/raid1/www/Hosts/bankrupt/TCR_Public/240126.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, January 26, 2024, Vol. 28, No. 25
Headlines
1011778 BC: Moody's Affirms Ba3 CFR Following Carrols Transaction
425 MARCY AVENUE: Seeks to Tap Avrum J. Rosen as Legal Counsel
5703 9TH: Amends WCP Fund Secured Claims Pay Details
746 EAST 4TH STREET: Voluntary Chapter 11 Case Summary
818 REAL ROAD: Robert Goe Named Subchapter V Trustee
ACCLIVITY ANCILLARY: Updates Unsecured Claims Pay; Amends Plan
ACME HOSPITALITY: M. Colette Gibbons Named Subchapter V Trustee
APOSTOLIC CHURCH: Jerrett McConnell Named Subchapter V Trustee
ARCHBISHOP OF SAN FRANCISCO: Taps TransPerfect for Legal Services
ARTISAN PACKAGING: Seeks to Hire Meadoworks LLC as Broker
ARTIVION INC: S&P Withdraws 'B-' Issuer Credit Rating
BARRETTS MINERALS: Matthew McKinney Appointed to Committee
BBB FOOD: Seeks to Hire Juan C. Bigas Law Office as Legal Counsel
BBQATOC INC: Mark Sharf Named Subchapter V Trustee
BERTRAMS PAINTING: Seeks to Hire EXP Realty as Real Estate Broker
BIOLASE INC: Registers 111,340 Shares Under 2018 LTIP
BIRD GLOBAL: Owes Corkbase Customer Service Company Voxpro $530K
BOXER PARENT: Moody's Affirms B2 CFR, Outlook Stable
BRIGHT HEALTH: Changes Name to 'NeueHealth, Inc.'
BRIGHT MOUNTAIN: Director Resigns Over Disagreement
CAESARS ENTERTAINMENT: S&P Rates $1.5BB Senior Secured Notes
CAMELOT UK: S&P Upgrades ICR to 'BB-', Outlook Stable
CAPROCK LAND: Trustee Taps Rochelle McCullough as Legal Counsel
CHAMPIONS FINANCING: S&P Assigns 'B-' ICR, Outlook Stable
CHARIOT BUYER: Fitch Assigns B Rating on Incremental 1st Lien Loan
CONNEXA SPORTS: Inks $16.5 Million Securities Purchase Agreements
CORE SCIENTIFIC: To Leave Chapter 11 Bankruptcy as Coin Rally
CROWN JEWEL: Seeks to Hire SM Realty Advisors as Real Estate Agent
CUPCAKE QUILTS: Tom Howley of Howley Law Named Subchapter V Trustee
DIAMOND SPORTS: Reaches Chapter 11 Plan Deal With Amazon
DIOCESE OF ALBANY: Hearing on Sale of NY Property Set for Feb. 14
DIRECT TEXTILE: Unsecureds Will Get 1.47% of Claims over 5 Years
DISH NETWORK: Parent EchoStar Starts New Distressed Debt Swap
EBIX INC: Okayed to Pay Employee Bonuses in Chapter 11
EMINENT CYCLES: Auctions Its Remaining Assets Online in Chapter 11
ENVIVA INC: Skips Interest Payment on 6.5% Senior Notes
EQUALTOX LLC: Seeks Approval to Hire Lab Zen LLC as Broker
FL RHW ERIE: Mark Dennis of SL Biggs Named Subchapter V Trustee
FRANCISCAN FRIARS: Seeks to Hire Ordinary Course Professionals
FREE SPEECH: Creditors, Alex Jones Will Present Chapter 11 Plans
FREE SPEECH: Trustee Taps Law Office of Liz Freeman as Counsel
FREEDOM MORTGAGE: S&P Rates New $500MM Senior Unsecured Notes 'B'
FTX GROUP: Clashes With IRS Over Tax Fight Burden
FTX GROUP: Ex-Customers Want Fair Cryptocurrency Boom Repayment
FTX GROUP: Parents of Bankman-Fried Want Bankruptcy Suit Tossed
FUSION GALAXY: Hires Integrity Business Systems as Accountant
GENESIS GLOBAL: Inks $8-Mil. NY Lawsuit Settlement With Regulators
GENESISCARE: Shareholder Ordered to Comply With Chapter 11 Plan
GNSP CORP: Michael Markham Named Subchapter V Trustee
GOL LINHAS: Case Summary & 30 Largest Unsecured Creditors
GOL LINHAS: Files for Chapter 11 Bankruptcy
GROWING AND LEARNING: Seeks to Hire Aprio LLP as Accountant
GROWING AND LEARNING: Taps Kenneth L. Baum LLC as Legal Counsel
HARLEM PROPERTIES: Seeks to Hire Morrison Tenenbaum as Counsel
HIJOLE FOODS: Hires Juan C. Bigas Law Office as Legal Counsel
INCLAN PAINTING: Tarek Kiem of Kiem Law Named Subchapter V Trustee
INDIEV INC: Hearing on Sale of Personal Property Set for Jan. 31
JERSEY WHOLESALE: Brian Hofmeister Named Subchapter V Trustee
JINZHENG GROUP: Seeks to Hire Leech Tishman as Special Counsel
JLM COUTURE: $1.5M Unsecured Claims to Get Share of Income
KARBONX CORP: Recurring Losses Raise Going Concern Doubt
KENNETH THOMPSON: Rental Income to Fund Plan Payments
KINFOLKS EVENT: Deborah Caruso Named Subchapter V Trustee
LAREDO OIL: Recurring Losses Raise Going Concern Doubt
LGX ENERGY: Cumulative Operating Losses Raise Going Concern Doubt
LIGADO NETWORKS: Seeks Additional Financing from Creditors
LUMMUS TECHNOLOGY: Moody's Rates Extended $1BB Sec. Term Loan 'B1'
MAJESTIC COACH: Michael Coury Named Subchapter V Trustee
MERCON COFFEE: Seeks to Hire Chipman Brown Cicero as Co-Counsel
MERCY HOSPITAL: Bondholders Want 96% of Sale Proceeds
MR@M1 LLC: Seeks to Hire Buddy D. Ford as Legal Counsel
MULLEN AUTOMOTIVE: 2023 Fiscal Year Ended on Sept. 30
MULLEN AUTOMOTIVE: Regains Compliance With Nasdaq Bid Price Rule
MUZIK INC: Seeks to Hire Otaigbe Group as Accountant
MVK FARMCO: Seeks Court Okay for $22-Mil. DIP Financing
NABORS INDUSTRIES: BlackRock Has 15.1% Stake as of Dec. 31
NABORS INDUSTRIES: State Street Has 5.42% Stake as of Dec. 31
NEW ALEXANDRIA: Seeks to Hire Baker & Associates as Attorney
NEW TROJAN: S&P Downgrades ICR to 'D' on Chapter 11 Filing
NGL ENERGY: S&P Rates $2.1BB Senior Secured Notes 'B+'
NOGIN INC: $35M Unsecured Claims to Get 0% in Joint Plan
NOGIN INC: Committee Seeks to Hire Morris James as Co-Counsel
NOGIN INC: Committee Taps Dundon Advisers as Financial Advisor
NOGIN INC: Committee Taps Lowenstein Sandler as Co-Counsel
NOVO INTEGRATED: Incurs $4.7MM Net Loss in First Quarter
OMNIQ CORP: Receives $5M Purchase Orders From Food and Drug Chains
OMNIQ CORP: Unit Sells Accounts Receivables to Prestige
PHUNWARE INC: Board Appoints Elloit Han as Class II Director
PLANET HOLDCO 2: S&P Assigns 'B' ICR, Outlook Stable
