/raid1/www/Hosts/bankrupt/TCR_Public/240124.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, January 24, 2024, Vol. 28, No. 23
Headlines
ACCLIVITY ANCILLARY: Seeks to Hire Parkins & Rubio as Legal Counsel
ALDRICH PUMP:Claimants Want to Appeal Trane's Ch. 11 Dismissal Loss
ALPINE 4 HOLDINGS: Inks Deal to Sell Morris Assets to Bright-MSM
ALPINE 4 HOLDINGS: Inks First Amendment to AEC Cash Advance Deal
AMERICAN BUILDERS: Moody's Rates New $1.4BB Sec. Term Loan 'Ba2'
AMERICANAS SA: Considers Associating With Digital Competitor
AMG EXPRESS TRUCKING: Starts Subchapter V Bankruptcy Case
ANNE FONTAINE: Eric Huebscher Named Subchapter V Trustee
ARTIFICIAL INTELLIGENCE: Issues Financial Results for Q3 2023
ASTRA ACQUISITION: Eaton Vance Marks $1.43MM Loan at 48% Off
ASTRA ACQUISITION: Eaton Vance Marks $920,000 Loan at 31% Off
ATHERSYS INC: Chapter 11 Could Result to Sale to Healios
AUGSBURG UNIVERSITY: Moody's Affirms Ba1 Issuer Rating, Outlook Neg
B, C & D LAND: Thomas Willson Named Subchapter V Trustee
BAAKLEEN CAPITAL: Celinda's Mexican Restaurant Files Subchapter V
BENGAL FIVE: Wins Interim Cash Collateral Access
CAIRO HOLDING: Hearing on Vicksburg Property Sale Set for Feb. 15
CAMELOT US: Moody's Rates New Secured First Lien Term Loan 'B1'
CANOO INC: Special Counsel Says Shares Offering Duly Authorized
CAREISMATIC BRANDS: Case Summary & 30 Largest Unsecured Creditors
CELSIUS NETWORK: Borrowers Group's Reimbursement Bid Opposed
CELSIUS NETWORK: Insurers Want Execs' Defense Costs Approved
CHAMP ENTERPRISES: Seeks to Hire Norgaard O'Boyle as Attorney
COLORADO FOOD: Court OKs Cash Collateral Access
CORE CONSTRUCTION: Court OKs Interim Cash Collateral Access
CURIA GLOBAL: Eaton Vance Marks $1.83MM Loan at 19% Off
DIAMOND SPORTS: In Fight With DirecTV Over MLB Games Airing Payment
DIVERSIFIED HEALTHCARE: Moody's Ups CFR to Caa3, Outlook Stable
DMG SECURITY: Court OKs Interim Cash Collateral Access
DYNACAST INTERNATIONAL: Eaton Vance Marks $329,000 Loan at 25% Off
ECO MATERIAL: Moody's Rates $100MM Incremental 1st Lien Notes 'B2'
EDGE RIVER: Ruediger Mueller of TCMI Named Subchapter V Trustee
EL DORADO GAS: Seeks to Hire Sheehan & Ramsey as Legal Counsel
ELMWOOD HEIGHTS: Unsecureds Will Get 100% of Claims in Plan
ERIC MCCRITE: Tamara Miles Ogier Named Subchapter V Trustee
FANJOY CO: Amends Plan to Resolve CircleUp Claim Issues
FIESTA PURCHASER: Moody's Assigns First Time B3 Corp. Family Rating
FIESTA PURCHASER: S&P Assigns 'B' ICR, Outlook Stable
FINANCE OF AMERICA: R. Jahangiri, Bloom Retirement Hold 9.49% Stake
FREEDOM PLUMBERS: Unsecureds Will Get 10% Dividend in Plan
FRIENDSHIP VILLAGE: Rebranded as Encore Village in Chapter 11
FTX GROUP: Clients Will Miss Crypto Increase Under Bankruptcy Plan
GOL GOLL4.SA: Considering Chapter 11 Bankruptcy Filing
GOLD STAR: L. Todd Budgen Named Subchapter V Trustee
GROWING AND LEARNING: Joseph Schwartz Named Subchapter V Trustee
GUANELLA PASS BREWING: Hits Chapter 11 Bankruptcy Protection
HAQUE MEDICAL: Seeks to Use Cash Collateral
HENDRIX FARMING: Seeks Court Nod to Sell Property for $47,000
HIGH POINT: Moody's Affirms 'Ba1' Rating on $26MM Debt
HOUSE OF DEAR HAIR SALON: Commences Subchapter V Bankruptcy
HUBBARD RADIO: Eaton Vance Marks $527,000 Loan at 15% Off
HULSEY CONTRACTING: Wins Cash Collateral Access Thru Feb 4
IYS VENTURES: Wins Cash Collateral Access Thru March 22
JL DANIELS: Banned From Using Cash Collateral
JM WAYS: Court OKs Cash Collateral Access Thru Feb 6
LORDSTOWN MOTORS: Chaper 11 Exit Hearing Stalled by 3 Objections
LUCAS MACYSZYN: Wins Cash Collateral Access Thru Feb 22
LUMMUS TECHNOLOGY: S&P Assigns 'B+' Rating to New 1BB Term Loan
MAGENTA BUYER: BlackRock MSIT Marks $530,000 Loan at 57% Off
MAGENTA BUYER: BlackRock MSIT Marks $791,000 Loan at 30% Off
MAGNITE INC: Moody's Rates New Bank Credit Facilities 'Ba3'
MAGNITE INC: S&P Rates New $540MM First-Lien Credit Facility 'BB-'
MALLINCKRODT INT'L: Eaton Vance Marks $1.85MM Loan at 24% Off
MALLINCKRODT INT'L: Eaton Vance Marks $2.65MM Loan at 24% Off
MARIO THE BAKER: Disposable Income to Fund Plan
MERLIN ACQUISITION: Moody's Affirms 'B3' CFR, Outlook Stable
MILK ROAD: Joseph Frost of Buckmiller Named Subchapter V Trustee
MISHI LOGISTICS: Matthew Brash Named Subchapter V Trustee
MISHI LOGISTICS: Seeks Cash Collateral Access
MISSISSIPPI CENTER: Gets OK to Sell Properties for $35,895
MULLEN AUTOMOTIVE: Has Not Issued New Warrants Since Dec. 21
MURPHY OIL: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
NATIONAL RIFLE:Jury Hears Former CFO's Ex-Girlfriend Payments,Perks
NUSTAR ENERGY: S&P Places 'BB-' ICR on CreditWatch Positive
OPTIVIEW 360: Unsecureds to Get Share of Income for 3 Years
PACKAGING COORDINATORS: Moody's Cuts First Lien Loans Rating to B3
PERSIMMON HOLLOW: Court OKs Interim Cash Collateral Access
PETERSON REAL ESTATE: Files for Chapter 11 Bankruptcy
PLUSGRADE INC:S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
RACKSPACE TECHNOLOGY: Eaton Vance Marks $2.94MM Loan at 55% Off
RED RIVER SUBS: Thomas Kapusta Named Subchapter V Trustee
RESHAPE LIFESCIENCES: Y. Schneid Holds $2.46MM Shares as of Jan. 5
ROOF HEROES: Wins Cash Collateral Access on Final Basis
SAVVYAN TECHNOLOGIES: Continued Operations to Fund Plan Payments
SCIENCE APPLICATIONS: Moody's Affirms 'Ba2' CFR, Outlook Stable
SCIENCE APPLICATIONS: S&P Rates New $510MM Term Loan B 'BB+'
SEMILEDS CORP: Simplot Taiwan, 4 Others Report Equity Stake
SILICON VALLEY: First Citizen Gets Second Chance at Secrets Suit
SINCLAIR BROADCAST: Settles Diamond Sports Litigation
SINCLAIR TELEVISION: Eaton Vance Marks $384,000 Loan at 28% Off
SINCLAIR TELEVISION: Eaton Vance Marks $576,000 Loan at 16% Off
SKILLS ACADEMY: Mark Dennis of SL Biggs Named Subchapter V Trustee
SPORTS INTERIORS: Court OKs Cash Collateral Access Thru Feb 29
STAFFING 360: Receives 180-Day Extension for Bid Price Compliance
STAGHORN OUTDOORS: G. Matt Barberich Named Subchapter V Trustee
SUMMER (BC) BIDCO: Moody's Rates New EUR800MM Sec. Term Loan 'B2'
SUNOCO LP: Moody's Puts 'Ba2' CFR on Review for Upgrade
SUNOCO LP: S&P Affirms 'BB' Issuer Credit Rating, On Watch Pos.
SUPOR PROPERTIES: Amends Unsecured Claims Pay Details
TAMPA BAY PLUMBERS: Wins Interim Cash Collateral Access
TENNECO INC: BlackRock MSIT Marks $234,000 Loan at 17% Off
TIMOTHY HILL: Court OKs Interim Cash Collateral Access
TRANS-LUX CORP: Gabelli Has 11.86% Stake as of Dec. 31
TREEIUM INC: Court OKs Cash Collateral Access on Final Basis
TROIKA MEDIA GROUP: Sent to Mediation for Acquisition Dispute
TRUEVISION COMPLETE: Frances Smith Named Subchapter V Trustee
UKG INC: S&P Alters Outlook to Stable, Affirms 'B-' ICR
VENUS CONCEPT: Issues $2 Million Convertible Notes
VESTOGE FREDERICK: Case Summary & Three Unsecured Creditors
VESTTOO LTD: Creditors Want to Cut Aon, Equity Holders' Plan Votes
VIRGINIA REAL ESTATE: Rental Income & Sale Proceeds to Fund Plan
VYERA PHARMACEUTICALS: Chapter 11 Trustee Wants $10 Mil. Clawback
WAITS R.V. CENTER: Wins Interim Cash Collateral Access
WESCO HOLDINGS: Incora Wants Gulfstream Supply Deal Rejected
WEWORK INC: Will Close Another Atlanta Office Amid Bankruptcy
WILLAMETTE VALLEY: Seeks Cash Collateral Access
WINDSOR HOLDINGS III: Moody's Alters Outlook on B1 CFR to Negative
YELLOW CORP: $82 Million Truck Terminal Sales Okayed
[*] Commercial Bankruptcies Rose 70% in 2023
[*] U.S. Private Equity Co. Bankruptcies Rose Record High in 2023
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ACCLIVITY ANCILLARY: Seeks to Hire Parkins & Rubio as Legal Counsel
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Acclivity Ancillary Services, LLC, and Acclivity West, LLC, seek
approval from the U.S. Bankruptcy Court for the Southern District
of Texas to hire Parkins & Rubio, LLP.
The Debtors require legal counsel to assist them in complying with
the provisions of the Bankruptcy Code and in reorganizing their
financial affairs in Chapter 11.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Lenard Parkins, Esq. $1,150 per hour
Charles Rubio, Esq. $775 per hour
Associate Attorneys $450 - $650 per hour
Paralegals $180 - $250 per hour
In addition, the firm will seek reimbursement for work-related
expenses incurred.
The Debtors provided the firm with a pre-filing retainer in the
amount of $550,000.
As disclosed in court filings, Parkins & Rubio is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Lenard M. Parkins, Esq.
Parkins & Rubio, LLP
700 Milam Street Suite 1300
Houston, TX 77002
Tel: (713) 715-1666
Email: lparkins@parkinsrubio.com
About Acclivity
Acclivity Ancillary Services, LLC and Acclivity West, LLC filed
voluntary Chapter 11 petitions (Bankr. S.D. Texas Lead Case No.
24-90001) on Jan. 5, 2024. At the time of the filing, both Debtors
reported up to $50,000 in assets and $1 million to $10 million in
liabilities.
Judge Marvin Isgur oversees the cases.
Lenard M. Parkins, Esq., at Parkins & Rubio, LLP and Schwartz
Associates, LLC serve as the Debtors' legal counsel and financial
advisor, respectively. W. Marc Schwartz, chairman of Schwartz
Associates, is the Debtors' chief restructuring officer.
ALDRICH PUMP:Claimants Want to Appeal Trane's Ch. 11 Dismissal Loss
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Evan Ochsner of Bloomberg Law reports that Aldrich Pump's asbestos
claimants are seeking to revive an effort to throw out the Trane
Technologies Plc unit's bankruptcy after a court rejected their
motion to dismiss the Chapter 11.
Claimants quoted bankruptcy Judge J. Craig Whitley, who denied
their motion to dismiss Aldrich's bankruptcy in December but said
it raised issues that are ripe for appellate review. Whitley noted
that Aldrich's bankruptcy, like Georgia-Pacific affiliate Bestwall
LLC, was languishing as questions about its controversial legal
strategy persist.
About Aldrich Pump
Aldrich Pump LLC and Murray Boiler LLC are U.S. subsidiaries of
Trane Technologies, a publicly traded company. Ireland's Trane
Technologies, formerly as Ingersoll Rand plc, is a global climate
innovator that brings efficient and sustainable climate solutions
to buildings, homes, and transportation. The North American
headquarters of Trane Technologies are located in Davidson, North
Carolina.
Aldrich Pump and Murray Boiler sought Chapter 11 protection (Bankr.
W.D.N.C. Lead Case No. 20-30608) on June 18, 2020. Judge Craig J.
Whitley oversees the cases.
In the petition signed by its chief legal officer, Allan Tananbaum,
Aldrich Pump reported $100 million to $500 million in both assets
and liabilities.
The Debtors tapped Rayburn Cooper & Durham, P.A. and Jones Day as
bankruptcy counsels; Bates White, LLC, Evert Weathersby Houff, and
K&L Gates, LLP as special counsel; AlixPartners, LLP as financial
advisor; and Kurtzman Carson Consultants, LLC as claims and
noticing agent.
The Office of the U.S. Trustee appointed a committee of asbestos
personal injury claimants. The asbestos committee tapped Robinson
& Cole, LLP and Caplin & Drysdale, Chartered as bankruptcy
counsels. The committee also selected FTI as its financial advisor
and Legal Analysis Systems, Inc. as its asbestos consultant.
On Oct. 14, 2020, the court entered the order appointing Joseph W.
Grier, III, as legal representative for future asbestos claimants
(FCR). Mr. Grier tapped Orrick, Herrington & Sutcliffe LLP and
Grier Wright Martinez, PA as bankruptcy counsels; Anderson Kill
P.C. as special insurance counsel; and Ankura Consulting Group,
LLC, as asbestos claims consultant and financial advisor.
ALPINE 4 HOLDINGS: Inks Deal to Sell Morris Assets to Bright-MSM
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Alpine 4 Holdings, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that the Company and
its subsidiaries, Morris Sheet Metal Corp., JTD Spiral, Morris
Enterprises, LLC, Morris Transportation LLC, and Deluxe Sheet
Metal, Inc., entered into an asset purchase agreement with
Bright-MSM Newco, Inc., an Indiana corporation, relating to the
sale by the Company of the assets of the Sellers, and the
assumption by Bright of certain liabilities of the Sellers.
Pursuant to the Agreement, the Company agreed to sell to Bright and
Bright agreed to purchase from the Seller 100% ownership of the
assets of the Subsidiaries, other than certain excluded assets.
Bright agreed to assume and agree to discharge certain liabilities
of the Sellers on the terms and subject to the conditions set forth
in the Agreement.
Assets Sold
Under the terms of the Agreement, the Sellers agreed to sell and
Bright agreed to purchase and acquire all of the Sellers' rights,
title, and interest in and to the Assets from the Sellers, free and
clear of any encumbrance, including but not limited to tangible
personal property; certain contracts of the Sellers; the accounts
receivable of the Sellers; certain amounts of cash and bank
accounts of Sellers; raw materials, supplies, finished goods,
components, and inventory of the Sellers; government licenses and
permits; data and records relating to the operation of the Sellers;
the intellectual property of the Sellers; insurance benefits and
rights of the Sellers; all of the Sellers' claims against third
parties; and the rights of the Sellers relating to deposits and
prepaid expenses. The Excluded Assets consist of the Employer
Identification Number of any of the Sellers, or any IRS filing made
under such EIN and any funds received pursuant therefrom, including
but not limited to any pending or future application by Company or
the Sellers with the IRS for employee retention credits, or any
funds received therefrom; any intercompany assets between the
Sellers and either the Company or any non-Seller subsidiary of the
Company; the checking accounts of Deluxe, MorrisT, and MorrisE; and
certain other scheduled property and assets.
Assumed Liabilities
The Assumed Liabilities assumed by Bright pursuant to the Agreement
include but are not limited to (i) any liability arising after the
closing under any of the Seller contracts that were part of the
Assets (other than any liability arising out of or relating to a
breach that occurred prior to closing); (ii) certain liabilities
set forth in the Closing Valuation Spreadsheet but only in the
maximum amounts for each line item as set forth therein; and (iii)
the unfunded pension liabilities (defined in the Agreement as
being, with respect to any of Sellers' obligations under a
Multiemployer Plan at any time, the amount of any of its unfunded
benefit liabilities as defined in Section 4001(a)(18) of ERISA),
but not including any Excluded Pension Remittance Liabilities
(defined in the Agreement as any under payment of pension
remittances owed to the extent an audit reveals an under payment of
union pension remittances due for periods prior to the closing).
Purchase Price Received by the Company
Pursuant to the Agreement, the consideration paid by Bright for the
Assets was (a) $1,577,488.97, and (b) the assumption of the Assumed
Liabilities. At the closing, Bright agreed to pay off certain
obligations of the Sellers, and retained $157,748.90 as a "Holdback
Amount (10% of the cash portion of the Purchase Price)." The
parties to the Agreement agreed that if there are no claims
asserted by Bright under the Agreement within one year of the
closing, Bright would pay the Holdback Amount to the Company.
The Agreement includes standard representations and warranties of
Bright, the Company, and the Sellers. Additionally, pursuant to the
Agreement, the Company and the Sellers agreed to pay all taxes
resulting from the sale of the Assets; prepare and file all reports
and returns relating to the business of the Sellers prior to the
closing; and to cooperate with Bright in continuing and maintaining
the business relationships of Sellers existing prior to the
closing.
The Agreement includes standard indemnification provisions relating
to claims arising from breaches of the Agreement; inaccuracies of
representations and warranties; and any claims for brokerage or
finders fees.
Assignment and Assumption of Lease - Morris Properties
Additionally, in connection with the Agreement, the Company,
Morris, and Ramnon Holdings, Inc. (the "Morris Landlord") entered
into an Assignment and Assumption of Lease (the "Assignment")
relating to the premises located at 6212 Highview Dr., Fort Wayne,
Indiana 46818 and 109 Garst Street, South Bend, Indiana 46601
(collectively, the "Morris Properties").
Morris had been listed as the tenant pursuant to the original lease
(the "Lease") of the Morris Properties, dated February 1, 2019.
Pursuant to the Assignment, Morris Assigned the leases to the
Company, and the Morris Landlord consented to the Assignment,
conditioned on the payment of certain outstanding rent amounts. The
parties to the Assignment acknowledged that the Company planned to
sublease the Morris Properties to another entity, and that the
payment of the outstanding rent amounts would be made in connection
with the sale of the Assets to Bright, described above.
Sublease - Morris Properties
Accordingly, following the Assignment, Bright and the Company
entered into a sublease relating to the sublease by Bright of the
Morris Properties.
Pursuant to the Sublease, Bright agreed to become the sublessee for
a period of one-year. Under the Sublease, Bright agreed to pay all
rent arrearages under the Lease and to pay rent on the Morris
Properties going forward for the Term of the Sublease. The Morris
Landlord under the Lease consented to the Sublease.
Agreement and Landlord's Waiver - Lonewolf Drive Property
Following the execution of the Agreement, the Company, Bright,
Deluxe, and Envision South Bend, LLC (the "Lonewolf Landlord")
entered into an Agreement and Landlord's Waiver (the "Landlord
Waiver") on January 10, 2024, relating to the property located at
6655 Lonewolf Drive, South Bend, Indiana 46628 (the "Deluxe
Property").
By way of background, in 2019, Deluxe and the Lonewolf Landlord had
entered into a commercial lease, relating to the Deluxe Property.
Pursuant to the Lonewolf Lease, Deluxe granted to the Lonewolf
Landlord a lien on Deluxe's property and assets located on the
Deluxe Property.
As such, pursuant to the Landlord's Waiver, the Lonewolf Landlord
acknowledged the purchase by Bright of the assets of Deluxe
pursuant to the Agreement, and agreed to waive any landlord lien,
right of levy, security interest or other interest in Deluxe's
assets being sold to Bright. The Lonewolf Landlord further
acknowledged that Bright was not planning to occupy the Deluxe
Property, and that Deluxe would pay certain outstanding rent
amounts to the Lonewolf Landlord.
About Alpine 4
Alpine 4 Holdings, Inc (formerly Alpine 4 Technologies, Ltd) is a
Nasdaq traded Holding Company (trading symbol: ALPP) that acquires
business, wholly, that fit under one of several portfolios:
Aerospace, Defense Services, Technology, Manufacturing or
Construction Services as either a Driver, Stabilizer or Facilitator
from Alpine 4's disruptive DSF business model.
Alpine 4 Holdings reported a net loss of $12.87 million for the
year ended Dec. 31, 2022, compared to a net loss of $19.48 million
for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company
had $145.63 million in total assets, $75.64 million in total
liabilities, and $69.99 million in total stockholders' equity.
Phoenix, Arizona-based RSM US LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
May 5, 2023, citing that the Company has suffered recurring losses
from operations and recurring negative cash flows from operations.
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,
Alpine 4 Holdings said that while the working capital deficiency of
prior years has improved, and working capital of the Company is
currently positive, continued operating losses cause doubt as to
the ability of the Company to continue. The Company's ability to
raise additional capital through the future issuances of common
stock is unknown. The obtainment of additional financing, the
successful development of the Company's plan of operations, and its
ultimate transition to profitable operations are necessary for the
Company to continue. The Company said the uncertainty that exists
with these factors raises substantial doubt about the Company's
ability to continue as a going concern.
ALPINE 4 HOLDINGS: Inks First Amendment to AEC Cash Advance Deal
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Alpine 4 Holdings, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that the Company and
its subsidiaries Thermal Dynamics International, Inc. and
Alternative Laboratories, Inc., as borrowers, entered into a First
Amendment to the Standard Merchant Cash Advance Agreement between
AEC and the Borrowers.
By way of background, the Company and the Borrowers had entered
into the AEC Cash Advance Agreement on December 27, 2023, for the
purchase and sale of future receipts, pursuant to which the Company
sold in the aggregate $745,000 in future receipts of the Company
and the Borrowers for gross proceeds to the Borrowers of $500,000.
The Company disclosed the terms and conditions of the AEC Cash
Advance Agreement in a Current Report filed on December 29, 2023.
In the Prior Current Report, the Company noted that in connection
with the AEC Cash Advance Agreement, Direct Tech Sales, Inc., a
subsidiary of the Company, entered into an addendum to secure the
performance obligations of the Borrowers. Pursuant to the Addendum,
DTI granted to AEC a security interest in certain collateral of DTI
consisting of (a) all accounts, including without limitation, all
deposit accounts, accounts-receivable, and other receivables,
chattel paper, documents, and instruments, as those terms are
defined by Article 9 of the Uniform Commercial Code, now or
thereafter owned or acquired by DTI; and (b) all proceeds, as that
term is defined by Article 9 of the UCC.
Subsequently, AEC, the Parties, entered into the AEC First
Amendment to amend certain terms of the AEC Cash Advance
Agreement.
Pursuant to the AEC Cash Advance Agreement, if an event of default
occurs, AEC agreed to first seek to enforce its rights against the
Company, and subsequently (if needed) to seek payment from DTI, in
that sequential order. Under the terms of the AEC First Amendment,
the Parties agreed to include the Assets of Alt Labs with the other
assets that could be used to satisfy the obligations of the
Borrowers. The Parties also agreed to permit AEC to debit the
accounts of any or all of Alt Labs, Vayu US Inc., Identified
Technologies Corp., and Elecjet Corp., as permitted under the AEC
Cash Advance Agreement if an event of default occurs under the AEC
Cash Advance Agreement.
Additionally, AEC has the right to require the Company to issue
shares of its common stock in the dollar amounts and as frequently
as required under the AEC Cash Advance Agreement, to the extent
that AEC has exhausted all of its other rights in sequential order.
Moreover, AEC and the Borrowers agreed that the portions of the AEC
First Amendment, which granted the security interest in the assets
of DTI, were to be deleted.
In connection with the AEC First Amendment, the Borrowers agreed to
pay a fee of $5,000 to AEC.
About Alpine 4
Alpine 4 Holdings, Inc (formerly Alpine 4 Technologies, Ltd) is a
Nasdaq traded Holding Company (trading symbol: ALPP) that acquires
business, wholly, that fit under one of several portfolios:
Aerospace, Defense Services, Technology, Manufacturing or
Construction Services as either a Driver, Stabilizer or Facilitator
from Alpine 4's disruptive DSF business model.
Alpine 4 Holdings reported a net loss of $12.87 million for the
year ended Dec. 31, 2022, compared to a net loss of $19.48 million
for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company
had $145.63 million in total assets, $75.64 million in total
liabilities, and $69.99 million in total stockholders' equity.
Phoenix, Arizona-based RSM US LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
May 5, 2023, citing that the Company has suffered recurring losses
from operations and recurring negative cash flows from operations.
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,
Alpine 4 Holdings said that while the working capital deficiency of
prior years has improved, and working capital of the Company is
currently positive, continued operating losses cause doubt as to
the ability of the Company to continue. The Company's ability to
raise additional capital through the future issuances of common
stock is unknown. The obtainment of additional financing, the
successful development of the Company's plan of operations, and its
ultimate transition to profitable operations are necessary for the
Company to continue. The Company said the uncertainty that exists
with these factors raises substantial doubt about the Company's
ability to continue as a going concern.
AMERICAN BUILDERS: Moody's Rates New $1.4BB Sec. Term Loan 'Ba2'
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Moody's Investors Service assigned a Ba2 rating to American
Builders & Contractors Supply Co., dba ABC Supply ("ABC") proposed
$1.4 billion senior secured term loan maturing 2031. ABC's Ba2
corporate family rating, Ba2-PD probability of default rating, Ba2
senior secured notes rating, Ba2 senior secured term loan rating,
and B1 senior unsecured notes rating are unchanged. The outlook
remains stable.
The new $1.4 billion term loan replaces the company's existing
senior secured term loan due 2027 that will be withdrawn upon
close. The new term loan is pari passu with the existing senior
secured notes due 2028.
The refinancing transaction is credit positive as it extends the
company's maturity profile in a leverage-neutral transaction.
Moody's expects that ABC's operating performance will remain solid
driven by inelastic demand for its products and Moody's expectation
for modest improvement in new single family residential
construction.
RATINGS RATIONALE
ABC's Ba2 CFR is supported by the company's scale and modest
leverage profile. Moody's project leverage to remain low, with
adjusted debt-to-EBITDA sustained at or below 2.0x through 2024. A
very good liquidity profile, inelastic demand for roofing products
and improving end markets are also supportive.
The rating also considers the highly competitive wholesale
distribution market with a number of large distributors. Moreover,
expanding operating margins beyond 10-11% will be difficult to
achieve given the company's reliance on commodity-like products.
The company's financial strategy including large dividends and
potential for acquisitions is also a ratings consideration.
The stable outlook reflects Moody's expectation that ABC Supply
will continue to perform well, maintain a very good liquidity
profile and conservative financial policies evidenced by low
leverage.
The Ba2 rating on ABC's proposed senior secured term loan is the
same rating as the CFR, reflecting the term loan's position as the
preponderance of debt in ABC's capital structure.
Covenants for the new term loan are expected to be materially
similar to the existing term loan.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The rating could be upgraded if the company sustains Debt-to-EBITDA
near 2.5x, maintains a conservative financial policy, and preserves
very good liquidity.
The ratings could be downgrade if Debt-to-EBITDA is sustained above
3.5x, the company's liquidity profile deteriorates, or the company
adopts a more aggressive financial strategy.
The principal methodology used in this rating was Distribution and
Supply Chain Services published in February 2023.
American Builders & Contractors Supply Co., dba ABC Supply ("ABC"),
headquartered in Beloit, Wisconsin, is one of the largest wholesale
distributors of building products in the US. Diane M. Hendricks
through Diane M. Hendricks Enterprises, Inc. (DMHE) is the sole
shareholder of the company.
AMERICANAS SA: Considers Associating With Digital Competitor
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Leonardo Lara of Bloomberg News reports that Americanas' leading
shareholders don't rule out the possibility of an association with
a relevant digital competitor, if the retailer's operations
recovers more firmly in the coming months, Valor Economico reports
citing unidentified sources.
Plan for association with a digital competitor will depend on the
performance of operations from now on, says the newspaper citing an
unidentified person familiar with the matter.
Valor says, citing high-level executives from Americanas'
competitors, who weren't identified, that there is no room at this
time for negotiation due to the high level of uncertainty involving
the group.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in
Rio de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White &
Case LLP, led by John K. Cunningham, is the U.S. counsel.
AMG EXPRESS TRUCKING: Starts Subchapter V Bankruptcy Case
---------------------------------------------------------
On AMG Express Trucking LLC filed for chapter 11 protection in the
Northern District of Texas.
The Debtor reports between $500,000 and $1 million in debt owed to
1 and 49 creditors. The petition states funds will be available to
unsecured creditors.
About AMG Express Trucking
AMG Express Trucking LLC is a limited liability company in Texas.
AMG Express Trucking LLC filed its voluntary petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Texas Case No. 24-30070) on January 5, 2024. In the petition
signed by Gebre Berhane, managing member, the Debtor estimated up
to $50,000 in assets and $500,001 - $1 million in liabilities.
The Debtor is represented by:
Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
9304 FOREST LN#S232
Dallas, TX 75243
ANNE FONTAINE: Eric Huebscher Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 2 appointed Eric Huebscher of Huebscher
& Co. as Subchapter V trustee for Anne Fontaine USA, Inc.
Mr. Huebscher will be paid an hourly fee of $425 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Huebscher declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Eric Huebscher
Huebscher & Co.
301 E 87th St. - 20E
New York, NY 10128
Phone: 917-763-3891
Email: ehuebscher@huebscherconsulting.com
About Anne Fontaine USA
New York-based Anne Fontaine USA, Inc. is an e-commerce platform
for women's apparel, bags, shoes and accessories.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-10058) on Jan. 16,
2024, with $11,399,790 in assets and $6,441,453 in liabilities. Ari
Zlotkin, chief executive officer, signed the petition.
Judge Lisa G. Beckerman oversees the case.
Fred Stevens, Esq., at Klestadt Winters Jureller Southard &
Stevens, LLC represents the Debtor as legal counsel.
ARTIFICIAL INTELLIGENCE: Issues Financial Results for Q3 2023
-------------------------------------------------------------
Artificial Intelligence Technology Solutions, Inc., along with its
wholly owned subsidiary, Robotic Assistance Devices, Inc. announced
its latest financial results as highlighted in the 10-Q filing for
the period ending November 30, 2023.
The report showcases significant growth in Recurring Monthly
Revenue (RMR) while managing a reduction in Selling, General, and
Administrative (SG&A) expenses, alongside a strategic extension of
debt maturity.
Management encourages all AITX investors, fans, and followers to
thoroughly review the full SEC filing at
http://tinyurl.com/ye6wbdpaand wishes to highlight three critical
areas of performance:
1. Robust Growth in Recurring Monthly Revenue (RMR):
For the three months ended November 30, 2023, AITX reported RMR of
$416,062, which is 2.7 times that of the $154,628 earned in the
same period in 2022. This substantial growth in RMR, a key metric
for the company, underscores continued strong growth.
Management reported that the quality of the sales funnel continues
to improve and is looking to add two salespeople to the team to
continue to accelerate sales.
2. Decrease in SG&A Expenses:
During the period of robust growth, the Company reported a 9%
decrease in SG&A expenses for the nine months ended November 30,
2023, totaling $9,038,313, compared to $9,928,144 for the same
period in 2022. For the three-month period ended November 30, 2023,
SG&A expenses were $2,766,523, an 8% decrease from $3,002,282 for
the corresponding period in 2022. These reductions are calculated
net of non-recurring bonuses and demonstrate AITX's continued focus
on efficiency and cost management.
Management will continue to strive for additional cost controls in
Q4 of AITX's fiscal year (December 1, 2023 through February 29,
2024).
3. Extension of Debt Maturity:
AITX successfully extended the maturity date of approximately $10.8
million of debt with its key lender. The terms of the various loans
have been extended by approximately two years, the debt has been
reclassified from current to long-term and ensuring there are now
no defaults of these loans within these new terms. This improves
the company's liquidity profile. Notably, the lender did not
request additional compensation for this extension, reflecting
confidence in AITX's financial health and future. As with all of
AITX's long term debt there are no monthly payments or other
servicing required. Note that this lender has extended these loans
in the past as well.
Steve Reinharz, CEO of AITX, expressed his satisfaction with these
developments, stating, "We're extremely pleased with the progress
we've made over the past year. The significant growth in our
Recurring Monthly Revenue is a testament to the strength and appeal
of our solutions in the market. Moreover, the reduction in SG&A
expenses reflects our commitment to lean and efficient operations.
Lastly, the demonstration of support from our key lender, extending
over $10 million in debt by 2 years, is simply fantastic and allows
us to continue to focus on building the business and reaching
positive operational cash flow."
Mark Folmer, CPP, PSP, FSyI, President of RAD, also commented on
the financial results, "The numbers speak volumes about our
strategic direction and operational efficiency. This performance is
a clear indication of our team's hard work and dedication to
achieving our financial goals."
AITX is poised to continue its growth trajectory, building on these
positive financial results, and strengthened liquidity position.
The Company remains dedicated to delivering innovative AI-driven
security solutions while maintaining a strong focus on financial
health and operational efficiency.
Recurring Monthly Revenue (RMR) is money earned from customers who
pay for a subscription to a service or product. RAD's solutions are
generally offered as a recurring monthly subscription, typically
with a minimum 12-month subscription contract.
AITX, through its subsidiary, Robotic Assistance Devices, Inc.
(RAD), is redefining the $25 billion (US) security and guarding
services industry through its broad lineup of innovative, AI-driven
Solutions-as-a-Service business model. RAD solutions are
specifically designed to provide cost savings to businesses of
between 35%-80% when compared to the industry's existing and costly
manned security guarding and monitoring model. RAD delivers these
tremendous cost savings via a suite of stationary and mobile
robotic solutions that complement, and at times, directly replace
the need for human personnel in environments better suited for
machines. All RAD technologies, AI-based analytics and software
platforms are developed in-house.
RAD has a prospective sales pipeline of over 35 Fortune 500
companies and numerous other client opportunities. RAD expects to
continue to attract new business as it converts its existing sales
opportunities into deployed clients generating a recurring revenue
stream. Each Fortune 500 client has the potential of making
numerous reorders over time.
About Artificial Intelligence Technology
Headquartered in Ferndale, MI, Artificial Intelligence Technology
Solutions Inc.'s business going forward will consist of one segment
activity, which is the delivery of artificial intelligence and
robotic solutions for operational, security and monitoring needs.
Deer Park, Illinois-based L J Soldinger Associates, LLC, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated June 14, 2023, citing that the
Company had a net loss of approximately $18 million, an accumulated
deficit of approximately $112 million and stockholders' deficit of
approximately $32 million as of and for the year ended February 28,
2023, and therefore there is substantial doubt about the ability of
the Company to continue as a going concern.
ASTRA ACQUISITION: Eaton Vance Marks $1.43MM Loan at 48% Off
------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$1,425,000 loan extended to Astra Acquisition Corp., to market at
$747,945 or 52% of the outstanding amount, as of October 31, 2023,
according to a disclosure contained in EFR's Form N-CSR for the
fiscal year ended October 31, 2023, filed with the U.S. Securities
and Exchange Commission.
EFR is a participant in a Second Lien Term Loan (SOFR + 8.88%) to
Astra Acquisition. The loan accrues interest at a rate of 14.527%,
per annum. The loan matures on October 25, 2029.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Astra Acquisition Corp. is a provider of cloud-based software
solutions for higher educational institutions.
ASTRA ACQUISITION: Eaton Vance Marks $920,000 Loan at 31% Off
-------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$920,000 loan extended to Astra Acquisition Corp., to market at
$631,209 or 69% of the outstanding amount, as of October 31, 2023,
according to a disclosure contained in EFR's Form N-CSR for the
fiscal year ended October 31, 2023, filed with the U.S. Securities
and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 5.25%) to Astra
Acquisition. The loan accrues interest at a rate of 10.902%, per
annum. The loan matures on October 25, 2028.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Astra Acquisition Corp. is a provider of cloud-based software
solutions for higher educational institutions.
ATHERSYS INC: Chapter 11 Could Result to Sale to Healios
--------------------------------------------------------
Mary Vanac of Cleveland Business Journal reports that regenerative
medicine developer Athersys Inc. could end up selling most of its
assets to its Japanese development partner, Healios K.K., to repay
creditors in bankruptcy court.
The locally based clinical-stage company and its subsidiaries filed
for Chapter 11 bankruptcy protection late Friday, January 12, 2024,
afternoon. Since 1995, Athersys has been developing a stem-cell
therapy derived from adult stem cells, called MultiStem, to treat
ischemic stroke, acute respiratory distress syndrome and spinal
cord injuries.
The filing is intended to maximize the value of Athersys’ assets,
which would be sold through an auction in the U.S. Bankruptcy Court
of Northern Ohio for the benefit of creditors, said Kasey Rosado,
the company's interim chief financial officer, in a bankruptcy
court filing.
About Athersys Inc.
Athersys Inc. is a clinical-stage biotechnology company developing
novel and proprietary best-in-class therapies designed to extend
and enhance the quality of human life. Its focus is on the
treatment of medical conditions where there is significant clinical
need, and it is particularly focused on developing therapies in the
regenerative medicine area. Debtor Athersys, Inc. is the direct or
indirect parent of each Debtor.
Athersys, Inc. and its affiliates concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ohio Case No. 24-10043) on Jan. 5, 2024. The petitions
were signed by Kasey Rosado as chief financial officer. At the time
of filing, Athersys, Inc. estimated $1 million to $10 million in
assets and $10 million to $50 million in liabilities.
The Honorable Bankruptcy Judge Jessica E. Price Smit oversees the
case.
McDONALD HOPKINS LLC is the Debtors' counsel. ANKURA CONSULTING
GROUP, LLC, is the financial advisor, and OUTCOME CAPITAL, LLC, is
the investment banker.
AUGSBURG UNIVERSITY: Moody's Affirms Ba1 Issuer Rating, Outlook Neg
-------------------------------------------------------------------
Moody's Investors Service has revised the outlook on Augsburg
University, MN (Augsburg) to negative from stable. At the same
time, Moody's has affirmed the Ba1 issuer and revenue bond ratings.
The bonds were issued by Minnesota Higher Education Facilities
Authority. The university had approximately $63 million of debt
outstanding at the end of fiscal 2023.
The outlook revision to negative is driven by the recent much
weaker operating performance that will make it challenging to
achieve improved results over the next several years sufficient to
generate headroom over debt service coverage covenants. The weaker
operating performance also led to lower unrestricted liquidity.
RATINGS RATIONALE
The affirmation of Augsburg's Ba1 issuer rating incorporates its
enrollment management as growing entering classes should support
some stability of net student revenue prospects. Credit strengths
include good philanthropic support and significant budgetary
efforts to address structural imbalances in fiscal 2024. Challenges
include thinner operating performance in fiscal 2023 as well as
limited liquidity and exposure to debt structure risks that reflect
some weaker elements of its financial management and strategy. The
university's debt structure includes private placement debt with
financial covenants that could trigger an acceleration of debt if
breached. The university has not consistently been in compliance
with said covenants in the past, including in fiscal 2022 and
fiscal 2023, requiring bank waivers to not trigger an acceleration
event. Favorably, some revenue gains in fiscal 2024 combined with
expense controls support prospects for debt service coverage
covenant compliance for the year. Other credit considerations
include relatively high exposure to private investments and a high
reliance on student charges to fund operations.
The affirmation of Augsburg's Ba1 revenue bond rating reflects the
issuer rating and the general obligation nature of the debt.
RATING OUTLOOK
The negative outlook reflects deeper deficit operations that have
further narrowed debt service coverage and the potential for thin
operating performance over the next several years as expense
pressures build in an environment of slow revenue growth. As a
result, the university remains exposed to potentially missing
compliance on covenants requiring bank waivers. A change to a
stable outlook would be driven by continued progress in enrollment
management and measured gains in operating performance that
strengthens debt service coverage and recovery of unrestricted
liquidity net of draws on operating lines.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Sustained improvement in operating performance including
substantial headroom over financial covenants
- Significant and sustained increase in unrestricted liquidity and
overall wealth to provide a stronger buffer to operations and debt
- Consistent growth in net tuition revenue over multiple years
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- Inability to strengthen EBIDA yielding meaningful headroom above
debt service coverage covenants in fiscal 2024
- Failure to build back unrestricted liquidity or ongoing reliance
on bank line
- Weakening in management of counterparty relationships that
underpin provision of covenant violation waivers
- Declines in undergraduate enrollment or net tuition revenue
LEGAL SECURITY
Outstanding public bonds and private notes are a general unsecured
obligation of the university. The university's rated debt is
secured by a debt service reserve fund. Public debt has multiple
covenants, which it is currently in compliance with, and does not
have a cross default provision.
