996 on or before March 30,
2022, and confirm the Plans of Reorganization within 90 days of the
entry of the Order, which Plans will incorporate the terms and
provisions of the Order.
To the extent of cash collateral in existence on the Petition Date,
CCG is granted post-petition liens against the same types of
property of the Debtor, to the same validity, extent and priority,
as existed as of the Petition Date, wherever located, effective
nunc pro tunc as of the Petition Date. The liens will be deemed for
all purposes to have been properly perfected, without filing, as of
the Petition Date.
These events constitute an "Event of Default:"
a. The Debtor violates or fails to timely satisfy,
post-petition, any term or condition of the Consent Order or the
Loan Documents.
b. A trustee or examiner (other than a Subchapter V trustee)
is appointed under Chapter 11 of the Code without the consent of
CCG.
c. The Debtor sells or encumbers any item of property subject
to CCG's liens, without the prior written consent of CCG.
d. The Debtor's Chapter 11 proceeding is converted to a
Chapter 7 proceeding or dismissed.
e. The Debtor's business operations materially change.
f. Insurance required under the Note is deemed inadequate,
allowed to lapse by the Debtor, or is otherwise terminated.
g. The Debtor will use cash collateral in a manner that is
materially inconsistent with the Budget. A use automatically will
be materially inconsistent to the extent (a) the Debtor's use of
cash collateral will exceed by more than 10% the budgeted line item
for such expense and/or (b) the Debtor's use of cash collateral
will exceed by more than 15% the total amount of expenses proposed
in the Budget.
h. The Debtor's principal will fail to timely fund payments to
CCG owed under Mr. Davis' Amended Plan of Reorganization, in which
CCG will be treated as a fully secured creditor.
* * *
On March 30, 2022, TLA Timber delivered to the Bankruptcy Court its
Amended Chapter 11 Plan. The Court will hold a hearing on April 11
to consider approval of the Small Business Chapter V Plan and the
objections lodged by Commercial Credit Group Inc., Exchange Bank,
Internal Revenue Service and Century Bank & Trust Co.
About TLA Timber
TLA Timber, LLC, a Eaton, Ga.-based company that owns and operates
a logging business, filed a voluntary petition for Chapter 11
protection (Bankr. M.D. Ga. Case No. 21-51009) on Oct. 29, 2021. In
the petition signed by Ross Elmer Davis, managing member, the
Debtor disclosed up to $1 million in asset and up to $10 million in
liabilities.
Judge James P. Smith oversees the case.
Wesley J. Boyer, Esq., at Boyer Terry LLC, is the Debtor's
bankruptcy counsel.
TON REAL ESTATE: Wins Access to Concord Mall Cash Collateral
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana,
South Bend Division, has authorized Ton Real Estate Investments X,
LLC to use the cash collateral of Concord Mall Properties, LLC on
an interim basis in accordance with the terms and conditions of the
Interim Stipulation and Order.
The Debtor requires immediate authority to use cash collateral in
order to continue its operations without interruption and allow it
to achieve a successful reorganization.
The Debtor and CMP agree the Debtor's obligations to CMP are
evidenced by a Promissory Note, dated February 11, 2020, whereby
the Debtor promised to pay the principal amount of $6,480,000. The
Loan is secured by certain real estate detailed in a Mortgage,
Security Agre ement, Assignment of Leases and Rents and Fixture
Filing, dated February 11, 2020, pursuant to which the Debtor
mortgaged, warranted, and conveyed to CMP its interests in the
Mall. The Mortgage was recorded in the Office of the Recorder for
Elkhart County, Indiana, on April 24, 2020, as Instrument Number
2020-08466. The repayment of the Loan was further secured by a
Guaranty executed by Daniel Olswang and John Thomas in which the
Guarantors, jointly and severally, unconditionally and irrevocably
guaranteed to CMP the punctual payment, performance and
indebtedness of the Note and Mortgage.
CMP asserts, and the Debtor agrees, CMP has a valid and enforceable
first priority properly perfected and nonavoidable security
interest in and lien on, inter alia, all of the Debtor's assets.