PMHC II: S&P Affirms 'B-' Issuer Credit Rating, Outlook Negative
PRESCOTT WHISPERING: Hires Citypoint Arizona as Real Estate Broker
PROTERRA INC: Updates Other Secured Claims Pay Details
RESTORATION HOUSE: Case Summary & One Unsecured Creditor
RICE OIL: Frederic Schwieg Named Subchapter V Trustee
RISKON INTERNATIONAL: Registers 40M Shares for Possible Resale
RITE AID: Investors Say Chapter 11 Stay Does Not Apply to Execs
RITE AID: Wants to Market 3 Free-Owned Properties, 8 Store Leases
SAL ATX: Amends Magnolia BridgeCo Secured Claim Pay Details
SBG BURGER: U.S. Trustee Appoints Creditors' Committee
SDPBC ACQUISITION: To Auction Assets on Jan. 29
SHIFT TECHNOLOGIES: Court OKs Bid Rules for Sale of Assets
SHOWFIELDS INC: Closes Stores for Good in Chapter 11
SOLENIS HOLDING: S&P Assigns 'B-' ICR, Outlook Stable
SOUTH COAST: Taps Sussman Shank as Bankruptcy Counsel
SPIRIT AIRLINES: Jetblue Airways Deal Blocked on Antitrust Cause
SREE AKSHAR: Case Summary & One Unsecured Creditor
STAGHORN OUTDOORS: Taps Seigfreid Bingham as Bankruptcy Counsel
STIMWAVE TECHNOLOGIES: Trustee Wants Founders Sanctioned
SUPOR PROPERTIES: Plan Contemplates Four Scenarios
TALLGRASS ENERGY: Fitch Rates $700MM Sr. Unsecured Notes 'BB-'
TALOS ENERGY: Fitch Alters Outlook on 'B' LongTerm IDR to Positive
TALOS PRODUCTION: Moody's Gives B3 Rating on New Second Lien Notes
THERATECHNOLOGIES INC: Receives Complete Response Letter From FDA
TRC FARMS: Seeks to Hire IronHorse Auction as Auctioneer
TROIKA MEDIA: Committee Hires Troika Media as Financial Advisor
TROIKA MEDIA: Committee Taps McDermott Will & Emery as Counsel
UPTOWN PARTNERS: Seeks to Hire MN Blum LLC as Accountant
VENUS CONCEPT: Board Reviewing Strategic Alternatives
WEALTH MANIFESTED: Norman Rouse Named Subchapter V Trustee
WESCO AIRCRAFT: Can't Control Creditor Suit vs. Platinum
WILLAMETTE VALLEY: Seeks to Hire Troutman Law as Legal Counsel
[] Smithtown Real Property Up for Sale on February 22
[^] BOOK REVIEW: The First Junk Bond
*********
1011778 BC: Moody's Affirms Ba3 CFR Following Carrols Transaction
-----------------------------------------------------------------
Moody's Investors Service affirmed all ratings of 1011778 B.C.
Unlimited Liability Company (dba Restaurant Brands, Inc. or
"RBI"), including its Ba3 corporate family rating, Ba3-PD
probability of default rating, Ba2 rating on its existing senior
secured first lien revolving credit facility due 2028, Ba2 ratings
on its senior secured first lien term loan A due 2028 and senior
secured first lien term loan B5 due 2030, Ba2 ratings on its senior
secured first lien global notes, and B2 ratings on its senior
secured second lien global notes. The SGL-1 speculative grade
liquidity rating (SGL) remains unchanged. The outlook is maintained
at stable.
On January 16, 2024 [1], RBI announced that it reached an agreement
to acquire all Carrols Restaurant Group, Inc. ("Carrols") issued
and outstanding shares that RBI or its affiliates do not already
own for $9.55 per share. RBI expects to fund the transaction with
around $200 million of cash and $750 million of debt. RBI and its
affiliates currently hold approximately 15% of Carrols outstanding
equity. The transaction has an aggregate total enterprise value of
approximately $1.0 billion, or around 6.7x Carrols' preliminary
2023 EBITDA [2].
The affirmation reflects Moody's expectation that the acquisition
will have only a modest impact on RBI's credit metrics. The
affirmation also reflects governance considerations particularly
RBI's commitment to reducing leverage and that RBI will continue to
show material improvement in its leverage profile such that
debt/EBITDA will fall below 5.75x over the very near term through
continued earnings growth. However, the transaction comes at a time
when RBI's debt/EBITDA remains very high at 6.2x for the LTM ending
September 30, 2023, a level that still exceeds Moody's 5.75x
leverage indicator needed to maintain the Ba3 corporate family
rating. The transaction also increases exposure to the risks
related to restaurant operations, including operating costs, as
well as execution risks related to significant unit remodel plans
as part of its Burger King Reclaim the Flame plan and planned
refranchising once remodels are completed over the next 5-plus
years.
RATINGS RATIONALE
RBI's Ba3 CFR benefits from its brand recognition, significant
scale in terms of global systemwide units and portfolio of
restaurant concepts, including Burger King, Popeyes, Tim Hortons
and Firehouse Subs. Despite the acquisition of Carrols, it largest
operator with around 1,022 Burger King and 60 Popeyes restaurants
across 23 states in the Northeast, Midwest, South and Southeast
regions of the US, RBI's business model remains largely franchised
focused, which provides more stability to earnings and cash flow,
than peers who operate large numbers of restaurants. In addition,
RBI's diversified day part and food offerings and very good
liquidity also support the rating. RBI's rating is constrained by
its high leverage and modest retained cash flow to debt, although
with improvement expected over the very near term through earnings
growth and debt reduction, as well as the need to continue to
execute its Reclaim the Flame plan to improve the overall health of
its Burger King system.
The stable outlook reflects Moody's expectation that RBI will
maintain steady improvement in operating performance by profitably
growing the breadth, depth and reach of its global restaurant base.
