/raid1/www/Hosts/bankrupt/TCR_Public/240118.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, January 18, 2024, Vol. 28, No. 17
Headlines
117 SPENCER: Resource Says Disclosure Lacks Adequate Information
365 S4 ST: Secured Creditor PSF Says Disclosure Inadequate
399 ATHERTON: Voluntary Chapter 11 Case Summary
4TH VECTOR: Wins Interim Cash Collateral Access
50 CROSBY PINES: Unsecureds Will Get 100% of Claims in Plan
502 E JED: Says Unsecured Creditors Expected to Get Full Payment
579 DECATUR: Voluntary Chapter 11 Case Summary
ACRISURE LLC: Moody's Rates New $925MM Sr. Unsecured Notes 'Caa2'
ACRISURE LLC: S&P Assigns 'CCC+' Rating to $925MM Senior Notes
ADDISON GROUP: Moody's Affirms 'B2' CFR, Outlook Remains Stable
ADIENT GLOBAL: Moody's Ups CFR to B1 & Senior Secured Notes to Ba2
AINOS INC: Enters Addendum to TCNT Product Development Agreement
AMPLUS ACADEMY: S&P Raises Charter School Bond Rating to 'BB+'
AQUARIUM SOLUTIONS: Wins Collateral Access on Final Basis
ASHFORD HOSPITALITY: Announces Preliminary Q4 2023 Results
AULT ALLIANCE: Three Proposals Approved at Annual Meeting
B-1208 PINE: Case Summary & 20 Largest Unsecured Creditors
BAFFINLAND IRON: S&P Downgrades ICR to 'CCC', Outlook Negative
BLACK PRESS: Chapter 15 Case Summary
BRANDYWINE REALTY: S&P Downgrades ICR to 'BB', Outlook Negative
BRAVO MULTINATIONAL: Agrees With Pythia to Create New Company
BROOKDALE SENIOR: Reports December 2023 Occupancy
C.W. KELLER: Unsecureds to Get 10%-13% or 30%-32% in Plan
CALIFORNIA STATEWIDE: Moody's Hikes Rating on 2 Bond Series to Ba1
CAMP DAVID: Kimberly Strong Named Subchapter V Trustee
CANOO INC: Yorkville Agrees to Advance $17.5M Under Amended PPA
CANOPY GROWTH: Cancels US$30M Subscription Agreement With Investors
CHAMBERLAIN GROUP: S&P Rates $625MM First-Lien Term Loan B 'B'
CHARIOT BUYER: Moody's Lowers First Lien Loans to 'B3'
CHICKEN SOUP: Receives Noncompliance Notice From Nasdaq
COMMSCOPE HOLDING: First Trust, 2 Others Report 6.16% Stake
CONSERVICE MIDCO: S&P Lowers First-Lien Debt Rating to 'B-'
CORECIVIC INC: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
CROWN SUBSEA: Moody's Rates New First Lien Loan 'B1'
CROWN SUBSEA: S&P Affirms 'B+' ICR, Outlook Stable
CVR REFINING: S&P Withdraws 'B+' Issuer Credit Rating
DEAN GUTIERREZ: Feb. 21 Disclosure Statement Hearing Set
DISCOVERY ENERGY: S&P Assigns 'B' ICR, Outlook Stable
DISH NETWORK:S&P Cuts ICR to 'CC' on Announced Distressed Exchange
EEA STERLING: Hires Goldberg Weprin Finkel Goldstein as Counsel
EMERALD ISLES: Aaron Cohen Named Subchapter V Trustee
EMERGENT BIOSOLUTIONS: Awarded Procurement Contract Valued $235.8M
EVOKE PHARMA: Registers Up to 8.33 Million Common Stock Units
EYE CARE LEADERS: Case Summary & 30 Largest Unsecured Creditors
FITNESS INTERNATIONAL: Moody's Puts 'B3' CFR on Review for Upgrade
FRANCISCAN FRIARS: Seeks to Hire B. Riley as Financial Advisor
FREEDOM WIND: Voluntary Chapter 11 Case Summary
FRINJ COFFEE: Case Summary & 14 Unsecured Creditors
GAINS CAPITAL: Gets OK to Hire Kelley & Clements as Legal Counsel
GALLERIA PAIN: Seeks Cash Collateral, $100,000 DIP Loan
GENESIS GLOBAL: Dollar Lenders Disclose More Than $468M Claims
GEO GROUP: S&P Affirms 'B' ICR on Solid Operating Performance
GOLDEN KEY: Creditors' Committee Proposes Rival Plan
GOLDEN SEAHORSE: All Unsecureds Will be Paid in Full in Plan
GPD COMPANIES: Moody's Cuts CFR to B3 & Alters Outlook to Stable
GRAND AUGUSTA: Seeks to Hire Michael Harker as Bankruptcy Counsel
GROUNDSWELL MMA: Taps Ascend Business Solutions as Accountant
GUR-MEAT INC: LUMA, Not a Creditor, Says Disclosure Inadequate
HARRISBURG'S HOMETOWN: Court OKs Cash Access Thru Feb 21
HARTMAN SPE: Unsecured Creditors Will Get 100% of Claims in Plan
HIGHWIRE NETWORKS: Operating Losses Raise Going Concern Doubt
HUB INT'L: Moody's Rates New $1.9BB Senior Unsecured Notes 'Caa2'
HUB INTERNATIONAL: S&P Rates New $1.9BB Sr. Unsecured Notes 'B-'
HUDSON 888 OWNER: Seeks to Hire Herrick Feinstein as Legal Counsel
HUGHES SATELLITE: Moody's Lowers CFR to Caa1, Outlook Negative
IMPEL PHARMACEUTICALS: Wins Cash Collateral Access on Final Basis
INFOBLOX: Moody's Affirms 'B3' CFR, Outlook Remains Stable
INTEGRATED HEALTH: Patient Care Ombudsman Taps Rimon PC as Counsel
INTELLIPHARMACEUTICS: Gets Conditional OK to List on TSX Venture
INVERSIONES LATIN AMERICA: Courtd Confirms Plan
J & S CONCEPTS: Timothy Stone Named Subchapter V Trustee
J.T. AND SON: Seeks to Hire Lally & Co. CPAs as Accountant
JACOBS ENTERTAINMENT: Moody's Alters Outlook on B2 CFR to Negative
JER INVESTORS: Seeks to Hire Seward & Kissel as Special Counsel
JER INVESTORS: Taps Dundon Advisers as Restructuring Advisor
JER INVESTORS: Taps Troutman Pepper Hamilton Sanders as Counsel
KEHE DISTRIBUTORS: Moody's Cuts CFR to B1 & Alters Outlook to Neg.
LAG SHOT: Ruediger Mueller of TCMI Named Subchapter V Trustee
LE LAMPADARIE: Involuntary Chapter 11 Case Summary
LEXARIA BIOSCIENCE: Incurs $1.2 Million Net Loss in First Quarter
LFS TOPCO: Moody's Affirms 'B1' CFR, Outlook Remains Stable
LITTLELOGISTICS LLC: Case Summary & 20 Top Unsecured Creditors
LIVINGSTON TOWNSHIP: Hires Jernigan Copeland as Special Counsel
LIVINGSTON TOWNSHIP: Taps Heritage Commercial & Land Co. as Realtor
LOCAL 8 INTERNATIONAL: Seeks Approval to Hire James Murphy Co.
LOCAL 8 INTERNATIONAL: Taps Peterson to Provide Tax Services
MALLINCKRODT PLC: To Wind Down StrataGraft Production
MBIA INC: Files IRS Form 8937
MINIM INC: Receives Noncompliance Notice From Nasdaq
NEXII BUILDING: Chapter 15 Case Summary
NGL ENERGY: Moody's Upgrades CFR to B2 & Alters Outlook to Stable
NICMAR INDUSTRIES: Seeks $800,000 DIP Loan from Gorham
NXT ENERGY: Closes Private Placement of $1.9M Debentures
OCEAN PARKWAY: Case Summary & Seven Unsecured Creditors
ORION TECHNOLOGIES: Lone Objection Resolved, Plan Confirmed
PLOURDE SAND: Court OKs Cash Collateral Access Thru Feb 9
PRUDENT AMERICAN: Court OKs Cash Collateral Access Thru Mar 1
RACKSPACE TECHNOLOGY: Promotes Mark Marino to CFO
RAPID7 INC: Appoints Scott Murphy as Senior VP, CAO
RGV PUMP: Wins Cash Collateral Access on Final Basis
RINCHEM CO: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR
RISKON INTERNATIONAL: Violates Nasdaq's Voting Rights Rule
RITE AID: A&G Real to Market Additional Tranche of Store Leases
ROUGH BUYER: Moody's Lowers First Lien Bank Loans to 'B2'
SEMILEDS CORP: Incurs $596K Net Loss in First Quarter
STAFFING 360: Baker Tilly Resigns; RBSM LLP Named New Auditor
STAFFING 360: Melanie Grossman Named Principal Accounting Officer
STAFFING 360: Nasdaq Filing Delinquencies Cured
STONEYBROOK FAMILY: Jerrett McConnell Named Subchapter V Trustee
SVB FINANCIAL: Inks Restructuring Support Deal Amid Chapter 11
SVB FINANCIAL: Retains Business of SVB Capital, Forms New Committee
TALLGRASS ENERGY: Moody's Rates New $700MM Unsecured Notes 'B1'
TALOS PRODUCTION: Moody's Affirms 'B2' CFR, Outlook Stable
TANTUM COMPANIES: Feb. 7 Disclosure Statement Hearing Set
TELEPHONE USA: Feb. 6 Bid Deadline Set
TRICORBRAUN HOLDINGS: Moody's Alters Outlook on B3 CFR to Negative
USA RV: Wins Interim Cash Collateral Access
VIDEO DISPLAY: Incurs $408K Net Loss in Third Quarter
WATCHMEN SECURITY: Judy Wolf Weiker Named Subchapter V Trustee
WEC US: S&P Upgrades ICR to 'B+' on Proposed Refinancing
[^] Recent Small-Dollar & Individual Chapter 11 Filings
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117 SPENCER: Resource Says Disclosure Lacks Adequate Information
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Resource Capital, LLC , a secured creditor, objects to the
Disclosure Statement filed jointly by debtors 117 Spencer LLC and
136 Spencer LLC with respect to their proposed Joint Plan of
Reorganization.
Resource says the Disclosure Statement, in certain respects, lacks
adequate information as required by Section 1125 of Title 11 of the
United States Code. As its specific objections, Resource states as
follows:
The Plan provides that Resource's claim will be paid in full, in
cash, including interest "in an amount determined by the Court
allowing such Claim," fifteen days after allowance of the claim.
The Plan and Disclosure Statement are silent, however, as to
precisely how and by whom the amount of Resource's allowed claim
will be determined; conspicuously, the Plan and Disclosure
Statement refer to the "Court allowing such Claim" and not to the
Bankruptcy Court.
In addition, Resource is entitled to know when the Debtors
intend to file their challenges against Resource, as the Disclosure
Statement does not make clear whether the Plan's deadline for the
filing of claim objections of 90 days after the Effective Date
applies to whatever the Debtors intend to do with respect to
Resource.
Once the amount of Resource's claim is determined, the Plan
provides for the claim to be paid almost immediately, specifically
within fifteen days. Nevertheless, the Plan and Disclosure
Statement are quite vague about the Debtors' ability to make such a
rapid full payment. According to the Disclosure Statement, Lisa
Venuto will make a cash contribution to the Debtors in an amount
either sufficient to pay Resource's claim in full or sufficient to
permit 117 Spencer, LLC to enter a refinancing transaction that
will pay Resource's claim in full. But the Disclosure Statement
gives no information whatsoever from which it is possible to
conclude or even infer that Lisa Venuto has a sufficient amount of
cash immediately available to her or, more importantly, that she
will still have such an amount of cash available when whatever
forum the Debtors contemplate acts upon the Debtors' challenge to
Resource's claim.
Counsel of Resource Capital, LLC:
Adam J. Ruttenberg, Esq.
BEACON LAW GROUP, LLC
935 Great Plain Ave., #116
Needham, MA 02492
Tel: (617) 235-8600
E-mail: aruttenberg@beaconlawgroup.com
About 117 Spencer and 136 Spencer
117 Spencer, LLC, is a Massachusetts limited liability company that
was formed in 2019 to own and operate the real estate located at
117 Main Street, Spencer, Massachusetts. Lisa Venuto and Peter
Venuto, who are married, collectively own 100% of the Debtor's
membership interests. Peter Venuto is the manager of the Debtor.
117 Spencer, LLC, sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-40590) on July 21,
2023. In the petition signed by Peter Venuto (by Lisa Venuto under
power of attorney), the Debtor disclosed up to $10 million in both
assets and liabilities.
136 Spencer LLC sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. D. Mass. Case No. 23-40684) on Aug. 23,
2023, listing $500,001 to $1 million in both assets and
liabilities.
Judge Elizabeth D. Katz oversees the cases.
D. Ethan Jeffery, Esq., at Murphy & King, Professional Corporation,
serves as the Debtors' legal counsel.
365 S4 ST: Secured Creditor PSF Says Disclosure Inadequate
----------------------------------------------------------
PS Funding, Inc., a secured creditor of 365 S4 ST LLC objects to
the Debtor's Disclosure Statement and to confirmation of Debtor's
Plan of Reorganization.
PSF asserts that the Disclosure Statement fails to provide adequate
information to enable creditors to vote on the Plan:
* The Plan fails to meet the applicable standards for
confirmation by failing to properly classify the Debtor's
creditors, by impermissibly discharging third party obligations
owed to PSF, and failing to treat PSF's claim fairly and
equitably.
* The Disclosure Statement fails to contain adequate information
about the Property, its management, operating history, leases,
tenants and security deposits, as required by 11 U.S.C. s 1125(a).
PSF objects to the Plan's classification scheme in that both it,
and the senior, priming liens of the Debtor's taxing authorities
are in the same Class Number 2, which violates the classification
scheme of 11 U.S.C. s 1122(a).
Although a term sheet has been provided for the Debtor's proposed
financing, there is no indication that all preconditions for the
required post-petition loan described therein have been met or
satisfied, and the Plan therefore fails to satisfy the feasibility
requirement of 11 U.S.C. s 1129(b)(2)(A).
The Plan clearly indicates that the contemplated payment of
$1,930,000 to PS Funding will fully satisfy PS Funding's claims
against the Debtor, which would work an impermissible release
and/or discharge of PSF's claims against the Guarantor.
Where, as here, PSF makes the election under s 1111(b)(2) then the
full amount of such claim, not just an amount equal to the
collateral's value, must be treated as a secured claim under a plan
of reorganization, and this section applies in all chapter 11
cases.
Accordingly, PSF has exercised its right of election under 11
U.S.C. Sec. 1111(b)(2)(B), and opted to waive its general unsecured
claim and have its total claim treated as fully secured, so that it
must be paid in full over the life of the Plan. Since the Plan does
not adequately provide for such treatment, it cannot be confirmed.
Attorneys for PS Funding, Inc:
Matthew Burrows, Esq.
John J. Winter, Esq. (Pro Hac Vice)
CHARTWELL LAW
One Battery Park Plaza, Suite 701
New York, NY 10004-1445
Tel: (212) 968-2300
About 365 S4 ST LLC
365 S4 ST LLC is an New York Limited Liability Company that was
formed to purchase a single parcel of real estate known as 365 S
4TH Street, Brooklyn, New York 11221, Block: 2437; Lot: 25 (the
"Property").
The Debtor filed its voluntary petition for Chapter 11 protection
(Bankr. E.D.N.Y. Case No. 23-43396) on September 21, 2023, listing
as much as $1 million to $10 million in both assets and
liabilities. Zalmen Wagschal as managing member, signed the
petition.
SOBERS LAW PLLC serve as the Debtor's legal counsel.
399 ATHERTON: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: 399 Atherton, LLC
5441 Country Club Parkway
San Jose, CA 95138
Business Description: 399 Atherton is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: January 17, 2024
Court: United States Bankruptcy Court
Northern District of California
Case No.: 24-50052
Debtor's Counsel: Arasto Farsad, Esq.
FARSAD LAW OFFICE, P.C.
1625 The Alameda, Suite 525
San Jose, CA 95126
Tel: 408-641-9966
Email: Farsadlaw1@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Luu as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/P4IT4ZQ/399_Atherton_LLC__canbke-24-50052__0001.0.pdf?mcid=tGE4TAMA
4TH VECTOR: Wins Interim Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized 4th Vector Technologies, LLC
to use cash collateral on an interim basis, in accordance with the
budget, with a 10% variance.
The Debtor needs to use cash collateral to make payment of
ordinary operating expenses.
A review of the North Carolina Secretary of State's UCC filings
reveals the following financing statements which might perfect a
lien on cash collateral:
a. File # 20190055278M recorded May 23, 2019, in favor of NOW
ACCOUNT NETWORK CORPORATION, at 2300 Peachtree NW, Suite C-102,
Atlanta, GA, 30309.
b. File # 20200042096G recorded April 17, 2020, in favor of First
Horizon Bank, PO Box 132, Memphis, TN 38101.
c. File # 202100006769E recorded January 17, 2021, in favor of U.S.
Small Business Association, 2 North 20th Street, Suite 320,
Birmingham, AL, 35203.
d. File # 20210077982K recorded June 11, 2021, in favor of CHTD
Company, P.O. Box 2576, Springfield, IL, 62708.
e. File # 20230059828M recorded May 10, 2023, in favor of Bay First
National, a national banking association, 700 Central Avenue, St.
Petersburg, FL, 33701.
f. File # 20230115497F recorded September 15, 2023, in favor of Bay
First National, a national banking association, 700 Central Avenue,
St. Petersburg, FL, 33701.
As adequate protection, and to the extent that cash collateral is
used, the Potential Secured Creditors will receive a post-petition
lien on the Debtor’s cash and inventory to the extent of the use
and to the extent that the pre-petition lien in the same type of
collateral was valid, perfected, enforceable, and non-avoidable as
of the petition date.
The Debtor's use of cash collateral will expire or terminate on the
earlier of: (i) the Debtor ceasing operations of its business; or
(ii) the non-compliance or default of the Debtor with any terms and
provisions of the Order.
A further hearing on the matter is set for February 20, 2024 at 10
a.m.
A copy of the order is available at https://urlcurt.com/u?l=M4RHNT
from PacerMonitor.com.
The Debtor projects $48,175 in total income for the 30-day ending
February 15, 2024.
About 4th Vector Technologies, LLC
4th Vector Technologies, LLC is an industrial equipment supplier in
Raleigh, North Carolina. The Company's current services include:
turnkey solutions, retrofits, field support & resource, industrial
research & engineering studies, traceability, data collection &
analytics, OEM open source development, and preventative
maintenance.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.C. Case No. 24-00021) on January 2,
2024. In the petition signed by Robert Couture, CTO/managing
member, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Pamela W. McAfee oversees the case.
William P. Janvier, Esq., at STEVENS MARTIN VAUGHN & TADYCH, PLLC,
represents the Debtor as legal counsel.
50 CROSBY PINES: Unsecureds Will Get 100% of Claims in Plan
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50 Crosby Pines, Ltd., and its Debtor Affiliates filed with the
U.S. Bankruptcy Court for the Southern District of Texas a Combined
Disclosure Statement and Plan of Reorganization dated January 11,
2024.
Prior to bankruptcy, the Debtors completed most preliminary
engineering studies and were applying for permits with the
applicable regulatory authorities in order to begin the actual
development work on their properties. However, most of the
properties were within the extraterritorial jurisdiction ("ETJ") of
either the City of Houston, the City of Baytown, or the City of
Cleveland, which required regulatory approval from the
municipalities. During this process, the various short-term loans
the Debtors received by the Debtors matured without the possibility
of further extensions of credit.
Recent legislation by the Texas Legislature is anticipated to have
a positive impact on the Debtor's future development. Specifically,
the Act of May 19, 2023 will allow the Debtors to remove the real
property from the ETJ of the City of Houston, the City of Baytown,
and the City of Cleveland, minimizing the Cities' influence over
the development, and the Act of Jun. 18, 2023 will allow the East
Lake Houston Management District to issue bonds without
interference by either the City of Houston, the City of Baytown, or
the City of Cleveland.
These positive developments in the law came too late to allow the
Debtors to either extend the maturity dates of their secured loans
or to obtain new financing. Ultimately, all Debtors, were left with
no option but to seek bankruptcy protection in a final effort to
reorganize their financial affairs.
Class 5 consists of General Unsecured Claims. Allowed amount of
$1,316,727.92 are subject to change because the bar dates for the
filing of claims are: (a) November 27, 2023 for creditors of 50
Crosby Pines, (b) February 5, 2023 for creditors of 48 Highland
Shores, 53 Eagles Cove, and 171 Lone Stag, and (c) May 6, 2024 for
creditors of 80 Crosby Terrace, 133 Lone Wolf, and 100 Tennessee
Township.
All allowed general unsecured claims will be paid in deferred cash
payments from cash on hand after all Allowed Claims in Classes 1
through 4 are paid in full. All payments made to holders of Allowed
Claims in Class 5 will be pro rata amounts until all Allowed Claims
in Class 5 are paid in full.
To the extent a claim is anticipated or is awaiting approval
pursuant to Fed. R. Bankr. P. 9019, an allowance for such claim
will be made and distributions on such claim will be made to the
extent such claim is ultimately allowed by a final court order.
Creditors in this class will receive 100 percent of their Allowed
Claims. Class 5 is impaired.
Class 6 consists of those secured and unsecured claims of Insiders.
Except as specifically allowed by the DIP Lender as an approved
budget item and draw request under the DIP Loan, no insider
creditor, whether secured or unsecured, shall receive any
distribution from the Reorganized Debtors until all Allowed Claims
in Classes 1 through 5 are paid in full. Creditors in this class
will receive 100 percent of their Allowed Claims. Class 6 is
impaired.
The equity interests of the General Partners and Limited Partners
shall remain unchanged as a result of confirmation of this Plan.
Prior to and immediately following the Confirmation Date, the
primary source of payments of allowed administrative expenses,
allowed priority tax claims, and allowed claims Classes 2 through 5
will be proceeds from the DIP Loan.
Additional proceeds from the DIP Loan will fund the completion of
the development of the Real Property and enable the Reorganized
Debtors to sell the developed lots to the homebuilders. The
revenues generated by the sales to homebuilders will enable the
Reorganized Debtors to pay the DIP Lender on, or prior to, the
Maturity of the DIP Loan.
The Plan Proponents believe that the Debtors will have enough cash
on hand on the Effective Date of the Plan to pay all the claims and
expenses that are entitled to be paid on that date. The Debtors
have negotiated a loan package that will fund up to $46.5 million
to allow the Debtors to complete development of the aggregate of
2,109 residential lots in the seven individual projects.
A full-text copy of the Combined Disclosure Statement and Plan
dated January 11, 2024 is available at
https://urlcurt.com/u?l=uLXO5o from PacerMonitor.com at no charge.
Counsel for Debtors:
Leonard H. Simon, Esq.
Pendergraft & Simon, LLP
2777 Allen Parkway, Suite 800,
Houston, TX 77019
Tel: (713) 528-8555
Fax: (713) 868-1267
E-mail: lsimon@pendergraftsimon.com
About 50 Crosby Pines
50 Crosby Pines, Ltd., is a limited partnership organized under the
laws of the State of Texas in October 2021. It is managed by its
General Partner, 50 Crosby Pines GP, Inc., whose President is Joe
Fogarty. This Debtor was organized for the purpose of developing
approximately 50.70 acres of land on the east side of F.M. 2100 in
Crosby, Texas, between Reidland Road and Foley Road.
The Debtor filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-32924) on
July 31, 2023, listing $1 million to $10 million in both assets and
liabilities.
Judge Eduardo V Rodriguez oversees the case.
Leonard H. Simon, Esq., at Pendergraft & Simon, LLP, is the
Debtor's counsel.
502 E JED: Says Unsecured Creditors Expected to Get Full Payment
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502 E Jed Realty Corp submitted a Plan of Liquidation and a
Disclosure Statement.
General unsecured creditors are classified in Class 3 and will
receive the net proceeds of sale of the Debtor's real estate after
payment of administrative, secured, and priority claims. The
Debtor projects that unsecured creditors will be paid in full, a
100% distribution, but the distributions are contingent on the sale
price that the Debtor obtains for the real property. Secured
creditors are classified in Classes 1, and 2 and they are also
projected to be paid in full, contingent on the price obtained for
the property.
The Debtor owns residential real property located at 502 East 138th
Street, Bronx, NY 10454 (the "Property"). The Property is an
apartment building located in the Bronx consisting of 32
residential units plus 5 commercial units.
Under the Plan, Class 4 All general unsecured creditors total
$11,333.40. After sale of the Property at auction, unsecured
creditors will receive the net proceeds of sale after the payment
of secured, administrative, and priority claims. The Debtor
anticipates that all general unsecured creditors will be paid in
full. Class 4 is impaired.
Under the Plan the Debtor shall market the Property for sale
through the retained real estate broker, through an auction
procedure and sale motion that will be filed prior to confirmation.
The net proceeds of sale shall be distributed to creditors pursuant
to the Plan.
Attorneys for the Debtor:
Lawrence F. Morrison, Esq.
Brian J. Hufnagel, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, NY 10013
Tel: (212) 620-0938
Fax: (646) 390-5095
A copy of the Disclosure Statement dated Jan. 3, 2024, is available
at https://tinyurl.ph/HsTlE from PacerMonitor.com.
About 502 E Jed Realty Corp.
502 E Jed Realty Corp., a company in Astoria, N.Y., filed its
voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case
No. 23-41316) on April 18, 2023, with $1 million to $10 million in
both assets and liabilities.
Judge Nancy Hershey Lord oversees the case.
Lawrence F. Morrison, Esq., at Morrison Tenenbaum, PLLC serves as
the Debtor's legal counsel.
579 DECATUR: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: 579 Decatur LLC
579 Decatur Street
Brooklyn, NY 11236
Chapter 11 Petition Date: January 16, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-40196
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Gabriel Del Virginia, Esq.
LAW OFFICE OF GABRIEL DEL VIRGINIA
30 Wall Street 12th Floor
New York, NY 10005
Tel: 212-371-5478
E-mail: gabriel.delvirginia@verizon.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mr. Cory Hewett as member/manager.
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/VEAGUOQ/579_Decatur_LLC__nyebke-24-40196__0001.0.pdf?mcid=tGE4TAMA
ACRISURE LLC: Moody's Rates New $925MM Sr. Unsecured Notes 'Caa2'
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Moody's Investors Service has assigned a Caa2 rating to $925
million of five-year senior unsecured notes being issued by
Acrisure, LLC (Acrisure, corporate family rating B3). The company
will use net proceeds from the offering to refinance its existing
senior unsecured notes due in 2025. The rating outlook for Acrisure
is unchanged at stable.
RATINGS RATIONALE
According to Moody's, Acrisure's ratings reflect its growing market
presence in US insurance brokerage and select international
markets, its good mix of business across property & casualty
insurance and employee benefits, and its good profitability. In May
2023, Acrisure announced plans to reorganize the company into a
more integrated platform under a single brand, aiming to streamline
processes and enhance data and analytics capabilities to support
client service and new business generation.
These strengths are offset by Acrisure's persistently high
financial leverage and low interest coverage given its aggressive
acquisition strategy, which heightens execution and integration
risk. The acquisitions also give rise to contingent earnout
liabilities that consume a substantial portion of free cash flow.
Acrisure's 2022 acquisition of FBC Mortgage, a mortgage origination
company, adds refinancing risk as well as market risk associated
with its mortgage servicing rights assets. Acrisure is also exposed
to errors and omissions in the delivery of products and services, a
risk inherent in professional services.
For the 12 months through September 2023, Acrisure reported $4.5
billion of revenue, up from $3.9 billion in 2022, driven by a
combination of acquisitions and organic growth. Acrisure has slowed
its pace of acquisitions in the past year given its focus on the
reorganization and also reflecting higher borrowing costs and
continued high purchase multiples. The company's EBITDA margin has
declined in recent periods as a result of its changing business mix
along with investments in technology and process improvements. For
the 12 months through September 2023, Acrisure's free cash flow was
slightly negative, although Moody's expects this metric to improve
as the company works through its reorganization and settles various
contingent earnout obligations.
Giving effect to the proposed refinancing, Moody's estimates that
Acrisure's pro forma debt-to-EBITDA ratio will remain in the range
of 7.0x-7.5x (excluding effects of certain unrestricted
subsidiaries), with (EBITDA - capex) interest coverage in the range
of 1.2x-1.8x, and a free-cash-flow-to-debt ratio in the low single
digits. These metrics incorporate Moody's adjustments for operating
leases, contingent earnout liabilities, changes in a warrant
liability, and run-rate earnings from recent acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to an upgrade of Acrisure's ratings
include: (i) debt-to-EBITDA ratio below 6x, (ii) (EBITDA - capex)
coverage of interest exceeding 2x, (iii) free-cash-flow-to-debt
ratio exceeding 5%, and (iv) declining portion of revenue and
earnings from newly acquired versus existing business.
Factors that could lead to a downgrade of Acrisure's ratings
include: (i) debt-to-EBITDA ratio above 7.5x, (ii) (EBITDA - capex)
coverage of interest below 1.2x, (iii) free-cash-flow-to-debt ratio
below 2%, or negative free cash flow after contingent earnout
payments and scheduled debt amortization, or (iv) disruptions to
existing or newly acquired operations.
The principal methodology used in this rating was Insurance Brokers
and Service Companies published in June 2018.
Based in Grand Rapids, Michigan, Acrisure is a leading insurance
broker, ranked as the sixth-largest in the world based on 2022
revenue according to Business Insurance. The company owns and
manages agencies in more than 1,000 locations in 45 US states and
61 international locations in 21 countries, largely in Europe.
Acrisure's clients are mostly small and midsize businesses as well
as individuals and other organizations. For the 12 months through
September 2023, Acrisure reported total revenue of $4.5 billion.
ACRISURE LLC: S&P Assigns 'CCC+' Rating to $925MM Senior Notes
--------------------------------------------------------------
S&P Global Ratings assigned its 'CCC+' debt rating to Acrisure
LLC's $925 million senior notes maturing in 2029. The recovery
rating is '6', indicating its expectation for negligible (0%)
recovery of principal in the event of a default.
S&P said, "We expect Acrisure to use the proceeds to refinance its
7% $925 million senior notes due November 2025. We consider this to
be a leverage neutral transaction. The ratings on Acrisure Holdings
Inc. and its core subsidiaries--including our 'B' long-term issuer
credit rating, 'B' first-lien credit facility debt rating, and
'CCC+' unsecured debt rating--are unaffected by the new senior
notes issuance.
"We believe Acrisure performed favorably in the 12 months ended
Sept. 30, 2023, achieving revenue growth of 26% to $4.0 billion
with stable adjusted EBITDA near 30%. Our forecast incorporates
sustained top-line growth, supported by organic growth in the 8%
area for 2024 with diminished contribution from acquisitions
relative to the historical trend.
"Our assessment of the company's financial risk continues to assume
a debt-intensive capital structure, consisting of a combination of
debt and debtlike instruments. S&P Global Ratings-adjusted
financial leverage and EBITDA coverage was 7.3x (excluding
payment-in-kind preferred treated as debt) and 1.8x, respectively,
for the 12 months ended Sept. 30, 2023, which is consistent with
our expectation for full-year 2023. We continue to expect modest
improvement for financial leverage (excluding preferred treated as
debt) of 6.0x-7.0x and EBITDA cash interest coverage of 2.0x-2.5x
in 2024."
ADDISON GROUP: Moody's Affirms 'B2' CFR, Outlook Remains Stable
---------------------------------------------------------------
Moody's Investors Service affirmed APFS Staffing Holdings, Inc.'s
("Addison Group"), Corporate Family Rating of B2, the Probability
of Default Rating of B2-PD and the B2 rating of the backed senior
secured 1st lien term loan due 2028, issued at the company's
subsidiary, AG Group Holdings, Inc. The rating outlook is mantained
stable.
The ratings action is based on Moody's expectations for low
single-digit revenue growth over the next 12-18 months, debt to
EBITDA leverage to remain below 5.0x and margins in the 13% area.
Chicago-based Addison Group provides professional services and
consulting for the information technology, finance and accounting,
human resources and administrative and healthcare sectors.
RATINGS RATIONALE
The B2 CFR reflects the company's niche and regional focus on
temporary and project staffing of professionals in information
technology, finance and accounting, non-clinical healthcare,
digital marketing and other white-collar functions. Addison Group
has modest profitability typical of temporary staffing companies,
with EBITDA margins that Moody's expects to remain in a 13% to 15%
range, over the next 12-18 months. Moody's also expects low single
digit organic revenue growth rates, debt to EBITDA of 4.6x by the
end of 2024, EBITA to interest of above 2.0x and free cash flow to
debt in the 11% area. These financial metrics are Moody's adjusted
metrics. Moody's considers the white-collar temporary staffing
industry to be highly competitive and cyclical. Over the last two
years, Addison Group has increased the proportion of its revenue
from consulting services, which tend to be longer in tenor than
staffing in the talent solutions segment with higher margins.
In its staffing segments, Addison Group has invested in proprietary
training of its recruiters and salespeople and a suite of software
tools to help it differentiate itself from competitors and maintain
its historically high customer retention rates. The company
generates a meaningful proportion of its revenue from the IT
services sector, which has benefited from strong growth over the
past few years due to the accelerated digitalization of services
and business operations globally. The finance and accounting
professionals that the company places are specialized positions and
have been stable. Addison Group has supplemented organic revenue
growth with acquisitions, purchasing two businesses since 2021.
Moody's believes that the company will continue with its strategy
of expanding via acquisitions as it adds geographies and expertise
in lines of businesses. Addison Group could incur debt to fund
additional leveraged acquisitions.
Moody's considers Addison Group's liquidity profile to be good.
Free cash flow of approximately $50 million over the next 12 months
will be more than adequate to fund about $5.3 million of annually
required term loan amortization and Addison Group's limited growth
capital expenditure needs (capital expenditures is less than 1% of
revenues). The company typically maintains a limited amount of cash
on its balance sheet ($14 million of cash balance as of the end of
September 2023). The unrated $85 million ABL revolver maturing in
2026 is expected to be unused and fully available. There are no
financial covenants applicable to the rated term loan.
The B2 rating to the term loan reflects both the B2-PD PDR and a
loss given default assessment of LGD4, reflecting its second
priority to the unrated senior secured ABL revolver. Because the
ABL revolver has a priority lien on the collateral, recovery on the
term loan would be lower. The term loan is guaranteed by the parent
company and all material existing and future wholly-owned domestic
subsidiaries.
The stable ratings outlook reflects Moody's expectations for high
client retention, low-single digit organic revenue growth rates and
free cash flow generation. Moody's also anticipates in the stable
outlook that Addison Group may use its cash flow and the proceeds
of additional debt issuances to continue to supplement organic
revenue growth with acquisitions. The industries that the company
places talent into also support the stable outlook. The IT services
sector and non-clinical health care industries are undergoing
growth and employment in these sectors will be robust.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if: 1) revenue scale, geographic
scope and service line diversity are increased; 2) Moody's expects
debt to EBITDA will remain below 4x; and 3) financial policies
emphasizing debt reduction above debt-funded acquisitions are
maintained.
The ratings could be downgraded if: 1) weaker customer retention,
pricing declines or cost increases pressure margins; 2) revenue
growth slows or stalls; 3) Moody's anticipates debt to EBITDA will
remain above 5.5x; 4) liquidity deteriorates; or 5) financial
policies featuring debt-funded shareholder returns or aggressive
M&A are adopted.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Addison Group, based in Chicago, IL and controlled by affiliates of
private equity sponsor Triatlantic North America, provides
temporary contract staffing, permanent placement and consulting
services in information technology, finance, non-clinical
healthcare and other professional vertical markets through 32
offices in 24 US markets that are large employment markets
surrounding metropolitan areas. The company was previously owned by
Odyssey Investment Partners. Revenue for 2023 is expected to be
around $925 million.
ADIENT GLOBAL: Moody's Ups CFR to B1 & Senior Secured Notes to Ba2
------------------------------------------------------------------
Moody's Investors Service upgraded Adient Global Holdings Ltd's
(Adient) corporate family rating to B1 from B2, the Probability of
Default Rating to B1-PD from B2-PD, the senior secured notes rating
to Ba2 from Ba3 and the senior unsecured notes rating to B2 from
B3. Concurrently, Moody's upgraded the senior secured first lien
term loan B rating at Adient's wholly owned subsidiary, Adient US
LLC, to Ba2 from Ba3. Adient's Speculative Grade Liquidity rating
was upgraded to SGL-1 from SGL-2. The outlooks at both Adient and
Adient US LLC remain stable.
The upgrades reflect significant progress in improving
profitability and Moody's expectation that automotive seating
trends will remain positive. Moody's also expects modest expansion
of profit margins and steady annual free cash flow in the low
single-digit percentage of debt range. Adient's operating momentum
stems from recovering light vehicle production, tighter cost
containment, good platform launch execution and a more favorable
customer/product mix. New business wins in China, a large and
rapidly growing market where a higher level of vertical integration
is captured, has and should continue to boost earnings.
Additionally, Moody's expects the deployment of light vehicle
seating comfort features - electronic functionality, driver assist
systems, passive safety systems and enhanced interior configuration
– to accelerate in upcoming years, providing higher return
growth opportunities. The roll-off of lower margin legacy
contracts, particularly in late-2025 and through 2026, will provide
additional margin tailwinds.
Governance considerations were a factor in this rating action as
the company has made significant progress in strengthening its
balance sheet largely due to a sizable reduction in reported debt
in recent years. As a result, Moody's changed Adient's Governance
Issuer Profile Score (IPS) to G-3 from G-4. Moody's added that
Adient's lower financial leverage provides greater financial
flexibility to manage through the inherent cyclicality in the
automotive industry.
RATINGS RATIONALE
The B1 CFR reflects Adient's position as a global leader in
automotive seating with strong geographic and customer
diversification highlighted by long-standing relationships with all
major automotive original equipment manufacturers (OEM). Led by
constant innovation and drivetrain agnostic products, Adient
continues to win higher margin new and replacement business across
geographic regions on internal combustion engine and electric
vehicle platforms.
In addition to the operational improvements, Adient has
significantly enhanced its financial flexibility and strengthened
its balance sheet over the past couple of years. The March 2021
sale of the Yanfeng Adient Seating Co., Ltd. joint venture interest
and use of over $1 billion in proceeds for debt repayment
jumpstarted Adient's balance sheet transformation. Since Q4 of
fiscal 2020, the company has repaid nearly $1.8 billion of reported
debt while maintaining a solid cash position - reported debt stood
at $2.5 billion at September 2023. Adient had a company-calculated
net leverage ratio of 1.5x, at the bottom of its target range of
1.5x – 2x. Debt-to-EBITDA (inclusive of Moody's standard
adjustments) was 3x at fiscal year-end September 2023 and is
expected to remain at or below 3x through Adient's 2025 fiscal
year.
The stable outlook reflects Moody's expectation for steady progress
in expanding margins as OEM light vehicle production grows and
vehicle seating content increases. Free cash flow (cash flow from
operations less capital expenditures less dividends) turned
positive in fiscal 2023 and is expected to remain above $200
million annually over the next couple of years, benefiting from
improving returns and more efficient capital investment. Moody's
expects share repurchases will be managed prudently without
impairing financial flexibility. The company does not pay a regular
common stock dividend.
The SGL-1 Speculative Grade Liquidity Rating reflects Moody's
expectation that Adient will maintain cash of around $700 million
($1.1 billion at September 30, 2023) and substantial borrowing base
availability ($900 million at September 30, 2023) under Adient US
LLC's unrated and undrawn $1.25 billion asset-based lending (ABL)
facility set to expire November 2027.
Adient enters into supply chain financing programs to sell accounts
receivable without recourse to third-party financial institutions.
There was $170 million outstanding at September 30, 2023, down from
$269 million at September 30, 2022. While not expected, if Adient
becomes unable to extend these receivables programs, borrowings
under the ABL facility would potentially be required to meet
working capital needs.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with demonstration of a sustained
and/or improving EBITA margin, even during periods of more subdued
global light vehicle production. EBITA-to-interest in excess of 3x
and debt-to-EBITDA sustained below 3x would also be key
considerations for an upgrade. The ability to manage volatile raw
material inputs and continued good execution of platform launches
and ongoing restructuring actions that support margin resiliency
and expansion would also be viewed favorably.
The ratings could be downgraded if margins meaningfully weaken,
free cash flow falls towards breakeven or debt-to-EBITDA moves back
above 4x. Deteriorating liquidity, including extended reliance on
the ABL facility for working capital needs or cash falling
significantly below $700 million could also result in a negative
rating action.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
Adient plc, the parent company of Adient Global Holdings Ltd, is
one of the world's largest automotive seating manufacturers with
longstanding relationships with many, including the largest, global
automotive OEMs. Automotive seating solutions include complete
seating systems, frames, mechanisms, foam, head restraints,
armrests, trim covers and fabrics. Adient operates in the Chinese
automotive seating market through several joint ventures. Revenue
for the fiscal year ended September 30, 2023 was $15.4 billion.
AINOS INC: Enters Addendum to TCNT Product Development Agreement
----------------------------------------------------------------
Ainos, Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that the Company and Taiwan Carbon Nano
Technology Corporation ("TCNT") entered into an addendum to the
Product Development Agreement in connection with the scope of
co-development and certain terms.
For products defined in the Addendum agreement, TCNT will provide
facilities, equipment, mass production process technology, ISO9001
and ISO13485 related management, as well as mass production
support. The procurement of parts and raw materials, rental fees,
and utility expenses are excluded. The Company will pay a total
fee of NT$5 million (approximately USD$161,000) for five-years of
development commencing from 2024.
For six months commencing from January 2024, TCNT will provide
non-exclusive use of certain patents related to VOC and POCT
technologies for a monthly fee of US$95,000 (plus 5% sales tax),
with negotiable payment terms. The parties can discuss subsequent
use of the patents at later dates.
The Company's audit committee ratified the Original Agreement and
approved the Addendum Agreement on Jan. 8, 2024.
On Aug. 1, 2021, Ainos entered into a five-year Product Development
Agreement with TCNT, an affiliate company. Pursuant to the
Original Agreement, the parties will co-develop pharmaceutical,
medical device and other products defined in the agreement.
About Ainos
Ainos, Inc. (www.ainos.com), formerly known as Amarillo
Biosciences, Inc., is a diversified healthcare company engaged in
the research and development and sales and marketing of
pharmaceutical and biotech products. The Company is engaged in
developing medical technologies for point-of-care testing and safe
and novel medical treatment for a broad range of disease
indications. The Company is a Texas corporation incorporated in
1984. The Company has historically been involved in extensive
research and development of low-dose oral interferon as a
therapeutic. The Company continues to develop its VELDONA platform
and other pharmaceutical platforms and recently have acquired
intellectual properties to expand our POCT business. In 2021 and
2022, the Company acquired significant intellectual property from
its majority shareholder, Ainos KY, to expand its potential product
portfolio into Volatile Organic Compounds and COVID-19 POCTs.
Ainos reported a net loss of $14.01 million for the year ended Dec.
31, 2022, compared to a net loss of $3.89 million for the year
ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $33.86
million in total assets, $6.18 million in total liabilities, and
$27.68 million in total stockholders' equity.
Houston, Texas-based PWR CPA, LLP, the Company's auditor since
2020, issued a "going concern" qualification in its report dated
March 31, 2023, citing that the Company has incurred recurring
losses and recurring negative cash flow from operating activities,
and has an accumulated deficit which raises substantial doubt about
its ability to continue as a going concern.
The Company has incurred net operating losses in every year since
inception and has an accumulated deficit of $31,961,654 as of Sept.
30, 2023, and expects to incur additional losses and negative
operating cash flows for at least the next twelve months.
"The Company's ability to meet its obligations is dependent upon
its ability to generate sufficient cash flows from operations and
future financing transactions. Although management expects the
Company will continue as a going concern, there is no assurance
that management's plans will be successful since the availability
and amount of such funding is not certain. Accordingly,
substantial doubt exists about the Company's ability to continue as
a going concern for at least one year from the issuance of these
financial statements," the Company said in its Quarterly Report for
the period ended Sept. 30, 2023.
AMPLUS ACADEMY: S&P Raises Charter School Bond Rating to 'BB+'
--------------------------------------------------------------
S&P Global Ratings raised its long-term rating to 'BB+' from 'BB'
on the Public Finance Authority, Wis.' series 2019 charter school
revenue bonds, and the authority's series 2017A and series 2017B
taxable charter school revenue bonds, issued for Nevada Charter
Academies (doing business as Amplus Academy). The outlook is
stable.
"The upgrade reflects our view of Amplus Academy's consistent
enrollment growth in recent years following the academy's
successful expansion to a new kindergarten through grade five (K-5)
campus in fall 2020, coupled with improved financial operations and
liquidity position," said S&P Global Ratings credit analyst Chase
Ashworth.
The series 2017 and 2019 bonds are a special limited obligation of
the authority. The bonds are secured by revenue from the school
primarily made up of payments from the State of Nevada based on
enrollment at the beginning of the year. The school has
approximately $47.1 million in total debt outstanding as of June
30, 2023. The series 2019 and 2017 bonds are on parity payable
solely from the lease payments made by the academy under the lease
agreement. The funds for the lease payments are derived from gross
revenue from the academy, excluding restricted funds.
S&P said, "We assessed the academy's enterprise profile as
adequate, characterized by a waitlist that exceeds enrollment
levels, rapid enrollment growth since inception, and healthy
enrollment size, offset by the academy's relatively short
institutional tenure. We assessed the academy's financial profile
as vulnerable, with variable but generally positive operating
performance, acceptable maximum annual debt service coverage,
offset by an elevated debt burden. We believe that, combined, these
credit factors lead to an anchor of 'bb'. As our criteria
indicates, the final rating can be adjusted above or below the
anchor due to a variety of overriding factors. The final rating of
'BB+' reflects our view of the school's large enrollment base,
coupled with improving demand and academic metrics, as well as a
rebound in liquidity in fiscal 2023 and expectations for continued
improvement in financial operations for fiscal 2024.
"The stable outlook reflects our view that the school will maintain
positive operations and a solid liquidity position for the rating,
based on fiscal 2023 results and significantly increased fiscal
2024 per pupil funding levels, while maintaining stable enrollment
and demand metrics."
AQUARIUM SOLUTIONS: Wins Collateral Access on Final Basis
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York,
Poughkeepsie Division, authorized Aquarium Solutions, LLC to use
cash collateral on a final basis, in accordance with the budget,
through March 31, 2024.
The Debtor requires the use of cash collateral to fund day to day
operations.
On September 29, 2021, the Debtor borrowed $49,100 from the Secured
Creditor, at an interest rate of 3.75% which was memorialized in a
promissory note. The Note was secured by a lien granted by the
Debtor to the Secured Creditor in the Debtor's assets as set forth
more fully in a Security Agreement entered into on the same date.