The indebtedness owed to CMP by the Debtor under the Loan Documents
as of the Petition Date is $7,626,649, plus accruing interest,
costs, fees, charges, expenses, and attorney fees.
The Debtor will use the cash collateral solely for ordinary and
necessary postpetition operating expenses, payroll expenses,
utility services, payroll taxes, insurance, supplies and equipment,
vendor and supplier services, and other expenditures as are
necessary for operating the Debtor's businesses at the Mall and
maintaining the Collateral consistent with and as set forth in the
budget from the Petition Date through April 30, 2022.
As adequate protection, the Debtor will pay to CMP monthly payments
in the amount of $30,000 for February and $40,000 for March and
April, respectively, for application against Debtor's obligations
to CMP as evidenced and secured by the Loan Documents.
CMP is granted a first post-petition replacement lien in all assets
of the Debtor to the same extent as CMP's valid, properly perfected
and nonavoidable liens in the Debtor's pre-petition property,
excluding bankruptcy causes of action, to the extent necessary to
secure CMP for any diminution in value of the cash collateral
securing CMP's prepetition obligations that occurs during the
period of cash use.
As further protection. CMP is granted a replacement lien on the
funds in the Operating Account, to the same validity, priority,
enforceability as CMP's prepetition lien on such funds.
The Debtor will also pay when due all taxes, insurance, assessments
and governmental and other charges accrued post-petition, including
any and all federal and state withholding taxes, and all property
taxes related to the Collateral, and will provide to CMP, on
request, copies of depository receipts or other satisfactory
evidence of the same.
A continued hearing on the matter is scheduled for April 11 at 1
pm.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3iX58UB from PacerMonitor.com.
The Debtor projects $96,342 in rent and $92,976 in total other
expenses for April 2022.
About Ton Real Estate Investments X
Ton Real Estate Investments X, LLC is an Illinois limited liability
company in the business of leasing, and running a retail mall
located at 3701 S. Mail St., Elkhart, Ind.
Ton Real Estate Investments sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ind. Case No. 22-30056) on Jan.
25, 2022. In the petition signed by John Thomas, manager, the
Debtor disclosed up to $50 million in assets and up to $10 million
in liabilities.
Judge Paul E. Singleton oversees the case.
Christopher A. Hansen, Esq., at the Law Offices of Chris Hansen and
Endeavor Property Services, Inc. serve as the Debtor's legal
counsel and property manager, respectively.
Concord Mall Properties, LLC, as lender, is represented by:
Annette England, Esq.
Barnes and Thornburg LLP
11 South Meridian Street
Indianapolis IND 46204
Tel: (317) 231-6460
Fax: (317) 231-7433
Email: aengland@btlaw.com
TOP LINE GRANITE: Seeks Cash Collateral Access
----------------------------------------------
Top Line Granite Design Inc. asks the U.S. Bankruptcy Court for the
District of Massachusetts for authority to use cash collateral and
provide adequate protection.
To maintain the viability of its business, the Debtor must (i) pay
employees, (ii) purchase materials from its suppliers and vendors,
the majority of which, if not all, have required cash on delivery,
(iii) pay rent and utility charges, (iv) cover other operating
expenses, and (v) pay professionals necessary for the successful
reorganization of its business. The Debtor will need to utilize
Cash Collateral in order to meet these obligations and avoid
disruption of the business and attendant economic losses.
The Debtor specifically seeks, without limitation:
a. Entry of an order authorizing the interim use of Cash
Collateral to maintain and operate its business and avoid
irreparable harm.
b. Authority to grant Post-petition Liens to certain
Lienholders and, to the extent funds are available, to make monthly
Adequate Protection Payments to the holders of Senior Claims.
c. Scheduling of a final hearing on the Motion for entry of a
final order regarding the continued use of Cash Collateral through
July 31, 2022, to maintain and operate the Debtor's business.