The outlook also anticipates that the company follows a balanced
financial policy toward dividends and debt reduction, with a focus
on materially improving leverage such that it falls below Moody's
downward rating factor over the very near term while maintaining
very good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded should there be any deterioration in
performance or liquidity, or more aggressive financial policies
that lead to Moody's-adjusted debt/EBITDA remaining above 5.75x or
EBIT to interest sustained under 2.5x.
Ratings could be upgraded should there be a sustained strengthening
of credit metrics through both earnings growth and material debt
reduction, with Moody's-adjusted debt/EBITDA maintained below 5.0x
and EBIT/interest maintained above 3.0x. A higher rating would also
require the company's commitment to preserving credit metrics at
these levels at all times, and to maintaining very good liquidity
including solid positive free cash flow.
1011778 B.C. Unlimited Liability Company is the debt issuing
subsidiary of parent company, Restaurant Brands International Inc.,
which owns, operates and franchises about 19,035 Burger King
hamburger quick service restaurants globally, 5,701 Tim Hortons
restaurants primarily in Canada and the US, 4,373 Popeyes
restaurants primarily in the US and 1,266 Firehouse Subs
restaurants primarily in the US. Revenue exceeded $5.76 billion for
the twelve month period ended September 30, 2023 (excluding
advertising revenue), although systemwide sales are over $40
billion. 3G Restaurant Brands Holdings LP, owns approximately 27%
of the combined voting power with respect to Restaurant Brands
International Inc. (RBI) and is affiliated with private investment
firm 3G Capital Partners, Ltd.
The principal methodology used in these ratings was Restaurants
published in August 2021.
425 MARCY AVENUE: Seeks to Tap Avrum J. Rosen as Legal Counsel
--------------------------------------------------------------
425 Marcy Avenue, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ the Law Offices of
Avrum J. Rosen, PLLC as its counsel effective as of March 2, 2023.
The Debtor requires legal counsel to:
(a) give advice regarding the rights and duties of the
Debtor;
(b) oversee the preparation of necessary reports to the court
or creditors;
(c) conduct all appropriate investigation or litigation; and
(d) perform any other necessary duty in aid of the
administration of the Debtor's estate.
The hourly rates of the firm's counsel and staff are as follows:
Partners $670
Associates $570
Paraprofessional $200
The firm received a post-petition retainer in the amount of
$25,000.
Avrum Rosen, Esq., a member of the Law Offices of Avrum J. Rosen,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Avrum J. Rosen, Esq.
LAW OFFICES OF AVRUM J. ROSEN PLLC
38 New Street
Huntington, NY 11743
Telephone: (631) 423-8527
Facsimile: (631) 423-4356
Email: arosen@ajrlawny.com
About 425 Marcy Avenue
425 Marcy Avenue, LLC owns a property located at 419-427 Marcy
Ave., Brooklyn, N.Y., valued at $19.6 million.
425 Marcy Avenue filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-40118) on Jan. 16, 2023, with $19,600,000 in assets and
$31,033,782 in liabilities. Aron Lebovits, owner of 425 Marcy
Avenue, signed the petition.
Judge Elizabeth S. Stong oversees the case.
The Law Offices of Avrum J. Rosen PLLC represents the Debtor as
counsel.
5703 9TH: Amends WCP Fund Secured Claims Pay Details
----------------------------------------------------
5703 9th, LLC, submitted an Amended Disclosure Statement for Plan
of Reorganization dated January 22, 2024.
The Bell Family inherited the single-family residential property
located at 5703 9th Street, NW, Washington D.C. (the "Property")
when their parents passed away.
The Bell Family determined that the value of the Property could be
maximized if the Property could be remodeled into a two-unit
residential condominium property (the "Project"). In order to
finance the project, the Debtor entered into a loan transaction
with WCP Fund I, LLC as servicer for U.S. Bank National Association
("WCP") pursuant to a certain note executed by the Debtor (the
"Note"). WCP has a security interest in the Property pursuant to
various loan documents (collectively, the "WCP Loan Documents") to
secure the Note.
The Debtor expects to refinance the Property and use the loan
proceeds to satisfy the WCP Secured Claim. If the Debtor is unable
to obtain refinance the Property within 90 days from the
Confirmation Date, the Debtor shall seek to sell the Property and
use the sale proceeds to fund the Plan.
Class 2 consists of WCP Secured Claim. Class 2 is unimpaired by the
Plan. In full and complete satisfaction, discharge, and release of
the Class 2 Claim, the holder of the Class 2 Claim shall receive
payment of its Allowed Secured Claim pursuant to the Consent Order
resolving the Debtor's objection to the proof of claim filed by the
Class 2 holder, paid from a loan refinancing the Property or at
closing on the sale of the Property. The holder of the Class 2
Claim shall continue to retain its lien on and security interest
in, if any, the Property until the Allowed Class 2 Claim is paid.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Class 3 consists of General Unsecured Claims. Class 3 is
unimpaired by the Plan. In full and complete satisfaction,
discharge, and release of the Class 3 Claims, the holders of the
Class 3 Claims shall receive cash equal to 100% of their Allowed
Claims, plus interest at the federal judgment rate in effect as of
the Petition Date from the later of the Petition Date or the date
that the Claim became liquidated through the date on which the
Claim is paid in full, paid pursuant to the Plan.
* The holders of the Class 4 Interests shall retain all of
their ownership interest in the Reorganized Debtor. Upon the
payment in full of all Allowed Class 3 Claims, any remaining Cash
on hand may be distributed by the Reorganized Debtor in its sole
discretion.
The sources for funding of this Plan shall include, but shall not
be limited to, the refinancing of the WCP Secured Claim and/or the
sale of the Property.
A full-text copy of the Amended Disclosure Statement dated January
22, 2024 is available at https://urlcurt.com/u?l=gDErLU from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Brent C. Strickland, Esq.
WHITEFORD, TAYLOR & PRESTON L.L.P.
111 Rockville Pike, Suite 800
Rockville, MD 20850
Tel: (410) 347-9402
Fax: (410) 223-4302
E-mail: bstrickland@whitefordlaw.com
About 5703 9th LLC
5703 9th, LLC is a limited liability company formed under the laws
of the District of Columbia on October 27, 2021.
The Debtor filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D.D.C. Case No. 23-00131) on May 16,
2023. At the time of filing, the Debtor estimated $500,001 to $1
million in assets and $100,001 to $500,000 in liabilities.
Brent C. Strickland, Esq. at Whiteford Taylor & Preston, is the
Debtor's counsel.
746 EAST 4TH STREET: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: 746 East 4th Street, LLC
245 Emerson Street
Boston, MA 02127
Business Description: 746 East 4th Street is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: January 25, 2024
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 24-10157
Judge: Hon. Janet E. Bostwick
Debtor's Counsel: Michael Van Dam, Esq.