The Secured Creditor duly perfected its lien in the Debtor's assets
by filing a UCC-1 financing statement evidencing such lien on
October 15, 2021.
As adequate protection, the Secured Creditor is granted a valid,
enforceable, fully-perfected, security interest, to the extent that
the Pre-Petition Liens were valid, perfected and enforceable as of
the Petition Date, to the extent of, and as security for any
decrease in the value of the Secured Creditor's interest in the
cash collateral since the Petition Date in, to and upon all
existing and hereafter-acquired property of the Debtor of any kind
or nature.
As further adequate protection for the Secured Creditor, the Debtor
will make a monthly payment of $253, not later than the 15th day
of each month, commencing January 2024 as adequate protection for
any diminution in the value of any collateral securing the Secured
Claim as a result of the use of cash collateral.
The right of the Debtor to use the cash collateral will terminate
immediately upon the occurrence of any of the following events:
a) the entry of an order of the Court converting or dismissing the
Chapter 11 case;
b) the entry of an order of the Court confirming a plan of
reorganization in the Chapter 11 case;
c) the failure of the Debtor (i) to perform any of its obligations
under the Order, and (ii) to cure such Default within 10 business
days after the giving of written notice thereof to the Debtor, the
U.S. Trustee and any official committee appointed in the Chapter 11
Case by the Secured Creditor;
d) the amendment, supplementation, waiver or other modification of
all or part of the Order without the Secured Creditor having been
given at least 72 hours advance, written notice, by overnight
service upon the Secured Creditor. However, in no event will the
Debtor seek emergency relief concerning the Order from the Court
without the Secured Creditor having been given at least 24 hours
advance, actual notice; or
e) the termination of all or substantially all of the operations of
the Debtor, whether by voluntary act(s) or omission(s) of the
Debtor, or otherwise.
A copy of the order is available at https://urlcurt.com/u?l=NDYxaR
from PacerMonitor.com.
About Aquarium Solutions, LLC
Aquarium Solutions, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-35894) on
October 25, 2023. In the petition signed by Emiliano Niell,
managing member, the Debtor disclosed up to $50,000 in assets and
up to $500,000 in liabilities.
Judge Cecelia G. Morris oversees the case.
Michelle L. Trier, Esq., at Genova, Malin & Trier, LLP, represents
the Debtor as legal counsel.
ASHFORD HOSPITALITY: Announces Preliminary Q4 2023 Results
----------------------------------------------------------
Ashford Hospitality Trust, Inc. announced that the Company expects
to report Occupancy of approximately 66% for the fourth quarter of
2023 with Average Daily Rate of approximately $182 resulting in
RevPAR of approximately $120. This Comparable RevPAR reflects an
approximate increase of 1% compared to the fourth quarter of 2022.
Additionally, for the month of October 2023, Comparable RevPAR
increased approximately 4% versus October 2022. For the month of
November 2023, Comparable RevPAR increased approximately 1% versus
November 2022. For the month of December 2023, Comparable RevPAR
decreased approximately 1% versus December 2022.
"We are pleased with our performance for the 2023 fourth quarter,"
commented Rob Hays, Ashford Trust's President and Chief Executive
Officer. "We continue to benefit from increased corporate and group
demand, and our high-quality, geographically diverse portfolio,
remains well-positioned to outperform."
Further, as previously announced, the Company commenced the
offering of its Non-Traded Preferred Equity during the third
quarter of 2022. Through December 31, 2023, the Company has
3,475,318 shares of its Series J non-traded preferred stock
outstanding and 194,193 shares of its Series K non-traded preferred
stock outstanding, raising approximately $91.3 million of gross
proceeds.
About Ashford Hospitality
Headquartered in Dallas, Texas, Ashford Hospitality Trust, Inc.
operates as a self-advised real estate investment trust focusing on
the lodging industry. As of September 30, 2023, the Trust had $3.7
billion in total assets against $3.9 billion in total liabilities.
Egan-Jones Ratings Company, on May 5, 2023, maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Ashford Hospitality Trust, Inc.
AULT ALLIANCE: Three Proposals Approved at Annual Meeting
---------------------------------------------------------
Ault Alliance, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that it held its annual meeting
of stockholders during which the stockholders:
(1) elected Milton C. Ault, III, William B. Horne, Henry C.
Nisser, Robert O. Smith, Howard Ash, Jeffrey A. Bentz, and
Mordechai Rosenberg as directors to hold office until the next
annual meeting of stockholders;
(2) ratified Marcum LLP as the Company's independent registered
public accounting firm for the fiscal year ending Dec. 31, 2023;
and
(6) approved the amendment to the Company's Certificate of
Incorporation to effect a reverse stock split of the Common Stock
by a ratio of not less than one-for-five and not more than
one-for-twenty-five at any time prior to Dec. 28, 2024, with the
exact ratio to be set at a whole number within this range as
determined by the Company's board of directors in its sole
discretion.
Proposals Three, Four, and Five were withdrawn by the Company.
After the Meeting, the Board approved a one-for-twenty-five reverse
stock split of the Common Stock that will be effective in the State
of Delaware on Jan. 16, 2024. The Company anticipates that
beginning with the opening of trading on Jan. 17, 2024, the
Company's Common Stock will trade on the NYSE American on a
split-adjusted basis under a new CUSIP number, 09175M 507.
The reverse stock split affects all issued and outstanding shares
of the Company's Common Stock, as well as the number of shares of
Common Stock available for issuance under the Company's equity
incentive plans. In addition, the reverse stock split reduces the
number of shares of Common Stock issuable upon the exercise of
stock options or warrants outstanding immediately prior to the
reverse split. The par value of the Company's Common Stock will
remain unchanged at $0.001 per share after the reverse stock split.
The reverse stock split affects all stockholders uniformly and
will not alter any stockholder's percentage interest in the
Company's equity, except to the extent that the reverse stock split
results in some stockholders owning a fractional share. No
fractional shares will be issued in connection with the reverse
split. Stockholders who would otherwise be entitled to receive a
fractional share will instead receive a cash payment.
Computershare Trust Company, N.A., is acting as the exchange agent
and transfer agent for the reverse stock split. Computershare will
provide instructions to stockholders with physical certificates
regarding the optional process for exchanging their pre-split stock
certificates for post-split stock certificates and receiving
payment for any fractional shares.
About Ault Alliance Inc.
Ault Alliance, Inc. (formerly, BitNile Holdings, Inc.) is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly- and majority-owned subsidiaries and
strategic investments, the Company owns and operates a data center
at which the Company mines Bitcoin, and provides mission-critical
products that support a diverse range of industries, including
crane services, oil exploration, defense/aerospace, industrial,
automotive, medical/biopharma, consumer electronics, hotel
operations and textiles. In addition, the Company extends credit
to
select entrepreneurial businesses through a licensed lending
subsidiary.
Ault Alliance reported a net loss of $189.83 million for the year
ended Dec. 31, 2022, compared to a net loss of $23.04 million for
the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had
$378.46 million in total assets, $257.22 million in total
liabilities, $2.18 million in redeemable noncontrolling interests
in equity of subsidiaries, and total stockholders' equity of
$119.06 million.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Ault Alliance said there is substantial doubt about the Company's
ability to continue as a going concern for at least one year after
the date that the condensed consolidated financial statements were
issued. As of Sept. 30, 2023, the Company had cash and cash
equivalents of $8.7 million, negative working capital of $45.1
million and a history of net operating losses. The Company has
financed its operations principally through issuances of
convertible debt, promissory notes and equity securities.
B-1208 PINE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: B-1208 Pine LLC
606 Maynard Avenue S, Suite 251
Seattle, WA 98104-2958
Business Description: B-1208 Pine is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)). The Debtor is the owner of real
property and improvements thereon located at
1208 Pine Street, Seattle, WA 98122,
commonly known as the Pivot Apartments. The
Property is valued at $31.72 million.
Chapter 11 Petition Date: January 16, 2024
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 24-10088
Judge: Hon. Marc L Barreca
Debtor's Counsel: James L. Day, Esq.
BUSH KORNFELD LLP
601 Union St., Suite 5000
Seattle, WA 98101-2373
Tel: (206) 292-2110
Fax: (206) 292-2104
Email: jday@bskd.com
Total Assets: $32,134,497
Total Liabilities: $46,793,638
The petition was signed by James H. Wong as manager.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/5J3KQ3A/B-1208_Pine_LLC__wawbke-24-10088__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Apartments LLC $3,040
19919 NE 42nd Street
Sammamish, WA
98074-6123
Email: usarealestateventures@gmail.com
2. Brian Shaffer $500
4901 Fairwood Blvd. NE
Apt. 131
Tacoma, WA 98422
Email: brian.shaffer2001@yahoo.com
3. CenturyLink $561
100 CenturyLink Drive
Monroe, LA
71203-2041
Email: Craig.glover@lumen.com
Fax: (318) 388-9562
4. Chong Guo Zhong $486
601 Union St, Suite 1730
Seattle, WA 98101
Email: zcg1226@gmail.com
5. Darryl Walton $400
1208 Pine Street
Seattle, WA 98101
Email: waltondarryl293@gmail.com
6. Deep Kotecha $500
1301 1st Ave., Apt. 807
Seattle, WA 98101
Email: deepjkotecha@gmail.com
7. Frontier Door &
Cabinet Inc.
11721 Steele Street S. $681
Tacoma, WA
98444-1321
Email: hr@frontierdoor.com
Phone: 206-768-2524
8. Gordon Patterson $500
1350 W Elmdale
Ave., Unit #3
Chicago, IL 60660
Email: gordopat@gmail.com
9. Graffiti Busters LLC $2,093
4640 Union Bay
Place NE
Seattle, WA
98105-4027
Email: info@graffitibusterswashington.com
10. Kayle Maikai $1,050
8839 Delridge Way
SW, Apt. 203
Seattle, WA 98106
Email: kaylemaikai@gmail.com
11. Lemmon Carpet & $860
Upholstery Cleaners
16825 48th Ave. W.,
Unit 341
Lynnwood, WA 98037
Email: char1947lemmon@gmail.com
12. Onelin Capital $3,271
Corporation
601 Union Street,
Suite 1730
Seattle, WA
98101-2196
Email: seattle@onelincapi
tal.com;onelinsv@
onelincapital.com
Phone: 206-682-2137
13. Seattle City Light $9,046
P.O. Box 34023
Seattle, WA
98124-4023
Email: SCL_ExternalComms@seattle.gov
14. Seattle Public $14,713
Utilities
P.O. Box 34018
Seattle, WA
98124-5177
Email: SPUCustomerService@seattle.gov
15. Skyline Communications, Inc. $589
12002 Beverly Park Road
Suite A
Everett, WA
98204-3506
Email: anna.anderson@sk
ylinecommunications.net
16. Smith, Currie & $23,132
Hancock LLP
245 Peachtree
Center Avenue NE
Marquis One Tower,
Suite 2700
Atlanta, GA 30303
Email: info@smithcurrie.com
Fax: (404) 688-0671
17. Sound Monitoring LLC $1,251
1117 28th Avenue
Ct. SW
Puyallup, WA 98373
Email: michelle@soundmonitoringllc.com
18. Submeter Solutions, Inc. $785
19115 68th Ave. S,
H108
Kent, WA
98032-2110
Email: officeadmin@submetersolutions.com
19. Super Sonic $10,800
Cleaning Serv. LLC
15450 10th Avenue NE
Shoreline, WA
98155-7015
Email: supersonicleaning@gmail.com
20. Zillow, Inc. $295
1301 2nd Avenue,
Floor 36
Seattle, WA
98101-3800
Email: legalrequests@zillowgroup.com
BAFFINLAND IRON: S&P Downgrades ICR to 'CCC', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings lowered its ratings on Canada-based iron ore
miner Baffinland Iron Mines Corp. (Baffinland) to 'CCC' from 'B-',
including our issuer credit rating on the company.
The outlook is negative, primarily reflecting Baffinland's sizable
upcoming debt maturities, which S&P believes increase the risk of a
distressed exchange or default occurring over the coming months.
Baffinland's significant near-term debt maturities contribute to
increased risk of default and weak liquidity in its view.
A significant portion of Baffinland's capital structure will mature
within a year, including the company's $212.5 million RCF (near
fully drawn as of Sept. 30, 2023) due on May 26, 2024, and its $75
million EDC term credit facility due in September 2024. S&P said,
"With a modest cash balance of about $90 million as of Sept. 30,
2023, negligible revolver availability, and our expectation for
negative FOCF this year, we expect there to be a material liquidity
deficit over the next 12 months. Furthermore, with Baffinland's RCF
near fully drawn and due in less than five months, we believe the
company is dependent on existing lenders and favorable market
conditions to extend its maturities and avoid a default."
S&P said, "In our view, there is also a possibility the company
will extend its revolver under terms that provide inadequate
compensation to its lenders, which we could consider a distressed
exchange. The increased likelihood this will occur is based on our
expectation for the company to generate a FOCF deficit over the
next couple of years and the short time remaining before the
revolver matures.
"We expect Baffinland to generate FOCF deficits over the next few
years, with interest coverage approaching 1.5x in 2024."
Baffinland has generated lower earnings and FOCF over the last two
years, primarily due to elevated capital spending for the rail
expansion project and operational challenges related to adverse
weather conditions. These include quicker-than-expected ice
formation that disrupted shipping activities in 2022, as well as
heavy rainfall that disrupted ore haulage and mining production
activities in 2023. This lowered production levels and elevated
cash costs in 2023.
S&P said, "We anticipate the company's credit metrics will weaken
further in 2024. This includes negative FOCF generation and EBITDA
interest coverage approaching 1.5x due to elevated debt levels and
muted S&P Global Ratings-adjusted EBITDA growth prospects. We
assume iron ore prices will moderate further in 2024 with elevated
operating costs, considering that the weather-related operational
challenges Baffinland faced over the past few years are not in
management's control and could persist. In addition, we assume
inflationary headwinds from labor and fuel costs will persist.
"The negative outlook primarily reflects Baffinland's sizable
upcoming debt maturities, which we believe increase the risk of a
distressed exchange or default occurring over the coming months.
"We could lower our ratings on Baffinland if it cannot extend its
debt maturities before they come due. We could also downgrade the
company if it refinances its upcoming debt maturities but under
terms that, in our view, do not provide adequate compensation to
lenders, which we would consider a distressed exchange and
tantamount to default.
"We could raise our ratings on Baffinland if the company refinances
its credit facilities under terms that we believe provide adequate
compensation to lenders. We would also expect an increase in the
company's prospective FOCF generation to support our view that a
liquidity crisis is unlikely within the next 12 months.
"Environmental factors are negative considerations in our credit
rating analysis of Baffinland. The company faces risk of
increasingly stringent environmental regulations due to its iron
ore mining at a single mine site in the Arctic (Nunavut, Canada)."
Social factors are negative considerations, mainly related to local
community groups' scrutiny of Baffinland's expansion project, which
led to permitting delays of the company's expansion project
proposal to the Milne Port and short-term operating curtailments in
early 2021.
Governance factors are a moderately negative consideration, mainly
due to the challenges associated with the proposed expansion.
BLACK PRESS: Chapter 15 Case Summary
------------------------------------
Twelve affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
Black Press Ltd. (Lead Case) 24-10044
San Francisco Print Media Co. 24-10043
311773 B.C. Ltd. 24-10045
0922015 B.C. Ltd. 24-10046
Black Press Group Ltd. 24-10047
Central Web Offset Ltd. 24-10048
Oahu Publications, Inc. 24-10049
Sound Publishing Holding, Inc. 24-10050
Sound Publishing Properties, Inc. 24-10051
Sound Publishing, Inc. 24-10052
The Beacon Journal Publishing Company 24-10053
WWA (BPH) Publications, Inc. 24-10054
Type of Business: Founded in 1975, Black Press publishes 150 daily
and weekly newspapers, magazines, and websites.
Black Press offers journalism across Western
Canada and beyond - both online and in print.
Foreign Proceeding: Foreign Main Proceeding in Canada
Chapter 15 Petition Date: January 15, 2024
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. Mary F. Walrath
Foreign Representative: Christopher Hargreaves
Foreign
Representative's
Counsel: Stanley B. Tarr, Esq.
BLANK ROME LLP
Tel: 302-425-6479
Email: tarr@blankrome.com
Estimated Assets: Unknown
Estimated Debt: Unknown
Full-text copies of the Chapter 15 petitions are now available for
download at PacerMonitor.com.
BRANDYWINE REALTY: S&P Downgrades ICR to 'BB', Outlook Negative
---------------------------------------------------------------
S&P Global Rating lowered its issuer credit rating on U.S. office
REIT Brandywine Realty Trust (BDN) to 'BB' from 'BB+' and lowered
its issue-level rating on its unsecured notes to 'BB+' from 'BBB-'.
At the same time, S&P assigned its '2' recovery rating to the
unsecured notes.
S&P said, "We believe the company's properties in Pennsylvania and
Austin could experience some pressure to operating performance over
the next year. As of the end of the third quarter, the company's
same-property portfolio was 88.3% occupied and 90.4% leased, which
was in line with the average levels among our rated office REITs
(in the high 80% range), though slightly lower on a year-over-year
and sequential basis due to its modestly lower tenant retention.
BDN's same-store net operating income (NOI) rose 7.0% on a cash
basis during the third quarter supported by its relatively healthy
operating performance and the demand for its properties located in
Philadelphia and suburban Pennsylvania (95.2% and 89.4% occupied,
respectively). We expect the company's same-store NOI will remain
flat to slightly positive over the next year and anticipate its
occupancy will likely stay in the high-80% range over the next
year, supported by its manageable lease expiration schedule (6.7%
in 2024 and 8.0% in 2025) and the healthier fundamentals in its
core markets of Philadelphia and suburban Pennsylvania (74% of
NOI).
"That said, we are monitoring the performance of BDN's assets in
Austin (18% of NOI and just 81.7% occupied as of Sept. 30, 2023).
We believe increased competition from new supply and weak office
fundamentals could lead to lower tenant retention, hinder the
company's ability to lease-up vacancies (Austin represents about a
third of the portfolio's vacancies), and limit its net effective
rent growth. Moreover, BDN has two speculative joint venture
development projects under construction in Austin that have shown
minimal leasing traction thus far, which could delay the
stabilization of its performance and limit its EBITDA expansion.
"We also assigned a new M&G modifier assessment of moderately
negative to BDN. The action follows the revision to our criteria
for evaluating the credit risks presented by an entity's M&G
framework. The terms "management and governance" encompass the
broad range of oversight and direction conducted by an entity's
owners, board representatives, and executive managers. These
activities and practices can impact an entity's creditworthiness
and, as such, the M&G modifier is an important component of our
analysis.
"BDN's fixed charge coverage (FCC) has deteriorated, and we expect
it will remain pressured as management addresses its near-term debt
maturities amid high interest rates and a stricter lending
environment. As of the third quarter of 2023, the company's FCC
ratio declined to 2.8x, from 3.4x during the same quarter in 2022,
due to its increased interest expense following the refinancing of
its lower-coupon debt at higher rates. Over the same period, BDN's
S&P Global Ratings-adjusted debt to EBITDA remained elevated at
8.0x, which was relatively unchanged from 7.9x in the third quarter
of 2022. We expect the company's FCC will remain pressured as BDN
addresses its approximately $620 million of debt maturing over the
next year (excluding extension options and including joint-venture
debt at the company's share) amid elevated interest rates.
"Given the challenging environment for office assets, we expect
asset sales could be difficult to execute. Therefore, we expect BDN
will likely refinance most of its debt as it comes due. In
addition, we expect the company's interest expense will increase
due to these refinancings, which will further pressure its coverage
ratios. That said, we expect some of this pressure will be offset
by the EBITDA contributions from BDN's several wholly owned, highly
pre-leased development projects as they come online and stabilize
this year. We also note that the company's debt remains largely
fixed rate (including its hedging instruments). Therefore, we
expect BDN's FCC ratio will weaken to about the low-2x area over
the next year and stabilize at that level because it has minimal
debt maturing in 2025 and 2026.
"The company's 2024 debt maturities include a $70 million unsecured
term loan due in February, $350 million of unsecured notes due in
October, and non-recourse mortgage debt related to its joint
ventures (at the company's share) with various maturity dates
throughout the year. We expect BDN will elect to exercise extension
options when possible, including the 12-month extension option
available under the $70 million unsecured term loan, which will
likely alleviate some of its near-term refinancing pressure. We
also believe it will seek extensions for some of its joint-venture
debt maturities. We anticipate the company will focus on
refinancing its unsecured notes and preserving its liquidity, which
remains adequate. Given BDN's largely unencumbered asset pool, we
view it as having some flexibility to raise secured debt. Moreover,
the company has full availability under its revolver, which it
could use to repay the unsecured notes, though this would pressure
its liquidity (thus we view it as the less-likely scenario).
"We expect the company will limit its investment spending over the
next year and focus on preserving its credit metrics, supporting
its leasing initiatives, and maintaining its liquidity. BDN has
manageable near-term capital commitments, with approximately $50
million left to fund on its development pipeline. We expect the
company will fund this amount with cash on hand, free cash flow,
construction loans, and--to a lesser extent--revolver borrowings.
BDN's recent dividend reduction in October provides approximately
$28 million of additional liquidity. Taken together, we expect the
company's debt leverage will remain near current levels (high 7x)
over the next year before improving to the mid 7x area thereafter
on increased EBITDA from development projects coming online, its
minimal debt maturing in 2025 and 2026, and our expectation it will
try to monetize its joint ventures and sell assets to improve its
balance sheet.
"The negative outlook reflects on BDN reflects our view that
sustained secular headwinds in the office sector could continue to
pressure its operating performance, which could lower its tenant
retention, pressure its occupancy, and slow its leasing activity.
That said, we expect its occupancy will remain near current levels
due to the company's manageable lease expiration schedule and
healthier fundamentals in its core market, provided its tenant
move-outs remain manageable. We expect BDN's credit metrics will
remain strained over the next year as it refinances its debt at
higher rates and faces difficulty in executing asset sales at
attractive prices. We project the company's S&P Global
Ratings-adjusted FCC ratio will be in the low-2x area over the next
two years and forecast its S&P Global Ratings-adjusted debt to
EBITDA will remain near current levels before improving to the
mid-7x area in 2025."
S&P could lower its ratings on BDN by one notch if:
-- The company's operating performance deteriorates beyond our
expectations such that its occupancy declines to the mid-85% range,
perhaps due to increased tenant move-outs, stress in its core
markets, or difficulty in leasing-up its speculative development
pipeline;
-- Its FCC falls below 2.1x for a sustained period without a
runway for improvement or its S&P Global Ratings-adjusted debt to
EBITDA approaches 8.5x; or
-- The company is unable to successfully refinance its upcoming
debt maturities, which pressures the stability of its capital
structure and its liquidity.
S&P could revise its outlook on BDN to stable if:
-- Its operating performance improves, including increased
occupancy, highly leased and stabilized development projects, and
positive business prospects;
-- The company successfully refinances its upcoming debt
maturities well within its maturity profile and improves its
weighted average maturity; and
-- Its S&P Global Ratings-adjusted debt to EBITDA declines below
7.5x while its FCC remain comfortably above 2.1x for a sustained
period.
BRAVO MULTINATIONAL: Agrees With Pythia to Create New Company
-------------------------------------------------------------
Bravo Multinational, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that it entered into a binding
letter of intent with Pythia Experiences LLC, a Virginia limited
liability company.
Under the terms of the letter of intent, the two companies will
create a new company that will be owned 51% by Pythia and 49% by
Bravo. Pythia will contribute to Newco its ownership of Vidgo,
Inc., a Delaware corporation, which owns rights to substantial
entertainment content. Bravo, at the same time, will contribute a
streaming platform to Newco. The object of the agreement is for
Newco to provide streaming entertainment, video, and audio as a
subscription service to subscribers. As a result of this
transaction, Pythia will become a wholly owned subsidiary of Newco
and Newco will become a partially owned subsidiary of Bravo. The
transaction has been approved by the Board of Directors of Bravo,
subject to certain contingencies. In order to close the
transaction, the parties have agreed to enter into a Definitive
Agreement, on terms common to such agreements. In addition, the
final closing will be subject to completion of all applicable
regulatory approvals.
About Bravo Multinational
Based in Ontario, Canada, Bravo Multinational Incorporated --
http://www.bravomultinational.com-- is currently engaged in the
business of leasing and selling gaming equipment. The Company,
however, ceased operations in Nicaragua in 2017 due to political
and economic instabilities. The Company is planning to operate its
business in the US and other more stable democracies in Latin
America.
Bravo Multinational reported a net loss of $528,058 for the year
ended Dec. 31, 2022, compared to a net loss of $420,126 for the
year ended Dec. 31, 2021. As of March 31, 2023, the Company had $43
in total assets, $1.91 million in total liabilities, and a
total stockholders' deficit of $1.91 million.
Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
March 6, 2023, citing that the Company has suffered recurring
losses from operations and has a significant accumulated deficit.
In addition, the Company continues to experience negative cash
flows from operations. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
* * *
This concludes the Troubled Company Reporter's coverage of Bravo
Multinational until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
BROOKDALE SENIOR: Reports December 2023 Occupancy
-------------------------------------------------
Brookdale Senior Living Inc. has reported its consolidated
occupancy for December 2023.
Brookdale's December 2023 Observations include:
* Fourth quarter 2023 weighted average occupancy increased 80
basis points compared to the third quarter 2023 to 78.4%.
* Achieved twenty-six consecutive months of year-over-year
weighted average occupancy growth.
* December's weighted average occupancy increased 130 basis
points year-over-year and grew nearly 900 basis points since the
start of the recovery in March 2021.
A copy of Brookdale's consolidated occupancy for December 2023 and
certain other information regarding the quarter ended December 31,
2023 filed on Form 8-K with the SEC is available at
http://tinyurl.com/4zehd9cd
About Brookdale Senior Living
Headquartered in Brentwood, Tennessee, Brookdale Senior Living Inc.
operates senior living facilities in the United States. As of
September 30, 2023, Brookdale Senior has $5.83 billion in total
assets and $5.34 billion in total liabilities.
Egan-Jones Ratings Company on October 26, 2023, maintained its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Brookdale Senior Living Inc.
C.W. KELLER: Unsecureds to Get 10%-13% or 30%-32% in Plan
---------------------------------------------------------
C.W. Keller & Associates, LLC. and C.W. Keller Holding Company,
Inc. submitted a First Amended Chapter 11 Plan of Liquidation,
dated Jan. 3, 2024.
The Plan provides for payment of creditors in order of their
priority under applicable law from the proceeds realized through
the collection and liquidation of the Excluded Assets and
resolution of claims with any balance to be paid otherwise pursuant
to the Plan. The proceeds from the collection of the Excluded
Assets shall be held in the Debtors DIP Account pending
distribution by Court Order.
Class 6 consists of the holders of Allowed General Unsecured
Claims. Unsecured claims not entitled to priority under the
Bankruptcy Code are called "general unsecured claims". If the claim
is for loaned money without collateral or for goods or services
supplied to the Debtors prior to the Petition Date (i.e., August
24, 2023) which have not been paid, then the claim is a general
unsecured claim. Holders of general unsecured claims also include
secured creditors whose claims exceed the value of their
collateral.
In order to be allowed, a general unsecured claim must either be
set forth in a proof of claim properly filed with the Bankruptcy
Court on or before November 9, 2023, or listed by the Debtors in
their Schedules of Assets and Liabilities filed with the Bankruptcy
Court as an obligation other than a liability that is disputed,
unliquidated or contingent. Even a properly filed or scheduled
claim may still be disallowed if an objection to the claim is filed
and granted by the Bankruptcy Court. The objection procedure is
described in Section VI.
Class 6 is comprised of all holders of Allowed general unsecured
claims against the Debtor. This class includes claims arising out
of unpaid promissory notes, trade claims owed by the Debtors, and
any portion of a claim of a taxing authority not entitled to
treatment as secured or priority claim, and lease arrears owed on
leases not assumed at the Closing. The Class 6 claimants are owed
approximately $6,882,151 based upon the proofs of claim filed and
the Debtor's Schedules.
The sums which will be available to satisfy the Class 6 claimants
are dependent the determination of the payment of the Class 1-B
Claims and from the sums outlined in Section III-D after
satisfaction in full of the Allowed Secured Claims, Administrative
Claims, Priority Non-Tax Claims and Priority Tax Claims. In the
event that the Class 1-B Claim is paid from Excluded Assets, it is
estimated that there will be a dividend of 10%-13% available for
satisfaction of the Class 6 claims. If the Class 1-B Claim is not
paid from the Excluded Assets, the dividend will be approximately
30%-32%. These dividend estimates are subject to reduction in the
due to costs of administration of the Liquidating Trust, as well as
litigation costs over the Class 1-B Claim and Avoidance Actions.
The Class 6 Allowed Claimants will receive in full and complete
settlement, satisfaction, a pro rata beneficial interest in the
Liquidating Trust, entitling such holder to receive a pro rata
share of the distributions made to the Allowed Class 6 claimants by
the Liquidating Trustee. The Class 6 Claimants are impaired.
On the Effective Date, the Liquidating Trust shall be created and
established. The terms and provisions of the Liquidating Trust
shall be as set forth in the Plan and shall become effective on the
Effective Date of the Plan. Following the Effective Date, the
liquidation of the Liquidating Trust Assets shall be conducted by
the Liquidating Trustee who shall liquidate the Liquidating Trust
Assets, object to claims and make distributions pursuant to the
terms of this Plan and the Liquidating Trust. The Liquidating
Trustee shall be under an obligation to make continuing efforts to
dispose of the Liquidating Trust Assets, make timely distributions,
and not unduly prolong the duration of the Liquidating Trust. The
Liquidating Trustee shall make distributions to the holders of
Allowed Classes | through 6 1n full before any distribution is made
on account of Allowed Class 7 Interests.
On the Effective Date, the Debtor shall be deemed to have
distributed the Liquidating Trust Assets to the holders of Claims
and Interests, who shall be deemed to have transferred the
Liquidating Trust Assets to the Liquidating Trust. Such transfers
shall be exempt from any stamp, real estate transfer, mortgage
reporting, sales, use or other similar tax. In connection with the
transfer of the Liquidating Trust Assets to the Liquidating Trust,
all records relating to the such Liquidating Trust Assets shall be
transferred to the Liquidating Trustee. The Debtor and the
Liquidating are authorized to take all necessary actions to
effectuate the transfer of the Liquidating Trust Assets. All of the
Debtor's rights, powers, immunities and privileges, including its
attorney-client privilege, shall be deemed transferred to the
Liquidating Trustee on the Effective Date. The Liquidating Trustee
shall have full power and authority to use all Liquidating Trust
Assets for purposes of the Liquidating Trust, without further order
of the Bankruptcy Court.
Counsel for C.W. Keller & Associates, LLC and C.W. Keller Holding
Company, Inc.:
David B. Madoff, Esq.
Nina M. Parker, Esq.
MADOFF & KHOURY LLP
124 Washington St., Suite 202
Foxborough, MA 02035
Tel: (508) 543-0040
A copy of the Plan of Liquidation dated Jan. 3, 2024, is available
at https://tinyurl.ph/bcZhK from PacerMonitor.com.
About C.W. Keller & Associates
C.W. Keller & Associates, LLC, is a fabrication and design
engineering firm in Newburyport, Mass., specializing in custom
millwork, composites and concrete form systems.
C.W. Keller & Associates and C.W. Keller Holding Company, Inc.
filed Chapter 11 petitions (Bankr. D. Mass. Lead Case No. 23-11357)
on Aug. 24, 2023. At the time of the filing, C.W. Keller &
Associates reported $1 million to $10 million in assets and $10
million to $50 million in liabilities while C.W. Keller Holding
Company, Inc. reported as much as $50,000 in assets and $1 million
to $10 million in liabilities.
Judge Christopher J. Panos oversees the case.
David B. Madoff, Esq., at Madoff & Khoury LLP, is the Debtors'
legal counsel.
CALIFORNIA STATEWIDE: Moody's Hikes Rating on 2 Bond Series to Ba1
------------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of four tranches
in the tobacco settlement revenue securitization issued by
California Statewide Financing Authority.
The complete rating actions are as follows:
Issuer: California Statewide Financing Authority (Pooled Tobacco
Securitization Program), Series 2002
Ser. 2002A Term Bonds 2, Upgraded to Baa1 (sf); previously on Feb
28, 2022 Upgraded to Baa3 (sf)
Ser. 2002A Term Bonds 3, Upgraded to Ba1 (sf); previously on Feb
28, 2022 Upgraded to Ba2 (sf)
Ser. 2002B Term Bonds 2, Upgraded to Baa1 (sf); previously on Feb
28, 2022 Upgraded to Baa3 (sf)
Ser. 2002B Term Bonds 3, Upgraded to Ba1 (sf); previously on Feb
28, 2022 Upgraded to Ba2 (sf)
RATINGS RATIONALE
The upgrade rating actions are primarily driven by continued
deleveraging and the availability of cash reserves. Cigarette
consumption volumes, the main driver of tobacco settlement
revenues, continued to decrease in the 2022 sales year. The
negative trends in cigarette volumes are partially offset by an
increase in inflation adjustments that positively impacted the
revenues available to the bonds. Other considerations include the
high regulatory risks in the tobacco sector and the bonds' legal
final maturities, as bonds with relatively short-term maturities
are less exposed to the impact of future cigarette shipment
declines. Moody's currently expects that US cigarette shipment
volumes will decline by 5%-8% per year over the next 3-5 years.
Continued shifts in attitudes towards smoking, as well as further
regulation, pose very high risks for tobacco settlement ABS. These
identified risks have been taken into account in the analysis of
the ABS.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was "Tobacco
Settlement Revenue Securitizations Methodology" published in May
2020.
Factors that would lead to an upgrade or downgrade of the ratings:
Up
Moody's could upgrade the ratings if the annual rate of decline in
the volume of domestic cigarette shipments decreases, if payments
increase due to inflation, if future arbitration proceedings and
subsequent recoveries for settling states become more expeditious
than they currently are, or, if additional settlements are entered
into which benefit the bonds.
Down
Moody's could downgrade the ratings if the annual rate of decline
in the volume of domestic cigarette shipments increases, if
subsequent recoveries from future arbitration proceedings for
settling states take longer than Moody's assumption of 15-20 years,
if an arbitration panel finds that a settling state was not
diligent in enforcing a certain statute which could lead to a
significant decline in cash flow to that state, or if additional
settlements are entered into which reduce the cash flow to the
bonds.
CAMP DAVID: Kimberly Strong Named Subchapter V Trustee
------------------------------------------------------
The Acting U.S. Trustee for Region 5 appointed Kimberly Strong,
audit director at Harper, Rains, Knight & Company, P.A., as
Subchapter V trustee for Camp David, LLC.
Ms. Strong will be paid an hourly fee of $250 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Strong declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Kimberly Strong
Harper, Rains, Knight & Company, P.A.
1052 Highland Colony Pwky, Suite 100
Ridgeland, MS 39157
Phone: (601) 605-0542
Email: kstrong@hrkcpa.com
About Camp David
Camp David, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. S.D. Miss. Case No. 24-50016) on Jan.
4, 2024, with $1 million to $10 million in both assets and
liabilities. Mark Parish, manager, signed the petition.
Judge Jamie A. Wilson oversees the case.
Patrick Sheehan, Esq., at Sheehan and Ramsey, PLLC represents the
Debtor as legal counsel.
CANOO INC: Yorkville Agrees to Advance $17.5M Under Amended PPA
---------------------------------------------------------------
Canoo Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that the Company entered into a sixth
Supplemental Agreement with YA II PN, Ltd. ("Yorkville") to the
Pre-Paid Advance Agreement.
Pursuant to the Sixth Supplemental Agreement, Yorkville agreed to
advance $17,500,000 to the Company and waive certain terms and
conditions set forth in the PPA with respect to such Supplemental
Advance. After giving effect to the commitment fee and the
purchase price discount provided for in the PPA, net proceeds of
the Sixth Supplemental Advance to the Company will be approximately
$16,450,000.
The Sixth Supplemental Agreement provides that solely with respect
to the Sixth Supplemental Advance, the Purchase Price (as such term
is used in the PPA) will be equal to the lower of (a) $0.24 per
share, or (b) 95% of the lowest daily VWAP during five Trading Days
immediately preceding each Purchase Notice Date (as such term is
used in the PPA), but not lower than the Floor Price (as defined in
the PPA). Further, the Company agreed to pay Yorkville a
commitment fee of $875,000 in connection with the Sixth
Supplemental Agreement, which shall be deducted from the proceeds
of the Sixth Supplemental Advance.
On July 20, 2022, Canoo entered into the PPA with Yorkville. In
accordance with the terms of the PPA, the Company may request
advances of up to $50,000,000 in cash from Yorkville (or such
greater amount that the parties may mutually agree).
About Canoo
Torrance, California-based Canoo Inc. -- www.canoo.com -- is a
mobility technology company with a mission to bring electric
vehicles to everyone and provide connected services that improve
the vehicle ownership experience. The Company is developing a
technology platform that it believes will enable the Company to
rapidly innovate and bring new products, addressing multiple use
cases, to market faster than its competition and at lower cost.
Canoo reported a net loss and comprehensive loss of $487.69 million
for the year ended Dec. 31, 2022, compared to a net loss and
comprehensive loss of $346.77 million for the year ended Dec. 31,
2021. As of Sept. 30, 2023, the Company had $534.35 million in
total assets, $368.69 million in total liabilities, and $165.65
million in total stockholders' equity.
"We require substantial additional capital to develop our EVs and
services and fund our operations for the foreseeable future. We
will also require capital to identify and commit resources to
investigate new areas of demand. Until we can generate sufficient
revenue from vehicle sales, we are financing our operations through
access to private and public equity offerings and debt financings.
Management believes substantial doubt exists about the Company's
ability to continue as a going concern for twelve months from the
date of issuance of the financial statements included in this
Quarterly Report on Form 10-Q," said Canoo in its Quarterly Report
for the period ended Sept. 30, 2023.
CANOPY GROWTH: Cancels US$30M Subscription Agreement With Investors
-------------------------------------------------------------------
Canopy Growth Corporation disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on Jan. 9, 2024, it entered
into subscription agreements with certain institutional investors
pursuant to which the Company agreed to sell to the Investors an
aggregate of 6,993,007 units of the Company at a price of $4.29 per
Unit in a private placement for approximate gross proceeds of US$30
million.
Following the announcement of the Private Placement and prior to
closing, the Company received information from a third party that
such third party could not complete certain tasks in a timely
manner, which would result in delays outside of the Company's
control and impact the Company's ability to satisfy customary
closing requirements. Due to this, and based on mutual agreement
with the Investors, the Company terminated the Subscription
Agreements on Jan. 12, 2024. As a result of such termination, no
securities will be sold pursuant to the Private Placement. The
Company expects to be in position to complete customary closing
requirements in the next few weeks, and the Company continues to
have sufficient liquidity, including through its cash on hand, debt
facilities, and other expected sources of financing. The Company
expects to report its fiscal third quarter financial results on
Feb. 9, 2024.
Each Unit was to be comprised of (a) one common share of the
Company and (b) either (i) one Series A Common Share purchase
warrant or (ii) one Series B Common Share purchase warrant. Each
Warrant was to entitle the holder to acquire one Common Share from
the Company at a price equal to US$4.83. The Series A Warrants
were to be exercisable immediately following the closing of the
Private Placement for a period of five years from such date and the
Series B Warrants were to be exercisable for a period commencing on
the date that is six-months following the closing of the Private
Placement and ending on the date that is five years following such
date.
In connection with the Private Placement, the Company entered into
an engagement letter with the Placement Agents, pursuant to which
the Company agreed to pay the Placement Agents a cash fee equal to
4.5% of the gross proceeds received by the Company in the Private
Placement, in addition to the reimbursement for certain reasonable
expenses. The Engagement Letter contains customary
representations, warranties, terms and conditions, including for
indemnification of the Placement Agents by the Company. Because
the Private Placement did not close, no proceeds were received by
the Company and no Cash Fee is owed to the Placement Agents.
About Canopy Growth
Headquartered in Smiths Falls, Ontario, Canopy Growth is a cannabis
and consumer packaged goods company which produces, distributes,
and sells a diverse range of cannabis, hemp, and CPG products.
Cannabis products are principally sold for adult-use and medical
purposes under a portfolio of distinct brands in Canada pursuant to
the Cannabis Act, SC 2018, c 16 (the "Cannabis Act"), and globally
pursuant to applicable international and Canadian legislation,
regulations, and permits. The Company's other product offerings,
which are sold by its subsidiaries in jurisdictions where it is
permissible to do so, include: (i) Storz & Bickel GmbH vaporizers;
(ii) BioSteel Sports Nutrition Inc. sports nutrition beverages,
hydration mixes, proteins and other specialty nutrition products;
and (iii) This Works Products Ltd. beauty, skincare, wellness and
sleep products. Its core operations are in Canada, the United
States, and Germany.
Ottawa, Canada-based KPMG LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated June 22,
2023, citing that the Company has material debt obligations coming
due in the short-term, has suffered recurring losses from
operations and requires additional capital to fund its operations,
which raise substantial doubt about its ability to continue as a
going concern.
CHAMBERLAIN GROUP: S&P Rates $625MM First-Lien Term Loan B 'B'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating to The
Chamberlain Group LLC's proposed $625 million incremental
first-lien term loan B due in 2028. The '3' recovery rating
indicates its expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery in the event of a payment default. At the
same time, the company is also extending the maturity of its
existing revolving credit facility to 2029 from 2026. The revolving
credit facility will include a springing maturity 91 days ahead of
the 2028 maturity of the first-lien term loan B, in the event there
is at least $200 million outstanding on the term loan. The company
will use the proceeds from the term loan to repay its outstanding
$600 million second-lien term loan due in 2029 and pay
transaction-related fees and expenses.
S&P's 'B' issuer credit rating on The Chamberlain Group and the
stable outlook are unchanged.
ISSUE RATINGS—RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'B' issue-level rating and '3' recovery rating
to Chamberlain's proposed $625 million incremental first-lien term
loan B due in 2028. The '3' recovery rating reflects its
expectation of meaningful (50%-70%; rounded estimate: 50%) recovery
in the event of a payment default.
-- S&P bases its recovery analysis on the company's proposed
structure, which includes a $250 million revolving credit facility
due in 2029 and a $2.630 billion first-lien term loan B due in
2028.
-- S&P values the company on a going-concern basis using a 5.5x
multiple of our emergence EBITDA. This multiple is in line with
that used for similarly rated peers.
-- S&P's simulated default scenario considers a default in 2026
amid a recessionary macroeconomic environment and reduced
residential and nonresidential new construction.
-- Thus, the company would fund operating losses and debt service
with available cash and, if available, credit facility borrowings.
Eventually, its liquidity and capital resources become strained to
the point it cannot continue to operate absent a bankruptcy
filing.
-- S&P assesses recovery prospects based on a gross reorganization
value of approximately $1.75 billion, reflecting about $286.3
million of emergence EBITDA and a 5.5x multiple.
-- S&P's recovery analysis assumes 85% of the company's $250
million revolving credit facility would be drawn in a hypothetical
bankruptcy scenario.
Simulated default assumptions
-- Year of default: 2026
-- Emergence EBITDA: $286.3 million
-- EBITDA multiple: 5.5x
-- Gross recovery value: $1.75 billion
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): About
$1.496 billion
-- Obligor/nonobligor split: 95%/5%
-- Total value available to first-lien claims: $1.470 billion
-- Estimated first-lien claims (including the revolver)*: $2.954
billion
--Recovery expectation: 50%-70% (rounded estimate: 50%)
*The estimated first-lien claim reflects payment of scheduled
amortization on the term loan of 1% per year through 2027.
Estimated claim amounts include about six months of accrued but
unpaid interest.
CHARIOT BUYER: Moody's Lowers First Lien Loans to 'B3'
------------------------------------------------------
Moody's Investors Service affirmed Chariot Buyer LLC's (aka
"Chamberlain Group") B3 corporate family rating and B3-PD
probability of default rating. Concurrently, Moody's downgraded the
ratings on Chamberlain's existing senior secured first lien bank
credit facilities to B3 from B2. In addition, Moody's assigned a B3
rating to its proposed incremental first lien term loan. The
company is also extending the maturity date on the revolver to five
years from close. The Caa2 ratings on the existing senior secured
second lien term loan have been reviewed in the rating committee
and remain unchanged. The outlook is maintained at stable.
Proceeds from the incremental first lien term loan will be used to
repay the senior secured second lien term loan. Upon repayment, the
senior secured second lien term loan rating of Caa2, which remains
unchanged, will be withdrawn.
The affirmation of the B3 CFR reflects the company's high leverage,
solid interest coverage and good liquidity which includes its
ability to generate good cash flow. The repayment of the second
lien term loan with an incremental first lien term loan is expected
to provide annual interest expense savings of about $15 million.
The affirmation also reflects the company's meaningful scale in the
US and increased adoption of automated access control equipment and
enhanced user technology.
The downgrade of the first lien term loan rating reflects the
elimination of the loss absorption within the capital structure
that had been provided by the second lien term loan. The first lien
term loan now represents the preponderance of the obligations in
the capital structure.
RATINGS RATIONALE
Chamberlain's B3 CFR reflects the company's high leverage and its
high tax distribution rate of 50%, which will impact its free cash
flow. The rating also reflects governance risks, including
historically limited disclosure provided around litigation risk
associated with the company's patents and potential materiality to
the company's overall operations. An International Trade Commission
(ITC) order, which took effect in April 2022, prohibited the
import, sale and distribution of nearly all of Chamberlain's
residential garage door openers and products due to a patent
infringement. Chamberlain received approval on newly designed
products from the US Customs and Border Patrol (CBP) in May 2022
and shipments resumed. In Q2 2023, the company settled its
outstanding disputes for about $45 million. The rating is supported
by solid interest coverage and good liquidity. In addition,
increased adoption of automated access control equipment and
enhanced user technology should drive long-term growth for
Chamberlain Group's products. The rating also considers the
company's meaningful scale in the US, broad distribution network
and strong brand recognition. Moody's adjusted leverage is expected
to decline below 7x in 2024 on increased earnings from commodity
cost disinflation and as the litigation costs roll off.
Chamberlain is expected to maintain good liquidity. As of September
30, 2023, the company had about $45 million of cash and combined
outstanding borrowings of about $84 million on its $250 million
revolver, due 2029 and its $125 million accounts receivable
securitization facility, due 2026. Chamberlain is expected to
generate about $50 million of free cash flow in 2024, which
includes $110 million of expected tax distributions paid to its
owners. The revolver expected to be undrawn at the end of 2023 but
it is also likely to be used to fund future tax distributions.
The stable outlook reflects Moody's expectation of sustained demand
for Chamberlain Group's access control products and the maintenance
of good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of the rating could result from a reduction of debt to
EBITDA to below 6.0x. An upgrade would also require increased
transparency while maintaining a conservative financial policy and
good liquidity, including positive free cash flow generation.