PROFILE
Augsburg University, founded as a Lutheran seminary in 1869, is in
Minneapolis, Minnesota. The university's diverse programs serve
traditional students and adult learners. Augsburg enrolled 2,998
full time equivalent students in fall 2023, mostly from Minnesota,
with revenue of $75 million in fiscal 2023.
METHODOLOGY
The principal methodology used in these ratings was Higher
Education Methodology published in August 2021.
B, C & D LAND: Thomas Willson Named Subchapter V Trustee
--------------------------------------------------------
The Acting U.S. Trustee for Region 5 appointed Thomas Willson as
Subchapter V trustee for B, C & D Land & Timber, LLC.
Mr. Willson 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. Willson declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Thomas R. Willson
1330 Jackson Street
Alexandria LA 71301
Phone: 318-442-8658
Email: Rocky@rockywillsonlaw.com
About B, C & D Land & Timber
B, C & D Land & Timber, LLC owns and operates The Dawg House Sports
Grill.
Based in Arcadia, La., B, C & D Land & Timber filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D.
La. Case No. 24-10048) on Jan. 12, 2024, with $1 million to $10
million in assets and $500,000 to $1 million in liabilities. Bert
Davis, III, managing member, signed the petition.
Judge John S. Hodge oversees the case.
Robert W. Raley, Esq., represents the Debtor as legal counsel.
BAAKLEEN CAPITAL: Celinda's Mexican Restaurant Files Subchapter V
-----------------------------------------------------------------
On Baakleen Capital, d/b/a Celinda's Mexican Restaurant, filed for
chapter 11 protection in the District of Central California.
According to court filing, the Debtor reports between $500,000 and
$1 million in debt owed to 1 and 49 creditors. The petition states
funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Feb. 9, 2024, at 11:00 AM at UST-LA3, TELEPHONIC MEETING.
CONFERENCE LINE:1-866-919-3121, PARTICIPANT CODE:3803126.
About Baakleen Capital
Baakleen Capital -- https://celindas.com/ -- dba Celinda's Mexican
Restaurant. It is a restaurant that serves great Mexican inspired
food since 1991.
Baakleen Capital sought relief under Subchapter V of Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10044) on January
4, 2024.
Honorable Bankruptcy Judge Theodor Albert oversees the case.
The Debtor is represented by:
W. Derek May, Esq.
Law Office of W. Derek May
29870 Santa Margarita Parkway
Rancho Santa Margarita, CA 9268
BENGAL FIVE: Wins Interim Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee, at
Chattanooga, authorized Bengal Five LLC DBA Super 8 Motel to use
cash collateral, on an interim basis, in accordance with the
budget.
The Debtor requires the immediate interim use of cash collateral to
operate its business and maximize its prospects for a successful
reorganization.
The Debtor is permitted to use cash collateral through the earlier
of (i) February 8, 2024; and (ii) the entry of a final order
authorizing the use of cash collateral; provided, however, that the
use of cash collateral will only be authorized for the actual and
necessary expenses of operating the Debtor's business during the
Usage Period as set forth in the Budget.
As adequate protection, SimplyBank is granted a valid, perfected
and enforceable continuing replacement lien and security interest
in and upon all assets of the Debtor existing on or after the
Petition Date of the same nature and type as the collateral
securing the Bank's Claim.
The Debtor will insure its property, including the Pre-Petition and
PostPetition Collateral against all risks to which it is exposed,
including loss, damage, fire, theft and all other such risks, in an
amount not less than the fair market value of such collateral, with
such companies, under such policies and in such form as is
appropriate for a business of a type similar to the Debtor using
sound business judgment.
A final hearing on the matter is set for February 8 at 9 a.m.
A copy of the order and the Debtor's budget is available at
https://urlcurt.com/u?l=Gr3YLx from PacerMonitor.com.
About Bengal Five LLC
Bengal Five LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tenn. Case No. 1:23-bk-12861-NWW) on
December 6, 2023. In the petition signed by AKM Shamsul Munir,
managing member, the Debtor disclosed up to $50,000 in both assets
and liabilities.
Judge Nicholas W. Whittenburg.
David J. Fulton, Esq., at Scarborough & Fulton, represents the
Debtor as legal counsel.
CAIRO HOLDING: Hearing on Vicksburg Property Sale Set for Feb. 15
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Mississippi
is set to hold a hearing on Feb. 15 to consider the sale of Cairo
Holding Company, Inc.'s real property in Vicksburg, Miss.
Cairo is selling its 2-acre mobile home park, including trailers,
to James Marble for $115,000, "free and clear" of liens, claims and
security interests.
Under the sale contract, the buyer will pay the company $115,000 in
cash, less the $5,000 earnest money, at closing. The buyer also
agreed to pay all of his closing attorney's fees and agent
commission.
The proceeds from the sale will be paid to RiverHills Bank at
closing.
About Cairo Holding
Cairo Holding Company, Inc. is engaged in activities related to
real estate.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Miss. Case No. 23-01954) on Aug. 25,
2023, with $1 million to $10 million in both assets and
liabilities. Robert Byrd, Esq., at Byrd & Wiser, serves as
Subchapter V trustee.
Judge Jamie A. Wilson oversees the case.
The Debtor tapped J. Walter Newman IV, Esq., at Newman & Newman as
legal counsel; Boolos + Oaks as accountant; and Legacy Capital, LLC
as financial advisor. Charles Porter, a partner at Legacy Capital,
serves as the Debtor's chief restructuring officer.
CAMELOT US: Moody's Rates New Secured First Lien Term Loan 'B1'
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Camelot US
Acquisition LLC's (dba "Clarivate") proposed $2,150 million backed
senior secured first lien term loan B due January 2031. Camelot UK
Holdco Limited's ("Camelot Holdco") B2 corporate family rating and
stable outlook remain unchanged.
The proceeds from the new senior secured term loan and
approximately $47 million of cash from the balance sheet will be
used to repay the existing term loans due 2026. Leverage was 5x as
of Q3 2023 (including Moody's standard adjustments), but $150
million of debt repayment during Q4 2023 and an additional $47
million as part of the transaction will lead to a modest decrease
in pro forma leverage to approximately 4.8x. Moody's expects a
significant portion of Clarivate's increasing free cash flow ($390
million LTM Q3 2023) will be used to repay additional debt going
forward and reduce leverage to the 4.5x range in 2024. Moody's will
withdraw the ratings on the existing term loans at Camelot Holdco's
subsidiaries after repayment.
Camelot US Acquisition LLC is an indirect wholly-owned holding
company of Camelot Holdco, which is a guarantor of the senior
credit facilities and the highest entity of the restricted group
under the credit agreement governing the senior credit facilities.
Camelot Holdco is a wholly-owned direct subsidiary of Clarivate
Plc, which is the entity that is owned by public shareholders and
files the group's consolidated financial statements. Clarivate Plc
is a holding company with no material assets other than the capital
stock of its subsidiaries, and conducts substantially all of its
operations through its subsidiaries. Though Clarivate Plc is not an
issuer or guarantor of the existing debt instruments, the company's
consolidated financial results of operations substantially reflect
the financial condition and results of operations of Camelot
Holdco.
RATINGS RATIONALE
Camelot UK Holdco Limited's credit profile is supported by
Clarivate Plc's leading global market positions across its core
scientific/academic research and intellectual property businesses.
The profile also considers the high proportion of subscription and
re-occurring revenue (78% of revenue LTM Q3 2023) and high
switching costs derived from Clarivate's proprietary data
extraction methodology, which facilitates development of high
quality value-added databases by its clients. Given that its
mission critical subscription products are embedded in customers'
core operations and research workflows, customer renewals and
retention rates on a weighted average basis have remained above
90%. Clarivate also benefits from good diversification across end
markets, geography and customers with EBITDA margins in the high
30% range (Moody's adjusted). The company's low net working capital
and asset lite operating model facilitates a high conversion of
EBITDA to free cash flow (FCF) (FCF as a percentage of debt of 8%
LTM Q3 2023). Clarivate has been pursuing a more moderate financial
policy and will use a significant portion of FCF to repay debt with
limited acquisition activity in the near term.
Factors that weigh on the business include Clarivate's moderately
high leverage and limited organic revenue growth, although Moody's
expect top line growth will increase modestly in 2024. Operating
performance has the potential to be impacted by more volatile
transactional revenue (about 22% of revenue LTM Q3 2023). In
addition, the possibility remains that subscription and
re-occurring revenue may weaken slightly during weak macroeconomic
times as some clients reduce spending on ancillary features to
offset pressures in other parts of their budgets. Clarivate also
faces competitive challenges from industry players that have been
amassing scale and new technology entrants.
Moody's expects Camelot Holdco to maintain good liquidity over the
next 12-15 months supported by a pro forma cash balance of about
$341 million and access to an undrawn $750 million revolving credit
facility ($9 million of L/Cs) as of Q3 2023. Capex was $225 million
as of LTM Q3 2023 and is expected to increase modestly in 2024 as
the company increases investments in product innovation. Free cash
flow after capex and $76 million in dividends on the mandatory
convertible preferred shares was $390 million LTM Q3 2023 and is
likely to continue to increase going forward. After the preferred
shares convert to equity in June 2024, FCF will benefit from the
$76 million annual reduction in dividends to preferred
shareholders. Following $150 million in debt repayment YTD Q3 2023,
$150 million in Q4 2023, and $47 million as part of the refinancing
transaction, Moody's expects a significant portion of Clarivate's
expanding FCF to be used for debt reduction in 2024. Clarivate
bought back $100 million in equity YTD Q3 2023 and additional
buybacks could occur in 2024. Clarivate will consider additional
acquisitions over the long term, but Moody's does not expect any
significant acquisitions in the near term.
The credit facilities are subject to a debt incurrence covenant of
consolidated EBITDA to Fixed Charges of at least 2x (as defined in
the credit agreement) as well as a springing maximum First lien Net
Leverage maintenance covenant of 7.25x (as defined) when more than
35% of the revolver is drawn. To the extent Clarivate were to draw
more than 35% over the next 12-15 months, Moody's expects the
company will have a substantial cushion with the springing
covenant. As of Q3 2023, the Fixed Charge Coverage ratio was 4.1x
and Total Net Leverage ratio was 4.0x.
The stable outlook reflects Moody's view that Clarivate's revenue
will grow in the low single digits in 2024. Updates to existing
service offerings such as the Web of Science platform and
additional enhancements to other product offerings will contribute
to growth while a portion of FCF will continue be used for debt
reduction. Moody's expects pro forma leverage will decrease to the
mid 4x range in FY 2024 from 4.8x as of LTM Q3 2023 driven largely
by debt repayment. While the business model will be relatively
resilient to a slow down in the economy, transaction related
revenue may be negatively impacted by weak economic conditions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Camelot Holdco's credit ratings could be upgraded if organic
revenue growth improves to the mid-single digit range and leverage
is sustained below 4.5x (Moody's adjusted). Liquidity would also
need to be good with FCF as a percentage of debt of over 5%
(Moody's adjusted) and the company would need to maintain prudent
financial policies.
Camelot Holdco's credit ratings could be downgraded if leverage was
sustained above 6.5x (Moody's adjusted) due to weak operating
performance, debt-financed acquisitions, or other debt-funded
shareholder friendly transactions. A deterioration in the company's
liquidity position could also lead to negative rating pressure.
Headquartered in London, United Kingdom, Camelot UK Holdco Limited
("Camelot Holdco") is a wholly-owned subsidiary of Clarivate Plc
(the "parent"), which provides comprehensive intellectual property
and scientific information, decision support tools and services
that enable academia, corporations, governments and the legal
community to discover, protect and commercialize content, ideas and
brands. Formerly the Intellectual Property & Science unit of
Thomson Reuters Corporation, Clarivate was a carveout purchased by
Onex and Baring Asia for approximately $3.55 billion in October
2016. Following the May 2019 merger with Churchill Capital Corp., a
special purpose acquisition company (SPAC), Clarivate operates as a
publicly traded company. Revenue as of LTM Q3 2023 was $2.6
billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CANOO INC: Special Counsel Says Shares Offering Duly Authorized
---------------------------------------------------------------
Canoo Inc. filed a Form 8-K with the Securities and Exchange
Commission which attached the opinion of Kirkland & Ellis LLP
relating to the validity of the shares to be offered pursuant to
the Company's prospectus supplement dated Jan. 19, 2024 in
connection with the transaction described in the Company's Current
Report on Form 8-K filed with the SEC on Dec. 20, 2023.
The Company also attached the opinion of Kirkland & Ellis LLP
relating to the validity of the shares to be offered pursuant to
the Company's prospectus supplement dated Jan. 19, 2024 in
connection with the transaction described in the Company's Current
Report on Form 8-K filed with the SEC on Jan. 12, 2024.
Kirkland & Ellis is acting as special counsel to Canoo in
connection with the registration by the Company of the offer and
sale of up to $15,957,447 of its common stock, par value $0.0001
per share, consisting of up to 159,574,470 shares pursuant to the
terms of the Pre-Paid Advance Agreement, dated July 20, 2022
between the Company and YA II PN, Ltd., as modified by the Side
Letter, dated Oct. 5, 2022, the Supplemental Agreement, dated Nov.
9, 2022, the Supplemental Agreement, dated Dec. 31, 2022, the
Supplemental Agreement, dated Sept. 11, 2023, the Supplemental
Agreement, dated Nov. 21, 2023, and the Supplemental Agreement,
dated Dec. 20, 2023. The Shares are being offered and sold pursuant
to a Registration Statement on Form S-3 (Registration No.
333-266666) filed by the Company with the SEC on Aug. 8, 2022 under
the Securities Act of 1933, as amended, including a base prospectus
dated Aug. 18, 2022 and the prospectus supplement dated Jan. 19,
2024.
Kirkland & Ellis is acting as special counsel to Canoo in
connection with the registration by the Company of the offer and
sale of up to $17,500,000 of its common stock, par value $0.0001
per share, consisting of up to 175,000,000 shares pursuant to the
terms of the Pre-Paid Advance Agreement, dated July 20, 2022
between the Company and YA II PN, Ltd., as modified by the Side
Letter, dated Oct. 5, 2022, the Supplemental Agreement, dated Nov.
9, 2022, the Supplemental Agreement, dated Dec. 31, 2022, the
Supplemental Agreement, dated Sept. 11, 2023, the Supplemental
Agreement, dated Nov. 21, 2023, the Supplemental Agreement, dated
Dec. 20, 2023, and the Supplemental Agreement, dated Jan. 11,
2024.
"We are of the opinion that the Shares are duly authorized, and
when the Shares are registered by the Company's transfer agent and
delivered against payment of the agreed consideration therefor, all
in accordance with the Agreement, the Shares will be validly
issued, fully paid and non-assessable," Kirkland & Ellis said.
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.
Los Angeles, California-based Deloitte & Touche LLP, the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated March 30, 2023, citing that the Company has suffered
recurring losses from operations, has generated recurring negative
cash flows from operating activities, and expects to continue to
incur net losses and negative cash flows from operating activities
in accordance with its ongoing activities. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Canoo reported substantial doubt about its ability to continue as a
going concern for the twelve months from the date of issuance of
the financial statements included in the Quarterly Report. The
Company said it requires substantial additional capital to develop
its EVs and services and fund its operations for the foreseeable
future. The Company will also require capital to identify and
commit resources to investigate new areas of demand. Until it can
generate sufficient revenue from vehicle sales, the Company is
financing its operations through access to private and public
equity offerings and debt financings.
CAREISMATIC BRANDS: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Careismatic Brands, LLC
1119 Colorado
Santa Monica CA 90401
Business Description: Careismatic is a designer, marketer, and
distributor of medical apparel, footwear,
and accessories. Founded in 1995 in
Chatsworth, California, Careismatic has
grown from operating a single flagship
brand, Cherokee Medical Uniforms, to a
portfolio of seventeen brands. The Company
offers value to its stakeholders through its
spectrum of medical apparel and workwear and
omnichannel distribution capabilities across
the globe. The Company has an extensive
portfolio of iconic and emerging brands
across the health and wellness platform,
including Cherokee Uniforms, Dickies
Medical, Heartsoul Scrubs, Infinity,
Scrubstar, Healing Hands, Med Couture,
Medelita, Classroom Uniforms, AllHeart,
Silverts Adaptive Apparel, and BALA
Footwear.
Chapter 11 Petition Date: January 22, 2024
Court: United States Bankruptcy Court
District of New Jersey
Twenty-two affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Careismatic Brands, LLC (Lead Case) 24-10561
AllHearts, LLC 24-10565
Careismatic, LLC 24-10572
Careismatic Group Inc. 24-10569
Careismatic Group II, Inc. 24-10567
CBI Intermediate, Inc. 24-10575
CBI Midco, Inc. 24-10577
CBI Parent, L.P. 24-10563
Krazy Kat Sportswear LLC 24-10560
Marketplace Impact, LLC 24-10576
Med Couture, LLC 24-10570
Medelita, LLC 24-10574
New Trojan Parent, Inc. 24-10578
Pacoima Limited, LLC 24-10579
Silverts Adaptive, LLC 24-10580
Strategic Distribution, L.P. 24-10581
Strategic General Partners, LLC 24-10562
Strategic Partners Acquisition Corp. 24-10564
Strategic Partners Corp. 24-10566
Strategic Partners Midco, LLC 24-10568
Trojan Buyer, Inc. 24-10571
Trojan Holdco, Inc. 24-10573
Judge: Hon. Vincent F. Papalia
Debtors'
General
Bankruptcy
Counsel: Joshua A. Sussberg, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: jsussberg@kirkland.com
- and -
Chad J. Husnick, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: chusnick@kirkland.com
Debtors'
Local
Bankruptcy
Counsel: Michael D. Sirota, Esq.
Warren A. Usatine, Esq.
Felice R. Yudkin, Esq.
COLE SCHOTZ P.C.
Court Plaza North, 25 Main Street
Hackensack, NJ 07601
Tel: (201) 489-3000
Fax: (201) 489-1536
Email: msirota@coleschotz.com
wusatine@coleschotz.com
fyudkin@coleschotz.com
Debtors'
Financial
Advisor: AP SERVICES, LLC
Debtors'
Investment
Banker: PJT PARTNERS LP
Debtors'
Claims,
Noticing,
& Solicitation
Agent and
Administrative
Advisor: DONLIN, RECANO & COMPANY, INC.
Counsel to
Transaction
committee of
CBI Parent, L.P: KOBRE & KIM LLP
Counsel to the
Transaction
Committee of CBI
Intermediate, Inc.: McDONALD HOPKINS LLC
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $1 billion to $10 billion
The petitions were signed by Kent Percy as chief restructuring
officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/IBHSFSY/Careismatic_Brands_LLC__njbke-24-10561__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Michelman & Robinson LLP Professional $10,094,654
Attn: Accounts Receivable Services
10880 Wilshire Blvd, 19th FL
Los Angeles CA 90024-4101
Eri Burns
Tel: 818-783-5530
Email: eburns@mrllp.com
2. Skadden, Arps, Slate, Professional $6,336,223
Meagher & Flom LLP Services
PO Box 1764
White Plains NY 10602
Mike Benham
Tel: 650-470-4964
Email: mike.benham@skadden.com
3. Leopard Textiles Holding Ltd Trade Payables $2,247,451
Leopard Textiles
Room A, 19F
Kim Chung Commercial
Building
Hong Kong
China
Zhenjiang "Steven" Wu
Tel: 86-186-0161-2518
Email: Steven@LeopardTex.com
4. Ducthanh Garment Import Trade Payables $726,214
Export Co Ltd
TI - Ducthanh Import Export Co, Ltd
18 Tran Hung Dao
My Thoi Ward
Long Xuyen City AG
Vietnam
MongHanh
Email: ketoanducthanhag@hcm.vnn.vn
5. Saddle Creek Corporation Trade Payables $530,250
PO Box 530614
Atlanta GA 30353-0614
Julie Freeze
Tel: 863-668-4469
Email: AR@sclogistics.com
6. Neelkamal Traders FZCO Trade Payables $269,074
S-60604, Jebel Ali Freezone
PO Box 262890
Dubai
United Arab Emirates
Vittal Radhakrishnan
Email: vittal.radhakrishnan@neelkamal.com
7. Royal Apparel EPZ Limited Trade Payables $247,931
Unit 1 @ Capital Industrial Park
Athi River Town
Nairobi, Central 00606
Kenya
Sunil Bojan
Email: sunilbojan@royalapparelepz.com
8. Comtrading Apparel DMCC Trade Payables $184,695
Jumeirah Lakes Towers Unit 302-08
Jumeirah Bay 2, Plot JLT-PH2-X2A
Dubai
United Arab Emirates
Miss Thao Le
Tel: 848-2-442-1178
Email: Thao.Le@comtextile.com.vn
9. Tay Son Garment Joint Stock Trade Payables $182,655
Company
Phu Xuan Ward
Phu Phong Town
Tay Son District, Binh Dihn
Vietnam
Miss Thao Le
Tel: 84-824-21178
Email: Thao.Le@comtextile.com.vn
10. M.E.S. (UK) Limited Trade Payables $146,646
KR - M.E.S. UK Limited
Hallswelle House
1 Hallswelle Road
London NW11 0DH
United Kingdom
Aydin Ozguven
Email: aydino@sesby.com
11. Cordial Experience, Inc. Trade Payables $109,455
402 W Broadway
Ste 700
San Diego CA 92101
Tel: 619-578-4360
Email: billing@cordial.com
12. Huafang Company Ltd Trade Payables $104,942
Huafang Company Limited by Shares
No 819 Huanghe 2 Road
Binzhou, Shandong
China
Wang Chao
Tel: 86-543-3288-286
Email: wchao2128@163.com
13. TianJin HaoCheng Int Trade Payables $104,773
Logistics Co, Ltd
No 65 ZiJinShan Road
Room 2-1302 No.2. ZiGuiYuan
Hexi District, Tianjin 300061
China
Email: yxshpg@eyou.com
14. Moody's Investors Service Trade Payables $96,500
PO Box 102597
Atlanta GA 30368-0597
Donna Hamrah
Tel: 212-553-0590
Email: Donna.Hamrah@moodys.com
15. American Express Trade Payables $90,857
Travel Related Services Co Inc
PO Box 360001
Fort Lauderdale FL 33336-0001
Shad Aldrich
Tel: 510-564-4265
Email: shad.g.aldrich@aexp.com
16. Red Banks Consulting Inc. Trade Payables $79,087
1079 Cragmont Ave
Berkeley CA 94708
Casey Carr
Tel: 415-613-9783
Email: ccarr@redbanksconsulting.com
17. Gloria Apparel Inc Trade Payables $74,019
500 7th Ave 8th Fl Ste 124
New York NY 10018
Sowon Yoon
Tel: 212-947-0869
Email: sowon@gloriaapparel.com
18. Thanh Truc Garment Imp/Exp Trade Payables $70,369
Co, Ltd
DT - Thanh Truc Garment
Imp/Exp Co, Ltd
No 61 A Nguyen Thi Bay Street
Ward 6
Tan An, Long An
Vietnam
Tom Nguyen
Email: tomtt@hcm.vnn.vn
19. Barco Uniforms Inc. Trade Payables $70,191
Attn: Jane Fowler
350 West Rosecrans Ave
Gardena CA 90248
Jane Fowler
Tel: 310-719-2138
Email: jane.fowler@barcouniforms.com
20. The Sourcing Place Ltd Trade Payables $67,257
Unit D-E, 31st Floor, Ford
Glory Plaza
37-39 Wing Hong Street,
Kowlong
Hong Kong
Hong Kong
George Zhang
Tel: 852-2370-8865
Email: george@suntexind.comGeorge Zhang
21. Insight Direct USA, Inc Trade Payables $56,175
2701 E Insight Way
Chandler AZ 85286
Tim Kilian
Tel: 602-705-7933
Tim.Kilian@Insight.com
22. Vitality Staffing Professional $55,747
Solutions, LLC Services
PO Box 823461
Philadephia PA 19182
Melissa Baez
Tel: 201-325-0900
Email: mbaez@vitalitystaffing.com
23. Logility Inc Trade Payables $51,975
470 E Paces Ferry Rd
Atlanta GA 30305
Bill Whalen
Tel: 404-364-7614
Email: bwhalen@logility.com
24. Oracle America, Inc (Netsuite) Trade Payables $51,687
2300 Oracle Way
Austin TX 78741
Collections
Tel: 877-638-7848
Email: CollectionsTeam_US@Oracle.com
25. Herbert Mines Associates Inc. Trade Payables $46,200
600 Lexington Ave
14th Floor
New York NY 10022
Daniel Herszaft
Tel: 212-355-0909
Email: daniel@herbertmines.com
26. Hyosung TNC Corporation Trade Payables $45,105
YF - Hyosung TNC Corporation
119 Mapodaero
Mapo-Gu
Seoul 4144
Korea
Chris
Tel: 82-2-707-7222
Email: chris@hyosung.com
27. Hirsch Solutions, Inc Trade Payable $44,910
490 Wheeler Rd, Ste 285
Hauppauge NY 1178
Cheryl Robbins
Tel: 631-457-8818
Email: CHERYL@HSI.US
28. Jefftex Mfg Co, Ltd. Trade Payable $41,507
RM # 503 Samhwa B/D
999-2 Daechi-Dong
Kangnam-Gu, Seoul 135502
Korea
Q.U Kwon
Tel: 82-2-501-7205
Email: jeffkwon@jefftex.com
29. Haiti Premier Apparel S.A. Trade Payables $39,571
No 18 Rue Jean Gilles
Route de L'Aeroport
Port-au-Prince
Haiti
Marie Florence Baker
Tel: 509-370-10297
Email: mfbaker@pbapparel.com
30. Ball Up, LLC Litigation Undetermined
Hueston Hennigan LLP
523 West 6th St., Suite 400
Los Angeles CA 90014
Robert Klieger
Tel: 213-788-4310
Email: rklieger@hueston.com
CELSIUS NETWORK: Borrowers Group's Reimbursement Bid Opposed
------------------------------------------------------------
Attorneys for several groups of unsecured creditors said the
creditors should have their legal costs reimbursed because they
made "substantial contributions" to the unusual Chapter 11
proceeding.
One the groups, the Borrower Ad Hoc Group, seeks the allowance of a
Substantial contribution claim in the amount of $1.02 million. The
Borrower Ad Hoc Group initially formed on or about October 3, 2022
and has been an active participant and the "voice" of the Borrowers
throughout these Chapter 11 Cases. The Borrower Ad Hoc Group and
its counsel, McCarter & English, LLP have been actively involved
and have added significant value to these Chapter 11 Cases.
Initially, the Borrower Ad Hoc Group sought removal of prior
management and greater transparency from the Debtors. Once
management was removed, the Borrower Ad Hoc Group was one of the
first constituencies to request plan mediation.
Because of the significant benefits provided by certain creditors,
the Debtors are not objecting to the substantial contribution
applications of those certain parties that were instrumental in key
plan negotiations and worked to move these cases forward not only
for their own benefit, but for creditors generally.
The Debtors initially did not object to the Borrower Ad Hoc Group's
application. But since the Application was filed, the Borrower Ad
Hoc Group violated its obligations under the Settlement Term Sheet,
and in so doing, revealed that the Borrower Ad Hoc Group has not
"acted to benefit all parties in the case."
"The Borrower Ad Hoc Group fails to demonstrate that its services
were pursued for the benefit of the Debtors' Chapter 11 Cases such
that it is entitled to a substantial contribution award. To the
contrary, the services performed by counsel to the Borrower Ad Hoc
Group were self-interested and only inured to the benefit of a
smaller subset of the Debtors' creditors. For example, the
Borrower Ad Hoc Group’s Wind-Down Objection sought to destroy the
value of the MiningCo to the detriment of all creditors for only a
slight increase in Liquid Cryptocurrency to the benefit of the
Borrower Ad Hoc Group's own tax purposes (and so they could try to
refinance their loans to avoid negative tax consequences)," Celsius
said in court filings.
The Official Committee of Unsecured Creditors reasserts its
position that certain ad hoc groups and other pro se creditors have
made a substantial contribution to these Chapter 11 Cases by taking
actions that directly and materially advanced the interests of the
Debtors' estates and facilitated their reorganization. However,
the Committee objects to the payment of any fees by the estate that
were incurred to further self-interested goals and did not benefit
the Debtors' estates.
"Here, the Borrower Group has demonstrated that its actions,
especially its efforts to oppose the Wind-Down Motion, were
self-interested. It has not proven by a preponderance of the
evidence that it has provided a substantial contribution to the
estate. Therefore, the Committee joins in the Debtors' objection
and requests that the Borrower Group's application for substantial
contribution be denied," the Committee said in court filings.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP as bankruptcy counsel;
Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as
investment banker; and Alvarez & Marsal North America, LLC, as
financial advisor. Stretto is the claims agent and administrative
advisor.
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP, as
its bankruptcy counsel; Elementus Inc. as its blockchain forensics
advisor; M3 Advisory Partners, LP as its financial advisor; and
Perella Weinberg Partners, LP as its investment banker.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP, and Huron Consulting
Services, LLC, serve as the examiner's legal counsel and financial
advisor, respectively.
CELSIUS NETWORK: Insurers Want Execs' Defense Costs Approved
------------------------------------------------------------
Four excess insurers are asking a New York bankruptcy judge to let
them provide defense coverage to Celsius Network executives facing
investigations, subpoenas and lawsuits.
Professional Solutions Insurance Company, Hudson Excess Insurance
Company, StarStone Specialty Insurance Company and Associated
Industries Insurance Company Inc. (collectively, the "Excess
Insurers") move the Bankruptcy Court pursuant to 11 U.S.C. Sec.
362(d) and Bankruptcy Rule 4001(a) for relief from the automatic
stay, to the extent applicable, for the purpose of the advancement
and/or payment of certain defense costs being incurred by the
insured persons of the Debtor and its subsidiaries under certain
excess Directors & Officers Liability and Corporate Securities
Liability insurance policies (the "Excess Policies") issued by the
Excess Insurers to one of the Debtors, namely, Celsius Network,
Inc. ("Celsius Network").
The Excess Policies generally follow the form of the primary
insurers, namely, Lloyd's of London RenaissanceRe Syndicate 1458,
Policy No. EFI120308800 and Vanguard Insurance Company, Policy No.
EFI120308800 (collectively the "Primary Insurers" and their
policies will be collectively referred to as the "Primary
Policy").
Beginning in July 2022, Celsius Network and its subsidiaries, as
well as numerous directors, officers and employees of Celsius,
including Adrian Alisie, Amir Ayalon, Tal Bentov, Guillermo Bodnar,
Rod Bolger, Ron Deutsch, Chris Ferraro, Hanoch Goldstein, Shiran
Kleiderman, Jason Perman, Trunshedda Ramos, Alex Mashinsky, Shlomi
Daniel Leon, Jeremie Beaudry, Rodney Sunada-Wong, Kristine Meehan
Mashinsky, Aliza Landes, Roni Cohen-Pavon, Johannes Treutler, Asaf
Iram, Dean Tappan, Harumi Urata-Thompson, David Barse and Alan
Jeffrey, have either: (a) been sued in in court cases or in
arbitration, (b) received demand letters and/or emails (i.e.,
Albert Yao (employment matter); Matthew Bowen; Brad Hart; Erik Jan
Smulders), (c) received subpoenas, formal and/or informal requests
for documents and information or formal letters, and/or (d)
received subpoenas or formal letters announcing investigations
and/or requests for documents or information in connection with
various investigations being conducted by the United States
Department of Justice, the Securities and Exchange Commission, the
Commodity Future Trading Commission, the Federal Trade Commission,
by Shoba Pillay, the Chapter 11 Examiner this Court approved by
Order dated September 29, 2022 (who interviewed 26 current and
former Celsius directors, officers and/or employees and others,
propounded Rule 2004 requests and reviewed approximately 231,000
documents, and issued a Final Report on January 30, 2023) and by
multiple state regulators and/or Attorneys General, including
Alabama, Alaska, California, Georgia, Hawaii, Idaho, Illinois,
Kentucky, Massachusetts, Minnesota, Mississippi, New Hampshire, New
Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South
Carolina, South Dakota, Tennessee, Texas, Vermont, Washington and
the District of Columbia. In addition, certain of the states have
initiated proceedings (i.e., the Texas State Securities Board
[Docket No.: 312-22-0160] on Sept. 17, 2021; the Texas State
Securities Board [no Docket No.] on Aug. 4, 2022; the California
Department of Financial Protection and Innovation (proceeding
regarding revocation of license) on August 19, 2022) and issued
cease and desist Orders (i.e., the New Jersey Bureau of Securities
on Sept. 17, 2021; the Kentucky Department of Financial
Institutions, Securities Division on Sept. 23, 2021; the California
Business, Consumer Services and Housing Agency Department of
Financial Protection and Innovation dated Aug. 8, 2022; the Alaska
Department of Commerce, Community, and Economic Development
Division of Banking and Securities dated Oct. 19, 2022) or Orders
to Show Cause why a Cease and Desist Order should not be issued or
Ex Parte Motions for a Cease and Desist Order or Notice to Cease
and Desist and Opportunity for a Hearing (i.e., the Vermont State
Department of Financial Regulation on August 12, 2022; the Alabama
Securities Commission on Sept. 16, 2021; the District of Columbia,
Department of Insurance, Securities and Banking on Oct. 13, 2022).
Investigations have also been initiated by certain foreign
regulatory agencies, including the Quebec Authority on Financial
Markets, the Ontario Securities Commission and the UK Financial
Conduct Authority against Celsius Network, Celsius Network Ltd and
Celsius Network LLC. The following actions, adversary proceedings
or arbitrations have also been commenced: a) Plutus21 Blockchain
Opportunities Fund, I, LP, et al. v. Alex Mashinsky and S. Daniel
Leon (Arbitration); b) Ray M. Langley (customer complaint against
Celsius Network dated June 14, 2022 filed just with the State of
California Department of Justice); c) Hugh Minton (customer
complaint) against Celsius Network, LLC dated June 24, 2022, filed
just to the South Dakota Dep't of Labor & Regulation); d) Samuel
Taylor Goines v. Celsius Network, LLC, Celsius Lending, LLC,
Celsius KeyFi, LLC, Alexander Mashinsky, Shlomi "Daniel" Leon,
David Barse and Alan Jeffrey Carr filed in the United States
District Court, District of New Jersey on July 13, 2022 (securities
class action); e) KeyFi, Inc. v. Celsius Network Ltd. and Celsius
KeyFi, LLC filed in New York County Supreme Court on July 7, 2022;
f) Valentin Komarovskiy v. Celsius Network, LLC, Alexander
Mashinsky and Shlomi "Daniel" Leon, (filed in the Commonwealth of
Massachusetts, Superior Court Department, Worcester on December 9,
2022) ; g) The People of the State of New York v. Alex Mashinsky
filed in New York County Supreme Court on January 5, 2023; h)
Official Committee of Unsecured Creditors of Celsius Network, LLC,
et al. v. Alexander Mashinsky, et al. [draft Adversary Proceeding
dated February 14, 2023, and as amended in draft March 30, 2023];
and i) Thomas Bull v. Alex Mashinsky and Kristine Mashinsky (filed
in the United States District Court, Southern District of New York
on Feb. 16, 2023).
There are also ongoing investigations being conducted by the United
States Attorneys' Offices for the Southern District of New York,
the Securities and Exchange Commission, the Commodity Future
Trading Commission, the Federal Trade Commission and other state
regulatory agencies in connection with the events leading up the
Debtors' bankruptcy filings.
Since May 6, 2022, the Excess Insurers have received numerous
notices seeking coverage under the Excess Policies on behalf of the
directors, officers and certain employees of the Debtors in
connection with the lawsuits and investigations that are now
pending, including multiple requests from Individual Insureds for
the payment of Defense Costs incurred in connection with the
aforementioned investigations, lawsuits and arbitration
proceeding.
Although the Excess Insurers have reserved their rights to deny
and/or limit coverage for these matters under the Excess Policies,
given that the quantum of potentially covered and reasonable
Defense Costs are well in excess of the Primary Policy's Aggregate
Limit of Liability as well as the Excess Policies' Limit of
Liability, they are agreeable at this time to advancing those
covered and reasonable Defense Costs incurred by those Individual
Insureds that are potentially covered subject to a full reservation
of rights under the Excess Policies, including those set forth in
Section VI of the Primary Policy.
Attorney for Professional Solutions Insurance Company and Hudson
Excess Insurance Company:
PEABODY & ARNOLD, LLP
Scarlett M. Rajbanshi
600 Atlantic Avenue
Boston, MA 02210
Phone: (617) 951-2011
E-mail: srajbanshi@peabodyarnold.com
Attorney for StarStone Specialty Insurance Company and Associated
Industries Insurance Company, Inc:
BAILEY CAVALIERI LLC
Elan Kandel
10 W. Broad Street, Suite 2100
Columbus, OH 43215
Phone: (614) 229-3254
E-mail: ekandel@baileycav.com
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP as bankruptcy counsel;
Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as
investment banker; and Alvarez & Marsal North America, LLC, as
financial advisor. Stretto is the claims agent and administrative
advisor.
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP, as
its bankruptcy counsel; Elementus Inc. as its blockchain forensics
advisor; M3 Advisory Partners, LP as its financial advisor; and
Perella Weinberg Partners, LP as its investment banker.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP, and Huron Consulting
Services, LLC, serve as the examiner's legal counsel and financial
advisor, respectively.
CHAMP ENTERPRISES: Seeks to Hire Norgaard O'Boyle as Attorney
-------------------------------------------------------------
Champ Enterprises, LLC seeks approval from the U.S. Bankruptcy
Court for the District of New Jersey to employ Norgaard O'Boyle &
Hannon as its attorney.
The firm will render these services:
-- represent the Debtor in the Chapter 11 bankruptcy
proceedings; and
-- assist in the preparation of the petition, schedules,
reports, motions, and the Plan of Confirmation.
Norgaard O'Boyle will be paid at these hourly rates:
Partner $375 to $450
Associate $275 to $325
Law Clerks $175
Paralegals $150
Adminstrative Assistants $90
Norgaard O'Boyle will also be reimbursed for reasonable
out-of-pocket expenses incurred.
John O'Boyle, a partner of Norgaard O'Boyle & Hannon, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Norgaard O'Boyle can be reached at:
John O'Boyle, Esq.
NORGAARD O'BOYLE & HANNON
184 Grand Avenue
Englewood, NJ 07631
Tel: (201) 871-1333
E-mail: bhannon@norgaardfirm.com
About Champ Enterprises, LLC
Champ Enterprises, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Court (Bankr. D. N.J. Case No.
24-10403) on Jan 16, 2023, listing up to $50,000 in assets and
$100,001 to $500,000 in liabilities.
John O'Boyle, Esq. at Norgaard O'Boyle & Hannon represents the
Debtor as counsel.
COLORADO FOOD: Court OKs Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado authorized
Colorado Food Enterprises, Inc. to use cash collateral in
accordance with the budget and the Final Order.
As previously reported by the Troubled Company Reporter, the Final
Order approved a budget for the use of cash collateral for a six
month period through February 29, 2024.
The Debtor maintains four loans with factors which incumber the
Debtor's receivables, have daily draws for payments, and accrue at
high interest rates. The Debtor cannot cash flow under the loan
serving obligation as it is currently structured. The Debtor has
also been sued for alleged employment violations, which the Debtor
disputes. The lawsuit disrupted the Debtor's ability to obtain
tradition financing.
The following parties may have or assert a lien encumbering the
Debtor's cash collateral. The liens are generally described as
follows:
a. The Debtor entered into a line of credit and related documents
with Fundbox on September 1, 2023. Fundbox is currently owed
approximately $30,000. The Debtor cannot locate an associated UCC-1
financing statement on the Colorado Secretary of State website
though there are numerous filings under corporate service companies
such as Corporation Servies Company and First Corporate Solutions.
b. The Debtor entered into three Merchant Agreements and related
documents with CFH Merchant Solutions on September 1, 2023 and
March 3, 2023. CFG is owed approximately $880,800. The Debtor
cannot locate an associated UCC-1 financing statement on the
Colorado Secretary of State website though there are numerous
filings under corporate service companies such as Corporation
Services Company and First Corporate Solutions.
c. The Debtor entered into a Merchant Agreement and related
documents with Everest Business Funding on April 6, 2023. EBF is
owed approximately $362,500. The Debtor cannot locate an associated
UCC-1 financing statement on the Colorado Secretary of State
website though there are numerous filings under corporate service
companies such as Corporation Services Company and First Corporate
Solutions.
d. The Debtor entered into a Merchant Agreement and related
documents with Cloud Fund/Delta Bridge on April 20, 2023. CF is
owed approximately $412,225. The Debtor cannot locate an associated
UCC-1 financing statement on the Colorado Secretary of State
website though there are numerous filings under corporate service
companies such as Corporation Services Company and First Corporate
Solutions.
e. The Debtor entered into a Merchant Agreement and related
documents with Seamless Capital on May 12, 2023. The SC debt has
been paid in full. The Debtor cannot locate an associated UCC-1
financing statement on the Colorado Secretary of State website
though there are numerous filings under corporate service companies
such as Corporation Services Company and First Corporate
Solutions.
f. The Debtor entered into two Merchant Agreements and related
documents with Black Beard Capital on February 3, 2023 and April
15, 2023. BBC is owed approximately $150,000. The Debtor cannot
locate an associated UCC-1 financing statement on the Colorado
Secretary of State website though there are numerous filings under
corporate service companies such as Corporation Service Company and
First Corporate Solutions.
g. The Debtor entered into a EIDL loan with the U.S. Small Business
Administration and related documents on June 16, 2020. The SBA is
owed approximately $150,000. The SBA filed a UCC-1 financing
statement on June 27, 2020.
h. The Debtor entered into two loan agreements and related
documents on June, 2021 and December 15, 2022, which loan was
assigned to Arma Capital on or around September 7, 2023. A UCC-1
financing statement on August 3, 2023. The Debtor asserts Arma
Capital is unsecured because the filed UCC-1 financing statement is
avoidable.