VAN DAM LAW LLP
233 Needham Street
Suite 540
Newton, MA 02464
Tel: 617-969-2900
Email: mvandam@vandamlawllp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Charles W. McCarthy, Jr. as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/QCAOAPA/746_East_4th_Street_LLC__mabke-24-10157__0001.0.pdf?mcid=tGE4TAMA
818 REAL ROAD: Robert Goe Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 16 appointed Robert Goe, Esq., a
practicing attorney in Irvine, Calif., as Subchapter V trustee for
818 Real Road Partners, LLC.
Mr. Goe will be paid an hourly fee of $545 for his services as
Subchapter V trustee while his case administrator, Arthur Johnston,
will be paid an hourly fee of $195. In addition, the Subchapter V
trustee will receive reimbursement for work-related expenses
incurred.
Mr. Goe declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert P. Goe, Esq.
17701 Cowan
Building D, Suite 210
Irvine, CA 92614
Telephone: (949) 798-2460
Facsimile: (949) 955-9437
Email: bktrustee@goeforlaw.com
About 818 Real Road Partners
818 Real Road Partners, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-10334) on
January 18, 2024, with $1 million to $10 million in both assets and
liabilities.
Judge Julia W. Brand oversees the case.
Raymond H. Aver, Esq., at the Law Offices of Raymond H. Aver
represents the Debtor as bankruptcy counsel.
ACCLIVITY ANCILLARY: Updates Unsecured Claims Pay; Amends Plan
--------------------------------------------------------------
Acclivity West, LLC ("AW") and Acclivity Ancillary Services LLC
("AAS") submitted a Second Amended Joint Combined Chapter 11 Plan
and Disclosure Statement dated January 21, 2024.
The Plan has one class of secured creditor claims, the LOF Secured
Claim, and three classes of unsecured creditor claims: (i) the 2020
Swap Claims, (ii) the FLS Interest Claims, and (iii) the Florida
Claims. Given the 2020 Swap Claims, the FLS Interest Claims, and
the Florida Claims differ in nature, the treatments under the plan
mirror these differences. The treatment of the general unsecured
claims, to the extent they exist, are provided for in the treatment
of the FLS Interest Claims.
Class 2 Unsecured Claims
Class 2.A. consists of the 2020 Swap Creditor-Investors holding
2020 Swap Claims. The 2020 Swap Claims have been allowed on a prima
facie basis in the 2020 Swap Claim Amount, which is the pro rata
portion of AW's capital account balance of its limited partnership
interest in LOF. Allowance of the claims on a prima facie basis
means that the claims are allowed unless there is a successful
objection to a claim.
In full satisfaction, settlement, discharge and release of each
2020 Swap Claim, each 2020 Swap Claim shall receive either (i) the
Cash Out Option, or, subject to meeting the eligibility
requirements, or (ii) the Retention Option, which 2020 Swap
Creditor-Investor will receive a limited liability company
membership interest (the "Replacement Membership Interests") in the
Reorganized Debtor with an initial capital account balance equal to
100% of the capital account balance associated with their 2020 Swap
Claim. The Reorganized Debtor's obligation to repay the Exit Loan
will reduce the future returns to the 2020 Swap Creditor-Investors
electing the Retention Option because the Reorganized Debtor's
limited partnership interest in LOF is subject to the Forced NAV
Reduction Payments.
Class 2.B. consists of the FLS Interest Claims and all other
Unsecured Claims against either Debtor. The FLS Interest Claims
have been allowed on a prima facie basis in the FLS Interest Claim
Amount, which is the proportion of death benefit a Holder of an FLS
Interest Claim would receive pursuant to their respect Life
Settlement Contract. Allowance of the claims on a prima facie basis
means that the claims are allowed unless there is a successful
objection to a claim.
In full satisfaction, settlement, discharge and release of each FLS
Interest Claim, each FLS Interest Claim shall receive either (i)
the Cash Out Option, or, (ii) the Retention Option, which is that
the Holder will enter into a replacement Life Settlement Contract
(a "Replacement Contract"; a Holder of an FLS Interest Claim that
elects the Retention Option and becomes a holder of a Replacement
Contract, is referred to as a "Replacement Contract Holder") and
under the Replacement Contract will only be entitled to 64%, rather
than 100%, of the death benefit amount set forth in their original
Life Settlement Contract, or the liquidation amount, if the
underlying life insurance policy is liquidated, as applicable,
which amount will not be payable until the underlying life
insurance policy matures or is liquidated.
Class 2.C. consist of the Florida Creditor-Investors holding
Florida Claims. The Florida Claims have been allowed on a prima
facie basis in the Florida Claim Amount. Allowance of the claims on
a prima facie basis means that the claims are allowed unless there
is a successful objection to a claim. The holders of Florida Claims
will receive (i) a cash payment equal to 1% of the Florida Claim
Amount paid as a lump sum within 90 days of effective date of the
Plan, plus (ii) the recovery that the Debtors receive from the LSSF
Causes of Action on account of such specific Florida Claim, less
and fees and expenses including any contingency fees for legal
counsel.
Life Opportunity Fund I, L.P. ("LOF"), not the Debtors, has agreed
to fund the cash payments under the Plan for those
Creditor-Investors that elect the Cash Out Option as their
treatment under the Plan. In exchange for the cash payment LOF will
receive that Creditor-Investors' associated capital account balance
or FLS Interest. The funding of these cash payments under the Plan
by LOF is in addition to the commitment to fund the DIP Loan and
the Exit Loan. The funding of the Cash Out Option payments by LOF
does not have to be repaid by the Debtors.
LOF has available cash and access to additional funding through a
line of credit to make the Cash Out Option payments under the Plan.
LOF's availability under its line of credit is substantially more
than the aggregate of all the Cash Out Option payments to the
Investor-Creditors if every Investor-Creditor eligible for a Cash
Out Option elects the Cash Out Option.
A full-text copy of the Second Amended Joint Combined Plan and
Disclosure Statement dated January 21, 2024 is available at
https://urlcurt.com/u?l=mIWtxp from PacerMonitor.com at no charge.
Proposed Counsel to the Debtors:
Lenard M. Parkins, Esq.
Charles M. Rubio, Esq.
PARKINS & RUBIO LLP
Pennzoil Place, 700 Milam St., Suite 1300
Houston, TX 77002
Tel: (713) 715-1660
E-mail: lparkins@parkinsrubio.com
crubio@parkinsrubio.com
About Acclivity Ancillary Services
Acclivity West, LLC, was formed by Kenneth "Ken" Frank and Timothy
"Tim" Murphy in 2009. It initially sold life settlement investment
instruments throughout the United States and later made the
decision to limit sales to California residents only. AW purchased
life insurance policies from persons who no longer wanted to
maintain their policies ("Viators"), identified and aggregated the
FLS Investors, and then sold FLS Interests to the FLS Investors.