A downgrade would likely result should the company experience
sustained revenue and EBITA margin declines, if financial leverage
is sustained above 7.0x, or if the company experiences a weakening
in its liquidity profile. Ratings could also be downgraded if the
company engages in more aggressive financial policies, including
debt funded acquisitions and shareholder returns.
Chamberlain Group, headquartered in Oak Brook, IL, is a
manufacturer of entryway and perimeter access control products and
solutions in residential and commercial applications in markets
around the world. Private equity firm Blackstone owns about 85% of
Chamberlain, with The Duchossois Group remaining the minority
equity owner with a 15% interest. Blackstone has had an ownership
interest in Chamberlain since 2021. Revenue was about $1.8 billion
for the last twelve month period ended September 30, 2023.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
CHICKEN SOUP: Receives Noncompliance Notice From Nasdaq
-------------------------------------------------------
Chicken Soup for the Soul Entertainment Inc. disclosed in a Form
8-K filed with the Securities and Exchange Commission that it
received a notification letter from the Nasdaq Stock Market LLC
indicating that the Company was not in compliance with the
continued listing standards of Nasdaq because the Company has less
than $10,000,000 in stockholders' equity.
Under the Rules, the Company now has 45 calendar days to submit a
plan to regain compliance. If Nasdaq accepts the Company's plan,
Nasdaq can grant an exception of up to 180 calendar days from the
date of the Letter, which 180-day period would end on July 3, 2024,
to regain compliance.
The Company previously received written notice from Nasdaq
indicating that the Company was not in compliance with the Rules
because for the prior 30 consecutive business days (through Sept.
21, 2023), the closing bid price of the Company's Class A Common
Stock, $0.0001 par value per share had been below the minimum of $1
per share required for continued listing on the Nasdaq under Nasdaq
Rule 5550(a)(2). The Notice stated that the Company would be
afforded 180 calendar days (until March 20, 2024) to regain
compliance. In order to regain compliance, the closing bid price
of the Company's common stock must be at least $1 for a minimum of
ten consecutive business days. The notification letter also stated
that, in the event the Company does not regain compliance within
the initial 180-day period, the Company may be eligible for an
additional 180-day period. If the Company is not eligible for the
additional 180-day period, or if it appears to the Nasdaq staff
that the Company will not be able to cure the deficiency, Nasdaq
will provide notice after the end of the initial 180-day period
that the Company's securities will be subject to delisting. The
Company is considering various strategic options to increase the
price of its common stock to regain compliance with the Rules.
The Letter does not have, and the Initial Notice did not have, any
immediate effect on the listing of the Company's securities on
Nasdaq, which remain trading. There can be no assurance, however,
that the Company will be able to regain compliance with the Rules
discussed above.
About Chicken Soup
Chicken Soup for the Soul Entertainment, Inc. provides premium
content to value-conscious consumers. The company is one of the
largest advertising-supported video-on-demand (AVOD) companies in
the US, with three flagship AVOD streaming services: Redbox,
Crackle, and Chicken Soup for the Soul. In addition, the company
operates Redbox Free Live TV, a free ad-supported streaming
television service (FAST), with over 160 channels as well as a
transaction video on demand (TVOD) service, and a network of
approximately 32,000 kiosks across the US for DVD rentals. To
provide original and exclusive content to its viewers, the company
creates, acquires, and distributes films and TV series through its
Screen Media and Chicken Soup for the Soul TV Group subsidiaries.
Chicken Soup for the Soul Entertainment is a subsidiary of Chicken
Soup for the Soul, LLC, which publishes the famous book series and
produces super-premium pet food under the Chicken Soup for the Soul
brand name.
In its Quarterly Report for the period ended Sept. 30, 2023, the
Company said there is substantial doubt about its ability to
continue as a going concern and this could materially impact its
ability to obtain capital financing and the value of its common and
preferred stock.
"In order to partially replace the working capital shortfall
resulting from the lack of the aforementioned working capital loan,
the Company factored its short-dated receivables but was unable to
factor its long-term receivables (which we expected to create
additional liquidity generally sufficient to cover the shortfall).
Also, the Company launched initiatives to improve its efficiency
and reduce its cost structure, including, but not limited to, (i)
optimizing its kiosk network, (ii) evaluating and implementing
workforce reductions across its supply chain and corporate teams
and (iii) maximizing cost synergies across the combined businesses.
The combination of these factors has resulted in asserted defaults
and/or contractual terminations with critical content and service
providers, impacting our ability to procure and monetize content
efficiently across our distribution platforms. Due to the on-going
impact of the above factors on our current and future results of
operations, cash flows and financial condition, there is
substantial doubt as to the ability of the Company to continue as a
going concern," the Company stated in its Quarterly Report for the
period ended Nov. 30, 2023.
Chicken Soup reported a net loss attributable to the Company of
$101.54 million in 2022 and a net loss attributable to the Company
of $50.41 million in 2021. As of Sept. 30, 2023, the Company had
$481.33 million in total assets, $890.06 million in total
liabilities, and a total deficit of $408.72 million.
COMMSCOPE HOLDING: First Trust, 2 Others Report 6.16% Stake
-----------------------------------------------------------
First Trust Advisors L.P., The Charger Corporation, and First Trust
Portfolios L.P. disclosed in a Schedule 13G filed with the
Securities and Exchange Commission that as of Dec. 31, 2023, they
beneficially owned 13,071,560 shares of common stock of CommScope
Holding Company, Inc., representing 6.16 percent of the Shares
outstanding. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/1517228/000144554624000139/sc13g_3.txt
About CommScope Holding
Headquartered in Hickory, North Carolina, CommScope Holding
Company, Inc. -- https://www.commscope.com -- is a global provider
of infrastructure solutions for communication, data center and
entertainment networks. The Company's solutions for wired and
wireless networks enable service providers, including cable,
telephone and digital broadcast satellite operators and media
programmers to deliver media, voice, Internet Protocol (IP) data
services and Wi-Fi to their subscribers and allow enterprises to
experience constant wireless and wired connectivity across complex
and varied networking environments.
CommScope reported a net loss of $1.28 billion in 2022, a net loss
of $462.6 million in 2021, and net loss of $573.4 million in 2020.
For the nine months ended Sept. 30, 2023, the Company incurred a
net loss of $925.7 million.
* * *
As reported by the TCR on Nov. 22, 2023, S&P Global Ratings lowered
its issuer credit rating on Network infrastructure provider
CommScope Holding Co. Inc. to 'CCC' from 'B-' and removed the
ratings from CreditWatch with negative implications, where they
were placed on Oct. 31, 2023. S&P revised the outlook to negative.
The negative outlook reflects S&P's view that CommScope's expected
weak financial performance of leverage above the 10x area and low
FOCF generation in 2023 and 2024 will increase the risk of a
distressed exchange or buyback within the next 12 months to address
upcoming maturities.
CONSERVICE MIDCO: S&P Lowers First-Lien Debt Rating to 'B-'
-----------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on Conservice
Midco LLC's $728 million first-lien term loan to 'B-' from 'B'
after the company announced a deal to upsize the loan to $728
million from $661 million. At the same time, S&P revised its
recovery rating on the first-lien facility to '3' from '2'. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate 65%) recovery for the first-lien lenders in the
event of a default.
S&P lowered its issue-level rating to reflect the reduced recovery
prospects for Conservice's first-lien lenders given the larger
amount of priority debt in its capital structure. The company has
announced it will use the $67 million proceeds from the incremental
first-lien term loan to pay down its second-lien facility,
resulting in an outstanding amount of $75 million under the
facility pro forma for the transaction.
Concurrently, Conservice seeks to reprice the amended first-lien
facility to reduce its interest expense and extend the maturity of
its existing $50 million revolving credit facility to May 2027 from
May 2025. S&P said, "We expect the transaction to provide about $4
million of cash interest savings annually, which we view favorably
because it will help improve the company's minimal free operating
cash flow."
S&P's 'B-' issuer-credit rating remains unchanged and reflects the
company's high debt leverage, relatively small scale, narrow
business focus, and a financial-sponsor ownership that prioritizes
top-line growth through its acquisitive growth strategy.
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- The company's proposed debt capitalization consists of a $50
million first-lien revolver due 2027 (undrawn), a $728 million
first-lien term loan due 2027 (including proposed $67.5 million
incremental debt) and a $75 million second-lien term loan due 2028
(unrated).
-- S&P said, "We lowered the issue-level rating on the company's
first-lien debt to 'B-' from 'B' and revised recovery rating to '3'
from '2'. This reflects our expectation of meaningful (50%-70%;
rounded estimate: 65%) recovery in the event of payment default. We
do not rate the second-lien term loan."
-- The incremental $67.5 million first-lien term loan reduces the
recovery prospects of the existing first-lien debtholders in a
default scenario.
-- Conservice Midco LLC is the borrower under the first- and
second-lien facilities. The facilities also benefit from guarantees
from the borrower's material subsidiaries. S&P's recovery analysis
assumes that first-lien collateral represents substantially all the
emergence enterprise value.
-- S&P's simulated default contemplates financial strain from high
debt leverage, a contract loss due to increased competition, the
reversal of advantageous utility regulation trends, increased
price-based competition, or a mistimed, high-priced, debt-funded
acquisition.
-- S&P said, "We value the company on a going-concern basis using
a 6.5x multiple of our projected emergence EBITDA. We believe
Conservice would likely reorganize in a default because of its
established relationships with key utilities and real estate owners
and operators."
Simulated default assumptions
-- Simulated year of default: 2026
-- EBITDA at emergence: $85 million
-- EBITDA multiple: 6.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $525
million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Value available to first-lien debt*: $525 million
-- Estimated first-lien debt claims: $772 million
-Recovery expectations: 50%-70% (rounded estimate: 65%)
*All debt amounts include six months of prepetition interest.
Collateral value equals an asset pledge from obligors after
priority claims plus an equity pledge from nonobligors after
nonobligors debt.
CORECIVIC INC: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on the issuer credit rating
to positive from stable and affirmed all its ratings on U.S.-based
criminal detention and residential re-entry facility provider
CoreCivic Inc., including the 'BB-' issuer credit rating and the
'BB-' issue-level and '3' recovery ratings on the unsecured debt.
The positive outlook reflects the potential that S&P will raise its
rating on CoreCivic over the next 12 months if it achieves its
forecast and maintains leverage comfortably beneath 3x.
S&P said, "The outlook revision reflects our expectation CoreCivic
will maintain deleveraging momentum and improve leverage
comfortably beneath 3x (in line with its publicly stated
2.25x-2.75x target) despite flat EBITDA growth and a large increase
in share repurchases. Despite pandemic-induced occupancy rate
restrictions, executive order non-renewal of certain federal
detention contracts, and pressure from activist advocacy groups,
CoreCivic has demonstrated a solid operating performance. It
reduced S&P Global Ratings-adjusted net leverage to 2.8x as of
Sept. 30 from 3.1x in 2022 and 3.3x in 2021. CoreCivic's revenues
have still expanded through new contract wins, above-trend price
increases, and a recent increase in demand from its largest
customer the U.S. Immigrations and Customs Enforcement agency (ICE;
29% of year-to-date revenues). We expect continued strong momentum
will support leverage reduction, primarily through cash generation,
to the mid-2x area in 2024 and 2025 even as EBITDA remains
relatively flat, and annual share repurchases increase toward the
$100 million area.
"In our view, the balance of industry risk factors for U.S.
criminal detention facility operators has recently begun to shift
more positively. CoreCivic's ICE populations have increased over
84% since the expiration of the Title 42 COVID-19 pandemic-related
border expulsion policy in May 2023. While uncertainty remains
around the timing and amount of ICE's contracted demand for 2024, a
key assumption underpinning our forecast includes our expectation
for growth in ICE revenues because we believe current populations
now exceed the contracted minimums for the first time since the
onset of the pandemic. Additional factors supporting our
expectation for earnings stability include a steady decline in
pandemic-related occupancy rate restrictions, increasing bipartisan
support for incremental border security funding, an expected
decline in labor costs associated with the ramp-up of the La Palma,
Ariz. facility, and the onboarding of new state and county
contracts."
CoreCivic is the second-largest operator of private criminal
detention and residential re-entry facilities in the U.S. The
company's significant cost advantage over public facilities and the
lack of viable alternatives support its ability to raise prices and
sign new multiyear contracts, even at facilities initially marked
for expiration under the 2021 executive non-renewal order. For
example, in the third quarter of 2023, the company completed a
five-year renewal of the U.S. Marshals Service contract at the
Central Arizona Florence Correctional Complex, the largest facility
in its portfolio. The renewal was largely driven by a lack of
available alternative facilities. This demonstrates the strong
value proposition of CoreCivic's services, including improved
capacity flexibility and the use of newer facilities that generally
reduce taxpayer costs.
S&P said, "Accordingly, we have revised our business risk
assessment for CoreCivic to fair from weak and now calculate
adjusted leverage netting cash. Our updated leverage calculation is
about 0.1x higher than management-calculated adjusted leverage.
"Nevertheless, our assessment reflects the high political and
regulatory risks to the industry. Labor related litigation outcomes
could affect earnings unpredictably if courts find that inmates are
entitled to minimum wage under its detainee work programs, as in a
recent Washington state ruling in a suit filed against competitor
The Geo Group Inc. (B/Stable). That said, we believe these risks
are limited. Most rulings on similar litigation have found that
inmates are not subject to labor requirements. Detainee work
programs are provided at the request of the government agencies, so
we believe they would contribute to additional program cost or
regulatory penalties in unfavorable rulings.
"While capital markets access has tightened across the industry in
recent years, we believe CoreCivic will refinance debt prior to
maturity. The company has demonstrated its ability to access credit
markets and issue new debt in 2021, 2022, and 2023, albeit at
higher interest rates. While several large banks have declined to
renew their exposure to the industry due to growing focus on
environmental, social, and governance-related social risks, the
company has raised financing from a group of smaller regional
banks. We expect it will pursue a refinancing to extend its debt
maturity profile over the next 12-18 months and that it will issue
debt at yields in line with or modestly higher than its current
yields. This would result in minimal impact to our cash flow credit
metrics.
"The positive outlook reflects the potential that we will raise our
rating on CoreCivic over the next 12 months if it maintains
leverage comfortably beneath 3x.
"Social factors are a negative consideration in our ratings
analysis of CoreCivic. The controversial topic of human rights,
combined with evolving public sentiment and policy views on prison
sentencing, exposes private detention facility operators to ongoing
social risks. Rhetoric opposing law enforcement and executive
orders limiting the U.S. Department of Justice's use of private
detention facilities introduce near-term risks and further
complicate the industry's outlook."
CROWN SUBSEA: Moody's Rates New First Lien Loan 'B1'
----------------------------------------------------
Moody's Investors Service affirmed Crown Subsea Communications
Holding, Inc.'s ("SubCom") B1 Corporate Family Rating and B1-PD
Probability of Default Rating. Concurrently, Moody's assigned a B1
rating to the company's proposed backed senior secured first lien
bank credit facilities consisting of a $175 million revolving
credit facility and a $1.35 billion term loan. The outlook is
stable.
The ratings affirmation follows SubCom's proposed issuance of $1.35
billion first lien term loan which will be used along with cash
from the balance sheet to refinance SubCom's existing debt and pay
a dividend to shareholders. SubCom, which is owned by funds
affiliated with private equity sponsor Cerberus Capital, has
demonstrated a shareholder friendly financial strategy with a
history of dividends funded through incremental debt and excess
cash. Pro forma debt/EBITDA (Moody's adjusted) will increase to mid
4x from mid 3x at the close of the transaction. Moody's expects
leverage to decrease below 4x over the next 12-18 months driven by
organic revenue and EBITDA growth as SubCom benefits from strong
demand and new contract wins.
RATINGS RATIONALE
SubCom's CFR reflects the company's aggressive financial policy
resulting in a moderately high financial leverage, with pro forma
gross debt/EBITDA (Moody's adjusted) of mid 4x based on September
2023 LTM results. The company's controlled ownership has resulted
in shareholder friendly policies including consistent dividend
distributions through incremental debt. However, this governance
risk is partially mitigated by SubCom's history of de-levering
relatively quickly through debt prepayments. Even though SubCom has
achieved strong operating performance over the last few years
driven by new cable construction, the rating is also constrained by
the project driven nature of the market which historically resulted
in volatile EBITDA and cash flow generation prior to 2018.
SubCom benefits from a leading market position as a provider of
long-haul fiber optic cable construction, strong operating
performance, and Moody's expectation for further organic revenue
and EBITDA growth through 2025 supported by new contract wins and
increasing backlog. SubCom's current backlog of about $3.9 billion
provides strong revenue visibility and mitigates risks associated
with potential revenue volatility. Moody's expects SubCom's
revenues to increase by at least mid single digit percentage range
over the next 12 months as the company benefits from secular
technological trends which will support demand for increased
long-haul transmission capacity as well as growing defense spending
as a result of geopolitical threats and aging systems.
SubCom's liquidity is considered very good based on expected $50
million of unrestricted balance sheet cash at the close of the
transaction and an undrawn proposed $175 million revolving credit
facility. SubCom will likely spend approximately $14 million on
mandatory term loan amortization and about $50 million in capex and
refit expenses over the next 12-18 months. Moody's expects SubCom
to generate strong operating cash flows of over $300 million, more
than offset by significant dividend payouts which will result in an
overall negative free cash flow for fiscal year 2024. Absent
further dividends, Moody's anticipates that the company will
produce about $200 million free cash flow in fiscal year 2025 which
can be used for voluntary debt reduction. Moody's expects little to
no usage of the revolver over the next 12-18 months.
The stable outlook reflects Moody's expectation of mid single digit
percentage revenue growth, which along with improving EBITDA
margins, will result in leverage below 4x debt/EBITDA (Moody's
adjusted) over the next 12-18 months. Moody's expects SubCom to
maintain a very good liquidity profile and generate free cash flows
of about $200 million, absent further dividends, over the outlook
period.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if SubCom were to demonstrate
conservative financial policies and continued organic revenue and
EBITDA growth such that Moody's expected leverage would be
sustained under 3x on a long-term basis.
The ratings could be downgraded if SubCom were to materially lose
market share such that revenue backlog and EBITDA generation were
to experience declines over time. The ratings could also face
downward pressure if the company were to pursue further shareholder
returns or M&A activity that resulted in a heightened leverage
profile with leverage maintained over 5x on other than a temporary
basis.
The principal methodology used in these ratings was Construction
published in September 2021.
SubCom is a provider of planning, engineering, manufacturing,
installation and maintenance services for the construction of
subsea fiber optic cable systems worldwide, and is one of three
leading global fiber optic cable installers. The company's
customers include telecom providers, operators, internet content
providers, network consortiums and government entities. SubCom,
which is owned by funds affiliated with Cerberus Capital, is
headquartered in Eatontown, NJ and generated revenue of $1,317
million in the LTM period ended September 30, 2023.
CROWN SUBSEA: S&P Affirms 'B+' ICR, Outlook Stable
--------------------------------------------------
S&P Global Ratings affirmed all ratings on Crown Subsea
Communications Holding Inc. (SubCom), a long-haul subsea fiber
optic cable services provider, including the 'B+' issuer credit
rating.
S&P assigned its 'B+' issue-level rating and '3' recovery rating to
the $175 million revolver and proposed $1.35 billion term loan.
The stable outlook reflects S&P's expectation that SubCom's backlog
provides good visibility into revenue and EBITDA growth over the
coming years and it stands to benefit from the secular growth in
data consumption and replacement demand for aging long-haul fiber
optic cables.
SubCom announced its plans to borrow a $1.35 billion term loan due
2031 and use the proceeds along with cash on balance sheet to
refinance the $1.043 billion principal outstanding under its
existing term loan due 2027 and pay a $482 million dividend to its
financial sponsor, Cerberus Capital Management.
SubCom is well positioned to benefit from favorable secular
tailwinds. SubCom is the largest long-haul global subsea fiber
optic cable services provider. The company benefits from good
visibility into its revenues over the next 4 years on account of
its $3.9 billion order backlog as of Dec. 31, 2023, secular trend
towards increase in data consumption, good history of operations,
and solid EBITDA margins as compared to other Engineering &
Construction companies. These strengths are somewhat offset by high
customer concentration of revenues, potential for volatility in
backlog and revenues as large contracts mature and operating risk
which could translate into costs increases and project delays.
The proposed dividend recapitalization will increase leverage,
albeit within our threshold for the rating. SubCom plans to secure
a $1.350 billion first-lien term loan to refinance its existing
term loan and pay a $482 million dividend to its financial sponsor,
Cerberus Capital. This follows a majority debt funded $900 million
dividend in fiscal 2023.
S&P said, "We expect the transaction will temporarily increase
SubCom's S&P Global Ratings-adjusted leverage to about 4.5x as of
year-end 2023, although we expect the company's leverage to
moderate subsequently under 4x backed by earnings growth. The
company has historically exhibited its willingness to pay down debt
using excess cash flows and we expect its financial sponsor will
continue to maintain its leverage below 5x, utilizing a similar
strategy.
"In our base case, we project its 2024 S&P Global Ratings-adjusted
EBITDA margin will remain in line with 2023 at 22%. We expect the
company's margin will slightly improve going forward as it benefits
from operating leverage and higher prices for its products and
services.
"SubCom has a history of operating effectively, although it
operates in a business that faces operating risk. SubCom's projects
are capital intensive in nature, and we believe there is
significant execution risk associated with manufacturing and
installation process. If some of the operational risks materialize,
we believe its earnings could be exposed to some volatility given
the fixed-price nature of its contracts. Additionally, its EBITDA
margins could be affected by unanticipated project costs or
execution delays. We note the structure of its contracts provides
some protection if it faces project delays or adds scope to the
project which could also be accretive to margins. While SubCom has
demonstrated resiliency to these risks in recent years, it will be
tested in a longer period as it manages considerable growth.
"Working capital trends are temporarily benefiting SubCom's free
operating cash flows. SubCom benefited from over $400 million in
positive working capital cash flows in its fiscal 2023, and expect
it to benefit from working capital inflows of about $200 million in
fiscal 2024 mainly due to advance payments on contracts in its
backlog and better working capital management. Combined with strong
expected earnings over the next 12 to 18 months, we expect the
company to generate strong free operating cash flows. Over time,
should the company's contract backlog shrink, working capital could
turn negative and become a use of cash over time, although we do
not expect a significant contraction in the backlog in the near
future. We expect SubCom's capital expenditure (capex) will remain
elevated at 3.5%-4.0% of revenue in 2024 to expand its capacity,
but it will reduce its growth capex to 2% of revenues in the
following years.
"We have assigned a new Management & Governance (M&G) assessment of
Moderately Negative to SubCom reflecting the company's financial
sponsor ownership that prioritizes shareholder returns and has a
finite holding period. This assignment follows the Jan. 7
publication of S&P Global Ratings' revised criteria for evaluating
the credit risks presented by an entity's M&G framework.
"The stable outlook reflects our expectation that SubCom's backlog
provides good visibility into revenue and EBITDA growth over the
coming years and it stands to benefit from the secular growth in
data consumption and replacement demand for aging long-haul fiber
optic cables."
S&P could lower its ratings on SubCom if:
-- Its S&P Global Ratings-adjusted debt to EBITDA approaches 5x;
or
-- S&P expects its FOCF to debt will fall below 10% on a sustained
basis.
This could occur if the company encounters unforeseen execution
issues on a large project, its EBITDA margins decrease materially
beyond its expectations, or it undertakes a debt-funded dividend
distribution.
S&P could raise its ratings on SubCom if:
-- The company successfully executes its large contracts and
maintains its win rates to mitigate its customer and project
concentration risks;
-- S&P gains greater visibility into the sponsor's holding period,
which dissipates the uncertainty around potentially aggressive
financial policy decisions; and
-- The company maintains debt to EBITDA of well below 4x and FOCF
to debt of above 15% on a sustained basis.
CVR REFINING: S&P Withdraws 'B+' Issuer Credit Rating
-----------------------------------------------------
S&P Global Ratings withdrew its 'B+' issuer credit rating on CVR
Refining L.P., at the issuers request. At the time of the
withdrawal, S&P's outlook on the company was stable. There is no
debt outstanding at CVR Refining.
DEAN GUTIERREZ: Feb. 21 Disclosure Statement Hearing Set
--------------------------------------------------------
Judge Eduardo V. Rodriguez has entered an order that the hearing to
consider the approval of the disclosure statement of Dean Gutierrez
Investments, LP will be held at the United States Courthouse,
Courtroom #5, 600 East Harrison, Brownsville, Texas, 78520 on Feb.
21, 2024, at 10:00 a.m., (Central Standard Time).
Feb. 14, 2024, is fixed as the last day for filing and serving
written objections to the Disclosure Statement.
About Dean Gutierrez Investments
Dean Gutierrez Investments, LP's business is in operating a food
restaurant in Brownsville, Cameron County, Texas and in
constructing residences on subdivision lots in Cameron County,
Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-10116) on July 3,
2023. In the petition signed by Melissa Gutierrez, general partner,
the Debtor disclosed up to $1 million in both assets and
liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Antonio Martinez Jr., Esq., at Law Office of Antonio Martinez, Jr.,
PC, is the Debtor's legal counsel.
DISCOVERY ENERGY: S&P Assigns 'B' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
Discovery Energy Holdings IV L.P. At the same time, S&P assigned
its 'B' issue-level rating and '3' recovery rating to the company's
proposed term loan B, which will be issued by Discovery Energy's
subsidiary, Discovery Energy Holding Corp.
The stable outlook on Discovery Energy reflects S&P's forecast for
EBITDA generation in 2024 that will support S&P Global
Ratings-adjusted leverage in the mid-4x area, adjusted interest
coverage in the mid-2x area, and good levels of free operating cash
flow (FOCF).
Platinum Equity, through its Platinum Equity Capital Partners VI
Fund, is acquiring a majority stake in Kohler Co.'s energy division
through a new entity, Discovery Energy Holdings IV L.P. (doing
business as [dba] Kohler Energy). Kohler Energy is a manufacturer
of back-up generators, gas and diesel engines, and electric
powertrain components for residential, commercial, and equipment
applications.
Kohler Energy competes in highly competitive markets that are
dominated by a few competitors with greater scale and higher
margins. Kohler Energy has good diversity in end-market exposure
but does not have a leading market share in any of its businesses.
The company competes with larger, well-capitalized peers in its
larger power systems and engines businesses whose EBITDA margins
compare favorably to that of Kohler Energy. S&P said, "Our forecast
for S&P Global Ratings-adjusted EBITDA margin of about 10% is
relatively low and the company has only a limited track record of
achieving margins at this level. Further, the company's capital
expenditure (capex) levels, at about 3% of revenue in recent years,
are higher compared with other capital goods companies that we
rate, highlighting the large capital investments needed to maintain
and expand manufacturing capacity. We believe that the company's
relatively small market penetration contributes, in part, to its
lower margins and higher capex needs to maintain or improve its
competitive position."
These attributes are somewhat offset by Kohler Energy's moderate
scale, participation in markets with relatively high barriers to
entry, moderate revenue diversification, and exposure to end
markets experiencing secular growth trends. S&P said, "Our forecast
for Kohler Energy's revenue of about $4 billion translates in our
view to a solid base to realize operating leverage and,
notwithstanding the company's relatively lower EBITDA margin,
generate sufficient cash flow to fund capex initiatives. While
Kohler Energy has relatively low market shares in the markets it
operates, we view the threat of new entrants into Kohler Energy's
operating markets as low since large generators are highly complex
pieces of equipment that require significant capital investment to
build manufacturing capabilities and establish a reputation. We
view Kohler Energy's revenue as being well diversified in relation
to customer concentration, end-market exposure, and geographic
footprint. This diversification should partially help mitigate
potential earnings volatility from adverse macroeconomic events in
a particular business segment or region."
S&P said, "Further, we believe Kohler Energy is differentiated from
competitors in part through lower lead times, due in part to
sourcing major components from various suppliers compared with
larger competitors that rely more on in-house capacity. We believe
this positions the company well to benefit from growth in end
markets such as data centers. This end market, which represented
about 10% of Kohler Energy's 2022 revenues, is growing at
double-digit rates.
"While we forecast S&P Global Ratings-adjusted leverage in the
mid-4x area, the company has a limited track record of maintaining
its current EBITDA margin. Our forecast for adjusted leverage
incorporates our assumption for 2024 year-over-year revenue growth
in the mid-single-digit percent area, following what we expect to
be mid-teens percent growth in 2023. Our expectation for 2023 is
based on performance through the first nine months of the year and
driven by solid demand from data center end markets for power
systems, good demand for diesel engines, and price realization in
the company's genset (engine-generator) backlog. We forecast
revenue growth in 2024 to decelerate in part because we assume
price increases, if any, will be more muted this year (following
more meaningful price increases realized in 2023). Nevertheless, we
assume 2024 revenue will be supported by continued volume growth in
power systems from data center end-market demand, and from demand
for diesel engines in part from the penetration of a recent product
introduction. Further, while a relatively small percent of revenue,
we forecast the company will continue to expand its residential
power segment modestly in 2024 as general demand for residential
power increase as weather-related events and grid outages become
more prevalent.
"We forecast Kohler Energy's S&P Global Ratings-adjusted EBITDA
margin to remain relatively low, about 10% in 2024, at about the
same level we expect for 2023. We anticipate the company's 2023 S&P
Global Ratings-adjusted EBITDA margin to reflect meaningful growth
over 2022, driven by a full-year benefit of price increases enacted
during 2022; a revenue mix-shift to higher-margin products,
particularly in engines; cost efficiencies achieved from actions
taken in the past few years, and a favorable year over year compare
with 2022 margins, which included additional charges related to
product discontinuations and other expenses, which we assume were
generally lower in 2023. We believe Kohler Energy will be able to
largely maintain pricing, continue to focus on higher-margin
products, and maintain the benefits from the cost actions it
completed in the past few years. Nevertheless, we forecast S&P
Global Ratings-adjusted EBITDA margin to remain about flat in 2024
since we assume the benefits of operating leverage from higher
revenue will be largely offset by a modest decline in gross margin
because pricing on certain products may decline if demand
decelerates. We assume that, over time, Kohler Energy will benefit
from operational improvements that will begin to be implemented
this year. We assume, however, that in 2024 costs to achieve those
operational improvements will largely offset the cost benefits.
"Further, our view of the company's overall leverage profile and
financial risk also incorporates the company's majority (76%)
ownership by financial sponsor Platinum Equity. We believe
financial sponsors typically follow aggressive financial policies
in using debt and debt-like instruments to maximize shareholder
returns, extract cash, and ultimately increase financial risk. In
addition, our view incorporates some execution risk to our overall
forecast as the company transitions to a stand-alone company.
"We forecast Kohler Energy to generate good levels of FOCF and
maintain adequate liquidity. For 2024, we forecast the company to
generate unadjusted FOCF of about $90 million, a level that is more
than sufficient to cover modest distributions to owners for tax
purposes, and about $16 million in amortization under the proposed
term loan. We forecast Kohler Energy will have excess cash
remaining to on its balance sheet cash, and the company's liquidity
buffer will further be supported by our forecast for good
availability under the proposed $400 million ABL facility.
"The stable outlook on Discovery Energy reflects our forecast for
EBITDA generation in 2024 that will support S&P Global
Ratings-adjusted leverage in the mid-4x area, adjusted interest
coverage in the mid-2x area, and good levels of FOCF."
S&P could lower its rating on Discovery Energy if:
-- S&P Global Ratings-adjusted EBITDA interest coverage approaches
1.5x,
-- S&P Global Ratings-adjusted debt to EBITDA is above 6x on a
sustained basis, or
-- The company generates negative FOCF.
S&P could raise our rating on Discovery Energy if:
-- The company establishes a track record of revenue generation at
least around recent levels and S&P adjusted EBITDA margin of at
least around 10%, such that S&P believes its adjusted leverage will
remain well below 5x; and
-- S&P Global Ratings-adjusted interest coverage is sustained
above 3x; and
-- Management and the company's owners commit to a financial
policy that is commensurate with this level of leverage, including
the impact of potential acquisitions and shareholder rewards.
S&P said, "Governance is a negative consideration, as it is for
most rated entities owned by private-equity sponsors. We believe
the company's aggressive financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects private-equity sponsors' generally
finite holding periods and focus on maximizing shareholder returns.
While Kohler Energy has heightened exposure to environmental
considerations, given emissions derived from its
products--including large and small power range diesel and gasoline
generators and power systems, we believe the company will continue
to dedicate research and development towards higher efficiency
products that help reduce end-user emissions. Moreover, Kohler
Energy provides renewable natural gas and biogas solutions and has
a growing revenue base derived from sales of electrification
components through its Curtis brand."
DISH NETWORK:S&P Cuts ICR to 'CC' on Announced Distressed Exchange
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating (ICR) on Dish
Network Corp. and Dish DBS Corp. to 'CC' from 'CCC+' and also
lowered all affected issue-level debt ratings to 'CC'.
U.S.-based telecommunications provider EchoStar Corp. announced
consent solicitations for largely sub-par exchanges of certain
convertible notes issued at Dish Network Corp. and unsecured notes
issued at Dish DBS Corp.
S&P said, "Our ICR on EchoStar Corp. and Hughes Satellite Systems
Corp. remains at 'CCC+' because the capital structure will likely
remain unsustainable after the close, but we believe its leverage
and near-term liquidity position will have improved such that the
risk of default is lower over the next year once the exchanges are
completed.
"The negative outlook reflects that we will lower the ICR on Dish
Network Corp and Dish DBS Corp to SD and the issue-level rating on
the affected issues to 'D' if the exchange is completed as
proposed.
"We view the exchanges as equivalent to a default. Holders of
existing notes are being offered less than the original promise
because the exchange rate is at a significant discount to par for
most issues and the maturity dates will be extended to 2030. In
exchange, the new notes will all carry a higher interest rate at
10% and be secured by certain assets." More specifically:
-- Holders of about $2.0 billion 0% converts issued at Dish
Network due 2025 can exchange at a rate of 61% to par for new notes
issued at EchoStar Corp due 2030, secured by AWS-4 spectrum
licenses.
-- Holders of about $2.9 billion 3.375% convertible notes due 2026
can exchange at a rate of 51% of par for new notes issued at
EchoStar Corp due 2030, secured by AWS-4 spectrum licenses.
-- Holders of $2.0 billion 7.75% unsecured notes due 2026 issued
at Dish DBS can exchange at a total consideration of 66% of par for
new notes issued at Dish DBS Issuer LLC, secured by 3.0 million
Dish TV subscribers.
-- Holders of $1.0 billion 7.375% unsecured notes due 2028 issued
at Dish DBS can exchange at a total consideration of 50% of par for
new notes issued at Dish DBS Issuer LLC, secured by 3.0 million
Dish TV subscribers.
-- Holders of $1.5 billion 5.125% unsecured notes due 2029 issued
at Dish DBS can exchange at a total consideration of 43% of par for
new notes issued at Dish DBS Issuer LLC, secured by 3.0 million
Dish TV subscribers.
-- Holders of a maximum of $1.0 billion 5.875% unsecured notes at
Dish DBS due 2024 can exchange at a total consideration rate of
100% of par for new notes issued at Dish DBS Issuer LLC, secured by
3.0 million Dish TV subscribers, which S&P does not consider an
SD.
EchoStar's capital structure will likely still be unsustainable,
with viability subject to execution risk. Although this transaction
would reduce total debt by about $4.5 billion, the company's debt
load would remain elevated and pro forma S&P Global
Ratings-adjusted leverage is still projected to be above 10x in
2024 (from about 12x pre-transactions). Furthermore, interest
expense would increase by about $100 million, putting further
pressure on free operating cash flow (FOCF). S&P said, "We continue
to believe there is a high degree of uncertainty around EchoStar's
ability to generate sustainably positive FOCF long term given the
cash burn at Dish Network and limited predictability of future
wireless revenue growth. Therefore, we believe the company depends
on favorable business, financial, and economic conditions to meet
its financial commitments over time."
EchoStar's refinancing needs will be reduced over the next two
years. S&P said, "We forecast that the company could have
sufficient internal liquidity to handle operational and financing
needs through 2025 if the exchanges are completed as proposed.
Furthermore, the estimated funding need in 2026 would be cut
roughly in half to about $4.5 billion-$5.0 billion, mainly to
handle Dish DBS secured maturities totaling $2.75 billion and
Hughes Satellite Systems Corp maturities totaling $1.5 billion.
Therefore, we believe the company has a path to execute its
wireless strategy and lower its cost of capital by 2026, when its
next major refinancing need occurs."
Separately, Dish has an option to purchase 800MHz spectrum from
T-Mobile for about $3.6 billion in April 2024. We believe the
company may be able to access capital using recently transferred
assets, including the $4.7 billion spectrum-backed intercompany
from Dish Network that is now due to the wholly owned EchoStar
subsidiary called EchoStar Intercompany Receivable LLC.
Recent actions indicate weak governance. S&P said, "We believe
controlling shareholder Charlie Ergen has placed the interests of
equity holders, including himself, above that of creditors. In
particular, the recently announced series of asset transfers
significantly impaired recovery value for several tranches of debt
at Dish DBS Corp by stripping certain entities of collateral
backing existing debt, transferring assets away from the reach of
existing borrowers. While the company is publicly traded,
transparency surrounding the intent of such actions has been
limited. Given the lack of effective board oversight, we believe
EchoStar's governance structure remains a credit risk."
The negative outlook on EchoStar Corp. reflects large FOCF
deficits, execution risk, the uncertainty of EchoStar's long-term
wireless earnings growth, and significant refinancing requirements
in 2026. S&P will re-evaluate the ICR on EchoStar and its
subsidiaries following the completion of the exchanges, but it's
unlikely to be rated higher than 'CCC+' given significant
uncertainty around cash generation long term.
S&P said, "We will lower our ICR on Dish Network Corp., Dish DBS
Corp. and the affected unsecured notes to 'D' if the transactions
closes as proposed.
"Although unlikely, we could raise the ICR on EchoStar if the
company demonstrated a path to long-term FOCF generation, possibly
from profitable market share gains in its wireless segment. This
would likely involve public disclosure of network partners and
enterprise contracts that would lead us to believe that its
wireless strategy could generate significant revenue and cash
flow."
EEA STERLING: Hires Goldberg Weprin Finkel Goldstein as Counsel
---------------------------------------------------------------
EEA Sterling Fund Ltd. seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ Goldberg
Weprin Finkel Goldstein LLP as its counsel.
The Debtor requires legal counsel to:
(a) provide the Debtor with necessary legal advice in
connection with the Chapter 11 case and its responsibilities and
duties as a debtor-in-possession;
(b) represent the Debtor in all proceedings before the
Bankruptcy Court and/or United States Trustee;
(c) review and prepare all necessary legal papers;
(d) represent the Debtor's interests in connection with the
sale of the Units and objections to the claims of the two alleged
mortgage lien holders; and
(e) perform all other legal services for the Debtor which may
be necessary to obtain a successful conclusion of the Chapter 11
case.
The firm's current billing rates for bankruptcy and real estate
matters are $685 per hour for partner time and between $275 to $500
for associate time.
The firm received a pre-bankruptcy payment in the amount of $25,000
from G Consulting Group, Inc., an entity wholly owned by Michael
Goldman, the sole member and manager of the Debtor.
J. Ted Donovan, an associate at Goldberg Weprin Finkel Goldstein,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
J. Ted Donovan, Esq.
Goldberg Weprin Finkel Goldstein LLP
125 Park Ave.
New York, NY 10017
Telephone: (212) 221-5700
Facsimile: (212) 730-4518
Email: tdonovan@gwfglaw.com
About EEA Sterling Fund
EEA Sterling Fund Ltd. owns two condominium apartments located at
325 Fifth Avenue, New York, Units 11G and 17G.
EEA sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D.N.Y. Case No. 23-22781) on Oct. 23, 2023. In the
petition signed by Chana Goldman, authorized representative, the
Debtor disclosed $2,222,000 in total assets and $1,391,267 in total
liabilities.
Judge Sean H. Lane oversees the case.
J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP is
the Debtor's counsel.
EMERALD ISLES: Aaron Cohen Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 21 appointed Aaron Cohen, Esq., a
practicing attorney in Jacksonville, Fla., as Subchapter V trustee
for Emerald Isles Holdings, LLC.
Mr. Cohen will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Cohen declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Aaron R. Cohen, Esq.
P.O. Box 4218
Jacksonville, FL 32201
Tel: (904) 389-7277
Email: aaron@arcohenlaw.com
About Emerald Isles Holdings
Emerald Isles Holdings, LLC, doing business as McK's Tavern &
Brewery serves pub food, genuine Irish dishes, a variety of beer,
and its very own craft brews. It is based in Daytona Beach, Fla.
Emerald filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00073) on Jan. 8,
2024, with $1,127,700 in assets and $914,883 in liabilities. Scot
A. Lawson, president, signed the petition.
Judge Lori V. Vaughan oversees the case.
Walter J. Snell, Esq., at Snell and Snell, P.A. represents the
Debtor as legal counsel.
EMERGENT BIOSOLUTIONS: Awarded Procurement Contract Valued $235.8M
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Emergent BioSolutions Inc. announced that it has secured an
indefinite-delivery, indefinite-quantity (IDIQ) procurement
contract with a maximum value up to $235.8 million to supply
BioThrax (Anthrax Vaccine Adsorbed) for use by all branches of the
U.S. military as Pre-Exposure Prophylaxis (PrEP) for anthrax
disease. The new contract with the U.S. Department of Defense
(DoD) and led by the Joint Program Executive Office for Chemical,
Biological, Radiological and Nuclear Defense, is comprised of a
five-year base agreement ending on Sept. 30, 2028, and an
additional five-year option that would extend the contract to Sept.
30, 2033.
"As a part of our mission to protect and enhance lives, Emergent is
proud to continue supporting and preparing our nation's service
members who have a high risk of exposure to anthrax bacteria by
supplying BioThrax vaccine," said Paul Williams, senior vice
president, products head at Emergent. "This new contract award is
a testament to the importance of Emergent's medical countermeasures
portfolio, and we look forward to delivering on our commitments to
the U.S. DoD."
Under the initial five-year IDIQ contract, there is a guaranteed
purchase minimum of $20.1 million, with future orders estimated to
be at least $20 million for each following year for a total award
value up to $235.8 million.
About Emergent Biosolutions
Headquartered in Gaithersburg, MD, Emergent Biosolutions Inc. is a
global life sciences company focused on providing innovative
preparedness and response solutions addressing accidental,
deliberate and naturally occurring public health threat. The
Company's solutions include a product portfolio, a product
development portfolio, and a contract development and
manufacturing
("CDMO") services portfolio.
Tysons, Virginia-based Ernst & Young LLP, the Company's auditor
since 2004, issued a "going concern" qualification in its report
dated March 1, 2023, citing that the Company does not expect to be
in compliance with debt covenants in future periods without
additional sources of liquidity or future amendments to its Credit
Agreement, has a working capital deficiency, and has stated that
substantial doubt exists about the Company's ability to continue as
a going concern.
EVOKE PHARMA: Registers Up to 8.33 Million Common Stock Units
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Evoke Pharma, Inc. has filed Amendment No. 4 to its Form S-1 filed
with the U.S. Securities and Exchange Commission relating to its
offering of up to 8,333,000 common stock units, each consisting of:
(i) one share of the Company's common stock, (ii) a Series A
warrant to purchase one share of common stock, (iii) a Series B
warrant to purchase one share of common stock, and (iv) a Series C
warrant to purchase one share of common stock. The assumed purchase
price for each Common Stock Unit is $0.90 (equal to the last sale
price of common stock as reported by The Nasdaq Capital Market on
January 9, 2024).
The Series A Warrants and Series B Warrants are exercisable
immediately, subject to certain limitations described herein. The
Series C Warrants may only be exercised to the extent and in
proportion to a holder of the Series C Warrants exercising its
corresponding Series B Warrants. The Series A Warrants will expire
five years from the closing date of this offering. The Series B
Warrants will expire nine months from the closing date of this
offering. The Series C Warrants will also expire nine months from
the closing date of this offering, provided that to the extent and
in proportion to a holder of the Series C Warrants exercising its
corresponding Series B Warrants included in the Common Stock Unit,
such Series C Warrant will expire five years from the closing date
of this offering.
Additionally, the Company is offering the shares of its common
stock that are issuable from time to time upon exercise of the
Common Warrants.
It is also offering to each purchaser whose purchase of Common
Stock Units in this offering would otherwise result in the
purchaser, together with its affiliates and certain related
parties, beneficially owning more than 4.99% of the Company's
outstanding common stock immediately following the consummation of
this offering, the opportunity to purchase, if the purchaser so
chooses, up to 8,333,000 pre-funded warrant units, in lieu of
Common Stock Units that would otherwise result in the purchaser's
beneficial ownership exceeding 4.99% of the Company's outstanding
common stock. Each PFW Unit consists of: (i): pre-funded warrants
to purchase one share of the Company's common stock, (ii) a Series
A Warrant to purchase one share of common stock, (iii) a Series B
Warrant to purchase one share of common stock, and (iv) a Series C
Warrant to purchase one share of common stock. The Common Warrants
included in the PFW Units are identical to the Common Warrants
included in the Common Stock Units. Subject to limited exceptions,
a holder of Pre-Funded Warrants will not have the right to exercise
any portion of its Pre-Funded Warrants if the holder, together with
its affiliates, would beneficially own in excess of 4.99% (or, at
the election of the holder, 9.99%, 14.99%, or 19.99%) of the number
of shares of common stock outstanding immediately after giving
effect to such exercise. Each Pre-Funded Warrant will be
exercisable for one share of common stock at an exercise price of
$0.0001 per share of common stock. The public offering price per
PFW Unit is equal to the public offering price per Common Stock
Unit less $0.0001. Each Pre-Funded Warrant will be exercisable upon
issuance and will expire when exercised in full. The Company is
also offering the shares of its common stock that are issuable from
time to time upon exercise of the Pre-Funded Warrants. For each PFW
Unit it will sell, the number of Common Stock Units the Company is
offering will be decreased on a one-for-one basis.
Because a Series A Warrant, Series B Warrant and Series C Warrant
are being sold together in this offering with each Common Stock
Unit and, in the alternative, each PFW Unit, the number of Series A
Warrants, Series B Warrants and Series C Warrants sold in this
offering will not change as a result of a change in the mix of the
Common Stock Units and PFW Units sold. The shares of common stock
in the Common Stock Units or the Pre-Funded Warrants in the PFW
Units, as applicable, and the accompanying Common Warrants, can
only be purchased together in this offering but will be issued
separately and will be immediately separable upon issuance;
provided that a Series C Warrant may not be separated from the
corresponding Series B Warrant until such Series B Warrant has been
exercised.