The Debtor is directed to make adequate protection payments to the
U.S. Small Business Administration in the amount of $731 per month
by the 10th day of each month.
A copy of the order is available at https://urlcurt.com/u?l=uVbG6a
from PacerMonitor.com.
About Colorado Food Enterprises Inc.
Colorado Food Enterprises Inc. is a collection of locally owned
companies that provide a variety of products and food production
services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 23-14259) on September
21, 2023. In the petition signed by James Teran, president, the
Debtor disclosed $774,251 in assets and $5,006,437 in liabilities.
Judge Michael E. Romero oversees the case.
Aaron A. Garber, Esq., at Wadsworth Garber Warner Conrardy, P.C.,
represents the Debtor as legal counsel.
CORE CONSTRUCTION: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized Core Construction and Development, Inc. to use
the cash collateral on an interim basis, in accordance with the
budget, retroactive to September 7, 2023.
Creditors John Deere Construction and Forestry Company, Caterpillar
Financial Services Corporation, Bank of the West, and VFS US LLC
assert an interest in the cash collateral.
The Debtor is permitted to use cash collateral to pay: (a) amounts
expressly authorized by the Court; (b) the current and necessary
expenses set forth in the budget, plus an amount not to exceed 10%
for each line item; and (c) additional amounts as may be expressly
approved in writing by the Secured Creditors. However, the Debtor
is not authorized to pay any compensation to insiders or
professionals set forth in the Budget absent Court approval of said
compensation.
The Secured Creditors will have perfected post-petition liens
against cash collateral to the same extent and with the same
validity and priority as their prepetition liens, without the need
to file or execute any document as may otherwise be required under
applicable non bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the Secured Creditors.
A continued hearing on the matter is set for February 2, 2024 at
1:30 p.m.
A copy of the order is available at https://urlcurt.com/u?l=lWGz2M
from PacerMonitor.com.
About Core Construction & Development
Core Construction & Development, Inc. is a site construction
company incorporated in Florida with offices in Colorado Springs,
Colo., and licensed in many states.
Core Construction & Development filed Chapter 11 petition (Bankr.
M.D. Fla. Case No. 23-03935) on Sept. 7, 2023, with $2,856,992 in
total assets and $5,387,421 in total liabilities. Gregory Lee,
president, signed the petition.
Judge Catherine Peek McEwen oversees the case.
Buddy D. Ford, Esq., at Buddy D. Ford, PA, is the Debtor's legal
counsel.
CURIA GLOBAL: Eaton Vance Marks $1.83MM Loan at 19% Off
-------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$1,827,000 loan extended to Curia Global, Inc., to market at
$1,470,953 or 81% of the outstanding amount, as of October 31,
2023, according to a disclosure contained in EFR's Form N-CSR for
the fiscal year ended October 31, 2023, filed with the U.S.
Securities and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 3.75%) to Curia Global.
The loan accrues interest at a rate of 9.233% per annum. The loan
matures on August 8, 2026.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Curia Global, Inc., operates as an integrated chemistry outsourcing
company. The Company offers discovery biology, synthetic and
medicinal chemistry, DMPK and bioanalytical, and small-scale
manufacturing services. Curia Global serves pharmaceutical and
biotech companies worldwide.
DIAMOND SPORTS: In Fight With DirecTV Over MLB Games Airing Payment
-------------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that DirecTV LLC is under no
obligation to pay Diamond Sports Group LLC licensing fees to show
Major League Baseball games that Diamond failed to provide, the
satellite TV provider said in a bankruptcy court objection.
DirecTV pushed back Thursday, January 11, 2024, against a bid by
Diamond, the owner of Bally Sports-branded sports channels, to
force payments allegedly owed under contract to broadcast San Diego
Padres and Arizona Diamondbacks baseball games.
The satellite TV provider is one of several high-profile creditors
involved in Diamond's Chapter 11 case, which was initiated in March
2023.
About Diamond Sports Group
Diamond Sports Group, LLC, and its affiliates own and/or operate
the Bally Sports Regional Sports Networks, making them the nation's
leading provider of local sports programming. DSG's 19 Bally
Sports RSNs serve as the home for 42 MLB, NHL, and NBA teams. DSG
also holds joint venture interests in Marquee, the home of the
Chicago Cubs, and the YES Network, the local destination for the
New York Yankees and Brooklyn Nets. The RSNs produce about 4,500
live local professional telecasts each year in addition to a wide
variety of locally produced sports events and programs. DSG is an
unconsolidated and independently run subsidiary of Sinclair
Broadcast Group.
Diamond Sports Group and 29 of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90116) on March 14, 2023. In the petition filed by David F.
DeVoe, Jr., as chief financial officer and chief operating officer,
Diamond Sports Group listed $1 billion to $10 billion in both
assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP
and Porter Hedges, LLP as bankruptcy counsel; Wilmer Cutler
Pickering Hale, Dorr, LLP and Quinn Emanuel Urquhart & Sullivan,
LLP as special counsel; AlixPartners, LLP as financial advisor;
Moelis & Company, LLC and LionTree Advisors, LLC as investment
bankers; Deloitte Tax, LLP, as tax advisor; Deloitte Financial
Advisory Services, LLP, as accountant; and Deloitte Consulting, LLP
as consultant. Kroll Restructuring Administration, LLC is the
claims agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer& Feld LLP as counsel;
FTI Consulting, Inc., as financial advisor; and Houlihan Lokey
Capital, Inc., as investment banker.
DIVERSIFIED HEALTHCARE: Moody's Ups CFR to Caa3, Outlook Stable
---------------------------------------------------------------
Moody's Investors Service upgraded Diversified Healthcare Trust's
(DHC') Corporate Family Rating to Caa3 from Ca, as well as the
rating on the Real Estate Investment Trust's (REIT) Backed Senior
Unsecured Notes to Caa3 from Ca and the rating on its Senior
Unsecured Notes to Ca from C. Moody's also assigned a Caa2 rating
to DHC's $941 million zero coupon 2026 Senior Secured Notes. DHC's
speculative grade liquidity (SGL) rating remains unchanged at
SGL-4. The rating outlook remains stable.
The upgrade of the CFR to Caa3 reflects some partial easing of
Moody's concerns over DHC's immediate capital needs as the new
notes' proceeds have been used to repay the company's 2024
maturities, namely $450 million under its senior credit facility
due 15 January 2024 and $250 million of unsecured notes due May 1,
2024.
RATINGS RATIONALE
The Caa3 CFR reflects Moody's assessment that, while imminent
payment default has been avoided, DHC's capital structure remains
unsustainable and the probability of a financial restructuring is
high in the coming 12-24 months. The Caa3 also reflects Moody's
concerns over the REIT's liquidity and its ability to repay or
refinance its $500 million June 2025 maturity.
DHC's operating performance in 2023 has continued to be weak
through the third quarter of the year. Moody's also expects the
REIT to report weak full year 2023 financial metrics. Pro-forma for
the zero coupon bond and the repayment of the 2024 maturities,
Moody's expects DHC's (Moody's adjusted) net debt to EBITDA of
12.7x as of the end of 2023.
While the new bond alleviates short term concerns over a payment
default, Moody's expects that with the continued slow recovery of
the senior housing operating assets segment, DHC's credit metrics
will remain very weak in the coming 12 months with (Moody's
adjusted) net debt to EBITDA at 12x at year end 2024.
The SGL-4 reflects Moody's expectation that the company will have
weak liquidity over the coming 12 months. Pro forma for the new
bond and the repayment of the 2024 maturities, Moody's expects DHC
to start 2024 with $169 million of cash on hand. With no revolving
credit facility in place, this is likely to be insufficient to fund
even maintenance capex needs for the full year and Moody's expects
DHC to need to seek external funding as early as second or third
quarter of 2024.
The Caa2 rating on the new zero coupon bond reflects its security
over assets which DHC has estimated at $1.6 billion. In addition,
the new bond is fully and unconditionally guaranteed by all
subsidiaries that guarantee the 9.750% senior notes due 2025 and
the 4.375% senior notes due 2031. The Caa3 rating on the 2025 and
2031 guaranteed notes reflect their priority of claim on material
assets over the unsecured unguaranteed notes which are rated Ca.
In assessing the recovery of the various debt instruments at
default, Moody's considered the REIT's asset pool which consists of
senior housing operating assets, triple-net lease assets, and
medical office and life science buildings that have a cumulative
gross book value greater than $5.5 billion. However, Moody's
believes that the market value of these assets could be materially
lower than that due to their poor overall operating performance and
tight financial market conditions.
The stable outlook reflects Moody's view that while the medium-term
default probability is high, it is appropriately captured at the
current rating level.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the probability of default were
to increase, or should Moody's expectations for recovery at default
materially change.
An upgrade is unlikely in the near term and would require long-term
liquidity concerns to be alleviated. An upgrade would also require
DHC's operations and credit metrics to improve materially.
Diversified Healthcare Trust is a real estate investment trust,
which owns senior living communities, medical offices and life
science buildings and wellness centers throughout the United
States. DHC is managed by the operating subsidiary of The RMR
Group, Inc., a publicly listed alternative asset management company
headquartered in Newton, MA.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
DMG SECURITY: Court OKs Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized D.M.G. Security, Inc. to use cash
collateral on an interim basis, in accordance with the budget.
The Debtor requires the use of cash collateral to make its payroll
and other operational expenses.
Prior to the Petition Date, the Debtor executed a Factoring and
Security Agreement with United Capital that on its face states that
certain receivables from Chicago Transit Authority, Skytech and
Steiner Security were sold to United.
To secure the Prepetition Obligations, the Prepetition Factoring
Agreement grants United first priority security interests on the
Debtor's "Accounts, Chattel Paper, Inventory, Equipment,
Instruments, Investment Property, Documents, Letter of Credit
Rights, Commercial Total Claims, and General Intangibles". Prior to
the Petition Date, United filed a UCC-1 financing statement.
United will be provided the following adequate protection for the
use of its cash collateral:
(A) United will be granted replacement in the Debtor's presently
owned or hereafter acquired property and assets, whether such
property and assets were acquired before or after the Petition
Date. Further, to the extent the Adequate Protection Liens do not
adequately protect against the diminution in value of the
Prepetition Liens, United will have a post-petition superpriority
administrative expense claim against the Debtor, with recourse to
all prepetition and postpetition property of the Debtor and all
proceeds thereof, under 11 U.S.C. sections 503 and 507 against the
Debtor’s estate;
(B) The Debtor will, by January 20, 2024, tender to United the sum
of $75,578 as adequate protection. The Debtor will, by January 25,
2024 tender to United an additional $10,000 as adequate
protection.;
(C) The Debtor will maintain its current levels of loss and
liability insurance coverage on all of the Debtor's assets.
The Debtor's right to use cash collateral will terminate upon the
earlier of (i) the date that is 30 days after entry of the Order if
a final order, or an additional interim order, has not been entered
by the Court on or before such date; or (ii) the occurrence of any
of the Termination Events set forth in clauses (c), or (d) below;
and (iii) 10 business days following the delivery of a written
notice by United to the Debtor, counsel to the Debtor, and the
United States Trustee, of a Default Notice of the occurrence and
continuance of a Termination Event'
These events are considered a "Termination Event":
(a) The Debtor violates any term of the Interim Order;
(b) The Debtor's actual expenditures exceed the amounts set forth
in the line items to the Interim Approved Budget by more than 5 %,
and United did not previously consent in writing to such deviation
from such Interim Approved Budget, or did not subsequently waive
such unauthorized use of cash collateral;
(c) The consummation of the sale or other disposition of all or
substantially all of the assets of the Debtor; or
(d) The entry of an order (i) converting the Debtor’s Chapter 11
case to a case under Chapter 7 of the Bankruptcy Code; or (ii)
dismissing the Debtor's bankruptcy case.
A continued on the matter is set for February 6, 2024 at 10 a.m..
A copy of the order is available at https://urlcurt.com/u?l=YQKyRu
from PacerMonitor.com.
About D.M.G. Security, Inc.
D.M.G. Security, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-15180) on
November 10, 2023.
In the petition signed by Debra M. German, president, the Debtor
disclosed up to $100,000 in assets and up to $500,000 in
liabilities.
Judge Donald R. Cassling oversees the case.
William E. Jamison, Jr. Esq., at William E. Jamison & Associates,
represents the Debtor as legal counsel.
DYNACAST INTERNATIONAL: Eaton Vance Marks $329,000 Loan at 25% Off
------------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$329,000 loan extended to Dynacast International, LLC, to market at
$248,174 or 75% of the outstanding amount, as of October 31, 2023,
according to a disclosure contained in EFR's Form N-CSR for the
fiscal year ended October 31, 2023, filed with the U.S. Securities
and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 9.00%) to Dynacast
International. The loan accrues interest at a rate of 14.517%, per
annum. The loan matures on October 22, 2025.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Dynacast International, LLC is a leading global manufacturer of
small engineered precision components utilizing proprietary
multi-slide die-casting technology and tooling techniques.
ECO MATERIAL: Moody's Rates $100MM Incremental 1st Lien Notes 'B2'
------------------------------------------------------------------
Moody's Investors Service has affirmed Eco Material Technologies
Inc.'s B2 Corporate Family Rating and B2-PD Probability of Default
Rating. As the same time, Moody's has assigned a B2 rating to the
company's proposed $100 million incremental senior secured first
lien notes and affirmed the B2 rating on the company's existing
$525 million senior secured first lien notes. Proceeds from the
incremental notes will be used to fund a number of capital
projects. The rating outlook is maintained at stable.
"Eco Material's ratings are supported by its well established
logistics networks, long-term supply contracts and the solid demand
for fly ash due to its sustainability benefits and performance
features. However, the declining fresh ash supply from electric
utilities and the company's large capital spending to develop
alternative fly ash supply sources elevate business risks in the
coming years. The company is likely to maintain adjusted debt to
EBITDA close to 5.0x in the next one to two years given consistent
demand from the construction sector, good cash flows from legacy
fresh fly ash business and some flexibility in future capital
spending," said Jiming Zou, Moody's lead analyst on Eco Material.
RATINGS RATIONALE
Eco Material has a small scale and a focus on marketing and
distributing fresh fly ash used as cement substitutes in concrete
production, as well as providing site services to electric
utilities. The phasedown of coal fired electricity generation in
the US will reduce the supply of fresh fly ash and increase the
cost of procurement for Eco Material, as already seen in the last
decade. Although earnings grew in the LTM September 2023 due to
double-digit price increases, the decline in fly ash supply poses a
key business risk in the coming years.
To secure additional supply and uphold its sales volumes, Eco
Material plans to accelerate the investment in harvesting and
beneficiation facilities to recover landfilled ash. It also plans
to invest in new technology to increase the portion of harvested
ash, natural pozzolans and slag that can be used as cement
substitutes in concrete production. Harvested ash volume should
increase to more than 10% of the total sales volume in 2025 from
just 2.6% in the LTM September 2023. The incremental debt issuance
will help fund nearly $100 million in growth capital expenditure
for 2024. However, the eventual return on investments remains to be
seen, given the nascent harvesting and beneficiation of landfills
and ash ponds in large quantities and their high operating costs
versus fresh fly ash. Moody's expects the company's adjusted debt
to EBITDA to remain close to 5.0x in the next one to two years
given consistent demand from the construction sector, good
profitability and cash generation from distributing fresh fly ash,
as well as management discretion on a large portion of the growth
capital expenditure in 2025 and beyond should return on investment
trail behind expectation.
Eco Material's rating is supported by its large market share,
established distribution networks, long-term relationships with
utilities and the strong demand for fly ash due to its
sustainability benefits, performance features and department of
transportation specification. Fly ash is a by-product of coal fired
electricity generation that can be used as a partial substitute for
cement in the production of concrete. It improves concrete strength
and durability, while decreasing permeability and thermal cracking.
According to Eco Material, it has a 50% share of volume in North
American's fly ash business, expansive logistics network of supply
sources, storage and distribution terminals. Major customers are
diversified, ready-mix concrete producers, which view fly ash as a
high quality and zero-carbon alternative for Portland cement.
Moody's expects demand for fly ash will remain strong, given a
healthy recovery in public and non-residential construction. Fly
ash prices have been rising faster than cement prices as a result
of its tight supply and environmental benefits in recent years.
Eco Material's adequate liquidity profile reflects its available
cash on hand of about $45 million and $50 million undrawn
asset-based revolver at the end of 2023, positive free cash flows
from the legacy fresh fly ash business, as well as the incremental
debt issuance to fund the planned capital expenditure in 2024. The
revolver due in February 2026 has a springing financial
covenant—fixed charge coverage ratio of 1x, which will be tested
if the availability is less than the greater of 10% of the
borrowing base and $5 million.
The company's existing $525 million and incremental $100 million
senior secured notes due in 2027 are rated B2, in line with the
CFR, reflecting their predominance in the debt capital structure,
although they are junior to the ABL revolver. The notes are secured
by a first priority lien on fixed assets and a second priority lien
on current assets including receivables, inventory and cash.
The stable outlook reflects Moody's expectation that fly ash demand
remains strong and the company will invest in alternative supply
sources without weakening its credit metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the rating, if the company successfully
implements its investment strategy, improves its supply sources and
expands its business scale and diversity. A rating upgrade would
also require debt leverage sustainably below 4.0 times, retained
cash flow to debt exceeding 15%, and management commitment to more
conservative financial policies.
Moody's could downgrade the rating, if the company fails to develop
alternative supply sources as planned and its sales volumes and
earnings deteriorate. Debt leverage above 5 times, negative free
cash flow, or deterioration in liquidity would also result in a
downgrade.
ESG consideration
Eco Material's CIS-4 is mainly underpinned by the company's
governance risks such as high debt leverage and limited free cash
flow given the spending needs for natural pozzolan projects and
harvesting previously landfilled ash. The company also faces waste
and pollution, health and safety, human capital and responsible
production risks associated with the storage and distribution of
fresh fly ash, harvesting of landfilled fly ash, ramping up of
natural pozzolan projects, as well as day-to-day site services for
utilities. While the supply of fresh fly ash is declining due to
the phasing down of coal fired power utilities, the company
benefits from the sustained demand for fly ash as a greener
substitute for Portland cement.
Eco Material is the largest marketer and distributer of fly ash and
one of the leading producers of sustainable cementitious products
in the United States. The company was formed in February 2022 in
connection with the proposed merger of Green Cement, Inc., and
Boral Resources, a North American subsidiary of Boral Limited. The
company is owned by Warburg Pincus, One Equity Partners and GCI
managers. The company generated revenues of about $670 million in
2023.
The principal methodology used in these ratings was Construction
published in September 2021.
EDGE RIVER: 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 Edge River Incorporated.
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 Edge River
Edge River Incorporated conducts business under the name Grease
Monkey.
Based in North Port, Fla., Edge River filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 24-00163) on Jan. 12, 2024, with $1 million to $10 million
in both assets and liabilities. Stephen T. Van Bergen, president,
signed the petition.
Judge Catherine Peek Mcewen oversees the case.
David S. Jennis, Esq., at David Jennis, PA, doing business as
Jennis Morse, represents the Debtor as legal counsel.
EL DORADO GAS: Seeks to Hire Sheehan & Ramsey as Legal Counsel
--------------------------------------------------------------
El Dorado Gas & Oil, Inc., seeks approval from the U.S. Bankruptcy
Court for the Southern District of Mississippi to hire Sheehan &
Ramsey, PLLC.
The Debtor requires legal counsel to:
1. Consult with the Office of the U.S. Trustee and any
appointed committee concerning the administration of the Debtor's
Chapter 11 case;
2. Investigate the acts, conduct, assets, liabilities and
financial condition of the Debtor, the operation of the Debtor's
business, the desirability to continue its business and any other
matters relevant to the bankruptcy case or to the formulation of a
Chapter 11 plan; and
3. Prepare a Chapter 11 plan and other legal papers.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Patrick Sheehan $500 per hour
Partners $375 per hour
Of Counsel $375 per hour
Associates $275 per hour
Paralegals $150 per hour
As disclosed in court filings, Sheehan & Ramsey has no connection
with the Debtor, the Debtor's creditors or any other party in
interest.
Sheehan & Ramsey can be reached at:
Patrick A. Sheehan, Esq.
Sheehan & Ramsey, PLLC
429 Porter Ave
Ocean Springs, MS 39564
Tel: 228-365-5707
Email: pat@sheehanramsey.com
About El Dorado Gas & Oil
El Dorado Gas & Oil, Inc., a company in Gulfport, Miss., filed
Chapter 11 petition (Bankr. S.D. Miss. Case No. 23-51715) on Dec.
22, 2023, with $500 million to $1 billion in assets and $50 million
to $100 million in liabilities. Thomas L. Swarek, president, signed
the petition.
Judge Katharine M Samson oversees the case.
Patrick Sheehan, Esq., at Sheehan & Ramsey, PLLC, is the Debtor's
legal counsel.
ELMWOOD HEIGHTS: Unsecureds Will Get 100% of Claims in Plan
-----------------------------------------------------------
Elmwood Heights LLC filed with the U.S. Bankruptcy Court for the
Southern District of New York a Disclosure Statement for the Plan
of Reorganization dated January 18, 2024.
Formed in 2006, the Debtor was formed under the laws of the State
of New York to acquire title to the property located at 597 – 605
Elmwood Avenue, Buffalo, NY, 14222 (the "Property").
The Debtor acquired the Property pursuant to an original mortgage
that was given to Realty Closing Solution LLC on July 30, 2018,
which was recorded in the Clerk's Office where the property is
located. The mortgage has a principal balance in the amount of
$600,000.00 with interest at the current judgment rate of 9%.
The Debtor's revenues were severely harmed by its inability to
evict non-paying tenants under the COVID restrictions on eviction.
This led to a deterioration of the property, causing the building
to become in disrepair and unattractive to new tenants.
On June 1, 2021, REO commenced an action in Erie County Supreme
Court to foreclose on the Property as a result of the Debtor's
purported failure to make monthly payments of principal and
interest pursuant to the terms of said note and mortgage (the
"Foreclosure Action"). Although the Debtor believed the Foreclosure
Action was defective for several reasons such as failure of proper
service of process, REO obtained a Judgment of Foreclosure and Sale
on August 21, 2023, and a sale was scheduled for October 23, 2023
at 10:00 a.m. To preserve the Debtor's interest in the Property, on
October 20, 2023, the Debtor filed for Chapter 11 bankruptcy
protection in the Southern District of New York.
The Debtor intends to utilize the Chapter 11 process to first make
the necessary repairs (subject to its ability to obtain financing)
required by the City of Buffalo and then embark on a robust
marketing campaign to refinance or sell the Property through
bankruptcy process and, if necessary, an auction sale, thereby
giving creditors the best opportunity to be paid in full.
During the Chapter 11 Case, the Debtor has been seeking out various
sources of capital as well as talking to potential brokers and
purchasers to either refinance or sell the Property. Subject to the
time deadlines set forth in the Plan, the Debtor shall market the
Property immediately, and the Debtor has agreed to retain a
licensed real estate broker, subject to Court approval, to
refinance or sell and liquidate the Property for the highest and
best price on or before June 30, 2024. Upon closing, the proceeds
of refinance or sale shall be distributed to holders of Claims and
Interests in the same manner as provided for in the Plan.
The Plan will be funded with the net proceeds from (a) the sale or
refinance of the Property. The sale or refinance of the Property,
as applicable, following Confirmation of the Plan, shall not be
subject to any stamp or similar transfer or mortgage recording tax
pursuant to section 1146(a) of the Code because they be refinanced
or sold under the Plan and after the Confirmation Date.
Class 4 consists of the Allowed General Unsecured Claims. The
holders of Allowed Class 4 General Unsecured Claims in the
approximate aggregate amount of $25,000.00, shall each be paid up
to 100% of its Allowed Claim based on the results of the
Sale/Auction, in Cash, from the Distribution Fund upon the earlier
of a post Effective Date refinance or the Sale/Auction Closing
Date, provided that in the event of a refinance, Class 4 shall be
paid 100% of its allowed claims. Class 4 is impaired and entitled
to vote on the Plan.
The holders of Class 5 interests shall continue to retain their
interests in the Debtor after the Effective Date and shall receive
any net proceeds after payment in full to all Allowed classified
and unclassified Claims. Class 5 interests are unimpaired under the
Plan and are deemed to accept the Plan.
Subject to the time deadlines set forth in this Article IV, the
Debtor shall continue through a licensed real estate broker, to
market the Property in order to refinance or sell and liquidate the
Property for the highest and best price on or before June 30, 2024.
Upon Closing, the proceeds of refinance or sale shall be
distributed to holders of Claims and Interests.
In the event that the Debtor has not previously refinanced the
Property or sold by a private sale, Debtor shall conduct a public
auction of the Property on or before May 31, 2024.
A full-text copy of the Disclosure Statement dated January 18, 2024
is available at https://urlcurt.com/u?l=O5TUuL from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Jonathan S. Pasternak, Esq.
Robert L. Rattet, Esq.
Davidoff Hutcher & Citron LLP
120 Bloomingdale Road, Suite 100
White Plains, NY 10605
Tel: (914) 381-7400
About Elmwood Heights
Elmwood Heights LLC is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101 (51B)).
Elmwood Heights LLC filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22255) on April 3,
2023. In the petition filed by Mary Schneck, as officer, the Debtor
reported assets and liabilities between $1 million and $10 million.
ERIC MCCRITE: Tamara Miles Ogier Named Subchapter V Trustee
-----------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tamara Miles Ogier, Esq.,
at Ogier, Rothschild & Rosenfeld, PC as Subchapter V trustee for
Eric McCrite Co.
Ms. Ogier will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Ogier declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tamara Miles Ogier, Esq.
Ogier, Rothschild & Rosenfeld, PC
P.O. Box 1547
Decatur, GA 30031
Phone: (404) 525-4000
Email: tmo@orratl.com
About Eric McCrite
Eric McCrite Co., a company in Acworth, Ga., filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 24-50463) on Jan. 15, 2024, with $1 million to $10 million
in both assets and liabilities. Graydon Eric McCrite, president and
sole shareholder, signed the petition.
Henry Sewell, Esq., at the Law Offices of Henry F. Sewell, Jr., LLC
represents the Debtor as bankruptcy counsel.
FANJOY CO: Amends Plan to Resolve CircleUp Claim Issues
-------------------------------------------------------
Fanjoy Co. submitted a Fifth Modification to Plan of Reorganization
dated January 18, 2024.
On November 13, 2023, CircleUp Credit Advisors LLC filed its Notice
of CircleUp Credit Advisors LLC of Election Pursuant to Section
1111(b) of the Bankruptcy Code (the "1111(b) Election"), whereby
pursuant to Section 1111(b) of the Bankruptcy Code CircleUp elected
to have the entirety of its $2,507,034.81 claim (Claim No. 21) (the
"CircleUp Claim") treated as fully secured.
Debtor and CircleUp have conferred regarding the Plan and agreed to
resolve the potential objection of CircleUp on the terms herein,
which shall replace and amend the First Modification and amend the
Second Modification. CircleUp agrees to vote for the Plan as
amended herein.
Debtor replaces Section 4.4 as set forth in the First and Second
Modifications with the following. The changes set forth in this
Modification address and reflect CircleUp's treatment under the
Plan and do not otherwise materially and adversely affect the
rights of any parties in interest which have not had notice and an
opportunity to be heard with regard thereto. The treatment of the
CircleUp Claim shall be as follows and Class 4 is amended as
follows:
Class 4: Secured Claim of CircleUp
Class 4 consists of the Secured Claim of CircleUp. On October 16,
2023, CircleUp filed proof of claim number 21 in the asserted
amount of $2,507,034.81 (the "Total Class 4 Claim"). The Total
Class 4 Claim consists of the following asserted amounts: (i)
Principal Balance of $2,275,699.58; (ii) Unpaid Accrued Interest of
$143,811.20, and (iii) fees and costs of $87,529.03. On November
13, 2023, CircleUp filed a Notice of CircleUp Credit Advisors LLC
of Election Pursuant to Section 1111(b) of the Bankruptcy Code. The
Total Class 4 Claim shall be deemed to be an allowed in the amount
asserted by CircleUp.
The Class 4 Claim is secured by a lien on Debtor's properties and
assets (real and personal) and rights against Accounts Debtors, in
each case, wherever located, whether now owner of hereafter
acquired or arising, and all proceeds thereof, including without
limitation all goods (including inventory, equipment and any
accession thereto), fixtures, instruments (including promissory
notes), documents, accounts (including health-care-insurance
receivables), chattel paper (whether tangible or electronic),
deposit accounts, letter-of-credit rights (whether or not the
letter of credit is evidence by a writing), books and records,
commercial tort claims, securities and all other investment
property, supporting obligations, and other contract rights or
rights to the payment of money, all money, cash and cash
equivalents, insurance claims and proceeds, and all general
intangibles, including all payment intangibles as ("CircleUp
Collateral") more particularly described in the Credit and Security
Agreement dated March 15, 2022 (the "CircleUp Loan Agreement") as
further evidenced by the UCC-1 Financing Statement bearing
Instrument Number 20227548811 filed on September 8, 2022, with the
Delaware Secretary of State (the "CircleUp UCC").
Debtor shall pay CircleUp $710,000 in full and final satisfaction
of CircleUp's Total Class 4 Claim, which shall be paid as follows:
(i) $50,000.00 on or by the Effective Date of the Plan; (ii) 12
monthly payments of $15,000.00 each, commencing on the 5th day of
the first month following the Effective Date and continuing by the
5th day of each subsequent month for a total of 12 months; and
(iii) 24 monthly payments of $20,000.00 each commencing on the 5th
day of the 13th month following the Effective Date and continuing
by the 5th day of each subsequent month for a total of 24 months.
Debtor shall also have the right to pre-pay a discounted amount. If
Debtor pays the total amount of $450,000.00 within 365 days of the
Effective Date, the Total Class 4 Claim will be discharged in full
based upon such $450,000 pre-payment.
The lien of CircleUp shall continue and attach to the CircleUp
Collateral with the same validity and priority as existed on the
Filing Date and to the extent of the Total Class 4 Claim. Upon
Debtor's completion of payments to CircleUp pursuant to this Class
4, CircleUp shall release its liens and file a cancellation of all
UCC financing statements and take such other acts as reasonably
necessary to evidence the release of its liens and security
interests as to its collateral. There shall be no pre-payment
penalty. Within 5 days of request by Debtor, CircleUp shall provide
a then current payoff of the Total Class 4 Claim together with an
accounting of all debits and credits to the Total Class 4 Claim
since the Filing Date.
Class 9 consists of Equity Interest Claims. The provisions of Class
9 are amended to provide that Vaccarino's Initial Bid shall be
$50,000 which is for payment of administrative expenses.
A full-text copy of the Fifth Modified Plan dated January 18, 2024
is available at https://urlcurt.com/u?l=zOkxjm from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Leslie M. Pineyro, Esq.
Mark Gensburg, Esq.
Jones & Walden LLC
699 Piedmont Ave. NE
Atlanta, GA 30308
Phone: (404) 564-9300
Email: lpineyro@joneswalden.com
About Fanjoy Co.
Fanjoy Co. has been operating since 2014 and was incorporated in
Delaware in 2014 to provide platform and merchandise marketplace
services to social media content creators. The Debtor operates the
fanjoy.co website, which provides end-to-end design, production,
fulfillment, customer support, e-mail marketing, photoshoots,
product shots, and paid advertisement services for its Content
Creators. The business is operated by the Debtor's principal,
Christopher Vaccarino, out of his residence in Brookhaven,
Georgia.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-57565) on August 8,
2023, with up to $500,000 in assets and up to $10 million in
liabilities. Christopher Vaccarino, president, signed the
petition.
Judge Paul W. Bonapfel oversees the case.
Leslie Pineyro, Esq., at Jones and Walden, LLC, represents the
Debtor as legal counsel.
FIESTA PURCHASER: Moody's Assigns First Time B3 Corp. Family Rating
-------------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
a B3-PD Probability of Default Rating to Fiesta Purchaser, Inc.
(dba as "Shearer's"). Concurrently, Moody's assigned B3 ratings to
the proposed senior secured first lien bank credit facility that is
expected to consist of a $300 million revolving credit facility
expiring in 2029 and a $1,220 million term loan due 2031. The
assigned ratings reflect Moody's expectation for the company to
also issue $500 million of other pari passu secured debt. The
rating outlook assigned is stable.
All ratings are subject to Moody's review of the final
documentation.
Proceeds from the planned $1,720 million of secured debt issuance
along with a new common equity contribution from private equity
firm Clayton Dubilier & Rice, LLC (CD&R) will fund a leveraged
buyout ("LBO") of Shearer's, including repayment of Shearer's
Foods, LLC's existing debt, along with transaction related fees and
expenses. The $300 million cash flow revolver is expected to have
$5 million drawn at close to bridge the timing of pending asset
sale proceeds that are expected to be received after the close of
the acquisition. The $300 million commitment is higher than
Shearer's Foods, LLC's existing $125 million ABL revolver
(unrated). Moody's will withdraw all existing ratings of Shearer's
Foods, LLC, relating to the capital structure under Ontario
Teachers' Pension Plan Board's ownership, including the B2 CFR upon
the close of the transaction and the repayment of its existing debt
obligations.
The assigned ratings reflect Shearer's high leverage and weak pro
forma free cash flow at the close of the LBO transaction. Moody's
estimates that at the close of the LBO, Shearer's pro forma
debt/EBITDA leverage will be 6.1x (on a Moody's adjusted basis) as
of December 30, 2023. Moody's expects debt/EBITDA leverage to
decline to nearly 5.5x by the end of the fiscal year ended
September 2024 and to a low 5x range by the end of fiscal 2025,
driven by earnings growth. Moody's projects weak free cash flow of
$10-20 million in fiscal 2024 pro forma for the higher interest
burden. This is partly because of elevated capital spending, but
also because of the company's high debt after the LBO and resulting
high interest expense. Moody's expects free cash flow to improve in
fiscal 2025 to $40-50 million. This reflects Moody's expectation
for earnings growth, lower interest rates, and reduced capital
spending. There is downside risk to Moody's forecast though,
reflecting the execution risk related to reducing debt/EBITDA
leverage and improving free cash flow over the next 12 months.
Consumers remain pressured and Shearer's could face volume
pressure, especially as snacks are a discretionary food purchase.
There is also risk of retailers pushing back on pricing, which
could result in manufacturers lowering prices to maintain volumes,
or alternatively it could lead to lower volumes and lower fixed
cost leverage. If earnings fail to grow or capital spending remains
elevated for longer than projected, Shearer's free cash flow will
remain weak.
Moody's pro forma adjusted EBITDA is forecast to grow more than 10%
in fiscal 2024, driven mainly by carry over pricing and moderating
inflation. Moody's also expects volume growth to be slightly
positive in fiscal 2024, driven by new business wins and growth in
private label (roughly 60% of sales). Demand for private label
products has been improving since early 2022 because consumers seek
value in a challenging economic environment. Partially offsetting
this will be weaker demand for co-manufactured/branded products,
which makes up roughly 40% of sales. Branded products are typically
priced at a premium to private label and therefore have seen more
volume pressure as consumers trade down because of tighter budgets.
Modest projected EBITDA growth in fiscal 2025 will be driven by
volume growth and cost savings. These improvements are anticipated
as a result of the company's investments in network optimization,
increased manufacturing efficiency, and capacity expansion. This
includes a large investment the company is making to build out
expanded multi-pack capabilities to support increasing demand.
RATINGS RATIONALE
Shearer's B3 CFR reflects Moody's expectation for an aggressive
financial policy. The credit profile also reflects Shearer's high
leverage and weak pro forma free cash flow at the close of the LBO
transaction. Moody's estimates that at the close of the LBO,
Shearer's pro forma debt/EBITDA leverage will be 6.1x (on a Moody's
adjusted basis) as of December 30, 2023 and that free cash flow in
fiscal 2024 will be in the range of $10-$20 million pro forma for
the higher interest burden. Capital spending will be elevated in
the next year because of investments the company is making in
network optimization, increased manufacturing efficiency, and
capacity expansion. Moody's expects the free cash flow profile to
improve over the next two years as these projects are completed and
as interest rates potentially decline. The CFR also reflects that
the company operates in the competitive private label and
co-manufacturing snacks industry. Customer concentration also
remains a risk because shifts in volume or pricing pressure can
weaken earnings. However, the company has solid relationships with
its largest customers and benefits from its leading position as a
producer of private label snacks, with a broad manufacturing
footprint that allows it to service customers nationally. Shearer's
credit profile is further supported by improving private label
demand and a diversified business mix (56% private label, 37%
co-manufacturing, and 7% foodservice).
Shearer's has good liquidity, supported by Moody's expectation of
positive free cash flow in fiscal 2024 and 2025 and access to a
$300 million revolving credit facility that is expected to have $5
million drawn at closing. The company is proposing to hold a
minimal cash balance pro forma for the LBO and this is a liquidity
weakness. Moody's projects that the company will generate positive
free cash flow of $10-$20 million in fiscal 2024, and that free
cash flow will improve to nearly $50 million in fiscal 2025.
Moody's expect these liquidity sources to sufficiently cover the
$12 million in required annual term loan amortization. The required
amortization is subject to change depending on the final
composition of first lien debt at closing. The new revolving credit
facility is expected to contain a 9.00x maximum first lien net
leverage covenant that springs when utilization exceeds 40% of the
commitment. Moody's does not expect the covenant to be triggered
over the next 12 months. If it does, Moody's expects that the
company will have sufficient cushion. There are no term loan
financial maintenance covenants.
ESG CONSIDERATIONS
ESG and specifically governance is a key driver of the rating
action. Shearer's CIS-4 indicates the rating is lower than it would
have been if ESG risk exposures did not exist. This reflects the
weight placed on Shearer's governance including its aggressive
financial policies and concentrated control under private equity
ownership by CD&R. This includes the willingness to operate with
high financial leverage at a time of high reinvestment, and event
risk related to debt-funded acquisitions and distributions.
Environmental and social risks are present and are scored similarly
to other companies across the packaged food sector but overall are
lesser factors than the governance risks driving the CIS-4.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade could occur if Shearer's is able to sustain
positive organic revenue growth, increase the EBITDA margin and
improve free cash flow to a comfortably positive level. Shearer's
would also need to sustain debt/EBITDA below 6.0x and EBITDA less
capital spending-to-interest above 1.25x.
A rating downgrade could occur if earnings decline due to volume or
margin pressure, liquidity or free cash flow deteriorate, or the
financial policy becomes more aggressive.
terms for the new credit facilities (final terms may differ
materially) include the following: Incremental pari passu debt
capacity up to the greater of $315 million and 100% of EBITDA, plus
unlimited amounts subject to either 5.5x total first lien leverage
or leverage neutral. There is an inside maturity sublimit up to the
greater of $630 million and 200% of EBITDA along with any
indebtedness incurred in connection with an acquisition or
investment. The marketing terms do not indicate any "blocker"
provisions which prohibit the transfer of specified assets to
unrestricted subsidiaries. The marketing terms do not indicate any
protective provisions restricting an up-tiering transaction.
Amounts up to 200% of unused capacity from the builder basket,
certain restricted payment carve-outs and the retained asset sales
proceeds basket may be reallocated to incur debt.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
COMPANY PROFILE
Fiesta Purchaser, Inc. (dba as "Shearer's") is headquartered in
Massillon, Ohio, and manufactures snack food products such as
traditional potato chips, tortilla chips, kettle potato chips,
extruded cheese snacks, cookies, and crackers for other companies.
Revenue was $2.0 billion for the fiscal year ended September 30,
2023, pro forma for the Super Pufft USA acquisition in October
2023. The business is being acquired by private equity firm Clayton
Dubilier & Rice, LLC (CD&R).
FIESTA PURCHASER: S&P Assigns 'B' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned a 'B' issuer credit rating to Fiesta
Purchaser, Inc., the proposed borrower of the new debt facilities.
S&P assigned a 'B' issue-level rating and a '3' recovery rating to
the proposed $300 million revolving credit facility and $1.22
billion senior secured term loan. The '3' recovery rating reflects
its expectation of meaningful (50%-70%; rounded estimate: 50%)
recovery for lenders in the event of a default. All ratings are
based on preliminary terms and subject to review of final
documentation.
S&P said, "The stable outlook reflects our expectation that
Shearer's operating performance will continue to benefit from
consumers trading down to private label, and productivity
initiatives, such that leverage remains below 7x.