Subject to the filing of the Debtor's bankruptcy schedules, the
Debtor's secured creditors with unexpired UCC-1 financing
statements filed before February 1, 2021, are Enterprise Bank and
Trust Company, Avidia Bank, ENG Commercial Finance, and the US
Small Business Administration.
In addition to the secured claims, several other creditors,
including those with certain Cash Advance Agreements, filed UCC-1
financing statements against assets of the Debtor with balance
totaling approximately $1,200,000. These creditors are ROC Funding,
TVT Capital, Mercury Funding Group Inc., Diverse Capital, Mr.
Advance, Ultra Funding, AJ Equity Group, Blade Funding, Brickstone
Group, and Speedy Funding.
The Senior Claims do not include the guaranty claims of Avidia
Bank, and Bay Colony Development Corp. (SBA loan) totaling
approximately $4,000,000. The primary obligor related to the
Guaranty Claims is 347 Middlesex Road Realty Trust. The Trust owns
the real property where the Debtor operates its business, namely
347 Middlesex Rd. Tyngsboro, MA.
The Guaranty Claims are secured by a mortgage on the Real Estate,
are contingent and unliquidated with respect to the Debtor, and are
deemed unsecured with respect to assets of the Debtor.
Avidia Bank also has two secured claims against assets of the
Debtor totaling approximately $2,500,000. The Trust is a guarantor
of the Avidia Secured Claims and the Real Estate also constitutes
collateral for such loans.
The Debtor estimates that there is approximately $1,500,000 in
other unsecured debt outstanding, not including the Guaranty Claims
(which are contingent and unliquidated) and insider debts.
The Debtor proceeded with the filing of the Chapter 11 case to
invoke the protections afforded by the Bankruptcy Code and to
continue its operations in light of (i) the continued impact of the
Covid-19 Pandemic, and (ii) certain unfair practices of the
Debtor's lenders and creditors, including the short-term lenders
with the Cash Advance Agreements, and the actions of Merchant
Capital.
While the Debtor's revenue remained stable during the COVID-19
pandemic, the Debtor needed more working capital to cover the
increase in operating and business expenses.
As adequate protection, the Debtor proposes the Senior Claims and
the other secured creditors with valid liens be granted
post-petition replacement liens and security interests in property
of the Debtor's estate, in an amount equivalent to the amount of
Cash Collateral expended by the Debtor, of the same type, in the
same nature and to the same extent as the Lienholders had in such
assets pre-petition to the extent the Lienholders held validly
perfected liens and security interests as of the Petition Date. The
Post-petition Liens will be recognized only to the extent of
diminution in the value of the Lienholders' prepetition collateral
constituting cash collateral resulting from the Debtor's use
thereof in the operation of the Debtor's business in the
Post-petition period. The Post-petition Liens will maintain the
same priority, validity, and enforceability as the Lienholders'
liens on their pre-petition collateral.
In addition, as further adequate protection pursuant to Section
361(a) of the Bankruptcy Code, to the extent funds are available,
the Debtor proposes to make monthly payments to the Senior Claims
with respect to their secured claims, as set forth in the Budget.
A copy of the motion is available at https://bit.ly/3LycAl4 from
PacerMonitor.com.
About Top Line Granite Design Inc.
Top Line Granite Design Inc. is a manufacturer of cut stone and
stone products. Top Line offers a selections of kitchen granite,
marble and quartz.
Top Line sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Mass. Case No. 22-40216) on March 25, 2022. In the
petition signed by Edmilson Ramos, president, the Debtor disclosed
up to $10 million in assets and up to $50 million in liabilities.
Alan L. Braunstein, Esq., at Riemer and Braunstein LLP is the
Debtor's counsel.
TOWN & COUNTRY: Trustee Taps Sanford Kahn as Special Counsel
------------------------------------------------------------
N. Neville Reid, the Chapter 11 trustee for Town & Country
Partners, LLC, received approval from the U.S. Bankruptcy Court for
the Northern District of Illinois to employ Sanford Kahn, LLP as
his special counsel.
The trustee needs the firm's legal assistance in connection with
eviction proceedings involving the Debtor's non-paying tenants in
Portage, Ind.