Neither the Common Stock Units nor the PFW Units will be issued or
certificated. The Common Stock Units, the PFW Units, the shares of
common stock, the Common Warrants, the Pre-Funded Warrants, and
shares of common stock underlying the Common Warrants and
Pre-Funded Warrants are sometimes collectively referred to herein
as the "securities."
A full-text copy of the Report is available at
http://tinyurl.com/fz75de24
About Evoke Pharma
Headquartered in Solana Beach, California, Evoke Pharma, Inc. --
http://www.evokepharma.com-- is a specialty pharmaceutical company
focused primarily on the development of drugs to treat GI disorders
and diseases. The Company is developing Gimoti, a nasal spray
formulation of metoclopramide, for the relief of symptoms
associated with acute and recurrent diabetic gastroparesis.
Evoke Pharma reported a net loss of $8.22 million for the year
ended Dec. 31, 2022, compared to a net loss of $8.54 million for
the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had
$7.85 million in total assets, $8.73 million in total liabilities,
and a total stockholders' deficit of $873,775.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Evoke Pharma said that there is substantial doubt about its ability
to continue as a going concern for one year after the date the
financial statements were issued. The Company has incurred
recurring losses and negative cash flows from operations since
inception and expects to continue to incur net losses for the
foreseeable future until such time, if ever, that it can generate
significant revenues from the sale of Gimoti. As of Sept0 30, 2023,
the Company had approximately $6.0 million in cash and cash
equivalents. The Company anticipates that it will continue to incur
losses from operations due to commercialization activities.
EYE CARE LEADERS: Case Summary & 30 Largest Unsecured Creditors
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Lead Debtor: Eye Care Leaders Portfolio Holdings, LLC
555 S. Mangum Street, Suite 100
Durham, NC 27701
Business Description: Eye Care Leaders provides a suite of
software specifically geared towards
ophthalmology and optometry practices,
practice management, surgical, revenue cycle
management (RCM), MIPS reporting and more.
Eye Care Leaders is a one-stop shop for eye
care specialists and their patients.
Chapter 11 Petition Date: January 16, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Thirty-five affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
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Eye Care Leaders Portfolio Holdings, LLC (Lead) 24-80001
ECL PH Services Group LLC 24-80000
ECL Group, LLC 24-80002
Alta Billing Holdings, LLC 24-80003
Alta Billing, LLC 24-80004
Canta Health, LLC 24-80005
DJRTC, LLC 24-80006
ECL Holdings, LLC 24-80007
Eye Care Leaders Holdings, LLC 24-30126
iMedicWare, Inc. 24-80008
IMW EMR, LLC 24-80009
IMW Holdings, LLC 24-80010
Insight Software, LLC 24-80011
Integrity EMR Holdings, LLC 24-80012
Integrity EMR, LLC 24-80013
IO PracticeWare, Inc. 24-80014
IOPW Holdings, LLC 24-80015
IOPW, LLC 24-80016
KeyMed Holdings, LLC 24-80017
KeyMed, LLC 24-80018
MD Office, LLC 24-80019
MDO Group Holdings, LLC 24-80020
MDX, LLC 24-80021
Medflow Holdings, LLC 24-80022
Medflow, Inc. 24-80023
MNI Holdings, LLC 24-80024
MRX Holdings, LLC 24-80025
My Vision Express, Inc. 24-80026
Penn Medical Informatics Systems, LLC 24-80027
PI Software Holdings, LLC 24-80028
PI Software, LLC 24-80029
PMX, LLC 24-80030
Revenue Health Solutions, LLC 24-80031
RHS Holdings, LLC 24-80032
The Hoehne Group - Software Division, Inc. 24-80033
Judge: Hon. Michelle V. Larson
Debtors' Counsel: Jason S. Brookner, Esq.
GRAY REED
1601 Elm Street, Suite 4600
Dallas, TX 75201
Tel: (214) 954-4135
Email: jbrookner@grayreed.com
Debtors'
Financial
Advisor: B. RILEY FINANCIAL, INC.
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $500 million to $1 billion
The petitions were signed by Sophie Turrell as CEO/portfolio
manager.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/25CYB5I/Eye_Care_Leaders_Portfolio_Holdings__txnbke-24-80001__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Amazon Web Services, Inc. Trade Debt $3,621,269
PO Box 84023
Seattle, WA 98124-8423
2. Waystar Inc. Trade Debt $701,008
1311 Solutions Center
Chicago, IL 60677-1311
3. DrFirst Trade Debt $623,610
PO Box 791487
Baltimore, MD 21279-1487
4. New Jersey Division of Taxation Sales & Use Tax $468,706
Freehold Regional Office - 2 Paragon
Way, Suite 1100
Freehold, NJ 7728
5. New York Department of Taxation Sales & Use Tax $373,027
and Finance
WA Harriman Campus
Albany, NY 12227-1099
6. Academy Association, Inc. Term Loan $339,000
3406 Stagecoach Rd.
Durham, NC 27713
Greg E. Lindberg
7. Darena Solutions LLC Trade Debt $338,110
100 Chesterfield Business Parkway-
Suite 200
St. Louis, MO 6300
8. Salesforce.com Inc Trade Debt $304,758
P.O. Box 203141
Dallas, TX 75320-3141
9. Texas Comptroller of Public Sales & Use Tax $302,329
Accounts
P.O. Box 149348
Austin, TX 78714-9348
10. MedNetwoRx Cloud Service Trade Debt $163,257
12700 Park Central Drive,-Suite 800
Dallas, Texas 75251
11. Relay Health Trade Debt $160,882
P.O. Box 98347
Chicago, IL 60693-8347
12. Condon Trobin Sladek Legal Services $142,349
Thornton
8080 Park Lane-Suite 700
Dallas, TX 75231
13. Commonwealth of Massachusetts Sales & Use Tax $151,213
PO Box 419257
Boston, MA 02241-9257
14. Berkeley Research Group LLC Professional $120,991
PO Box 676158 Services
Dallas, TX 75267-6158
15. Emdeon- Change Healthcare Trade Debt $98,262
3055 Lebanon Pike
Nashville, TN 37214
16. Navicure Inc. Trade Debt $62,202
1311 Solutions Centre
Chicago, IL 60677-1311
17. Marc Ellman, M.D. P.A. Litigation $60,000
12247 Eagle Heart
El Paso, TX 79936
18. AdvancedMD Trade Debt $59,746
PO Box 413120
Salt Lake City, UT 84141-3120
19. Microsoft Trade Debt $55,851
PO Box 842103
Dallas, TX 75284-2103
20. Data Media Associates, LLC Trade Debt $51,625
P. O. Box 96514
Charlotte, NC 28296-0514
21. Kate Stevens Ltd Trade Debt $50,924
The Generator
The Gallery Kings Wharf,
The Quay Exeter EX2 4AN
22. Drummond Group, LLC Trade Debt $33,880
13359 North Hwy 183-Suite B 406-
238
Austin, TX 7875
23. Peak 10 Inc Trade Debt $32,384
PO Box 530619
Atlanta, GA 30353-0619
24. NW Brixham Green Two LP Trade Debt $32,313
110 West 13775 South Suite 3
Draper, UT 84020
25. Five9, Inc. Trade Debt $31,421
FILE 2361-1801 W Olympic Blvd
Padadena, CA 91199-2361
26. UPDox, LLC Trade Debt $31,421
PO Box 772112
Detroit, MI 48277
27. Docusign Inc. Trade Debt $30,032
Dept 3428
PO Box 123428
Dallas, TX 75312-3428
28. Secure Exchange Trade Debt $29,826
Solutions, Inc.
9600 Blackwell Road, Suite 250
Rockville,MD 20850
29. Universal Life Insurance Co. and Litigation Unknown
TMI Trust Co., in its capacity as
trustee of Certain Reinsurance
Trusts
5901 Peachtree Dunwoody Road,
Suite C495
Atlanta, GA 30328
Christopher G. Browning, Jr.
305 Church at North Hills Drive,
Suite 1200
Raleigh, NC 27609
Email: Chris.browning@troutman.com
30. John Johnston, as Joint Litigation Unknown
Provisional Liquidator on behalf of
PB Life and Annuity Co., Ltd., et al.
Corner House
20 Parliament Street
Hamilton, HM 12 Bermuda
Nicholas F. Kajon
Email: nicholas.kajon@stevenslee.com
FITNESS INTERNATIONAL: Moody's Puts 'B3' CFR on Review for Upgrade
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Moody's Investors Service placed Fitness International, LLC's B3
Corporate Family Rating and B3-PD Probability of Default Rating on
review for upgrade, where a potential upgrade is contingent on a
successful completion of the proposed refinancing. Concurrently,
Moody's assigned a B1 rating to the company's proposed new first
lien bank credit facility based on the expectation that the CFR
will be upgraded to B2 at transaction close. The new first lien
bank credit facility consists of a $300 million revolver due 2028,
$300 million term loan A due 2028, and a $675 million term loan B
due 2029. The B2 ratings on the existing revolver, term loan A and
term loan B are not affected and Moody's expects to withdraw these
ratings if the facilities are retired in conjunction with the
refinancing. Previously, the outlook was stable.
Fitness International plans to utilize proceeds from the
refinancing transaction along with a roughly $61 million draw on
the new revolver and $53 million of balance sheet cash to pay off
the existing term loan A and term loan B and fund related
transaction fees. The proposed revolver will replace the existing
$400 million revolver.
The review for upgrade is prompted by Moody's expectation that the
refinancing transaction will address the refinancing risk
associated with the maturity of the existing credit facility in
early 2025 without materially affecting cash interest expense. The
review also reflects an expectation that operating performance
including membership trends will continue to improve in 2024.
Membership and revenue as of September 2023 have almost fully
recovered to pre-pandemic levels. Pro forma for the refinancing,
Moody's lease adjusted debt-to-EBITDA leverage is in the high 5x
range for the 12 month period ended September 30, 2023 and Moody's
expects leverage will decline to the low to mid 5x range over the
next 12 to 18 months through earnings growth and some debt
repayment. The review also reflects Moody's expectation for good
liquidity if the company completes the proposed refinancing,
supported by a pro forma cash balance of roughly $150 million at
transaction close and access to the new $300 million revolver due
2028 ($61 million draw at closing). The transaction extends out the
maturities of the new credit facility to 2028 for the revolver and
term loan A, and to 2029 for the term loan B. Moody's expects free
cash flow to be in the range of $50 million after required tax
distributions over the next year. These cash sources will provide
sufficient coverage of the $22 million per annum of required
amortization on the new term loan A and B. Required amortization
will increase to about $29 million in 2026 because the annual
amortization for the term loan A steps up to 7.5%. The term loan B
has a standard 1% annual mandatory amortization.
In the review, Moody's will assess the company's ability to
successfully complete the proposed refinancing at a manageable
interest cost that preserves good free cash flow generation.
The B1 rating for its proposed new first lien credit facility
(revolver and term loans) is based on the expectation that the CFR
will be upgraded to B2 following the transaction. The credit
facility ratings would be one notch above the CFR, reflecting the
loss absorption and support provided by the significant amount of
unsecured operating lease obligations. Moody's expects to withdraw
the B2 ratings on the existing $400 million revolver due January
2025, term loan A due January 2025 and term loan B due April 2025
if the facilities are completely retired in conjunction with the
proposed refinancing.
RATINGS RATIONALE
Fitness International's existing B3 CFR broadly reflects its high
leverage with LTM pro forma Moody's adjusted debt-to-EBITDA
leverage in the high 5x range, geographic concentration in
California, Florida and Texas that represent roughly 40% of the
total club count, competition from technology-based fitness
services that are not tied to a facility, and highly fragmented and
competitive fitness club industry with high attrition rates.
Fitness International is positioned in the industry's more
pressured mid-tier price point and the company is exposed to
cyclical shifts in discretionary consumer spending. However, the
rating is supported by the company's well-recognized brand name,
steady expansion of the club count and broadening concept to
include budget-oriented Esporta and add upscale Club Studio
concepts, and position as the largest non-franchise fitness
operator by number of clubs. Increased awareness of the importance
of health and wellness supports good growth prospects. The
company's improving free cash flow includes self-funding of new
club development and debt reduction.
The change in lease accounting following Fitness International's
adoption of ASC 842 starting in its annual audit for 2022
meaningfully increased the company's debt-to-EBITDA leverage level.
The accounting changes do not affect cash flow and Moody's adjusted
its leverage expectations for the B3 CFR to reflect the updated
lease accounting.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Moody's expects membership levels,
EBITDA, and credit metrics to continue to improve. Moody's adjusted
debt-to-EBITDA sustained below 6.0x along with good free cash flow
and successfully addressing the 2025 maturities would be necessary
for an upgrade.
The ratings could be downgraded if operating performance
deteriorates through membership declines, an erosion of pricing
power or rising costs. An increase in leverage, inability to
sustain positive free cash flow, or a deterioration in liquidity
could also lead to a downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Fitness International, LLC is the largest non-franchised fitness
club operator in the United States with about 728 clubs in 27 US
states and 2 Canadian provinces under the LA Fitness, City Sports
Club, Esporta Fitness, and Club Studio brand names. Common equity
in the company is wholly owned by founding members and the Seidler
family. Revenue for the LTM period ended September 30, 2023 was
about $2.086 billion.
FRANCISCAN FRIARS: Seeks to Hire B. Riley as Financial Advisor
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Franciscan Friars of California, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
GlassRatner Advisory & Capital Group LLC, doing business as B.
Riley Advisory Services, as financial advisor.
The Debtor requires a financial advisor to:
(a) assist the Debtor in the review of its strategic options;
(b) assist the Debtor in developing financial projections and
liquidity projections;
(c) assist the Debtor with negotiations with various
stakeholders;
(d) assist the Debtor in implementing potential operational
and/or strategic enhancements;
(e) assist the Debtor in preparation of the statutory reporting
requirements during the Chapter 11 proceedings;
(f) assist with the preparation of reports for, and
communications with, the Bankruptcy Court, creditors, and any other
constituents;
(g) review, evaluate, and analyze the financial ramifications
of proposed transactions for which the Debtor may seek Bankruptcy
Court approval;
(h) provide appraisal and valuation services;
(i) provide financial advice and assistance to the Debtor in
connection with asset sale transactions;
(j) assist the Debtor in developing and supporting a proposed
Plan of Reorganization;
(k) render Bankruptcy Court testimony in connection with the
foregoing, as required, on behalf of the Debtor; and
(l) any other duty or task which falls within the normal
responsibilities of a financial advisor at the direction of
management or board.
The hourly rates of the firm's professionals are as follows:
Sr. Managing Directors $495 - $850
Directors, Managing Directors $325 - $595
Associates, Other Professionals $200 - $425
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the filing date, B. Riley received retainer payments
totaling $100,000 and payments with respect to invoices totaling
$261,805. As of the petition date, B. Riley continues to hold
$59,692 of the retainer.
Wayne Weitz, a senior managing director at B. Riley, disclosed in a
court filing that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Wayne P. Weitz
B. Riley Advisory Services
19800 MacArthur Boulevard, Suite 820
Irvine, CA 92612
Telephone: (415) 229-4860
About Franciscan Friars of California
Franciscan Friars of California, Inc. is a tax-exempt religious
organization. The Debtor was formed to provide religious,
charitable, and educational acts, ministry, and service to the
poor.
Franciscan Friars of California filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Calif. Case No.
23-41723) on Dec. 31, 2023, with up to $10 million in assets and up
to $50 million in liabilities. David Gaa, president, signed the
petition.
Judge William J. Lafferty oversees the case.
The Debtor tapped Robert G. Harris, Esq., at Binder & Malter, LLP
as legal counsel and GlassRatner Advisory & Capital Group LLC,
doing business as B. Riley Advisory Services, as financial advisor.
FREEDOM WIND: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Freedom Wind Tunnel, LLC
200 Reservoir Street
North Attleboro, MA 02760
Chapter 11 Petition Date: January 16, 2024
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 24-10082
Debtor's Counsel: Jesse I. Redlener, Esq.
ASCENDANT LAW GROUP LLC
2 Dundee Park Drive, Suite 102
Andover, MA 01810
Tel: 978-409-2038
E-mail: jredlener@ascendantlawgroup.com
Estimated Assets: $__________
Estimated Liabilities: $__________
The petition was signed by Neal Gouck as authorized
representative.
A full-text copy of the amended petition is now available for
download at PacerMonitor.com.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/TGPHMRY/Freedom_Wind_Tunnel_LLC__mabke-24-10082__0001.0.pdf?mcid=tGE4TAMA
FRINJ COFFEE: Case Summary & 14 Unsecured Creditors
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Debtor: FRINJ Coffee, Incorporated
DBA Frinj Coffee Inc.
1362 Farren Road
Goleta, GA 93117
Business Description: FRINJ is a coffee production firm that
offers coffee plant material, production
consulting, post-harvest, and marketing
services. The Company creates a
transformative experience by connecting
coffee drinkers to farmers, propelling the
growth of a coffee industry in Southern
California. Today, FRINJ supports more than
65 farmers who are growing coffee in Santa
Barbara, Ventura, and San Diego counties as
well as many more property owners who are
adding coffee to their crops.
Chapter 11 Petition Date: January 16, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-10044
Judge: Hon. Ronald A Clifford III
Debtor's Counsel: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9805
Email: michael.berger@bankruptcypower.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by John A. Ruskey III as chief executive
officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 14 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/UDTK5EY/FRINJ_Coffee_Incorporated__cacbke-24-10044__0001.0.pdf?mcid=tGE4TAMA
GAINS CAPITAL: Gets OK to Hire Kelley & Clements as Legal Counsel
-----------------------------------------------------------------
Gains Capital, LLC received approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Kelley & Clements,
LLP as its legal counsel.
The Debtor requires legal counsel to:
(a) give advice regarding the Debtor's Chapter 11 case and how
to accomplish its goals in connection with the prosecution of the
bankruptcy case;
(b) advise the Debtor of its obligations, duties, and rights;
(c) prepare documents to be filed with the court;
(d) appear in court and at any meeting with the U.S. Trustee
and any meeting of creditors on behalf of the Debtor;
(e) perform various services in connection with the
administration of this Chapter 11 case;
(f) interact and communicate with the court's chambers and the
court's Clerk's Office;
(g) prepare, review, revise, file, and prosecute motions and
other pleadings related to contested matters, executory contracts
and unexpired leases, asset sales, plan and disclosure statement
issues, and claims administration and resolve objections and other
matters relating thereto; and
(h) perform all other services necessary to prosecute the
Debtor's Chapter 11 case to a successful conclusion.
The hourly rates of the firm's counsel and staff are as follows:
Charles N. Kelley, Jr., Partner $415
Jonathan D. Clements, Partner $250
Tammy A. Winkler, Paralegal $135
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the petition date, the Debtor made payments to Kelley &
Clements totaling $6,800.
Charles Kelley, Jr., Esq., a partner at Kelley & Clements,
disclosed in a court filing that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Charles N. Kelley, Jr., Esq.
Kelley & Clements LLP
P.O. Box 2758
Gainesville, GA 30503
Telephone: (770) 531-0007
Email: ckelley@kelleyclements.com
About Gains Capital
Gains Capital LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
23-21361) on Dec. 4, 2023, with as much as $1 million in both
assets and liabilities. Brian McClure, sole member, signed the
petition.
Judge James R. Sacca oversees the case.
Kelley & Clements LLP serves as the Debtor's legal counsel.
GALLERIA PAIN: Seeks Cash Collateral, $100,000 DIP Loan
-------------------------------------------------------
Galleria Pain Physicians, PLLC, asks the U.S. Bankruptcy Court for
the Southern District of Texas, Houston Division, for authority to
use cash collateral and obtain postpetition financing.
To make a restructuring possible, Arthritis Knee Pain Centers, LLC,
an affiliate of the Debtor and its management company, has agreed
to make a Debtor-in-possession loan to the Debtor of up to $100,000
as needed based on the Debtor's cash flow.
The DIP Financing will accrue interest at 8% per year, but AKPC is
not requiring interest to be paid current to help the Debtor's cash
flow.
The Debtor's bankruptcy filing resulted from long-term financial
challenges, the consistent unprofitability of the Katy Clinic, and
resultant debt levels. These issues were exacerbated and made acute
by significant cuts to Medicare physician payments effective in
2022 and the failure of the Debtor's Prior Owners to maintain the
Debtor's DME license for its Webster Clinic.
The Debtor has two creditors that appear to assert a security
interest in substantially all of the Debtor's assets to secure loan
obligations: (i) PlainsCapital; and (ii) the U.S. Small Business
Administration.
The Debtor's senior secured lender, PlainsCapital, has one loan and
one line of credit to the Debtor that have amounts owed on them as
of the Petition Date. PlainsCapital asserts a first-priority
security interest in Debtor's accounts, equipment, and proceeds.
ASD Specialist Healthcare, LLC d/b/a Besse Medical, has filed a UCC
financing statement asserting a lien on the Collateral. If found to
have a properly perfected security interest on the Debtor's
collateral, the Debtor understands that Besse Medical would have a
secured lien senior to the SBA (due to Besse Medical's UCC
pre-dating that of the SBA). The Debtor understands that Besse
Medical asserts that it was owed approximately $104,000 as of the
Petition Date.
However, the Debtor is presently unaware of any written security
agreement (or other agreement) granting Besse Medical a security
interest in the Debtor's assets and authority to file a UCC
financing statement. Given the foregoing, the Debtor is treating
Besse Medical's purported claim as unsecured and disputed.
The Debtor has entered into equipment financing agreements with:
(i) OnePlace Capital, a division of Bank Midwest;
(ii) Flex Financial, a division of Stryker Sales, LLC;
(iii) Hologic Capital; and
(iv) Financial Servicing, LLC, which assert a first-priority
purchase money security interest in specific equipment and/or other
collateral.
The Debtor requires the use of cash collateral to pay its
employees, operating expenses, and Restructuring costs.
The estimated liquidation value of the Debtor's assets
($425,206.84) materially outweighs the combined asserted claims of
PlainsCapital. As a result, PlainsCapital is oversecured and
benefits from an equity cushion.
As additional adequate protection for the Debtor's use of cash
collateral, the Debtor proposes to grant to each of PlainsCapital,
Besse Medical, and the SBA, to secure payment of an amount equal to
any diminution in the value of their respective collateral (as
applicable), a replacement security interest in and lien upon all
assets of the Debtor upon which each respective lender had properly
perfected liens pre-petition, if any (for the sake of clarity, not
including any causes of action arising under the Bankruptcy Code),
senior to any other security interests, liens, or encumbrances.
A copy of the motion is available at https://urlcurt.com/u?l=NN3mDO
from PacerMonitor.com.
About Galleria Pain Physicians, PLLC
Galleria Pain Physicians, PLLC is a provider of health care
services in Texas. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-30130) on
January 11, 2024. In the petition signed by Brent Callister,
authorized representative, the Debtor disclosed up to $1 million in
assets and up to $10 million in liabilities.
Matthew E. McClintock, Esq., at GOLDSTEIN & MCCLINTOCK LLLP,
represents the Debtor as legal counsel.
GENESIS GLOBAL: Dollar Lenders Disclose More Than $468M Claims
--------------------------------------------------------------
In the Chapter 11 cases of Genesis Global Holdco, LLC, et al., the
Ad Hoc Group of Dollar Lenders (the "Dollar Ad Hoc Group") filed a
verified statement pursuant to Rule 2019 of the Federal Rules of
Bankruptcy Procedure.
On Jan. 20, 2023, the Debtors filed a motion for authorization to,
among other things, have redacted from any paper filed or to be
filed with the Court in the Chapter 11 cases certain confidential
and personally identifiable information of creditors. On Jan. 27,
2023, the Court entered an interim order authorizing the Redaction
Motion, but no final order has been entered.
In or around July 2023, the Dollar Ad Hoc Group retained Pryor
Cashman LLP to represent it as counsel in connection with the
Debtors' restructuring.
The Members of Dollar Ad Hoc Group's nature and amount of
disclosable economic interests held in relation to the Debtors are:
Claim Holder USD USDC ETH ETHW MANA
------------ ---- ---- --- ---- ----
Member 1 $20,378,187 0 0 0 2,513,237
Member 2 $6,411,004 0 0 0 0
Member 3 $79,727,020 0 0 0 0
Member 4 $6,107,627 0 0 0 0
Member 5 $56,142,009 0 0 0 0
Member 6 $27,529,096 0 0 0 0
Member 7 $78,544,313 0 38 0 0
Member 8 $11,515,477 0 0 0 0
Member 9 $407,758 0 0 0 0
Member 10 $0 3,958,358 0 0 0
Member 11 $865,781 0 0 0 0
Member 12 $54,519,224 0 0 0 0
Member 13 $3,003,390 0 0 0 0
Member 14 $2,328,748 0 0 0 0
Member 15 $11,489,133 2,048,656 8,880 11,916 0
Member 16 $91,723,812 0 0 0 0
------------- --------- ----- ------ ---------
$450,692,579 6,007,014 8,918 11,916 2,513,237
Attorneys to the Ad Hoc Group of Dollar Lenders:
PRYOR CASHMAN LLP
Seth H. Lieberman, Esq.
Matthew W. Silverman, Esq.
7 Times Square
New York, New York 10036-6569
Telephone: (212) 421-4100
Facsimile: (212) 326-0806
Email: slieberman@pryorcashman.com
msilverman@pryorcashman.com
About Genesis Global
Genesis Global Holdco, LLC, through its subsidiaries, and Global
Trading, Inc., provide lending and borrowing, spot trading,
derivatives and custody services for digital assets and fiat
currency.
Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE.
LTD. (GAP) provide lending and borrowing, spot trading, derivatives
and custody services for digital assets and fiat currency. Genesis
Global Holdco, LLC owns 100% of GGC and GAP.
Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are
pending before the Honorable Sean H. Lane.
At the time of the filing, Genesis Holdco reported $100 million to
$500 million in both assets and liabilities.
Genesis Holdco is a sister company of Genesis Global Trading, Inc.
("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG").
GGT, DCG and certain of the Holdco subsidiaries are not included in
the Chapter 11 filings. The non-debtor subsidiaries include
Genesis UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia
(Hong Kong) Limited, Genesis Bermuda Holdco Limited, Genesis
Custody Limited ("GCL"), GGC International Limited ("GGCI"), GGA
International Limited, Genesis Global Markets Limited, GSB 2022 II
LLC, GSB 2022 III LLC and GSB 2022 I LLC.
The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as
bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez
& Marsal Holdings, LLC as financial advisor; and Moelis & Company,
LLC as investment banker. Kroll Restructuring Administration, LLC,
is the Debtors' claims and noticing agent and administrative
advisor.
The ad hoc group of creditors is represented by Kirkland & Ellis,
LLP and Kirkland & Ellis International, LLP. The ad hoc group of
Genesis lenders is represented by Proskauer Rose, LLP. The U.S.
Trustee for Region 2 appointed an official committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped White & Case, LLP as bankruptcy counsel; Houlihan
Lokey Capital, Inc., as investment banker; Berkeley Research Group,
LLC as financial advisor; and Kroll as information agent.
GEO GROUP: S&P Affirms 'B' ICR on Solid Operating Performance
-------------------------------------------------------------
S&P Global Ratings affirmed all its ratings on U.S.-based private
prison operator The GEO Group Inc., including the 'B' issuer credit
rating.
S&P said, "Additionally, we affirmed the 'BB-' issue-level rating
on its first-lien secured debt, 'B' issue-level rating on its
second-lien notes, and the 'CCC+' issue-level rating on the
unsecured notes. The '1', '3', and '6' recovery ratings on the debt
are unchanged.
"The stable outlook reflects our expectation GEO will maintain
EBITDA margins in the low-20% area in 2024 with stable free
operating cash flow (FOCF) generation of at least $100 million. We
expect this will allow GEO to reduce its large debt maturities
while maintaining adequate liquidity.
"The ratings affirmation reflects our view that the company's solid
operating performance and reduced leverage is offset by the risk
that the company will be unable to refinance about $1.8 billion of
upcoming 2026, 2027, and 2028 debt maturities without a distressed
debt restructuring transaction."
GEO has reduced leverage beneath our upgrade leverage trigger with
strong contract renewals, price increases, and favorable business
mix-shift. GEO has reduced its S&P Global Ratings'-adjusted net
leverage to 3.4x as of Sept. 30, 2023, from 3.6x in 2022 and over
4x in 2021 through strong earnings performance driven by expansion
in its higher margin electronic monitoring services revenues.
Alternatives to detention, like electronic monitoring services,
gained adoption in 2022 driven by a high number of monthly illegal
border crossings at the Southwest Border along with federal
government policy and funding availability. Over the next twelve
months, S&P expects electronic monitoring revenues will steadily
decline and traditional detention occupancy rates will steadily
rise toward historical levels. Since the May 2023 expiration of
Title 42, a regulation that authorized the Center for Disease
Control and Prevention to prevent migrants from entering the U.S.
on public health concerns, volumes at GEO's largest customer, U.S.
Immigration and Customs Enforcement (ICE; 43% of revenues), have
increased by about 100%.
GEO is the largest operator of private criminal detention
facilities in the U.S. The company's significant cost advantage
relative to public facilities and the lack of viable alternatives
have supported its ability to obtain additional funding to support
higher labor costs and sign new multi-year contracts, even at
facilities initially marked for expiration under the 2021 executive
nonrenewal order. This demonstrates the strong value proposition of
its services, including improved capacity flexibility and the use
of newer facilities that generally reduce taxpayer costs. S&P said,
"Accordingly, we have improved our business risk assessment for GEO
to fair from weak, and we now calculate adjusted leverage netting
cash. We forecast GEO will maintain adjusted leverage between 3x
and 4x and generate over $100 million in annual FOCF in 2024 and
2025. Key variables in our assessment include the potential for a
large increase in ICE minimum contracted volumes, and the extent of
any litigation accruals related to labor related litigation
outstanding in Washington, Colorado, and California."
The risks of a distressed debt restructuring, given its large
medium-term debt maturity wall and reduced capital markets access,
limit ratings improvement. GEO has sizable debt maturities
concentrated in 2026, 2027, and 2028 of approximately $1.8 billion.
Furthermore, GEO's 2027 term loans and revolver (about $1 billion
outstanding) are subject to a springing maturity on Nov. 24, 2025,
if the outstanding senior exchangeable notes due 2026 are greater
than $100 million ($230 million outstanding). S&P does not expect
the company will generate sufficient FOCF to meet these maturities
without accessing capital markets.
Rising social pressures on the industry have narrowed the company's
pool of investors, resulting in higher borrowing costs and a sharp
reduction in revolving credit facility commitments. Our ratings
reflect the risk that GEO's access to capital markets is
constricted as its debt maturity wall approaches. S&P said, "This
could complicate refinancing efforts and increase the risk of a
refinancing transaction that we view as distressed and tantamount
to a default, which previously occurred in 2022. We expect GEO to
execute refinancing transactions over the next 6-18 months to
address its debt capitalization and potentially amend terms to
allow for share buybacks. While the impact to ratings of any
refinancing depends on the final terms, a comprehensive extension
of maturities, or an equity financed reduction in its total debt
burden would support GEO's credit profile."
S&P said, "The stable outlook reflects our expectation GEO will
maintain EBITDA margins in the low-20% area in 2024 with stable
free operating cash flow (FOCF) generation of at least $100
million. We expect this will allow GEO to reduce its large debt
maturities while maintaining adequate liquidity.
"Social factors are a negative consideration in our ratings
analysis of GEO. Topics related to human rights and evolving public
sentiment and policy on criminal justice reform expose privately
operated criminal detention facilities operators to ongoing social
and governance risks. The company is often criticized for various
human rights issues--including its confinement practices, prisoner
violence, and mistreatment--and is subject to ongoing litigation.
In recent years, select banks have chosen to end their lending
relationships with GEO once their commitments matured because of
pressure from activist advocacy groups."
GOLDEN KEY: Creditors' Committee Proposes Rival Plan
----------------------------------------------------
The Official Committee of Unsecured Creditors of Golden Key Group,
LLC, filed a Plan of Reorganization and a Disclosure Statement for
the Debtor.
The Creditors Committee believes that the Committee Plan is in the
best interests of all creditors and the estate. The Committee
urges the holders of impaired claims entitled to vote to accept the
Committee Plan and to evidence such acceptance by properly voting
and timely returning their ballot in favor of the Committee Plan.
The Committee Plan is more favorable to creditors than the Chapter
11 Plan proposed by the Debtor because, among other things, the
Committee Plan (a) requires significantly higher minimum monthly
payments for the benefit of creditors thereby enabling them to get
paid in full more quickly, (b) provides for an Independent Board of
Managers to oversee the Debtor's operations and compliance with the
Committee Plan, (c) provides that the New Equity Interests in the
Reorganized Debtor will be subject to a pledge for the benefit of
the Creditors to secure the payment of Allowed Claims under the
Committee Plan, (d) installs a Plan Administrator responsible for
monitoring and enforcing the Debtor's compliance with the Committee
Plan, (e) preserves Causes of Action that the Debtor and/or
Creditors may have against the Debtor's insiders and Holders of
Equity Interests, and (f) protects non-insider Creditors from
Avoidance Actions during the life of the Committee Plan.
In connection with filing of the Debtor's Plan and the Debtor's
Amended Plan, the Debtor has provided future projections for its
operations, which have been used by the Committee's financial
advisors to form the basis for the Committee Plan.
The Committee asserts that the Committee Plan offers an opportunity
to repay creditors 100% of their Allowed Claims plus interest over
a reasonable period of time. The Committee and its Professionals
believe that the Committee Plan is feasible, and that the Debtor's
reorganization pursuant to the Committee Plan is not likely to be
followed by any additional reorganization or liquidation
proceedings.
During the pendency of the bankruptcy case, the Debtor reported
that it has secured several new contracts, a noteworthy selection
including engagements with the Defense Logistics Agency (DLA), NIH
Center for Information Technology, National Transportation Safety
Board (NTSB), NIH National Institute of Child Health and Human
Development, NASA Enterprise Wide Human Capital Support Services,
and the National Science Foundation (NSF). It is also worth noting
that, despite the bankruptcy, Debtor's federal customers, supported
by the Debtor as a prime contractor, have chosen to renew or
exercise additional option periods of performance with no break in
service.
As a government contractor, the Debtor was compelled to undergo a
Department of Labor OFCCP. According to the Debtor, this
achievement ensures a prolonged exemption from audits, with the
resultant benefits extending over a decade or more.
All property of the Debtor's Estate not otherwise specifically
treated under the Committee Plan shall become the Reorganized
Debtor's property. The Reorganized Debtor will implement the terms
of the Committee Plan, including making Distributions to Holders of
Allowed Claims as set forth in the Committee Plan.
The Committee Plan will be funded from four sources: (1) Cash on
hand on the Effective Date, (2) recoveries from the pursuit of any
claims, rights, or other legal remedies the Debtor has or may have
in the future income derived from its operations, (3) tax refunds
and/or tax credits which the Debtor is owed for any pre- or
post-petition period, including but not limited to the ERTC, and
(4) available Cash from ongoing operations. The Debtor shall have
the right to utilize its M&T Bank line of credit (if it remains
open), to seek alternative financing (with approval of the
Independent Board of Managers), and to use funds from other sources
not contemplated herein to fund the Committee Plan, and/or vary the
proportions of funds from these or such other sources, provided the
intent and purposes of the Committee Plan are adequately
addressed.
Under the Plan, Class 4 consists of General Unsecured Creditors.
The Reorganized Debtor will pay the Holders of Class 4 Claims 100%
of their Allowed Claims, with interest at the Applicable Federal
Judgment Rate until paid in full, in consecutive equal monthly
installments as reflected in Exhibit 2, commencing the month
immediately following Classes 2 and 3 being Paid in Full. Payments
will be made on a pro rata basis pari passu. Class 4 is impaired.
Counsel to the Official Committee of Unsecured Creditors:
Brent C. Strickland, Esq.
WHITEFORD, TAYLOR & PRESTON L.L.P.
111 Rockville Pike, Suite 800
Rockville, MD 20850
Tel: (410) 347-9402
Fax: (410) 223-4302
Email: bstrickland@whitefordlaw.com
-and-
Christopher A. Jones, Esq.
3190 Fairview Park Drive, Suite 800
Falls Church, VA 22042
Tel: (703) 280-9263
Fax: (703) 280-9139
Email: cajones@whitefordlaw.com
A copy of the Disclosure Statement dated Jan. 3, 2024, is available
at https://tinyurl.ph/VmjXv from PacerMonitor.com.
About Golden Key Group
Golden Key Group, LLC, is a professional services firm dedicated to
helping federal and commercial clients solve today's strategic,
organizational and operational challenges while addressing their
future needs. Founded in 2002, Golden Key Group's solution
offerings include Human Capital Management Support, Human Resources
Operations, Employee Training and Leadership Development,
Professional Consulting Services, Program Management Office,
Acquisition and Category Management, Analytics and Information
Technology, Executive Search Services, and Select Solutions.
The Debtor sought protection under U.S. Bankruptcy Code (Bankr. D.
Md. Case No. 23-10414) on Jan. 20, 2023. In the petition signed by
Gretchen McCracken as CEO and managing member, the Debtor disclosed
up to $10 million in assets and up to $50 million in liabilities.
Judge Maria Elena Chavez-Ruark oversees the case.
Paul Sweeney, Esq., at Yumkas, Vidmar, Sweeney and Mulrenin, LLC,
is the Debtor's legal counsel.
GOLDEN SEAHORSE: All Unsecureds Will be Paid in Full in Plan
------------------------------------------------------------
Golden Seahorse LLC, d/b/a Holiday Inn Manhattan Financial
District, FILED A Fourth Amended Plan of Reorganization dated Jan.
3, 2024
Unsecured claims will be treated as follows:
Class 3 consists of holders of Unsecured Claims against the
Debtor who hold Claims of $2,500.00 or less. Class 3 also includes
any other Unsecured Creditor with the Claim greater than $2,500 who
specifically elects to be treated as a Class 3 Creditor
notwithstanding the fact they are included below as Class 5
Unsecured Creditors. Holders of Allowed Class 3 Claims will be paid
in Cash on the Effective Date the full amount of their Allowed
Claim plus 5% interest from the Petition Date. Class 3 is
unimpaired and not entitled to vote for or against the Plan
Class 4 consists of SBA's Unsecured Claim. Class 4 is unimpaired
under the Plan, and it is not entitled to vote for or against the
Plan. The holder of Class 4 Claim will retain the legal, equitable
and contractual rights to which the SBA is entitled to under the
applicable Loan Authorization Agreement dated April 9, 2022 and the
accompanying promissory note. Specifically, the Class 4 Claimholder
will receive monthly payments of $979.00 commencing April 9, 2024
for the next 30 years at 3.5% annual interest as provided in the
note dated April 9, 2022.
Class 5 consists of the holders of General Unsecured Claims. All
holders of Allowed Class 5 Unsecured Claims (including any
Deficiency Claim) will be paid in full without interest no later
than six months from the Effective Date. On the Effective Date, all
holders of Allowed Class 5 Claims will receive 50% of their Allowed
Claims in Cash and the remaining 50% will be paid in Cash no later
than six months from the Effective Date. In the event the Property
is sold prior to six months from the Effective Date, the Allowed
Class 5 Claims will be paid any remaining unpaid amount of their
Distributions from the Sale Proceeds. Class 5 Claimholders are
impaired as that term is defined under section 1124 of the
Bankruptcy Code and entitled to vote for or against the Plan.
The Plan will be funded from the revenue generated from the Hotel's
operations and from the Plan Contribution to the extent necessary.
Based upon the Bankruptcy Court Decision, the Debtor estimates it
will need a Plan Contribution of approximately $20 million in
addition to the funds on hand generated from the Hotel's operations
in order to reinstate the Loan. The Debtor believes based upon its
projections the Hotel will continue to generate sufficient cashflow
to remain current on the monthly interest payment of approximately
$612,000 under the reinstated Loan, or if the Debtor pursues the
modification/recasting of the Loan, payments will be approximately
$1 million per month. The Debtor intends to obtain the monies
required to pay Wilmington Trust the balloon payment on the
Maturity Date by refinancing the Property or selling the Property.
Attorneys for Golden Seahorse:
Scott S. Markowitz, Esq.
Rocco A. Cavaliere, Esq.
TARTER KRINSKY & DROGIN LLP
1350 Broadway, 11th Floor
New York, NY 10018
Tel: (212) 216-8000
E-mail: smarkowitz@tarterkrinsky.com
rcavaliere@tarterkrinsky.com
A copy of the Amended Plan of Reorganization dated Jan. 3, 2024, is
available at https://tinyurl.ph/iFdNC from PacerMonitor.com.
About Golden Seahorse
Golden Seahorse LLC, doing business as Holiday Inn Manhattan
Financial District, operates the Holiday Inn hotel, which is a
full-service hotel located at 99 Washington St., New York. It also
owns an adjacent neighboring property at 103 Washington St., New
York, whereby it leases space to Amazon Restaurant and Bar (doing
business as St. George Tavern). The Debtor believes the value of
the hotel is at least $165 million, an amount greater than the
$137.2 million in principal, together with accrued interest, due
pre-bankruptcy lenders.
Golden Seahorse sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-11582) on Nov. 29,
2022. In the petition signed by Jubao Xie, managing member of
Hysendal USA, LLC, the Debtor disclosed up to $500 million in both
assets and liabilities.
Judge Philip Bentley oversees the case.
Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, is the
Debtor's counsel.
GPD COMPANIES: Moody's Cuts CFR to B3 & Alters Outlook to Stable
----------------------------------------------------------------
Moody's Investors Service downgraded GPD Companies, Inc.'s
corporate family rating to B3 from B2, probability of default
rating to B3-PD from B2-PD and senior secured notes rating to Caa1
from B3. Moody's changed the rating outlook to stable from negative
following the downgrade.
RATINGS RATIONALE
GPD Companies, Inc.'s (GPD) credit profile reflects good market
position and geographic and customer diversification, offset by
high balance sheet leverage (9.2x on a Moody's adjusted basis in
fiscal year ended September 2023), low operating margins (EBITDA
margin of 3.1%) and supplier concentration risk. The company has
been negatively impacted by slower growth that resulted in volume
declines in fiscal 2023. Moody's expects the global economy to slow
down in 2024, which will impact demand for various resins that GPD
distributes. Moody's expect the company to show slow volume growth
with margin improvement to pre-pandemic levels, but the overall
credit metrics will remain weak with leverage projected at around 7
times in 2024 and working capital use resulting in negative free
cash flow. The company's capital structure will need to be
refinanced in the next two years, which adds financial risk as
current interest rates are high and refinancing will likely result
in higher interest. The current interest expense burden is already
high and funds from operations before working capital were negative
in 2023. The company needs to significantly improve its earnings to
generate positive funds from operations and improve its interest
coverage.
The company benefits from its asset-light model that requires
minimal capex and supports free cash flow generation. In addition,
working capital release during the downturn further supports cash
flows and adequate liquidity. The rating also reflects the
company's leading market share positions in plastics distribution
in North America and Europe, good end-market and customer
diversification, long-term relationships with customers and broad
product offering, including engineered thermoplastics and prime
branded polyolefin resins. The company generates more than half of
sales from engineered thermoplastics and prime branded polyolefin
resins, which are specified into customer production and generate
higher unit gross margins than pure commodity polypropylene and
polyethylene sales.
RATING OUTLOOK
The stable rating outlook reflects expectations of modest volume
growth and margin improvement and adequate liquidity over the next
12 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider an upgrade if leverage is sustained below
5.0x, EBITDA margins are maintained above 4% on a sustained basis,
the company consistently generates free cash flow and liquidity is
good with no refinancing risk.
Moody's would consider a downgrade if the company fails to
refinance debt before maturities become current, leverage remains
above 6.0x, EBITDA/Interest fails to improve above 1.5x, margins
declined further and liquidity deteriorated. Debt funded M&A
activity amid already stressed credit metrics could also lead to a
downgrade.
LIQUIDITY
GPD's liquidity is adequate, supported by cash on hand and revolver
availability. The company had approximately $30 million cash on
hand as of September 2023, which is mainly held overseas in foreign
currencies.The company also has a $270 million ABL revolver with
approximately $28.1 million outstanding as of September 30, 2023
and $124.5 million undrawn and available. Moody's expect the
company to generate negative free cash flow in 2024 and to use
revolver to fund working capital needs. The company's revolver will
turn current in October and will mature on October 1, 2025. The
company needs to bring leverage down to reduce refinancing risk.
The European subsidiaries have a $25 million EMEA ABL facility with
various maturities the latest of which is July 28, 2024. The
majority of the facility is available after $2.6 million of letters
of credit. The main revolver contains a springing 1.0x fixed charge
coverage ratio test if excess availability is less than $20
million. Moody's does not expect the covenants will be tested in
the near term. The company's notes mature in April 2026. Most
assets are encumbered by the revolver and secured notes, leaving
little alternative liquidity sources.
GPD Companies, Inc., based in The Woodlands, Texas, is a holding
company formed by One Rock Capital Partners LLC. Its operational
entities currently include Nexeo Plastics, a leading plastics
distributor in North America, Europe and Asia, as well as
Distrupol, a leading plastics distributor in the UK and Nordic
regions. Annual revenue for the LTM September 30, 2023 was roughly
$1.9 billion.
The principal methodology used in these ratings was Chemicals
published in October 2023.
GRAND AUGUSTA: Seeks to Hire Michael Harker as Bankruptcy Counsel
-----------------------------------------------------------------
Grand Augusta, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Nevada to employ the Law Offices of Michael J.
Harker.
The Debtor requires legal counsel to:
(a) advise and represent the Debtor concerning the rights and
remedies of the estate with respect to the estate's assets and with
respect to the secured, priority, and general claims of creditors;
(b) advise and represent the Debtor in connection with
financial and business matters;
(c) advise and represent the Debtor in connection with the
investigation of potential causes of action against persons or
entities;
(d) represent the Debtor in any proceeding or hearing in the
bankruptcy court, and in any action in other courts in which the
rights of the estate may be litigated or affected;
(e) conduct examinations of witnesses, claimants, or adverse
parties and prepare and assist in the preparation of reports,
accounts, applications, and orders;
(f) advise and represent the Debtor in the negotiation,
formulation, and drafting of any plan of reorganization and
disclosure statement;
(g) advise and represent the Debtor in the performance of its
duties and exercise of its powers under the Bankruptcy Code,
Bankruptcy Rules, Local Rules, and the Trustee Guidelines; and
(h) provide the Debtor other necessary advice and services
that may be required in connection with this Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Attorneys $425
Regular Associate Attorneys $275
Paraprofessionals $175
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to filing the case, the firm received a retainer in the
amount of $10,000.
Michael Harker, Esq., 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:
Michael J. Harker, Esq.
Law Offices of Michael J. Harker
2901 El Camino Ave., Ste. 200
Las Vegas, NV 89102
Telephone: (702) 248-3000
Email: mharker@harkerlawfirm.com
About Grand Augusta
Grand Augusta LLC filed Chapter 11 petition (Bankr. D. Nev. Case
No. 23-15475) on Dec. 12, 2023, with up to $10 million in both
assets and liabilities. Shane Hakakian, managing member, signed the
petition.