"We assigned a Management & Governance (M&G) assessment of
moderately negative to Fiesta Purchaser Inc. 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."
Clayton, Dubilier & Rice LLC (CD&R) has agreed to acquire U.S-based
Shearer's Foods LLC. As a result of the transaction, Fiesta
Purchaser Inc. will become the parent company of Shearer's Foods
LLC and all existing debt will be repaid. S&P expects the
acquisition will close in February 2024.
S&P said, "The 'B' rating reflects our expectation of pro forma
leverage of about 6.2x with gradual deleveraging over time. On Dec.
12, 2023, CD&R signed a definitive agreement to acquire Shearer's
Foods LLC. As a result of the transaction, Fiesta Intermediate Inc.
will become the new parent company of Shearer's Foods LLC. The
acquisition will be funded by a new $1.22 billion first-lien term
loan due 2029, $500 million of other secured debt, and a $1.2
billion common equity contribution by financial sponsor CD&R.
Fiesta Purchaser Inc. will be the borrower of the credit
facilities, which will also include a new $300 million first-lien
revolver due in 2029 that is not expected to be drawn at close. We
estimate S&P Global Ratings-adjusted pro forma leverage of about
6.2x as of Sept. 30, 2023, compared to about 4.6x prior to the
transaction. Despite the higher leverage, we expect the company
will sustain leverage below our 7x downside threshold for the
rating.
"We expect sales and profitability growth to enable the company to
deleverage to the mid-5x area in fiscal 2024. While we expect the
macroeconomic environment to remain weak, we believe the weak
macroeconomic backdrop, including stretched household budgets, will
continue to drive steady demand. This coupled with continuing
improvements in manufacturing efficiencies, better capacity
utilization, and cost reductions should improve credit metrics
through fiscal 2024. We forecast sales growth of about 5% in fiscal
2024 and about 4% in fiscal 2025, reflecting good demand for the
company's private label products and contribution from the recent
acquisition of Super-Pufft USA. The company has also secured
additional new business with key customers, which will add to
volume growth. The company has secured its key commodity
requirements for 2024, which should protect margins. In addition,
product mix and customer mix changes, ongoing operational
improvements including automation opportunities, tight cost
control, and higher operating leverage should support good current
profitability of EBITDA margins in the mid-to-high-teens range.
"We forecast earnings growth will result in adjusted leverage
declining to about 5.4x by the end of fiscal 2024 and 5.3x in 2025.
However, annual free cash flow generation in fiscal 2024 will
decline to about $34 million under the new capital structure partly
because annual interest expense will increase by about $50 million.
We also expect capital expenditures to remain elevated over the
next three years to support production capacity expansion and
investments in multi-pack product capabilities."
The Super-Pufft USA acquisition will improve capacity while
enhancing product capabilities and geographic diversity. On Oct.
30, 2023, Shearer's completed the acquisition of Super-Pufft USA,
which it funded with the company's cash balances. In July 2022, the
company purchased Super-Pufft Canada. Super-Pufft manufactures
potato chips, kettle chips, canister snacks, pellet-based snacks,
sheeted products, and extruded cheese puffs. S&P believes Shearer's
could leverage Super-Pufft's unique canister and pellet
capabilities to expand its product offerings to its existing
customers. The acquisition also added enhanced capabilities such as
laminated tortilla chips and potato skins. Moreover, the
transaction should provide Shearer's exposure to some additional
customers. The Super-Pufft USA acquisition added capacity with two
manufacturing plants based in Perry, Fla. and Bluffton, Ind. and
will assist in expanding Shearer's manufacturing footprint in the
Southeast, where the company currently lacks capacity while
enabling the company to optimize its kettle chip network. S&P
expects Super-Pufft USA to contribute about $80 million in revenues
and $15 million in EBITDA, including acquisition synergies and
run-rate savings during fiscal 2024.
Financial sponsor ownership and acquisition strategy will likely
keep S&P Global Ratings-adjusted debt to EBITDA over 5x. Shearer's
has a history of being acquisitive and sustaining leverage over 5x.
S&P said, "We believe the company's acquisition strategy and its
financial sponsor ownership may prevent S&P Global Ratings-adjusted
leverage to decline below 5x over the longer term. We expect
Shearer's and its financial sponsor to prioritize investment in the
business to expand capacity, capabilities, and geographic presence.
We believe they will use excess cash flow and debt capacity to
support acquisitions and possibly shareholder distributions."
S&P said, "We also assigned our new management and governance
assessment of moderately negative to the company. The moderately
negative M&G assessment, compares to our previous view of M&G as
fair under our previous criteria for Shearer's Foods. 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.
"For sponsor-owned companies, we typically assign a negative
assessment for the ownership structure subfactor, which leads to a
preliminary M&G modifier of moderately negative. We believe sponsor
ownership can lead to corporate decision-making that prioritizes
the interests of the controlling owners. This also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns.
"The stable outlook reflects our expectation that Shearer's
operating performance will remain steady because of favorable
snacking and private label trends. We expect it will continue
experiencing modest inflation related to labor and certain
ingredients but this will be offset with pricing and productivity
initiatives, such that leverage remains below 7x.
"We could lower our rating on Shearer's if leverage increases above
7x or if we expect substantial free cash flow decline."
This could happen if:
-- Shearer's loses key customers or has several plant closures or
disruptions; or
-- Operating issues (including supply chain, labor, or
inflationary pressures) cause profit and cash flow to degrade
materially; or
-- The company makes large, debt-funded acquisitions or
dividends.
S&P said, "While unlikely within the next 12 months, we could raise
our ratings if the company reduces leverage to below 5x and
demonstrates financial policies consistent with maintaining
leverage below 5x.
"Social factors are a neutral consideration in our credit rating
analysis of Shearer's. Although consumer sentiment indicates a
shift toward healthier foods, the salty snacks category continues
to exhibit faster growth than other food categories. We believe
this reflects the continued desire of consumers to indulge, which
we believe offsets the social risk related to healthier eating
trends. Governance factors are a moderately negative consideration
in our credit rating analysis of Shearer's. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
FINANCE OF AMERICA: R. Jahangiri, Bloom Retirement Hold 9.49% Stake
-------------------------------------------------------------------
In a Schedule 13D/A Report filed with the U.S. Securities and
Exchange Commission, Reza Jahangiri and affiliated entity, Bloom
Retirement Holdings Inc. disclosed that as of Jan. 16, 2024, they
beneficially owned 33,893,666 shares of Class A Common Stock of
Finance of America Companies Inc., representing 9.49% of the shares
outstanding.
The percentage is based on 87,943,931 shares of Class A Common
Stock outstanding as of November 3, 2023, as set forth in the
Finance of America's Quarterly Report on Form 10-Q filed on
November 9, 2023, increased by 8,0000,000 shares of Class A Common
Stock issued to Bloom upon conversion of an equal number of FOAEC
Units on December 29, 2023, and giving effect to the Conversion
Agreement.
A full-text copy of the report is available at
http://tinyurl.com/2577h4pd
About Finance of America
Plano, Texas-based, Finance of America Companies Inc. is a
financial services holding company which, through its operating
subsidiaries, is a modern retirement solutions platform that
provides customers with access to an innovative range of retirement
offerings centered on the home. In addition, FoA offers capital
markets and portfolio management capabilities to optimize
distribution to investors.
As of September 30, 2023, Finance of America has $26.4 billion in
total assets and $26.3 billion in total liabilities.
As reported by the Troubled Company Reporter on Oct. 20, 2023,
Fitch Ratings has downgraded the Long-Term Issuer Default Ratings
(IDRs) of Finance of America Companies Inc. and its subsidiaries,
Finance of America Equity Capital LLC and Finance of America
Funding LLC, to 'CCC+' from 'B-'. Fitch has also downgraded Finance
of America Funding LLC's senior unsecured debt rating to
'CCC-'/'RR6' from 'CCC+'/'RR5'. The Rating Outlook remains
Negative. The rating actions have been taken as part of a periodic
peer review of non-bank mortgage companies, which is comprised of
six publicly rated firms.
The rating downgrade reflects the operating losses and resulting
erosion of tangible equity FOA has experienced over the last year,
which has resulted in continuing covenant breaches, which may limit
the company's ability to extend debt maturities and secure future
funding. High interest rates and borrower affordability challenges
have reduced origination volumes, which, along with widening credit
spreads, have resulted in significant negative fair value
adjustments to FOA's assets. Tangible equity has decreased to
negative $5 million at 2Q23, down from $288 million in 2Q22 and
$480 million at YE21.
The Negative Outlook reflects Fitch's expectation that FOA's
profitability will remain weak, challenging its ability to rebuild
tangible capital levels over the Outlook horizon. Additionally,
Fitch's believes execution risk remains with regard to the
integration of American Advisors Group (AAG) and the restructuring
of FOA's continuing business segments, which could impact its
long-term franchise and market position.
FREEDOM PLUMBERS: Unsecureds Will Get 10% Dividend in Plan
----------------------------------------------------------
Freedom Plumbers Corporation filed with the U.S. Bankruptcy Court
for the Eastern District of Virginia a Disclosure Statement
describing Chapter 11 Plan.
The Debtor is a Virginia corporation that was formed in 2018 and is
in good standing, engaged in the plumbing industry.
Richard Salinas is its sole owner and principal. The Debtor is
located in Manassas, Virginia and employs 13 people. Prior to
incorporating the Debtor, Mr. Salinas worked for a period of years
as a partner of a plumbing business in Virginia.
The Debtor has a track record of obtaining business, of doing its
work and being paid. There is the risk that the Debtor's gross
revenues may not meet expectations. If this happens, then this
would mean that costs of goods sold (which is a percentage of gross
revenues) would decline and the Debtor would find ways to reduce
expenses. This should allow it to maintain plan payments despite
any shortfall in gross revenues that may occur.
Class 12 consists of General Unsecured Claims. Unsecured creditors
hold claims totaling $280,389.68. This class will be paid pro rata
at 10% on account of their claims over a 54-month period beginning
in month 7. Monthly payment amount shall be $519.24. The Debtor
will make payments to this class monthly. The Debtor can elect to
make the monthly payments on a quarterly basis for administrative
convenience. This Class is impaired.
The 10% dividend stated is an estimate. The actual amount may be
more or less depending on the outcome of any objections to claims,
whether creditors withdraw claims and/or whether claims that would
normally be classified in other classes ultimately are determined
to be members of this class. The Debtor is paying a 10% dividend
based on an estimated $280,389.68 in claims. If the percentage
ultimately paid is more or less than 10%, that shall not constitute
a default under the Plan. Before a Class Member may add attorney's
fees or other charges on to its claim, the Bankruptcy Court must
approve the allowability and reasonableness of any such fee or
charge, with a motion seeking approval filed no later than 30 days
following entry of the order confirming the Plan. The failure to
seek such timely review shall constitute a waiver of all such fees
and other charges.
Richard Salinas holds 100% of the equity interests in the Debtor,
and is its CEO and President, responsible for all of the day-to day
operations of the business. As a practical matter, continued
operation of the business and payment of the Plan payments, require
his continued employment. Not later than 20 days prior to the
confirmation hearing, Mr. Salinas will contribute $20,000 to the
Debtor to assist in making payments due under the Plan on the
Effective Date to professionals. In exchange, he will obtain the
equity interest in the Reorganized Debtor.
Funding for the Plan will come from cash on hand, future revenues
of the Debtor and from a new value contribution of $20,000 by the
Debtor's principal in exchange for obtaining the equity in the
Reorganized Debtor.
A full-text copy of the Disclosure Statement dated January 18, 2024
is available at https://urlcurt.com/u?l=HCiKgE from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Steven R. Fox, Esq.
The Fox Law Corporation, Inc.
17835 Ventura Blvd., Suite 306
Encino, CA 91316
Telephone: (818) 774-4656
Telecopier: (818) 774-3707
Email: srfox@foxlaw.com
Local Counsel to Debtor:
Christopher L. Rogan, Esq.
ROGANMILLERZIMMERMAN, PLLC
50 Catoctin Circle, NE, Suite 300
Leesburg, VA 20176
Tel: (703) 777-8850
Fax: (703) 777-8854
Email: crogan@RMZLawFirm.com
About Freedom Plumbers
Freedom Plumbers Corporation is a Virginia corporation that was
formed in 2018 and engaged in the plumbing industry.
The Debtor filed a Chapter 11 petition (Bankr. E.D. Va. Case No.
23-11654) on Oct. 12, 2023, with $500,001 to $1 million in both
assets and liabilities.
The Debtor tapped Steven R. Fox, Esq., at The Fox Law Corporation,
Inc., as lead bankruptcy counsel and RoganMillerZimmerman, PLLC, as
local counsel.
FRIENDSHIP VILLAGE: Rebranded as Encore Village in Chapter 11
-------------------------------------------------------------
Eric Peterson of Daily Herald reports that the largest continuing
care retirement community in Illinois has been rebranded Encore
Village of Schaumburg after 46 years as Friendship Village that
ended with seven months under Chapter 11 bankruptcy protection.
Encore Healthcare Services of New York closed on its purchase of
the senior housing facility December 28, 2023 as a major step
toward ending the financial woes blamed on an inability to offer
tours to prospective residents during the COVID-19 pandemic.
Along with the new ownership and name comes a new permanent
business model of offering only rentals and not a sales option to
new residents.
"It's a trend in the industry anyway," said Mark Zullo, director of
sales and marketing and one of the officials remaining consistent
after the transition.
The name change is intended as a safeguard against any setback to
the facility's reputation the bankruptcy might have caused. But
having signed four new leases in the previous two days, Zullo said
the evidence suggests there was no permanent damage.
"We had just as good a year, if not better, than the year before,"
he said of the leases signed in 2023.
Zullo and also continuing Executive Director Mike Flynn believe a
commitment to maintaining the community's long-promised resident
lifestyle had a lot to do with that.
"Our care never suffered due to bankruptcy," Flynn said.
But the financial rescue of the facility did entail a reduction in
the amount of health care coverage provided and new regulations on
the amount of deposit refunds families could expect from purchased
units after a resident dies or otherwise moves out.
This allows the new company time to generate more revenue for
operating costs that the previous ownership no longer had, Flynn
said.
"Encore came up with its own financial projects on what would
work," he added.
They expressed sympathy for these changes to the expected return on
a major investment, but said concerns have been voiced largely by
family members rather than the residents intending to live out
their lives in the community.
Under the purchase agreement reached in bankruptcy court, former
residents seeking repayment of entrance fees would split a payment
of $2 million while current residents would be able to collect on
their share over time from $76.6 million of the $114.8 million
purchase price.
For current residents, 25% of their entrance fee would be repaid
within three years of the closing, 35% within four years, 40%
within seven years, 55% by 10 years, 75% by 13 years, 85% before 16
years and 100% only after 16 years.
Some family members have expressed concern over the likelihood of
already elderly residents living as long as 16 years after the
closing.
But officials said the intention of the bankruptcy process was to
find an investor best able to keep the community afloat under any
conditions.
"If no one had come forward, the implications would have been
horrendous," Zullo said.
Beyond its purchase price, Encore has committed to $15 million in
capital improvements at the facility, $50,000 in annual charitable
contributions and $25,000 per year to its employees for educational
assistance.
The facility's bankruptcy process began last June 2023 and Encore
received court approval to be the new buyer in early November.
Encore Village can accommodate up to 1,000 residents.
About Friendship Village of Mill Creek
Friendship Village of Mill Creek, NFP, doing business as
GreenFields of Geneva, owns and operates a continuing care
retirement community located in Geneva, Illinois, known as
GreenFields of Geneva ("Campus"). The Campus is improved with a
building which includes (i) 147 independent living units, (ii) 51
assisted living units, (iii) 26 memory support-assisted living
units, (iv) 43 nursing beds, and (v) related common areas and
parking. Approximately 270 senior citizens reside at the Campus.
Friendship Village of Mill Creek sought Chapter 11 protection
(Bankr. N.D. Ill. Case No. 17-12470) on April 20, 2017.
* * *
GreenFields of Geneva has filed a motion to sell substantially all
assets to Friendship Senior Options ("FSO") for $52,800,000,
subject to overbid. In connection with the sale process, the
Debtor proposed a July 19, 2017 deadline for bids and an auction on
July 26.
Stahl Cowen Crowley Addis, LLC, is serving as counsel to the
Debtor, with the engagement led by Bruce Dopke, Esq., Kevin V.
Hunt, Esq., and Melissa J. Lettiere, Esq., in Chicago, Illinois.
FTX GROUP: Clients Will Miss Crypto Increase Under Bankruptcy Plan
------------------------------------------------------------------
Steven Church of Bloomberg News reports that some former customers
of the bankrupt crypto firm FTX Trading Ltd. are pushing a US judge
to change how they will be repaid, arguing that proposed rules
unfairly leave them out of a yearlong rise in the price of Bitcoin
and other digital currencies.
More than 80 individual customers have filed letters attacking a
plan to peg the value of their digital assets to the date FTX filed
bankruptcy — Nov. 11, 2022 — and pay claims in US dollars
instead of returning the crypto coins.
The customers had some form of crypto trapped on the FTX platform
when company founder Sam Bankman-Fried stepped down amid fraud
allegations. Nearly a year later, he was convicted of orchestrating
a massive fraud that led to the collapse of his FTX exchange.
Since the collapse, a team of bankruptcy experts, lead by chief
restructuring officer John J. Ray III, has been trying to recover
as much cash and as many crypto assets as possible. The team won
court approval to sell crypto held on the platform in order to
create a pool of billions of dollars that can be returned to
customers.
The size of each customer’s claim will be based on the price of
the crypto coin they held on the FTX platform when the company
filed its Chapter 11 petition in Wilmington, Delaware. For Bitcoin
holders, that means they will be owed $16,871 for each of their
former coins, according to court records. The current price surged
past $49,000 at one point on Thursday after trading began on the
first US exchange-traded funds that invest directly in the biggest
cryptocurrency.
"The Bitcoin and Ethereum I held on FTX prior to the collapse were
purchased nearly a decade ago," Robert Shearer, of Bronxville, New
York, wrote in his objection. "Simply put, I had no intention to
sell at the market bottom price."
The US Securities and Exchange Commission approved Bitcoin-spot
ETFs on Wednesday, helping spark a brief rally in the
cryptocurrency as the price fluctuated Thursday.
'Impossible' Task
The FTX bankruptcy team argues in court papers that it would
impractical to figure out the precise value of each customer's
digital portfolio because there are simply too many claims. In the
language of bankruptcy courts, the various FTX units, known as
debtors, would have to liquidate all the customer claims one at a
time. Such a process would be "impossible," FTX officials said in
court papers.
"It is simply not realistic that the debtors would be able to
liquidate every one of the millions of claims based on digital
assets," FTX said in a filing.
In the coming months, the payout plan will be sent to creditors for
a vote before it goes to US Bankruptcy Judge John Dorsey for final
approval. An official committee appointed to represent creditors,
and a group that includes several big crypto holders, have agreed
to the broad outlines of the plan.
The objections filed this week are from customers who do not have
lawyers. Many of the letters contain identical language, which
means they were likely based on a form letter shared among the
writers.
Since the company filed for bankruptcy, the restructuring advisers
have been tracking down assets and trying to untangle a complex web
of debt owed to various creditors, including customers who put cash
and crypto on the trading platform.
The case is FTX Trading Ltd., 22-11068, US Bankruptcy Court for the
District of Delaware.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
GOL GOLL4.SA: Considering Chapter 11 Bankruptcy Filing
------------------------------------------------------
Gabriel Araujo of Reuters reports that Brazilian airline Gol
GOLL4.SA is considering filing for Chapter 11 bankruptcy in the
United States within the next month, February 2024, newspaper Folha
de S.Paulo reported on Sunday, January 14, 2024, citing sources
familiar with the matter.
Gol has been struggling with high debt and last month hired Seabury
Capital to assist it in a capital structure review that included
addressing liability management, financial transactions and "other
measures" to enhance its liquidity.
About Gol GOLL4.SA
Gol GOLL4.SA is a Brazilian airline company.
GOLD STAR: L. Todd Budgen Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 21 appointed L. Todd Budgen, Esq., as
Subchapter V trustee for Gold Star Transportation, LLC.
Mr. Budgen will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Budgen declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
L. Todd Budgen, Esq.
P.O. Box 520546
Longwood, FL 32752
Tel: (407) 232-9118
Email: Todd@C11Trustee.com
About Gold Star Transportation
Gold Star Transportation, LLC filed Chapter 11 petition (Bankr.
M.D. Fla. Case No. 24-00177) on Jan. 15, 2024, with up to $50,000
in assets and $50,001 to $100,000 in liabilities.
Judge Grace E. Robson oversees the case.
Melissa A. Youngman, Esq., at Winter Park Estate Plans & Reorgs
represents the Debtor as legal counsel.
GROWING AND LEARNING: Joseph Schwartz Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Joseph Schwartz
Esq., at Riker Danzig Scherer Hyland & Perretti, LLP as Subchapter
V trustee for Growing and Learning Academy, LLC.
Mr. Schwartz will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Schwartz declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Joseph L. Schwartz, Esq.
Riker Danzig Scherer Hyland & Perretti, LLP
One Speedwell Avenue,
Morristown, NJ 07962-1981
Phone: (973) 451-8506
Email: jschwartz@riker.com
About Growing and Learning Academy
Growing and Learning Academy, LLC filed Chapter 11 petition (Bankr.
D.N.J. Case No. 24-10309) on Jan. 11, 2024, with up to $50,000 in
assets and $50,001 to $100,000 in liabilities.
Kenneth L. Baum, Esq., at the Law Offices of Kenneth L. Baum, LLC
represents the Debtor as bankruptcy counsel.
GUANELLA PASS BREWING: Hits Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Ryan Pachmayer of Westword reports that Guanella Pass Brewing is
reorganizing. It is using Chapter 11 bankruptcy to reorganize its
company. Chapter 11 is a way to keep the business open while it
reorganizes its debt. The brewery closed its Empire location in
October, and in a Facebook comment, Guanella Pass said this is a
way to focus on its primary Georgetown location, which will remain
open throughout the process.
About Guanella Pass Brewing
Guanella Pass Brewing owns and operates a brewery in Georgetown,
CO.
Guanella Pass Brewing Company, LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo.
Case No. 23-16068) on Dec. 30, 2023. The petition was signed by
Steven Skalski as managing member. At the time of filing, the
Debtor estimated $72,340 in assets and $2,282,564 in liabilities.
Judge Thomas B. Mcnamara presides over the case.
Katharine Sender, Esq. at COHEN & COHEN, P.C. represents the Debtor
as counsel.
HAQUE MEDICAL: Seeks to Use Cash Collateral
-------------------------------------------
Haque Medical Properties, LLC asks the U.S. Bankruptcy Court for
the Middle District of North Carolina, Greensboro Division, for
authority to use cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to pay its
operational needs including payment of adequate protection
payments, utilities, insurance and other normal expenses incurred
in the ordinary course of its business.
The Debtor owes approximately $1.188 million to First Citizens bank
pursuant to a Promissory Note and Deed of Trust dated on November
3, 2021. The Deed of Trust contains a Collection of Rents clause
which constitutes cash collateral as it is defined in 11 U.S.C.
Section 363(a).
The promissory note to first Citizens is personally guaranteed by
Haque Medical Properties principal, Dr. Imran Haque, who operates a
medical clinics out of the property. Dr. Haque has incurred a
significant amount of tax debt which led the IRS to file tax liens
as against him personally. No tax liens were filed as against Haque
Medical Properties. Due to tax liens filed against Dr. Haque,
individually as the guarantor, First Citizens invoked provisions in
the Deed of Trust and filed foreclosure procedures. At the time the
foreclosure proceedings were filed, Haque Medical Properties was
current on its debt to First Citizens.
In addition to the lien of First Citizens, On January 16, 2023, CT
Corporation filed a UCC with the North Carolina Secretary of State
as against Haque Medical and various other entities in which Dr.
Haque currently, or previously had an interest. CT Corporation
filed the UCC as the representative of MoneyWell GRP, LLC. It is
the position of the Debtor that the Debt of MoneyWell has been
satisfied in full.
Parties claiming a valid security interest in the cash collateral,
are adequately protected as the result of the following:
a. First Citizens Bank & Trust Company will be adequately protected
by continuing to maintain a security interest in the property which
was held pre-petition having the same priority and rights in the
collateral as it had pre-petition to the including post-petition
accounts and accounts
receivable. Use of the pre-petition and post-petition accounts,
accounts receivable and rents will assist in the Debtor in
preserving the ability to maintain the business operations and the
value of the land. First Citizens is adequately protected because
the amount owed to First Citizens is less than the total value of
all collateral pledged to First Citizens by the Debtor.
b. The Debtor takes the position that First Citizens security in
cash collateral assets exceeds the value of its loan and is
adequately protected regardless of use of cash collateral. However,
in the interest of preserving future negotiations with First
Citizens and ensuring that First Citizens is in fact adequately
protected the Debtor is prepared to make adequate protection
payments in the amount of $6,572 per month which is equal to the
monthly payment owed on the Debt.
c. MoneyWell will be adequately protected by continuing to allow it
to maintain a security interest in the property which was held
pre-petition having the same priority and rights in the collateral
as it had pre-petition to the including post-petition accounts and
accounts receivable. Use of the prepetition and post-petition
accounts, accounts receivable and rents will assist in the Debtor
in preserving the ability to maintain the business operations and
the value of the land. Upon information and belief, adequately
protected because the amount owed to MoneyWell is less than the
total value of all collateral pledged to First Citizens by the
Debtor.
d. The Debtor takes the position that MoneyWell's security in cash
collateral assets exceeds the value of its loan and is adequately
protected regardless of use of cash collateral. Additionally, the
Debtor takes the position that the Debt of MoneyWell is paid in
full and as such the Debtor is not proposing additional adequate
protection payments to MoneyWell.
A copy of the motion is available at https://urlcurt.com/u?l=E0gOUC
from PacerMonitor.com.
About Haque Medical Properties, LLC
Haque Medical Properties, LLC was created on February 17, 2021 in
order to purchase a medical building located at 1380 Eastchester
Dr., High Point, NC. Haque Medical is solely owned by Dr. Imran
Haque. On February 2, 2021 the building was purchased and leases
office space to Horizon Interna Medicine and Koher Medical.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. N.C. Case No. 24-10022) on January 17,
2024. In the petition signed by Imran Haque, member/manager, the
Debtor disclosed up to $10 million in both assets and liabilities.
Dirk W. Siegmund, Esq., at Ivey, McClellan, Siegmund, Brumbaugh &
McDonough, LLP, represents the Debtor as legal counsel.
HENDRIX FARMING: Seeks Court Nod to Sell Property for $47,000
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Mississippi
is set to hold a hearing on Feb. 21 to consider the sale of Hendrix
Farming, LLC's property.
The company is selling a 2018 Sooner trailer to Wesley and Shannon
Holcolmb for $47,000.
The property is being sold "free and clear" of liens, claims and
interests.
Hendrix will use the proceeds from the sale to pay Arvest
Financial, which holds lien on the property.
About Hendrix Farming
Hendrix Farming, LLC, a company in Holy Springs, Miss., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. N.D. Miss. Case No. 23-13663) on Nov. 30, 2023, with $1
million to $10 million in both assets and liabilities. Robert Byrd,
Esq., at Byrd & Wiser, serves as Subchapter V trustee.
Judge Jason D. Woodard oversees the case.
Craig M. Geno, Esq., at the Law Offices of Craig M. Geno, PLLC
represents the Debtor as bankruptcy counsel.
HIGH POINT: Moody's Affirms 'Ba1' Rating on $26MM Debt
------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 debt rating for High
Point Academy, SC. The academy has about $26 million in total debt
outstanding. The outlook remains stable.
The affirmation of the rating is supported by modest but adequate
operating margins and growing gross revenues of $16 million which
has lead to increased cash on hand equal to 136 days and
satisfactory coverage levels, both of which provide operating
flexability. The rating remains limited by its very small waitlist
and enrollment that is below full capacity.
RATINGS RATIONALE
High Point Academy's (HPA) Ba1 rating reflects a sound financial
position, somewhat offset by sub-optimal demand and slightly
underperforming academics.The school's financial health is
underscored by a consistent trend of revenue growth, resulting in
modest yet steady profit margins. At the time of its 2018 bond
issuance, enrollment was expected to reach 1,400 students, though
current enrollment remains well below initial projections at 1,233.
Nevertheless, gross revenues, debt service coverage, and days cash
on hand generally align with original projections. Liquidity is
adequate, with cash reserves surpassing 100 days annually since
2020. Likewise, coverage remains satisfactory and for Fiscal Year
2023, maximum annual debt service (MADS) coverage is strong at
1.34 times. HPA's leverage is moderate, with a cash-to-debt ratio
just over 20%, and no significant debt plans.
Established in 2013, HPA boasts a decade's experience and local
brand recognition. However, HPA faces challenges, including limited
waitlist numbers, competition from nearby charter schools, and
academic performance that lags district and state averages. The
school's charter, set for renewal on June 30, 2024, is expected to
be granted within the coming month.
RATING OUTLOOK
The stable outlook anticipates continued improvement to HPA's
financial position and improved market position, in terms of
waitlist. Likewise maintenance or growth of its days cash on hand
and continued amortization of its debt levels are key to its stable
credit quality. The outlook also assumes a ten year charter
renewal through 2034. The adept handling of these elements will be
pivotal in upcoming evaluations of creditworthiness.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
- Increased waitlist and strengthened competitive profile, which
underscores the academy's ability to maintain full enrollment
- Coverage stabilized and consistent at 1.5x to 2x,
- Continued preservation of operating margins with maintenance of
at least 130 days cash on hand
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
- Liquidity weakens, with cash on hand falling below 100 days,
suggesting diminished operational flexibility
- Debt service coverage ratio declines below 1.20x, reflecting
potential systemic challenges in meeting educational commitments
within current budget constraints
- The risk associated with charter renewal increases, the academy's
competitive standing worsens and/or student demand decreases
LEGAL SECURITY
The debt service payments are secured by a revenue pledge and a
mortgage. The academy deposits revenues on a monthly with the
trustee. The covenants include a debt service coverage test that
requires if coverage is falls below 1.1 times, the school is
obligated to engage a consultant. If coverage is under 1.0 times it
constitutes an event of default event. The liquidity covenant
requirement stipulates a minimum of 45 days cash on hand.
The debt service reserve fund requirement and additional bonds test
encompass a typical three-tiered structure of the lesser of 10% of
the principal of bonds, 125% of annual debt service, or 100% of
maximum annual debt service. If the debt service reserve fund is
drawn upon, replenishment within 12 months is mandatory.Short-term
debt is capped at 15% of Gross Revenues. In case of a covenant
breach, a 30-day period is allowed for rectification.
PROFILE
Opened in 2013, High Point Academy is a K-12 school located in
Spartanburg, South Carolina Its second charter, expires June 30,
2024, operates below full capacity and can expand to just over
1,400 comapred to its 2023-24 enrollment of 1,233. The school
contracts out for back-office fundtions payroll, regulatory
compliance, reporting and budget services working directly with the
business office. Moody's consider the school a stand-alone
operator.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in September 2016.
HOUSE OF DEAR HAIR SALON: Commences Subchapter V Bankruptcy
-----------------------------------------------------------
On House of Dear Hair Salon, LLC and affiliates filed for chapter
11 protection in the Northern District of Texas. According to court
filing, the Debtor reports between $500,000 and $1 million in debt
owed to 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated
for
February 7, 2024, at 11:00 AM at UST-LA3, TELEPHONIC MEETING.
About House of Dear Hair Salon
House of Dear Hair Salon LLC is a limited liability company in
Texas.
House of Dear Hair Salon, LLC filed its voluntary petition for
relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Tex. Case No. 24-30068) on Jan 5, 2024. The petition
was signed by Holly Dear, managing member. At the time of filing,
the Debtor estimated $50,001 to $100,000 in assets and $500,001 to
$1 million in liabilities.
The Debtor is represented by:
Eric A. Liepins. Esq.
Eric A. Liepins, P.C.
114 N Edgefield Ave
Dallas, TX 75208
HUBBARD RADIO: Eaton Vance Marks $527,000 Loan at 15% Off
---------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$527,000 loan extended to Hubbard Radio, LLC, to market at $446,351
or 85% of the outstanding amount, as of October 31, 2023, according
to a disclosure contained in EFR's Form N-CSR for the fiscal year
ended October 31, 2023, filed with the U.S. Securities and Exchange
Commission.
EFR is a participant in a Term Loan (1 mo. USD LIBOR + 4.25%) to
Hubbard Radio. The loan accrues interest at a rate of 9.69% per
annum. The loan matures on March 28, 2025.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Formed in 2011, Hubbard Radio, LLC is a family controlled and
privately held media company that owns and operates radio stations
in seven of top 30 markets, including Chicago, Washington, D.C.,
Minneapolis/St. Paul, St. Louis, Cincinnati, Seattle, and Phoenix.
Hubbard also operates 2060 Digital, LLC, a national digital
marketing agency based in Cincinnati, OH. Headquartered in St.
Paul, MN, the company is affiliated with Hubbard Broadcasting Inc.,
a television and radio broadcasting company that was started in
1923.
HULSEY CONTRACTING: Wins Cash Collateral Access Thru Feb 4
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Hulsey Contracting, Inc., to use
cash collateral on an interim basis, in accordance with the budget,
with a 15% variance, through the continued hearing set for February
8, 2024 at 2 p.m.
A judgment against the Debtor in the amount of $2.6 million was
entered on November 14, 2023 in a civil case filed on April 24,
2020 in the U.S. District Court, Northern District of California.
The judgment creditor will likely continue with its collection
efforts preventing the Debtor from operating.
Three creditors have a blanket security interest on the Debtor’s
assets which are the U.S. Small Business Administration, JPMorgan
Chase Bank, N.A., and the judgment creditor, District Council 16
Northern California Health and Welfare Trust Fund et al.
Each creditor with a security interest in cash collateral is
granted adequate protection in the form of a replacement lien,
dollar for dollar, in post-petition accounts and accounts
receivable of the Debtor, in the same priority and to the same
extent as such creditor’s pre-petition lien and security
interest.
A copy of the order is available at https://urlcurt.com/u?l=yfmTl6
from PacerMonitor.com.
About Hulsey Contracting, Inc.
Hulsey Contracting, Inc. is a commercial roofing and painting
company based in Redlands & Madera California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10151) on January 14,
2024. In the petition signed by Roberto Hulsey, president, the
Debtor disclosed $920,614 in assets and $3,564,801 in
liabilities.
Judge Magdalena Reyes Bordeaux oversees the case.
Todd Turoci, Esq., at The Turoci Firm, represents the Debtor as
legal counsel.
IYS VENTURES: Wins Cash Collateral Access Thru March 22
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, granted IYS Ventures, LLC authority to use cash
collateral, on an interim basis through March 22, 2024.
As previously reported by the Troubled Company Reporter, the Debtor
seeks cash collateral access to fund the payment of rent and
gasoline and the various management companies which pay the
necessary expenses associated with the operation of its business.
The creditors that may assert a security interest in and to the
Collateral are Byzfunder NY LLC, Fox Capital Group, Inc., Itria
Ventures, Samson Funding, and The Huntington National Bank.
Investigation into the priority and security of the Lien Claimants
is ongoing, however, the following represents the approximate claim
and basis for the secured liens:
a. Byzfunder may assert a security interest in the Collateral
pursuant to a Revenue Purchase Agreement and Security Agreement
dated October 25, 2022. Byzfunder's scheduled claim is in the
amount of $153,986.
b. Fox may assert a security interest in the Collateral
pursuant to a Future Receivables Sale and Purchase Agreement dated
November 23, 2022. Fox's scheduled claim is in the amount of
$444,005.
c. Itria asserts a security interest in the Collateral
pursuant to an agreement. Itria's scheduled claim is in the amount
of $1,492,109, which is disputed in part by the Debtor.
d. Samson may assert a security interest in the Collateral by
virtue of multiple Revenue Purchase Agreement and Security
Agreement dated, inter alia, April 8, 2022, November 21, 2022,
December 2, 2022, December 23, 2022, and March 2, 2023. Samson's
scheduled claim is in the amount of $4,091,514.
e. Huntington asserts a security interest in the Collateral by
virtue of an Order on Motion for Prejudgment Attachment dated March
16, 2023, in the case more commonly known as The Huntington
National Bank v. IYS Ventures, LLC, et al., Case No. 23-CV-01368
pending in the United States District Court for the Northern
District of Illinois.
The court ruled that as partial adequate protection to the Lien
Claimants and any other entity claiming a security interest in the
Collateral, for the use of collateral, which includes the Debtor's
equipment, fixtures, inventory, accounts, instruments, chattel
paper, general intangibles, now owned and hereafter acquired
together with all replacements, accessions, proceeds and products
and all proceeds of the Collateral, including cash and cash
equivalent pursuant to the terms of the interim Cash Collateral
Order, the Lien Claimants are granted and will have replacement
liens in and to the Collateral which will have the same validity,
perfection, and enforceability as the pre petition liens held by
the Lien Claimants without any further action by the Debtor or the
Lien Claimants and without executing or recording any financing
statements, security agreements, or other documents.
A continued hearing on the matter is set for March 13 at 10:30
a.m.
A copy of the court's order is available at
https://urlcurt.com/u?l=DQlprr from PacerMonitor.com.
About IYS Ventures
IYS Ventures LLC leases, owns and operates gas stations located in
Illinois, Minnesota, Michigan, Indiana, Ohio, South Dakota,
Virginia, Wisconsin, and Louisiana.
The Debtor filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06782) on May 23,
2023. In the petition filed by Muwafak Rizek, as manager and
member, the Debtor reported assets between $1 million and $10
million and liabilities between $10 million and $50 million.
Honorable Bankruptcy Judge David D. Cleary oversees the case.
The Debtor is represented by Gregory K Stern, Esq. at Gregory K.
Stern, P.C., represents the Debtor as legal counsel.
JL DANIELS: Banned From Using Cash Collateral
---------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama,
Southern Division, entered an order prohibiting JL Daniels Group
LLC from using cash collateral absent further order of the Court or
the consent of Velocity Commercial Capital, LLC.
As previously reported by the Troubled Company Reporter, Velocity's
duly recorded mortgage is a valid first-priority perfected lien on
the Debtor's property, fully enforceable in accordance with the
terms of the underlying loan documents, without defense, offset or
counterclaim of any nature.
On August 23, 2023, Velocity commenced advertisement of a
nonjudicial foreclosure against the real property located at 2628
Wenonah Oxmoor Road, Birmingham, Alabama 35211, with a scheduled
sale date of September 22, 2023, during the legal hours of sale.
On September 21, 2023, the day prior to the Foreclosure sale date,
the Debtor filed for relief under Chapter 11 of Title 11, claiming
status as a Subchapter V debtor.
As of the Petition Date, the Debtor owed Velocity at least $1.4
million, including arrearages of $82,47, and such amount increases
every day.
The Debtor has not requested nor received Court approval to use
Velocity's cash collateral or rent and the Debtor has made no
adequate protection payments to Velocity.
The Debtor has converted for its owner's own use and purpose cash
collateral rightly belonging to Velocity without Velocity's
permission and without Court authorization.
The Debtor is directed to account to Velocity for all rental
receipts at the Property the Petition Date and will pay such rent
proceeds to Velocity for application to the indebtedness within 10
days from the entry of the order.
A copy of the order is available at https://urlcurt.com/u?l=Laxv7U
from PacerMonitor.com.
About JL Daniels Group LLC
JL Daniels Group, LLC, a company in Birmingham, Ala., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. N.D. Ala. Case No. 23-02503) on Sept. 21, 2023, with $1
million to $10 million in both assets and liabilities. James L.
Daniels, president, signed the petition.
Judge D. Sims Crawford oversees the case.
Jacquese Antoinette Gary, Esq., at Gary Law, LLC represents the
Debtor as bankruptcy counsel.
JM WAYS: Court OKs Cash Collateral Access Thru Feb 6
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana, New
Albany Division, authorized JM Ways, LLC d/b/a Skyline Chili to use
cash collateral on an interim basis, in accordance with the budget,
through the date of the final hearing set for February 6, 2024 at
11 a.m.
The Debtor's authority to use cash collateral will automatically
terminate upon the occurrence of any of the following:
a. An order is entered in the Debtor's case (i) dismissing Debtor's
case; (ii) converting Debtor's case to a Chapter 7 proceeding, or
(iii) the appointment of a Chapter 11 trustee for Debtor;
b. Debtor's failure to (i) comply with any material provision of
the order (including the failure to comply with a budget) or (ii)
comply with any other covenant or agreement specified in the order,
which such failure will have continued unremedied for three days
following receipt of written notice to such Debtor from FSB; or
c. A Debtor engages in any merger, consolidation, disposition,
acquisition, investment, dividend, incurrence of indebtedness, sale
of assets or other transaction outside the ordinary course of
business without the prior consent of FSB or an order of the
Court.
FSB will be granted adequate protection of its interests in the FSB
Collateral as of the Petition Date in an amount equal to the
aggregate post-petition diminution in value of such interests from
and after the Petition Date, including any such diminution
resulting from the use by a Debtor of the cash collateral, the
imposition of the automatic stay pursuant to 11 U.S.C. Section 362,
and the use of the cash collateral pursuant to the Interim Order.