Sanford Kahn will be paid as follows:
a. $500 for any work through the first court appearance;
b. $400 for any work related to a damages hearing, if
requested;
c. $250 per hour for any work outside of court; and
d. Reimbursement of work-related expenses.
As disclosed in court filings, Sanford Kahn is "disinterested"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael Griffin, Esq.
Sanford Kahn, LLP
180 North LaSalle Street, Suite 2025
Chicago, IL 60601
Phone: +1 312-263-6778
Email: michael@sanfordkahnllp.com
About Town & Country Partners
Orland Park, Ill.-based Town & Country Partners, LLC filed a
petition for Chapter 11 protection (Bankr. N.D. Ill. Case No.
21-08430) on July 14, 2021, listing up to $50 million in assets and
up to $10 million in liabilities. Judge Jacqueline P. Cox oversees
the case. Benjamin Legal Services, PLC, led by Kevin Benjamin,
Esq., is the Debtor's legal counsel.
Polsinelli PC serves as counsel for Toorak Capital Partners, LLC,
the pre-bankruptcy lender.
N. Neville Reid, the Chapter 11 trustee appointed in the Debtor's
case, tapped Fox Swibel Levin & Carroll, LLP as bankruptcy counsel;
Sanford Kahn, LLP as special counsel; and Kutchins Robbins &
Diamond, Ltd. as tax accountant.
TRANSPORTATION DEMAND: Wins Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
has authorized Transportation Demand Management, LLC on an interim
basis pursuant to the budget, with a 15% variance.
As adequate protection and for the Debtor's use of the cash
collateral, First Security Bank will be granted replacement liens
in the Debtor's post-petition cash, accounts receivable and
inventory, and related proceeds, to the same extent and priority as
any duly perfected and unavoidable liens in cash collateral held by
the Secured Creditor as of the Petition Date, limited to the amount
of any cash collateral of the Secured Creditor as of the Petition
Date, to the extent that any cash collateral of the Secured
Creditor is actually used by the Debtor. The replacement lien does
not include, without limitation, a lien on avoidance action
proceeds.
A final hearing on the use of cash collateral is set for May 5,
2022 at 9:30 a.m.
A copy of the order is available at https://bit.ly/3wZcP4K from
PacerMonitor.com.
About Transportation Demand Management, LLC
Transportation Demand Management, LLC is a motorcoach and minibus
operator in the Pacific Northwest with a fleet of over 90
motorcoaches and mini buses of varying size generating more than
$15M in annual sales.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10482-MLB) on March
26, 2022. In the petition signed by Gladys Gillis, chief executive
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Marc Barreca oversees the case.
Nathan T. Riordan, Esq., at Wenokur Riordan PLLC is the Debtor's
counsel.
TRILOGY INTERNATIONAL: Fitch Withdraws All Ratings
--------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings of
Trilogy International Partners, Inc. (Trilogy) and Trilogy
International South Pacific LLC (TISP) at 'CCC+' and has
simultaneously withdrawn the ratings. Fitch has also affirmed the
$51 million TISP senior secured notes at 'B+'/'RR1' and $367.7
million TISP senior secured notes due 2023 at 'CCC+'/'RR4' and
withdrawn all ratings.
Fitch has withdrawn Trilogy's ratings for commercial reasons. Fitch
reserves the right in its sole discretion to withdraw or maintain
any rating at any time for any reason it deems sufficient.
KEY RATING DRIVERS
Bolivian Asset Sale Announcement: On March 28, 2022, Trilogy
announced that it has entered an agreement to transfer, for nominal
consideration, its 71.5% equity interest in Nuevatel (PCS de
Bolivia) S.A. to Balesia Technologies, Inc., a member of the
Balesia Group of Companies. The transaction is subject to customary
closing conditions, and Trilogy anticipates that the closing will
take place in the second quarter of 2022.
New Zealand Subsidiary Sale: Trilogy, which owns 73.17% of the
equity in 2degrees, and its minority partner, Tesbrit BV, entered
into a definitive agreement to sell 2degrees to Voyage Digital (New
Zealand) Limited for NZ$1.58 billion excluding lease liabilities.