Judge Natalie M. Cox oversees the case.
The Law Offices of Michael J. Harker serves as the Debtor's
bankruptcy counsel.
GROUNDSWELL MMA: Taps Ascend Business Solutions as Accountant
-------------------------------------------------------------
Groundswell MMA, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Maryland to employ Ascend Business Solutions,
LLC as accountant.
The Debtor requires an accountant to:
(a) prepare and file federal and state tax returns;
(b) provide tax and accounting advice, as needed; and
(c) render such other tax or accounting assistance as the
Debtor or its counsel may deem necessary.
For the preparation of the Debtor's federal and state tax returns,
the firm has agreed to charge a flat fee of $535.
In addition, the firm will seek reimbursement for expenses
incurred.
Liz Crabbs, a member of Ascend Business Solutions, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Liz A. Crabbs
Ascend Business Solutions LLC
P.O. Box 308
Braddock Heights, MD 21714
Telephone: (301) 845-5850
Email: liz@ascendbsllc.com
About Groundswell MMA
Groundswell MMA, LLC filed Chapter 11 petition (Bankr. D. Md. Case
No. 23-17981) on Nov. 3, 2023, with as much as $1 million in both
assets and liabilities. Zachary Davis, member, signed the
petition.
Judge Lori S. Simpson oversees the case.
The Debtor tapped Dennis J. Shaffer, Esq., at Whiteford Taylor &
Preston, LLP as legal counsel and Liz A. Crabbs at Ascend Business
Solutions, LLC as accountant.
GUR-MEAT INC: LUMA, Not a Creditor, Says Disclosure Inadequate
--------------------------------------------------------------
LUMA Energy, LLC, and LUMA Energy ServCo, LLC, filed an objection
to the approval of the Disclosure Statement dated Dec. 1, 2023 and
confirmation of the Plan of Reorganization Gur Meat, Inc.
LUMA is not a "creditor" in this case as such term is defined under
11 U.S.C. Sec. 101(10)(A) since it does not have a claim against
the Debtor. However, certain provisions included by the Debtor in
the Plan have a direct financial impact upon LUMA and thus make
LUMA a party in interest in the proceedings involving the approval
of the Disclosure Statement and confirmation of the Plan.
Specifically, LUMA has a claim against the Debtor's president, Ms.
Mariely Ramos Rojas for electric power consumption which the Debtor
alleges was incurred by the Debtor. The Debtor has never seriously
disputed that the relevant account with LUMA is under Ms. Ramos'
name -- and not under the Debtor's -- and that, under Puerto Rico
law, Ms. Ramos is thus liable for any consumption that is incurred
under such account. Yet, from the start of this case, the Debtor
has made clear its intent to seek a release of Ms. Ramos' personal
liability to LUMA—even though Ms. Ramos has not filed for
bankruptcy -- through the Debtor's bankruptcy filing.
The Disclosure Statement does not contain "adequate information" as
required under 11 U.S.C. s1125(b) and thus cannot not be approved.
Among other reasons, the Disclosure Statement fails to address the
scope of, or provide any information whatsoever with respect to,
the nonconsensual third-party releases ("Releases") provided under
Article IX of the Plan. In fact, neither the Disclosure Statement
nor the Plan include a definition of "Released Parties", which are
the intended recipients of the Releases. In this regard, the
Disclosure Statement also fails to comply with Bankruptcy Rule
3017(b).
Additionally, as held by courts in this and other circuits, a
chapter 11 plan that includes non-consensual third-party releases
which do not meet the factors established in In re Master Mtg. Inv.
Fund, Inc., 168 B.R. 930, 935 (Bankr. W.D. Miss. 1994), is fatally
flawed and incapable of confirmation.
In such circumstances, courts have avoided an "exercise in
futility"—allowing for the solicitation of votes of a patently
unconfirmable plan—and rejected the Disclosure Statement
precisely because of the same deficiencies that the Disclosure
Statement suffers in this case.
Attorney LUMA Energy, LLC and LUMA and Energy ServCo, LLC:
Hans E. Riefkohl Hernández, Esq.
RIEFKOHL LLC
PO Box 194259
San Juan, PR 00919
Tel: (787)-236-1657
E-mail: hans.riefkohl@riefkohllaw.com
About Gur Meat Inc.
Gur Meat, Inc., is a domestic corporation registered on May 2009
and is engaged in the business of sale of pre-packaged food
products for several types of clients including fast food
restaurants. Its business operation is located at Carr. 682 Km 4.8,
Garrochales, Arecibo, PR.
The Debtor had to seek emergency relief in bankruptcy for the
combination of factors: issues with prior accountants, the region's
earthquakes which affected the clients' facilities, the COVID-19
pandemic, shortage of personal, and aggressive collection actions
by creditors. There combinations of factors triggered a negative
ripple effect of Debtor's finances that led to the filing of the
bankruptcy case.
Vilariño & Associates LLC is the Debtor's legal counsel.
HARRISBURG'S HOMETOWN: Court OKs Cash Access Thru Feb 21
--------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina, Charlotte Division, authorized Harrisburg's Hometown
Pharmacy, Inc. to use cash collateral on an interim basis, in
accordance with the budget, with a 10% variance, through February
21, 2024.
As adequate protection for the use of Smith Drug Company's, a
division of J M Smith Corporation, cash collateral, on or before
February 20, 2024, the Debtor will make a payment to Smith in the
amount of $1,500.
Smith and the Internal Revenue Service are granted a replacement
lien or other property interest under 11 U.S.C. Section 361 to the
extent its collateral or property is used by the Debtor and to the
extent and with the same priority in post-petition property, and
the proceeds thereof, that Smith and the IRS hold in the
pre-petition property; and to the extent of any diminution in value
of the Secured Parties' interest in prepetition collateral caused
solely by the use of cash collateral pursuant to the terms of the
Order, the Secured Parties will have the protections required by 11
U.S.C. Section 507(b), in the same order of priority of those
Secured Parties that existed on the petition date.
A continued hearing on the matter is set for February 21 at 9:30
a.m.
A copy of the court's order is available at
https://urlcurt.com/u?l=cOCVbc from PacerMonitor.com.
About Harrisburg's Hometown Pharmacy, Inc.
Harrisburg's Hometown Pharmacy, Inc. is a North Carolina
corporation operating as a retail pharmacy in Harrisburg, North
Carolina.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. N.C. Case No. 23-30884) on December
13, 2023. In the petition signed by Sherrie McDonald Everhart,
president, the Debtor disclosed up to $50,000 in assets and up to
$1 million in liabilities.
Judge Laura T. Beyer oversees the case.
Kristen Nardone, Esq., at Nardone Law, PLLC, represents the Debtor
as legal counsel.
HARTMAN SPE: Unsecured Creditors Will Get 100% of Claims in Plan
----------------------------------------------------------------
Hartman SPE, LLC, filed with the U.S. Bankruptcy Court for the
District of Delaware a Combined Disclosure Statement and Chapter 11
Plan.
As of the Petition Date, the held title to 35 properties that
included office, retail, and industrial properties with an
estimated value of over $400 million.
From the Petition Date to the date of the Combined Disclosure
Statement and Plan, the Debtor sold 7 Properties for an aggregate,
gross sales price of approximately $80.7 million. Sales will
continue during the pendency of the Chapter 11 case.
On October 1, 2018, the Debtor closed on the Prepetition Loan in
the principal amount of approximately $259 million. The Debtor,
however, was unable to consummate the loan due to the improper
cloud on title caused by the actions of Allen R. Hartman and the
Hartman Minority Member that holds a 2.47% Interest in the Debtor.
On March 20, 2023, the Hartman Minority Member and Allen R. Hartman
filed Plaintiff's Original Petition in the District Court of Harris
County Texas, commencing the State Court Lawsuit.
The State Court Plaintiff's actions are particularly troubling
since they were fully aware that the Prepetition Loan was in
default and would mature on Oct. 9, 2023. Despite this, the
plaintiffs continued with their course of action, leaving the
Debtor with no viable option other than to file for bankruptcy
relief before the Prepetition Loan matured in order to preserve the
purchase and sale agreements that were negotiated prior to the
Petition Date.
Because of this, in early September 2023, the Debtor's management
team, together with its professionals, determined that a chapter 11
process that includes section 363 sales of property free and clear
of all Liens, Claims, encumbrances, and other interests (including
the cloud on title) was the best and most value maximizing path
forward.
Class 4 consists of Allowed General Unsecured Claims, including
Intercompany Claims and Deficiency Claims. The allowed unsecured
claims total $20,292,162. This Class will receive a distribution of
100% of their allowed claims. This Class is unimpaired.
Except to the extent that a Holder of an Allowed General Unsecured
Claim agrees to less favorable treatment, each Holder of an Allowed
General Unsecured Claim shall, in exchange for full and final
satisfaction, settlement, release, and discharge of such Claim,
receive at the sole option of the Debtor either:
* Payment in Cash in the full amount of an Allowed General
Unsecured Claim plus interest on such Allowed General Unsecured
Claim from the Petition Date to the date of payment at the Federal
Judgment Rate, which payment shall occur on the later of (i) as
soon as reasonably practicable after the Effective Date, but in no
event later than 5 business days after the Effective Date (or if a
General Unsecured Claim is Allowed after the Effective Date, on the
date such General Unsecured Claim is Allowed or as soon thereafter
as is reasonably practicable, but in no event later than 5 business
days after such General Unsecured Claim is Allowed) or, (ii) if not
then due, when such Allowed General Unsecured Claim is due in
accordance with the terms and conditions of the particular
transaction giving rise to such Allowed General Unsecured Claim;
or
* Such other treatment as would render such General Unsecured
Claim otherwise Unimpaired pursuant to section 1124 of the
Bankruptcy Code.
All Holders of Interests shall retain the Interests.
Distributions under this Combined Disclosure Statement and Plan
will be funded from the Debtor's Cash on hand, including funds from
the Exit Facility, as of the Effective Date.
On the Effective Date, the Debtor shall establish and maintain a
separate reserve account funded from Cash on hand and the Exit
Facility in an amount of $20,292,162 (the "Class 4 Reserve"),
which, for the avoidance of doubt, shall include interest on such
Claims at Federal Judgment Rate from the Petition Date through the
Effective Date. In addition, Debtor shall supplement the Class 4
Reserve on the first Business Day of each quarter following the
Effective Date with additional accrued interest on the outstanding
balance of the Class 4 Reserve.
The Plan confirmation hearing before the Bankruptcy Court has been
scheduled for February 7, 2024 at 11:30 a.m. at the United States
Bankruptcy Court, 824 North Market Street, 6th Floor, Wilmington,
DE 19801 to consider (a) approval of this Combined Disclosure
Statement and Plan as providing adequate information pursuant to
Section 1125, and (b) confirmation of this Combined Disclosure
Statement and Plan.
Any objection to Confirmation of the Combined Disclosure Statement
and Plan must be filed by January 31, 2024.
A full-text copy of the Combined Disclosure Statement and Plan
dated January 11, 2024 is available at
https://urlcurt.com/u?l=WRKERD from PacerMonitor.com at no charge.
Counsel to the Debtor:
William E. Chipman, Jr., Esq.
Mark D. Olivere, Esq.
CHIPMAN BROWN CICERO & COLE, LLP
Hercules Plaza
1313 North Market St., Suite 5400
Wilmington, DE 19801
Tel: (302) 295-0191
Fax: (302) 295-0199
Email: chipman@chipmanbrown.com
olivere@chipmanbrown.com
-and-
John E. Mitchell, Esq.
Michaela C. Crocker, Esq.
Yelena E. Archiyan, Esq.
KATTEN MUCHIN ROSENMAN LLP
2121 North Pearl St., Suite 1100
Dallas, TX 75201
Tel: (214) 765-3600
Fax: (214) 765-3602
Email: john.mitchell@katten.com
michaela.crocker@katten.com
yelena.archiyan@katten.com
.
About Hartman SPE LLC
Hartman SPE, LLC, is a Delaware special purpose entity formed in
July 2018. As of the bankruptcy filing, Hartman held title to 35
properties that included office, retail, and industrial properties
with an estimated value of over $400 million.
Hartman SPE, LLC, sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11452) on Sept. 13,
2023. In the petition signed by David Wheeler, president, the
Debtor disclosed up to $500 million in both assets and
liabilities.
Judge Mary F. Walrath oversees the case.
Katten Muchin Rosenman LLP is the Debtor's legal counsel, and and
Chipman Brown Cicero & Cole, LLP, is the Debtor's Delaware counsel.
Epiq Corporate is the claims agent and administrative advisor.
The Official Committee of Unsecured Creditors formed in the case
tapped Fox Rothschild LLP as counsel, and Phoenix Management as
financial advisor.
HIGHWIRE NETWORKS: Operating Losses Raise Going Concern Doubt
-------------------------------------------------------------
High Wire Networks, Inc. disclosed in a Form 10-Q Report filed with
the U.S. Securities and Exchange Commission for the quarterly
period ended September 30, 2023, that there is substantial doubt
about its ability to continue as a going concern within the next 12
months.
According to the Company, it generated operating losses in the
three and nine months ended September 30, 2023 and 2022, and High
Wire has generated operating losses since its inception and has
relied on cash on hand, sales of securities, external bank lines of
credit, and issuance of third-party and related party debt to
support cash flow from operations. As of and for the nine months
ended September 30, 2023, the Company had an operating loss of
$7,402,876, cash flows used in continuing operations of $6,898,188,
and a working capital deficit of $6,609,855. These factors raise
substantial doubt regarding the Company's ability to continue as a
going concern for a period of one year from the issuance of these
unaudited condensed consolidated financial statements.
Management believes that based on relevant conditions and events
that are known and reasonably knowable, its forecasts of operations
for one year from the date of the filing of the unaudited condensed
consolidated financial statements in the Company's Quarterly Report
on Form 10-Q indicate improved operations and the Company's ability
to continue operations as a going concern. The Company has
contingency plans to reduce or defer expenses and cash outlays
should operations not improve in the look-forward period. The
continuation of the Company as a going concern is dependent upon
the continued financial support from its shareholders, the ability
of management to raise additional equity capital through private
and public offerings of its common stock, and the attainment of
profitable operations.
Management requires additional funds over the next 12 months to
fully implement its business plan. Management is currently seeking
additional financing through the sale of equity and from borrowings
from private lenders to cover its operating expenditures. There can
be no certainty that these sources will provide the additional
funds required for the next 12 months.
For the three months ended September 30, 2023, the Company had a
net loss attributable to High Wire Networks, Inc. common
shareholders of $3,550,649 on $6,021,585 of revenue, compared to a
net loss of $2,761,736 on $6,327,416 of revenue in the same period
of 2022.
For the nine months ended September 30, 2023, the Company had a net
loss attributable to High Wire Networks, Inc. common shareholders
of $7,524,335 on $22,126,822 of revenue, compared to net income of
$7,560,854 on $18,483,253 of revenue in the same period of 2022.
As of September 30, 2023, the Company had $16,109,476 in total
assets and $12,306,878 in total liabilities.
A full-text copy of the Form 10-Q is available at
http://tinyurl.com/35aaj2ay
About High Wire Networks
Batavia, IL-based High Wire Networks, Inc. is a global provider of
managed cybersecurity, managed networks, and tech-enabled
professional services delivered exclusively through a channel sales
model. The Company's Overwatch managed security
platform-as-a-service offers organizations end-to-end protection
for networks, data, endpoints, and users via multiyear recurring
revenue contracts in this fast-growing technology segment.
HUB INT'L: Moody's Rates New $1.9BB Senior Unsecured Notes 'Caa2'
-----------------------------------------------------------------
Moody's Investors Service has assigned a Caa2 rating to $1.9
billion of eight-year senior unsecured notes being issued by Hub
International Limited (Hub, corporate family rating B3) following
the company's announcement of a partial recapitalization. The
company is also repricing and upsizing its senior secured term loan
due June 2030 to approximately $4.9 billion (including $110 million
increase, rated B2) and increasing its senior secured notes due
June 2030 to about $3.3 billion (including $1.1 billion increase,
rated B2). Hub will use the net proceeds to repay its senior
secured term loan B4 maturing in November 2029 and its senior
unsecured notes maturing in May 2026, help fund acquisitions,
redeem some of Hub's existing stock, and pay related fees and
expenses. Collectively, these actions will increase Hub's total
debt by about $600 million. The rating outlook for Hub is unchanged
at positive.
RATINGS RATIONALE
According to Moody's, Hub's ratings reflect its solid market
position in North American insurance brokerage, good
diversification across products and geographic areas in the US and
Canada, and consistently strong EBITDA margins. Hub has generated
good organic growth averaging in the mid-to-high single digits with
strong EBITDA margins in the mid-30s (per Moody's calculations)
over the past few years. These strengths are tempered by the
company's high financial leverage and limited fixed charge
coverage. The company also faces potential liabilities from errors
and omissions, a risk inherent in professional services. Hub will
continue to pursue acquisitions, which carry execution risk,
although the company has a good track record of integrating small
and midsize brokers through common operating platforms and
information systems.
Hub has generated solid performance over the last 12 months,
achieving organic revenue growth in the mid-to-upper single digits
overall, with around 9% organic growth for the 12 months through
September 2023. EBITDA margins remain strong in the mid-30s (per
Moody's calculations) while funding a pickup in travel and
entertainment, further investments in technology, and additions to
the workforce to support growth. Hub completed 15 acquisitions over
the 12 months through September 2023.
Giving effect to the proposed transactions, Moody's estimates that
Hub's pro forma debt-to-EBITDA ratio will be slightly above 7.5x
(per Moody's calculations), with (EBITDA - capex) interest coverage
around 1.5x, and a free-cash-flow-to-debt ratio in the
low-to-mid-single digits. These metrics incorporate Moody's
accounting adjustments for operating leases, deferred earnout
obligations and run-rate earnings from completed acquisitions.
Moody's expects the company to reduce its leverage over the next
several quarters.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to an upgrade of Hub's ratings include: (i)
debt-to-EBITDA ratio consistently below 7.5x, (ii) (EBITDA - capex)
coverage of interest consistently above 1.5x, and (iii)
free-cash-flow-to-debt ratio consistently exceeding 3%.
Factors that could lead to a stable rating outlook include: (i)
debt-to-EBITDA ratio above 7.5x, (ii) (EBITDA - capex) coverage of
interest below 1.5x, or (iii) free-cash-flow-to-debt ratio below
3%.
The principal methodology used in this rating was Insurance Brokers
and Service Companies published in June 2018.
Based in Chicago, Hub ranks among the top 10 US-based insurance
brokers, providing property and casualty, life and health, employee
benefits, and risk management products and services through retail
and wholesale brokers. The company generated total revenue of $4.2
billion in the 12 months through September 2023.
HUB INTERNATIONAL: S&P Rates New $1.9BB Sr. Unsecured Notes 'B-'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating to Hub
International Ltd.'s (B/Stable/--) proposed $1.9 billion senior
unsecured notes due 2032. The recovery rating is '5', indicating
its expectation for modest recovery (10%-30%; rounded to 10%) of
principal in the event of default. S&P also assigned a 'B'
issue-level rating to Hub's proposed $1.1 billion of add-on debt
with similar terms to its existing $2.175 billion senior secured
notes due 2030. The recovery rating is '3', indicating S&P's
expectation for modest recovery (50%-70%; rounded to 50%) of
principal in the event of default.
Hub is also seeking to reprice its existing Term Loan B due June
2030 (up to $4.86 billion from $4.75 billion). S&P expects proceeds
to be used to refinance its Term Loan B-4 due 2029, refinance its
senior unsecured notes due 2026, repay revolver borrowings, finance
current and future acquisitions under letter of intent, redeem
existing Hub stock, and pay any associated fees and expenses.
S&P said, "Hub's financial leverage for the 12 months ended Sept.
30, 2023, pro forma for this transaction, increases modestly to
about 7.0x, consistent with our expectation for year-end 2023. We
expect this deal to moderately enhance Hub's liquidity profile and
moderately diminish its weighted average cost of capital (also
moderately reducing its debt service burden).
"Our stable outlook continues to reflect our expectation that Hub's
growing scale and steady performance will help sustain earnings and
improve cash flow. We expect reported revenue growth to be 10%-15%
per year through 2025, supported by organic growth of 5%-7%, and an
adjusted EBITDA margin near 35%. We also expect Hub to remain
highly leveraged, with adjusted pro-forma (PF) financial leverage
and EBITDA coverage of 6.5x-7.0x and 2.0x-2.5x through 2025,
respectively."
HUDSON 888 OWNER: Seeks to Hire Herrick Feinstein as Legal Counsel
------------------------------------------------------------------
Hudson 888 Owner, LLC and Hudson 888 Holdco, LLC seek approval from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Herrick Feinstein, LLP.
The Debtors require legal counsel to:
(a) take all necessary actions to protect and preserve the
Debtors' estates;
(b) prepare on behalf of the Debtors all necessary legal
papers in connection with the administration of their estates;
(c) take all necessary actions in connection with any sale of
the Debtors' assets, a Chapter 11 plan and related disclosure
statement, and all related documents, and such further actions as
may be required in connection with the administration of the
Debtors' estates;
(d) take all necessary action to protect and preserve the
value of the Debtors' assets; and
(e) perform all other necessary legal services in connection
with the prosecution of these Chapter 11 cases.
The hourly rates of the firm's counsel and staff are as follows:
Partners and Counsel $715 - $1,250
Associates $505 - $695
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the petition date, Herrick received total payments from
the Debtors in the amount of $1,216,000.
Stephen Selbst, Esq., a member of Herrick Feinstein, disclosed in a
court filing that the firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Stephen B. Selbst, Esq.
Herrick Feinstein LLP
Two Park Avenue
New York, NY 10016
Telephone: (212) 592-1400
Email: sselbst@herrick.com
About Hudson 888 Owner
Hudson 888 Owner LLC and Hudson 888 Holdco LLC filed their
voluntary petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-10021) on Jan. 8,
2024. In the petitions signed by Sheng Zhang, chairman and chief
executive officer, Hudson 888 Owner disclosed $100 million to $500
million in both assets and liabilities.
Stephen B. Selbst, Esq., at Herrick Feinstein LLP represents the
Debtors as bankruptcy counsel.
HUGHES SATELLITE: Moody's Lowers CFR to Caa1, Outlook Negative
--------------------------------------------------------------
Moody's Investors Service downgraded Hughes Satellite Systems
Corporation's corporate family rating to Caa1 from Ba3, probability
of default rating to Caa1-PD from Ba3-PD, senior secured notes
rating to B2 from Ba1, and senior unsecured notes rating to Caa2
from B2, with a negative outlook. Moody's also lowered Hughes'
speculative grade liquidity rating to SGL-4 from SGL-1. Previously,
the ratings were on review for downgrade.
This rating action concludes the review for downgrade that was
initiated on August 9, 2023 following Hughes' parent, EchoStar
Corporation's (EchoStar, unrated) announced merger with Dish
Network Corporation (Dish, Caa1 negative) [1]. On December 31,
2023, EchoStar closed the merger with Dish [2]. Dish operates a
wireless business and is the fourth largest US national carrier.
Dish DBS Corporation (DBS, Caa1 negative) is a wholly-owned
subsidiary of Dish and is a direct broadcast satellite pay-TV
provider as well as an internet pay-TV provider.
"The ratings downgrade, lowering of the SGL and outlook change
consider that consolidated Debt/EBITDA exceeds 8x while the
combined company has limited access to the debt market to address
meaningful debt maturities at Dish, which raises the risk of
default", said Peter Adu, Moody's Vice President and Senior Credit
Officer.
RATINGS RATIONALE
Hughes' Caa1 CFR is constrained by: (1) its controlled ownership
and lack of transparency on strategy and forward view indications;
(2) potential for liquidity constraints and limited ability to
invest for growth as its cash and free cash flow will be moved to
Dish to fund debt maturities and capital needs; (3) declining
subscribers and EBITDA until capacity under its new geosynchronous
(GEO) satellite (Jupiter 3) enables it to win substantial new
customers; and (4) competitive pressures from new entrants,
increasing supply of satellites and US government broadband
funding, which skews toward terrestrial telecom operators due to
fiber build outs. The rating benefits from: (1) its good North
American market position in satellite-based consumer broadband
internet; (2) moderate stand-alone Debt/EBITDA of 2.3x at LTM
Q3/2023 and Moody's expectation that the metric will be sustained
below 2.5x through the end of 2024, absent any leveraging
transaction by EchoStar (consolidated Debt/EBITDA is 8.6x); and (3)
potential for meaningful EBITDA growth from Jupiter 3 over time due
to rising demand for broadband internet globally.
Hughes has two classes of debt: (1) B2-rated $750 million senior
secured notes due August 2026; and (2) Caa2-rated $750 million
senior unsecured notes due August 2026. The B2 rating on the
secured notes, which is two notches above the CFR, benefit from
preferential access to realization proceeds and loss absorption
capacity provided by the unsecured notes. The Caa2 rating on the
unsecured notes is one notch below the CFR to reflect their junior
ranking in the debt capital structure. Unsecured debt at Dish and
DBS are also rated Caa2 currently. As there is uncertainty around
Hughes' go-forward capital structure, Moody's has aligned the
secured notes to keep them at the same rating level as the secured
debt at Dish and DBS.
Hughes' ESG credit impact score has been changed to CIS-5 from
CIS-4. The CIS-5 reflect very high governance risk stemming from
controlled ownership and lack of visibility into its financial
policy because it does not provide the market with clear insight
into strategy. The merger will constrain Hughes' liquidity due to
the capital needs and debt maturity profile at Dish.
Moody's anticipates that Hughes will have weak liquidity (SGL-4)
through December 31, 2024 because it is likely that its cash and
free cash flow will be used to fund debt maturities and capital
needs at Dish. Hughes' liquidity sources include $1.6 billion of
cash and marketable securities at September 30, 2023 and Moody's
free cash flow estimate of $300 million for 2024. Hughes maintains
a large cash balance because it does not have a bank revolving
credit facility. The combined company has about $2.7 billion of
cash and marketable securities at September 30, 2023 and $2.9
billion of debt maturities (including convertible notes) in 2024,
which drive the weak liquidity assessment for Hughes. Hughes has
limited flexibility to generate liquidity from asset sales, with an
asset mix that is not easy to carve out for sale given the nature
of its business. Hughes' balance sheet debt of $1.5 billion comes
due in August 2026.
The negative outlook reflects the lack of visibility on forward
strategy and high execution risks after the merger with Dish. Dish
has significant capital needs to build its wireless business and
refinance debt over the next several years, which could impact
Hughes due to the relationship among the entities under EchoStar.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Hughes' rating could be upgraded if the forward strategy for the
merged company is made clear such that Hughes' cash and free cash
flow will not be used to fund the cash needs at Dish. Following
that, material growth in subscribers and EBITDA, and sustaining
consolidated Debt/EBITDA below 6x.
Hughes' rating could be downgraded if the probability of default
increases, or if there are further ratings downgrades at Dish or
DBS.
Hughes, headquartered in Englewood, Colorado, provides
satellite-based broadband internet to consumers and small to medium
sized businesses. Hughes also manufactures/provides satellite
network technologies and services to corporations and governments.
The principal methodology used in these ratings was Communications
Infrastructure published in February 2022.
IMPEL PHARMACEUTICALS: Wins Cash Collateral Access on Final Basis
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, authorized Impel Pharmaceuticals, Inc. and
affiliates to use cash collateral, on a final basis, in accordance
with the budget.
The Debtors require the use of cash collateral to, among other
things, (A) pay certain adequate protection payments; (B) pay the
costs of administration of their estates, including the payment of
professional fees and expenses; and (C) to satisfy other working
capital and general corporate needs of the Debtors.
Under the Prepetition Term Loan Credit Agreement, dated March 17,
2022, with Oaktree Fund Administration, LLC, as administrative
agent, Impel borrowed an aggregate principal amount of $101.505
million of Tranche A Term Loans and $20.020 million of Tranche B
Term Loans, subject to the relative rights, rankings, and
priorities set forth in the agreement.
As adequate protection, the Prepetition Term Loan Administrative
Agent, is granted valid, binding, continuing, enforceable,
fully-perfected, nonavoidable, first-priority senior, additional
and replacement security interests in and liens on (i) the
Prepetition Collateral and (ii) all of the Debtors' now-owned and
hereafter-acquired real and personal property, assets and rights.
As further adequate protection, the Prepetition Term Loan
Administrative Agent, is granted allowed superpriority
administrative expense claims in these Chapter 11 Cases ahead of
and senior to any and all other administrative expense claims in
the Chapter 11 Cases to the extent of any Diminution in Value,
junior only to the Carve Out and the termination fee and expense
reimbursement approved by the Court in favor of JN Bidco LLC in
substantially the forms included in Sections 9.3(a) and 9.3(b),
respectively, of the Asset Purchase Agreement dated as of December
18, 2023 by and between the Stalking Horse Bidder and Impel
Pharmaceuticals Inc.
A copy of the order is available at https://urlcurt.com/u?l=kuecJ7
from PacerMonitor.com.
About Impel Pharmaceuticals
Impel Pharmaceuticals Inc. is a commercial-stage pharmaceutical
company developing transformative therapies for people suffering
from diseases with high unmet medical needs. Impel offers
development opportunities that pair its proprietary POD technology
with well-established therapeutics. In September 2021, Impel
received U.S. FDA approval for its first product, Trudhesa® nasal
spray, which is approved in the U.S. for the acute treatment of
migraine with or without aura in adults. On the Web:
https://impelpharma.com/
Impel Pharmaceuticals Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 23-80016) on
Dec. 20, 2023.
In the petition filed by Brandon Smith, as chief restructuring
officer, the Debtor disclosed total assets of $35,073,000 and total
debt of $126,978,000 as of Sept. 30, 2023.
The case is overseen by the Honorable Bankruptcy Judge Stacey G.
Jernigan.
Impel is being advised by Moelis & Company LLC as its investment
banker, Teneo Capital LLC as its financial advisor, and Sidley
Austin LLP and Fenwick & West LLP as legal counsel. Omni Agent
Solutions is the claims agent.
INFOBLOX: Moody's Affirms 'B3' CFR, Outlook Remains Stable
----------------------------------------------------------
Moody's Investors Service affirmed the ratings of Delta Topco, Inc.
(Infoblox), including its B3 Corporate Family Rating, B3-PD
Probability of Default Rating, B2 Senior Secured First Lien Bank
Credit Facility (Term Loan and Revolving Credit Facility), and the
Caa2 Senior Secured Second Lien Bank Credit Facility. The outlook
remains stable.
The stable outlook reflects Moody's expectation that the company's
revenue will expand north of 20% in FY 2024 (fiscal year ending
July 31, 2024) and will continue its healthy growth in FY 2025, and
that cash-adjusted Debt-to-EBITDA will approach 6x in FY 2024.
RATINGS RATIONALE
The B3 CFR reflects the company's elevated LTM cash-adjusted
leverage of about 8x, aggressive financial policies, and cash flows
that have been thin at times given timing of collections, balanced
by very robust growth dynamics and expectations for upcoming strong
cash flow periods as a large cohort of contracts comes up for
renewal and further market penetration opportunities lead to new
business wins.
Governance considerations are mainly driven by financial policies
that have tolerated elevated leverage going back to the 2016
leverage buyout by Vista Equity Partners and continuing with
Warburg Pincus' investment in 2020, which besides an equity
injunction also included a significant increase in debt. This
increase in debt particularly impacted leverage metrics in FY 2022
and FY 2023 as the company's revenue declined relative to FY 2021,
when the company benefitted from a large amount of new business
with a high proportion of 3-5 year contract lengths, which were
largely recognized upfront and therefore resulted in lower revenue
realization in subsequent years. Additionally, the company's
decision to lower contract length of new bookings starting in FY
2022 further impacted revenue realization. These factors also led
to negative free cash flow in FY 2022 and FY 2023, given upfront
collection dynamics.
FY 2024 and FY 2025, however, are likely to benefit from the
renewal of the large amount of new 3-5 year contracts booked in the
FY 2020-2021 timeframe, as well as the shorter-duration contracts
booked in more recent years. More generally, the shorter-duration
contracts mean smoother revenue and cash flow performance going
forward. Additionally, an estimated 60% of large companies (more
than 5,000 employees) lack an enterprise-grade DDI solution, which
provides ample opportunities for new logo wins, especially since
Infoblox is the market leader, with approximately 50% market share
in the enterprise-grade DDI market, which integrates domain name
services (DNS), Dynamic Host Configuration Protocol (DHCP), and IP
Address Management (IPAM) into one offering.
Liquidity is good and is comprised of a $52 million cash balance
and an undrawn $200 million revolving credit facility as of October
31, 2023. Moody's expects the company to generate about $20 million
of free cash flow in FY 2024, with a stronger amount in FY 2025.
The revolver has a springing financial covenant of 9.25x net first
lien leverage with at least 40% utilization.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company generates strong and
sustained revenue growth such that cash adjusted leverage is
sustained below 6.5x while free cash flow to debt is sustained at
around the mid-single-digit range.
The ratings could be downgraded if competitive or execution
challenges result in revenue and EBITDA declining such that cash
adjusted leverage is sustained above 8x.
Infoblox's provides core network services including DNS, DHCP and
IPAM along with related security and network automation products.
The company, headquartered in Santa Clara, CA, is owned by funds
affiliated with Warburg Pincus and Vista Equity Partners. Infoblox
generated total revenues of about $645 million and annual recurring
revenue of about $651 million in the LTM ended October 31, 2023.
The principal methodology used in these ratings was Software
published in June 2022.
INTEGRATED HEALTH: Patient Care Ombudsman Taps Rimon PC as Counsel
------------------------------------------------------------------
Joseph Tomaino, the patient care ombudsman (PCO) appointed in the
Chapter 11 case of Integrated Health Care Concepts and
Consultation, LLC, seeks approval from the U.S. Bankruptcy Court
for the District of New Jersey to employ Rimon PC as his counsel.
The firm's services include:
(a) advising the PCO with respect to his duties, obligations,
and powers during the continuance of the Debtor's case;
(b) representing the PCO as an interested party in connection
with any proceedings in this case;
(c) preparing necessary legal documents; and
(d) performing all other legal services for the PCO.
Ronald Friedman, Esq., an attorney at Rimon, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Ronald J. Friedman, Esq.
Rimon PC
100 Jericho Quadrangle, Suite 300
Jericho, NY 11753
Telephone: (516) 479-6300
About Integrated Health Care
Concepts and Consultation
Integrated Health Care Concepts and Consultation, LLC filed a
Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 23-17773) on
Sept. 5, 2023, listing up to $1 million in estimated assets and up
to $10 million in estimated liabilities.
Judge Christine M. Gravelle oversees the case.
Donald F. Campbell, Jr., Esq., at Giordano Halleran & Ciesla, PC
serves as the Debtor's counsel.
On Nov. 29, 2023, Joseph J. Tomaino was appointed as the patient
care ombudsman in this Chapter 11 case. The PCO tapped Rimon PC as
his counsel.
INTELLIPHARMACEUTICS: Gets Conditional OK to List on TSX Venture
----------------------------------------------------------------
Intellipharmaceutics International Inc. announced that it has
applied and received conditional approval to list the Company's
common shares for trading on the TSX Venture Exchange as a Tier 2
Life Science Issuer.
Final approval of the listing on the TSXV is subject to the Company
satisfying certain conditions required by the TSXV. The Company's
management team is working diligently to satisfy such listing
conditions. Subject to the receipt of TSXV's final approval of
listing, the Company expects a seamless transition from trading on
the Toronto Stock Exchange (the "TSX") to the TSXV.
Upon listing on the TSXV, the Company expects its Shares to
continue to trade under the symbol "IPCI". The Shares will also
continue to be listed on the OTCQB Marketplace in the United States
under the symbol "IPCIF". The Company will provide further updates
relating to the listing on the TSXV and voluntarily delisting from
the TSX by way of press release.
Neither TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
About Intellipharmaceutics
Intellipharmaceutics International Inc. is a pharmaceutical company
specializing in the research, development and manufacture of novel
and generic controlled-release and targeted-release oral solid
dosage drugs. The Company's patented Hypermatrix technology is a
multidimensional controlled-release drug delivery platform that can
be applied to the efficient development of a wide range of existing
and new pharmaceuticals. Based on this technology platform, the
Company has developed several drug delivery systems and a pipeline
of products (some of which have received FDA approval) and product
candidates in various stages of development, including ANDAs filed
with the FDA (and one ANDS filed with Health Canada) and one NDA
filing, in therapeutic areas that include neurology,
cardiovascular, gastrointestinal tract ("GIT"), diabetes and pain.
Intellipharmaceutics reported a net loss and comprehensive loss of
$2.89 million for the year ended Nov. 30, 2022, compared to a net
loss and comprehensive loss of $5.14 million for the year ended
Dec. 31, 2021. As of Aug. 31, 2023, the Company had $1.56 million
in total assets, $14.44 million in total liabilities, and a total
shareholders' deficiency of $12.87 million.
Toronto, Canada-based MNP LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated June 5,
2023, citing that the Company has suffered recurring losses from
operations and has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern.
INVERSIONES LATIN AMERICA: Courtd Confirms Plan
-----------------------------------------------
Judge John P. Mastando III has entered an order approving the
Disclosure Statement of Inversiones Latin America Power Ltda., et
al., and confirming the Debtors' Joint Prepackaged Plan of
Reorganization.
The Plan satisfies the requirements of section 1129(a)(8) of the
Bankruptcy Code. Classes 1, 2, 4, and 5 constitute the Unimpaired
Classes, each of which is conclusively presumed to have accepted
the Plan in accordance with section 1126(f) of the Bankruptcy Code.
The holders in the Voting Classes, Classes 3 and 6, are Impaired
by the Plan and have voted to accept the Plan in accordance with
Sections 1126(b), (c) and (d) of the Bankruptcy Code.
Under the Plan, the Debtors will emerge from chapter 11
appropriately capitalized to support their emergence and going
forward business needs:
* On the Plan Effective Date, the Reorganized ILAP shall issue
to Holders of Senior Debt Claims senior secured notes in the
principal amount of $260,000,000 (as further defined in the Plan,
the "Take-back SSNs"). Furthermore, in settlement of disputes and
claims, the Holder of the LC Facility Claims have agreed to forfeit
their rights to receive Convertible Notes in exchange for the
issuance of the Settlement Take-back SSNs in the principal amount
of $4,305,966. The obligations under the Take-back SSNs shall be
guaranteed by the Reorganized Guarantor Debtors and the New Issuer,
which will be an entity that, on the Plan Effective Date, will hold
all of the Interests in the Reorganized ILAP. The Take back SSNs
shall be secured by substantially all of the assets of the
Reorganized Debtors and the New Issuer.
* On the Plan Effective Date, the New Issuer shall issue to
Holders of Senior Debt Claims convertible notes in the principal
amount of $173,345,973 (as further defined in the Plan, the
"Convertible Notes"). The Convertibles Notes shall be secured by a
charge over the equity shares in the New Issuer (the "New Issuer
Equity"). Furthermore, as noted, the Holder of the LC Facility
Claims have agreed to forfeit their Pro Rata Share of the
Convertible Notes (totaling approximately $8.23 million in
principal amount of the Convertible Notes) in exchange for the
issuance of the Settlement Take-back SSNs.
* On the Plan Effective Date, the Reorganized ILAP shall issue
senior secured notes, with super-priority relative to the Take-back
SSNs and Convertible Notes, in the principal amount of $14,000,000
(as further defined in the Plan, the "Super Priority Notes"). The
obligations under the Super Priority Notes shall be guaranteed by
the Reorganized Guarantor Debtors and the New Issuer, which will be
an entity that, on the Plan Effective Date, will hold all of the
Interests in the Reorganized ILAP (the "Reorganized ILAP Equity").
The Super Priority Notes shall be secured by substantially all of
the assets of the Reorganized Debtors and the New Issuer. The
proceeds from the sale of the Super Priority Notes will be used
largely to fund costs associated with the Restructuring and to
provide working capital to the Reorganized Debtors.
* On the Plan Effective Date, the New Issuer shall issue all
of the New Issuer Equity to Latin America Power S.A., a corporation
(sociedad anonima) formed under the laws of Chile ("LAP Chile"),
which is the Holder of substantially all of the Existing ILAP
Equity Interest.
* On or prior to the Plan Effective Date, a holding company
structured as a Cayman Islands exempted company shall be formed
("New Issuer" and together with the Reorganized Debtors, the
"Reorganized Business"). Upon implementation of the Restructuring
Transactions, from and after the Plan Effective Date, the New
Issuer shall hold all of the Reorganized ILAP Equity.
* On or prior to the Plan Effective Date, ILAP shall
reorganize as a Chilean stock corporation (sociedad por acciones).
* On or prior to the Plan Effective Date, LAP Chile shall
contribute the Purchased PEC 1 Receivables to the Reorganized
Business.
* On the Plan Effective Date, the New Issuer, the Reorganized
Debtors, the ILAP Partners and the Convertible Notes Indenture
Trustee will enter into a Sales Facilitation Agreement, pursuant to
which the parties thereto will agree to make their best efforts to
sell 100% of the Reorganized ILAP Equity by December 31, 2025 in a
manner designed to maximize the sales proceeds to all
stakeholders.
On the Plan Effective Date:
* Except as otherwise expressly provided in the Plan, each
Holder of an Allowed Administrative Claim shall receive payment in
full in cash.
* Each Holder of an Allowed Priority Tax Claim shall receive
treatment in a manner consistent with section 1129(a)(9)(C) of the
Bankruptcy Code.
* Each Holder of an Allowed Other Secured Claim shall receive,
at the Debtors' or Reorganized Debtors' option (as applicable): (a)
payment in full in cash; (b) the collateral securing its Allowed
Other Secured Claim; (c) Reinstatement of its Allowed Other Secured
Claim; or (d) such other treatment rendering its Allowed Other
Secured Claim Unimpaired in accordance with section 1124 of the
Bankruptcy Code.
* Each Holder of an Allowed Other Priority Claim shall receive
treatment in a manner consistent with section 1129(a)(9) of the
Bankruptcy Code.
* The Senior Debt Claims shall be Allowed in an amount of
$433,345,973. On the Plan Effective Date (or as soon as practicable
thereafter), each Holder of an Allowed Existing Notes Claim and
Allowed LC Facility Claim shall receive their Pro Rata Share of the
Take-back SSNs and the Convertible Notes. Furthermore, in
settlement of disputes and claims, the Holder of the LC Facility
Claims have agreed to forfeit their rights to receive Convertible
Notes in exchange for the issuance of the Settlement Take-back
SSNs.
* Each Holder of an Allowed General Unsecured Claim shall
either be Reinstated or otherwise paid in full in Cash in the
ordinary course of business.
* Each Holder of an Existing Guarantor Equity Interest shall
have such Interest Reinstated.
* LAP Renewables B.V., a Dutch corporation, the minority
Holder of the Existing ILAP Equity Interest, shall transfer such
Interest to LAP Chile; LAP Chile, in turn, will contribute to the
New Issuer all Existing ILAP Equity Interest (inclusive of the
Interest that LAP BV will transfer to LAP Chile), and LAP Chile
shall receive 100% of the New Issuer Equity.
Class 4 consists of General Unsecured Claims. Each Holder of an
Allowed General Unsecured Claim shall, at the election of the
applicable Debtor or Reorganized Debtor, (A) have the legal,
equitable and contractual rights of such Holder Reinstated or (B)
receive Cash in an amount equal to such Allowed General Unsecured
Claims in the ordinary course of business. Cash payments to
creditors outside of the United States of America may be made in
such funds and by such means as are necessary or customary in a
particular foreign jurisdiction. The allowed unsecured claims total
$14.6 million. This Class will receive a distribution of 100% of
their allowed claims. This Class is unimpaired.
All Cash consideration necessary for the Reorganized Debtors to
make payments or distributions pursuant to this Plan shall be
obtained from the Cash proceeds received from the Super Priority
Notes, Cash on hand, and Cash derived from post-petition business
operations. Further, the Debtors and the Reorganized Debtors will
be entitled to transfer funds between and among themselves as they
determine to be necessary or appropriate to enable the Reorganized
Debtors to satisfy their obligations under the Plan.
A full-text copy of the Disclosure Statement dated November 30,
2023 is available at https://urlcurt.com/u?l=yMhgVj from Epiq
Corporate Restructuring LLC, claims agent.
About Inversiones Latin America
Inversiones Latin America Power Ltda. is a clean energy company
that owns and operates wind generation plants with an aggregate
installed capacity of 239.2 megawatts (MW) and is engaged in the
generation of electricity business in northern Chile.
Inversiones owns and operates two wind farm projects: (1) a 193.2
MW facility located in Freirina, Vallenar in the region of Atacama
(the "San Juan Project"), currently the second largest wind farm
project by capacity in Chile, and (2) a 46.0 MW facility located in
Canela, in the region of Coquimbo (the "Totoral Project"). The San
Juan Project has been fully operational since March 2017 and the
Totoral Project has been fully operational since January 2010.
Both
wind projects are located in areas characterized for their strong
and highly predictable wind resource.
Inversiones Latin America Power Ltda. and affiliates San Juan S.A.
and Norvind S.A. sought Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 23-11891) on Nov. 30, 2023.
Inversiones estimated assets and debt of $100 million to $500
million as of the bankruptcy filing.
The Hon. Judge John P. Mastando III is the case judge.
The Debtors tapped GREENBERG TRAURIG, LLP as counsel, and LAZARD
FRERES & CO. LLC as investment banker. BARROS, SILVA, VARELA &
VIGIL ABOGADOS LIMITADA is the Chilean legal advisor. EPIQ
CORPORATE RESTRUCTURING, LLC, is the claims agent.
J & S CONCEPTS: Timothy Stone Named Subchapter V Trustee
--------------------------------------------------------
The Acting U.S. Trustee for Region 8 appointed Timothy Stone of
Newpoint Advisors Corporation as Subchapter V trustee for J & S
Concepts, LLC and its affiliates.
The affiliates are Party Fowl Cool Springs LLC, Party Fowl
Murfreesboro LLC, Party Fowl Destin LLC, Party Fowl Donelson LLC,
and Party Fowl Hamilton Place, LLC.
Mr. Stone will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Stone declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Timothy Stone
Newpoint Advisors Corporation
750 Old Hickory Blvd, Building Two, Suite 150
Brentwood, TN 37027
Phone: 800-306-1250/615-440-8273
Fax: (702) 543-3881
Email: tstone@newpointadvisors.us
About J & S Concepts
J & S Concepts, LLC and its affiliates filed petitions under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Tenn.
Lead Case No. 24-00066) on Jan. 9, 2024. The affiliates are Party
Fowl Cool Springs LLC, Party Fowl Murfreesboro LLC, Party Fowl
Destin LLC, Party Fowl Donelson LLC, and Party Fowl Hamilton Place,
LLC.
At the time of the filing, J & S Concepts reported as much as
$50,000 in assets and $1 million to $10 million in liabilities.