In October 2020, AW gave AW's FLS Investors the opportunity to
exchange their FLS Interests for limited liability company
membership interests in AW and thereby become AW Investors.
Acclivity Ancillary Services LLC and Acclivity West, LLC, filed
their voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 24-90001) on Jan.
5, 2024.
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.
Life Opportunity Fund I, L.P., and Life Opportunity I Feeder, L.P
have agreed to provide debtor-in-possession financing to the
Debtors under a multi-draw credit facility that provides funding
availability up to an additional $735,000.
ACME HOSPITALITY: M. Colette Gibbons Named Subchapter V Trustee
---------------------------------------------------------------
The U.S. Trustee for Regions 3 & 9 appointed M. Colette Gibbons,
Esq., a practicing attorney in Westlake, Ohio, as Subchapter V
trustee for ACME Hospitality, LLC.
Ms. Gibbons will be paid an hourly fee of $400 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Gibbons declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
M. Colette Gibbons, Esq.
Attorney at Law
28841 Weybridge Drive
Westlake, OH 44145
Phone: (216) 798-6940
Email: colette@mcgibbonslaw.com
About ACME Hospitality
ACME Hospitality, LLC owns and operates Moxies Grille, a family
owned and operated restaurant founded in 2011 and known for
scratch-made, homestyle meals.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-50077) on January 22,
2024, with up to $50,000 in assets and $1 million to $10 million in
liabilities. Jerad Miller, sole member, signed the petition.
Judge Alan M. Koschik oversees the case.
Steven J. Heimberger, Esq., at Roderick Linton Belfance, LLP
represents the Debtor as legal counsel.
APOSTOLIC CHURCH: Jerrett McConnell Named Subchapter V Trustee
--------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Jerrett McConnell, Esq.,
at McConnell Law Group, P.A. as Subchapter V trustee for The
Apostolic Church of Jesus Orlando West, The Apostolic International
Ministries, Inc.
Mr. McConnell will be paid an hourly fee of $350 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. McConnell declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jerrett M. McConnell, Esq.
McConnell Law Group, P.A.
6100 Greenland Rd., Unit 603
Jacksonville, FL 32258
Phone: (904) 570-9180
Email: info@mcconnelllawgroup.com
About The Apostolic Church of
Jesus Orlando West
The Apostolic Church of Jesus Orlando West, The Apostolic
International Ministries, Inc. is a tax-exempt religious
organization operated for worship, religious training or study,
government or administration of an organized religion, or for
promotion of religious activities.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00281) on January 19,
2024, with $3,183,398 in assets and $4,933,663 in liabilities.
Keith Hicks, president, signed the petition.
Judge Lori V. Vaughan oversees the case.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC represents the
Debtor as bankruptcy counsel.
ARCHBISHOP OF SAN FRANCISCO: Taps TransPerfect for Legal Services
-----------------------------------------------------------------
The Roman Catholic Archbishop of San Francisco seeks approval from
the U.S. Bankruptcy Court for the Northern District of California
to employ TransPerfect Document Management, Inc. and Chancery
Staffing Solutions, LLC, together known as TransPerfect Legal
Solutions, to provide litigation and e-discovery support services.
A summary of the key rates for services to be provided by
TransPerfect are as follows:
PHASE 1
Forensice Collection
Standard Forensic Acquisitions $315 per hour
Forensic Consulting & Analysis $375 each
Senior Forensic Consulting $595 per hour
Storage Media -- 1 TB $230 per set
Remote Collection Kit - Domestic $85 each
PHASE II
Data Processing
Pre-Review Analytics Waived
Ingestion $10/GB
ECA Hosting $2/GB
Export for Review $75/GB
PHASE III
Review
US-Based Review Attorney -- English $50 per hour
Off-Shore Review Attorney -- English $28 per hour
Review Manager -- English $85 per hour
Project Manager Hour $125 per hour
PHASE IV
Production & Hosting
Relativity Hosting -- Monthly $6/GB
Relativity User License -- Monthly $75 each
Production $250/GB
Technology-Assisted-Review Waived
Project Management $175 per hour
Senior Project Management $275 per hour
Consulting $450 per hour
PHASE V
Depo Support
Court Reporter and Videographer Available
upon request
Miscellaneous Charges
Forensic Services -- Nighttime hours $445 per hour
Encryption Services $295 per hour
David Brill, a director at TransPerfect, disclosed that
TransPerfect and the professionals that are providing services to
the Debtor are disinterested persons who do not hold or represent
an interest adverse to the Debtor's estate.
The firm can be reached through:
David Brill
TransPerfect Legal Solutions
1250 Broadway
New York, NY, 10001
Phone: (212) 689-5555
About The Roman Catholic Archbishop
of San Francisco
The Roman Catholic Archbishop of San Francisco filed Chapter 11
petition (Bankr. N.D. Cal. Case No. 23-30564) on Aug. 21, 2023,
with $100 million to $500 million in both assets and liabilities.
Judge Dennis Montali oversees the case.
The Debtor tapped Felderstein Fitzgerald Willoughby Pascuzzi &
Rios, LLP and Sheppard, Mullin, Richter & Hampton LLP as counsel.
Weintraub Tobin Chediak Coleman & Grodin as special litigation
counsel. Weinstein & Numbers, LLP as special insurance counsel.
GlassRatner Advisory & Capital Group LLC d/b/a B. Riley Advisory
Services as financial advisor. Omni Agent Solutions, Inc. as
administrative agent.
ARTISAN PACKAGING: Seeks to Hire Meadoworks LLC as Broker
---------------------------------------------------------
Artisan Packaging, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Virginia to hire Meadoworks, LLC
as broker and auctioneer.
The firm will provide advice and representation in the marketing
and sale of the Debtor's assets.
The broker will receive a commission equal to 10 percent of
purchase price of the sale and a buyer's premium of 18 percent
payable by any buyer at closing on the sale.
Meadoworks is a "disinterested person" as defined in Bankruptcy
Code Sec. 101(14), according to court filings.
The firm can be reached through:
Brian Walsh
Meadoworks, LLC
291 W. Wolfe St.
Harrisonburg, VA 22802
Tel: (847) 640-8580
About Artisan Packaging, LLC
Artisan Packaging, LLC is primarily engaged in manufacturing
plastics bottles. It offers up to 100 percent post-consumer resin
(PCR) and use energy-saving features to fuel its manufacturing.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Va. Case No. 23-50588) on December 11,
2023. In the petition signed by Richard Jay Veenis, member, the
Debtor disclosed up to $10 million in both assets and liabilities.