Net proceeds to Trilogy, after considering transaction costs and
local debt at 2degrees, are expected to exceed NZ$900 million and
be more than sufficient to repay outstanding debt (~USD450 million)
at Trilogy International South Pacific LLC (TISP). Repayment is
required under the terms of TISP's indenture.
The transaction obtained shareholder approval and approvals from
the New Zealand Commerce Commission and the New Zealand Government
Communications Security Bureau. The transaction is expected to
close in the second quarter of 2022 once all customary regulatory
approvals are in place. Per Trilogy, one additional government
approval remains, the Overseas Investment Office, which is expected
in the second quarter.
Limited Liquidity: As of Dec. 31, 2021, the company had
approximately USD55 million in cash, cash equivalents and
restricted cash, of which $36.8 million was held by 2degrees,
USD17.5 million was held by NuevaTel and USD0.7 million was held at
headquarters and others.
Inefficient OpCo/HoldCo Structure: The current corporate structure
is less than optimal when upstreaming dividends due to cash leakage
from withholding taxes and minority interest distributions in both
Bolivia and New Zealand. Upstreaming dividends are also subject to
foreign exchange risk. NuevaTel was historically a dividend
contributor and paid dividends of more than USD300 million to
Trilogy since 2008. However, due to the deterioration in the
Bolivian operations, Trilogy became solely reliant on distributions
from New Zealand operations.
TISP Collateral and Ranking: The $367.7 million (including $10.7
million increase due to offer under Liquidity Event under the
indentures) exchanged TISP notes are guaranteed by Trilogy LLC,
Trilogy International South Pacific Holdings LLC (TISPH) and the
Bolivian Holding companies. The $367.7 million TISP Notes are
secured by a first priority lien of the equity interests in TISPH
and TISP, a pledge by TISP of its interest in its loans to Trilogy
LLC, and by a first priority lien on the NuevaTel/2degrees proceeds
cash collateral account.
The $51 million TISP notes have priority in recovery ahead of the
$367.7 million TISP notes in respect to the collateral for net
proceeds received with any dispositions of collateral or in any
insolvency proceeding.
Good Momentum in New Zealand: The New Zealand operations maintained
good operational momentum during the coronavirus pandemic with
reported service revenue and EBITDA increasing 17% and 15%,
respectively during 2021. 2degrees results have benefitted from
lower post-paid churn, increased post-paid subscribers and expanded
EBITDA margins. 2degrees' market challenger strategy has enabled
the company to take market share from the incumbents. 2degrees is
focused on growing its postpaid share, increasing penetration in
the business sector, increasing bundled broadband growth and
leveraging 5G/fixed wireless strategy.
Bolivian Operations Challenged: Significant cash flow deterioration
occurred in the Bolivian operations during the past several years.
This was due to the competitive environment from mobile number
portability, social unrest from political instability and
aggressive promotional offers resulting in significant subscriber
and ARPU erosion and more recently, the coronavirus pandemic. As a
result, EBITDA declined to near zero from approximately USD82
million in 2016. Fitch believes significant operating uncertainty
remains given the current operating environment in Bolivia.
DERIVATION SUMMARY
Trilogy's 'CCC+' rating, now withdrawn, reflects its small scale,
material exposure to the higher risk operational environment in
Bolivia, challenger brand strategy, low profitability and
constrained financial profile. 2degrees in New Zealand and NuevaTel
in Bolivia compete against much larger peers in three-competitor
markets. Both operating companies maintain market share in the low-
to mid-20% range with substantial exposure in both markets to
lower-valued prepaid subscribers. In early 2020, 2degrees entered
into a network sharing arrangement which supports a more efficient
capital deployment.
2degrees competes with a former operating subsidiary of Vodafone
Group Plc (BBB/Stable) in New Zealand, which has more expansive
scale and financial resources. Vodafone sold the operations in 2019
to a New Zealand infrastructure company and Canadian asset
management firm.