Denis Graham "Gray" Waldron, Esq., at Dunham Hildebrand, PLLC
represents the Debtors as legal counsel.
J.T. AND SON: Seeks to Hire Lally & Co. CPAs as Accountant
----------------------------------------------------------
J.T. and Son Construction, LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Pennsylvania to employ
Lally & Co. CPAs and Business Advisors to prepare its various tax
returns and filings.
The Debtor proposes to pay accountant fees at a standard bill rate
of $3,000 annually for its tax preparation and filing.
Allen Wassel, CPA, a member of Lally & Co. CPAs and Business
Advisors, disclosed in a court filing that the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Allen W. Wassel, CPA
Lally & Co. CPAs and Business Advisors
5700 Corporate Drive, Suite 800
Pittsburgh, PA 15237
Telephone: (412) 367-8190
Facsimile: (412) 366-3111
About J.T. and Son Construction
J.T. and Son Construction, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-21623) on
August 2, 2023. In the petition signed by John Minarik, owner and
operator, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge John C. Melaragno oversees the case.
The Debtor tapped Brian C. Thompson, Esq., at Thompson Law Group,
PC as legal counsel and Allen W. Wassel, CPA, at Lally & Co. CPAs
and Business Advisors as accountant.
JACOBS ENTERTAINMENT: Moody's Alters Outlook on B2 CFR to Negative
------------------------------------------------------------------
Moody's Investors Service changed the ratings outlook of Jacobs
Entertainment, Inc. to negative from stable. At the same time,
Moody's affirmed Jacobs B2 Corporate Family Rating, B2-PD
Probability of Default Rating, and the B2 ratings of its senior
unsecured notes.
The affirmation reflects Jacobs's position in markets with limited
new competition, and the company's adequate liquidity. The change
in outlook to negative from stable reflects the deterioration in
Jacobs' operating metrics and EBITDA generation, which has led to
increased leverage and reduced covenant cushion. The company's
EBITDA has come down following post-pandemic highs in the prior
years. At the same time, the company incurred new debt to finance
the redevelopment of its J Resort. While Moody's expects leverage
to improve from elevated levels, this comes with significant risk
because it depends on the continued renovation and subsequent ramp
up of the J Resort, as well as continued strong performance from
the company's other regional operations.
RATINGS RATIONALE
Jacobs' B2 Corporate Family Rating reflects its high leverage for
the size of the company, the company's small scale in terms of
revenue relative to peers, exposure to cyclical discretionary
consumer spending, and high earnings concentration with nearly 80%
of EBITDA coming from two markets, Colorado and Louisiana. The
rating is supported by the good market position of Jacobs' revenue
generating assets within its operating regions, certain barriers to
entry in the Louisiana market due to laws that limit the locations
of new direct truck stop operators -- this provides Jacobs with a
certain level of earnings stability -- and regional growth in the
Reno, NV market where the company owns two land-based casinos. The
company's adequate liquidity also supports the rating, with access
to an $80 million revolver that is expected to remain largely
undrawn.
The negative outlook reflects the deterioration in Jacobs'
operating metrics and EBITDA generation, which has led to increased
leverage and reduced covenant cushion. The company's EBITDA has
come down following post-pandemic highs in the prior years. At the
same time, the company incurred new debt to finance the
redevelopment of its J Resort. While Moody's expects leverage to
improve from elevated levels, this comes with significant risk
because it depends on the continued renovation and subsequent ramp
up of the J Resort, as well as continued strong performance from
the company's other regional operations.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if EBITDA declines further from factors
such as volume pressures or higher operating costs, liquidity
deteriorates, or debt-to-EBITDA is sustained over 6.0x.
Acquisitions or shareholder distributions that increase leverage
could also lead to a downgrade.
Ratings could be upgraded if the company generates consistent and
comfortably positive free cash flow, revenue grows, debt-to-EBITDA
is sustained below 4.0x, and the company adheres to financial
policies that maintain low leverage.
Jacobs Entertainment, Inc. ("Jacobs") is a privately held company
that does not disclose financial information publicly. The company
owns and operates gaming facilities located in Colorado, Nevada and
Louisiana. The company owns six land-based casinos: The Lodge
Casino and the Gilpin Casino, both in Black Hawk, CO; the J Resort
and the Gold Dust West Casino in Reno, NV; the Gold Dust
West-Carson City in Carson City, NV and the Gold Dust West-Elko in
Elko, NV. Jacobs also owns and operates 26 video poker truck stop
facilities in Louisiana. Additionally, the company has operations
in Cleveland, Ohio that include an aquarium, parking, a 5,000 seat
covered outdoor amphitheater, and a dinner cruise and entertainment
ship. The company is a wholly-owned subsidiary of Jacobs
Investments, Inc. (JII). Jeffrey P. Jacobs, the Chief Executive
Officer and his family trusts own 100% of JII's outstanding Class A
and Class B shares. Revenue for the 12 months ended September 2023
was approximately $469 million.
JER INVESTORS: Seeks to Hire Seward & Kissel as Special Counsel
---------------------------------------------------------------
JER Investors Trust, Inc. and JERIT Non-CDO CMBS 1, LLC seek
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Seward & Kissel, LLP as their special counsel.
The Debtors require a special counsel to provide advice to and
representation of the Debtors at the direction of Stephen P.
Kovacs, the independent member of the board of directors, during
the Chapter 11 cases that relates to work performed for the Debtors
at the direction of the independent member prior to commencement of
the Chapter 11 cases.
The hourly rates of the firm's counsel and staff are as follows:
John R. Ashmead $1,625
Thomas R. Hooper $1,050
Catherine V. LoTempio $975
John Patouhas $600
In addition, the firm will seek reimbursement for expenses
incurred.
On Oct. 11, 2023, the Debtors provided the firm with a retainer in
the amount of $200,000. On Dec. 28, 2023, the firm received an
additional retainer in the amount of $20,000.
John Ashmead, Esq., a partner at Seward & Kissel, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
John R. Ashmead
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Telephone: (212) 574-1366
Facsimile: (212) 480-8421
Email: ashmead@sewkis.com
About JER Investors
JER Investors Trust, Inc. is a mortgage real estate investment
trust (REIT).
JER Investors and JERIT Non-CDO CMBS 1, LLC filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-12109) on December 29,
2023. At the time of the filing, JER Investors reported assets of
$10 million to $50 million and liabilities of $100 million to $500
million.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Troutman Pepper Hamilton Sanders LLP as
restructuring counsel, Seward & Kissel LLP as special counsel, and
Dundon Advisers LLC to provide them with a chief restructuring
officer.
JER INVESTORS: Taps Dundon Advisers as Restructuring Advisor
------------------------------------------------------------
JER Investors Trust, Inc. and JERIT Non-CDO CMBS 1, LLC seek
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Dundon Advisers, LLC to provide them with a
chief restructuring officer and certain additional services by
related personnel.
The firm will render these services:
(a) business and financial analyses of the Debtors;
(b) assist the Debtors in the preparation of motions,
declarations, plan, and other pleadings in these Chapter 11 cases;
(c) prepare any required feasibility analysis, liquidation
analysis and/or asset valuation as directed by the Debtors;
(d) present the Debtors' state of affairs and proposed Plan of
Liquidation to creditors and other stakeholders, and assistance (as
directed by the Debtors) in their inquiries regarding the same;
(e) if requested, provide testimony and affidavits relating to
the foregoing; and
(f) perform such other services as requested by the Debtors
and agreed to by Dundon Advisers.
The current rates of Dundon Advisers' professionals range from $350
per hour to $890 per hour, subject to annual adjustment taking
effect July 1, 2024 and each July 1 thereafter, and subject to a
further courtesy discount of 15 percent.
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the petition date, Dundon Advisers received $268,064.23,
including a $50,000 retainer.
Tabish Rizvi, a managing director with Dundon Advisers, disclosed
in a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Tabish Rizvi
Dundon Advisers LLC
Ten Bank Street, Suite 1100
White Plains, NY 10606
Telephone: (917) 216-3329
Email: tr@dundon.com
About JER Investors
JER Investors Trust, Inc. is a mortgage real estate investment
trust (REIT).
JER Investors and JERIT Non-CDO CMBS 1, LLC filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-12109) on December 29,
2023. At the time of the filing, JER Investors reported assets of
$10 million to $50 million and liabilities of $100 million to $500
million.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Troutman Pepper Hamilton Sanders LLP as
restructuring counsel, Seward & Kissel LLP as special counsel, and
Dundon Advisers LLC to provide them with a chief restructuring
officer.
JER INVESTORS: Taps Troutman Pepper Hamilton Sanders as Counsel
---------------------------------------------------------------
JER Investors Trust, Inc. and JERIT Non-CDO CMBS 1, LLC seek
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Troutman Pepper Hamilton Sanders, LLP as
bankruptcy counsel.
The firm's services include:
(a) advising the Debtors of their rights, powers, and duties
under Chapter 11 of the Bankruptcy Code;
(b) taking action to protect and preserve the Debtors'
estates;
(c) assisting in preparing legal papers;
(d) prosecuting on behalf of the Debtors a proposed Chapter 11
plan and seeking approval of all transactions contemplated therein
and in any amendments thereto or other structured exit from
bankruptcy; and
(e) performing other necessary or desirable legal services in
connection with these Chapter 11 cases.
The 2023 hourly rates of the firm's counsel and staff are:
David Fournier, Partner $1,250
Deborah Kovsky-Apap, Partner $1,090
Kenneth Listwak, Associate $830
Tori Remington, Associate $670
Monica Molitor, Paralegal $390
The 2024 hourly rates of the firm's counsel and staff are:
David Fournier, Partner $1,360
Deborah Kovsky-Apap, Partner $1,190
Kenneth Listwak, Associate $920
Tori Remington, Associate $780
Monica Molitor, Paralegal $430
In addition, the firm will seek reimbursement for expenses
incurred.
On September 24, 2021, the Debtors provided Troutman Pepper with a
retainer in the amount of $25,000. In connection with the Chapter
11 Engagement, on April 24, 2023, Troutman Pepper received a
retainer in the amount of $100,000. Additionally, on December 28,
2023, Troutman Pepper received an additional retainer in the amount
of $30,000 to cover preparation for filing the Chapter 11 cases on
December 28 and 29, 2023.
Ms. Kovsky-Apap disclosed in a court filing that the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Deborah Kovsky-Apap, Esq.
Troutman Pepper Hamilton Sanders LLP
875 Third Avenue
New York, NY 10022
Telephone: (212) 808-2726
Email: deborah.kovsky@troutman.com
About JER Investors
JER Investors Trust, Inc. is a mortgage real estate investment
trust (REIT).
JER Investors and JERIT Non-CDO CMBS 1, LLC filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-12109) on December 29,
2023. At the time of the filing, JER Investors reported assets of
$10 million to $50 million and liabilities of $100 million to $500
million.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Troutman Pepper Hamilton Sanders LLP as
restructuring counsel, Seward & Kissel LLP as special counsel, and
Dundon Advisers LLC to provide them with a chief restructuring
officer.
KEHE DISTRIBUTORS: Moody's Cuts CFR to B1 & Alters Outlook to Neg.
------------------------------------------------------------------
Moody's Investors Service downgraded KeHE Distributors, LLC's
Corporate Family Rating to B1 from Ba3 and its Probability of
Default Rating to B1-PD from Ba3-PD. Moody's also assigned a B3
rating to the company's proposed $750 million senior secured global
notes due 2031. The B2 rating on the company's second lien secured
notes due 2026 will be withdrawn upon closing of the transaction
and its repayment in full. The rating outlook was changed to
negative from stable.
Net proceeds from the proposed secured notes will be used to pay
down $153 million of the company's asset based revolving credit
facility("ABL"), fully repay the $154 million outstanding on its
second lien notes, fully repurchase the $199 million in preferred
equity held by private equity firm TowerBrook Capital Partners
(TowerBrook), repurchase about 59% of TowerBrook's common equity
and for transaction fees and expenses.
The downgrade of KeHE's CFR to B1 reflects governance
considerations reflecting the weaker credit protection measures
following the recapitalization of KeHe's balance sheet, which will
lead to a 54% increase in funded debt. The recapitalization will
reduce TowerBrook's ownership in KeHe to 4.75% from 11.5% and is
KeHE's first step in regaining 100% control of the company.
Pro-forma for the transaction, debt to EBITDA will increase to 5.7x
from 3.8x in fiscal 2023 ended April 30th 2023 and EBITA to
interest will weaken to about 1.5x from 2.9x for the same period.
Moody's expects that it will take KeHE 12-18 months to improve
credit protection measures to levels more in line with a B1 CFR as
KeHE prioritizes deleveraging.
The change in outlook to negative reflects the high leverage at the
closing of the transaction and risk that KeHe should be unable to
improve its credit metrics over the next 12-18 month given the
integration risks and the uncertainty surrounding the timing and
successful execution of synergies associated with the acquisition
of NextWave Distribution (dba DPI Specialty Foods; "DPI"). Higher
than expected costs or weakening demand for the company's products
could also slow deleveraging.
RATINGS RATIONALE
KeHE's B1 CFR reflects its small scale as compared to other larger
and better capitalized players in the food distribution market.
This makes the company vulnerable to larger broadline food
distributors expanding into KeHE's niche natural and organic focus.
The rating also reflects the company's customer concentration with
its top 3 customers accounting for over 50% of total revenue,
including its largest customer that accounts for about 30% of
sales. The company generates thin margins given its fixed cost
structure and limited pricing power in a highly competitive market.
KeHE is in the process of recapitalizing its balance sheet, which
will increase its funded debt by more than 50% and weaken credit
protection measures with pro-forma debt to EBITDA at 5.7x and EBITA
to interest at 1.5x. Credit metrics will improve over time as
largely through EBITDA growth. Moody's expects debt to EBITDA to
improve to about 4.7x and for EBITA to interest to reach 2.1x by
fiscal 2025 ending April 29, 2025.
The ratings are supported by KeHE's focus on the natural and
organic specialty food industry, which is the highest growth
category in overall grocery sales. Over the next 12 months Moody's
expects KeHE's organic sales and earnings to grow in the low-mid
single digit range driven by good demand for specialty food
products as consumers continue to increasingly eat healthy food.
KeHE's earnings will also benefit from continued cost reduction
initiatives, as well as operating leverage and synergies following
its recent acquisition of DPI in June 2023. Some of these
synergies will include workforce reductions and the optimization of
the company's distribution centers. Positive factors also include
the company's good geographic diversification.
The B3 rating on the company's proposed senior secured notes
reflects its junior position in KeHE's capital structure to its
$1.15 billion ABL which has a priority claim on accounts receivable
and inventory.
KeHE's liquidity is adequate as demonstrated by $451 million of
pro-forma availability on its $1.15 billion ABL expiring December
2027 (unrated). Availability on the company's ABL was meaningfully
reduced following its acquisition of DPI in June 2023. KeHE
maintains little balance sheet cash, but Moody's expects the
company to generate about $60-$80 million of free cash flow per
annum.
KeHE's credit impact score was lowered to CIS-4 from CIS-3 and its
governance score was lowered to G-4 from G-3. The change in both
these scores is related to it's the company's more aggressive
financial strategy and risk management reflecting high pro-forma
financial leverage and weak interest coverage following the
recapitalization of its balance sheet.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if KeHE successfully integrates DPI
including achieving its targeted synergies and demonstrates
sustained growth in sales and profitability with good liquidity.
Quantitatively, ratings could be upgraded if debt/EBITDA is
sustained below 4.0x and EBITA/interest expense is sustained above
2.5x.
Ratings could be downgraded if KeHE's experiences difficulty in
integrating DPI, if operating performance deteriorates or free cash
flow weakens. Ratings could also be downgraded if liquidity
deteriorates or if acquisition activity causes deterioration in
cash flow or credit metrics. Quantitatively ratings could be
downgraded if debt/EBITDA is sustained above 5.0x or EBITA/interest
is sustained below 2.0x.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
KeHE Distributors, LLC is a majority employee owned Specialty and
Natural and Organic (N&O) and Fresh food distributor in the US and
Canada. KeHE's US Distribution customers include chain grocery,
chain natural, independent grocery and independent natural
retailers. In Canada, KeHE services grocery supermarket chain
retailers, independent grocery retailers, club stores and
foodservice retailers. Total pro-forma revenue is approximately
$8.0 billion.
LAG SHOT: Ruediger Mueller of TCMI Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Ruediger Mueller of TCMI,
Inc. as Subchapter V trustee for Lag Shot LLC.
Mr. Mueller will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Mueller declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Ruediger Mueller
TCMI, Inc.
1112 Watson Court
Reunion, FL 34747
Email: truste@tcmius.com
About Lag Shot
Lag Shot, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00034) on January
9, 2024, with $500,001 to $1 million in assets and $500,001 to $1
million in liabilities.
Judge Caryl E. Delano oversees the case.
Michael R. Dal Lago, Esq., represents the Debtor as legal counsel.
LE LAMPADARIE: Involuntary Chapter 11 Case Summary
--------------------------------------------------
Alleged Debtor: Le Lampadarie Inc
276 Atlantic City Blvd
Pine Beach, NJ 08741-1558
Involuntary Chapter
11 Petition Date: January 11, 2024
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 24-10389
Petitioners' Counsel: Pro Se
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/NFXABUQ/Le_Lampadarie_Inc__njbke-24-10389__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petition:
Petitioner Nature of Claim Claim Amount
Eli Klein Loan $70,000
2 Bartenura
Lakewood NJ 08701
Harry Fisher Loan $480,000
1903 Mercedes Road
Toms River NJ 08755
Israel Farkash Loan $50,000
1909 New York Ave
Brooklyn NY 11210
LEXARIA BIOSCIENCE: Incurs $1.2 Million Net Loss in First Quarter
-----------------------------------------------------------------
Lexaria Bioscience Corp. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $1.18 million on $151,278 of revenue for the three months ended
Nov. 30, 2023, compared to a net loss of $1.77 million on $97,735
of revenue for the three months ended Nov. 30, 2022.
As of Nov. 30, 2023, the Company had $3.63 million in total assets,
$254,040 in total liabilities, and $3.37 million in total
stockholders' equity.
Lexaria said, "Since inception, the Company has incurred
significant operating and net losses. Net losses attributable to
shareholders were $1.2 million and $1.8 million for the quarters
ended November 30, 2023 and 2022, respectively. As of November 30,
2023, we had an accumulated deficit of $46.9 million. We expect to
continue to incur significant operational expenses and net losses
in the upcoming 12 months. Our net losses may fluctuate
significantly from quarter to quarter and year to year, depending
on the stage and complexity of our R&D studies and corporate
expenditures, additional revenues received from the licensing of
our technology, if any, and the receipt of payments under any
current or future collaborations we may enter into. The recurring
losses and negative cash flows from operations raise substantial
doubt as to the Company's ability to continue as a going concern."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1348362/000164033424000051/lxrp_10q.htm
About Lexaria
Lexaria Bioscience Corp. -- http://www.lexariabioscience.com-- is
a biotechnology company developing the enhancement of the
bioavailability of a broad range of fat-soluble active molecules
and active pharmaceutical ingredients using its patented
DehydraTECH drug delivery technology. DehydraTECH combines
lipophilic molecules or APIs with specific long-chain fatty acids
and carrier compounds that improve the way they enter the
bloodstream, increasing their effectiveness and allowing for lower
overall dosing while promoting healthier oral ingestion methods.
Lexaria Bioscience incurred a net loss of $6.71 million for the
year ended Aug. 31, 2023, a net loss of $7.38 million for the year
ended Aug. 31, 2022, a net loss and comprehensive loss of $4.19
million for the year ended Aug. 31, 2021, a net loss and
comprehensive loss of $4.08 million for the year ended Aug. 31,
2020, and a net loss and comprehensive loss of $4.16 million for
the year ended Aug. 31, 2019.
LFS TOPCO: Moody's Affirms 'B1' CFR, Outlook Remains Stable
-----------------------------------------------------------
Moody's Investors Service has affirmed LFS TopCo, LLC's (Lendmark)
B1 corporate family rating and B1 long-term senior unsecured debt
rating. The outlook was maintained stable.
RATINGS RATIONALE
The ratings affirmation reflects Lendmark's solid capitalization
and stronger than average liquidity runway relative to other
single-B rated peers as well as solid franchise positioning and
historical profitability. Offsetting these positive credit
attributes is a recent deterioration in consumer loan asset quality
following the run-off of pandemic-era stimulus programs compounded
by a high inflationary environment. Lendmark's ratings also reflect
the risk surrounding the company's high reliance on secured funding
and resulting modest level of unencumbered assets that it could
pledge and use to access alternative sources of liquidity should a
need arise.
Lendmark's resilience to unexpected losses is solid by virtue of
its total loss absorbing capital. As measured by tangible common
equity (TCE) to tangible managed assets (TMA), Lendmark's
capitalization was 5.1% as of September 30, 2023. Though down from
9.9% as of December 31, 2022 and 13.2% as of December 31, 2019, the
decline was largely driven by the adoption of the current expected
credit loss (CECL) accounting standard in 2023. Total loss
absorbing capacity, measured by TCE plus reserves to TMA was
approximately 15.7% as of September 30, 2023 compared with 13.5% as
of year-end 2019. Still, Moody's believes that an increase in the
capital cushion would be a credit positive, given the high-risk
nature and potential volatility of lending to non-prime borrowers.
Delinquencies and charge-offs have risen above the company's 8%
target in recent periods, which has caused the company to tighten
underwriting standards over the last two years. Barring a material
rise in unemployment, Moody's expects the elevated credit losses
will likely continue to decline over the next 12-18 months towards
the company's historical average.
Lendmark has exhibited solid profitability historically, generating
a ratio of net income to average managed assets (NI/AMA) of about
2.5% from 2018-20 and a robust 4.0% in 2021. Higher loan loss
provisions partially offset higher interest income in 2022, leading
to a ratio of NI/AMA of about 1.7%. Profitability again declined in
2023 as the company faced even higher provisions and funding costs,
resulting in annualized NI/AMA of only 0.9% for the nine months
ended September 30, 2023. However, Moody's expects that
profitability is likely to improve towards the company's long-term
average of around 2.5% as asset quality improves over the next
12-18 months.
Lendmark's ratings also reflect the company's stronger than average
liquidity runway offset by its high reliance on secured financing.
Though the $300 million senior unsecured debt issuance in 2021
strengthened the company's funding profile, as of September 30,
2023, Lendmark's secured debt to gross tangible assets ratio was
just over 75%. Moody's notes that a lower reliance on secured debt
financing would be credit positive.
The stable outlook reflects that over the next 12-18 months,
Moody's expects that Lendmark's profitability and asset quality
will improve and return to their long-term averages of around 2.5%
NI/AMA and 8.0% net charge offs/average gross loans, respectively,
as the firm also maintains its current liquidity and funding
profile as well as resilience to unexpected losses evidenced by
sound capitalization and reserves.
The B1 senior unsecured bond rating is based on Lendmark's B1 CFR
and the application of Moody's Loss Given Default for
Speculative-Grade Companies methodology and model, which
incorporates the priority ranking of the unsecured debt in the
company's capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Lendmark's ratings if it reduces its reliance
on secured corporate funding, strengthens its capitalization
levels, or increases its liquidity runway while continuing to
maintain similar levels of asset quality and its solid
profitability.
Moody's could downgrade Lendmark's ratings if its financial
performance deteriorates such that profitability as measured by
NI/AMA declines and Moody's expects it to remain below 1.75%,
capitalization declines such that TCE plus loan loss reserves to
TMA dropped below, and was expected to remain below 14.5%, asset
quality deteriorates such that net charge-offs are expected to
remain long-term above 8.5%, or its liquidity runway declines and
is expected to remain below 15 months.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
LITTLELOGISTICS LLC: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Littlelogistics LLC
6565 Whispering Pine Lane
Jacksonville, OR 97530
Business Description: Littlelogistics is global supply chain
management company specializing in nearshore
production, distribution and fulfillment
model; start-up operational implementation;,
negotiations for all modes of
transportation; and site selection and
vetting business partners.
Chapter 11 Petition Date: January 17, 2024
Court: United States Bankruptcy Court
District of Oregon
Case No.: 24-60093
Judge: Hon. Thomas M. Renn
Debtor's Counsel: Keith Y Boyd, Esq.
KEITH Y. BOYD, PC
724 S Central Ave 106
Medford, OR 97501
Email: keith@boydlegal.net
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Philip Littleton as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/2YKV4YI/Littlelogistics_LLC__orbke-24-60093__0001.0.pdf?mcid=tGE4TAMA
LIVINGSTON TOWNSHIP: Hires Jernigan Copeland as Special Counsel
---------------------------------------------------------------
Livingston Township Fund One, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Mississippi to employ
Jernigan Copeland Attorneys, PLLC as special counsel.
The Debtor needs a special counsel to facilitate the sale and
closing of its real property located at 106 Livingston Church Road,
Flora, Miss.
The firm requested compensation of $1,750 and $100 for recording
and courier fees. The Debtor will pay 50 percent of these charges
and the other 50 percent will be paid by the purchaser.
Andrew Clark, Esq., an attorney at Jernigan Copeland Attorneys,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Andrew J. Clark, Esq.
Jernigan Copeland Attorneys, PLLC
P.O. Box 2249
Madison, MS 39130
Telephone: (601) 427-0021
Email: aclark@jcalawfirm.com
About Livingston Township Fund One
Livingston Township Fund One, LLC filed a petition under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Miss. Case No.
23-02573) on Nov. 6, 2023, with $1 million to $10 million in both
assets and liabilities. Michael Bollenbacher, managing member,
signed the petition.
Judge Jamie A. Wilson oversees the case.
The Debtor tapped Eileen N. Shaffer, Esq., as legal counsel and
Andrew J. Clark, Esq., at Jernigan Copeland Attorneys, PLLC as
special counsel.
LIVINGSTON TOWNSHIP: Taps Heritage Commercial & Land Co. as Realtor
-------------------------------------------------------------------
Livingston Township Fund One, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Mississippi to employ
Heritage Commercial & Land Company, LLC to market and sell its real
property.
Christine Greenlee, a real estate agent at Heritage Commercial &
Land Company, will be paid a commission of 6 percent of the sales
price.
Ms. Greenlee disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Christine Greenlee
Heritage Commercial & Land Company, LLC
116 Livingston Church Rd.
Flora, MS 39071
Telephone: (601) 941-3035
About Livingston Township Fund One
Livingston Township Fund One, LLC filed a petition under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Miss. Case No.
23-02573) on Nov. 6, 2023, with $1 million to $10 million in both
assets and liabilities. Michael Bollenbacher, managing member,
signed the petition.
Judge Jamie A. Wilson oversees the case.
The Debtor tapped Eileen N. Shaffer, Esq., as legal counsel and
Andrew J. Clark, Esq., at Jernigan Copeland Attorneys, PLLC as
special counsel.
LOCAL 8 INTERNATIONAL: Seeks Approval to Hire James Murphy Co.
--------------------------------------------------------------
Local 8, International Longshoremen's and Warehousemen's Union
seeks approval from the U.S. Bankruptcy Court for the District of
Oregon to employ James G. Murphy Co.
The firm will provide an appraisal of the Debtor's furniture,
fixtures, and equipment at liquidation value and provide a report.
Colin Murphy, a representative of James G. Murphy Co., disclosed in
a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Colin Murphy
James G. Murphy Co.
260 S. Pleasantburg Drive
P.O. Box 568
Greenville, SC 29602
Telephone: (864) 271-4470
About Local 8, International Longshoremen's
and Warehousemen's Union
Local 8, International Longshoremen's and Warehousemen's Union in
Portland, OR, filed its voluntary petition for Chapter 11
protection (Bankr. D. Ore. Case No. 23-32366) on October 18, 2023,
with $394,481 in assets and $1,017,820 in liabilities. Troy L.
Mosteller as secretary/treasurer, signed the petition.
Judge Peter C. McKittrick oversees the case.
The Debtor tapped Sussman Shank LLP as legal counsel; Barnard,
Iglitzin & Lavitt LLP as labor counsel; and Peterson & Associates,
PS to provide tax-related services and other necessary accounting
support.
LOCAL 8 INTERNATIONAL: Taps Peterson to Provide Tax Services
------------------------------------------------------------
Local 8, International Longshoremen's and Warehousemen's Union
seeks approval from the U.S. Bankruptcy Court for the District of
Oregon to employ Peterson & Associates, PS.
The firm's services include:
(a) preparing the Debtor's annual financial statement;
(b) providing ongoing tax services and prepare Department of
Treasury Form 990 and U.S. Dept. of Labor Form LM-2 at the end of
each year;
(c) providing any necessary advice and analysis of the
validity and priority of a proof of claim for priority tax recently
which was recently filed in the bankruptcy case; and
(d) continuing to provide accounting and tax services and
advice in connection with the Debtor's accounting and tax
requirements.
Peterson recently received a $6,500 payment for services but has
refunded that payment to the Debtor.
Laurie Kangas, a member of Peterson, disclosed in a court filing
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Laurie Kangas
Peterson & Associates, PS
14201 NE 20th Ave, Suite B-101
Vancouver, WA 98686
Telephone: (360) 953-5920
Facsimile: (360) 573-4499
About Local 8, International Longshoremen's
and Warehousemen's Union
Local 8, International Longshoremen's and Warehousemen's Union in
Portland, OR, filed its voluntary petition for Chapter 11
protection (Bankr. D. Ore. Case No. 23-32366) on October 18, 2023,
with $394,481 in assets and $1,017,820 in liabilities. Troy L.
Mosteller as secretary/treasurer, signed the petition.
Judge Peter C. McKittrick oversees the case.
The Debtor tapped Sussman Shank LLP as legal counsel; Barnard,
Iglitzin & Lavitt LLP as labor counsel; and Peterson & Associates,
PS to provide tax-related services and other necessary accounting
support.
MALLINCKRODT PLC: To Wind Down StrataGraft Production
-----------------------------------------------------
Mallinckrodt plc disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that the Company committed to a
plan to cease commercialization and clinical development and wind
down production of its StrataGraft product (allogenic cultured
keratinocytes and dermal fibroblasts in murine collagen - dsat), a
regenerative skin tissue that is an allogeneic cellularized
scaffold product derived from keratinocytes grown on gelled
collagen containing dermal fibroblasts indicated for the treatment
of adults with thermal burns containing intact dermal elements for
which surgical intervention is clinically indicated (deep
partial-thickness burns). The Company expects to complete this
process by the end of the first quarter of 2025.
The decision to discontinue StrataGraft was made following a
slower-than-anticipated commercial uptake of the product and
slower-than-anticipated enrollment in clinical trials. The Company
is evaluating its next steps with respect to StrataGraft, which
could include pursuing a sale, out-license or other strategic
arrangement.
In connection with ceasing commercialization and clinical
development and winding down production of StrataGraft, the Company
currently expects to incur pre-tax charges, exclusive of
impairments, of approximately $15 million, which include (i)
approximately $5 million of one-time termination benefits, (ii)
approximately $5 million in contract and lease termination costs,
and (iii) approximately $5 million of other associated costs. The
Company plans to recognize the majority of these charges in the
first fiscal quarter of 2024, with the remaining amount to be
recognized over the course of fiscal 2024 and into the first fiscal
quarter of fiscal 2025. These estimated charges are expected to be
cash charges. The Company also expects to incur an impairment
charge related to its existing StrataGraft inventory for which it
cannot provide an estimate at this time.
Furthermore, the Company expects to recognize an impairment charge
related to its existing StrataGraft inventory in the first fiscal
quarter of 2024. The Company cannot currently estimate the size or
materiality of the impairment charge because it is currently
assessing the fair value of its assets as a result of the adoption
of fresh-start accounting in connection with the Company's
emergence from bankruptcy on November 14, 2023. The Company expects
to complete the ongoing fresh-start accounting adoption
contemporaneously with the filing with the U.S. Securities and
Exchange Commission of its Annual Report on Form 10-K for the
fiscal year ending December 29, 2023. The Company will include an
estimate of the impairment charge, to the extent material, in a
future filing with the SEC. The Company does not expect the
impairment charge to result in future cash expenditures.
About Mallinckrodt plc
Mallinckrodt (OTCMKTS: MNKTQ) -- 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 in mid-June 2022 successfully completed
its reorganization process, emerged from Chapter 11 and completed
the Irish Examinership proceedings.
Mallinckrodt Plc said in a regulatory filing in early June 2023
that it was considering a second bankruptcy filing and other
options after its lenders raised concerns over an upcoming $200
million payment related to opioid-related litigation.
Mallinckrodt plc and certain of its affiliates again sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 23-11258) on Aug. 28,
2023. Mallinckrodt disclosed $5,106,900,000 in assets and
$3,512,000,000 in liabilities as of June 30, 2023.
Judge John T. Dorsey oversees the new cases.
In the prior Chapter 11 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
corporateand 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.
In the new Chapter 11 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; Guggenheim Securities, LLC, as investment
banker; and AlixPartners, LLP, as restructuring advisor. Kroll is
the claims agent.
MBIA INC: Files IRS Form 8937
-----------------------------
MBIA Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that on January 11, 2024, the
Company posted its IRS Form 8937 "Report of Organizational Actions
Affecting Basis of Securities".
The Company's IRS Form 8937 provides an explanation of the tax
consequences to shareholders with respect to the Company's
treatment of the extraordinary cash dividend of $8.00 per share
paid on December 22, 2023, to shareholders of record as of December
18, 2023. It indicates that the extraordinary cash dividend is
expected to be treated as a tax-free return of capital up to an
investor's adjusted cost basis in its shares, and if an investor's
adjusted cost basis is reduced to zero, any remaining portion of
the dividend will be taxed as capital gains. The Company's IRS Form
8937 will be updated as necessary following the release of the
Company's full year 2023 financial results, which is tentatively
scheduled for February 28, 2024. Shareholders should consult their
own tax professionals regarding their receipt of the extraordinary
cash dividend.
A copy of the IRS Form 8937 is available at
http://tinyurl.com/85dsaenk
About MBIA
MBIA Inc., together with its consolidated subsidiaries, operates
within the financial guarantee insurance industry. MBIA manages
its business within three operating segments: 1) United States
public finance insurance; 2) corporate; and 3) international and
structured finance insurance. The Company's U.S. public finance
insurance portfolio is managed through National Public Finance
Guarantee Corporation, its corporate segment is managed through
MBIA Inc. and several of its subsidiaries, including our service
company, MBIA Services Corporation, and its international and
structured finance insurance business is primarily managed through
MBIA Insurance Corporation and its subsidiaries.
MBIA reported a net loss attributable to the Company of $195
million in 2022, a net loss attributable to the Company of $445
million in 2021, and a net loss attributable to the Company of $578
million in 2020.
* * *
Egan-Jones Ratings Company on September 28, 2023, maintained its
'CCC-' foreign currency and local currency senior unsecured ratings
on debt issued by MBIA Inc.
MINIM INC: Receives Noncompliance Notice From Nasdaq
----------------------------------------------------
Minim, Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that the Company received a deficiency letter
from the Listing Qualifications Department of The Nasdaq Stock
Market LLC notifying the Company that it is not in compliance with
the minimum stockholders' equity requirement of at least $2,500,000
for continued inclusion on The Nasdaq Capital Market pursuant to
Nasdaq Listing Rule 5550(b)(1). In the Company's Quarterly Report
on Form 10-Q for the quarter ended Sept. 30, 2023, the Company
reported stockholders' equity of $135,637, which was below the
Stockholders' Equity Requirement.
In accordance with Nasdaq rules, the Company has 45 calendar days,
or until Feb. 26, 2024, to submit a plan to the Staff to regain
compliance with the Stockholders' Equity Requirement. If the
Compliance Plan is accepted, Nasdaq can grant an extension of up to
180 calendar days from the date of the Letter for the Company to
evidence compliance.
The Company must submit a Compliance Plan to the Staff on or before
Feb. 26, 2024 and is considering available options to regain
compliance with the Stockholders' Equity Requirement. However,
there is no assurance that the Company will be successful in
developing the Compliance Plan, that the Compliance Plan will be
accepted by Nasdaq, or even if it is accepted, that the Company
will ultimately be able to regain compliance with the
Stockholders’ Equity Requirement within the allotted extension
period, which may be less than 180 calendar days.
Receipt of the letter described above from Nasdaq has no immediate
effect on the listing of the Company's common stock.
About Minim Inc.
Minim was founded in 1977 as a networking company and now delivers
intelligent software to protect and improve the WiFi connections.
Headquartered in Manchester, New Hampshire, Minim holds the
exclusive global license to design, manufacture, and sell consumer
networking products under the Motorola brand. The Company designs
and manufactures products including cable modems, cable
modem/routers, mobile broadband modems, wireless routers,
Multimedia over Coax adapters and mesh home networking devices.
Minim reported a net loss of $15.55 million in 2022 compared to a
net loss of $2.20 million in 2021. As of Sept. 30, 2023, the
Company had $15.28 million in total assets, $15.14 million in total
liabilities, and $135,637 in total stockholders' equity.
Boston, Massachusetts-based RSM US LLP, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
March 31, 2023, citing that the Company has suffered recurring
losses and negative cash flows from operations and will need
additional funding within the next twelve months. This raises
substantial doubt about the Company's ability to continue as a
going concern.
In its Quarterly Report for the three months ended June 30, 2023,
Minim said that it has incurred significant losses and negative
cash flows from operations since inception. During the nine months
ended June 30, 2023, the Company incurred a net loss of $9.7
million and had positive cash flows from operating activities of
$2.5 million. As of June 30, 2023, the Company had an accumulated
deficit of $84.5 million and cash and cash equivalents of $0.3
million. The Company implemented cost reduction plans to align its
cost structure to its sales and increase its liquidity. The
Company will continue to monitor its cost in relation to its sales
and adjust its cost structure accordingly. The Company said its
financial position and operating results raise substantial doubt
about its ability to continue as a going concern.
NEXII BUILDING: Chapter 15 Case Summary
---------------------------------------
Lead Debtor: Nexii Building Solutions Inc.
1455 W. Georgia Street
Vancouver, BC V6G 2T3
Canada
Business Description: Nexii is a green construction company that
uses its proprietary material, Nexiite, to
manufacture high performance cladding and
structural wall panels which are used in the
construction of buildings.
Foreign Proceeding: Proceeding under Sections 9, 11, 11.51,
11.52 and 23 of the Companies' Creditors
Arrangement Act pending before the
Supreme Court of British Columbia
Chapter 15 Petition Date: January 11, 2024
Court: United States Bankruptcy Court
District of Delaware
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
Nexii Building Solutions Inc. (Lead Case) 24-10026
Nexii Holdings Inc. 24-10025
Nexii Construction Inc. 24-10027
NBS IP Inc. 24-10028
Judge: Hon. J. Kate Stickles
Foreign Representative: William Tucker
Acting Chief Executive Officer
Nexii Building Solutions Inc.
1455 W. Georgia Street
Vancouver, BC V6G 2T3
Canada
Foreign Representative's
Counsel: Steven W. Golden, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
Wilmington, DE 19899-8705
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Lead Chapter 15 petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/2DOV4PY/Nexii_Building_Solutions_Inc_and__debke-24-10026__0001.0.pdf?mcid=tGE4TAMA
NGL ENERGY: Moody's Upgrades CFR to B2 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded NGL Energy Partners LP's (NGLEP
or NGL Energy) corporate family rating to B2 from B3, probability
of default rating to B2-PD from B3-PD, and senior unsecured notes
rating to Caa1 from Caa2 and changed the outlook to stable from
positive. Moody's also assigned a B2 rating to NGL Energy Operating
LLC's proposed $700 million backed senior secured first-lien term
loan B and affirmed the B2 rating on the existing $2.05 billion
senior secured first lien notes due 2026 and changed the outlook to
stable from positive. NGLEP's SGL-3 speculative grade liquidity
rating was unchanged.
"The upgrade recognizes NGL Energy's recent deleveraging, improving
maturity profile and Moody's expectation that management will
remain highly focused on further reducing the company's significant
debt burden and high-coupon preferred shares over the next few
years," said Sajjad Alam, Moody's Vice President. "The term loan
issuance is contingent on NGL Energy successfully raising
additional pari passu secured debt for up to $2.1 billion, which
taken together, will significantly improve NGL Energy's debt
maturity profile providing the company a longer runway to reduce
debt and preferred obligations."
RATINGS RATIONALE
Net proceeds from the proposed term loan will be used to redeem
existing debt. The term loan was rated B2 given it will rank pari
passu with the company's existing secured notes, which are also
rated B2. The senior unsecured notes were upgraded to Caa1 based on
the upgrade of the CFR. These notes are expected to be ultimately
repaid with the proceeds of the planned refinancing transactions.
NGLEP's B2 CFR is restrained by its complex capital structure that
includes high-coupon cumulative preferred stocks, still sizable
debt load and associated interest costs, and the company's prior
history of aggressive acquisitions and financial policies. The
rating also reflects the inherent volatility and seasonality in
NGLEP's working capital requirements and the high volumetric risks
across all its business segments. NGLEP's businesses have performed
more consistently since 2021 leading to increasing free cash flow
generation and meaningful debt reduction. Management plans to apply
all near term free cash flow to reduce debt and repurchase
preferred shares with a goal to permanently delever the business.
NGLEP's primary strengths include its significant scale,
diversified midstream operations across several key US hydrocarbon
basins, fee-based business model, and large and growing water
solutions business in the Delaware Basin.
The SGL-3 rating reflects adequate liquidity through 2024.
Following the planned refinancing transactions, the company will
have an improved maturity profile and a more sustainable free cash
flow base to execute its debt reduction goals. The company will
have more availability under the $600 million ABL facility
following these transactions providing increased liquidity cushion.
Moody's expects the company to use the ABL primarily for working
capital purposes and keep drawings to a low level. NGL Energy
should be able to comfortably comply with the new financial
covenants governing the ABL and term loan facilities through 2024.
The company's alternative source of liquidity is limited given its
assets are largely encumbered.
The stable outlook reflects Moody's expectation of continued good
operational execution and steady debt reduction through 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if NGLEP further reduces debt,
financial leverage and outstanding preferred dividends, and
delivers consistent free cash flow. More specifically, an upgrade
could be considered if the company sustains the debt/EBITDA below
4x while making substantial progress towards reducing preferred
arrearages. The ratings could be downgraded if the debt/EBITDA
ratio rises above 5x or the EBITDA/interest ratio falls below 3x.
Weak liquidity and leveraging acquisitions or shareholder
distributions would also negatively impact ratings.
NGL Energy Partners LP is a midstream Master Limited Partnership
headquartered in Tulsa, Oklahoma.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
NICMAR INDUSTRIES: Seeks $800,000 DIP Loan from Gorham
------------------------------------------------------
Nicmar Industries d/b/a George R. Roberts Company asks the U.S.
Bankruptcy Court for the District of Maine for authority to use
cash collateral and obtain postpetition financing.
The Debtor seeks to obtain postpetition financing from Gorham
Savings Bank up to the maximum principal amount of $800,000.
The DIP Facility will mature on the 60th day after the Petition
Date, unless extended by the DIP Lender in writing.
Allan Martin may assert an interest in cash collateral. The Debtor
entered into a security agreement with Martin, but Martin failed to
file a UCC-1 Financing Statement or to otherwise take the necessary
actions to perfect any interest in cash collateral as of the
Petition Date.
On June 24, 2009, the DIP Lender and the Debtor entered into a
promissory note in the original principal amount of $1.4 million.
That same day, the DIP Lender and Nicmar Realty Associates, LLC
entered into a promissory note in the principal amount of
$300,000.
On June 30, 2023, the DIP Lender, the Debtor, and Nicmar Realty
restructured the GSB Notes by entering into:
(i) the amended and restated term note in the original principal
amount of $1.041 million, and
(ii) the line of credit in the original maximum principal amount of
$650,000.
The Restated Term Note and LOC remain secured by first priority
liens on the personal property assets of the Debtor and the Nicmar
Real Property through the GSB Mortgage, among other collateral, as
of the Petition Date.
On November 1, 2019, Martin, the Debtor, and Nicmar Realty entered
into two different promissory notes as part of the Debtor's
conversion to an Employee Stock Ownership Plan. Under the first
note, Martin extended credit to Nicmar Realty in the original
principal amount of $1.1 million, which was the purchase price
payable by the Debtor to Martin for his equity interest in Nicmar
Realty. Under the second note, Martin extended credit to the Debtor
in the original principal amount of $1.371 million, which was the
purchase price for the transfer of the equity interests Martin held
in the Debtor.
Pursuant to the Interim Order, all prepetition obligations under
the line of credit will become postpetition obligations under the
DIP Facility, with the DIP Lender to continue making advances under
the DIP Facility after the Petition Date in accordance with the
Budget, provided that the maximum principal amount under the LOC
will be increased from $650,000 to $800,000 through the DIP
Facility, provided, further, that the increase will not be
effective until entry of the Final Order.
The Debtor's use of cash collateral will be conditioned upon the
Debtor's compliance with the Budget, with the understanding that
the timing of revenue and expenses may vary from projections, and
with the allowed variance that the Debtor's aggregate disbursements
will be limited to 125% of projected aggregate disbursements in the
Budget.
The DIP Lender and/or Martin will be provided with adequate
protection to the extent of any diminution after the Petition Date
in their respective interest in cash collateral (if any) as of the
Petition Date, including the following:
(i) Through an increase in cash collateral from the Petition
Date during the relevant time period, as reflected in the Budget;
(ii) Through the Adequate Protection Liens and Continuing
Liens; and
(iii) To the extent the Adequate Protection Liens and Continuing
Liens are insufficient to cover the Adequate Protection Obligations
in their entirety, the remaining, unsatisfied Adequate Protection
Obligations due to the DIP Lender and Martin shall constitute
allowed administrative claims against the Debtor to the extent
provided by section 507(b) of the Bankruptcy Code.
These events constitute an "Event of Default":
(i) failure by the Debtor to pay principal, interest, or any
other amounts when due under the DIP Facility;
(ii) the chapter 11 case is dismissed or converted to a chapter
7 case;
(iii) the Debtor uses the proceeds of the DIP Facility in
violation of the Budget; or
(iv) the failure to satisfy any of the Sale Milestones.
The Sale Milestones are:
(i) The Bankruptcy Court must have entered an order approving
the Bid Procedures no later than five business days after the
Petition Date.
(ii) The Bankruptcy Court must have entered an order approving
and authorizing the Sale Transaction no later than 45 days after
the Petition Date.
(iii) The Sale Transaction has closed no later than 60 days
after the Petition Date.
A copy of the motion is available at https://urlcurt.com/u?l=uK0cfp
from PacerMonitor.com.
About Nicmar Industries
Nicmar Industries sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Me. Case No. 24-20006) on January 12,
2024. In the petition signed by Stephen J. Ray, its president and
trustee, the Debtor disclosed up to $1 million in assets and up to
$10 million in liabilities.
The Debtor has tapped Bernstein, Shur, Sawyer & Nelson, P.A. as
bankruptcy counsel and Dominion Management Services, LLC as
financial advisor.