FSB is also granted post-petition, valid, binding, continuing,
enforceable, fully-perfected, non-avoidable replacement liens on,
and security interest in the FSB Collateral in the total aggregate
amount of the value of the FSB Collateral that existed as of the
Petition Date to the same extent and priority as any properly
perfected, prepetition security interest, without the need for any
additional filing or notice by FSB.
The Debtor was previously ordered to make an adequate protection
payment of $9,000 to FSB on or before November 15, 2023.
The Debtor is ordered to make another Adequate Protection Payment
on or before January 15, 2024.
A copy of the order is available at https://urlcurt.com/u?l=xUIBE5
from PacerMonitor.com.
About JMWays LLC
JMWays LLC owns a building located on leased land having a current
value of $1.2 million.
The Debtor sought protection under Chapter 11 of the U.S.Bankruptcy
Code (Bankr. S.D. Ind. Case No. 23-90970) on October 6, 2023. In
the petition signed by William Jacobs, managing partner, the Debtor
disclosed $1,357,890 in assets and $1,545,419 in liabilities.
Judge Andrea K. Mccord oversees the case.
Weston E. Overturf, Esq., at Kroger, Gardis & Regas, LLP,
represents the Debtor as legal counsel.
LORDSTOWN MOTORS: Chaper 11 Exit Hearing Stalled by 3 Objections
----------------------------------------------------------------
The Business Journal reports that lawyers representing parties in
the Lordstown Motors Corp. Chapter 11 bankruptcy case negotiated
for seven hours to resolve outstanding issues that block a
consensual resolution of the failed EV maker's reorganization
plan.
"We've been together all day in a conference room in an attempt to
make the planned confirmation as consensual as possible," attorney
David M. Turetsky told Judge Mary F. Walrath at the start of a 3
p.m. hearing.
"I'm optimistic," he said. "Debtors and parties [to the case] have
made significant progress."
Still, three issues remained -- and they are significant. Each
deals with shares of Lordstown Motors and the legality of how
executives and directors solicited shareholders and operated the
company.
Topping the list, at least in terms of headline value, is the $45
million claim by the U.S. Securities and Exchange Commission,
related to "monetary remedies for violations of federal securities
law," which Lordstown disclosed in a regulatory filing Tuesday,
January 9, 2023.
The SEC earlier told the court that its "staff has engaged in
numerous discussions with the debtors, creditors' committee, equity
committee and other constituencies to resolve [confirmation] plan
issues in this case."
The SEC wants to be able to pursue charges of securities
violations, if warranted, against Lordstown Motors and its
executives, and not be restricted by legal discharges that would be
confirmed in the reorganization plan.
Likewise, the lead plaintiff in the Ohio Securities Class Action
lawsuit has opposed the reorganization plan at every stage in the
case.
And Lordstown Motors and Foxconn remain at odds over a related
fraud complaint that Lordstown filed the same day it entered
Chapter 11. Foxconn has also asked the bankruptcy court to convert
the Chapter 11 to liquidation.
Walrath initially continued the hearing until Feb. 22, which
prompted Matthew Altman, representing the Official Committee of
Equity Security Holders, to seek permission to speak.
"Good momentum and a lot of dealmaking has been done," he said.
"Everybody has to go back to their clients, obviously. But it’s
been a good day."
Altman reminded the judge of the old adage, in his words: "If you
expand the amount of time to do the task, the work will expand. …
The work product doesn't get better," he said. "Sometimes mischief
gets into it."
Walrath told the attorneys to agree on a confirmation hearing date,
possibly as soon as Jan. 25, 2024 and notify the court.
"I order you all to stay in that conference room a little longer to
resolve everything," she said.
Her humor -- and advisory -- were both apparent. Ten minutes or so
after the hearing began, it was adjourned.
About Lordstown Motors Corp.
Lordstown Motors Corp. -- http://www.lordstownmotors.com/-- is an
electric vehicle OEM developing innovative light duty commercial
fleet vehicles, with the Endurance all electric pickup truck as its
first vehicle. It has engineering, research and development
facilities in Farmington Hills, Mich. and Irvine, Calif.
On June 27, 2023, Lordstown Motors Corp. and two affiliated debtors
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10831). The cases
are pending before Judge Mary F. Walrath.
The Debtors tapped White & Case, LLP and Richards, Layton & Finger,
P.A., as bankruptcy counsels; Baker & Hostetler, LLP as special
counsel; Jefferies, LLC as investment banker; KPMG, LLP as auditor;
and Silverman Consulting as restructuring advisor. Kurtzman Carson
Consultants, LLC is the Debtors' claims and noticing agent and
administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped Troutman Pepper Hamilton Sanders,
LLP, as legal counsel and Huron Consulting Group Inc. as financial
advisor.
LUCAS MACYSZYN: Wins Cash Collateral Access Thru Feb 22
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized Lucas, Macyszyn & Dyer, PLLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through the date of the continued hearing set for
February 22, 2024 at 3 p.m.
As previously reported by the Troubled Company Reporter, the
Debtor's primary secured creditor is Cogent Bank in connection with
a line of credit with a principal balance of approximately
$681,837. Cogent filed a UCC financing statement asserting a
security interest in, among other things, all inventory, equipment,
accounts and accounts receivable.
Cogent also holds a second secured claim in the approximate amount
of $615,602 in connection with a term loan. Cogent filed a UCC
financing statement asserting a security interest in, among other
things, all inventory, equipment, accounts and accounts receivable.
Cogent further holds a third secured claim in the approximate
amount of $450,000 in connection with a second term loan. Cogent
filed a UCC financing statement asserting a security interest in,
among other things, all inventory, equipment, accounts and accounts
receivable.
As of the Petition Date, the Debtor's cash on hand ($728,052) and
accounts receivable ($152,502) totaled approximately $880,553.
As adequate protection with respect to Cogent's interests in the
cash collateral, Cogent is granted a replacement lien in and upon
all of the categories and types of collateral in which they held a
security interest and lien as of the Petition Date to the same
extent, validity and priority that they held as of the Petition
Date.
The Debtor will maintain insurance coverage for the collateral in
accordance with the obligations under the loan and security
documents.
A copy of the court's order is available at
https://urlcurt.com/u?l=xNnLwE from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, amounting
to $1.654 million for three months.
About Lucas, Macyszyn & Dyer Law Firm, PLLC
Lucas, Macyszyn & Dyer Law Firm, PLLC is a law firm that handles
car accidents, truck accidents, motorcycle accidents and slip and
fall injury cases.
The Debtor sought protection under Chapter 11 of thte U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-03944) on September
8, 2023. In the petition signed by Jeffrey Lucas, Manager of Jeff
Lucas PLLC, member, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Catherine Peek McEwen oversees the case.
Alberto F. Gomez, Jr., Esq., at Johnson, Pope, Bokor, Ruppel &
Burns, LLP, represents the Debtor as legal counsel.
LUMMUS TECHNOLOGY: S&P Assigns 'B+' Rating to New 1BB Term Loan
---------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Lummus Technology Holdings V LLC's (Lummus)
proposed $1 billion first-lien term loan due 2029 and $175 million
revolving credit facility due 2027 (undrawn at close). The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 65%) recovery in the event of a payment default.
As part of the proposed transaction, Lummus also plans to upsize
its letter of credit facility (unrated) to $200 million from $150
million. S&P's 'B+' issuer credit rating, stable outlook, and 'B-'
issue-level rating on the company's senior unsecured notes remain
unchanged.
S&P said, "We expect the company will use proceeds from the term
loan to fully repay its existing term loan due 2027 ($971 million
outstanding as of September 2023) and pay fees and expenses related
to the transaction. The refinancing will increase gross debt by
about $30 million and extend the company's senior secured debt
maturities by two years. Following the transaction, we expect
financial metrics will remain in line with our prior expectations,
with slightly higher gross debt offset by modest EBITDA growth over
the next 12 months."
Despite weaker petrochemical profitability due to sluggish global
demand, declining operating rates, and overcapacity in certain
chemical chains, Lummus achieved record bookings in 2023, including
two large proprietary equipment awards that will likely translate
into substantial free cash flow generation in 2024.
S&P said, "While we believe the challenging industry backdrop could
result in potential project delays, final investment decision (FID)
deferrals, and reduced capital expenditure (capex) by the company's
petrochemical customers, Lummus' diversified geographic exposure
and technology portfolio has thus far allowed the company to
successfully replace and grow backlog as existing projects roll
off. We continue to anticipate S&P Global Ratings-adjusted debt to
EBITDA of around 6x on a weighted average basis with our 'B+'
issuer credit rating and stable outlook remaining unchanged."
Issue Ratings - Recovery Analysis
Key analytical factors
-- The borrower under the credit agreement will remain Lummus
Technology Holdings V LLC, with guarantees provided by the
company's parent, Lummus Technology Holdings III LLC, and by each
existing and future wholly owned material domestic restricted
subsidiary of the borrower.
-- The issuer of the company's senior unsecured notes is Lummus
Technology Holdings V LLC, with subsidiary guarantees provided by
the same guarantors as the senior secured credit facility.
Simulated default assumptions
S&P's simulated default scenario considers a secular decline in
demand for the company's proprietary equipment, catalysts, and
technology due to petrochemical and refining overcapacity,
increased competition, and the commercialization of new
technologies. Additionally, a steep economic recession and weak
petrochemical and refined product demand could negatively affect
the company's licensing activity and catalyst sales, exacerbating
its path toward a payment default.
-- Year of default: 2027
-- Emergence EBITDA: $159 million
-- Implied enterprise value multiple: 6x
-- Gross recovery value: $951 million
S&P said, "We estimate a gross recovery value of $951 million,
assuming an emergence EBITDA of $159 million and a 6x multiple. Our
estimated emergence EBITDA reflects a decline from current EBITDA
levels, which we anticipate the company could return to through
cost-cutting measures during a bankruptcy process. This would
normalize margins, albeit at lower top-line levels. We have used a
6x multiple to reflect the economic value of the company's
intellectual property, its ability to operate and generate high
cash flow margins, and its consistent No. 1 or No. 2 market share
in key process technologies. The company generates over
three-quarters of its EBITDA from domestic operations."
Simplified waterfall
-- Gross recovery value: $951 million
--Less: 5% administrative expense: $48 million
--Less: unpledged 35% foreign stock pledge: $47 million
-- First-lien direct recovery value: $857 million
-- Recovery from unsecured deficiency claims: $22 million
-- Total recovery for first-lien debt: $879 million
-- First-lien debt outstanding at default: $1.285 billion
--Recovery estimate: (50%-70%, rounded estimate: 65%)
-- First-lien recovery rating: '3'
-- Net recovery value available to unsecured claims: $47 million
-- Unsecured senior note debt outstanding: $481 million
-- Unsecured deficiency claims of first-lien debt: $428 million
-- Total unsecured and deficiency claims: $908 million
--Unsecured debt recovery estimate: (0%-10%, rounded estimate:
5%)
-- Unsecured debt recovery rating: '6'
Notes: Debt amounts include six months of accrued interest that S&P
assumes will be owed at default. Collateral value includes asset
pledges from obligors (after priority claims) plus equity pledges
in nonobligors.
MAGENTA BUYER: BlackRock MSIT Marks $530,000 Loan at 57% Off
------------------------------------------------------------
BlackRock MSIT Ltd has marked its $530,000 loan extended to Magenta
Buyer LLC to market at $227,900 or 43% of the outstanding amount,
as of October 30, 2023, according to a disclosure contained in
BlackRock MSIT's Form 10-K for the Fiscal year ended October 30,
2023, filed with the Securities and Exchange Commission.
BlackRock MSIT is a participant in a 2021 USD Second Lien Term Loan
to Magenta Buyer LLC. The loan accrues interest at a rate of 13.89%
(3-mo. CME Term SOFR at 0.75% Floor + 8.25%) per annum. The loan
matures on July 27, 2029.
BlackRock Multi-Sector Income Trust is registered under the
Investment Company Act of 1940. BlackRock Multi-Sector Income Trust
is registered as a diversified, closed-end management investment
company. BlackRock Multi-Sector is organized as a Delaware
statutory trust & determines and makes available for publication
the net asset value of its Common Shares on a daily basis.
Magenta Buyer LLC is a provider of cybersecurity software that
derives revenue from the sale of security products, subscriptions,
SaaS, support and maintenance, and professional services.
MAGENTA BUYER: BlackRock MSIT Marks $791,000 Loan at 30% Off
------------------------------------------------------------
BlackRock MSIT Ltd has marked its $791,000 loan extended to Magenta
Buyer LLC to market at $553,417 or 70% of the outstanding amount,
as of October 30, 2023, according to a disclosure contained in
BlackRock MSIT's Form 10-K for the Fiscal year ended October 30,
2023, filed with the Securities and Exchange Commission.
BlackRock MSIT is a participant in a 2021 USD First Lien Term Loan
to Magenta Buyer LLC. The loan accrues interest at a rate of 10.64%
(3-mo. CME Term SOFR at 0.75% Floor + 5.00%) per annum. The loan
matures on July 27, 2028.
BlackRock Multi-Sector Income Trust is registered under the
Investment Company Act of 1940. BlackRock Multi-Sector Income Trust
is registered as a diversified, closed-end management investment
company. BlackRock Multi-Sector is organized as a Delaware
statutory trust & determines and makes available for publication
the net asset value of its Common Shares on a daily basis.
Magenta Buyer LLC is a provider of cybersecurity software that
derives revenue from the sale of security products, subscriptions,
SaaS, support and maintenance, and professional services.
MAGNITE INC: Moody's Rates New Bank Credit Facilities 'Ba3'
-----------------------------------------------------------
Moody's Investors Service assigned Ba3 ratings to Magnite, Inc.'s
new bank credit facilities comprising an upsized $175 million
senior secured revolving credit facility (RCF) due 2029 and $365
million senior secured term loan B due 2031. Magnite's B2 Corporate
Family Rating and stable outlook remain unchanged.
Net proceeds from the new credit facilities are expected to be used
to fully refinance the existing credit facilities consisting of the
$65 million RCF due 2025 and senior secured term loan B due 2028
($351 million outstanding as of December 2023). The new credit
facilities will be issued by the same borrower, secured by the same
collateral package, guaranteed by similar guarantors and contain
substantially the same terms and conditions as the existing credit
facilities. However, the new term loan is not expected to have a
springing maturity related to the company's convertible notes due
2026, a provision that exists in the current term loan.
The assigned ratings are subject to review of final documentation
and no material change in the size, terms and conditions of the
transaction as advised to Moody's. Upon transaction closing,
Moody's will withdraw the Ba3 ratings on the existing credit
facilities.
RATINGS RATIONALE
Moody's views Magnite's proposed refinancing as credit neutral
since pro forma financial leverage remains unchanged at roughly
5.4x total debt to EBITDA (Moody's adjusted). However, the maturity
extension of the credit facilities combined with upsizing of the
RCF enhances financial flexibility during a period of macroeconomic
uncertainty.
Magnite's B2 CFR reflects the company's solid market position as an
independent advertising technology solutions provider that
automates buying and selling of digital advertising inventory to
digital publishers and ad networks. With more than 80% of revenue
derived from mobile and connected television (CTV) markets, Magnite
has benefitted from fast growth in these segments, evidenced by its
blended revenue growth rate of approximately 13% for both
businesses YTD through September 2023. Moody's expects both market
segments to sustain industry growth rates in the 10%-12% range over
the next several years supported by the secular shift of
advertising to digital/mobile platforms and convergence of TV and
digital. The company has entered into or expanded its relationships
with a number of CTV partnerships and industry-leading streaming
content providers and expects to add more partners to solidify its
market position as a leader in identity solutions and audience
targeting. The company is also well-positioned for growth in live
sports and retail media networks. Liquidity is good with $311
million of cash, an undrawn RCF and solid free cash flow (FCF) of
$173 million at LTM September 2023.
The B2 rating also considers Magnite's exposure to cyclical ad
spending. Despite the recent challenging ad spend environment, the
company's financial profile has remained relatively steady,
benefitting from robust 20+% growth in mobile channels offset by
slower growth in the mid-single digit range in its CTV business.
EBITDA margins declined to the low-end of the 20%-25% range
(Moody's adjusted) due to slowing top-line revenue growth and
increases in cloud hosting, data center and bandwidth costs,
personnel expenses, and traffic acquisition costs (TAC). The credit
profile is also constrained by Magnite's moderately high financial
leverage (albeit decreasing) and small but expanding scale in a
rapidly evolving landscape. Though Magnite has experienced good
penetration in the fast-growing CTV segment, Moody's believe there
is potential for large deep-pocketed media platforms or new
entrants to develop competing offerings and take greater revenue
share. Notwithstanding pressure on EBITDA last year, leverage has
declined because the company repurchased some of its convertible
notes in the open market.
The stable outlook reflects Moody's expectation for revenue and
revenue ex-TAC growth in the mid-to-high single-digit percentage
range in 2024 supported by CTV and DV+ (display, video and other
formats such as native, audio and digital out of home) channels in
a strong year for political ad spend, as well as Magnite's
expanding partnerships. Moody's also expects EBITDA margins to
strengthen driven by top-line revenue growth, economies of scale on
operating expenses, optimization of technical infrastructure, and
benefits from achieving full integration of prior acquisitions
(i.e., SpotX and SpringServe).
Over the next 12-18 months, Moody's expects Magnite will maintain
good liquidity as indicated by the SGL-2 Speculative Grade
Liquidity rating with cash balances of at least $250 million and
access to the proposed $175 million revolver, which Moody's
forecast will remain undrawn. Moody's expects FCF over the next 12
months to be in the range of $125 million to $150 million and that
excess cash will be used to fund M&A growth investments and
opportunistically repurchase more of the convertible notes.
STRUCTURAL CONSIDERATIONS
The Ba3 rating on the proposed bank credit facilities is two
notches above the B2 CFR reflecting the secured debts' senior
position ahead of the unsecured convertible notes (unrated) under
Moody's Loss Given Default (LGD) framework. To the extent Magnite
continues to repurchase the convertible notes, this could result in
downward ratings pressure on the secured debts due to reduced
junior debt cushion to absorb losses in a distressed scenario.
ESG CONSIDERATIONS
Magnite's CIS-4 indicates that the rating is lower than it would
have been if ESG risk exposures did not exist. This is chiefly
driven by governance risks as denoted by the G-4 governance score
resulting from Magnite's moderately high financial leverage, as
well as data privacy concerns and reliance on a highly skilled
workforce as indicated by the S-3 social score.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Magnite demonstrates solid revenue
growth, improving margins and debt repayment such that total debt
to EBITDA is sustained below 4.5x, despite the potential for tuck
in acquisitions. Magnite would also need to establish a track
record of consistent EBITDA and free cash flow growth while
adhering to disciplined financial policies. Liquidity would also
need to remain good with ample cash balances and free cash to total
debt consistently above 15% (all metrics are Moody's adjusted).
Ratings could be downgraded if total debt to EBITDA is sustained
above 6x due to operating underperformance, lack of progress with
integrating acquisitions, or debt financed distributions or
acquisitions among other factors. There could also be downward
pressure on ratings if organic revenue growth decelerates to the
mid-single digit percentage range reflecting competitive pressures
or poor execution. Ratings could also be downgraded if liquidity
deteriorates indicated by working capital requirements becoming a
meaningful use of cash, reduced cash balances or revolver
availability, or free cash flow to total debt sustained below the
mid-single percentage range (all metrics are Moody's adjusted).
Magnite, Inc., domiciled in New York, NY, provides technology
solutions to automate the purchase and sale of digital advertising
inventory. Revenue for the twelve months ended September 30, 2023
totaled approximately $608 million.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
MAGNITE INC: S&P Rates New $540MM First-Lien Credit Facility 'BB-'
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating to Magnite
Inc.'s proposed $540 million first-lien credit facility, comprising
a $365 million term loan B due in 2031 and $175 million revolving
credit facility due in 2029.
S&P said, "We expect Magnite to use the net proceeds to refinance
its existing first-lien term loan and revolving facility. We view
the transaction as leverage neutral and improving the company's
liquidity by further extending its secured debt maturities.
"Our 'B+' issuer credit rating and stable outlook reflect our view
that adjusted leverage will remain below 5x and free operating cash
flow to debt above 10% in the next 12 months. We expect Magnite to
continue to benefit from fast-expanding connected TV advertising in
line with a forecast recovery in advertising spending in 2024 as
macroeconomic pressures begin to ease."
ISSUE RATINGS – RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario considers a default in 2028
stemming from intense competitive pressures that materially reduce
volume and pricing power, significantly eroding Magnite's market
share. S&P also assumes further fragmentation of viewing audiences
across different devices or platforms such as gaming, which would
temper or reverse digital advertising spending growth, including
within connected TV.
-- S&P's default scenario assumes Magnite would reorganize rather
than liquidate given its advanced supply-side platform and
technological capabilities to service digital advertising.
-- S&P values the company using a 6x EBITDA multiple and a
run-rate
-- EBITDA decline of approximately 50% from the default year.
Simulated default assumptions
-- Simulated year of default: 2028
-- EBITDA at emergence: $73 million
-- EBITDA multiple: 6x
-- Revolver: 85% drawn at default
Simplified waterfall
--Net enterprise value (after 5% administrative costs): $417
million
-- Collateral value available to secured creditors: $410 million
-- Secured first-lien debt: $514 million
--Recovery expectations: 70%-90% (rounded estimate: 80%)
All debt amounts include six months of prepetition interest.
MALLINCKRODT INT'L: Eaton Vance Marks $1.85MM Loan at 24% Off
-------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$1,846,000 loan extended to Mallinckrodt International Finance, SA,
to market at $1,406,164 or 76% of the outstanding amount, as of
October 31, 2023, according to a disclosure contained in EFR's Form
N-CSR for the fiscal year ended October 31, 2023, filed with the
U.S. Securities and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 7.25%) to Mallinckrodt
International. The loan accrues interest at a rate of 12.703%, per
annum. The loan matures on September 30, 2027.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
About Mallinckrodt plc
Mallinckrodt plc -- https://www.mallinckrodt.com/ -- is a global
business consisting of multiple wholly owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. 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.
Mallinckrodt plc and certain of its affiliates first sought Chapter
11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522)
on Oct. 12, 2020, 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
the reorganization process, emerged from Chapter 11, and completed
an Irish Examinership proceedings.
In a regulatory filing in early June 2023, Mallinckrodt said 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 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 corporate
and finance counsel; Ropes & Gray, LLP as litigation counsel;
Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as
investment banker; and AlixPartners, LLP, as restructuring
advisor.
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.
Davis Polk advised an ad hoc group of holders of first-lien notes
due 2025. Certain members of the ad hoc group are also lenders
under a DIP term loan facility.
* * *
On Oct. 10, 2023, the bankruptcy court confirmed Mallinckrodt's
plan of reorganization. On Nov. 14, 2023, Mallinckrodt disclosed it
has completed its financial restructuring, emerged from Chapter 11
following an expedited court-supervised process, and completed the
Irish Examinership Proceedings. Mallinckrodt reduced its total
funded debt by approximately $1.9 billion. The Company also
satisfied its obligations to the Opioid Master Disbursement Trust
II on terms agreed with the Trust, including through a $250 million
payment made to the Trust prior to the Chapter 11 filing, among
other consideration. As contemplated by Mallinckrodt's plan of
reorganization, ownership of the business transitioned to the
Company's creditors and all of the Company's outstanding ordinary
shares were extinguished at emergence.
MALLINCKRODT INT'L: Eaton Vance Marks $2.65MM Loan at 24% Off
-------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$2,646,000 loan extended to Mallinckrodt International Finance, SA,
to market at $2,022,857 or 76% of the outstanding amount, as of
October 31, 2023, according to a disclosure contained in EFR's Form
N-CSR for the fiscal year ended October 31, 2023, filed with the
U.S. Securities and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 7.50%) to Mallinckrodt
International. The loan accrues interest at a rate of 12.953%, per
annum. The loan matures on September 30, 2027.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
About Mallinckrodt plc
Mallinckrodt plc -- https://www.mallinckrodt.com/ -- is a global
business consisting of multiple wholly owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. 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.
Mallinckrodt plc and certain of its affiliates first sought Chapter
11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522)
on Oct. 12, 2020, 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
the reorganization process, emerged from Chapter 11, and completed
an Irish Examinership proceedings.
In a regulatory filing in early June 2023, Mallinckrodt said 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 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 corporate
and finance counsel; Ropes & Gray, LLP as litigation counsel;
Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as
investment banker; and AlixPartners, LLP, as restructuring
advisor.
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.
Davis Polk advised an ad hoc group of holders of first-lien notes
due 2025. Certain members of the ad hoc group are also lenders
under a DIP term loan facility.
* * *
On Oct. 10, 2023, the bankruptcy court confirmed Mallinckrodt's
plan of reorganization. On Nov. 14, 2023, Mallinckrodt disclosed it
has completed its financial restructuring, emerged from Chapter 11
following an expedited court-supervised process, and completed the
Irish Examinership Proceedings. Mallinckrodt reduced its total
funded debt by approximately $1.9 billion. The Company also
satisfied its obligations to the Opioid Master Disbursement Trust
II on terms agreed with the Trust, including through a $250 million
payment made to the Trust prior to the Chapter 11 filing, among
other consideration. As contemplated by Mallinckrodt's plan of
reorganization, ownership of the business transitioned to the
Company's creditors and all of the Company's outstanding ordinary
shares were extinguished at emergence.
MARIO THE BAKER: Disposable Income to Fund Plan
-----------------------------------------------
Mario the Baker Downtown, Inc. filed with the U.S. Bankruptcy Court
for the Southern District of Florida a Plan of Reorganization for
Small Business.
The Debtor is an Italian Restaurant with its operations in downtown
Miami at 43 West Flagler Street, Miami, Florida. The Debtor is
owned and operated by Diego Estremadoyro·and he has been the
owner/operator since 2015.
The Debtor encountered significant problems as a result of Covid
and related shutdowns and the downtown redevelopment which has
interfered with downtown visitors. The Debtor has a loan with the
United States Small Business Association ("SBA") in the amount of
$150,000 and the SBA has a first lien security interest as to all
of the Debtor's assets, including but not limited to accounts,
furniture, fixtures and equipment.
As a result of the financial difficulties, the debtor sought needed
financing from several merchant cash advance entities which
provided very short-term relief, but soon became a significant
detriment to its financial circumstances ultimately leading to the
attachment of funds in its bank account resulting in the necessity
of this Chapter 11 case.
This Plan will pay the first lender, The Small Business
Administration("SBA"), up to the value of the Debtor's assets,
$45,000, by making payments as set forth in the Plan at the
interest rate of 4.0% The remainder of the SBA loan is treated as
unsecured under the Plan and will receive pro rata distribution
with allowed unsecured creditors under the Plan. All other
creditors claiming a security interest in the Debtor's assets are
wholly under-secured and will be treated as unsecured creditors
under the Plan.
The Plan payments will be made from net revenues (disposable
income) over the life of the Plan. The final Plan payment is
expected to be paid in March 2027.
Class 3 consists of General Unsecured Creditors. Payments to
allowed unsecured creditors will commence in year 3, in April ,2026
with a payment of $5,000.00, payment in September 2026 of
$7,500.00, payment in December 2026 in the amount of $13,000.00 and
payment of $13,000 in March 2027 as set forth in the Distribution
Schedule. This Class is impaired.
Equity Interest Holders as scheduled shall maintain their equity
ownership of the Debtor which they held pre-petition and shall
receive no distribution under the Plan. Mr. Estremaydoro is the
100% shareholder of the Debtor. The stock is subject to the stock
pledge under the treatment provided to Class 2 DIP Lender herein.
The Debtor shall fund the plan from its revenues received from the
revenues derived from its operations which pursuant to its
projections is sufficient to pay the plan payments on a timely
basis.
A full-text copy of the Plan of Reorganization dated January 18,
2024 is available at https://urlcurt.com/u?l=RikiI9 from
PacerMonitor.com at no charge.
About Mario the Baker Downtown
Mario the Baker Downtown, Inc., is an Italian Restaurant with its
operations in downtown Miami at 43 West Flagler Street, Miami,
Florida.
The Debtor filed Chapter 11 petition (Bankr. S.D. Fla. Case No.
23-18594) on Oct. 20, 2023, with up to $50,000 in assets and
$100,001 to $500,000 in liabilities.
Judge Laurel M. Isicoff oversees the case.
Thomas L. Abrams, Esq., represents the Debtor as legal counsel.
MERLIN ACQUISITION: Moody's Affirms 'B3' CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service affirmed Merlin Acquisition Corporation's
(dba Bettcher) B3 Corporate Family Rating and B3-PD Probability of
Default Rating. Concurrently, Moody's affirmed the B2 ratings on
the senior secured first lien term loan, senior secured revolving
credit facility, and the Caa2 rating on the senior secured second
lien term loan. The outlook is stable.
The affirmation of the ratings reflect Bettcher's increase in scale
and geographic coverage since KKR & Co. Inc.'s (KKR) leveraged
buyout (LBO) of the company in December 2021. A credit positive,
the sponsor has provided significant equity to execute Bettcher's
acquisitive growth strategy. Liquidity will be adequate because
Moody's expects at least breakeven free cash flow over the next 12
to 18 months and limited use of the undrawn revolving credit
facility.
RATINGS RATIONALE
The B3 CFR reflects Bettcher's modest scale and credit metrics. Pro
forma for acquisitions that will close in the first quarter of
2024, revenue will approximate $500 million. Moody's expects
organic revenue growth in the 2-4% range over the next 12-18
months. Pro forma EBITA/Interest expense will be modest at around
1.0 times and pro forma debt/EBITDA will remain high at around 7.0
times. Operating performance will continue to be challenged,
particularly in the Frontmatec business, as some protein processors
reduce capital investments to preserve liquidity. Adequate
liquidity will be supported by an undrawn revolver and at least
breakeven free cash flow over the next several quarters.
Bettcher benefits from good aftermarket revenue driven by its large
installed base of motorized cutting tools at most of the major
protein processors. The company's proprietary technology is patent
protected. The company's adjusted EBITDA margin of around 20% will
remain solid. Bettcher also benefits from good revenue diversity
with exposure to beef, poultry and pork processing that mitigates a
downturn in any one segment. The sponsor has contributed
significant equity to support Bettcher's growth strategy. Bettcher
also has various interest rate swaps that partially mitigate the
impact of higher interest rates.
The stable outlook reflects Moody's expectation of adequate
liquidity and that the company will successfully integrate
acquired businesses without diluting operating results.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings may be upgraded if Bettcher increases scale of operations
and effectively manages its growth. Sustained positive free cash
flow of at least 3% FCF/debt, improvement of interest coverage
above 1.5 times or debt/EBITDA below 5.0 times may also support an
upgrade.
Ratings may be downgraded if liquidity erodes. Inability to
integrate acquired businesses without disruption, a higher
probability for a distressed exchange or a weakening of interest
coverage may also result in a downgrade.
Headquartered in Birmingham, Ohio, Merlin Acquisition Corporation,
parent company of Bettcher Industries, Inc. designs and
manufacturers cutting tools, processing equipment and automation
solutions for the meat, pork and poultry industries. Revenue for
the twelve months ending September 30, 2023 was $415 million.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
MILK ROAD: Joseph Frost of Buckmiller Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina appointed Joseph Frost, Esq., as Subchapter V trustee for
The Milk Road, LLC.
Mr. Frost, a member of the law firm of Buckmiller, Boyette & Frost,
PLLC, will be paid an hourly fee of $350 for his services as
Subchapter V trustee.
Mr. Frost declared that he does not have an interest materially
adverse to The Milk Road and the company's creditors and equity
security holders.
About The Milk Road
The Milk Road, LLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-00152) on Jan.
17, 2024, with $50,001 to $100,000 in assets and $100,001 to
$500,000 in liabilities.
Judge Joseph N. Callaway oversees the case.
Richard Preston Cook of Richard P. Cook, PLLC represents the Debtor
as legal counsel.
MISHI LOGISTICS: Matthew Brash Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 11 appointed Matthew Brash of Newpoint
Advisors Corporation as Subchapter V trustee for Mishi Logistics,
Inc.
Mr. Brash will be paid an hourly fee of $395 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Brash declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Matthew Brash
Newpoint Advisors Corporation
655 Deerfield Road, Suite 100-311
Deerfield, IL 60015
Tel: (847) 404-7845
Email: mbrash@newpointadvisors.us
About Mishi Logistics
Mishi Logistics, Inc., a company in Inverness, Ill., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. N.D. Ill. Case No. 24-00484) on Jan. 15, 2024, with
$683,853 in assets and $1,959,767 in liabilities. Kami Kalt,
president, signed the petition.
Judge A. Benjamin Goldgar oversees the case.
Joshua D. Greene, Esq., at SpringerLarsenGreene, LLC represents the
Debtor as legal counsel.
MISHI LOGISTICS: Seeks Cash Collateral Access
---------------------------------------------
Mishi Logistics, Inc. asks the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, for authority to
use cash collateral and provide adequate protection.
Due to instability in the logistics business, the Debtor has faced
substantial financial difficulties causing it to default on
numerous loans that secure its equipment. The current bankruptcy
proceeding will allow the Debtor to restructure its debt while
avoiding repossession of its equipment. The Debtor has already
began restructuring its business prior to the bankruptcy
proceeding, as it has substantially scaled back expenses through
its entry into an agreement with a third party carrier Lemberg, who
uses the trucks and trailers to make deliveries, and pays most of
the expenses associated with transportation (gas, employees, etc),
and then pays the Debtor a portion of the gross revenue.
As of the Petition Date, the U.S. Small Business Administration
holds a first priority perfected lien on substantially all of the
Debtor's pre-petition assets pursuant to its UCC lien recorded on
July 1, 2020. The amount owed to the SBA as of the Petition Date is
approximately $97,000 and is likely more than the value of the
Debtor's unencumbered assets. Most of the Debtor's assets are
trucks and trailers, which are encumbered. The Debtor is aware of
other potential lienholders as there is a UCC lien recorded on
August 2, 2023. However, this lien does not identify the secured
party.
As adequate protection for SBA's and Junior Lienholders' interest
in the cash collateral, the Debtor proposes to use the cash
collateral solely for the purposes outlined in the Interim Cash
Collateral Order and budget. The Debtor further proposes: (1) for
any diminution in value of SBA's interests in the cash collateral
from and after the Petition date, grant the SBA a replacement lien
on all of the Debtor's assets; (2) for any diminution in value of
the SBA's interests in the cash collateral from and after the
Petition date, grant the SBA an administrative expense claim
pursuant to Section 507(b) of the Code and (3) grant Junior
Lienholders replacement liens in the same priority that existed as
of the Petition Date.
A hearing on the matter is set for January 29, 2024 at 9:30 a.m.
A copy of the motion is available at https://urlcurt.com/u?l=SOSD86
from PacerMonitor.com.
About Mishi Logistics, Inc.
Mishi Logistics, Inc. operates a logistics and transportation
business in which it utilizes numerous trucks and trailers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill Case No. 24-00484) on January 15,
2024. In the petition signed by Kami Kalt, president, the Debtor
disclosed $683,853 in assets and $1,959,767 in liabilities.
Judge A Benjamin Goldgar oversees the case.
Joshua D. Greene, Esq., at SPRINGERLARSENGREENE, LLC, represents
the Debtor as legal counsel.
MISSISSIPPI CENTER: Gets OK to Sell Properties for $35,895
----------------------------------------------------------
Mississippi Center for Advanced Medicine, P.C. received approval
from the U.S. Bankruptcy Court for the Southern District of
Mississippi to sell personal properties to Dr. Cynthia Bean and Dr.
James Hogg.
The buyers offered $35,895.63 for the properties, which include
medical equipment used to operate Mississippi Center's business.
The properties are being sold "free and clear" of liens, claims and
interests.
Mississippi Center will use the proceeds from the sale to pay
Community Bank of Mississippi, which holds lien on the properties.
About Mississippi Center for
Advanced Medicine
Mississippi Center for Advanced Medicine, P.C. is a healthcare
organization in Mississippi that integrates subspecialty care,
clinical pharmacy services, and care coordination for patients with
pediatric, congenital, and maternal fetal disorders.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Miss. Case No. 23-00962) on April 21,
2023, with $1 million to $10 million in both assets and
liabilities. Greta Brouphy, Esq., a partner at Heller, Draper and
Horn, LLC, has been appointed as Subchapter V trustee.
Judge Jamie A. Wilson oversees the case.
The Debtor tapped Craig M. Geno, Esq., at the Law Offices of Craig
M. Geno, PLLC as bankruptcy counsel; Priester Law Firm, PLLC,
Bradley Arant Boult Cummings, LLP and Brunini, Grantham, Grower &
Hewes, PLLC as special counsels; and Haddox Reid Eubank Betts, PLLC
as accountant.
MULLEN AUTOMOTIVE: Has Not Issued New Warrants Since Dec. 21
------------------------------------------------------------
Mullen Automotive Inc. filed with the Securities and Exchange
Commission a Form 8-K to report that the Company has not issued any
new warrants and no existing warrants have been exercised since the
reverse stock split of its common stock that was effected on
Dec. 21, 2023. Currently, there are 69,977 warrants outstanding.
About Mullen
Mullen Automotive Inc., f/k/a Net Element Inc., is a Southern
California-based automotive company building the next generation
of
electric vehicles that will be manufactured in two Company-owned
United States-based assembly plants. Mullen's EV development
portfolio includes the Mullen FIVE EV Crossover, Mullen Commercial
Class 1 and 3 EVs and Bollinger Motors, which features both the B1
and B2 electric SUV trucks and Class 4-6 commercial offerings. The
Company operated as the EV division of Mullen Technologies, Inc.
until Nov. 5, 2021, at which time the Company underwent a
capitalization and corporate reorganization by way of a spin-off by
the Company to its shareholders, followed by a reverse merger with
and into Net Element, Inc.
Mullen Automotive incurred a net loss of $1.01 billion for the year
ended Sept. 30, 2023, a net loss of $740.32 million for the year
ended Sept. 30, 2022, and a net loss of $44.24 million for the year
ended Sept. 30, 2021. As of Sept. 30, 2023, the Company had $421.71
million in total assets, $148.90 million in total liabilities, and
$272.81 million in total stockholders' equity.
Larkspur, California-based RBSM LLP, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
Jan. 16, 2024, citing that the Company has an accumulated deficit,
recurring losses, and expects continuing future losses. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
MURPHY OIL: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
-------------------------------------------------------------
Moody's Investors Service affirmed Murphy Oil USA Inc.'s ("MUSA")
ratings including its Ba1 corporate family rating, Ba1-PD
probability of default rating, Ba2 backed senior unsecured notes
rating, Ba2 senior unsecured notes ratings, Baa3 ratings of the
company's senior secured revolving credit facility and senior
secured term loan B. The company's speculative grade liquidity
rating (SGL) of SGL-1 remains unchanged. The outlook is maintained
at stable.
RATINGS RATIONALE
MUSA's Ba1 corporate family rating reflects its strong credit
metrics – which Moody's expect will remain appropriate for the
Ba1 rating category even after potential tuck in acquisitions and
returns to shareholders – its very good liquidity, significant
scale, good market position and geographic reach. MUSA's rating is
also supported by Moody's opinion that consumer demand for motor
fuel and value priced convenience items will retain some degree of
stability regardless of economic conditions. Moody's expects the
company's credit metrics to remain in line with its debt/EBITDA (as
reported) target of 2.5 times, even during times of volatile
earnings. The company's leverage peaked at 2.9x in September 2021
because of the debt financed acquisition of QuickChek but has since
improved to 2.1x for the LTM ended third quarter of fiscal 2023 as
margins improved. Given Moody's expectation for lower fuel margins
in 2024 across the industry relative to the high levels in 2022 and
2023, Moody's forecasts that leverage will increase modestly. MUSA
continues to generate good free cash flow and could curtail share
repurchases to maintain leverage at its 2.5x target. The company is
constrained by its exposure to revenue and earnings volatility
related to motor fuel sales which account for a substantial
majority of the company's revenue and the company's low merchandise
margins, relative to rated peers.
The stable outlook reflects Moody's forecast for debt/EBITDA to be
maintained around 2.5x and the company's very good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade would require a balanced growth strategy and evidence of
a financial policy and capital structure that supports the credit
profile required of an investment grade rating. An upgrade would
also require very good liquidity, increased product diversification
to lower its reliance on fuel sales and increase its higher margin
merchandise revenues. Quantitatively, an upgrade would require
debt/EBITDA maintained below 2.5 times and EBIT/interest sustained
near 5.5 times.
Deterioration in operating performance resulting in weakening of
liquidity or credit metrics could result in a downgrade. A growth
strategy that negatively impacts liquidity or metrics could also
pressure ratings. Specifically, ratings could be downgraded if
debt/EBITDA is sustained above 3.5 times and EBIT/interest is
sustained below 4.0 times.
Murphy Oil USA Inc. is the primary operating subsidiary of Murphy
USA Inc., and mainly sells retail motor fuel products and
convenience merchandise through a total of more than 1,700 retail
stations under the Murphy USA and QuickChek brands. The company's
retail stations are located in 27 states, primarily in the
Southeast, Southwest and Midwest US. Revenue was about $21.8
billion for the last 12-month period ended September 30, 2023.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
NATIONAL RIFLE:Jury Hears Former CFO's Ex-Girlfriend Payments,Perks
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Bloomberg News reports that the National Rifle Association's
longtime chief financial officer told a New York jury he was paid
$30,000 a month after his retirement for consulting services to the
gun-rights group, which the state alleges had squandered millions
of dollars in donated cash.