In Bolivia, NuevaTel competes against Tigo, S.A., an operating
subsidiary of Millicom International Cellular S.A. (MIC;
BB+/Stable), which has a much stronger business and financial
profile.
Oi S.A.'s (CCC+) is another telecom peer with ratings that reflect
its restructured financial profile and the still-uncertain outlook
for its turnaround strategy following the reorganization of the
group's activities.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Consolidated EBITDA in the range of USD110 million to 120
million;
-- Capex intensity in low to mid-teens;
-- A moderate FCF deficit;
-- Annual operating cash costs including debt service costs of
roughly USD50 million for TISP notes;
-- Core telecom leverage (debt/operating EBITDA adjusted for
financial services) near 6.0x range.
-- There is no material change to recovery assumptions as
detailed in Fitch's previous release dated June 11, 2021.
RATING SENSITIVITIES
Rating sensitivities are no longer relevant given Fitch's rating
withdrawal.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Limited Liquidity Headroom: Trilogy's consolidated cash, cash
equivalents and restricted cash was about USD55 million as at Dec.
31, 2021, including USD36.8 million held at 2degrees, USD17.5
million held at NuevaTel and USD0.7 million held at the parent
level. The USD50 million dollars debt issuance at TISP LLC during
4Q20 improved short-term liquidity for debt service at TISP. In
June 2021, Trilogy completed an exchange offer for USD350 million
of parent's notes with TISP 8.875% Notes. The outstanding balance
of TISP notes was USD367.7 million as of Dec. 31, 2021.
ISSUER PROFILE
Trilogy is an internationally focused wireless telecommunications
company with operations in New Zealand (2degrees) and Bolivia
(NuevaTel).
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.
SUMMARY OF FINANCIAL ADJUSTMENTS
-- Adjustments for factoring and outstanding handset receivables
related to FS operations that Fitch brought back on balance
sheet (assessed using a debt-to-equity ratio of 1x);
-- Fair value of debt adjusted to reflect debt amount payable at
maturity;
-- Readily available cash excludes restricted amounts and cash in
Bolivia;
-- In calculating leverage metrics, EBITDA is reduced to reflect
any dividends to minorities.
TRUE HEALTH: Ex-Lab. Execs, Staff Aces DOJ Kickback Lawsuit
-----------------------------------------------------------
Rachel Scharf of Law360 reports that former executives for
laboratory companies True Health Diagnostics LLC and Boston Heart
Diagnostics Corp. paid millions of dollars worth of kickbacks to
conduct lucrative tests at a rural Texas hospital, the U.S.
Department of Justice alleged in a False Claims Act lawsuit
unsealed Monday, April 4, 2022.
The federal government intervened in a 2016 whistleblower action
over an alleged plot by 18 former employees of True Health, Boston
Heart and other businesses to bribe doctors into referring patients
covered by Medicare, Medicaid and Tricare.
About THG Holdings LLC
THG Holdings LLC and its affiliates, including True Health LLC,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Del. Lead Case No. 19-11689) on July 30, 2019.
THG's business is conducted in large part through True Health --
https://truehealthdiag.com/ -- a laboratory provider of diagnostic
and disease-management solutions based in Frisco, Texas. It
utilizes proprietary and innovative diagnostic to detect disease
indicators that enable early stage and monitoring for a variety of
chronic diseases.
At the time of the filing, True Health Diagnostics was estimated to
have assets of between $10 million and $50 million and liabilities
of between $100 million and $500 million.
The cases have been assigned to Judge John T. Dorsey.
The Debtors tapped Morris, Nichols, Arsht & Tunnell LLP as counsel;
Perkins Coie LLP as special counsel; SSG Advisors LLC as investment
banker; and Epiq Corporate , LLC as claims, noticing and
solicitation agent.
Andrew Vara, acting U.S. trustee for Region 3, on Aug. 8, 2019,
three creditors to serve on the official committee of creditors in
the Chapter 11 cases. The Committee retained Elliott Greenleaf,
P.C., and Cooley LLP, as attorneys, and GlassRatner Advisory &
Capital Group, LLC as financial advisor.