NXT ENERGY: Closes Private Placement of $1.9M Debentures
--------------------------------------------------------
NXT Energy Solutions Inc. announced the closing of the private
placement of convertible debentures for a total of US$1,872,000
(approximately C$2,542,000).
The Debentures are convertible into common shares in the capital of
NXT at a conversion price of US$0.1808 (approximately C$0.25) per
Common Share, which provides the subscribers with the right to
obtain an aggregate of up to 10,353,982 Common Shares. Any Common
Shares issued upon the conversion of the respective Debentures will
be subject to a hold period of four months plus a day from the date
of issuance of the Debenture being so converted.
Insiders were issued Debentures valued, in the aggregate principal
amount, at US$1,522,000 (Approximately C$2,075,000) Debentures or
(81.3%) of the value of the total Debentures issued. The Company
has issued an aggregate principal amount of US$1,375,000
(approximately C$1,882,000) of the Debentures to MCAPM, LP and
Michael P. Mork ("Mork Capital"). Mork Capital will now have the
right to obtain an additional 7,605,088 Common Shares upon the
conversion of their Debentures. However, due to the current
shareholdings of Mork Capital in NXT, no conversion of Mork
Capital's Debentures can occur until approval of NXT's shareholders
is obtained. Mork Capital currently own an aggregate of 14,921,233
Common Shares, representing 19.12% of the currently issued and
outstanding Common Shares of NXT. With the acquisition of the
Debentures, Mork Capital will have the right to own, after
conversion of their Debentures, 22,526,321 Common Shares,
representing approximately 26.3% of the issued and outstanding
Common Shares. The Company has agreed to appoint a representative
from Mork Capital to its board of directors in the near future. In
addition, all six current directors of NXT participated in the
private placement by converting their outstanding director fees
payable as at Dec. 31, 2023 into Debentures valued, in the
aggregate principal amount, at US$147,000 (approximately
C$194,000). In connection with this issuance, the current
directors have the right to obtain, in the aggregate, up to 813,053
Common Shares.
The proceeds from the private placement of Debentures have been
used to support the working capital needs of the SFD survey in
Turkiye, and other general and administrative costs which include
business development and marketing activities required to transform
the existing pipeline of SFD opportunities into firm contracts.
The data acquisition phase of the Turkiye contract has been
completed and NXT is actively pursuing other prospects in the
country and region.
About NXT Energy
NXT Energy Solutions Inc. is a Calgary-based technology company
whose proprietary SFD survey system utilizes quantum-scale sensors
to detect gravity field perturbations in an airborne survey method
which can be used both onshore and offshore to remotely identify
areas with exploration potential for traps and reservoirs. The SFD
survey system enables the Company's clients to focus their
hydrocarbon exploration decisions concerning land commitments, data
acquisition expenditures and prospect prioritization on areas with
the greatest potential. SFD is environmentally friendly and
unaffected by ground security issues or difficult terrain and is
the registered trademark of NXT Energy Solutions Inc. NXT Energy
Solutions provides its clients with an effective and reliable
method to reduce time, costs, and risks related to exploration.
NXT Energy a net loss and comprehensive loss of C$6.73 million in
2022, a net loss and comprehensive loss of C$3.12 million in 2021,
a net loss and comprehensive loss of C$6.03 million in 2020. As of
March 31, 2023, the Company had C$15.24 million in total
assets, C$3.06 million in total liabilities, and C$12.18 million in
shareholders' equity.
Calgary, Canada-based KPMG LLP, the Company's auditor since 2006,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company's current and forecasted cash and
cash equivalents and short-term investments position are not
expected to be sufficient to meet its obligations which raises
substantial doubt about its ability to continue as a going concern.
OCEAN PARKWAY: Case Summary & Seven Unsecured Creditors
-------------------------------------------------------
Debtor: Ocean Parkway BH 26 LLC
2105 Ocean Parkway
Brooklyn, NY 11223
Business Description: Ocean Parkway is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)). The Debtor is the owner of real
property located at 2105 Ocean Parkway,
Brooklyn, NY 11223 having an appraised value
of $9.8 million.
Chapter 11 Petition Date: January 17, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-40210
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Jonathan S. Pasternak, Esq.
DAVIDOFF HUTCHER & CITRON LLP
605 Third Avenue
34th Floor
New York, NY 10158
Tel: 212 557 7200
Fax: 212 286 1884
Total Assets: $9,802,500
Total Liabilities: $5,387,703
The petition was signed by Salomao Laniado as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/QIG4BOA/Ocean_Parkway_BH_26_LLC__nyebke-24-40210__0001.0.pdf?mcid=tGE4TAMA
ORION TECHNOLOGIES: Lone Objection Resolved, Plan Confirmed
-----------------------------------------------------------
Judge Tiffany P Geyer has entered an order approving the Disclosure
Statement of Orion Technologies, LLC, on a final basis, and
confirming the Debtor's Plan in all respects.
The only objection to the Plan or Disclosure Statement was the
objection filed by Seth Ellis and Penta Orion LLC, which was
resolved prior to the Confirmation Hearing.
The property of the Debtor's estate, together with any property of
the Debtor that is not property of its estate and that is not
specifically disposed of pursuant to the Plan, shall revest in the
reorganized Debtor on the Effective Date. No property of the
Debtor's estate is being, or should be deemed to be, abandoned
pursuant to Section 554 of the Bankruptcy Code or otherwise.
Thereafter, the reorganized Debtor may operate its business and may
use, acquire, and dispose of property free of any restrictions of
the Bankruptcy Code, the Bankruptcy Rules, and this Court.
With regard to confirmation of the Plan and final approval of the
Disclosure Statement, the Court finds as follows:
* As a result of the Plan, the Allowed Claims of creditors of
the Debtor will receive at least as much as they would receive in a
Chapter 7 liquidation of the Debtor.
* The Plan is feasible.
* The Debtor will be able to meet all its obligations under the
Plan.
* The equity holders of the Debtor will not receive any equity
distribution until the Allowed Claims against the Debtor are paid
in full.
* The Plan has been proposed in good faith and is not by any
means forbidden by law.
* Confirmation of the Plan is not likely to be followed by
liquidation, except as provided in the Plan.
* The Plan does not discriminate unfairly, and is fair and
equitable, with respect to each class of claims and interests.
* No creditor entitled to vote on the Plan voted to reject the
Plan. Though for the purposes of voting on the Plan, Seth Ellis and
Penta Orion LLC were considered insiders, this Court makes no
binding factual finding or conclusion of law by virtue of this
Confirmation Order that they are or are not insiders as
contemplated in the Bankruptcy Code for the purposes of the
adversary proceeding pending as Case No. 23-00104-TPG.
* The Debtor solicited acceptances of the Plan in good faith and
in compliance with the applicable provisions of the Bankruptcy
Code, and any applicable non-bankruptcy law, rule or regulation
governing the adequacy of disclosure in connection with such
solicitation.
* The Debtor and its counsel (i) have acted in good faith in
negotiating, formulating, and proposing the Plan and any
agreements, compromises, settlements, transactions and transfers
contemplated thereby, and (ii) will be acting in good faith in
proceeding to (a) consummate the Plan and the agreements,
compromises, settlements, transactions, and transfers contemplated
thereby, and (b) take the actions authorized and directed or
contemplated by this Confirmation Order.
* Confirmation of the Plan is in the best interests of the
Debtor, its estate, its creditors, its equity security holders, and
all other parties in interest.
* The Debtor has met its burden of proving the elements of
Section 1129(a) of the Bankruptcy Code.
About Orion Technologies
Orion Technologies, LLC, is a technology company that specializes
in single board computers as well as full system design and
development. The company is based in Orlando, Fla.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 23-01867) on May 17, 2023, with
$2,047,840 in assets and $20,342,885 in liabilities.
Judge Tiffany P. Geyer oversees the case.
James C. Moon, Esq., at Melano Budwick, P.A. is the Debtor's legal
counsel.
PLOURDE SAND: Court OKs Cash Collateral Access Thru Feb 9
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire
authorized Plourde Sand & Gravel Co., Inc. to use cash collateral
on an interim basis, in accordance with the budget, through
February 9, 2024.
GreenLake Real Estate Fund, LLC, the Internal Revenue Service, and
other potential cash collateral lienholders will be allowed a
post-petition replacement lien in any property of the estate held
by such lienholder as collateral on the Petition Date, to the
extent that such a lien or security interest is not otherwise
extended under 11 U.S.C. Section 552(b)(2), in all postpetition
property of the estate, pursuant to valid, enforceable, and
perfected encumbrances, which will have and enjoy the same degree
of perfection, preference, and priority as their pre-petition
potential cash collateral liens enjoyed under applicable state law
on the Petition Date subject to further terms of the Order. The
Replacement Liens will maintain the same priority, validity and
enforceability as such pre-petition liens on the cash collateral,
but will be recognized only to the extent of any diminution in the
value of the property securing each record lienholder's claim on
the Petition Date.
The Debtor will continue to pay GreenLake its weekly adequate
protection payment of $5,000 and the IRS its weekly adequate
protection payment of $1,000, as it has been doing, each week
commencing January 17, 2024. These payments will continue pending
further order of the Court.
A final hearing on the matter is set for February 7 at 2 p.m.
A copy of the order is available at https://urlcurt.com/u?l=aKUXZ6
from PacerMonitor.com.
About Plourde Sand & Gravel Co., Inc.
Plourde Sand & Gravel Co., Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. N.H. Case No. 24-10015) on
January 9, 2024. In the petition signed by Daniel O. Plourde, sole
shareholder and vice president, the Debtor disclosed up to $10
million in both assets and liabilities.
Judge Bruce A. Harwood oversees the case.
Eleanor Wm. Dahar, Esq., at VICTOR W. DAHAR PROFESSIONAL
ASSOCIATION, represents the Debtor as legal counsel.
PRUDENT AMERICAN: Court OKs Cash Collateral Access Thru Mar 1
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, authorized Prudent American Technologies, Inc. to
use cash collateral on an interim basis, in accordance with the
budget, with a 10% variance, through March 1, 2024.
The Debtor requires the use of cash collateral to pay its direct
operating expenses and obtain goods and services needed to carry on
its business.
As adequate protection, the Secured Creditors are granted valid,
binding, enforceable, and perfected replacement liens of the same
extent, validity, priority, and perfection as their pre-petition
security interests and liens in all currently owned or hereafter
acquired property and assets of the Debtor.
As additional adequate protection, to the extent the liens and
security interests in granted prove insufficient to secure any
diminution in value of a Secured Creditor's interest in its
collateral, such Secured Creditor is granted a superpriority
administrative expense claim pursuant to 11 U.S.C. section 507(b)
to compensate such Secured Party for any such diminution in value.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=mm8zue from PacerMonitor.com.
The Debtor projects total operating cash disbursements, on a weekly
basis, as follows:
$261,823 for the week ending January 19, 2024;
$258,017 for the week ending January 26, 2024;
$297,598 for the week ending February 2, 2024;
$263,552 for the week ending February 9, 2024; and
$248,552 for the week ending February 16, 2024.
About Prudent American Technologies
Prudent American Technologies, Inc. filed voluntary Chapter 11
petition (Bankr. E.D. Texas Case No. 23-41959) on Oct. 17, 2023,
with up to $50,000 in assets and $10 million to $50 million in
liabilities. Jay Rigby, interim president and chief executive
officer, signed the petition.
Judge Brenda T. Rhoades oversees the case.
Howard Marc Spector, Esq. at Spector & Cox, PLLC represents the
Debtor as legal counsel.
RACKSPACE TECHNOLOGY: Promotes Mark Marino to CFO
-------------------------------------------------
Rackspace Technology announced the appointment of Mark Marino as
chief financial officer, effective immediately. Marino previously
served as the Company's chief accounting officer and succeeds
Naushaza "Bobby" Molu. Molu resigned his position to pursue a new
opportunity in the UK, where he resides. He will remain with
Rackspace Technology in an advisory role through late February to
ensure a seamless transition.
"I am delighted to welcome Mark as our CFO," said Amar Maletira,
chief executive officer. "Having worked with Mark since I joined
Rackspace, I have witnessed firsthand what a strong asset he is to
our company. Mark's comprehensive understanding of the business
and extensive financial leadership experience will continue to be
instrumental as we strengthen our position in an attractive and
growing hybrid multicloud and AI market. I look forward to
collaborating with Mark as we continue to execute on our strategy
and deliver value to our shareholders."
Marino joined Rackspace Technology as Vice President, Americas CFO
in 2020 and was promoted to chief accounting officer in late 2021.
Prior to joining the company, Marino served as Vice President of
Finance for Acelity, a leading global medical technology company
acquired by 3M, from 2015 to 2020. Prior to Acelity, Marino was
Vice President, Finance at iHeartMedia and head of Corporate FP&A
at SunEdison, Inc. He began his career at General Electric as a
graduate of the Financial Management Program (FMP) and spent nearly
10 years there in a variety of key financial leadership roles
across manufacturing, supply chain, business development, FP&A and
as Segment CFO for GE Aviation. Marino holds a BA from DePauw
University and an MBA from Baylor University.
"It is a privilege to move into the role of CFO at this exciting
time for Rackspace Technology," said Marino. "We have made
significant progress on our transformation, having fully
implemented a new operating model over the past year, unveiled
innovative AI capabilities and rolled out unique, tailored
solutions for customers across our Private Cloud and Public Cloud
businesses. I look forward to working more closely with Amar and
the leadership team to execute on our strategy and continuing to
drive operating efficiency and profitable growth."
"The Board and management team would like to thank Bobby for his
leadership over the past year," added Maletira. "I am personally
grateful for his partnership and contributions, and we wish him the
best in his future endeavors."
According to the Company. Molu's resignation is not the result of
any dispute or disagreement with the Company or the Board on any
matter relating to the operations, policies, or practices of the
Company.
In connection with his appointment as chief financial officer, Mr.
Marino and the Company entered into an amended and restated
employment agreement. Pursuant to the terms of the Employment
Agreement, Mr. Marino will receive (i) an annual base salary of
$530,000, (ii) a signing bonus in the amount of $200,000, and (iii)
retention equity grants in the form of restricted stock units
("RSUs") and performance stock units ("PSUs") valued at $3,000,000
and $1,000,000, respectively. The number of shares subject to the
RSUs and PSUs shall be determined by dividing each value by a
30-trading day volume-weighted average market closing price. The
equity awards are expected to vest over three years, subject to Mr.
Marino's continued employment and the additional terms and
conditions in the applicable award agreements and the 2020
Rackspace Technology, Inc. Equity Incentive Plan. Mr. Marino will
be eligible for annual equity awards beginning in 2025. Mr. Marino
will also be eligible to participate in the Company's annual cash
bonus plan with a target annual bonus amount equal to 85% of his
annual base salary.
Outlook
Concurrently with the foregoing announcement, Rackspace Technology
reaffirms its financial guidance for the fourth quarter 2023, as
provided in a press release issued on Nov. 7, 2023.
About Rackspace Technology
Headquartered in San Antonio, Texas, Rackspace Technology, Inc. --
www.rackspace.com -- is an end-to-end multicloud technology
services company. The Company designs, builds, and operates its
customers' cloud environments across all major technology
platforms, irrespective of technology stack or deployment model.
The Company partners with its customers at every stage of their
cloud journey, enabling them to modernize applications, build new
products and adopt innovative technologies.
Rackspace reported a net loss of $804.8 million in 2022, a net loss
of $218.3 million in 2021, and a net loss of $245.8 million in
2020. As of June 30, 2023, the Company had $4.66 billion in total
assets, $4.63 billion in total liabilities, and $31.9 million in
total stockholders' equity.
* * *
As reported by the TCR on May 18, 2023, S&P Global Ratings lowered
its issuer credit rating on Rackspace to 'CCC+' from 'B-' and
revised the outlook to negative from stable. S&P said the negative
outlook reflects the rising risk of distressed exchange by the
company from further EBITDA margin degradation and free cash flows
sustaining negative.
RAPID7 INC: Appoints Scott Murphy as Senior VP, CAO
---------------------------------------------------
Rapid7, Inc. announced the appointment of Scott Murphy, 43, as its
new senior vice president, chief accounting officer, effective on
March 4, 2024. Upon the commencement of his employment with the
Company, Mr. Murphy will assume the duties of the Company's
principal accounting officer. Mr. Murphy most recently served as
vice president, chief accounting officer and controller at Booz
Allen Hamilton Inc. since February 2022. He joined Booz Allen
Hamilton Inc. as Corporate Controller in May 2021. Prior to that,
Mr. Murphy held various roles at Iron Mountain Inc., including Vice
President, Americas Controller, from December 2019 through May 2021
and Vice President, Global Controller, from June 2018 through
December 2019. He began his career in public accounting at Ernst &
Young LLP. Mr. Murphy received an MSA and BSBA in Accounting from
Bryant University and is a Certified Public Accountant.
In connection with his appointment, on Jan. 7, 2024, Mr. Murphy and
the Company entered into an offer letter, pursuant to which Mr.
Murphy will receive an annual base salary of $370,000 and be
eligible to earn an annual bonus equal to 50% of his base salary
subject to the Company's executive bonus plan then in effect,
prorated from his start date. Mr. Murphy will also receive a
one-time cash sign-on bonus of $75,000, less applicable
withholdings or taxes, which must be repaid in full (net of any
withholding taxes) if his employment is terminated for cause (as
defined in the Offer Letter) or he voluntarily resigns during his
first year of employment. Mr. Murphy is also eligible to
participate in the Company's employee benefit plans, as may be
maintained by the Company from time to time, on the same terms as
other similarly situated employees of the Company.
Under the Offer Letter, Mr. Murphy is eligible to receive a
restricted stock unit award with an approximate value of $800,000,
with the underlying number of shares of common stock for such award
determined using the 30-trading day average closing price through
and including the date of grant, pursuant to the terms and
conditions of the Company's 2015 Equity Incentive Plan, as amended,
and the applicable award agreement thereunder. The award will vest
over a three-year period with 1/3 of the award vesting on April 15,
2025, with quarterly vesting thereafter, subject to Mr. Murphy's
continued service on each such vesting date.
In connection with his appointment, on Jan. 7, 2024, Mr. Murphy and
the Company also entered into a Severance and Equity Award Vesting
Acceleration Letter, which provides for severance payments and
benefits summarized as follows: in the case of a termination of Mr.
Murphy's employment either (x) by the Company without cause (as
defined in the Plan) or (y) by Mr. Murphy for good reason, Mr.
Murphy will be entitled to: (i) continued payment of base salary
for three months following termination of employment and (ii)
payment of premiums for continued health benefits under COBRA for
up to three months. If a Qualifying Termination occurs within
three months prior to or 12 months following a change in control of
the Company, then Mr. Murphy will be entitled to: (i) continued
payment of base salary for 6 months following termination of
employment, (ii) payment of premiums for continued health benefits
under COBRA for up to 6 months, (iii) 50% of Mr. Murphy's target
performance bonus for the year in which the termination of
employment occurs, and (iv) accelerated vesting of all of Mr.
Murphy's equity awards then outstanding on such date of termination
of employment (or, in the event that any outstanding award is not
assumed or substituted by the successor or acquiror entity in such
change in control, upon and subject to the consummation of such
change in control).
The Company plans to enter into an indemnification agreement with
Mr. Murphy in connection with his appointment.
Effective upon commencement of Mr. Murphy's employment at the
Company on March 4, 2024, Tim Adams, the Company's chief financial
officer, will cease to serve as the Company's principal accounting
officer.
About Rapid7
Rapid7 (Nasdaq: RPD) is on a mission to create a safer digital
world by making cybersecurity simpler and more accessible. The
Company empowers security professionals to manage a modern attack
surface through its best-in-class technology, leading-edge
research, and broad, strategic expertise.
Rapid7 reported a net loss of $124.72 million in 2022, a net loss
of $146.33 million in 2021, a net loss of $98.85 million in 2020, a
net loss of $53.84 million in 2019, and a net loss of $55.54
million in 2018. Rapid7 incurred a net loss of $169.31 million net
loss in the nine months ended Sept. 30, 2023. As of Sept. 30,
2023, the Company had $1.40 billion in total assets, $1.56 billion
in total liabilities, and a total stockholders' deficit of $161.64
million.
Egan-Jones Ratings Company on October 10, 2023, maintained its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Rapid7, Inc.
RGV PUMP: Wins Cash Collateral Access on Final Basis
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The U.S. Bankruptcy Court for the Southern District of Texas,
Brownsville Division, authorized RGV Pump & Equipment LLC to use
cash collateral on a final basis, in accordance with the budget,
with a 10% variance.
The U.S. Small Business Administration, OnDeck Capital, PIRS
Capital, and IOU Financial assert an interest in the Debtor's cash
collateral.
As adequate protection for the use of cash collateral, all
creditors are granted replacement liens on all post-petition cash
collateral and post-petition acquired property to the same extent,
validity, and priority they possessed as of the Petition Date. The
Replacement Liens will be deemed automatically valid and perfected
with such priority as provided in the Order without any further
notice or act by any party that may otherwise be required under any
other law.
Other holders of allowed secured claims with a perfected security
interest in cash collateral, if any, will be entitled to a
replacement lien in postpetition accounts receivable, contract
rights, and deposit accounts to the same extent allowed and in the
same priority as those interests held as of the Petition Date.
The adequate protection liens in cash collateral are subject in all
respects to the carve out in an amount equal to the sum of (i) all
fees required to be paid Subchapter V Trustee, or the United States
Trustee under Section 1930(a) of title 28 of the United States Code
plus interest at the statutory rate; (ii) all reasonable fees,
costs, and expenses incurred by a trustee under 11 U.S.C. Section
726(b) in an amount not exceeding $15,000; and (iii) to the extent
allowed by the Court on an interim or final basis at any time, all
unpaid fees, costs, and expenses of the professionals retained by
the Debtor under 11 U.S.C. Section 327.
A copy of the order is available at https://urlcurt.com/u?l=nnwUGO
from PacerMonitor.com.
About RGV Pump & Equipment LLC
RGV Pump & Equipment LLC established in San Benito, TX in March
2008, is a provider of solutions for automotive & commercial
trucks, and industrial equipment. Its services include lubricant
delivery, waste oil removal, equipment servicing, and fueling.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-10223) on December
12, 2023. In the petition signed by Eliud George, managing member,
the Debtor disclosed $329,021 in assets and $1,690,466 in
liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Robert C. Lane, Esq., at the Lane Law Firm, represents the Debtor
as legal counsel.
RINCHEM CO: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR
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S&P Global Ratings revised its outlook on Rinchem Co. LLC to stable
from negative and affirmed its 'CCC+' issuer credit rating.
S&P said, "At the same time, we affirmed our 'CCC+' issue-level
rating and '3' recovery rating on Rinchem's senior secured
first-lien facilities. We revised the rounded estimate to 50% from
55%.
The stable outlook reflects improved availability under Rinchem's
revolving credit facility that we deem sufficient to cover the
negative free cash flow expected in 2024 and 2025, largely
precluding a credit or payment crisis.
"Incremental debt issuance has relieved Rinchem's liquidity
constraints, but free cash flow concerns remain. We estimate the
company will report about $12 million-$15 million cash balances and
have full availability under its $35 million revolving credit
facility at the end of fiscal 2023. We believe the added liquidity
will be necessary to support expected reported free operating cash
flow (FOCF) deficits of about $20 million-$25 million in 2024 and
about $5 million-$10 million in 2025. However, this is
significantly better than our October 2023 estimate that increasing
revolver utilization would lead to negligible availability by the
end of fiscal 2023. Assuming Rinchem maintains a minimum cash
balance of $5 million on its books for 2024 and 2025, we expect
revolver utilization to increase to $15 million-$20 million by the
end of 2024 and $25 million-$30 million by the end of 2025 to cover
the cash flow shortfalls.
"We expect Rinchem's 2024 revenue to increase by low-double-digit
percents, driven by increasing volumes. Rinchem's high dependency
on semiconductor chip production volumes will be a benefit in 2024,
we expect, as paring of excess inventory at chip manufacturers is
almost complete and chip production increases for the year. After
declining in 2023, we estimate the semiconductor industry will
expand in the low-teens percent area in 2024, increasing demand for
Rinchem's warehousing and freight forwarding services. We estimate
about 10%-12% volume growth across Rinchem's business segments
while price increases in its warehousing segment further support
revenue growth.
"Moreover, we also factor in the incremental revenue contributions
from Rinchem's new facilities in Malaysia and Cornelius, Ore.,
completed in 2023 and the expected commencement of operations at
its Surprise, Ariz., facility in 2024. We expect these factors to
increase revenue by a mid-teens percent in 2024 on a pro forma
basis. After factoring in the revenue loss from its 2023 sale of a
business division in Taiwan, we estimate 11%-12% revenue growth in
2024 on a reported basis. As volumes ramp up further in recently
commissioned facilities in 2025, we expect Rinchem's revenues to
expand in the high-single-digit percent area in 2025.
"We expect normalization in ocean container shipping rates from
records during the worst of the COVID-19 pandemic to reduce
Rinchem's gross profit about $20 million-$25 million in 2023. We
expect volume growth in 2024 and 2025 to offset some declines,
supported further by price increases in the warehousing segment.
Although the recent disruptions in ocean routes pertaining to the
Red Sea and drought in the Panama Canal may provide some uplift to
ocean shipping rates, we do not expect these to materially benefit
Rinchem. We expect Rinchem to maintain its EBITDA margins for 2023,
albeit at significantly lower revenue (down 35% from 2022 revenue)
as they benefit from an increased proportion of higher-margin
warehousing segment. We expect EBITDA margins to improve to
19%-19.5% in 2024 and 2025 as the warehousing segment's proportion
increases further from the new facilities' incremental
contribution.
"We expect the company's reported free cash flow shortfall to
continue for a protracted period. S&P Global Ratings estimates
Rinchem's reported free cash flow for 2024 at about a $20
million-$25 million deficit, an improvement of about $8 million-$10
million over 2023. This stems from volume-driven growth in revenue
and profitability in 2024, increasing EBITDA $10 million-$12
million over 2023. However, we expect some use of cash for working
capital arising from higher revenue in 2024 to offset this.
Nonetheless, Rinchem's free cash flow will benefit from some
reduction in capital expenditure (capex) during 2024 and 2025,
which we expect to stabilize somewhat lower than 2023. Growth capex
was elevated during 2022 and 2023 to support new builds at
Cornelius and Malaysia. We expect lower capex for new builds at
Surprise and other smaller projects.
"Our 2024 free cash flow estimates reflect the final tranche of
Rinchem's $8 million earnout related expenses (also incurred in
2023). Absence of this expense in 2025 along with further volume
growth driven profitability improvement, we estimate free cash flow
to improve but remain weak at a $5 million–$10 million deficit.
"Our capex estimates do not yet factor in requirements for
Rinchem's Ohio facility, the construction for which is expected to
begin in late 2024. However, we continue to believe that the
company's financial sponsor, Stonepeak Infrastructure Partners,
could support Rinchem as needed with growth capital spending.
"The stable outlook reflects improved availability under Rinchem's
revolving credit facility that we deem sufficient to cover the
negative free cash flow expected in 2024 and 2025. As semiconductor
volumes start to recover in 2024 and new projects ramp up, we
expect Rinchem's credit metrics to improve marginally from 2023,
with leverage staying above 8x for 2024 and 2025 and funds from
operations (FFO) to debt staying in the low- to mid-single-digit
percent area."
S&P could lower its ratings on Rinchem if it believes it will
default or enter into a distressed exchange offer over the next 12
months in the absence of an unforeseen positive development, likely
due to a liquidity crisis. This could occur if:
-- Weaker semiconductor demand reduces volumes handled or freight
rates do not recover for a prolonged period, resulting in a larger
cash flow shortfall; or
-- The availability under its revolving credit facility becomes
restricted, either because of a covenant violation or a
larger-than-expected draw.
Although unlikely over the next 12 months, S&P could raise its
ratings on Rinchem if:
-- It improves its earnings such that S&P views its capital
structure as sustainable; and
-- S&P expects it to generate consistent positive reported FOCF of
at least $10 million-$12 million annually.
RISKON INTERNATIONAL: Violates Nasdaq's Voting Rights Rule
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RiskOn International, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on Jan. 9, 2024, it
received a letter from the Listing Qualifications staff of the
Nasdaq Stock Market LLC notifying the Company that the Staff has
determined that the Company has violated Nasdaq's voting rights
rule set forth in Listing Rule 5640.
The alleged violation of the Voting Rights Rule relates to the
issuance of 603.44 shares of newly designated Series D Convertible
Preferred Stock of the Company in exchange for the cancellation of
$15,085,930.69 of cash advances made by Ault Alliance, Inc. ("AAI")
to the Company between January 1 and Nov. 9, 2023, pursuant to the
Securities Purchase Agreement by and between the Company and AAI.
The terms of the Preferred Stock are as set forth in the
Certificates of Designations of the Rights, Preferences and
Limitations of the Series D Convertible Preferred Stock. Each
share of Preferred Stock has a stated value of $25,000 per share.
Pursuant to the Certificate, each share of Preferred Stock is
convertible into a number of shares of the Company's common stock
determined by dividing the Stated Value by $0.51. The Conversion
Price, which represented a premium to the closing price of the
Common Stock on the date of execution of the Agreement, is also
subject to adjustment in the event of an issuance of Common Stock
at a price per share lower than the Conversion Price then in
effect. Each share of Preferred Stock is entitled to vote, on an
as-converted basis, with the Common Stock at a rate of 0.9 votes
per share of Common Stock into which the Preferred Stock is
convertible.
According to the Letter, Nasdaq determined that because the
Preferred Stock could convert into a discount to the price of the
Common Stock on the date of execution of the Agreement, and because
the Preferred Stock votes on an as-converted basis, the Preferred
Stock violates the Voting Rights Rule. The Company notes that the
violation is based on a hypothetical situation in the future, in
which the anti-dilution protection triggers a ratchet down of the
Conversion Price below the minimum price per share of the Company's
common stock at the time of the issuance of the Preferred Stock.
Under the Voting Rights Rule, a company cannot create a new class
of security that votes at a higher rate than an existing class of
securities or take any other action that has the effect of
restricting or reducing the voting rights of an existing class of
securities. As such, according to the Letter, the issuance of the
Preferred Stock violated the Voting Rights Rule because the holders
of the Preferred Stock are entitled to vote on an as-converted
basis, thus could have greater voting rights than holders of common
stock.
As previously disclosed, the Company has appealed a prior
determination of the Staff to delist the Company's Common Stock to
a Hearings Panel. The Panel will hear the Company's appeal on
Feb. 29, 2024. According to the Letter, this matter serves as an
additional basis for delisting the Company's Common Stock from the
Nasdaq. Further, according to the Letter, because this is the
Company's third incidence of violating the Voting Rights Rule, this
demonstrates a pattern of disregard for the Nasdaq listing rules
and serves as an additional basis for delisting the Company's
Common Stock from the Nasdaq. As such, the Panel will consider
these matters in connection with the Company's appeal.
The Letter has no immediate impact on the listing of the Company's
Common Stock, which will continue to be listed and traded on The
Nasdaq Capital Market, subject to the Company's compliance with the
Letter and other continued listing requirements of The Nasdaq
Capital Market.
About RiskOn International
Founded in 2011, RiskOn International, Inc. (formerly known as
BitNile Metaverse, Inc.) owns 100% of BNC, including the
BitNile.com metaverse platform. The Platform, which went live to
the public on March 1, 2023, allows users to engage with a new
social networking community and purchase both digital and physical
products while playing 3D immersive games. In addition to BNC, the
Company also owns two non-core subsidiaries: approximately 66% of
Wolf Energy Services Inc. (OTCQB: WOEN) indirectly and
approximately 89% of Agora Digital Holdings, Inc. directly. RiskOn
also owns approximately 70% of White River Energy Corp (OTCQB:
WTRV).
RiskOn reported a net loss of $87.36 million on zero revenue for
the year ended March 31, 2023, compared to a net loss of $10.55
million on $27,182 of revenues for the year ended March 31, 2022.
As of Sept. 30, 2023, the Company had $16.80 million in total
assets, $35.86 million in total liabilities, and a total
shareholders' deficit of $19.05 million.
In its Quarterly Report for the three months ended Sept. 30, 2023,
RiskOn said there is substantial doubt about its ability to
continue as a going concern. The Company believes that the current
cash on hand is not sufficient to conduct planned operations for
one year from the issuance of the condensed consolidated financial
statements, and it needs to raise capital to support its
operations.
RITE AID: A&G Real to Market Additional Tranche of Store Leases
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A&G Real Estate Partners, in its capacity as real estate advisor to
Rite Aid Corporation, on Jan. 16, 2024, announced plans to market
for sale an additional tranche of neighborhood pharmacy leases and
fee-owned properties, pending approval by the U.S. Bankruptcy Court
for the District of New Jersey.
Eight additional store leases will be made available in private
sales, pending court approval, in Washington, Pennsylvania (two
stores), New York, New Hampshire, Maryland, Massachusetts and
California. A&G also announced plans to market newly available,
fee-owned buildings and land in Washington state and California, as
well as a land-only parcel in Ashtabula, Ohio. The fee-owned
properties in Washington and California boast large parking lots
with easements to adjacent retail centers/anchors.
"In all, we are marketing 24 fee-owned properties, including both
land parcels and stores, in these private sales, and 55 new and
previously announced retail leases," said Mike Matlat, a Senior
Managing Director and real estate sales veteran at New York-based
A&G. "It's a tremendous opportunity for operators and investors."
Rite Aid is working collaboratively with its financial stakeholders
to reduce its debt and better position its business for long-term
success. As part of this process, the Company continues to assess
its property portfolio and may close additional stores to optimize
its real estate footprint and improve its overall financial
performance.
Including options, all leases being marketed by Rite Aid -- the
third-largest drugstore chain in the United States -- boast more
than 10 years of remaining term. The new and previously announced
offerings include freestanding stores as well as those in strip
centers, power centers and central business districts.
"The majority of the available stores offer drive-thru lanes--an
important benefit for the QSR and other operators that are
interested in these high-visibility locations," noted Todd Eyler,
an A&G Senior Managing Director and leader of the firm's valuation
practice. "Retailers and investors should stay tuned for further
announcements, as A&G may be marketing additional Rite Aid leases,
pending court approval and the outcome of ongoing negotiations
between A&G and landlords."
For additional details, visit https://www.agrep.com/rite-aid and/or
contact Mike Matlat, (631) 465-9508, mike@agrep.com, or Todd Eyler,
(914) 325-1602, todd@agrep.com.
Media Contacts: At Jaffe Communications, Elisa Krantz, (908)
789-0700, elisa@jaffecom.com.
About Rite Aid Corp.
Rite Aid -- http://www.riteaid.com/-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15, 2023. In
the petition signed by Jeffrey S. Stein, chief executive officer
and chief restructuring officer, Rite Aid disclosed $7,650,418,000
in total assets and $8,597,866,000 in total liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, and Alvarez & Marsal North America, LLC, as financial, tax
and restructuring advisor. Kroll Restructuring Administration is
the claims and noticing agent.
ROUGH BUYER: Moody's Lowers First Lien Bank Loans to 'B2'
---------------------------------------------------------
Moody's Investors Service affirmed RC Buyer, Inc.'s ("Rough
Country") B2 corporate family rating and B2-PD probability of
default rating. Moody's downgraded the rating on the company's
senior secured first lien bank credit facilities to B2 from B1.
Moody's also affirmed the Caa1 senior secured second lien term loan
rating. The outlook is maintained at stable.
The affirmation of the B2 CFR reflects Rough Country's steady
earnings and consistent free cash flow despite concerns of slower
revenue growth over the next twelve months.
The downgrade of the rating on the first lien credit facilities,
which consist of a revolver and a first lien term loan, reflects
the elimination of the loss absorption within the capital structure
that had been provided by the second lien term loan. Proceeds from
a proposed $100 million incremental first lien term loan will be
used to repay a portion of the company's second lien term loan.
First lien debt now represents the preponderance of the obligations
in Rough Country's capital structure.
RATINGS RATIONALE
Rough Country's ratings reflect its moderate scale with favorable
brand recognition, strong profit margins, and good liquidity
supported by solid free cash flow. Rough Country maintains a
competitive position within the discretionary segment of truck and
Jeep aftermarket accessories. Moody's believes Rough Country's
products face high demand risk should consumer sentiment wane and
disposable income decreases. Nonetheless, Moody's expects Rough
Country's revenue to increase at least 5% in 2024 as the company
expands its non-suspension product categories.
Financial leverage remains high with debt/LTM EBITDA slightly above
6x as of September 30, 2023. Moody's expects debt/EBITDA to trend
toward the mid-5x range in 2024 through a combination of moderate
earnings growth and debt repayment through free cash flow. Rough
Country has a demonstrated track record of reducing leverage, but
higher costs in recent years have stalled earnings growth.
Rough Country is expected to maintain good liquidity. The company
consistently generates solid free cash flow, which is reflective of
its high quality earnings, efficient working capital management and
low capital expenditure requirements. Moody's expects Rough Country
to generate free cash flow as a percentage of debt of at least 5%
in 2024 and to deploy a majority of this cash flow toward debt
repayment. As a result, Moody's expects Rough Country to maintain a
moderate amount of cash.
The stable outlook reflects Moody's view that Rough Country will
steadily grow earnings and generate good free cash flow in 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Rough Country substantially
increases its scale and product diversification while maintaining
its high level of profitability. In addition, a more conservative
financial policy that would sustain debt/EBITDA below 4x could
support an upgrade.
The ratings could be downgraded if Rough Country's organic revenue
growth stalls or earnings materially weaken from historical levels.
Debt/EBITDA expected to remain above 6x or a deterioration in
liquidity, including an extended period of limited availability
under the revolving credit facility or sharply weaker free cash
flow, could prompt a downgrade of the ratings.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
Headquartered in Dyersburg, Tennessee, Rough Country is a US
focused manufacturer of aftermarket performance suspension products
and accessories. The company provides lift and leveling kits,
shocks and stabilizers, and accessories primarily for truck, SUV
and Jeep models. Rough Country is majority owned by private equity
firm TSG Consumer Partners, LLC. Revenue for the twelve months
ended September 30, 2023 was approximately $465 million.
SEMILEDS CORP: Incurs $596K Net Loss in First Quarter
-----------------------------------------------------
SemiLEDs Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $596,000 on $1.65 million of net revenues for the three months
ended Nov. 30, 2023, compared to a net loss of $509,000 on $1.69
million of net revenues for the three months ended Nov. 30, 2022.
As of Nov. 30, 2023, the Company had $13.16 million in total
assets, $12.41 million in total liabilities, and $750,000 in total
equity.
The Company suffered losses from operations of $3.4 million and
$3.2 million and used net cash in operating activities of $984,000
and $1.5 million for the years ended Aug. 31, 2023 and 2022,
respectively. The Company said these facts and conditions raise
substantial doubt about its ability to continue as a going concern,
even though gross profit on product sales was $1.0 million for the
year ended Aug. 31, 2023 compared to $1.4 million for the year
ended Aug. 31, 2022. On Nov. 30, 2023, the Company's cash and cash
equivalents had decreased to $2.3 million compared to $4.5 million
on Nov. 30, 2022. Further, loss from operations for the three
months ended November 30, 2023 and 2022 was $819,000 and $654,000,
respectively. Management believes that it has developed a
liquidity plan that, if executed successfully, should provide
sufficient liquidity to meet the Company's obligations as they
become due for a reasonable period of time, and allow the
development of its core business.
* Gaining positive cash-inflow from operating activities through
continuous cost reductions and the sales of new higher margin
products. Steady growth of module products and the continued
commercial sales of its UV LED product are expected to improve the
Company's future gross margin, operating results and cash flows.
The Company is targeting niche markets and focused on product
enhancement and developing its LED product into many other
applications or devices.
* Continuing to monitor prices, work with current and potential
vendors to decrease costs and, consistent with its existing
contractual commitments, may possibly decrease its activity level
and capital expenditures further. This plan reflects its strategy
of controlling capital costs and maintaining financial
flexibility.
* Raising additional cash through further equity offerings,
including sales through an at-the-market, or ATM, program, sales of
assets and/or issuance of debt as considered necessary and looking
at other potential business opportunities.
"While the Company's management believes that the measures
described in the above liquidity plan will be adequate to satisfy
its liquidity requirements for the twelve months after the date
that the financial statements are issued, there is no assurance
that the liquidity plan will be successfully implemented. Failure
to successfully implement the liquidity plan may have a material
adverse effect on its business, results of operations and financial
position, and may adversely affect its ability to continue as a
going concern," SemiLeds said.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1333822/000095017024004103/leds-20231130.htm
About SemiLEDs
Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs --
http://www.semileds.com-- develops and manufactures LED chips and
LED components for general lighting applications, including street
lights and commercial, industrial, system and residential lighting,
along with specialty industrial applications such as ultraviolet
(UV) curing, medical/cosmetic, counterfeit detection, horticulture,
architectural lighting and entertainment lighting.
Diamond Bar, California-based KCCW Accountancy Corp., the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 27, 2023, citing that the Company incurred
recurring losses from operations and has an accumulated deficit,
which raises substantial doubt about its ability to continue as a
going concern.
STAFFING 360: Baker Tilly Resigns; RBSM LLP Named New Auditor
-------------------------------------------------------------
Staffing 360 Solutions, Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that Baker Tilly
US, LLP resigned as independent registered public accounting firm
of the Company, effective as of January 9, 2024. The Audit
Committee of the Board of Directors of the Company accepted Baker
Tilly's resignation on January 9, 2024.
The report of Baker Tilly on the Company's consolidated financial
statements for the year ended December 31, 2022, did not contain an
adverse opinion or a disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope, or accounting principles,
except that Baker Tilly's report dated May 19, 2023, contained an
explanatory paragraph stating there was substantial doubt about the
Company's ability to continue as a going concern. Baker Tilly was
first appointed on August 26, 2022, as the Company's independent
registered public accounting for the fiscal year ended December 31,
2022, and did not audit the Company's financial statements for the
fiscal year ended January 1, 2022, or any prior period.
During the two most recent fiscal years, ended December 30, 2023,
and December 31, 2022, and the subsequent interim period through
January 9, 2024, there were no disagreements (as defined in Item
304(a)(1)(iv) of Regulation S-K of the Securities Exchange Act of
1934, as amended ("Regulation S-K") and the related instructions to
Item 304 of Regulation S-K) with Baker Tilly on any matter of
accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of Baker Tilly, would have caused
Baker Tilly to make reference to the subject matter of the
disagreements in connection with its reports on the Company's
consolidated financial statements for such years. Also during this
time, there were no "reportable events," as defined in Item
304(a)(1)(v) of Regulation S-K, except to note for the year ended
December 31, 2022, and for each of the quarters ended April 1,
2023, July 1, 2023, and September 30, 2023, that management
identified a material weakness in the Company's (i) internal
control over financial reporting related to the lack of sufficient
number of competent finance personnel to appropriately account for,
review and disclose the completeness and accuracy of transactions
entered into by the Company and (ii) design and operating
effectiveness over forecasts used in the Company's goodwill
impairment evaluation.
On January 12, 2024, the Audit Committee engaged RBSM LLP as the
Company's independent registered public accounting firm for the
fiscal year ending December 28, 2024, effective immediately. In
connection with the engagement, RBSM will prepare the report on the
Company's consolidated financial statements for the year ended
December 30, 2023. During the fiscal years ended December 30, 2023,
and January 1, 2022, and the subsequent interim period through
January 12, 2024, neither the Company nor anyone on its behalf has
consulted with RBSM regarding (i) the application of accounting
principles to any specified transaction, either completed or
proposed or the type of audit opinion that might be rendered on the
Company's consolidated financial statements, and neither a written
report nor oral advice was provided to the Company that RBSM
concluded was an important factor considered by the Company in
reaching a decision as to any accounting, auditing, or financial
reporting issue, or (ii) any matter that was either the subject of
a "disagreement," as defined in Item 304(a)(1)(iv) of Regulation
S-K, or a "reportable event," as defined in Item 304(a)(1)(v) of
Regulation S-K.
About Staffing 360 Solutions
New York, NY-based Staffing 360 Solutions, Inc. was incorporated in
the State of Nevada on December 22, 2009, as Golden Fork
Corporation, which changed its name to Staffing 360 Solutions,
Inc., ticker symbol "STAF," on March 16, 2012. STAF is a
high-growth international staffing company engaged in the
acquisition of U.S. and U.K. based staffing companies. As part of
its consolidation model, the Company pursues a broad spectrum of
staffing companies supporting primarily the Professional and
Commercial Business Streams. The model is based on finding and
acquiring suitable, mature, profitable, operating, domestic and
international staffing companies focused specifically on the
accounting and finance, information technology, engineering,
administration and light industrial disciplines.
As of September 30, 2023, the Company had $80,555,000 in total
assets, $72,021,000 in total liabilities, and $8,534,000 in total
stockholders' equity.
In the quarterly report for the period ended September 30, 2023,
the Company disclosed that its negative working capital and
liquidity position combined with the uncertainty generated by the
economic reaction to COVID-19 and its ongoing effects contribute to
substantial doubt about the Company's ability to continue as a
going concern.
STAFFING 360: Melanie Grossman Named Principal Accounting Officer
-----------------------------------------------------------------
Staffing 360 Solutions, Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that the Board of
Directors appointed Melanie Grossman, Senior Vice President,
Controller, as the principal accounting officer of the Company,
effective as of January 9, 2024.
Melanie Grossman joined the Company in November 2023. Grossman is a
CPA with 35 years of accounting and finance experience within the
financial and medical device industries. Most recently, Grossman
was the Director, Controller of Vaxxinity, Inc., a biotechnology
company, from May 2022 through November 2023. Previously, Grossman
was the Controller at Byram Healthcare, an Owens & Minor subsidiary
from October 2016 through January 2022. Grossman graduated from the
University of Buffalo in Buffalo, NY with a Bachelor of Science
degree in accounting and a minor in finance.
There is no family relationship between Grossman and any director
or executive officer of the Company. There are no transactions
between Grossman and the Company that would be required to be
reported under Item 404(a) of Regulation S-K.
In connection with Grossman's employment as Senior Vice President,
Controller, of the Company, Grossman and the Company entered into
an employment agreement (the "Grossman Employment Agreement"),
dated as of October 26, 2023, effective as of November 13, 2023.
Pursuant to the Grossman Employment Agreement, Grossman is entitled
to an annual base salary of $250,000, less applicable payroll
deductions and tax withholdings, and is eligible to be considered
for an annual bonus in an amount up to 35% of her base salary,
based upon the achievement of certain performance objectives set
forth in the Grossman Employment Agreement.
The Grossman Employment Agreement will remain in effect for one
year unless terminated earlier in accordance with its terms.