Stephan W. Milo, Esq., at Wharton, Aldhizer & Weaver, PLC,
represents the Debtor as legal counsel.
ARTIVION INC: S&P Withdraws 'B-' Issuer Credit Rating
-----------------------------------------------------
S&P Global Ratings withdrew its 'B-' issuer credit rating on
Artivion Inc. due to the redemption of its rated debt. At the time
of the withdrawal, S&P's outlook on Artivion was stable. It also
withdrew its 'B-' issue-level rating and '3'(65%) recovery rating
on the first-lien debt.
BARRETTS MINERALS: Matthew McKinney Appointed to Committee
----------------------------------------------------------
The U.S. Trustee for Region 7 appointed Michael Perry as new member
of the official committee of unsecured creditors in the Chapter 11
cases of Barretts Minerals, Inc. and its affiliates.
Meanwhile, Matthew McKinney, who was appointed on Oct. 20 last
year, has withdrawn from the committee.
As of Jan. 23, the members of the committee are:
1. Nelson S., Libell Jr.
c/o Rachel Libell
Counsel:
The Gori Firm
Attn: Beth Gori-Gregory
156 N. Main Street
Edwardsville, IL 62025
Phone: (618) 659-9833
Email: beth@gorilaw.com
2. Aubrey Brinneman Hawk for the Estate of Tyler Brinneman
Counsel:
Weitz & Luxenberg, P.C.
Attn: Perry Weitz & Justine Delaney, Esq
700 Broadway
New York, NY 10003
Phone: (212)-558-5500
Email: pw@weitzlux.com
Email: JDelaney@weitzlux.com
3. Frank Finch
Counsel:
MRHFM Law Firm
Attn: Chris McKean
Locust St., Ste. 1200
St. Louis, MO 63101
Phone: (314) 241-2003
Email: cmckean@mrhfmlaw.com
4. Teras Williams
Counsel:
Simon Greenstone Panatier
Attn: Leah C. Kagan
1201 Elm Street, Suite 3400
Dallas, TX 75270
Phone: (214) 276-7680
Email: lkagan@sgptrial.com
5. Kimberly Hatcher
Counsel:
Simmons Hanly Conroy, LLP
Attn: Lisa Nathanson Busch
112 Madison Ave
New York, NY 10016
Phone: (212) 257-8482
Email: lbusch@simmonsfirm.com
6. Michael Perry
Counsel:
Dean Omar Branham Shirely, LLP
Attn: J. Bradley Smith
302 N. Market St., Suite 300
Dallas, TX 75202
Phone: (214) 722-5990
Email: bsmith@dobslegal.com
7. Mark Sorum
Counsel:
Kazan, McClain, Satterley & Greenwood
Attn: Joseph Satterley
55 Harrison Street, Suite 400
Oakland, CA 94607
Phone: (510) 302-1000
Email: jsatterley@kazanlaw.com
About Barretts Minerals
Barretts Minerals Inc. current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. It
historically supplied a relatively minor percentage of its sales
into cosmetic applications. Barretts Minerals' talc is sold to
distributors and third-party manufacturers for use in such parties'
products, which are then incorporated into downstream products
eventually sold to consumers.
Barretts Minerals and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90794) on Oct. 2, 2023. In the petition signed by its chief
restructuring officer, David J. Gordon, Barretts Minerals disclosed
$50 million to $100 million in assets and $10 million to $50
million in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Porter Hedges, LLP and Latham& Watkins, LLP as
legal counsel; M3 Partners, LP as financial advisor; Jefferies, LLC
as investment banker; and DJG Services, LLC as restructuring
advisor. David J. Gordon of DJG Services serves as the Debtors'
chief restructuring officer. Stretto, Inc. is the claims, noticing
and solicitation agent and administrative advisor.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Caplin & Drysdale, Chartered and Province, LLC serve as the
committee's legal counsel and financial advisor, respectively.
BBB FOOD: Seeks to Hire Juan C. Bigas Law Office as Legal Counsel
-----------------------------------------------------------------
BBB Food Corp seeks approval from the U.S. Bankruptcy Court for the
District of Puerto Rico to employ Juan C. Bigas Law Office to
handle its Chapter 11 case.
Juan C Bigas Law Office received a retainer in the amount of
$5,000, against which the firm will bill on the basis of $300 per
hour.
In addition, the firm will seek reimbursement for work-related
expenses.
As disclosed in court filings, Juan C Bigas Law Office is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Juan Carlos Bigas Valedon, Esq.
JUAN C. BIGAS LAW OFFICE
P.O. Box 7462
Ponce, PR 00732- 7462
Phone: (787) 259-1000
Email: cortequiebra@yahoo.com
About BBB Food Corp
BBB Food Corp sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 24-00152) on Jan. 19, 2024,
listing $500,001 to $1 million in assets and liabilities.
Juan C Bigas Valedon, Esq. at Juan C Bigas Law Office represents
the Debtor as counsel.
BBQATOC INC: Mark Sharf Named Subchapter V Trustee
--------------------------------------------------
The U.S. Trustee for Region 16 appointed Mark Sharf, Esq., a
practicing attorney in Los Angeles, as Subchapter V trustee for
BBQATOC, Inc.
Mr. Sharf will charge $660 per hour for his services as Subchapter
V trustee and $195 per hour for his trustee administrator's
services. In addition, the Subchapter V trustee will seek
reimbursement for work-related expenses incurred.
Mr. Sharf 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 Sharf, Esq.
6080 Center Drive, 6th Floor
Los Angeles, CA 90045
Telephone: (323) 612-0202
Email: mark@sharflaw.com
About BBQATOC Inc.
BBQATOC, Inc. filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-10114) on
January 18, 2024, with up to $50,000 in assets and $100,001 to
$500,000 in liabilities.
Andrew S. Bisom, Esq., at Bisom Law Group represents the Debtor as
bankruptcy counsel.
BERTRAMS PAINTING: Seeks to Hire EXP Realty as Real Estate Broker
-----------------------------------------------------------------
Bertrams Painting Services, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ EXP
Realty, LLC as its real estate broker.
The firm will assist Debtor with the sale of its real property
located at 5669 S. Sterling Ranch Drive, Davie, FL 33314.
As compensation for its services, EXP will receive 4 percent of the
gross purchase price in connection with the sale of the property.
Melissa Miller, real estate agent with EXP Realty, assured the
court that neither she nor EXP represents any interest adverse to
the Debtor.
The firm can be reached through:
Melissa Miller
EXP Realty, LLC
3265 Meridian Pkwy, Ste 124
Weston, FL 33331
Phone: (954) 646-1233
Email: melissamillerrealtor@gmail.com
About Bertrams Painting Services, Inc.