Woody Phillips, the NRA's CFO from 1992 to 2018, testified Jan. 12,
2024, that the five-year consulting contract he signed required him
to coordinate with former colleagues on relationships with major
donors, though he said there were months when he rarely spoke to
his successor or Chief Executive Officer Wayne LaPierre.
Phillips and LaPierre are among four defendants in the 2020 lawsuit
filed by New York Attorney General Letitia James, who claims the
NRA wasted money on lavish entertainment, travel and personal
expenses for top executives. Phillips was the first defendant to
take the stand in the trial, which began Jan. 8, 2024, and could
last eight weeks.
New York's complaint is based on the NRA being a registered
nonprofit organization in the state, which has restrictions on how
donated funds can be used. James initially sought to dissolve the
NRA over the alleged financial wrongdoing, but a judge took that
penalty off the table before trial.
The state alleges breach of fiduciary duty and violations of laws
requiring proper administration of charitable assets, among other
claims. Phillips and the other defendants have denied wrongdoing.
LaPierre, who said last week he would resign at the end of this
month, is expected to testify later in the trial, as is the NRA’s
general counsel, John Frazer.
On Jan. 12, a state lawyer questioned Phillips about the contract
he signed in his final months as CFO, which authorized Phillips to
bill the NRA $30,000 a month for five years. The deal included an
agreement that he would provide consulting services to "coordinate
activities with the NRA's Executive Vice President, Treasurer and
CFO," according to a court filing.
The contract required Phillips to help his ex-colleagues "build and
maintain relationships with major gifts donors, identify and
cultivate relationships with fundraising partners, and identify
prospective high net worth individuals to solicit for major gifts,"
court records show.
Phillips said he provided consulting services, but didn't speak
with his successor or with Lapierre as a consultant for months
during which he was paid. The contract was eventually canceled.
Phillips said he didn't know why.
At stake in the trial is millions in restitution and penalties.
About National Rifle Association
Founded in 1871 in New York, the National Rifle Association of
America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, the National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. Norton Rose Fulbright US, LLP
and AlixPartners, LLP serve as the committee's legal counsel and
financial advisor, respectively.
* * *
Following a 12-day trial, U.S. Bankruptcy Judge Harlin D. Hale
dismissed the National Rifle Association's Chapter 11 case Tuesday,
May 11, 2021, after finding the group filed its petition in bad
faith in order to gain advantage in litigation brought by New
York's attorney general. New York Attorney General Letitia James
sought the dismissal of the case. The judge condemned the NRA's
attempts to avoid accountability, making clear that the
organization's actions were "not an appropriate use of bankruptcy."
NUSTAR ENERGY: S&P Places 'BB-' ICR on CreditWatch Positive
-----------------------------------------------------------
S&P Global Ratings placed all its ratings on NuStar Energy L.P.
(NuStar), including the 'BB-' issuer credit rating, on CreditWatch
with positive implications.
S&P said, "The CreditWatch placement reflects that we could raise
our ratings on NuStar two notches to align them with our potential
ratings on Sunoco. We anticipate resolving the CreditWatch around
the close of the proposed acquisition.
"We also assigned a new management and governance (M&G) assessment
of neutral to NuStar. This assignment follows the January 7
publication of S&P Global Ratings' revised criteria for evaluating
the credit risks presented by an entity's M&G framework."
Sunoco L.P. (Sunoco) announced a proposed transaction to acquire
all of NuStar's common units, which would make NuStar a wholly
owned subsidiary of Sunoco. S&P expects to view NuStar as a core
subsidiary of Sunoco and, as a result, its rating would be
equalized to that of Sunoco.
S&P placed Sunoco's issuer credit rating and the issue-level rating
on its senior unsecured debt on CreditWatch Positive. The positive
CreditWatch at Sunoco reflects its view that the NuStar acquisition
will strengthen Sunoco's business risk profile. On a pro forma
basis, we project Sunoco's S&P Global Ratings-adjusted debt to
EBITDA will be 4.25x–4.75x.
S&P Global Ratings assigned a neutral M&G assessment to NuStar.
This follows the revision of our criteria for evaluating the credit
risks presented by an entity's M&G framework. M&G 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.
The CreditWatch positive placement reflects that S&P could raise
its ratings on NuStar two notches to align them with our
prospective rating on Sunoco. S&P expects to resolve the
CreditWatch listing around transaction close.
OPTIVIEW 360: Unsecureds to Get Share of Income for 3 Years
-----------------------------------------------------------
Optiview 360 Tours LLC filed with the U.S. Bankruptcy Court for the
Middle District of Florida a Subchapter V Plan of Reorganization
dated January 16, 2024.
The Debtor is a Florida limited liability company organized in 2014
by Joseph A. Diaz, which operates a 12,000 SF immersive
multi-purpose venue featuring 3D-Art programming, a modern event
space, a gaming lounge, content creation studio, 4K LED display
walls and a museum of specially curated art and exhibits.
Optiview's leased facility is located in Seminole County, Florida
at: 855 N. Hwy. 17-92, Longwood, Florida 32750.
In late 2021, Optiview relocated its multi-purpose venue from
Colonial Drive in Orlando to a 12,000 SF facility with frontage on
Highway 17-92 in Seminole County with plans to further develop its
immersive art museum and social lounge offerings. In pursuit of
this goal, Debtor entered into a five-year lease with Marqui
Longwood, LLC ("Landlord") for the Venue with the expectation that
it would be able to develop a kitchen, juice bar and gift shop to
further its revenue generating activities.
Shortly before the commencement of this case, Optiview was served
with an eviction complaint filed by Landlord in Seminole County,
Florida and received multiple demands for payment from equipment
and merchant cash advance lenders.
In order to avoid litigation, and to preserve and develop its
business for the benefit of its creditors and estate, Optiview
commenced the instant Chapter 11 case and elected to proceed with
its reorganization effort under Subchapter V. Optiview believes
this Chapter 11 case will provide an opportunity for it to
stabilize its business, pursue and object to claims, and
restructure its balance sheet for future sustained operations.
Class 16 consists of all Allowed General Unsecured Claims against
the Debtor. In full satisfaction of the Allowed Class 16 General
Unsecured Claims, Holders of Class 16 Claims shall receive a pro
rata share of Distributions paid pursuant to the following payment
schedule:
* Payment #1: $1,000.00 of the Effective Date of the Plan.
* Payment #2: $1,000.00 on the last day of the 6th month
following the Effective Date.
* Payment #3: $5,000.00 on the last day of the 12th month
following the Effective Date.
* Payment #4: $5,000.00 on the last day of the 24th month
following the Effective Date.
* Payment #5: $5,000.00 on the last day of the 36th month
following the Effective Date.
However, Debtor shall devote its Disposable Income over a 3-year
period commencing on the Effective Date to be paid pro rata on an
annual basis pursuant to the payment dates established for Payments
3, 4, and 5 above to the extent that its Disposable Income exceeds
the value of Payment #3, Payment #4, and Payment #5. For purposes
of clarity, the Debtor is devoting its Disposable Income over a
3-year period commencing on the Effective Date for distribution to
Holders of Allowed Class 16 Claims but establishing a mandatory
minimum payment of $5,000.00 per year to the extent that its
Disposable Income does not exceed $5,000.00 in any given year of
the Plan term.
In addition to the annual Distributions, Class 16 Claimholders
shall also receive a pro rata share of the net proceeds recovered
from all Causes of Action after payment of professional fees and
costs associated with such collection efforts, and after
Administrative Claims and Priority Claims are paid in full. The
maximum Distribution to Class 16 Claimholders shall be equal to the
total amount of all Allowed Class 16 General Unsecured Claims.
Class 16 is Impaired.
Class 17 consists of all equity interests in Optiview 360 Tours,
L.L.C. The Interests in Optiview shall be allocated as follows: (i)
90% Joseph Diaz and (ii) 10% Aaron "Blake" Richard. Class 17 is
Unimpaired.
The Plan contemplates the Debtor will continue to manage and
operate its business in the ordinary course, but with restructured
debt obligations. It is anticipated the Debtor's postconfirmation
business will mainly involve continued operation of its content
creation lounge and museum, the funds from which will be utilized
toward the Debtor's payment obligations under the Plan.
Funds generated from the Debtor's operations through the Effective
Date will be used for Plan Payments; however, the Debtor's cash on
hand as of Confirmation will be available for payment of
Administrative Expenses.
A full-text copy of the Subchapter V Plan dated January 16, 2024 is
available at https://urlcurt.com/u?l=X4Wxad from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Daniel A. Velasquez, Esq.
Latham, Luna, Eden & Beaudine, LLP
201 S. Orange Ave., Suite 1400
Orlando, FL 32801
Telephone: (407) 481-5800
Facsimile: (407) 481-5801
Email: dvelasquez@lathamluna.com
About Optiview 360 Tours
Optiview 360 Tours, LLC, is a Florida limited liability company
organized in 2014 by Joseph A. Diaz, which operates a 12,000 SF
immersive multi-purpose venue.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-04900) on Nov. 20,
2023, with up to $100,000 in assets and up to $500,000 in
liabilities. Joseph A. Diaz, president, signed the petition.
Judge Grace E. Robson oversees the case.
Daniel A. Velasquez, Esq., at Latham Luna Eden & Beaudine, LLP, is
the Debtor's legal counsel.
PACKAGING COORDINATORS: Moody's Cuts First Lien Loans Rating to B3
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Packaging
Coordinators Midco, Inc. ("PCI"), including its B3 Corporate Family
Rating and B3-PD Probability of Default Rating. Concurrently,
Moody's downgraded the ratings on the company's existing backed
senior secured first lien revolving credit facility and backed
senior secured first lien term loan to B3 from B2. Moody's also
assigned a B3 rating to PCI's proposed new backed senior secured
first lien revolving credit facility expiring in August 2027.
Moody's will withdraw the B3 rating on the existing revolving
credit facility upon close of the transaction. The outlook is
maintained at positive. The company intends to raise $440 million
in incremental first lien term loan borrowings. Proceeds will be
used to repay $380 million of second lien term loan (unrated), add
cash to the balance sheet and cover fees and expenses related to
this transaction.
The downgrade of the senior secured first lien bank credit facility
reflects the addition of $440 million of incremental first lien
debt, and the removal of the loss absorption provided by second
lien debt cushion. The rating for the senior secured first lien
revolver and term loan matches the B3 CFR, as these instruments
will represent all of the liabilities in the capital structure.
RATINGS RATIONALE
PCI's B3 CFR reflects its elevated Moody's adjusted financial
leverage of about 6.9x as of September 30, 2023. Moody's forecasts
for PCI's credit metrics to improve, supported by mid double-digit
earnings growth, and financial leverage approaching 5.5 times, over
the next 12-18 months. The rating also reflects PCI's risk of
revenue losses due to selective in-sourcing by customers and
incorporates event and financial policy risk due to the company's
acquisitive nature and associated integration risks.
PCI's rating benefits from its leading position among contract
packaging services companies, and a relatively well diversified
customer base consisting largely of blue-chip pharmaceutical
clients. Moody's expects the company's growth will continue to be
supported by favorable industry tailwinds, as the pharmaceutical
industry will continue to increase its reliance on outsourced
service providers.
The company's good liquidity includes approximately $250 million,
including a cash balance of approximately $100 million pro forma
for this transaction and an undrawn $150 million senior secured
first lien revolving credit facility. With this refinancing
transaction, the expiration of the revolving credit facility will
be extended to August 2027 from November 2025. Moody's forecasts
positive annual free cash flow in 2025 despite elevated capital
expenditure spend to support infrastructure growth. PCI has
multiple interest rate swaps that shield its senior secured first
lien term loan from rising interest rates and that expire on March
31, 2025. The company will also have approximately $19 million of
annual term loan amortization.
The new revolver will have a springing first lien net leverage
ratio covenant, when the revolver draw exceeds 40% ($60 million) of
the total commitment. Moody's expects the company to maintain good
covenant cushion over the next 12 months, if the covenant is
triggered. The company's first lien term loan does not contain
financial maintenance covenants. Revolver and first lien term loan
lenders have a pledge on all of the company's assets, restricting
sources of alternate liquidity.
The borrower of the bank credit facility is Packaging Coordinators
Midco, Inc. The first lien senior secured credit facility includes
a $150 million senior secured revolver expiring in November 2025
(to be extended to August 2027) and a $1,930 million (face value)
senior secured first lien term loan due November 2027. The first
lien facilities are rated B3, in line with the B3 CFR, as the
facilities will no longer receive the benefit of a layer of loss
absorption that had been provided by the former second lien term
loan. The credit facilities benefit from both upstream and
downstream guarantees and are secured by all the assets of the
borrower as well as the assets of the parent firm's U.S. operating
subsidiaries.
PCI's ESG credit impact score (CIS-4) indicates that the rating is
lower than it would have been if ESG risk exposures did not exist.
The CIS-4 reflects social risk (S-4) associated with government
regulations surrounding the operation of the company's specialized
facilities and equipment, and exposure to governance risks (G-4),
most notably with aggressive financial policies under private
equity ownership.
The positive outlook incorporates Moody's expectation of continuous
improvements of PCI's credit metrics in the next 12-18 months.
Moody's forecasts mid double-digit earnings growth, and financial
leverage approaching 5.5 times, over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if the company were to experience
operating disruptions or loss of a major contract or if financial
policies became more aggressive. A downgrade could also occur if
the company's liquidity profile were to erode, such that free cash
flow were to turn negative on a sustained basis, or interest
coverage falls below one times.
Ratings could be upgraded if the company can profitably grow in
scale and maintain good product and customer diversity.
Additionally, the company will need to maintain good liquidity,
reflected in consistently positive free cash flow, and debt/EBITDA
will need to be sustained below 6 times, for ratings to be
upgraded.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Packaging Coordinators Midco, Inc. ("PCI Pharma") is a global
provider of outsourced pharmaceutical services that include
commercial and clinical packaging, clinical storage and
distribution services, Sterile Fill Finish and Lyophilization
services, high potency drug manufacturing, and selected drug
development and analytical services. Packaging Coordinators Midco,
Inc. generated revenues of approximately $1.1 billion for the LTM
period ending September 30, 2023. Packaging Coordinators Midco,
Inc.'s parent firm and issuer of the audited financial statements,
Pioneer UK Midco 1 Limited (guarantor of the rated debt) is
majority owned by private equity firm Kohlberg & Company, along
with minority stakes by equity sponsor Partners Group, and
Mubadala, and the management team.
PERSIMMON HOLLOW: Court OKs Interim Cash Collateral Access
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The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Persimmon Hollow Brewing Company, LLC
to continue using the cash collateral of its secured creditor,
Seacoast National Bank, on an interim basis, in accordance with the
budget, with a 20% variance.
As adequate protection for any diminution in the value of cash
collateral and other prepetition collateral resulting from the
Debtor's use thereof after the Petition Date, Secured Creditors
will be entitled to a continuing replacement lien and security
interest in all assets of the Debtor existing on or after the
Petition Date of the same type as the prepetition collateral,
together with the proceeds, rents, products and profits thereof,
whether acquired or arising before or after the Petition Date, to
the same extent, validity, perfection, enforceability and priority
of the liens and security interests of Secured Creditors as of the
Petition Date. The Rollover Lien will be limited to the amount of
any Diminution, and does not extend to any avoidance claims held by
the estate.
The lien granted will be valid and perfected without the need for
the execution of filing of any further document or instrument
otherwise required to be filed under applicable non-bankruptcy
law.
The Debtor's authority to use cash collateral will terminate upon
the earlier of (i) the entry of an order modifying the order, (ii)
the appointment of a Chapter 11 trustee in the Debtor's case, (iii)
the conversion of the Debtor's Chapter 11 case to a case under
Chapter 7 of the Bankruptcy Code, or (iv) a default in the
performance or observance of any material provision of the order.
A further hearing on the matter is set for February 22, 2024 at
10:30 a.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=W7vJVB from PacerMonitor.com.
The Debtor projects $246,500 in total expenses for January 2024 and
$221,250 for February 2024.
About Persimmon Hollow Brewing Company, LLC
Persimmon Hollow Brewing Company, LLC owns and operates a brewery
and taproom in DeLand, FL.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Banke. M.D. Fla. Case No. 23-04742) on November
10, 2023. In the petition signed by Robert Burnette, president and
chief manager, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Grace E. Robson oversees the case.
Richard R. Thames, Esq., at THAMES | MARKEY, represents the Debtor
as legal counsel.
PETERSON REAL ESTATE: Files for Chapter 11 Bankruptcy
-----------------------------------------------------
On Peterson Real Estate LLC filed for chapter 11 protection in the
District of Colorado. According to court filing, the Debtor reports
between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will be available to insecured
Creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated
for
February 14, 2024, at 12:00 PM at UST-LA3, TELEPHONIC MEETING.
CONFERENCE LINE:888-497-4718, PARTICIPANT CODE:96026644#.
About Peterson Real Estate
Peterson Real Estate LLC is a Single Asset Real Estate (as defined
in 11 U.S.C. Sec. 101(51B)).
Peterson Real Estate LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No.
24-10045) on Jan. 5, 2024. The petition was signed by James
Peterson as managing member. At the time of filing, the Debtor
estimated $500,000 to $1 million in assets and $1 million to $10
million in liabilities.
The Debtor is represented by:
Aaron J. Conrardy, Esq.
2980 S. Galapago St.
Englewood, CO 80110
PLUSGRADE INC:S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
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S&P Global Ratings assigned its 'B' issuer credit rating to
Montreal-based global ancillary services solution provider
Plusgrade Inc., reflecting its relatively small scale, operations
in a niche segment of the fragmented travel industry, S&P Global
Ratings-adjusted leverage about 5x-5.5x, and private
equity-sponsored ownership while acknowledging the company's
diverse customer base in the growing travel industry and a
track-record of generating free cash flow generation.
At the same time, S&P assigned its 'B' issue-level rating and '3'
recovery rating to the company's proposed senior secured credit
facilities, consisting of a five-year $80 million revolving credit
facility and seven-year $420 million first-lien term loan.
The stable outlook reflects S&P's expectation the company will
reflect the travel industry's secular growth leading to an
expansion of Plusgrade's small but profitable revenue base and to
an improvement in credit metrics.
The weak business risk assessment reflects Plusgrade's limited
scale in a niche and highly fragmented global travel industry. S&P
said, "Based on revenue and EBITDA size and compared to the
industry ancillary revenue programs or other end-to-end traveler
experiences providers, we view Plusgrade's business as smaller in
scale. We also assess the business to be constrained by the scope
of its operations which mainly consists of two products--Loyalty
Currency Retailing (LCR) and Premium Upgrade--that together
generate a majority of revenue. The operations are heavily
concentrated toward the highly volatile airlines business (more
than half) with North America accounting for more than half of
total revenues and the top 10 customers generating a large part of
revenues. In our view, the company's small EBITDA base and exposure
to the travel industry leaves Plusgrade more susceptible to the
macroeconomy and competitive industry pressures than larger travel
infrastructure peers. Moreover, more than half of its revenues are
tied to transaction-based business. The transaction-based business
model makes it heavily dependent and vulnerable to the volatility
in air travel volumes. In 2020, when travel fell dramatically, the
company's EBITDA dropped by more than 88% from 2019 reflecting a
material decline in travel and associated transactions while
operating costs (fixed and variable) did not decline by a similar
level."
S&P said, "We view the global airline sector as volatile, highly
cyclical, and subject to disruptions. The travel industry is very
volatile and materially affected by macroeconomic recessions,
geopolitical tensions, or travel restrictions. We also consider the
airline sector as high risk due to cyclical demand and passenger
air travel susceptible to outside events such as war, terrorism,
and epidemics. Air travel has rebounded since the pandemic and our
base-case forecast for 2024 assumes that demand will remain robust.
Compared to the prior years, however, we expect passenger traffic
will grow at a reduced rate as the post-pandemic recovery plateaus.
We believe that air travelers will continue to face tight capacity
in the sector as aircraft supply remains restricted, new aircraft
deliveries are delayed, parts and maintenance constraints continue,
and engine reliability issues are heightened. Nonetheless,
historically recovery has typically been fairly quick within the
airline sector. With ancillary revenues generating higher margins
and the premium segment growing at a faster pace, airline business
models have evolved to embrace ancillary offerings, and this is
where Plusgrade excels. However, the risk remains that the travel
industry, including airline, is very cyclical and a significant
drop in transactions would have a disproportionate impact on the
Plusgrade's operations within a short period.
"We assess Plusgrade's financial risk as highly leveraged but will
generate free cash flow. Pro forma for GA`s investment, Plusgrade
will remain 85%-90% financial sponsors owned. Post transaction, we
expect Plusgrade's S&P adjusted leverage to be around 5.0x-5.5x
based on last 12 months' (LTM) EBITDA. S&P forecasts Plusgrade
credit metrics to improve through 2025, with S&P Global
Ratings-adjusted debt to EBITDA of about 5.0x in 2024 and 4.0x-4.5x
in 2025. However, the improvement in leverage is partially
contingent on sustained growth in the airline and travel industry
and a measured financial policy by the financial sponsors. In our
view, financial sponsor-owned companies tend to follow a more
aggressive financial policy to achieve the sponsor's desired
returns and Plusgrade's financial risk profile assessment reflects
this risk, regardless of actual or projected balance-sheet
strength. We expect Plusgrade to generate modest free cash flow
annually through 2025, reflecting the company's positive growth
trajectory, stable margins, and low capital expenditures (capex).
"Recent momentum in the leisure travel industry supports our
revenue and EBITDA growth expectations in 2024 and 2025. The
airline industry has benefitted from pent-up demand post pandemic,
and we expect the demand will remain robust as consumers continue
to prioritize spending on travel over other discretionary spending.
We believe the demand for leisure travel--with overproportionate
growth in the premium segment--will continue to drive passenger
volumes. Loyalty programs are another venue for airlines and the
travel industry to increase ancillary revenues. As a result, we
expect Plusgrade to benefit as the global travel industry
emphasizes growth in its high-margin ancillary revenues. Plusgrade
has more than 200 partners in the travel industry and the
combination of LCR and Premium Upgrade products--the LCR business
is synergistic and allows a customer the option to upgrade seats
with points--allows the company to provide a platform for the
global travel industry to harvest this demand. As a result, we
expect Plusgrade'stopline to grow in the high double-digit teens
percentage annually in fiscal 2024 and 2025. Moreover, we believe
that Plusgrade's loyalty points business, which gained traction
during the pandemic has become an integral part of airlines' and
hotels' businesses and will continue to support the overall growth.
In addition, Plusgrade's vast customer datasets, which helps
personalize offers to travelers, is hard to replicate and increases
competitive benefits and opportunities.
"We expect profitability margins to remain mostly stable over the
next 12 months. Even though we view leisure and airline growth will
moderate somewhat in 2024, we still expect ancillary revenue will
outpace industry growth. As the airline industry continues to
unbundle its services and the global leisure industry search for
more white space continues to generate revenues, we expect
Plusgrade would continue to invest on innovation and new product
launches. Even though research and development (R&D) expenses
increase, we believe the revenue growth should offset some of the
operating costs. Plusgrade has been successful in signing on new
customers, and cross selling between the solutions and points
business units have increased product penetration among existing
customers. New product development has also allowed Plusgrade to
grow its share of processed revenues and grow market share. While
we expect Plusgrade will continue to invest in its R&D to expand
product offerings, we expect its profitability margins (i.e.,
EBITDA and gross revenue) will show limited contraction as the
company's operations continue to scale up.
"The stable outlook reflects our expectation the company will
reflect the travel industry's secular moderating growth, leading to
an expansion of Plusgrade's small but profitable revenue base
resulting in improved credit metrics. We expect Plusgrade's
leverage (S&P Global Ratings-adjusted) to improve close to 5.0x
range in 2024 from about 5.0x-5.5x based on the LTM EBITDA pro
forma transaction as well as generating consistent positive free
operating cash flow.
"We could lower our ratings on Plusgrade's leverage deteriorates
greater than 6.0x on a sustained basis or free operating cash flow
(FOCF) to debt weakens to 5%."
This could happen if:
-- Plusgrade pursues a less prudent financial policy, especially
if it relates to shareholder returns or debt-funded acquisitions;
or
-- There is deteriorating operating performance driven by
unforeseen setbacks or a sustained decline in consumer
discretionary spending.
Although unlikely within the next 12-24 months, S&P could raise its
rating if Plusgrade:
-- Continues to broaden its revenue and earnings diversity and
improves its profitability, and
-- Implements a prudent financial policy such that financial
sponsor prioritizes stronger credit measures such that they commit
to sustaining adjusted leverage below 5.0x and FOCF to debt close
to 10%.
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Plusgrade, as is the
case for most rated entities owned by private-equity sponsors. We
believe the company's highly leveraged financial risk profile
points to corporate decision-making that prioritizes the interests
of the controlling owners." This also reflects the generally finite
holding periods and a focus on maximizing shareholder returns.
RACKSPACE TECHNOLOGY: Eaton Vance Marks $2.94MM Loan at 55% Off
---------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$2,940,000 loan extended to Rackspace Technology Global, Inc., to
market at $1,325,069 or 45% of the outstanding amount, as of
October 31, 2023, according to a disclosure contained in EFR's Form
N-CSR for the fiscal year ended October 31, 2023, filed with the
U.S. Securities and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 2.75%) to Rackspace
Technology. The loan accrues interest at a rate of 8.206% per
annum. The loan matures on February 15, 2028.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Rackspace Technology Global, Inc., supports and manages cloud
platforms, as well as offers managed hosting, colocation, security,
data processing, and enterprise application development.
* * *
S&P Global Ratings in August 2023 raised its issuer credit rating
on Rackspace Technology Global Inc. to 'CCC+' from 'SD' (selective
default). S&P said, "We also raised our ratings on the unsecured
notes to 'CCC-' from 'D' and affirmed our 'CCC+' ratings on the
company's senior secured debt. Our recovery ratings on this debt
are unchanged.
"The negative outlook reflects the risk of lower ratings if
declining revenue and profitability trends persist with only
limited free operating cash flow (FOCF) improvements such that
liquidity appears insufficient to repay debt or if we believe the
company could pursue more below par debt repurchases."
Rackspace's capital structure remains unsustainable and until
performance improves, there will continue to be potential for
additional below-par debt repurchases. Rackspace is estimated to
have roughly $3.1 billion of outstanding debt principal, including
$2.25 billion on its term loan facility, $550 million on its 3.50%
senior secured notes, and $328 million on its 5.375% senior notes,
with an additional $50 million borrowed under its $375 million
revolving credit facility. S&P said, "Despite lower principal after
the open market repurchases, we still estimate Rackspace's leverage
to be above 10x, which we consider unsustainable. Even with reduced
interest requirements, ample liquidity, and no near-term
maturities, all of the debt continues to trade at deep discounts.
At these secondary trading levels and with management's appetite to
pursue additional opportunistic below-par repurchases, we see an
ongoing risk over the next 12 months, particularly if performance
stalls or continues to deteriorate."
S&P said, "Our forecast does not envision a liquidity shortfall or
involuntary default occurring within the next 18 months. We have
updated our forecast to incorporate the company's performance in
the second quarter of fiscal 2023 (which was above the high end of
its guidance), the impact of debt buybacks, Q3 guidance from the
company which underscores expectations for positive FOCF and
sequential improvement over the second quarter, as well as our own
projections. We are modeling revenue declines of about 7% in 2023
and 2.5% in 2024, S&P Global Ratings'-adjusted EBITDA margins of
around 10.4% and 13.6% respectively, and reported free cash flow
around break even in 2023 and $140 million in 2024. Even though
these metrics are weaker than what we previously contemplated in
May, at this trajectory, we don't envision a liquidity shortfall or
payment default in the near term."
Rackspace's recent restructuring strategy remains subject to high
execution risk. Rackspace revealed its plans to split its business
into two primary units, public cloud and private cloud, at the
beginning of 2023. S&P said, "While the move was aimed at
capitalizing on the unique competitive advantages of each division
and enhancing long-term growth prospects and profitability, we
believe this may have at least initially caused disruptions and
uncertainties for customers. Margins have come under pressure due
to the transition from resale to higher-margin services(public
cloud) and a decline in managed hosting and OpenStack businesses,
which are highly profitable. Still, the company intends for this to
be a longer term strategy, and we understand Rackspace is already
seeing growth in its sales pipeline and an uptick in private cloud
bookings. Considering it is early stages and that it will take time
for these booking to convert revenue, we anticipate operating
performance will remain constrained for at least the next few
quarters." Furthermore, the economic environment will likely limit
demand and elongate sales cycles, adding to the execution risk.
Despite these challenges, second-quarter performance was largely
consistent with management's previous guidance.
RED RIVER SUBS: Thomas Kapusta Named Subchapter V Trustee
---------------------------------------------------------
The Acting U.S. Trustee for Region 12 appointed Thomas Kapusta as
Subchapter V trustee for Red River Subs, Inc.
Mr. Kapusta will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kapusta declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Thomas J. Kapusta
P.O. Box 90624
Sioux Falls, SD 57109
Email: tkapusta@aol.com
About Red River Subs
Red River Subs, Inc. filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D.N.D. Case No. 24-30010) on Jan.
13, 2024, with $50,001 to $100,000 in assets and $500,001 to $1
million in liabilities.
Maurice VerStandig, Esq., at The Dakota Bankruptcy Firm represents
the Debtor as legal counsel.
RESHAPE LIFESCIENCES: Y. Schneid Holds $2.46MM Shares as of Jan. 5
------------------------------------------------------------------
Yair Schneid, Director of ReShape Lifesciences Inc., filed a Form 3
Report with the U.S. Securities and Exchange Commission, disclosing
direct beneficial ownership of 2,461,000 shares of the company's
common stock as of January 5, 2024.
A copy of the report is available at http://tinyurl.com/3e4zm5yw
About ReShape Lifesciences
ReShape Lifesciences Inc. (Obalon Therapeurtics, Inc.) is a weight
loss and metabolic health-solutions company, offering an integrated
portfolio of proven products and services that manage and treat
obesity and metabolic disease.
Reshape Lifesciences reported a net loss of $46.21 million for the
year ended Dec. 31, 2022, compared to a net loss of $63.15 million
for the year ended Dec. 31, 2021. As of March 31, 2023, the Company
had $16.35 million in total assets, $8.59 million in total
liabilities, and $7.76 million in total stockholders' equity.
Irvine, California-based RSM US LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has suffered recurring
losses and negative cash flows. The Company currently does not
generate revenue sufficient to offset operating costs and
anticipates such shortfalls to continue. This raises substantial
doubt about the Company's ability to continue as a going concern.
ROOF HEROES: Wins Cash Collateral Access on Final Basis
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Fort
Myers, authorized Roof Heroes LLC to use cash collateral on an
interim basis in accordance with the budget.
The Debtor's Lenders are:
Cucumber Capital LLC -
$224,850
Everest Business Funding -
$100,000
Velocity Capital Group -
$84,000
As adequate protection for the use of cash collateral, the Lenders
are granted a replacement lien on the all post-petition property of
the Debtor that is of the same nature and type as Lenders'
pre-petition collateral.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=YHSv9h from PacerMonitor.com.
The Debtor projects $150,000 in gross income for 30 days.
About
Roof Heroes
Roof Heroes, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01235) on Oct.
14, 2023, with up to $50,000 in assets and $100,001 to $500,000 in
liabilities.
Judge Caryl E. Delano oversees the case.
Joel M. Aresty, Esq., at Joel M. Aresty, P.A. represents the Debtor
as legal counsel.
SAVVYAN TECHNOLOGIES: Continued Operations to Fund Plan Payments
----------------------------------------------------------------
Savvyan Technologies, LLC, and Kamalakannan Sivanandam, filed with
the U.S. Bankruptcy Court for the Eastern District of Texas a Joint
Plan of Reorganization under Subchapter V dated January 18, 2024.
Kamalakannan Sivanandam is an individual who resides in Frisco,
Texas. Sivanandam manages the operations of Savvyan Technologies,
LLC, but is not a member of Savvyan.
Savvyan Technologies, LLC is an Independent Product Development, IT
consulting and services firm, and is owned by Annukraga Rajalakshmi
Logaiah, the spouse of Sivanandam.
Savvyan filed this Case due to ongoing and expensive state court
litigation brought by Themesoft, Inc., a disputed creditor.
Sivanandam likewise filed his Case when the state court continued
to proceed against him despite Savvyan's bankruptcy filing. Both
the company and the individual felt that the outcome in bankruptcy
would be better than the outcome in state court and they would have
the opportunity to propose a pay plan to resolve the claims.
According to Sivanandam's Schedules, he owes total Unsecured Claims
of $3,573,131.20 as of the Petition Date, of which 3,450,000.00 is
the Disputed litigation Claim of Themesoft, Inc.
According to Savvyan's Schedules, it owes total Unsecured Claims of
$3,572,807.20 as of the Petition Date, of which 3,450,000.00 is the
Disputed litigation Claim of Themesoft, Inc.
This Plan proposes to pay 100% of all Allowed Secured Claims, and
will pay a return to holders of Allowed Unsecured Claims, which
would not receive any payment in a Chapter 7 liquidation. This Plan
does not contemplate a liquidation of the Assets.
Class Sivanandam 5 Allowed General Unsecured Claims shall be paid
pro-rata out of $2,000.00 per month in equal monthly payments over
36 months, commencing on the first day of the first month following
the Effective Date and continuing on the first day of each month
thereafter until the expiration of 36 months.
Sivanandam shall retain his ownership interests in his real and
personal property.
Class Savvyan 1 Allowed General Unsecured Claims shall be paid
pro-rata out of $500.00 per month in equal monthly payments over 36
months commencing on the first day of the first month following the
Effective Date and continuing on the first day of each month
thereafter until the expiration of 36 months.
The Debtors intend to make all payments required under the Plan
from available cash and income from the business operations of the
Debtors.
A full-text copy of the Joint Plan of Reorganization dated January
18, 2024 is available at https://urlcurt.com/u?l=YotY2v from
PacerMonitor.com at no charge.
Attorneys for Debtors:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Tel: (972) 503-4033
Fax: (972) 503-4034
Email: joyce@joycelindauer.com
About Savvyan Technologies
Savvyan Technologies, LLC, is an Independent Product Development,
IT consulting and services firm.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-42043) on October 27,
2023. In the petition signed by Kamalakannan Sivanandam, senior
leader, the Debtor disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC, is
the Debtor's legal counsel.
SCIENCE APPLICATIONS: Moody's Affirms 'Ba2' CFR, Outlook Stable
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Science
Applications International Corporation ("SAIC"), including the Ba2
corporate family rating, the Ba2-PD probability of default rating,
the Ba1 ratings on the company's senior secured first lien term
loan A due 2027, the Ba1 rating of the senior secured first lien
revolving credit facility and the B1 rating on SAIC's senior
unsecured notes. The SGL-2 speculative grade liquidity rating
("SGL") is unchanged. At the same time, Moody's assigned Ba1 rating
to SAIC's proposed senior secured first lien term loan B due 2031.
The Ba1 ratings on existing Term Loans B due 2025 and 2027 are
unchanged and will be withdrawn on close of the refinancing
transactions. The outlook is maintained at stable.
Proceeds from the new term loan B will be used to repay existing
first lien term loans due 2025 and 2027. This transaction is
debt-neutral, and therefore does not affect SAIC's other ratings.
The ratings affirmation reflects Moody's expectation that SAIC will
achieve modest organic revenue growth while maintaining an EBITDA
margin close to 9% through its fiscal year ending January 2025.
Moody's expects that SAIC will pursue conservative shareholder
return practices and limited, if any, acquisitions over that time.
RATINGS RATIONALE
SAIC's ratings are supported by the company's well-established
position within the government services sector and good
qualifications for technical, engineering and enterprise
information technology (IT) programs. Moody's expects the company
to experience modest but steady organic revenue growth over the
next several years. This will help SAIC to recover sales foregone
from recent divestitures and establish reliable revenue visibility.
Moody's believes that SAIC will maintain debt-to-EBITDA around the
mid-3 times through FY 2025.
However, SAIC faces strong competition from other large companies
in the government services market. This presents challenges to
companies like SAIC in achieving organic revenue and operating
margin growth. Although SAIC is likely to forego sizeable
acquisitions over the next year, Moody's expects that over the long
run, M&A activity will present event risk and increase the use of
debt over time.
The stable outlook reflects Moody's expectation of steady earnings
growth and modest leverage reduction as the company continues to
pursue its organic growth objectives. The stable outlook also
reflects Moody's expectation that the company will maintain good
liquidity while pursuing a balanced approach towards debt reduction
and shareholder repurchases.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
SAIC's ratings could be upgraded if Moody's expects the company to
sustain debt-to-EBITDA at or below 3.5x while it achieves good
organic revenue growth. An upgrade could also be supported by the
demonstration of higher cash reserves and free cash flow to debt
sustained above 15%.
The ratings could be downgraded if the company encounters a
significant loss of contracts. Debt-to-EBITDA sustained above 4x
could warrant a downgrade, as could the undertaking of more
aggressive financial policies, such as share repurchases that
exceed free cash flow or large leveraged acquisitions.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
Science Applications International Corporation, headquartered in
Reston, VA, is a provider of technical, engineering and enterprise
information technology services primarily to the US government,
including the Department of Defense, federal civilian agencies and
the intelligence community. Revenue for the twelve months ended
November 3, 2023, was $7.7 billion.
SCIENCE APPLICATIONS: S&P Rates New $510MM Term Loan B 'BB+'
------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level and '3' recovery
ratings to Science Applications International Corp.'s (SAIC)
proposed $510 million term loan B due in 2031. The '3' recovery
rating indicates its expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery in the event of a default.
S&P said, "At the same time, we affirmed our 'BB+' issue-level
rating on SAIC's revolver and term loan A, and revised the recovery
rating to '3' from '4'. The higher recovery rating reflects the
reduction in secured debt following some early term loan repayment
using proceeds from the divestiture of SAIC's supply chain
business. We also affirmed our 'BB-' issue-level rating on the
company's unsecured notes. The '6' recovery rating is unchanged.
"We expect SAIC will use the proceeds from the additional debt to
pay down its term loan B1 and term loan B2, which leads us to view
the transaction as leverage neutral. Management extended the
maturities to 2031 from 2025 and 2027."
S&P's 'BB+' issuer credit rating on SAIC is unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- SAIC's proposed capital structure will consist of a $1.2
billion term loan A due in 2027, $510 million term loan B due in
2031, $400 million unsecured notes due in 2028, $1 billion revolver
due in 2027, and $300 million accounts receivable facility (not
rated).
-- S&P values the company on a going-concern basis using a 5x
multiple of our projected emergence EBITDA. Other key assumptions
at default include SOFR of 2.5%, the revolver is 85% drawn, and the
$300 million accounts receivable facility is 100% drawn.
Simulated default assumptions
-- Simulated year of default: 2029
-- EBITDA at emergence: $297 million
-- EBITDA multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $1.4
billion
-- Valuation split (obligors/nonobligors): 100%/0%
-- Value available for first-lien claims: $1.1 billion
-- Secured first-lien debt claims: $2.2 billion
--Recovery expectations: 50%-70% (rounded estimate: 50%)
-- Value available for unsecured claims: $0
-- Unsecured debt claims: $410 million
--Recovery expectations: 0%-10% (rounded estimate: 0%)
SEMILEDS CORP: Simplot Taiwan, 4 Others Report Equity Stake
-----------------------------------------------------------
In a Schedule 13D/A filed with the Securities and Exchange
Commission, the following entities reported beneficial ownership of
shares of common stock of SemiLEDs Corporation as of Jan. 8, 2024:
Shares Percent
Beneficially of
Reporting Person Owned Class
Simplot Taiwan Inc. 2,445,299 49.2%
J.R. Simplot Company 2,445,299 49.2%
JRS Properties III LLLP 31,036 0.6%
JRS Management L.L.C. 31,036 0.6%
Scott R. Simplot 2,476,335 49.8%
Simplot Taiwan is wholly owned by Simplot Company. Mr. Simplot is
the chairman of Simplot Company and a manager of JRS Management.
The Reporting Persons entered into a Joint Filing Agreement dated
Feb. 28, 2020.
Simplot Taiwan and Simplot Company is each engaged in the food and
agribusiness industry. JRS Properties is engaged in the business
of real estate development and investment as its principal
business. JRS Management is engaged in the business of estate
planning as its principal business. The principal occupation of
Mr. Simplot is serving as chairman of Simplot Company.
Simplot Company and the Issuer entered into a Convertible Unsecured
Promissory Note on Nov. 25, 2019, having an original principal
amount of $1,500,000, and which was convertible into Common Stock
at any time at a conversion price of $1.31 per share of Common
Stock. The Note was purchased with funds of Simplot Company held
for investment purposes. On Feb. 20, 2020, Simplot Company
assigned the Note to Simplot Taiwan for no consideration. On May
26, 2020, Simplot Taiwan converted $300,000 of the principal amount
of the Note into 100,000 shares of Common Stock. On Jan. 8, 2024,
Simplot Taiwan converted (i) $1,200,000 of the principal amount of
the Note and (ii) $175,529 of accrued interest under the Note into
1,050,022 shares of Common Stock. As of the Effective Date, all
amounts due and payable under the Note have been satisfied.