VTV THERAPEUTICS: Incurs $13 Million Net Loss in 2021
-----------------------------------------------------
vTv Therapeutics Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
attributable to the company of $12.99 million on $4.01 million of
revenue for the year ended Dec. 31, 2021, compared to a net loss
attributable to the company of $8.50 million on $6.41 million of
revenue for the year ended Dec. 31, 2020.
"I am dedicated to the long-term growth and development of the
Company and look forward to working with vTv's talented employees,
scientists, and partners during this exciting time," Mr. Nelson
said. "The positive Phase 2 study results and FDA Breakthrough
Therapy Designation for TTP339 are very promising milestones in the
development of a novel treatment for type 1 diabetes patients
worldwide."
As of Dec. 31, 2021, the Company had $25.47 million in total
assets, $10.25 million in total liabilities, $24.96 million in
redeemable noncontrolling interest, and a total stockholders'
deficit attributable to the company of $9.74 million.
The Company's cash position as of Dec. 31, 2021, was $13.4 million
compared to $19.6 million as of Sept. 30, 2021.
Raleigh, North Carolina-based Ernst & Young LLP, the Company's
auditor since 2000, issued a "going concern" qualification in its
report dated March 29, 2022, citing that the Company has not
generated any product revenue, has not achieved profitable
operations, has insufficient liquidity to sustain operations and
has stated that substantial doubt exists about the Company's
ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1641489/000156459022012258/vtvt-10k_20211231.htm
About vTv Therapeutics
vTv Therapeutics Inc. is a clinical-stage biopharmaceutical company
focused on developing oral small molecule drug candidates. vTv has
a pipeline of clinical drug candidates led by programs for the
treatment of type 1 diabetes, Alzheimer's disease, and inflammatory
disorders. vTv's development partners are pursuing additional
indications in type 2 diabetes, chronic obstructive pulmonary
disease (COPD), and genetic mitochondrial diseases.
VYANT BIO: Incurs $40.9 Million Net Loss in 2021
------------------------------------------------
Vyant Bio, Inc. filed with the Securities and Exchange Commission
its Annual Report on Form 10-K disclosing a net loss of $40.86
million on $1.15 million of total revenue for the year ended Dec.
31, 2021, compared to a net loss of $8.65 million on $867,000 of
total revenue for the year ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $37.64 million in total
assets, $6.35 million in total liabilities, and $31.29 million in
total common stockholders' equity.
Vyant Bio stated, "The 2021 results included a net loss from
discontinuing operations of $22.3 million, which includes a $20.2
million goodwill impairment charge as well as continuing operations
non-cash expenses of $4.8 million and merger related costs of $2.3
million. We expect losses to continue. These losses have had, and
will continue to have, an adverse effect on working capital, total
assets and stockholders' equity. Because of the numerous risks and
uncertainties associated with our revenue growth and costs
associated with being a public company, we are unable to predict
when we will become profitable, and we may never become profitable.
Even if we do achieve profitability, we may not be able to sustain
or increase profitability on a quarterly or annual basis. Our
inability to achieve, and then maintain, profitability would
negatively affect our business, financial condition, results of
operations and cash flows."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1349929/000149315222008085/form10-k.htm
About Vyant Bio
Vyant Bio, Inc. (formerly known as Cancer Genetics, Inc.) is an
innovative biotechnology company reinventing drug discovery for
complex neurodevelopmental and neurodegenerative disorders. Its
central nervous system drug discovery platform combines
human-derived organoid models of brain disease, scaled biology, and
machine learning.
Vyant Bio reported 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.
WESCO AIRCRAFT: Incora Recapitalization Stops Default Risk
----------------------------------------------------------
Soma Biswas of The Wall Street Journal reports that Incora
recapitalization stops default risk at some bondholders' expense.
Aircraft parts distributor Incora's deal to raise fresh capital
from bondholders led by Silver Point Capital LP weakens the claims
of other creditors, while also reducing the chances of a chapter 11
filing in the near term, according to people familiar with the
matter.