Bertrams Painting Services Inc. in Fort Lauderdale, FL, filed its
voluntary petition for Chapter 11 protection (Bankr. S.D. Fla. Case
No. 23-16418) on August 15, 2023, listing $2,463,550 in assets and
$2,279,441 in liabilities. Camiel Bertram as president, signed the
petition.
Judge Peter D. Russin oversees the case.
VAN HORN LAW GROUP, P.A. serve as the Debtor's legal counsel.
BIOLASE INC: Registers 111,340 Shares Under 2018 LTIP
-----------------------------------------------------
Biolase, Inc. filed a Form S-8 registration statement with the
Securities and Exchange Commission to register 111,340 shares of
common stock (as adjusted to reflect the 1-for-100 reverse stock
split that became effective on July 27, 2023).
On April 27, 2023, the stockholders of Biolase approved an
amendment to the BIOLASE, Inc. 2018 Long-Term Incentive Plan (as
amended effective as of Sept. 21, 2018, May 15, 2019, May 13, 2020,
June 11, 2021, and April 27, 2023) to increase the number of the
Company's shares of Common Stock available for issuance under the
2018 Plan by 111,340 shares of Common Stock.
Such additional shares of Common Stock are of the same class of
securities as the shares of Common Stock issuable under the 2018
Plan for which the currently effective registration statement on
Form S-8 (File No. 333-224832) filed with the SEC on May 10, 2018
was filed.
A full-text copy of the Registration Statement is available for
free at:
https://www.sec.gov/Archives/edgar/data/811240/000119312524014345/d738722ds8.htm
About Biolase
Biolase, Inc. -- http://www.biolase.com-- is a medical device
company that develops, manufactures, markets, and sells laser
systems that provide significant benefits for dental practitioners
and their patients. The Company's proprietary systems allow
dentists, periodontists, endodontists, pediatric dentists, oral
surgeons, and other dental specialists to perform a broad range of
minimally invasive dental procedures, including cosmetic,
restorative, and complex surgical applications.
Biolase reported a net loss of $28.63 million in 2022, a net loss
of $16.16 million in 2021, a net loss of $16.83 million in 2020, a
net loss of $17.85 million in 2019, and a net loss of $21.52
million in 2018. As of Sept. 30, 2022, the Company had $42.86
million in total assets, $29.01 million in total liabilities, and
$13.86 million in total stockholders' equity.
The Company incurred losses from operations and used cash in
operating activities for the three and nine months ended Sept. 30,
2023 and for the years ended Dec. 31, 2022, 2021, and 2020. The
Company said its recurring losses, level of cash used in
operations, and potential need for additional capital, along with
uncertainties surrounding the Company's ability to raise additional
capital, raise substantial doubt about the Company's ability to
continue as a going concern.
BIRD GLOBAL: Owes Corkbase Customer Service Company Voxpro $530K
----------------------------------------------------------------
Jonathan Keane of Irish Independent reports that Voxpro, the
Cork-based customer service firm, is owed more than $530,000 by the
US e-scooter company Bird, according to court bankruptcy filings.
Bird, one of the mainstays in the e-scooter rental business, filed
for bankruptcy last month in the US at the end of December,
following months of financial turmoil at the company.
It filed for Chapter 11 bankruptcy in Florida in order to
restructure its debts.
Documents detailing creditors and the amounts owed filed with the
court show that Bird owes $535,218 to Voxpro Limited for support
services.
Voxpro is owned by Canadian tech firm Telus International.
Founded by Dan and Linda Kiely, Voxpro provides customer and
technical support services for clients, and was acquired in 2017
for around €150m.
Telus International declined to comment on Bird's court filing.
The Irish company is listed among the top 30 largest creditors.
Bird owes more than $24m to these creditors.
These are the latest in a slew of collapses in the e-scooter
business
Amazon Web Services tops the list with $4.8m. Other firms such as
KPMG and Peter Thiel’s data analytics company Palantir are also
listed as creditors and are owed six-figure sums.
Bird was founded in 2017 and quickly became one of the market
leaders in e-scooter rentals, at one point being valued at $2.5
billion.
It struggled in recent years with the economics of e-scooter
renting, and found it difficult to reach profitability.
An ill-fated listing on the New York Stock Exchange through a blank
check vehicle did little to change its fortunes, and when the
company failed to maintain a market cap above $15m, it was delisted
from the exchange.
Bird’s founder Travis VanderZanden departed the company last
summer.
It filed for bankruptcy protection just before Christmas with
private equity firm Apollo Global Management and other lenders
providing $25m to Bird to allow it to continue operating during the
restructuring.
"We are making progress toward profitability and aim to accelerate
that progress by right-sizing our capital structure through this
restructuring," interim CEO Michael Washinushi said at the time.
Bird's European and Canadian businesses are not impacted by the
restructuring, however Bird's presence in Europe has downsized in
recent years after it pulled out of several countries.
Bird's woes are the latest in a slew of collapses and
consolidations in the e-scooter business.
One rival, Superpedestrian, announced late last year that it was
shutting down -- while last week two European rivals, Dott and
Tier, announced a merger, further concentrating the market.
Following its initial acquisition of a majority stake in Voxpro in
2017, Telus International purchased the remainder of the company in
2019 and has since dropped the Voxpro branding.
The latest accounts filed with the Companies Registration Office by
Voxpro Limited, for the year ended December 2021, show that the
company booked turnover of EUR78.6 million for the year, down from
€80.8 million. Profits for the year came in at EUR1.6 million,
down from EUR3.7 million.
Telus, the parent company of Telus International, announced in
August of last year that it would be cutting 6,000 jobs globally.
Telus also has a presence in Dublin and Ballina.
About Bird Global
Bird Global, Inc., a micro-mobility operator, is an electric
vehicle company dedicated to bringing affordable, environmentally
friendly transportation solutions such as e-scooters and e-bikes to
communities across the world.
Bird Global, Inc. and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Lead Case
No. 23-20514) on December 20, 2023. In the petition signed by
Christopher Rankin, chief restructuring officer, Bird Global
disclosed up to $500 million in both assets and liabilities.
Judge Laurel M. Isicoff oversees the case.
Paul Steven Singerman, Esq., Jordi Guso, Esq., and Clay B. Roberts,
Esq., at Berger Singerman LLP, represent the Debtor as legal
counsel. Teneo Capital LLC is the Debtor's restructuring advisor.
Epiq Corporate Restructuring, LLC serves as notice and claims
agent.
The Senior DIP Parties and Prepetition First Lien Parties, led by
MidCap Financial Trust, are represented by Latham & Watkins LLP
(James Ktsanes; John Lister; Hugh Murtagh).
Covington & Burling LLP (Ronald A. Hewitt) represents the Junior
DIP Agent, U.S. Bank. Venable LLP (Paul J. Battista) advises the
Junior DIP Lenders and Participating Second Lien Parties.