Pursuant to the Grossman Employment Agreement, either the Company
or Grossman may terminate the Grossman Employment Agreement at any
time upon written notice, provided that Grossman will be required
to provide the Company at least three months' advance written
notice of her voluntary resignation. Upon termination of Grossman's
employment, the Company shall pay Grossman (i) any unpaid salary
accrued through the termination date, (ii) any accrued and unpaid
vacation, paid time off or similar pay to which Grossman is
entitled, and (iii) any unreimbursed expenses (collectively, the
"Accrued Obligations"). In the event that Grossman voluntarily
resigns without Good Reason or the Company terminates Grossman for
Cause, the Company shall have no further liability or obligation to
Grossman other than payment to Grossman of the Accrued Obligations.
If Grossman's employment is terminated without Cause or by Grossman
for Good Reason, Grossman shall receive (i) the Accrued Obligations
and (ii) severance pay equal to the Base Salary as of the date of
termination for three months
About Staffing 360 Solutions
New York, NY-based Staffing 360 Solutions, Inc. was incorporated in
the State of Nevada on December 22, 2009, as Golden Fork
Corporation, which changed its name to Staffing 360 Solutions,
Inc., ticker symbol "STAF," on March 16, 2012. STAF is a
high-growth international staffing company engaged in the
acquisition of U.S. and U.K. based staffing companies. As part of
its consolidation model, the Company pursues a broad spectrum of
staffing companies supporting primarily the Professional and
Commercial Business Streams. The model is based on finding and
acquiring suitable, mature, profitable, operating, domestic and
international staffing companies focused specifically on the
accounting and finance, information technology, engineering,
administration and light industrial disciplines.
As of September 30, 2023, the Company had $80,555,000 in total
assets, $72,021,000 in total liabilities, and $8,534,000 in total
stockholders' equity.
In the quarterly report for the period ended September 30, 2023,
the Company disclosed that its negative working capital and
liquidity position combined with the uncertainty generated by the
economic reaction to COVID-19 and its ongoing effects contribute to
substantial doubt about the Company's ability to continue as a
going concern.
STAFFING 360: Nasdaq Filing Delinquencies Cured
-----------------------------------------------
Staffing 360 Solutions, Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that on January
10, 2024, the Company received a notice from the Nasdaq Office of
General Counsel stating that the Listing Qualifications Staff of
the Nasdaq Stock Market LLC has determined that the Company's
filing delinquencies for the periods ended July 1, 2023, and
September 30, 2023, have been cured. Accordingly, the scheduled
hearing before the Hearings Panel on January 11, 2024, has been
canceled, and the matter is now closed.
About Staffing 360 Solutions
New York, NY-based Staffing 360 Solutions, Inc. was incorporated in
the State of Nevada on December 22, 2009, as Golden Fork
Corporation, which changed its name to Staffing 360 Solutions,
Inc., ticker symbol "STAF," on March 16, 2012. STAF is a
high-growth international staffing company engaged in the
acquisition of U.S. and U.K. based staffing companies. As part of
its consolidation model, the Company pursues a broad spectrum of
staffing companies supporting primarily the Professional and
Commercial Business Streams. The model is based on finding and
acquiring suitable, mature, profitable, operating, domestic and
international staffing companies focused specifically on the
accounting and finance, information technology, engineering,
administration and light industrial disciplines.
As of September 30, 2023, the Company had $80,555,000 in total
assets, $72,021,000 in total liabilities, and $8,534,000 in total
stockholders' equity.
In the quarterly report for the period ended September 30, 2023,
the Company disclosed that its negative working capital and
liquidity position combined with the uncertainty generated by the
economic reaction to COVID-19 and its ongoing effects contribute to
substantial doubt about the Company's ability to continue as a
going concern.
STONEYBROOK FAMILY: Jerrett McConnell Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Jerrett McConnell, Esq.,
at McConnell Law Group, P.A. as Subchapter V trustee for
Stoneybrook Family Dentistry, P.A.
Mr. McConnell will be paid an hourly fee of $350 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. McConnell declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jerrett M. McConnell, Esq.
McConnell Law Group, P.A.
6100 Greenland Rd., Unit 603
Jacksonville, FL 32258
Phone: (904) 570-9180
Email: info@mcconnelllawgroup.com
About Stoneybrook Family Dentistry
Stoneybrook Family Dentistry, P.A. specializes in cosmetic
dentistry, invisalign, dental implants, pediatric dentistry, root
canal therapy, and smile makeovers. It is based in Winter Garden,
Fla.
Stoneybrook filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00076) on January 8,
2024, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. Dr. Wendi K. Wardlaw, president, signed the
petition.
Judge Tiffany P. Geyer oversees the case.
Daniel A. Velasquez, Esq., at Latham Luna Eden & Beaudine, LLP
represents the Debtor as legal counsel.
SVB FINANCIAL: Inks Restructuring Support Deal Amid Chapter 11
--------------------------------------------------------------
SVB Financial Group disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that on January 9, 2024,
the Company entered into a Restructuring Support Agreement with the
holders of certain claims that are members of an ad hoc group of
senior noteholders and the official committee of unsecured
creditors appointed in connection with the Chapter 11 Case.
The RSA reflects certain principal terms of a potential
restructuring that include the proposed treatment of classes of
claims and interests, the creation of a liquidating trust and the
formation of a new holding company as set forth in the term sheet
attached as an exhibit to the RSA. The RSA also contains various
milestones, including the date by which the Company is required to,
among other things, file the disclosure statement and the chapter
11 plan, the date by which more than two-thirds of the aggregate
outstanding principal amount of the Company's senior notes must
have signed on to the RSA and the dates by which the Bankruptcy
Court must have entered certain orders.
The RSA provides that the agreement may be terminated by the
Supporting Ad Hoc Group of Senior Noteholder Members holding
greater than 50% in amount of the Company's senior notes held by
all Supporting Ad Hoc Group of Senior Noteholder Members, by the
Official Committee and by any other supporting creditor party to
the RSA, each solely with respect to itself and upon the occurrence
of certain events, including the breach by any supporting creditors
of any representation, warranty or covenant that results in the
restructuring transactions no longer having the support of at least
two-thirds of the aggregate outstanding principal amount of the
Company's senior notes, and the failure to meet any of the
milestones unless such milestone has been waived or extended. The
RSA also provides certain other termination events, including that
the Company may terminate the RSA in the event its Board of
Directors, Restructuring Committee or its equivalent determines in
good faith, based on the advice of outside counsel, (i) that
continuing to pursue any of the restructuring transactions
described therein would be inconsistent with the exercise of its
fiduciary duties or applicable law or (ii) in the exercise of its
fiduciary duties, to pursue an Alternative Restructuring Proposal
(as defined in the RSA).
Although the Company intends to pursue the restructuring
transactions contemplated by the RSA, there can be no assurance
that the Company will be successful in completing a restructuring
or any other similar transaction on the terms set forth in the RSA
or at all. In addition, the transactions contemplated by the RSA
are subject to approval by the Bankruptcy Court, among other
conditions. Accordingly, no assurance can be given that the
transactions described therein will be consummated on the expected
terms, if at all.
In connection with the Chapter 11 Case, on January 9, 2024, the
Company also provided certain financial and other information to
certain holders of the Company's senior notes and preferred stock,
pursuant to non-disclosure agreements with such Creditors. Pursuant
to the NDAs, the Company agreed to disclose publicly any material
non-public information disclosed to such Creditors after a
specified period or upon the occurrence of certain events set forth
in the NDAs.
About SVB Financial Group
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC, is
the claims and noticing agent and administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee tapped Akin Gump Strauss Hauer & Feld, LLP as bankruptcy
counsel; Cole Schotz P.C. as conflict counsel; Lazard Freres & Co.,
LLC as investment banker; and Berkeley Research Group, LLC as
financial advisor.
SVB FINANCIAL: Retains Business of SVB Capital, Forms New Committee
-------------------------------------------------------------------
SVB Capital Management, LLC, a wholly-owned indirect subsidiary of
SVB Financial Group, announced that, following a review of
strategic alternatives, SVB Financial Group and its creditors have
determined that retaining the SVB Capital business would result in
superior value creation opportunities. In connection with mapping
its go-forward strategy, SVB Capital has created a new operating
committee that will oversee all aspects of the business's strategic
and operational initiatives.
The operating committee is made up of Aaron Gershenberg, Sulu
Mamdani, and Beau Laskey, three longtime SVB Capital executives and
experienced venture capital leaders. Gershenberg, a co-founder of
SVB Capital who has served as a Senior Advisor since January 2023,
is returning as a Managing Partner. The operating committee will be
focused on maximizing the value of SVB Capital's portfolio and
assets and continuing to serve its limited partners. The committee
will work closely with William Kosturos, Chief Restructuring
Officer of SVB Financial Group, to ensure a smooth transition.
"We believe that retaining SVB Capital under a reorganized company
is the best path forward to maximize its value in the current
environment," said Kosturos. "SVB Financial Group and its creditors
recognize the strong foundation on which SVB Capital has been
built, thanks in large part to Aaron, Sulu and Beau's outstanding
leadership and partnership, with the significant support and
contributions of the entire SVB Capital team. Aaron, Sulu and
Beau's vision for the future of this business is closely aligned
with our creditor group, and all parties are focused on preserving
the value of the business, meeting obligations to partners and
positioning the platform to capitalize on future opportunities."
Gershenberg, Mamdani and Laskey will return to the equal
partnership model that for years drove SVB Capital's success and
growth into an industry leader. For more than ten years, the three
cultivated an impressive investment track record through
collaboration, alignment of interests and tenured partnership. They
share a cohesive vision for SVB Capital's operations going forward
and, as part of the operating committee, they will act as
responsible stewards of the business on behalf of its creditors,
limited partners and employees.
The members of the operating committee issued the following
statement:
"For nearly 25 years, SVB Capital has operated with a mission to
grow and enhance access to the innovation economy and has built an
exceptional reputation as the premier investment partner for top
venture capital firms and technology companies. Our multi-strategy
platform has enabled us to create a leading portfolio of assets,
cultivate enduring relationships with our limited partners, and
generate strong returns. With a demonstrated track record of
leadership and equal collaboration, we look forward to reuniting
the experienced partnership that has powered SVB Capital's success,
with the goal of preserving the tremendous value inherent in the
firm, while also undertaking structural initiatives to position us
for the future. Together, we intend to leverage our unique
skillsets and industry expertise to manage our assets responsibly
and efficiently and unlock the full potential of our platform."
About SVB Financial Group
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC, is
the claims and noticing agent and administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee tapped Akin Gump Strauss Hauer & Feld, LLP as bankruptcy
counsel; Cole Schotz P.C. as conflict counsel; Lazard Freres & Co.,
LLC as investment banker; and Berkeley Research Group, LLC as
financial advisor.
TALLGRASS ENERGY: Moody's Rates New $700MM Unsecured Notes 'B1'
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Tallgrass Energy
Partners, LP's proposed $700 million senior unsecured notes due
2029. All other ratings of Tallgrass and its parent company,
Prairie ECI Acquiror LP are unchanged, including Prairie's B1
Corporate Family Rating. The stable outlook is also unchanged.
Tallgrass intends to use the proceeds of the proposed senior notes
issuance to repay its $600 million senior unsecured notes issue due
2025 and repay a portion of the outstanding balance on its
revolving credit facility.
RATINGS RATIONALE
Tallgrass is a wholly-owned subsidiary of Prairie through which
Prairie conducts its operations. Tallgrass's senior unsecured notes
are rated B1, the same as Prairie's B1 CFR. Although the notes are
subordinated to Tallgrass's $1.5 billion senior secured revolving
credit facility (unrated), the notes have a priority claim to the
assets over Prairie's $1.4 billion backed senior secured term loan
due 2026. Prairie's term loan is rated B3, two notches below its
CFR reflecting the term loan's structural subordination to
Tallgrass's revolving credit facility and unsecured notes.
Prairie's term loan is secured only by its equity ownership
interests in Tallgrass and is the most junior debt in the
consolidated capital structure.
Prairie's credit profile is constrained by its high financial
leverage including Prairie's term loan, debt at Tallgrass and its
pro-rata share of Rockies Express Pipeline LLC's (REX, Ba2 stable)
debt. Leverage has remained high following Prairie's take-private
acquisition of Tallgrass Energy, LP (TGE, Prairie's parent,
unrated) in early 2020. Leverage is not likely to improve in the
near term as Tallgrass intends to undertake a $1.7 billion
conversion of its Trailblazer natural gas pipeline as part of a
carbon dioxide transmission and sequestration system. Tallgrass
expects it will fund the conversion 50% with debt and apply free
cash generated by Tallgrass and distributions received from REX.
Prairie benefits from its meaningful size, its predominantly
interstate pipeline asset base with cash flow from long-term firm
transportation contracts and some earnings diversification.
Prairie will continue to maintain adequate liquidity through 2024.
Tallgrass maintains a $1.5 billion revolving credit facility under
which it had more than $1.2 billion available at September 30,
2023. With the repayment of the 2025 notes, the expiration date for
Tallgrass's revolver will move to November 27, 2026; prior to the
repayment, the revolver would have expired July 1, 2025 if any of
the 2025 notes remained outstanding on that date.
Prairie's stable rating outlook reflects the predictable cash flow
from the company's existing long-term firm transportation contracts
and some earnings diversification.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
An upgrade would be considered if Prairie sustains its consolidated
debt/EBITDA below 7x and enhances its contracted revenue position.
Prairie's ratings could be downgraded if consolidated leverage is
sustained above 7.5x or distribution policy becomes aggressive.
Prairie, though its ownership of Tallgrass, provides crude oil
transportation, natural gas transportation and storage, processing
and water business services for customers in the Rocky Mountain,
Appalachian, Midwest, and West Coast regions of the United States.
The principal methodology used in this rating was Midstream Energy
published in February 2022.
TALOS PRODUCTION: Moody's Affirms 'B2' CFR, Outlook Stable
----------------------------------------------------------
Moody's Investors Service affirmed Talos Production Inc.'s (Talos)
ratings, including its B2 Corporate Family Rating, B2-PD
Probability of Default Rating and B3 senior secured second lien
notes rating, and maintained the stable outlook. Talos' Speculative
Grade Liquidity (SGL) rating is maintained at SGL-3. Similarly,
Moody's afirmed Talos Energy Ventures GOM LLC's (Talos EnVen) B3
senior secured second lien notes rating and maintained the stable
outlook.
Concurrently, Moody's placed under review for upgrade QuarterNorth
Energy Holding Inc.'s B3 Corporate Family Rating and B3-PD
Probability of Default Rating, and affirmed QuarterNorth's B3
senior secured second lien term loan rating. Previously, the
outlook was stable.
These actions follows a definitive agreement reached by Talos
Energy Inc. (Talos Energy) to acquire QuarterNorth Energy Inc.
(QuarterNorth Energy) for $1.29 billion, comprised of approximately
$965 million in cash and 24.8 million shares of Talos Energy's
common stock.[1] Talos Energy is publicly traded and is the parent
of Talos. QuarterNorth Energy is the parent of QuarterNorth.
The board of directors of both Talos Energy and QuarterNorth Energy
have unanimously approved the transaction. QuarterNorth Energy's
top equity holders, representing approximately 68% of its total
ownership group, have entered into a support agreement pursuant to
which they will vote in favor of the transaction. The transaction
is expected to close by the end of the first quarter of 2024,
subject to regulatory approvals and certain customary closing
conditions.
Talos Energy has secured $650 million in bridge financing providing
it with flexibility with respect to the timing and structure of
permanent financing of the transaction. The company expects to fund
a portion of the cash consideration with availability under the
revolver, and opportunistic debt and equity financings depending on
market conditions. While pro forma debt balances will increase
materially, Moody's expects a significant amount of equity to be
used to fund this transaction and expects pro forma credit metrics
to not change meaningfully given the equity funding and the cash
flow potential of the combined operations as well as likely post
acquisition debt reduction and asset integration benefits. The
ultimate capital structure and resulting liquidity could affect
Moody's ratings or outlook, and Moody's ratings are subject to
review of all final documentation.
A List of Affected Credit Ratings is available at
https://urlcurt.com/u?l=zFhXOf
RATINGS RATIONALE
Talos should enhance its scale and deepwater Gulf of Mexico (GoM)
position through the acquisition of QuarterNorth. Talos has been an
active acquiror in the US GoM and had closed its EnVen Energy
Corporation acquisition in early 2023. The QuarterNorth acquisition
should add roughly 30 thousands barrels of oil equivalent (boe) per
day of oil-weighted production volumes and Talos' pro forma
production should approach 100 thousand boe per day in 2024.
Nonetheless, Talos will remain constrained by its production
concentration in offshore GoM, where challenging operating
conditions in the deepwater further magnify this concentration
risk.
Talos' B2 CFR reflects its moderate scale, asset concentration and
challenges of operating in the GoM, especially deepwater. Operating
in the GoM involves risks including relatively short-life reserves,
significant asset retirement obligations (ARO) as a result of its
ownership of several end-of-life offshore wells, and inherent storm
and geological risks. The company is supported by an active hedging
program, exposure to premium crude pricing, solid asset coverage,
relatively lower risk behind-pipe drilling and recompletion
opportunities, and an experienced management team that has a
multi-year track record of managing operations in the GoM. The
company is acquisitive and faces the prospect of additional
spending to explore and develop its assets and discoveries,
including potentially developing its oil & gas discovery in the
Zama Field offshore Mexico upon final investment decision. Talos'
leverage metrics are weaker after taking into consideration the
company's ARO liabilities. Credit metrics going forward will depend
on how the company funds its future spending and acquisitions as
well as the extent of potential debt reduction.
Talos' second lien notes are rated B3, one notch below the B2 CFR,
and reflects the notes' second lien claim on assets upon which
Talos' revolver (unrated) has a first lien. Talos and Talos EnVen's
second lien notes are pari passu in the capital structure as a
result of cross-guarantees, and are rated the same.
Talos' SGL-3 rating reflects its adequate liquidity into 2025.
Talos had $13.6 million in cash (excluding $101.8 million of
restricted cash) at September 30. The company's revolver matures in
March 2027, and includes a springing maturity commencing around
October 2025 if the second lien notes due January 2026 have not
been refinanced, redeemed or repaid in full. The revolver has a
$1.1 billion borrowing base with $965 million in commitments, with
$215 million drawn and $10.8 million in letters of credit issued
under the revolver at September 30. Revolver borrowings will
increase significantly following QuarterNorth's acquisition and the
outstanding amount on the revolver will depend on the final capital
structure. Separately, Talos had secured performance bonds from
third party sureties primarily related to plugging and abandonment
of wells and removal of facilities totaling approximately $1.4
billion at September 30. Talos' financial covenants include a
maximum debt to EBITDAX of 3x and a minimum current ratio of 1x,
and Talos should be in compliance with these covenants into 2025.
Talos' stable outlook reflects Moody's expectation that Talos will
continue to maintain moderate leverage metrics.
QuarterNorth's B3 CFR and B3-PD PDR were placed on review for
upgrade based on the likely acquisition by Talos, which has a
stronger credit profile. The transaction will result in a larger,
oil-weighted producer in the US GoM, creating synergy opportunities
and increased economies of scale. QuarterNorth's B3 second line
term loan rating was affirmed because it would likely be rated in
line with Talos' second lien ratings if the debt were to become
part of the combined company's capital structure. However, under
terms of the acquisition agreement, QuarterNorth will pay off the
term loan prior to closing of the acquisition, and therefore the
term loan rating is likely to be withdrawn following repayment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Talos' ratings could be upgraded if it diversifies and grows
production, proved developed reserves and cash flow in a stable to
improving industry environment while integrating its acquisitions,
the company generates consistent free cash flow, its retained cash
flow (RCF) to debt ratio is above 50%, leveraged full cycle ratio
(LFCR) comfortably exceeds 1x providing sufficient returns on
projects while maintaining adequate liquidity.
Talos' ratings could be considered for a downgrade if the company's
production meaningfully declines, RCF/debt ratio falls below 25%,
liquidity deteriorates, leverage increases materially due to
capital spending or acquisitions, or the company's capital
productivity declines significantly.
Under the terms of the acquisition agreement, QuarterNorth will
fully repay its debt shortly before closing. Accordingly, Moody's
will likely withdraw all of QuarterNorth's ratings upon full
extinguishment of the company's debt.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
Talos Production Inc., a wholly-owned subsidiary of publicly-traded
Talos Energy Inc., is an exploration and production company whose
assets are primarily located on the continental shelf and deepwater
areas in the US Gulf of Mexico.
QuarterNorth Energy Holding Inc. is Delaware incorporated
exploration and production company with offshore operations in the
Gulf of Mexico.
TANTUM COMPANIES: Feb. 7 Disclosure Statement Hearing Set
---------------------------------------------------------
Judge Laura T. Beyer has entered an order that the hearing to
consider approval of the disclosure statement of Tantum Companies,
LLC will be held on Feb. 7, 2024 at 09:30 AM, Charles R. Jonas
Federal Building, 401 West Trade Street, Courtroom 2A, Charlotte,
NC 28202.
The last date to file and serve written objections to the
disclosure statement pursuant to Rule 3017(a) is fixed as Jan. 31,
2024.
About Tantum Companies
Tantum Companies, LLC operates in the restaurant industry. The
company is based in Charlotte, N.C.
Tantum Companies and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. W.D.N.C. Lead Case No.
23-30407) on June 26, 2023. In the petition signed by CEO Mark
Cote, Tantum Companies disclosed $1 million to $10 million in
assets and $10 million to $50 million in liabilities.
Judge Craig Whitley oversees the cases.
Robert A. Cox, Jr., Esq., at Hamilton Stephens Steele + Martin,
PLLC and Blystone and Donaldson serve as the Debtors' legal counsel
and financial advisor, respectively.
Moon Wright & Houston, PLLC represents the official committee of
unsecured creditors appointed in the Debtors' Chapter 11 cases.
TELEPHONE USA: Feb. 6 Bid Deadline Set
--------------------------------------
Lumen Technologies Inc. f/k/a CenturyTel Inc. ("secured party") is
selling, by public auction, through its agent Hilco Streambank
("agent") all right, title and interest of Telephone USA
Investments Inc. ("debtor") in, to and under 50 class A voting
shares of TelUSA Holdings LLC.
The Debtor pledged the collateral to secure commercial indebtedness
owed by the Debtor to the secured party pursuant to that certain
promissory note dated as of Sept. 29, 2000, and that certain pledge
agreement dated as of Sept. 29, 2000 between the Debtor and secured
party. The collateral will be sold free and clear of secured
party's lien and any subordinate security interest in the
collateral.
Qualified bidders may attend the sale scheduled on Feb. 8, 2024, at
1:00 p.m. C.T. at the law offices of Polsinelli PC, 150 North
Riverside Plaza, Suite 3000, Chicago, Illinois 60606 or virtually
through a videoconference platform, the credentials for which will
be made available to qualified bidders by contacting the Agent.
The deadline for qualified bidders to submit a bid is Feb. 6, 2024,
at 12:00 p.m. C.T.
Potential bidders interested in the obtaining information regarding
the collateral, requirements for participating in the auction,
access to the videoconference platform and the terms of the sale
may contact the agent by sending an email to: Gabe Fried at
gfried@hilcoglobal.com; Richelle Kalnit at rkalnit@hilcoglobal.com;
or Stella Silverstein at ssilverstein@hilcoglobal.com.
TRICORBRAUN HOLDINGS: Moody's Alters Outlook on B3 CFR to Negative
------------------------------------------------------------------
Moody's Investors Service affirmed TricorBraun Holdings, Inc.'s
corporate family rating at B3, probability of default rating at
B3-PD, its senior secured first lien term loan and senior secured
first lien delayed draw term loan at B2. The outlook has been
changed to negative from stable.
The negative outlook reflects weak credit metrics, importantly
interest coverage and debt leverage. Moody's expect market volumes
to trend positively over the next twelve months, but not experience
a sharp recovery. Therefore, credit metrics may be challenged
without a material recovery in volumes and market conditions.
"Challenging market conditions and a rise in interest rates have
weakened TricorBraun's credit profile. The cadence of expected
volume and market improvement will heavily influence the credit
quality of the company. In the meantime, Moody's view free cash
flow generation, the lack of near term maturities, and no drawings
on the ABL revolver positively," said Scott Manduca, Vice President
at Moody's.
RATINGS RATIONALE
TricorBraun's B3 CFR reflects the company's weak credit metrics,
including high leverage and weak interest coverage. Challenging
market conditions have raised debt leverage (Moody's adjusted),
which is expected to be sustained above 8.0x in 2024, and the rise
in interest rates has negatively impacted interest coverage to just
above 1.5x, despite the placement of an interest rate hedge
expiring in 2025. However, Moody's do expect TricorBraun to
continue to generate free cash flow in 2024, importantly through an
improvement in funds from operations, as the reduction and
rightsizing of inventory largely occurred in 2023.
TricorBraun benefits from around 80% of its revenue generated from
stable end markets, including food & beverage, healthcare &
nutraceutical, personal care, and household products. The
company's products also consist of a diversified set of substrates
including plastic, glass, and metal. Moody's expect an increase in
TricorBraun's volumes in 2024, due to expected year over year
positive trends, but not a sharp recovery driven by customer
restocking actions. Over the past year, the company has taken
steps to rationalize its footprint and become more operationally
efficient, while implementing other on-going cost reduction
initiatives, to benefit operating performance once the market
improves. In addition, the company has the flexibility to allocate
free cash flow to absolute debt reduction or fund its strategic
bolt-on acquisition growth strategy.
Moody's expects TricorBraun's liquidity to be good over the next 12
months. Cash is expected to remain at around $50 million and any
limited borrowings on its $300 million ABL revolver expiring in
2026, will be repaid with free cash flow generation. Refinancing
risk is minimal, since the first and second lien term loans do not
mature until 2028 and 2029, respectively.
The B2 ratings on the first lien senior secured credit facilities
are one notch above the CFR reflecting their superior position in
the capital structure and the loss absorption provided by the
second lien debt. However, the amount of debt cushion supporting
the first lien rating has been declining as first lien debt levels
have increased relative to second lien debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could consider a downgrade if funds from operations is
compromised and free cash flow-to-debt falls below 1%, EBITDA-to
interest expense is well below 2.0x, there is increased risk of a
debt restructuring, liquidity deteriorates, and pro forma debt
leverage (Moody's adjusted) exceeds 6.5x.
Moody's could consider an upgrade to TricorBraun's ratings,
although unlikely over the next 12 to 18 months, if there is
significant improvement in credit metrics. Specifically, if debt
leverage (Moody's adjusted) were to fall below 5.5x,
EBITDA-to-interest expect exceeds 3.0x, free cash flow-to-debt is
above 4.5%, and a more conservative financial policy were
implemented.
Based in St. Louis, Missouri, TricorBraun Holdings, Inc. is a
distributor of rigid packaging, with capabilities in package design
and engineering, logistics, and international sourcing. Revenue
for the last twelve months ended September 2023 was $2.2 billion.
TricorBraun is a portfolio company of Ares Management and the
Ontario Teachers' Pension Plan Board.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
USA RV: Wins Interim Cash Collateral Access
-------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized USA RV, LLC to use cash
collateral, on an interim basis, in accordance with the budget,
with a 10% variance.
The Debtor believes that the parties that may have an interest in
its cash collateral are identified as follows:
a. Automotive Finance Corporation - by way of Security Agreement
and UCC-1 financing statement number 20190014043F filed on February
12, 2019 with the North Carolina Secretary of State.
b. U.S. Small Business Administration - by way of Security
Agreement and UCC-1 financing statement number 20200059522J filed
on May 22, 2020 with the North Carolina Secretary of State.
c. Northpoint Commercial Finance, LLC - by way of Security
Agreement and UCC-1 financing statement number 20200102111A filed
on July 9, 2020 with the North Carolina Secretary of State.
d. SouthState Bank, NA - by way of Security Agreement and UCC-1
financing statement number 20220126386C filed on September 14, 2022
with the North Carolina Secretary of State.
e. Wells Fargo Commercial Distribution Finance, LLC - by way of
Security Agreement and UCC-1 financing statement number
20220157501G filed on November 22, 2022 with the North Carolina
Secretary of State.
As adequate protection and to the extent that cash collateral is
used, the Potential Secured Creditors will receive a post-petition
lien on the Debtor's postpetition cash and personal property to the
extent of the use of cash collateral and to the same extent,
validity, and priority as each such creditor's lien in the same
type of collateral existed prepetition.
As additional adequate protection to the SBA and Northpoint, the
Debtor will make monthly adequate protection payments to the SBA in
the amount of $350 and to Northpoint in the amount of $1,000,
beginning February 1, 2024, and continuing monthly for as long as
the Debtor's use of cash collateral is authorized.
A further hearing on the matter is set for February 6, 2024 at 10
a.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=FME1LN from PacerMonitor.com.
The Debtor projects $120,500 in net sales and $119,200 in total
expenses.
About USA RV, LLC
USA RV, LLC is a locally owned and operated company that sells new
and used recreational vehicles.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.C. Case No. 24-00001) on January 1,
2024. In the petition signed by David W. Hall, member, the Debtor
disclosed $2,850,847 in assets and $4,487,838 in liabilities.
Judge David M. Warren oversees the case.
Danny Bradford, Esq., at Paul D. Bradford, PLLC, represents the
Debtor as legal counsel.
VIDEO DISPLAY: Incurs $408K Net Loss in Third Quarter
-----------------------------------------------------
Video Display Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $408,000 on $2.02 million of net sales for the three months
ended Nov. 30, 2023, compared to a net loss of $713,000 on $1.68
million of net sales for the three months ended Nov. 30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss of $504,000 on $6.94 million of net sales, compared to a
net loss of $943,000 on $6.49 million of net sales for the same
period in 2022.
As of Nov. 30, 2023, the Company had $5.27 million in total assets,
$6.06 million in total liabilities, and a total shareholders'
deficit of $783,000.
Video Display said, "Management continues to implement plans to
improve liquidity and to increase revenues at all divisions. The
ability of the Company to continue as a going concern is dependent
upon the success of management's plans to improve revenues, the
operational effectiveness of continuing operations, the procurement
of suitable financing, or a combination of these. The uncertainty
regarding the potential success of management's plan create
substantial doubt about the ability of the Company to continue as a
going concern."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/758743/000143774924001260/vide20231130_10q.htm
About Video Display
Headquartered in Cocoa, Florida, Video Display Corporation
manufactures and distributes a wide range of display devices,
encompassing, among others, industrial, military, medical, and
simulation display solutions.
Video Display reported a net loss of $2 million for the year ended
Feb. 28, 2023, compared to a net loss of $2.56 million for the year
ended Feb. 28, 2022. As of Feb. 28, 2023, the Company had $5.36
million in total assets, $5.64 million in total liabilities, and a
total shareholders' deficit of $279,000.
Peachtree Corners, Georgia-based Hancock Askew & Co., LLP, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated May 30, 2023, citing that the
Company has historically reported net losses or breakeven results
along with reporting low levels of working capital. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
WATCHMEN SECURITY: Judy Wolf Weiker Named Subchapter V Trustee
--------------------------------------------------------------
The U.S. Trustee for Region 10 appointed Judy Wolf Weiker of
Manewitz Weiker Associates, LLC as Subchapter V trustee for
Watchmen Security LLC.
Ms. Weiker will be paid an hourly fee of $375 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Weiker declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Judy Wolf Weiker
Manewitz Weiker Associates, LLC
P.O. Box 40185
Indianapolis, IN 46240
Phone: 973-768-2735
Email: JWWtrustee@manewitzweiker.com
About Watchmen Security
Watchmen Security, LLC is a commercial security, and surveillance
company in Indianapolis, Ind. It specializes in physical security,
camera installation, surveillance and low voltage security.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Ind. Case No. 24-00087) on Jan. 9,
2024, with up to $50,000 in assets and $1 million to $10 million in
liabilities. Austin Smith, chief executive officer, signed the
petition.
Judge James M. Carr oversees the case.
David Krebs, Esq., at Hester Baker Krebs, LLC represents the Debtor
as legal counsel.
WEC US: S&P Upgrades ICR to 'B+' on Proposed Refinancing
--------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on
Pennsylvania-based provider of nuclear power plant components and
services WEC US Holdings Ltd. (Westinghouse) to 'B+' from 'B'. At
the same time, S&P assigned its 'B+' issue-level rating and '3'
recovery rating to the company's proposed $3.5 billion first-lien
term loan due 2031.
S&P said, "The stable outlook on WEC reflects our expectation that
it will continue to benefit from favorable industry tailwinds while
remaining disciplined in its capital allocation priorities, despite
potential for temporary earnings swings.
"Separately, we assigned a new management and governance (M&G)
assessment of moderately negative to Westinghouse, which reflects
the concentrated ownership structure. This follows the Jan. 7,
2024, publication of S&P Global Ratings' revised criteria for
evaluating the credit risks presented by an entity's M&G
framework.
"Our rating on Westinghouse reflects the company's ability to
compete in the specialized nuclear fuel and equipment markets as
well favorable secular trends in the nuclear industry. Westinghouse
is a leading fuel assemblies and components provider in
approximately 35% of nuclear reactors worldwide with capabilities
to serve 85% of the total operating fleet spanning across all 35
licensed countries. We view WEC's scale and competitive position as
stronger among its rated peers, but its participation in a single
end market, higher fixed-cost nature of its business, and moderate
customer concentration serve as partial offsets. In addition, we
anticipate nuclear power will continue to play a vital role in the
energy transition to a carbon-free future. Many reactors across the
globe are delaying decommissioning timeframes and several countries
are even restarting new build efforts as demand for nuclear energy
grows. There has also been a significant amount of technological
development in smaller nuclear reactors, in which WEC is well
positioned to become a significant player. However, given the
highly regulated nature of the nuclear markets and relatively long
lead times needed to manufacture such equipment, we expect these
trends will take some time to materialize.
"While we view the debt refinancing as relatively neutral from a
credit metrics perspective, leverage remains elevated. The
refinancing transaction will add about $50 million of debt to
Westinghouse's balance sheet, primarily due to transaction fees and
expenses. However, for the period ended Sept. 30, 2023, the
company's leverage was about 6.4x, and we do not anticipate this to
improve significantly over the next couple of quarters as the
company continues winding down its D&D business and given previous
restructuring charges will roll off gradually. Going forward, we
expect moderate revenue growth, continuous cost improvements, and
that the recent change in ownership will have a modestly positive
impact on credit metrics and the company will now prioritize
organic and inorganic growth opportunities over shareholder
distributions. However, given the currently high debt burden, we do
not anticipate leverage will drop below 5x over the next 12-24
months.
"We expect WEC will generate moderate free operating cash flow
(FOCF) over the next couple of years. As of the third quarter of
2023, the company had S&P Global Ratings-adjusted last-12-months
FOCF outflows of about $187 million, primarily due to higher
working capital requirements. While we expect a sizable cash inflow
from working capital in the fourth quarter, FOCF is likely to be
lower in 2023 than in previous years. In 2024, we expect WEC's cash
generation will be supported by stronger earnings from its core
operations, partially offset by modestly higher capital spending as
the company invests in growth initiatives.
"We assigned a new M&G assessment of moderately negative to
Westinghouse. This assignment follows the Jan. 7 publication of S&P
Global Ratings' revised criteria for evaluating the credit risks
presented by an entity's M&G framework. Our assessment incorporates
our view of the company's ownership by Brookfield Renewable
Partners L.P.(BBB+/Stable/A-2) and Cameco Corp. (BBB-/Stable/A-3).
While we anticipate a longer hold period than a sponsor-owned
company, we believe the concentrated ownership structure promotes
the interest of the controlling shareholders.
"The stable outlook on WEC reflects our expectation that it will
continue to benefit from favorable industry tailwinds while
remaining disciplined in its capital allocation priorities, despite
some near-term earnings volatility. More specifically, we
anticipate that the company's S&P Global Ratings-adjusted EBITDA
could exceed 6x in 2023 but will continue to improve over the next
12 months."
S&P could lower its ratings on WEC if it sustained leverage
consistently well above 6x, which could occur if:
-- An economic downturn in the nuclear markets or operating
challenges caused the company to experience a worse-than-expected
operating performance;
-- It adopted a more aggressive financial policy that included
large debt-financed acquisitions or sizable shareholder rewards;
or
-- A shift in secular trends or disruption in the nuclear markets
caused us to reassess the company's business prospects.
Although unlikely over the next 12 months given S&P's expectations
for leverage sustained above 5x, S&P could raise its ratings on WEC
if:
-- S&P expected its S&P Global Ratings-adjusted debt to EBITDA
would remain consistently below 5x, including potential future
acquisitions and shareholder returns; and
-- The company maintained adequate liquidity while demonstrating a
commitment to sustain its improved debt leverage.
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of WEC. In our view, there are safety
concerns among the public regarding nuclear energy, as evidenced by
historical disasters. This is partially offset by recent
developments in reactor technology and potentially larger use of
nuclear as a viable source of energy for a carbon-free future.
However, we also note the social views and environmental benefits
of nuclear energy could shift over time due to changes in
regulation, the evolving geopolitical landscape, and public
perception."
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Social Elements LLC
Bankr. N.D. Ga. Case No. 24-50205
Chapter 11 Petition filed January 8, 2024
Filed Pro Se
In re R H Industries, LLC
Bankr. N.D. Ala. Case No. 24-00072
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/KJPPIIA/R_H_Industries_LLC__alnbke-24-00072__0001.0.pdf?mcid=tGE4TAMA
represented by: C. Taylor Crockett, Esq.
C. TAYLOR CROCKETT, P.C.
E-mail: taylor@taylorcrockett.com
In re Lag Shot LLC
Bankr. M.D. Fla. Case No. 24-00034
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/YEFT4EY/Lag_Shot_LLC__flmbke-24-00034__0001.0.pdf?mcid=tGE4TAMA
represented by: Mike Dal Lago, Esq.
DAL LAGO LAW
E-mail: mike@dallagolaw.com
In re Myrie's Pets LLC
Bankr. N.D. Ga. Case No. 24-20025
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/FWLSZYQ/Myries_Pets_LLC__ganbke-24-20025__0001.0.pdf?mcid=tGE4TAMA
represented by: William Rountree, Esq.
ROUNTREE, LEITMAN, KLEIN & GEER, LLC
E-mail: wrountree@rlkglaw.com
In re AMK Investment Properties, LLC
Bankr. S.D. Ind. Case No. 24-00099
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/ETJYNKA/AMK_Investment_Properties_LLC__insbke-24-00099__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric Welch, Esq.
WELCH & COMPANY, LLC
E-mail: ecwelch@ewelchlaw.com
In re 13 Clinton Ave LLC
Bankr. D. Mass. Case No. 24-10028
Chapter 11 Petition filed January 9, 2024
Filed Pro Se
In re Park & Main Restaurant, Inc
Bankr. E.D.N.Y. Case No. 24-70114
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/L4U444A/Park__Main_Restaurant_Inc__nyebke-24-70114__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Clark Renovations, Inc.
Bankr. W.D. Pa. Case No. 24-20062
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/EG3WSPY/Clark_Renovations_Inc__pawbke-24-20062__0001.0.pdf?mcid=tGE4TAMA
represented by: Donald R. Calaiaro, Esq.
CALAIARO VALENCIK
E-mail: dcalaiaro@c-vlaw.com
In re Fritolandia Y Algo Mas Inc.
Bankr. D.P.R. Case No. 24-00029
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/4UBCXAA/FRITOLANDIA_Y_ALGO_MAS_INC__prbke-24-00029__0001.0.pdf?mcid=tGE4TAMA
represented by: Jose M Prieto Carballo, Esq.
JPC LAW OFFICE
E-mail: jpc@jpclawpr.com
In re Moving & Storage Solutions, Inc.
Bankr. W.D. Wash. Case No. 24-10039
Chapter 11 Petition filed January 9, 2024
See
https://www.pacermonitor.com/view/RTTEUGQ/Moving__Storage_Solutions_Inc__wawbke-24-10039__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas D. Neeleman, Esq.
NEELEMAN LAW GROUP, P.C.
E-mail: courtmail@expresslaw.com
In re Jonathan Scott James
Bankr. S.D. Ind. Case No. 24-80010
Chapter 11 Petition filed January 10, 2024
represented by: Morgan Decker, Esq.
In re 109-08 Northern Blvd LLC
Bankr. E.D.N.Y. Case No. 24-40126
Chapter 11 Petition filed January 10, 2024
See
https://www.pacermonitor.com/view/SCJR2MQ/109-08_Northern_Blvd_LLC__nyebke-24-40126__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re KOZNITZ I LLC
Bankr. E.D.N.Y. Case No. 24-40133
Chapter 11 Petition filed January 10, 2024
See
https://www.pacermonitor.com/view/SGRRLKQ/koznitz_I_LLC_KOZNITZ_I_LLC__nyebke-24-40133__0001.0.pdf?mcid=tGE4TAMA
represented by: Solomon Rosengarten, Esq.
SOLOMON ROSENGARTEN
E-mail: vokma@aol.com
In re Michael Israel LLC
Bankr. E.D.N.Y. Case No. 24-40145
Chapter 11 Petition filed January 10, 2024
See
https://www.pacermonitor.com/view/6IJUWXA/Michael_Israel_LLC__nyebke-24-40145__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Shuco Holdings, LLC
Bankr. M.D. Tenn. Case No. 24-00081
Chapter 11 Petition filed January 10, 2024
See
https://www.pacermonitor.com/view/4WQNBBQ/Holdings_LLC_Shuco__tnmbke-24-00081__0001.0.pdf?mcid=tGE4TAMA
represented by: Bradley E. Essman, Esq.
GENERAL COUNSEL USA, LLC
E-mail: bradley@gc-us.com
In re Ambulhealth, Inc.
Bankr. S.D. Tex. Case No. 24-30113
Chapter 11 Petition filed January 10, 2024
See
https://www.pacermonitor.com/view/4HLO74Q/Ambulhealth_Inc__txsbke-24-30113__0001.0.pdf?mcid=tGE4TAMA
represented by: Jack N. Fuerst, Esq.
JACK N. FUERST, ATTORNEY AT LAW
E-mail: jfuerst@sbcglobal.net
In re Parrs Enterprises, Inc.
Bankr. N.D. Iowa Case No. 24-00026
Chapter 11 Petition filed January 11, 2024
See
https://www.pacermonitor.com/view/SLQ466I/Parrs_Enterprises_Inc__ianbke-24-00026__0001.0.pdf?mcid=tGE4TAMA
represented by: Joseph A. Peiffer, Esq.
AG & BUSINESS LEGAL STRATEGIES
E-mail: joe@ablsonline.com
In re Growing and Learning Academy, LLC
Bankr. D.N.J. Case No. 24-10309
Chapter 11 Petition filed January 11, 2024
See
https://www.pacermonitor.com/view/4HT2CJA/Growing_and_Learning_Aacdemy_LLC__njbke-24-10309__0001.0.pdf?mcid=tGE4TAMA
represented by: Kenneth L. Baum, Esq.
LAW OFFICES OF KENNETH L. BAUM LLC
E-mail: kbaum@kenbaumdebtsolutions.com
In re Bruce S Boone, Sr. and Meredith Boone
Bankr. W.D. Va. Case No. 24-60032
Chapter 11 Petition filed January 11, 2024
represented by: Marleca Adams, Esq.
In re Alan J. Mullen
Bankr. W.D. Wash. Case No. 24-10060
Chapter 11 Petition filed January 11, 2024
represented by: Thomas Neeleman, Esq.
In re Ronald D Dotzauer
Bankr. W.D. Wash. Case No. 24-10052
Chapter 11 Petition filed January 11, 2024
represented by: Bradley Duncan, Esq.
In re Skills Academy Vocational Center, LLC
Bankr. D. Colo. Case No. 24-10155
Chapter 11 Petition filed January 12, 2024
See
https://www.pacermonitor.com/view/22776ZY/Skills_Academy_Vocational_Center__cobke-24-10155__0001.0.pdf?mcid=tGE4TAMA
represented by: Jeffrey A. Weinman, Esq.
ALLEN VELLONE WOLF HELFRICH & FACTOR,
P.C.
E-mail: jweinman@allen-vellone.com
In re Snc Watson LLC
Bankr. E.D.N.Y. Case No. 24-40177
Chapter 11 Petition filed January 12, 2024
See
https://www.pacermonitor.com/view/TRCIWSI/Snc_Watson_LLC__nyebke-24-40177__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Craig Brodock
Bankr. N.D.N.Y. Case No. 24-60028
Involuntary Chapter 11 Petition filed January 12, 2024
represented by: Sari Placona, Esq.
In re Prestige Home Health Care, LLC
Bankr. E.D.N.C. Case No. 24-00105
Chapter 11 Petition filed January 12, 2024
See
https://www.pacermonitor.com/view/2R3SHTA/Prestige_Home_Health_Care_LLC__ncebke-24-00105__0001.0.pdf?mcid=tGE4TAMA
represented by: Danny Bradford, Esq.
PAUL D. BRADFORD, PLLC
E-mail: dbradford@bradford-law.com
In re Truevision Complete Eye Care, PA
Bankr. N.D. Tex. Case No. 24-30108
Chapter 11 Petition filed January 12, 2024
See
https://www.pacermonitor.com/view/QXXAEXA/Truevision_Complete_Eye_Care_PA__txnbke-24-30108__0001.0.pdf?mcid=tGE4TAMA
represented by: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
E-mail: joyce@joycelindauer.com
In re Red River Subs, Inc.
Bankr. D.N.D. Case No. 24-30010
Chapter 11 Petition filed January 13, 2024
See
https://www.pacermonitor.com/view/LSEOEFA/Red_River_Subs_Inc__ndbke-24-30010__0001.0.pdf?mcid=tGE4TAMA
represented by: Maurice Verstandig, Esq.
THE DAKOTA BANKRUPTCY FIRM
E-mail: mac@dakotabankruptcy.com
In re Janice A. Jones
Bankr. N.D. Cal. Case No. 24-40048
Chapter 11 Petition filed January 15, 2024
represented by: Mufthiha Sabaratnam, Esq.
In re Gold Star Transportation Services LLC
Bankr. M.D. Fla. Case No. 24-00177
Chapter 11 Petition filed January 15, 2024
See
https://www.pacermonitor.com/view/7ASCH7I/Gold_Star_Transportation_Services__flmbke-24-00177__0001.0.pdf?mcid=tGE4TAMA
represented by: Melissa Youngman, Esq.
WINTER PARK ESTATE PLANS & REORGS
E-mail: my@melissayoungman.com
In re Flawless Screen Printing, LLC
Bankr. W.D. La. Case No. 24-50019
Chapter 11 Petition filed January 15, 2024
See
https://www.pacermonitor.com/view/4QB5SLQ/Flawless_Screen_Printing_LLC__lawbke-24-50019__0001.0.pdf?mcid=tGE4TAMA
represented by: Tom St. Germain, Esq.
WEINSTEIN & ST. GERMAIN
*********
Monday's edition of the TCR delivers a list of indicative prices
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obtained by TCR editors from a variety of outside sources during
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however, be complete or accurate. The Monday Bond Pricing table
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Troubled Company Reporter is a daily newsletter co-published
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Peter A. Chapman, Editors.
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