On the Effective Date, Simplot Taiwan received an additional
305,343 shares of Common Stock as a payment of interest pursuant to
a Loan Agreement between the Issuer and Simplot Company dated Jan.
8, 2019, as amended on Jan. 16, 2021, Jan. 14, 2022, Jan. 13, 2023
and Jan. 7, 2024.
Previously, Simplot Taiwan and JRS Properties received shares of
Common Stock via conversion of their shares of Preferred Stock in
the Issuer upon the effectiveness of the Issuer's Registration
Statement on Form S-1 filed with the SEC on Dec. 8, 2010. Such
shares of Preferred Stock were purchased with funds of Simplot
Taiwan and JRS Properties held for investment purposes.
A full-text copy of the SEC filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1333822/000119312524009767/d700949dsc13da.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.
SILICON VALLEY: First Citizen Gets Second Chance at Secrets Suit
----------------------------------------------------------------
Ben Zigterman of Law360 reports that First Citizens Bank & Trust
has won a chance to clean up a "confusing" lawsuit in California
federal court that claims HSBC Holdings stole confidential
information to poach employees from failed Silicon Valley Bank as
it was divvied up between U.K. and U.S. buyers.
About Silicon Valley Bank
Silicon Valley Bank was the nation's 16th largest bank and the
biggest to fail since the 2008 financial meltdown.
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, 2023, the California Department of Financial Protection
and Innovation seized SVB and placed it under the receivership of
the Federal Deposit Insurance Corporation (FDIC).
The FDIC on March 13, 2023, disclosed that it transferred all
deposits -- both insured and uninsured -- and substantially all
assets of the former Silicon Valley Bank of Santa Clara,
California, to a newly created, full-service FDIC-operated "bridge
bank" in an action designed to protect all depositors of Silicon
Valley Bank.
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.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin
Glenn is the bankruptcy judge. The Debtor had assets of
$19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31,
2022.
Centerview Partners LLC is proposed financial advisor, Sullivan &
Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed
restructuring advisor to SVB Financial Group as
debtor-in-possession. Kroll is the claims agent.
SINCLAIR BROADCAST: Settles Diamond Sports Litigation
-----------------------------------------------------
Sinclair, Inc. (Nasdaq: SBGI) announced that it has agreed, subject
to definitive documentation and final court approval, to a global
settlement and release of all claims associated with the litigation
filed by Diamond Sports Group, LLC and DSG's wholly-owned
subsidiary, Diamond Sports Net, LLC, in July 2023, which settlement
includes an amendment to the Management Services Agreement between
Sinclair Television Group, Inc. and DSG.
The settlement terms include, among other things, DSG's withdrawal
of its $1.5 billion litigation against Sinclair and all other
defendants, along with the full and final satisfaction and release
of all claims in that litigation against all defendants, including
Sinclair and its subsidiaries, in exchange for Sinclair's cash
payment to DSG of $495 million, which is estimated to result in a
net cost to Sinclair of approximately $250-325 million after
considering corresponding tax benefits, additional Management
Services Agreement payments to STG, and other assets and value to
be received by Sinclair in connection with the settlement. The $495
million cash payment will be funded by cash on hand at Sinclair
Ventures, LLC, Sinclair Television Group, Inc., and/or a loan
backed by Sinclair Ventures, LLC. Under the terms of the
settlement, Sinclair will provide transition services to DSG to
allow DSG to become a self-standing entity going forward.
The settlement is subject to definitive documentation, including
finalization of certain transition terms, and approval by the U.S.
Bankruptcy Court in Houston overseeing DSG's chapter 11 case. A
motion for approval of the settlement is expected to be filed with
the Court next week.
The Company has entered into the settlement, without admitting any
fault or wrongdoing. If the settlement does not receive final Court
approval, Sinclair remains committed to vigorously defending
against the claims asserted in the litigation.
About Sinclair Broadcast Group
Headquartered in Hunt Valley, Cockeysville, Maryland, Sinclair
Broadcast Group, Inc. operates as a television broadcasting
company.
As of September 30, 2023, the Company had $6.083 billion in total
assets against $5.499 billion in total liabilities.
Egan-Jones Ratings Company, on December 6, 2023, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Sinclair Broadcast Group, Inc. EJR also withdraws
the rating on commercial paper issued by the Company.
SINCLAIR TELEVISION: Eaton Vance Marks $384,000 Loan at 28% Off
---------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$384,000 loan extended to Sinclair Television Group, Inc., to
market at $277,364 or 72% of the outstanding amount, as of October
31, 2023, according to a disclosure contained in EFR's Form N-CSR
for the fiscal year ended October 31, 2023, filed with the U.S.
Securities and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 3.00%) to Sinclair
Television Group. The loan accrues interest at a rate of 8.439%,
per annum. The loan matures on April 1, 2028.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Sinclair Television Group, Inc. provides media broadcasting
services. The Company offers television broadcasting and
programming services.
SINCLAIR TELEVISION: Eaton Vance Marks $576,000 Loan at 16% Off
---------------------------------------------------------------
Eaton Vance Senior Floating-Rate Trust (EFR) has marked its
$576,000 loan extended to Sinclair Television Group, Inc., to
market at $486,329 or 84% of the outstanding amount, as of October
31, 2023, according to a disclosure contained in EFR's Form N-CSR
for the fiscal year ended October 31, 2023, filed with the U.S.
Securities and Exchange Commission.
EFR is a participant in a Term Loan (SOFR + 2.50%) to Sinclair
Television Group. The loan accrues interest at a rate of 7.939% per
annum. The loan matures on September 30, 2026.
EFR is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Trust's primary
investment objective is to provide a high level of current income.
The Trust may, as a secondary objective, also seek the preservation
of capital to the extent consistent with its primary objective.
EFR can be reached at:
Deidre E. Walsh
Eaton Vance Senior Floating-Rate Trust
Two International Place
Boston, MA 02110
Sinclair Television Group, Inc. provides media broadcasting
services. The Company offers television broadcasting and
programming services.
SKILLS ACADEMY: Mark Dennis of SL Biggs Named Subchapter V Trustee
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The U.S. Trustee for Region 11 appointed Mark Dennis, a certified
public accountant at SL Biggs, as Subchapter V trustee for Skills
Academy Vocational Center, LLC.
Mr. Dennis will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Dennis declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark D. Dennis, CPA
SL Biggs, A Division of SingerLewak, LLP
2000 S. Colorado Blvd., Tower 2, Ste. 200
Denver, CO 80222
Phone: 303-226-5471
Email: mdennis@slbiggs.com
About Skills Academy Vocational Center
Skills Academy Vocational Center, LLC filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Colo.
Case No. 24-10155) on Jan. 12, 2024, with up to $500,000 in assets
and up to $1 million in liabilities. Randee Van Ness, president,
signed the petition.
Judge Thomas B. Mcnamara oversees the case.
Jeffrey A. Weinman, Esq., at Allen Vellone Wolf Helfrich & Factor,
P.C., represents the Debtor as legal counsel.
SPORTS INTERIORS: Court OKs Cash Collateral Access Thru Feb 29
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The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Sports Interiors, Inc. to use cash
collateral, on an interim basis, in accordance with the budget,
with a 10% variance, through February 29, 2024.
In return for the Debtor's continued interim use of cash
collateral, Bank Financial, National Association is granted the
following adequate protection for its purported secured interests
in property of the Debtor:
1. The Debtor will permit the Bank to inspect, upon reasonable
notice, within reasonable hours, the Debtor's books and records;
2. The Debtor will maintain and pay premiums for insurance to
cover all of its assets from fire, theft and water damage;
3. The Debtor will, upon reasonable request, make available to the
Bank evidence of that which constitutes its collateral or
proceeds;
4. The Debtor will properly maintain its assets in good repair and
properly manage its business; and
5. The Bank will be granted valid, perfected, enforceable security
interests in and to Debtor's postpetition assets, including all
proceeds and products which are now or hereafter become property of
this estate to the extent and priority of its alleged pre-petition
liens, if valid, but only to the extent of any diminution in the
value of such assets during the period from the commencement of the
Debtor's Chapter 11 case through February 29, 2024.
A final hearing on the matter is set for February 14, 2024 at 10:45
a.m.
A copy of the order is available at https://urlcurt.com/u?l=SUabka
from PacerMonitor.com.
About Sports Interiors, Inc.
Sports Interiors, Inc. sells and installs its liner system and
metal halide lighting system for indoor tennis facilities.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-00297) on January 9,
2024. In the petition signed by Robert VanDixhorn, president, a
director and a shareholder, the Debtor disclosed up to $1 million
in assets and up to $10 million in liabilities.
Judge Deborah L Thorne oversees the case.
David K. Welch, Esq., at BURKE, WARREN, MACKAY & SERRITELLA, P.C.,
represents the Debtor as legal counsel.
STAFFING 360: Receives 180-Day Extension for Bid Price Compliance
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Staffing 360 Solutions, Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that it received a
letter from Nasdaq notifying the Company that it has been granted
an additional 180-day period, or until July 15, 2024, to regain
compliance with the Minimum Bid Price Requirement.
The new compliance period is an extension of the initial Compliance
Period provided for in Nasdaq's deficiency notice to the Company,
dated July 17, 2023. Nasdaq's determination was based on the
Company meeting the continued listing requirement for market value
of publicly held shares and all other applicable requirements for
initial listing on the Nasdaq Capital Market, with the exception of
the Minimum Bid Price Requirement, and the Company's written notice
of its intention to cure the deficiency during the second
compliance period by effecting a reverse stock split, if
necessary.
As previously reported, on July 17, 2023, the Company received a
letter from the Listing Qualifications Department of the Nasdaq
Stock Market indicating that, based upon the closing bid price of
the Company's common stock for the 30 consecutive business day
period between June 1, 2023, through July 14, 2023, the Company did
not meet the minimum bid price of $1.00 per share required for
continued listing on The Nasdaq Capital Market pursuant to Nasdaq
Listing Rule 5550(a)(2). The letter also indicated that the Company
would be provided with a compliance period of 180 calendar days, or
until January 15, 2024, in which to regain compliance pursuant to
Nasdaq Listing Rule 5810(c)(3)(A).
If compliance with the Minimum Bid Price Requirement cannot be
demonstrated by July 15, 2024, Nasdaq will provide written
notification that the Company's common stock could be delisted. In
such event, Nasdaq rules permit the Company to appeal any delisting
determination to a Nasdaq Hearings Panel. Accordingly, there can be
no assurance that the Company will be able to regain compliance
with the Nasdaq listing rules or maintain its listing on the Nasdaq
Capital Market.
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.
STAGHORN OUTDOORS: G. Matt Barberich Named Subchapter V Trustee
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The Acting U.S. Trustee for Region 13 appointed G. Matt Barberich,
Jr. of B. Riley Advisory Services as Subchapter V trustee for
Staghorn Outdoors, LLC.
Mr. Barberich 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. Barberich declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
G. Matt Barberich, Jr.
B. Riley Advisory Services
7101 College Boulevard, Suite 730
Overland Park, KS 66210
Phone: 913-389-9270
Email: mbarberich@brileyfin.com
About Staghorn Outdoors
Staghorn Outdoors, LLC, formerly known as Staghorn Outfitters,
manufactures and sells outdoor apparel and footwear. The company is
based in Independence, Mo.
Staghorn Outdoors filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 24-40029) on Jan.
11, 2024, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. Matthew Gray, president and managing
member, signed the petition.
Judge Cynthia A. Norton oversees the case.
Jonathan Margolies, Esq., at Seigfreid Bingham represents the
Debtor as legal counsel.
SUMMER (BC) BIDCO: Moody's Rates New EUR800MM Sec. Term Loan 'B2'
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Moody's Investors Service has assigned a B2 rating to the EUR800
million senior secured term loan B3 due 2029 (Extended Facility B),
issued by Summer (BC) Bidco B LLC and co-borrowed by Summer (BC)
Holdco B S.a r.l.
All other ratings including Kantar Global Holdings S.a r.l.'s B2
long term corporate family rating (CFR) are unaffected.
RATINGS RATIONALE
On January 24, Kantar Global Holdings S.a r.l. (Kantar or the
company, B2 stable) launched a EUR800 million senior secured term
loan B3 extension of the existing EUR1.135 billion senior secured
term loan B3 issued by Summer (BC) Bidco B LLC. The launch is an
initial step in addressing the upcoming debt maturities in 2026,
which comprise Summer (BC) Bidco B LLC's $400 million senior
secured revolving credit facility (RCF), the aforementioned
EUR1.135 billion senior secured term loan B3, the $500 million
senior secured term loan B2, the $350 million senior secured term
loan (B and B1), $425 million backed senior secured notes; and
Summer (BC) Holdco B S.a r.l. EUR1 billion backed senior secured
notes. Summer (BC) Holdco A S.a r.l.'s EUR428 million backed senior
unsecured notes mature in 2027.
The Extended Facility B contains a springing maturity condition.
The springing maturity will be triggered in the event the maturity
date of the existing RCF, senior secured term loans, and backed
senior secured notes occurs before the maturity of Extended
Facility B. The company intends to progressively refinance and
extend the maturity of the remaining term loans and notes following
the extension of the Extended Term Loan B.
The rating on Extended Facility B, which forms a material portion
of the group's debt is in line with Kantar's B2 CFR.
Kantar has guided revenue growth of 4% and EBITDA of around $719
million for 2023, slightly below Moody's previous expectations,
reflecting the challenging macroeconomic conditions across the
sector. Nevertheless, the company's earnings performance has
benefitted from the implementation of cost savings programmes
across the businesses which include technology, procurement, and
real estate savings.
The transaction is leverage-neutral. Moody's adjusted debt/EBITDA
of 7.2x (excluding overdraft) for the last twelve months September
30, 2023 places Kantar weakly in the rating category with little
room for deviation from its deleveraging plan. The company has
indicated it remains committed to reducing leverage ahead of any
further acquisitions or increases in returns to shareholders.
The agency expects Moody's adjusted free cash flow (FCF) for 2023
to be negative to the tune of around $280 million which weighs on
the company's rating. A material swing in working capital,
continued restructuring costs and high capital spending are factors
that contribute to Moody's projected negative FCF in 2023.
Interest costs are also high. Kantar has guided for $282 million in
net interest costs for 2023. Kantar's ability to generate positive
FCF in the next twelve to eighteen months will depend on a
significant improvement in working capital, a reduction in
restructuring costs, and moderating capital spending. The agency
expects Moody's adjusted gross debt/EBITDA of 6.4x (excluding
overdrafts) for 2024, as the company's cost initiatives deliver
earnings improvement. However, execution risks remain.
LIQUIDITY ANALYSIS
The company's liquidity position remains adequate. The company
reported cash and cash equivalents of $158 million (net of
overdraft) as of September 2023. The company has a committed RCF of
$400 million, of which $159 million is drawn. The RCF contains a
springing net leverage covenant of 7.2x when the RCF is drawn more
than 40% net of cash, which is unlikely considering the company's
strong cash position.
STRUCTURAL CONSIDERATIONS
The B2 rating on Summer (BC) Bidco B LLC's senior secured
instruments which form the majority of the group's debt is in line
with Kantar's CFR. The backed senior unsecured notes issued by
Summer (BC) Holdco A S.a r.l. are rated Caa1.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that the company
will continue to generate cost savings and achieve operating
performance such that the company's gross leverage (Moody's
adjusted) will trend to below 6.5x over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
A rating upgrade is unlikely given that is weakly positioned in the
rating category. However, the rating could be upgraded over time if
Kantar demonstrates steady revenue and EBITDA growth; its gross
debt/EBITDA (Moody's adjusted) decreases sustainably and remains
below 5.5x; and the company's Moody's-adjusted FCF/debt improves
towards 10%.
The rating would be downgraded if Kantar's revenue and EBITDA fail
to grow; its gross leverage (Moody's-adjusted gross debt/EBITDA)
remains above 6.5x on a sustained basis; or its FCF is materially
negative in 2024. There would also be downward rating pressure if
the company's liquidity were to significantly deteriorate.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
COMPANY PROFILE
Kantar is a global data, research, consulting, and analytics
business that assesses consumer behaviour, serving more than 20,000
clients in more than 100 countries. The company is 40% owned by WPP
Plc (Baa2 stable) and 60% owned by Bain Capital. In the last twelve
months September 30, 2023, Kantar generated revenue of $2.9 billion
and Moody's adjusted EBITDA of $634 million.
SUNOCO LP: Moody's Puts 'Ba2' CFR on Review for Upgrade
-------------------------------------------------------
Moody's Investors Service placed Sunoco LP's ratings on review for
upgrade, including its Ba2 Corporate Family Rating, Ba2-PD
Probability of Default Rating and Ba3 senior unsecured notes
ratings. Previously, the outlook was stable. The SGL-2 Speculative
Grade Liquidity (SGL) rating remains unchanged.
Concurrently, Moody's placed NuStar Energy L.P.'s (NuStar Energy)
and NuStar Logistics, L.P.'s (NuStar Logistics, wholly owned
subsidiary of NuStar Energy) ratings on review for upgrade. Ratings
placed on review for upgrade at NuStar Energy are its Ba3 Corporate
Family Rating (CFR), Ba3-PD Probability of Default Rating (PDR),
and B2 preferred stock ratings. Ratings placed on review for
upgrade at NuStar Logistics are its Ba3 backed senior unsecured
notes ratings and B2 backed subordinated notes rating. NuStar
Energy's Speculative Grade Liquidity (SGL) rating remains unchanged
at SGL-3. Previously, the outlooks for NuStar Energy and NuStar
Logistics were stable.
Moody's also placed on review for upgrade the Ba3 rating of the
five series of senior unsecured revenue bonds at St. James (Parish
of) LA for which NuStar Logistics is obligated to make principal
and interest payments. These bonds (referred to as "GoZone Bonds")
are outstanding pursuant to the Gulf Opportunity Zone Act of 2005
related to NuStar Logistics' St. James terminal expansion.
This action follows Sunoco's agreement to acquire NuStar Energy
L.P. (collectively, with NuStar Logistics, "NuStar") in a $7.3
billion all-stock transaction, including NuStar's debt, subject to
unitholder and regulatory approvals, and other customary closing
conditions. Closing is expected in the second quarter of 2024.
"The NuStar acquisition provides Sunoco with investment grade
scale, a substantially expanded operating footprint, and a strong
measure of contracted pipeline and storage earnings that bring
important diversification to Sunoco's legacy wholesale fuel
distribution business," noted John Thieroff, Moody's Senior Credit
Officer.
RATINGS RATIONALE/FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The placement of Sunoco's ratings on review for upgrade reflects
the business profile enhancement the NuStar acquisition provides.
The proposed transaction will moderately increase Sunoco's
financial leverage. Sunoco is likely to achieve cost improvements
and operating efficiencies from the combination, leading to cash
flow growth and gradual deleveraging. Beyond these initial
benefits, Sunoco may identify additional opportunities over the
next several years to optimize NuStar's legacy businesses within
the broader Energy Transfer LP (Sunoco's general partner)
operations.
Sunoco intends to issue $1.6 billion in senior unsecured notes at
close, to refinance NuStar's revolving credit and accounts
receivable securitization facilities, and NuStar's subordinated
notes and preferred units. Sunoco will also redo its existing
$1.5BN secured revolving credit facility into a new $1.5BN
unsecured facility. With a completely unsecured capital structure,
Sunoco's existing senior unsecured notes – currently rated one
notch below the CFR – and the new senior notes would be rated
equal to the CFR.
The review will focus on the final post-transaction capital
structure, the benefits of diversification NuStar brings to Sunoco,
Sunoco's deleveraging plan, Sunoco's treatment of the remaining
NuStar debt post-close, and Moody's assessment of integration and
execution risks. Moody's expects to conclude the review following
the closure of the transaction. Based on the proposed transaction
and information available and, pro forma leverage, an upgrade would
likely be limited to Ba1.
Both NuStar Energy's and NuStar Logistics' ratings were placed
under review for upgrade based on the pending merger with Sunoco,
which has a stronger credit profile. Upon closing of the
transaction, if Sunoco legally assumes or guarantees NuStar
Logistics' senior notes, making them pari passu with Sunoco's
existing senior notes, then the ratings on NuStar's senior notes
would likely be upgraded to Sunoco's senior unsecured rating level
depending on the pro forma capital structure. If Sunoco repays
NuStar's subordinated notes and preferred units as planned, Moody's
will withdraw those ratings. Should these securities remain
outstanding post-close, these instruments could be upgraded
depending on the pro forma capital structure, any potential
guarantees and the level of anticipated parental support.
Dallas, TX-based Sunoco is a master limited partnership with core
operations that include the distribution of motor as well as
refined product transportation and terminalling assets. Sunoco's
general partner is owned by Energy Transfer LP (ET, Baa3 positive)
Pro forma for the NuStar acquisition ET will also own 21% of
Sunoco's common units.
NuStar Energy, headquartered in San Antonio, Texas, is a publicly
traded master limited partnership (MLP) that owns pipelines and
terminal and storage facilities that store and distribute crude
oil, refined products, renewable fuels, ammonia, and specialty
liquids.
LIST OF AFFECTED RATINGS
Issuer: NuStar Energy L.P.
On Review for Upgrade:
- Corporate Family Rating, Placed on Review for Upgrade, currently
Ba3
- Probability of Default Rating, Placed on Review for Upgrade,
currently Ba3-PD
- Pref. Stock Preferred Stock, Placed on Review for Upgrade,
currently B2
Outlook Actions:
- Outlook, Changed To Rating Under Review From Stable
Issuer: NuStar Logistics, L.P.
On Review for Upgrade:
- Backed Subordinate Regular Bond/Debenture, Placed on Review for
Upgrade, currently B2
- Backed Senior Unsecured Regular Bond/Debenture, Placed on Review
for Upgrade, currently Ba3
Outlook Actions:
- Outlook, Changed To Rating Under Review From Stable
Issuer: St. James (Parish of) LA
On Review for Upgrade:
- Senior Unsecured Revenue Bonds, Placed on Review for Upgrade,
currently Ba3
Issuer: Sunoco LP
On Review for Upgrade:
- Corporate Family Rating, Placed on Review for Upgrade, currently
Ba2
- Probability of Default Rating, Placed on Review for Upgrade,
currently Ba2-PD
- Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently Ba3
Outlook Actions:
- Outlook, Changed To Rating Under Review From Stable
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
SUNOCO LP: S&P Affirms 'BB' Issuer Credit Rating, On Watch Pos.
---------------------------------------------------------------
S&P Global Ratings affirmed all of its existing ratings on Sunoco
L.P. (Sunoco), including its 'BB' issuer credit rating, 'BBB-'
issue-level rating on its senior secured debt, and 'BB' issue-level
rating on its senior unsecured debt.
On Jan. 22, 2024, Sunoco announced that it intends to acquire
NuStar Energy L.P. (NuStar). This follows the recent announcements
of the sale of West Texas Assets to 7-Eleven Inc. (7-Eleven) and
the acquisition of Zenith Energy Netherlands Amsterdam B.V.
S&P said, "At the same time, we placed our issuer credit rating on
Sunoco and issue-level rating on its senior unsecured debt on
CreditWatch with positive implications.
"The CreditWatch with positive implications reflects the likelihood
that we could raise our issuer credit rating and senior unsecured
issue-level rating on Sunoco by one notch around close of the
merger with NuStar. We expect to resolve the CreditWatch placements
around close of the proposed transaction, which we expect will
occur in the second or third quarter of 2024.
We have assigned a new Management and Governance (M&G) assessment
of neutral to Sunoco. This assignment 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.
"The CreditWatch placement reflects our expectation that we could
raise our corporate credit rating and senior unsecured issue-level
rating on Sunoco around close of the proposed transaction. We view
that the proposed merger with NuStar will strengthen Sunoco's
business risk profile. On a pro forma basis, we project Sunoco's
S&P Global Ratings adjusted debt to EBITDA will be in the 4.25x to
4.75x range."
S&P Global Ratings assigned a neutral M&G assessment to Sunoco.
This follows the revision of our criteria for evaluating the credit
risks presented by an entity's M&G framework. M&G 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 S&P's
analysis.
CreditWatch
The CreditWatch with positive implications reflects the likelihood
that S&P could raise its corporate credit rating and senior
unsecured issue-level rating on Sunoco by one notch around close of
the merger with NuStar.
SUPOR PROPERTIES: Amends Unsecured Claims Pay Details
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BEB Bergen Ave, LLC, a New York limited liability company and a
secured creditor of Supor Properties Bergen Avenue, LLC, submitted
a Second Amended Disclosure Statement in support of Second Amended
Plan of Liquidation dated January 18, 2024.
The Case was commenced on July 5, 2023 and was precipitated by a
sheriff's sale (a foreclosure sale) of the Debtor's real property
commonly known as 433 Bergen Avenue, Kearny, New Jersey (i.e.
Bergen Avenue) that was scheduled for the day immediately following
the Petition Date. The filing of the Case stayed such sale.
The Plan Proponent estimates that Bergen Avenue will be worth more
than such Secured Claims in a marketed, transfer tax free sale to a
Third Party, if the purported Leases of such non-paying affiliated
and otherwise related Tenants are rejected and terminated and such
non-paying affiliated and otherwise related Tenants are no longer
in possession of Bergen Avenue. Such a sale would allow for a
Distribution to any Creditors holding Allowed Unsecured Claims and,
thereafter, to holders of Equity Interests in the Debtor.
On December 22, 2023, the Chapter 11 Trustee received a letter of
intent from a potential third-party buyer of Bergen Avenue,
expressing an interest to buy Bergen Avenue, if vacant of all
Tenants, for $26 million.
On January 9, 2024, an objection was filed by Supor Properties
Bergen Avenue LLC and Joseph Supor, III to the Claim of the Secured
Creditor, arguing that the amount of the Allowed Secured Claim of
the Secured Creditor should be limited to not less than
$16,219,161.27. Pursuant to the terms, conditions, and provisions
of the Secured Creditor Loan Documents, the Claim of the Secured
Creditor is a full recourse Claim against the Debtor and recourse
is not limited to the Secured Creditor's collateral.
Section 11.24 of the Loan Agreement, dated as of August 4, 2021,
between the Debtor and the Secured Party expressly provides that:
"The Loan shall be fully recourse to Borrower. Lender shall have
the right to enforce the liability and obligation of Borrower
against Borrower by money judgment or otherwise, to the extent of
any and all losses incurred by Lender (including, without
limitation, reasonable attorneys' fees and expenses incurred)
including, but not limited to, any unpaid principal and any and all
accrued and unpaid Interest and all fees, penalties, or liabilities
incurred by Lender arising out of or in connection with the Loan."
Thus, for purposes of voting on the Plan only, the Secured Creditor
asserts that the Secured Creditor should be deemed to have an
Allowed Secured Claim in the amount of $16,219,161.27 and an
Allowed Unsecured Claim in the amount of $2,016,090.64.
Class 3 consists of General Unsecured Claims. After the payment in
full of Allowed Secured Claims in Classes 1 and 2, Allowed Claims
in Class 3 shall receive Pro Rata Distributions up to the full
amount their Allowed Claims, plus interest at the greater of (a)
any contract rate of interest applicable to such Allowed Claim,
plus attorney's fees and costs incurred and reimbursable pursuant
any contractual agreements applicable to such Allowed Claim, or (b)
the Federal Judgment Rate. Such Pro Rata Distributions shall be
made from the Proceeds of the sale of the Plan Assets.
The Plan shall be implemented though the appointment of the Plan
Administrator. The Plan Administrator shall manage its assigned
duties and responsibilities under the Plan and administer all of
the Plan Assets (including, without limitation, Bergen Avenue) and
the Proceeds and, subject to the specific provisions of the Plan,
shall have the authority to exercise all of the rights and powers
of the Debtor. The Plan Administrator may retain Post-Confirmation
Professionals to assist the Plan Administrator in carrying out its
duties and responsibilities.
The Plan provides that all Leases will be rejected effective as of
the Effective Date and for a process by which Bergen Avenue can be
marketed for sale by the Plan Administrator to a Third Party
without the non-paying affiliated and otherwise related Tenants
remaining in possession of Bergen Avenue. The Plan contemplates a
marketing and sale process of approximately 4 months from the
Effective Date.
Plan Expenses will be funded though the proceeds of the Plan
Funding Advances and the Proceeds of the Plan Assets. The Plan
provides certain releases to the Secured Creditor in exchange for
the Plan Funding Advances. Payments on account of Allowed Claims
and, thereafter, Equity Interests in the Debtor will be made
through Distributions of the Proceeds of the sale of the Plan
Assets.
A full-text copy of the Second Amended Disclosure Statement dated
January 18, 2024 is available at https://urlcurt.com/u?l=tHVeJd
from PacerMonitor.com at no charge.
Counsel for BEB Bergen:
Derek J. Baker, Esq.
Brian M. Schenker, Esq.
Lauren S. Zabel, Esq.
REED SMITH LLP
506 Carnegie Center, Suite 300
Princeton, New Jersey 08540
Telephone: 609-987-0050
Fax: 609-951-0824
Email: dbaker@reedsmith.com
bschenker@reedsmith.com
lzabel@reedsmith.com
About Supor Properties
Supor Properties Bergen Avenue LLC is in the business of a
multifaceted, unique technical industrial support facility provider
in addition to its real estate, landlord business.
The Debtor filed a Chapter 11 petition (Bankr. D.N.J. Case No.
23-15758) on July 5, 2023, with $0 to $50,000 in assets and $10
million to $50 million in liabilities. Joseph Supor III,
authorized member, co-trustee of Marital Trust, signed the
petition.
Jay Meyers, Esq. of J. MEYERS PLLC, is the Debtor's legal counsel.
TAMPA BAY PLUMBERS: Wins Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized Tampa Bay Plumbers, LLC to use cash collateral
on an interim basis in accordance with the budget, retroactive to
July 10, 2023.
As previously reported by the Troubled Company Reporter, the
creditors that may assert blanket liens against the Debtor's assets
are Corporation Service Company, as representative, American
Express National Bank, U.S. Small Business Administration, Western
Equipment Finance, Inc., Alliance Funding Group, Pawnee Leasing
Corporation, Dedicated Funding, LLC/First Foundation Bank, Wells
Fargo Bank, N.A., ASSN Company, American Bank, N.A, First Horizon
Bank, and UCC Filer 2.
The Debtor estimates that the Secured Creditors' collective claims
are secured by $451,891. The Secured Creditor Assets include
$349,891 in cash and accounts receivable.
The court said the Debtor is permitted to use cash collateral to
pay: (a) amounts expressly authorized by the Court; (b) one quarter
of the current and necessary expenses set forth in the budget, plus
an amount not to exceed 10% for each line item; and (c) such
additional amounts as may be expressly approved in writing by the
Secured Creditors.
As adequate protection for the use of cash collateral, the Secured
Creditors will have perfected post-petition liens against cash
collateral to the same extent and with the same validity and
priority as their prepetition liens, without the need to file or
execute any document as may otherwise be required under applicable
non bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the Secured Creditors.
A continued hearing on the matter is set for February 22 at 2 p.m.
A copy of the order is available at https://urlcurt.com/u?l=BNAgOq
from PacerMonitor.com.
About Tampa Bay Plumbers, LLC
Tampa Bay Plumbers, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02904) on July
10, 2023. In the petition signed by Ryan J. Pelky, its manager, the
Debtor disclosed $1,781,764 in assets and $4,418,145 in
liabilities.
Judge Catherine Peek McEwen oversees the case.
Buddy D. Ford, Esq., represents the Debtor as legal counsel.
TENNECO INC: BlackRock MSIT Marks $234,000 Loan at 17% Off
----------------------------------------------------------
BlackRock MSIT Ltd has marked its $234,000 loan extended to
Tenneco, Inc to market at $194,257 or 83% of the outstanding
amount, as of October 30, 2023, according to a disclosure contained
in BlackRock MSIT's Form 10-K for the Fiscal year ended October 30,
2023, filed with the Securities and Exchange Commission.
BlackRock MSIT is a participant in a 2022 Term Loan B to Tenneco,
Inc. The loan accrues interest at a rate of 10.3% (3-mo. CME Term
SOFR + 5.00%) per annum. The loan matures on November 17, 2028.
BlackRock Multi-Sector Income Trust is registered under the
Investment Company Act of 1940. BlackRock Multi-Sector Income Trust
is registered as a diversified, closed-end management investment
company. BlackRock Multi-Sector is organized as a Delaware
statutory trust & determines and makes available for publication
the net asset value of its Common Shares on a daily basis.
Tenneco Inc. designs, manufactures, and markets emission control
and ride control products and systems for the automotive original
equipment market and the aftermarket. The Company's products
include shocks and struts, shock absorbers, mufflers, and
performance exhaust products, as well as noise, vibration, and
harshness control components.
TIMOTHY HILL: Court OKs Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized Timothy Hill Children's Ranch, Inc. to use cash
collateral on an interim basis, in accordance with the budget, with
a 10% variance.
As of the Petition Date, the Debtor owed Dime Bank an aggregate
principal amount of not less than $2.3 million plus accrued and
accruing interest, fees, costs, indemnification obligations, and
other amounts owing under the Loan Documents.
The Debtor is indebted to Dime Bank under a certain Mortgage Note
dated June 15, 2016 in the principal amount of $2.850 million. The
Mortgage Note is secured by mortgages on several real properties.
As of the Petition Date, the Debtor owed Dime Bank an amount not
less than $2.055 million.
The Debtor is a Borrower under the Business Loan Agreement dated as
of May 13, 2016 and Commercial Promissory Note dated as of May 13,
2018 in the principal amount of $790,000. As of the Petition Date,
the Debtor owed Dime Bank an amount not less than $192,538.
Pursuant to a Secured Business Advantage Line of Credit Agreement
dated as of April 14, 2021, Dime Bank provided the Debtor with a
line of credit up to a principal amount of $200,000.
Unless extended further with the written consent of Dime Bank, the
authorization granted to the Debtor to use cash collateral will
terminate immediately upon the earliest to occur of the following:
(i) the Debtor's failure to confirm a plan of reorganization
acceptable to Dime Bank by August 31, 2024 (or such later date as
may be agreed upon by Dime Bank);
(ii) the entry of an order dismissing the Bankruptcy Case;
(iii) the entry of an order converting the Bankruptcy Case to a
case under Chapter 7;
(iv) the entry of an order appointing a trustee or an examiner
with expanded powers with respect to the Debtor's estate;
(v) entry of an order reversing, vacating, or otherwise
amending, supplementing, or modifying the Second Interim Order;
(vi) entry of an order granting relief from the automatic stay
to any creditor (other than Dime Bank) holding or asserting a lien
in the Prepetition Collateral, or;
(vii) the Debtor's breach or failure to comply with any term or
provision of the Second Interim Order.
As adequate protection, Dime Bank will be granted valid, binding,
enforceable, and automatically perfected post-petition liens that
are co-extensive with Dime Bank's prepetition liens and security
interests.
The Replacement Liens are junior only to: (A) Dime Bank's
prepetition liens on and against the Prepetition Collateral, and
(B) other unavoidable liens, if any, existing as of the Petition
Date that are senior in priority to Dime Bank's prepetition liens
on and against the Prepetition Collateral.
To the extent the Replacement Liens granted to Dime Bank in the
Second Interim Order do not provide Dime Bank with adequate
protection of its interests in the cash collateral, Dime Bank is
granted pursuant to 11 U.S.C. Sections 503(b) and 507(b) an allowed
administrative expense claim in the Bankruptcy Case ahead and
senior to any and all other administrative expense claims in the
Bankruptcy Case to the extent of any postpetition diminution in
value of Dime Bank's interests in the Prepetition Collateral,
including the cash collateral. The Adequate Protection
Superpriority Claim will not be junior to or pari passu with any
claims or administrative expenses.
As partial adequate protection to Dime Bank under the Second
Interim Order, the Debtor will make the following monthly payments
under the Loan Documents:
a. On or before January 15, 2024 and by the 15th day of each month
thereafter, the Debtor will pay Dime Bank the monthly payment of
principal and interest due under the Mortgage Note.
b. By no later than January 28, 2024, and by the 28th of each month
thereafter, the Debtor will pay Dime Bank $8,154 in respect of the
monthly payment of principal and interest under the Term Note, as
extended.
c. On or before January 28, 2024, and by the 28th of each month
thereafter, the Debtor will pay Dime Bank $2,301 in respect of the
monthly payment of principal and interest under the Line of Credit
Agreement, as extended.
A further hearing on the matter is set for March 7, 2024 at 10
a.m.
A copy of the order is available at https://urlcurt.com/u?l=xXoHhq
from PacerMonitor.com.
About Timothy Hill Children's Ranch, Inc.
Timothy Hill Children's Ranch, Inc. owns and operates transitional
housing programs for troubled teens and young adults.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-73821) on October 16,
2023. In the petition signed by Thaddaeis Hill, executive director,
the Debtor disclosed $13,637,708 in assets and $4,841,336 in
liabilities.
Judge Louis A. Scarcella oversees the case.
Heath S. Berger, Esq., at Berger, Fischoff, Shumer, Wexler &
Goodman, LLP, represents the Debtor as legal counsel.
TRANS-LUX CORP: Gabelli Has 11.86% Stake as of Dec. 31
------------------------------------------------------
In a Schedule 13G/A filed with the Securities and Exchange
Commission, Gabelli Equity Series Funds, Inc. - The Gabelli Small
Cap Growth Fund disclosed that as of Dec. 31, 2023, it beneficially
owned 1,600,000 shares of common stock of Trans-Lux Corporation,
representing 11.86 percent of the 13,496,276 shares outstanding as
reported in the Issuer's most recently filed Form 10-Q for the
quarterly period ended Sept. 30, 2023. A full-text copy of the
regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/99106/000080724924000015/tlx13g_12.htm
About Trans-Lux
Headquartered in New York, New York, Trans-Lux Corporation --
http://www.trans-lux.com-- designs and manufactures TL Vision
digital video displays for the financial, sports and entertainment,
gaming, education, government, and commercial markets. With a
comprehensive offering of LED Large Screen Systems, LCD Flat Panel
Displays, Data Walls and scoreboards (marketed under Fair-Play by
Trans-Lux), Trans-Lux delivers comprehensive video display
solutions for any size venue's indoor and outdoor display needs.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Trans-Lux said there is substantial doubt as to whether the Company
will have adequate liquidity to continue as a going concern over
the next 12 months from the date of issuance of the report. The
Company said it has incurred recurring operating losses and
continues to have a working capital deficiency including being in
default of several debt obligations. The Company recorded a loss of
$2.6 million in the nine months ended September 30, 2023, and had a
working capital deficiency of $12.5 million as of September 30,
2023.
TREEIUM INC: Court OKs Cash Collateral Access on Final Basis
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
San Fernando Valley Division, authorized Treeium Inc to use cash
collateral on an interim basis, in accordance with the budget.
The Debtor requires the use of cash collateral to pay reasonable
expenses it incurs during the ordinary course of its business.
The Debtor has been using the cash collateral securing the claims
of Secured Creditors without Court approval. The Debtor has not
wasted or dissipated its assets, and has been using its assets as
necessary to operate and preserve the value of its estate.
The events of the COVID-19 pandemic, and the subsequent rise in
cost of materials and rise in interest rates, led to many customers
unable to timely pay Debtor, reduced Debtor's business
opportunities, and at the same time increased the operating
expenses of Debtor to unmanageable levels. The Debtor’s inability
to make payments to its creditors and the pending litigations were
the driving force for the present bankruptcy filing.
The Debtor's secured creditors, in the priority of UCC filings, are
as follows:
1. Wells Fargo Bank, with an estimated balance of $40,000.00. UCC
statement was filed on January 15, 2017.
2. The IRS, with an estimated balance of $36,720.61. The IRS'
amended proof of claim no. 3-2 was filed on December 7, 2023.
The Debtor's other secured creditors, those not secured by the
Debtor's cash collateral, include JP Morgan Chase Bank (secured by
a 2021 Tesla Model 3 automobile), and TD Auto Finance (secured by a
2020 Tesla Model Y automobile).
The Debtor's priority unsecured creditors are the IRS, with a claim
of $4,670, the Department of Labor - Employee Benefits Security
Administration with an unliquidated claim, and the EDD with a claim
of $2,925.
The Debtor's unsecured creditors include vendors, distributors, and
customers with breach of contract claims, with estimated total
claims value of $1,340,181.
The value of the Debtor's assets as of the petition date is
estimated at $778,671. Based on the value of the assets, Secured
Creditors Wells Fargo and IRS are fully secured.
The Debtor proposed $650 monthly adequate protection payments to
Wells Fargo, and $600 monthly adequate protection payment to the
IRS, while it works with its counsel in negotiating plan treatment
stipulations with its creditors and formulating its reorganization
plan.
As additional adequate protection, the Secured Creditors will
receive a replacement lien on all post-petition revenues of the
Debtor to the same extent, priority and validity that each
respective lien attached to the cash collateral. The scope of each
replacement lien is limited to the amount (if any) that cash
collateral diminishes postpetition as a result of the Debtor’s
post-petition use of cash collateral.