Wesco Aircraft Holdings Inc., which does business as Incora,
announced a deal with bondholders led by Silver Point on Tuesday,
raising $250 million in fresh financing and exchanging $450 million
of bonds due in 2024 for new debt with maturities in 2026 and
2027.
About Wesco Aircraft Holdings
Wesco Aircraft Holdings, Inc., doing business as Incora, is
headquartered in Valencia, California, is a leading distributor and
provider of supply chain management services to the global
aerospace industry. Services include the distribution of C-class
hardware, chemical and electrical products as well as quality
assurance, kitting, just-in-time delivery and point-of-use
inventory management. Pattonair, headquartered in Derby, UK, is a
leading supply chain management services provider focusing on parts
distribution as well as sourcing and procurement, forecasting and
inventory planning, supplier management, and operations and quality
assurance. The combined companies will offer more than 640,000
active SKUs and are expected to have pro forma revenues of about
$2.2 billion for the 12 months ended March 2020.
WHITE RABBIT: Wins Cash Collateral Access Thru April 30
-------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington at
Vancouver has authorized White Rabbit Ventures, Inc., dba Matrix
Roofing, and Home Solutions dba Matrix Roof+Home to use cash
collateral on an interim basis in accordance with the budget
through April 30, 2022.
The U.S. Small Business Administration is granted a replacement
lien in the Debtor's post-petition assets, to the same extent,
validity, and priority it had in the Debtor's pre-petition assets,
excluding any security interests in avoidance actions pursuant to
sections 506(c), 544, 545, 547, 548, and 549 of the Bankruptcy
Code, and without prejudice to the ability of the Debtor or its
creditors to contest the amount, validity and priority of the
replacement lien.
A continued hearing on the matter is scheduled April 26 at 9 a.m.
by telephone.
A copy of the order and the Debtor's budget for April 2022 is
available at https://bit.ly/3Dp7iFT from PacerMonitor.com.
The Debtor projects $284,346 in total cost of goods/expenses.
About White Rabbit Ventures, Inc.
White Rabbit Ventures, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-40173-MJH)
on February 14, 2022. In the petition signed by Wendy J. Marvin,
chief executive officer, the Debtor disclosed up to $1 million in
assets and up to $10 million in liabilities.
Judge Mary Jo Heston oversees the case.
Geoffrey Groshong, Esq., at Groshong Law PLLC is the Debtor's
counsel.
YUNHONG CTI: Delays Filing of 2021 Annual Report
------------------------------------------------
Yunhong CTI Ltd. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay in the filing of its Annual
Report on Form 10-K for the period ended Dec. 31, 2021. The
Comopany said the compilation, dissemination and review of the
information required to be presented in the Form 10-K has imposed
requirements that have rendered timely filing of the Form 10-K
impracticable without undue hardship and expense to the Company.
About Yunhong CTI
Lake Barrington, Illinois-based Yunhong CTI Ltd. --
www.ctiindustries.com -- develops, produces, distributes and sells
a number of consumer products throughout the United States and in
over 30 other countries, and it produces film products for
commercial and industrial uses in the United States. Many of the
Company's products utilize flexible films and, for a number of
years, it has been a leading developer of innovative products which
employ flexible films including novelty balloons, pouches and films
for commercial packaging applications.
Yunhong CTI reported a net loss of $4.25 million for the 12 months
ended Dec. 31, 2020, compared to a net loss of $8.07 million for
the 12 months ended Dec. 31, 2019. As of Sept. 30, 2021, the
Company had $24.88 million in total assets, $19.59 million in total
liabilities, and $5.30 million in total shareholders' equity.
New York, NY-based RBSM LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated April
15, 2021, citing that the Company has suffered recurring losses
from operations and will require additional capital to continue as
a going concern. In addition, the Company is in violation of
certain covenants agreed to with PNC Bank which if not resolved
could result in PNC Bank initiating liquidation proceedings. This
raises substantial doubt about the Company's ability to continue as
a going concern.
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