A copy of the motion is available at https://urlcurt.com/u?l=QNj8de
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=OAgXfL
from PacerMonitor.com.
About Treeium Inc.
Treeium Inc. is a home remodeling company, founded in 2010, that
offers design services and installs paving stones, kitchen and
bathroom fixtures, solar panels, heating and air conditioning
fixtures, home extensions, roof replacements, and related
renovations.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. C.D.Cal.
Case No. 23-11515) on October 20, 2023, disclosing under $1 million
in both assets and liabilities.
Judge Martin R. Barash oversees the case.
The Debtor is represented by LAW OFFICES OF MICHAEL JAY BERGER.
TROIKA MEDIA GROUP: Sent to Mediation for Acquisition Dispute
-------------------------------------------------------------
Rick Archer of Law360 reports that a New York bankruptcy judge
Thursday, January 11, 2024, sent the Troika Media Group marketing
firm and a former executive of a company it purchased before its
Chapter 11 filing into mediation over the fate of $16 million held
in escrow in the sale transaction.
About Troika Media Group Inc.
Troika Media Group, Inc. (fka M2 nGage Group, Inc.) -- thetmgrp.com
-- is a professional services company that architects and builds
enterprise value in consumer facing brands to generate scalable
performance driven revenue growth. The Company delivers three
solutions pillars that: CREATE brands and experiences and CONNECT
consumers through emerging technology products and ecosystems to
deliver PERFORMANCE based measurable business outcomes.
Troika Media reported a net loss of $9.58 million for the six
months ended Dec. 31, 2022. Troika Media reported a net loss of
$38.69 million for the year ended June 30, 2022, a net loss of $16
million for the year ended June 30, 2021, and a net loss of $14.45
million for the year ended June 30, 2020. For the six months ended
June 30, 2023, the Company reported a net loss of $20.16 million.
TRUEVISION COMPLETE: Frances Smith Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 6 appointed Frances Smith, Esq., at
Ross, Smith & Binford, PC, as Subchapter V trustee for Truevision
Complete Eye Care, PA.
Ms. Smith will be paid an hourly fee of $495 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Smith declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Frances A. Smith, Esq.
Ross, Smith & Binford, PC
700 N. Pearl Street, Ste. 1610
Dallas, TX 75201
Phone: 214-593-4976
Fax: 214-377-9409
Email: frances.smith@rsbfirm.com
About Truevision Complete Eye Care
Truevision Complete Eye Care, PA filed Chapter 11 petition (Bankr.
N.D. Texas Case No. 24-30108) on Jan. 12, 2024, with $100,001 to
$500,000 in assets and $500,001 to $1 million in liabilities.
Judge Michelle V. Larson oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC
represents the Debtor as legal counsel.
UKG INC: S&P Alters Outlook to Stable, Affirms 'B-' ICR
-------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed the 'B-' issuer credit rating on human capital management
(HCM) solutions provider UKG Inc.
S&P Global Ratings also assigned a 'B-' issue-level and '3'
recovery rating to its refinanced revolving credit facility and
first-lien term loan.
The stable outlook reflects S&P's expectation that UKG's strong
topline growth, mid-80% recurring revenue, EBITDA margins in the
mid-20% area, positive free operating cash flow (FOCF) after
mandatory principal and equity payments, and good liquidity will
enable to it to sustain its capital structure even in a tougher
macroeconomic environment.
S&P said, "We expect UKG's unadjusted FOCF generation, after
mandatory principal payments and non-discretionary equity payments,
will be positive in fiscal 2024 and 2025. Due to different factors,
UKG generated negative reported FOCF in fiscal 2022 and 2023,
ending in September. UKG incurred high one-time costs related to
its Kronos Private Cloud (KPC) cyber incident and savings plan to
right size its cost structure in a tougher macroeconomic
environment. While UKG has interest rate hedges in place, interest
expense was still significantly higher in fiscal 2023. Lastly, UKG
has nondiscretionary equity payments that it must make for tax
liabilities related to equity awards. UKG saw those factors weigh
on its FOCF generation such that it generated more than $100
million FOCF deficit in fiscal 2023.
"However, we believe UKG is past many of these factors such that it
should be able to generate positive reported FOCF after mandatory
principal payments and nondiscretionary equity payments in fiscal
2024 and 2025. We expect UKG to continue its strong organic revenue
growth in the low-teens percent area year over year on strong
demand for its HCM and workforce management (WFM) solutions in
fiscal 2024 and fiscal 2025."
UKG has seen its EBITDA margins improve more than 400 basis points
(bps) as one-time costs related to the KPC, costs savings plan in
fiscal 2023 rolled off, and float income increased on higher rates.
S&P said, "We expect UKG's EBITDA margin will continue to grow,
reaching the mid-20% area on better subscription revenue
utilization and as additional one-time costs roll off. Due to the
interest rate hedges in place, interest expense will not increase
significantly on expected higher SOFR rates in fiscal 2024. We
expect those factors to improve UKG's reported FOCF generation
after mandatory principal payments and nondiscretionary equity
payments to more than $85 million in fiscal 2024 and $275 million
in fiscal 2025."
S&P said, "The stable outlook reflects our expectation that UKG's
strong topline growth, mid-80% recurring revenue, EBITDA margins in
the mid-20% area, positive FOCF after mandatory principal and
equity payments, and good liquidity will enable to it to sustain
its capital structure even in a tougher macroeconomic environment.
"We could downgrade UKG over the next 12 months if it underperforms
our cost savings plan, generates worse-than-expected revenue on
weaker demand, competitive pressures intensify and lead to customer
attrition, or experiences business disruptions because of its cost
savings plan, leading to break-even FOCF generation after mandatory
principal and equity payments. We could also downgrade UKG if it
engages in debt-funded acquisitions or shareholder returns that
increase its leverage and hampers FOCF generation.
"Although unlikely over the next 12 months, given high leverage, we
could raise the rating over the longer term if UKG reduces and
sustains leverage below 8x and maintains FOCF-to-debt after
mandatory principal payments and non-discretionary equity spending
in the mid-single digit area.
"Governance factors remain a moderately negative consideration in
our credit rating analysis of the company, as is the case for most
rated entities owned by private-equity sponsors. We believe UKG
Inc.'s highly leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects the generally finite holding periods and
a focus on maximizing shareholder returns."
VENUS CONCEPT: Issues $2 Million Convertible Notes
--------------------------------------------------
Venus Concept, Inc. announced that it has issued new secured
convertible notes to EW Healthcare Partners, L.P. and one of its
affiliates in an aggregate principal amount of $2.0 million. The
convertible notes have a maturity date of Dec. 9, 2025 and an
annual interest rate of 90-day Adjusted SOFR + 8.5% that is payable
in kind on a quarterly basis. The notes are convertible at any
time into shares of common stock of the Company at an initial
conversion price of $1.251 per share, subject to adjustment. The
convertible notes include a mandatory redemption provision for part
or all of the notes upon the Company or Venus Concept USA Inc.
receiving payments in connection with employee retention credits,
and the occurrence of certain specified events.
"I want to thank EW Healthcare for their valuable partnership and
support of the Company over many years," said Rajiv De Silva, chief
executive officer of Venus Concept. "While our fourth quarter 2023
revenue results were softer-than-expected due to the impact of
restructuring activities related to improving profitability in our
international markets and the difficult financing environment for
customers in all markets including the US, we are pleased to
deliver on our primary objective for 2023 - to reduce our cash used
in operations by approximately 50% year-over-year. This new debt
financing provides Venus Concept with additional liquidity to
support ongoing operations and execution of our
near-to-intermediate term strategic turnaround objectives."
The offer and sale of the foregoing securities are being made in a
transaction not involving a public offering and have not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws. The securities may not be
offered or sold in the United States absent registration or
pursuant to an exemption from the registration requirements of the
Securities Act and applicable state securities laws. The Company
has agreed to file a registration statement covering the resale of
the Common Stock issuable upon conversion of the notes.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Venus Concept reported a net loss of $43.58 million in 2022
compared to a net loss of $22.14 million in 2021. As of Sept. 30,
2023, the Company had $98.92 million in total assets, $110.30
million in total liabilities, and a total stockholders' deficit of
$12.17 million.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
27, 2023, citing that the Company has reported recurring net losses
and negative cash flows from operations that raise substantial
doubt about its ability to continue as a going concern.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Venus Concept said the Company's recurring losses from operations
and negative cash flows raise substantial doubt about the Company's
ability to continue as a going concern within 12 months from the
date that the unaudited condensed consolidated financial statements
were issued. The global economy, including the financial and
credit markets, has recently experienced extreme volatility and
disruptions, including increasing inflation rates, rising interest
rates, foreign currency impacts, declines in consumer confidence,
and declines in economic growth. All these factors point to
uncertainty about economic stability, and the severity and duration
of these conditions on the Company's business cannot be predicted,
and the Company cannot assure that it will remain in compliance
with the financial covenants contained within its credit
facilities.
VESTOGE FREDERICK: Case Summary & Three Unsecured Creditors
-----------------------------------------------------------
Debtor: Vestoge Frederick MD, LLC
44801 Pipeline Plaza, Suite 315
Ashburn, VA 20147
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: June 22, 2024
Court: United States Bankruptcy Court
District of Maryland
Case No.: 24-10536
Debtor's Counsel: Brent C. Strickland, Esq.
WHITEFORD, TAYLOR & PRESTON L.L.P.
111 Rockville Pike, Suite 800
Rockville, MD 20852
Tel: (410) 347-9402
Email: bstrickland@whitefordlaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ramesh Kalwala, Member Vestoge Frederick
MD, LLC.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/BXKARXA/Vestoge_Frederick_MD_LLC__mdbke-24-10536__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Three Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Devlan/Yowaiski Mill LLC Development Unknown
11654 Plaza America Agreement
Dr., #293
Reston, VA 20190
2. Drees Homes of DC Inc. Lot Purchase Unknown
8551 Rixlew Lane, Agreement
Suite 230
Manassas, VA 20109
3. Snyder Environmental Mechanics Lien $536,465
Services, Inc.
270 Industrial Blvd.
Kearneysville, WV
25430
VESTTOO LTD: Creditors Want to Cut Aon, Equity Holders' Plan Votes
------------------------------------------------------------------
Steve Evans of Artemis reports that the Committee of Unsecured
Creditors in the Chapter 11 bankruptcy case of insurtech Vesttoo
has objected to broking group Aon being allowed multiple votes on
the proposed plan of bankruptcy, while also saying claims from
equity holders in certain Vesttoo structures should be denied votes
completely.
As we reported recently, the plan of reorganisation under Chapter
11 for Vesttoo's impending bankruptcy was conditionally approved by
the Delaware court judge and so can proceed to a vote among the
creditors.
The official Committee of Unsecured Creditors all get their votes,
of course, but there is some disagreement over how the number of
claims an organisation has made against the bankruptcy should play
into the influence it could wield over the eventual voting and
approval process.
Because of this, the official Committee of Unsecured Creditors have
filed their objection to many of the claims made by insurance and
reinsurance broking group Aon and certain subsidiary entities.
They state that Aon and its entities have made hundreds of claims
against Vesttoo’s bankruptcy estate, many of them duplicative.
Some of these have been filed via the joint provisional liquidators
(JPL’') assigned to White Rock Insurance (SAC) Ltd. in the
Bermuda court case that ensued some months back.
Claims from Aon and the JPL’s amount to over $3.1 billion in
value, it seems, a figure well beyond any recovery that can be
hoped for under the bankruptcy process, given how little value
remains in the Vesttoo business.
But the creditor committee appear to be concerned that claims
levelled by Aon and the JPL’s could resulting in them having
additional votes on the bankruptcy plan and so more influence over
it. So, they are objecting to them and asking the court to deny, or
downgrade the priority of the majority of claims made.
There has now been an agreement and an order entered in the court,
to allow the committee of creditors more time to file an objection
to the hundreds of claims that have been made by the JPLs on behalf
of Aon entities. The JPLs also have an extended time frame to
subsequently reply to this.
The creditor committee want the JPL claims reclassified as General
Unsecured Claims and disallowed for purposes of voting on the
Vesttoo bankruptcy plan, while they are disputing the validity of
the duplicative claims made by other Aon entities, it seems.
One filing states, "If Aon is allowed to vote each Disputed Claim,
it could single-handedly control whether acceptance and
confirmation of the Plan is denied, a result that is manifestly
unfair to the Cedents and other valid creditors who were victimized
by the fraud, particularly given the duplicative nature of the
Disputed Claims."
In addition, the creditors note that disallowing these claims will
"protect the voting process and the orderly resolution of these
Chapter 11 Cases."
At the same time, the official Committee of Unsecured Creditors is
also objecting to claims made by some equity holders that have
interests in certain Vesttoo investment structures.
These equity holders seem a mix of entities and investors that have
provided funding in one or another of Vesttoo's seed or venture
rounds over the insurtech’s lifespan.
But these claims do not deserve a vote on the bankruptcy plan, in
the creditor committee's opinion.
"Based on the allegations in the Disputed Claims, the holders of
the Disputed Claims do not hold claims at all, but instead hold
equity interests in Debtors Vescor Bay, L.P. or Vesttoo Ltd. Equity
interests are not claims and, thus, do not entitle the holders to
vote on the Plan. Even if it was determined that the Disputed
Claims assert more than equity interests (which they do not), the
asserted claims should be subordinated under section 510(b) of the
Bankruptcy Code or otherwise disallowed," the committee's filing
states
As a result, these disputed claims to the bankruptcy estate of
Vesttoo should be recategorised as interests, the creditors
believe.
Further stating, "The Disputed Claims represent equity interests,
not a "claim” against the Debtors, and should be disallowed for
purposes of voting on the Plan."
As we've reported before, there seems little chance that creditors
are going to be particularly satisfied with the amount of value
that can be recovered from Vesttoo's bankruptcy, as documents show
that the eventual recovery for creditors may be minimal and
certainly well-below the level of claims made against the estate.
Remember there is also litigation ongoing, currently involving
Clear Blue Insurance and Aon, with a chance of more erupting, as
creditors look to other avenues to recover some of the significant
value lost due to the letter of credit reinsurance collateral fraud
that occurred.
About Vesttoo Ltd
Vesttoo Ltd. is a technology-driven collateralized reinsurance
provider in Tel Aviv, Israel. It connects the insurance industry
with the capital markets by combining AI-powered technology with
expertise in data science, insurance and finance.
Vesttoo and its affiliates sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. (Lead Case No. 23-11160) on
Aug. 14 and 15, 2023.
The Honorable Bankruptcy Judge Mary F. Walrath oversees the case.
The Debtors tapped DLA Piper, LLP (US) as legal counsel and Kroll,
LLC, as financial advisor. Epiq Corporate Restructuring, LLC is the
claims and administrative agent.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee tapped Greenberg Traurig, LLP, as legal counsel and
Alvarez & Marsal North America, LLC as financial advisor.
VIRGINIA REAL ESTATE: Rental Income & Sale Proceeds to Fund Plan
----------------------------------------------------------------
Virginia Real Estate Services and Rentals, LLC, f/k/a Virginia Real
Estate Services, LLC, filed with the U.S. Bankruptcy Court for the
Western District of Virginia a Chapter 11 Plan of Reorganization
dated January 16, 2024.
The Debtor is a Virginia limited liability company engaged in the
business of real property ownership and rental for approximately 15
years.
The Debtor owns 10 deeded residential properties, some of which are
multi-unit, resulting in 15 total rental units. These rental units
are rented as residences to individuals and families (the
"Tenants") pursuant to lease agreements.
The Debtor's income producing single-family and multi-unit
properties were purchased by the Debtor primarily for long term
investment and rental purposes. Until the pandemic, significant
cash flow was generated to meet all operating expenses, and the
long term trend of the Debtor was very positive and successful. In
addition to the impact of the pandemic, though, the Debtor concedes
that it made certain operational errors in failing to maintain
rental rates consistent with market rates, resulting in a number of
properties that were not realizing their true rental value.
Although going forward the Debtor sees a positive turn around
post-pandemic, with improved rental rates and increased occupancy
rates, the Debtor was nonetheless required to seek relief under
Chapter 11 to prevent a foreclosure of one if its properties. As
such, on October 16, 2023 (the "Petition Date"), the Debtor
commenced this bankruptcy case by filing a voluntary petition for
relief under chapter 11 of the Bankruptcy Code and elected to
proceed under subchapter V of chapter 11 as part of that initial
filing.
By and through this Plan, the Debtor seeks to reorganize
thoughtfully its debts in a manner that will improve its cash flow
such that it may provide repayment to all unsecured creditors while
simultaneously permitting it to provide for the full payment of its
secured creditors in a feasible and economically realistic manner.
Going forward, the Debtor will continue to rent its properties and
devote the rental income to the successful completion of this Plan.
The Debtor will improve its management of its tenants, ensuring
that rents are brought to market rates as soon as practicable and
that defaulting tenants are replaced promptly with new, performing
tenants.
This Plan under chapter 11 of the Bankruptcy Code proposes to pay
creditors of the Debtor from its income and from the sale of
certain of its real properties.
Priority and non-priority unsecured creditors holding allowed
claims will receive distributions in accordance with this Plan that
meet or exceed the amount such claims would receive in a Chapter 7
liquidation. This Plan also provides for the payment of
administrative claims and expenses and secured claims.
Class 4 includes all unsecured creditors. Distributions will be
made from Plan Funding to the allowed unsecured claims, pro rata,
in Class 4, until all such claims are paid in full. Class 4 is
impaired by the Plan.
The holder of the equity interests shall retain his interests in
Virginia Real Estate Services and Rentals, LLC, but he shall not be
entitled, and shall not receive, any distribution of available Cash
on account of such equity interests during the Plan Term.
The Debtor will fund its Plan from its rental income and real
property sales as otherwise set forth in this Plan. Upon and after
the Effective Date, the reorganized Debtor shall have all powers
provided for under this Plan and the Confirmation Order and shall
have all of the powers provided by Section 1184 of the Bankruptcy
Code. The Debtor's disposable income shall be utilized to complete
the Monthly Plan Payments.
The Debtor intends to market and sell sufficient properties or
obtain financing to satisfy the balloon payment requirements of the
repayment terms of the Class 2 claims within the first three years
following the Effective Date.
A full-text copy of the Plan of Reorganization dated January 16,
2024 is available at https://urlcurt.com/u?l=DQafoD from
PacerMonitor.com at no charge.
Counsel for the Debtor:
H. David Cox, Esq.
Cox Law Group, PLLC
900 Lakeside Drive
Lynchburg, VA 24501
Telephone: (434) 845-2600
Facsimile: (434) 845-0727
Email: David@coxlawgroup.com
About Virginia Real Estate Services
Virginia Real Estate Services and Rentals LLC is primarily engaged
in renting and leasing real estate properties.
Virginia Real Estate Services and Rentals LLC sought relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D.
Va. Case No. 23-50486) on October 16, 2023. In the petition signed
by Dale King, as manager and sole member, the Debtor reports
estimated assets between $1 million and $10 million and estimated
liabilities between $500,000 and $1 million.
Judge Rebecca B. Connelly oversees the case.
The Debtor is represented by H. David Cox, Esq. at Cox Law Group,
PLLC.
VYERA PHARMACEUTICALS: Chapter 11 Trustee Wants $10 Mil. Clawback
-----------------------------------------------------------------
Emlyn Cameron of Law360 reports that Vyera Pharmaceuticals'
liquidating trustee told a Delaware bankruptcy judge he wants to
claw back almost $10 million paid out to a drug ingredient
supplier, allegedly to allow convicted fraudster Martin Shkreli to
ratchet up the price of life-saving drug Daraprim while restricting
the ingredient supply for generics.
About Vyera Pharmaceuticals
Vyera Pharmaceuticals, LLC is a New York-based biopharmaceutical
company. It focuses on developing and commercializing innovative
treatments for patients with unmet medical needs.
Vyera and its affiliates filed petitions under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
23-10605) on May 9, 2023. In its petition, Vyera reported between
$10 million and $50 million in assets and between $1 million and
$10 million in liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped DLA Piper, LLP as bankruptcy counsel; Sierra
Constellation Partners, LLC as financial advisor; and Alvarez &
Marsal Securities, LLC as investment banker. Epiq Corporate
Restructuring, LLC is the claims agent.
WAITS R.V. CENTER: Wins Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized Waits R.V. Center, Inc. to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtor requires the use of cash collateral to pay its regular
business operating expenses and administrative expenses and other
ordinary expenses as they become due.
BayFirst National Bank, First Home Bank, Northport Commercial
Finance, LLC, Grandsouth Bank, the U.S. Small Business
Administration, FC Marketplace, LLC, Wells Fargo Commercial
Distribution Finance, LLC, and Automotive Finance Corporation
assert an interest in the Debtor's cash collateral.
As adequate protection for and to the extent of Debtor's use of
cash collateral, BayFirst, Northport, Grandsouth, SBA, FC
Marketplace, Wells Fargo, First Home, and Automotive Finance are
granted, as of the Petition Date, a replacement lien to the same
extent as any pre-petition lien, pursuant to 11 U.S.C. Section
361(2) on the property set forth in its security agreements, on an
interim basis, without any prejudice to any rights of the Debtor to
seek to void the lien as to the extent, validity, or priority of
said liens.
On or before 48 hours of the sale of a vehicle (or 7 days if the
sale is financed by the customer), the Debtor will remit to the
lien holder the Payoff Amount. The Debtor may use any amount over
and above the Payoff Amount in the ordinary course, subject to the
terms of this order and any subsequent order on the use of cash
collateral.
An interim hearing on the matter is set for January 22, 2024 at
2:30 p.m.
A copy of the order is available at https://urlcurt.com/u?l=ABux1G
from PacerMonitor.com.
About Waits R.V. Center, Inc.
Waits RV Center is an RV dealership serving the West Palm Beach
area offering a selection of new and pre-owned RVs.
Waits R.V. Center, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-18437) on Oct. 15, 2023. The petition was signed by William
Waits as president. At the time of filing, the Debtor estimated
$1,845,763 in assets and $2,375,951 in liabilities.
Judge Mindy A. Mora presides over the case.
Craig I. Kelley, Esq. at KELLEY, FULTON & KAPLAN, P.L. represents
the Debtor as legal counsel.
WESCO HOLDINGS: Incora Wants Gulfstream Supply Deal Rejected
------------------------------------------------------------
Incora, a bankrupt aerospace supply chain management company, is
asking a Texas bankruptcy court to immediately end a Gulfstream
supply contract that became unprofitable during the COVID-19
pandemic, contesting Gulfstream's claims that a contract
termination clause must be honored for Incora to reject the deal.
Until recently, Gulfstream Aerospace Corporation was a significant
customer of Incora's, with a long-term, multi-million-dollar
contract for Incora to manage Gulfstream's hardware needs at
several of its North American locations. Like many of Incora's
long-term customer contracts, the Gulfstream Contract suffered from
declining margins in the face of
inflationary pressures, rising supply costs, and several
unfavorable commercial terms. For instance, the Gulfstream
Contract required Incora to maintain several months' worth of parts
in stock for Gulfstream's benefit, without requiring Gulfstream to
purchase those parts exclusively from Incora. Gulfstream has been
unwilling to accept the modifications to its contract that Incora
has requested. For this reason, the Gulfstream Contract is, to
date, the only material customer contract that the Debtors have
proposed to reject, according to court filings.
From the perspective of the Debtors' estates, the Gulfstream
Contract is unduly burdensome for several reasons. Among other
things, Incora is required to sell to Gulfstream at prices that are
projected to become unprofitable in 2024 and to remain unprofitable
through the remaining con- tract term. Even in 2023, Incora was
required to place over $10 million of "gap buys" and expedited
orders -- i.e., purchases of inventory on shorter lead times than
typical purchase orders, which enables Incora to meet specific
customer need dates -- which caused the Gulfstream Contract to
underperform economic expectations.
Incora has invested approximately $77 million in Incora-owned parts
and $104 million in outstanding purchase orders for parts that were
intended for Gulfstream's ultimate use. Gulfstream currently owes
Incora $8,961,325 for prepetition goods and services provided under
the Gulfstream Contract, $12,507,192 for post-petition goods and
services
provided under the Gulfstream Contract, and $820,662 for ad hoc
post-petition goods and services.
Gulfstream has filed a proof of claim (no. 1269) for $9,344,544.90
in "rebates, credits, and other contractual amounts that have
accrued pre-petition" (although Incora believes that only
approximately $3.3 million in pre-petition rebates and penalties
are outstanding) and has accrued
approximately $4.8 million in post-petition rebates.
Incora derives no benefit from holding Gulfstream's property and
will
allow Gulfstream to take its owned property, either before or after
rejection of the Gulfstream Contract, provided only that Gulfstream
pay its outstanding invoices (net of any appropriate rebates).
Because Incora's estates derive zero benefit from holding
Gulfstream's property (and in fact, they likely bear marginal cost
for storage and insurance), Incora believes that the imposition of
an administrative claim, even if properly presented to the Court,
would be inappropriate.
About Incora
Incora -- http://www.incora.com/-- is the trade name for the group
of companies formed by Wesco Aircraft and Pattonair, a provider of
comprehensive supply chain management services to the global
aerospace and other industries. Beginning with a strong foundation
in aerospace and defense, Incora also utilizes its supply chain
expertise to serve industrial manufacturing, marine, pharmaceutical
and beyond. Incora incorporates itself into customers' businesses,
managing all aspects of supply chain from procurement and inventory
management to logistics and on-site customer services. The company
is headquartered in Fort Worth, Texas, with a global footprint that
includes 68 locations in 17 countries and more than 3,800
employees.
Wesco Aircraft Holdings, Inc., doing business as Incora, and 43
affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case
No. 23-90611) on June 1, 2023.
Wesco Aircraft estimated assets and debt of $1 billion to $10
billion as of the bankruptcy filing.
The Debtors tapped Milbank, LLP and Haynes and Boone, LLP as
bankruptcy counsels; PJT Partners, Inc. as investment banker;
Alvarez & Marsal North America, LLC as restructuring advisor; and
Quinn Emanuel Urquhart & Sullivan, LLP as special litigation and
conflicts counsel. Kurtzman Carson Consultants, LLC, is the claims
agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee tapped McDermott Will & Emery, LLP and Morrison
Foerster, LLP as its counsel; Piper Sandler & Co. as investment
banker; and Province, LLC as financial advisor.
WEWORK INC: Will Close Another Atlanta Office Amid Bankruptcy
-------------------------------------------------------------
Zachary Hansen of The Atlanta Journal-Constitution reports that
WeWork, the shared workplace company famous for its high-profile
corporate collapse, is trying to shed another Atlanta location as
it works to forge a new financial path through Chapter 11
bankruptcy.
The co-working company, which was once valued at $47 billion, filed
for bankruptcy protection in November and has since been trying to
cut loose unprofitable locations. During its initial round of
cuts, the New York-based company rejected dozens of leases. The
first cuts included two in Atlanta — Buckhead's Tower Place 100
and The Boundary in Midtown.
About WeWork Inc.
New York, NY-based WeWork Inc. is a global flexible workspace
provider, serving a membership base of businesses large and small
through its network of 779 Systemwide Locations, including 622
Consolidated Locations as of December 2022.
WeWork Inc. and its affiliates sought relief under Chapter 11 of
the Bankruptcy Code (Bankr. D.N.J. Case No. 23-19865) on Nov. 6,
2023. In its petition, WeWork Inc. reported $19 billion of
liabilities and $15 billion of assets.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP, Cole Schotz PC, and Munger, Tolles & Olson LLP
as counsel; Alvarez & Marsal North America LLC and Province, LLC as
financial advisors; and PJT Partners LP as investment banker.
Softbank is represented by Weil Gotshal & Manges LLP and Wollmuth
Maher & Deutsch LLP as legal counsel and Houlihan Lokey Capital as
financial advisor.
The Ad Hoc Group of First Lien and Second Lien Lenders is
represented by Davis Polk & Wardwell LLP (Eli Vonnegut, Elliot
Moskowitz, Natasha Tsiouris, Jonah Peppiatt) and Greenberg Traurig
LLP (Alan Brody) as legal counsel and Ducera Partners LLC as
financial advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases.
WILLAMETTE VALLEY: Seeks Cash Collateral Access
-----------------------------------------------
Willamette Valley Hops, LLC asks the U.S. Bankruptcy Court for the
District of Oregon for authority to use cash collateral through
February 5, 2024 and grant a replacement lien.
The secured creditor is US Bank N.A. and they have a UCC-1. The
debt secured by the UCC is approximately $1.1 million. Creditor has
a blanket lien on all accounts, accounts receivable and equipment
of the Debtor.
As and for adequate protection, the Secured Creditor will be
granted a security interest and replacement lien, dollar for
dollar, in all the post-petition accounts and account receivables
to replace their security interest and liens in the collateral.
A hearing on the matter is set for January 23, 2024 at 1 p.m.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=4fgeL1 from PacerMonitor.com.
The Debtor projects $382,646 in total income and $49,802 in total
expenses.
About Willamette Valley Hops, LLC
Willamette Valley Hops, LLC is a family owned and operated premium
hop product distributor, established in 2008 and located in the
heart of the Willamette Valley.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ore. Case No. 24-60110) on January 19,
2024. In the petition signed by Paul Stevens, managing member, the
Debtor disclosed up to $50 million in both assets and liabilities.
Judge Peter C. Mckittrick oversees the case.
Ted A. Troutman, Esq., at Troutman Law Firm, PC, represents the
Debtor as legal counsel.
WINDSOR HOLDINGS III: Moody's Alters Outlook on B1 CFR to Negative
------------------------------------------------------------------
Moody's Investors Service affirmed Windsor Holdings III, LLC's
("Univar") B1 corporate family rating, B1-PD probability of default
rating, and the B2 ratings on the backed senior secured bank credit
facilities and the senior secured notes. The ratings outlook has
been revised to negative from stable.
ESG was a key driver of the rating action, specifically governance
considerations related to financial policy.
RATINGS RATIONALE
The revision of the ratings outlook to negative reflects further
increase in Univar's leverage following the proposed $450 million
incremental issuance and shareholder distribution, which follows
the near doubling of balance sheet debt from the leveraged buyout
by Apollo and a wholly owned subsidiary of Abu Dhabi Investment
Authority in August 2023. Proforma for the transaction, Moody's
adjusted leverage is expected to increase to 5.6x in 2024 from 5.1x
at the end of 2023, with interest coverage declining to 2.0x.
However, Moody's adjusted leverage is expected to decline to 5.0x
in 2025 and assumes free cash flow is prioritized for deleveraging
and there is no additional leverage added to the balance sheet
during this period.
The ratings affirmation reflects Moody's expectation that Univar is
able to manage through this period of elevated leverage for the
rating given its large scale and diversity, ability to generate
strong free cash flow, and a likely rebound in demand following a
longer than expected customer inventory destocking cycle. The
assessment also reflects Moody's expectation that the company will
prioritize free cash flow for deleveraging over the next 18-24
months and drive leverage below 5.0x.
The credit profile of Univar is supported by its: (1) leading
market share in North America chemical and ingredient distribution,
the second largest market share in Europe and third largest in
Latin America; (2) broad distribution network and diverse product
offerings servicing a broad array of end markets that provide a
strong competitive position in the distribution sector and provide
some stability during economic slowdowns; (3) low capital
expenditure requirements, however, the operations are subject to
working capital swings.
The credit profile is challenged by (1) weak credit metrics
following the LBO and the proposed dividend transaction; (2) narrow
margins that are inherent in the distribution industry, (3) an
acquisition-driven growth strategy, given the fragmented nature of
the industry and the expectation that management will continue this
strategy under Apollo's ownership; (4) an increased interest
expense burden, further exacerbated by the proposed transaction,
which limits the company's ability to fund future acquisitions
through free cash flow; (5) uncertainty around earnings recovery
following a longer than expected customer inventory destocking
cycle.
The B2 rating on the senior secured bank credit facilities and the
senior secured notes, one notch below the CFR, reflects their
secondary position in the capital structure behind the unrated $1.4
billion asset-based revolver. However, the instrument ratings could
become in line with the CFR if the relative proportion of senior
secured debt in the capital structure were to increase. The senior
secured credit facilities and the senior secured notes have a first
priority security interest in all equity interests of the borrower
and substantially all material assets of the borrower and each
subsidiary guarantor (other than ABL priority collateral) and a
second priority security interest on the ABL priority collateral.
The negative outlook reflects the possibility of a downgrade if (1)
the de-levering process were to take longer than expected, (2) the
company pursues any larger M&A transactions which further weaken
credit metrics, (3) the company undertakes another sponsor dividend
transaction or other leveraging transaction before returning
leverage to below 5.0x.
The company is expected to have good liquidity. The company had
$168 million of cash at September 30, 2023, and $531 million of
availability under its ABL credit facility, for total liquidity of
$699 million. Moody's expects Univar to generate positive free cash
flow in 2024, excluding the dividend payment to the sponsor, which
will be used to reduce the ABL draw, thereby improving available
liquidity. The revolver has a springing fixed charge covenant of 1x
if availability is less than 10% of the commitment or $105 million.
The term loans do not have any covenants. Moody's expect the
company to remain in compliance with covenants. The majority of
assets are encumbered by the secured credit facilities with
guarantors accounting for approximately two thirds of sales, EBITDA
and assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade is unlikely given the negative outlook. However,
Moody's could consider an upgrade, if the company:
-- Lowers balance sheet debt and reduces leverage sustainably
below 4.0x
-- Increases interest coverage above 2.5x
-- Consistently generates retained cash flow to debt above 10%.
Moody's could consider a rating downgrade, if:
-- Customer inventory destocking continues for longer than
currently expected, putting pressure on the company's earnings
-- Leverage is sustained above 5.0x for longer than currently
anticipated
-- EBITDA to interest expense is sustained below 2.0x
-- Retained cash flow to debt is sustained below 7%
-- The company pursues further leveraging transactions, including
sponsor dividends and large M&A
Windsor Holdings III, LLC ("Univar") is one of the largest global
chemical and ingredient distributors and providers of related
services, operating hundreds of distribution facilities to service
a diverse set of customers end markets in the US, Canada, Europe,
the Middle East, Latin America and the Asia Pacific region.
Univar's top 10 customers account for roughly 6% of sales, while
its top 10 suppliers represent roughly 41% of its total chemical
expenditures. For the 12 months ended September 30, 2023, the
company generated approximately $10.3 billion in revenue.
The principal methodology used in these ratings was Chemicals
published in October 2023.
YELLOW CORP: $82 Million Truck Terminal Sales Okayed
----------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge
Friday, January 12, 2024, gave Yellow Corp. the go-ahead to sell
off the leases on nearly two dozen truck terminals for almost $83
million after hearing all objections to the transactions had been
resolved.
About Yellow Corporation
Yellow Corporation -- http://www.myyellow.com/-- operates
logistics and less-than-truckload (LTL) networks in North America,
providing customers with regional, national, and international
shipping services throughout. Yellow's principal office is in
Nashville, Tenn., and is the holding company for a portfolio of LTL
brands including Holland, New Penn, Reddaway, and YRC Freight, as
well as the logistics company Yellow Logistics.
Yellow Corporation and 23 affiliates concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before
the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow
Corporation had $2,152,200,000 in total assets against
$2,588,800,000 in total liabilities. The petitions were signed by
Matthew A. Doheny as chief restructuring officer.
The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel;
Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel;
Kasowitz, Benson and Torres, LLP as special litigation counsel;
Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as
investment banker; and Alvarez and Marsal as financial advisor.
Epiq Bankruptcy Solutions is the claims and noticing agent.
Milbank LLP serves as counsel to certain investment funds and
accounts managed by affiliates of Apollo Capital Management, L.P.
while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve
as counsels to Beal Bank USA and the U.S. Department of the
Treasury, respectively.
On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in the Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer & Feld, LLP and
Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller
Buckfire as investment banker; and Huron Consulting Services, LLC,
as financial advisor.
[*] Commercial Bankruptcies Rose 70% in 2023
--------------------------------------------
DS News reports that according to a new monthly bankruptcy filings
report covering the calendar year 2023 published by Epiq AACER,
commercial Chapter 11 bankruptcy filings increased a whopping 72%
over the course of the year rising from 3,819 in 2022 to 6,569 in
2023.
Looking at the bigger picture, all commercial filings increased 19%
to 25,627 in 2023 from the 21,479 filings recorded during 2022.
Subchapter V elections within Chapter 11 also experienced a
substantial increase in calendar year 2023, as the 1,939 filings
represented a 45% increase from the 1,334 recorded in 2022.
In total, all bankruptcy filings during the calendar year 2023
amounted to 445,186 filings, an 18% increase from the 378,390
recorded in 2022. While representing a substantial year-over-year
increase, total bankruptcy filings remain lower than the
pre-pandemic total of 757,816 recorded in CY2019.
"As anticipated, we saw new filings in 2023 increase momentum over
2022 with a significant number of commercial filers leading the
expected increase and normalization back to pre-pandemic bankruptcy
volumes," said Michael Hunter, VP of Epiq AACER. "We expect the
increase in number of consumer and commercial filers seeking
bankruptcy protection to continue in 2024 given the runoff of
pandemic stimulus, increased cost of funds, higher interest rates,
rising delinquency rates, and near historic levels of household
debt."
Overall consumer filing totals for calendar year 2023 were 419,559,
representing an 18% increase from the 356,911 consumer filings the
previous year. The 175,964 consumer Chapter 13 bankruptcy filings
during calendar year 2023 also registered an 18% increase over
2022’s total of 149,069. Consumer Chapter 7 filings increased 17%
in CY2023 to 242,936 from 207,188 filings the previous year.
"Though still below pre-pandemic figures, bankruptcies in all
filing categories climbed last year amid the evaporation of
pandemic emergency responses, increased interest rates and tougher
lending standards," said ABI Executive Director Amy Quackenboss.
"As interest rates remain elevated, increasing geopolitical
tensions weigh on global supply chains and debt loads continue to
grow, struggling businesses and families can turn to the proven
process of bankruptcy for a financial fresh start."
[*] U.S. Private Equity Co. Bankruptcies Rose Record High in 2023
-----------------------------------------------------------------
Dylan Thomas and Annie Sabater of S&P Global Market Intelligence
reports that US private equity portfolio company bankruptcies
spiked to record high in 2023.
Bankruptcy filings by private equity- and venture capital-backed
companies in the US surged to 104 in 2023, the highest annual total
on record, according to S&P Global Market Intelligence data.
The total represents 174% growth over the 38 US portfolio company
bankruptcy filings in 2022.
The overall bankruptcy rate for US companies also rose to 642
filings in 2023, a 73% increase over the prior-year total of 372,
as businesses grappled with the combined effects of inflation,
higher interest rates and the fading impact of pandemic-era
stimulus spending.
"It's no secret that there's been economic headwinds after the
Covid bump," said Kris Herrmann, a partner in the private equity
group for law firm Proskauer, referring to the stimulus-fueled
economic rebound after COVID-19 lockdowns in 2020. That stimulus
may have allowed owners or financial sponsors of distressed
businesses to "kick the can," Herrmann said, suggesting the full
backlog of bankruptcies has yet to hit the courts.
"I wouldn't be surprised if, even when the economy kicks up again,
you're still going to see some of those residual bankruptcies
happening for those businesses whose time maybe should have run out
three years ago," Herrmann said.
Sector focus
Portfolio companies of private equity and venture capital firms
accounted for more than 16% of all US bankruptcy filings in 2023,
their largest share of the annual bankruptcy rate going back to at
least 2010, Market Intelligence data shows.
Fifty-five, or just over half of the 104 US portfolio company
bankruptcies in 2023, were filed by healthcare and consumer
discretionary businesses. That data point hints at specific
economic pressures squeezing those sectors.
"Consumer discretionary is certainly going to be impacted in any
sort of recessionary moment," Herrmann said, adding that recent
stressors, like the impact of higher labor costs on business
margins and inflation-related reductions in consumer spending, are
likely blending with longer-term shifts in the sector, including
the transition away from brick-and-mortar stores in favor of online
shopping.
In the healthcare sector, some private equity-backed businesses are
dealing with restrictions on raising prices in response to rising
costs, Herrmann said. The 2022 No Surprises Act, a law designed to
shield patients from unexpected costs related to emergency or
out-of-network care, cut into the margins of some healthcare
businesses and factored into the Chapter 11 filing of American
Securities LLC-backed Air Methods Corp., a helicopter ambulance
business.
Largest portfolio company bankruptcies
The November filing for Chapter 11 bankruptcy protection by
coworking space operator WeWork Inc. was among the largest
bankruptcies of private equity- or venture capital-backed
businesses in 2023. The listed company's largest shareholders
include SoftBank Investment Advisers (UK) Ltd., BlackRock Inc. and
Vanguard Group Inc.
Akumin Inc., which alongside Air Methods ranks as one of the
largest private equity portfolio company bankruptcies in the
healthcare sector in 2023, filed for a prepackaged Chapter 11
bankruptcy in October that will result in the outsourced radiology
and oncology business being taken private by alternative investment
firm Stonepeak Partners LP.
The deal will convert $470 million in debt held by Stonepeak into
equity, and Stonepeak agreed to invest an additional $130 million
into the business.
*********
Monday's edition of the TCR delivers a list of indicative prices
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then-ending.
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Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
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