BOXER PARENT: Moody's Affirms B2 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service affirmed Boxer Parent Company Inc.'s
("BMC") B2 Corporate Family Rating and B2-PD Probability of Default
Rating and downgraded the first lien senior secured debt to B2 from
B1. Moody's also affirmed the Caa1 ratings on the second lien
senior secured and senior unsecured debt. BMC is upsizing its first
lien debt facilities to repay a portion of second lien debt. The
outlook is stable.
The downgrade of the first lien debt reflects the greater mix of
first lien debt in the capital structure following the upsizing of
this debt class and subsequent downsizing of the second lien debt.
This shift will result in in the first lien debt comprising over
90% of the total debt in the capital structure. Given that the
first lien debt will comprise the preponderance of total debt, it
will be rated B2, the same as the B2 CFR.
RATINGS RATIONALE
BMC's B2 CFR reflects the company's high leverage as a result of
the KKR buyout and Compuware acquisition, as well as aggressive
financial policies. At the same time, BMC benefits from its market
position as a leading independent provider of IT systems management
software solutions, large scale (over $2.2 billion in revenue), the
resiliency of the high-margin mainframe and workload automation
software businesses, and resultant cash generating capabilities.
BMC's mainframe business (including the mainframe portion of
workload automation business) generates close to half of the
company's operating profit and cash flow (and over three quarters
of profits and cash flow when including the entire workload
automation segment). BMC's distributed platform products, including
the Helix IT service management lines, produce lower profit margins
than the rest of the business but have the potential for moderate
growth despite a challenging competitive environment.
BMC's revenues, profits, and cash flow can swing significantly
based on renewal cycles resulting in free cash flow to debt levels
fluctuating between 1% and 5%. Although Moody's expect modest
"through the cycle" growth, revenues and EBITDA can be volatile due
to upfront revenue recognition during renewal cycles. While Moody's
view the product portfolio as stronger and broader than after the
previous Bain led buyout, BMC needs to continually introduce new
products and features or risk declines in market share.
BMC's liquidity is good based on solid levels of cash
(approximately $170 million expected at closing), an undrawn $650
million revolver, and Moody's expectation of around $250 million of
annual free cash flow (including receivables financing proceeds)
over the next 12-18 months.
The stable outlook reflects Moody's expectation of stable
performance for BMC through renewal cycles supported by a
moderately growing mainframe business. Moody's expects that BMC's
leverage will trend under 7x over the next 12 to 18 months as the
company enters into a stronger part of the renewal cycle with
overall low to mid-single digit growth over the long term.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if BMC demonstrates modest long term
growth, sustains leverage below 6x, and produces free cash flow to
debt averaging greater than 7.5% through the renewal cycle. BMC's
ratings could be downgraded if performance deteriorates (other than
typical renewal cycle swings), leverage is expected to be sustained
above 8x, or free cash flow is expected to average below 2% over an
extended period.
Boxer Parent Company Inc. is the parent of BMC Software, Inc. and
related entities. The company was acquired by private equity
affiliates of Kohlberg Kravis Roberts & Co. in 2018 from a group of
private equity investors led by Bain Capital and Golden Gate (which
acquired BMC in 2013). BMC is a provider of a broad range of IT
management software tools for mainframe and distributed
environments. Non-GAAP revenues were approximately $2.2 billion for
the twelve months ended September 30, 2023. The company is
headquartered in Houston, TX.
The principal methodology used in these ratings was Software
published in June 2022.
BRIGHT HEALTH: Changes Name to 'NeueHealth, Inc.'
-------------------------------------------------
Bright Health Group, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on Jan. 18, 2024, it filed
with the Secretary of State of the State of Delaware a Certificate
of Amendment to its Ninth Amended and Restated Certificate of
Incorporation to change its corporate name from Bright Health
Group, Inc. to NeueHealth, Inc.
In connection with the Company's name change, the Company's board
of directors amended and restated its Bylaws to reflect the
corporate name NeueHealth, Inc. No other changes were made to the
Company's Bylaws.
The Company's common stock will begin trading under the new ticker
symbol "NEUE" on the New York Stock Exchange, effective Jan. 29,
2024. Outstanding stock certificates for shares of the Company are
not affected by the name change; they continue to be valid and need
not be exchanged.
About NeueHealth, Inc.
NeueHealth designs, delivers, and manages high-performing networks.
NeueHealth infuse providers with advanced technology, a wealth of
health care expertise, and proven models of care.
Based on its projected cash flows and absent any other action, the
Company may not meet certain covenants under the Credit Agreement,
the Fourth Waiver or the New Credit Agreement, which may result in
the obligations under the Credit Agreement and New Credit Agreement
being accelerated. The Company will require additional liquidity
to meet its obligations as they come due in the 12 months following
the date the condensed consolidated financial statements contained
in this Quarterly Report are issued. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern, according to the Company's Quarterly Report for the
period ended Sept. 30, 2023.
BRIGHT MOUNTAIN: Director Resigns Over Disagreement
---------------------------------------------------
Bright Mountain Media, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on Jan. 18, 2024, Pamela J.
Parizek, a director of the Company, notified the Company that she
was resigning from the board of directors, effective immediately.
At the time of her resignation, Ms. Parizek was also the Chair of
the Company's audit committee.
The Company said, "Ms. Parizek's resignation was prompted by a
disagreement as to how to handle a matter with the Company's
lender. Over the course of several conversations and meetings,
management of the Company and the Board discussed the matter with
the Company's internal counsel and outside counsel. Pursuant to
its standard procedures, outside SEC counsel recommended to the
Board that the Company pursue the course of action that ultimately
prevailed, supported by a four to one vote by the Board of
Directors."
About Bright Mountain
Based in Boca Raton, Fla., Bright Mountain Media, Inc. --
www.brightmountainmedia.com -- is engaged in operating a
proprietary, end-to-end digital media and advertising services
platform designed to connect brand advertisers with
demographically-targeted consumers -- both large audiences and more
granular segments -- across digital, social and connected
television publishing formats. The Company defines "end-to-end" as
its process for taking ad buying from beginning to end, delivering
a complete functional solution, usually without requiring any
involvement from a third party.
Bright Mountain reported a net loss of $8.13 million for the year
ended Dec. 31, 2022, compared to a net loss of $12 million for the
year ended Dec. 31, 2021. For the three months ended Dec. 31,
2022, the Company reported a net loss of $2.32 million. As of Dec.
31, 2022, the Company had $29.20 million in total assets, $43.27
million in total liabilities, and a total stockholders' deficit of
$14.07 million.
East Brunswick, New Jersey-based WithumSmith+Brown, PC, the
Company's auditor since 2021, issued a "going concern"
qualification in its report dated March 28, 2023, citing that the
Company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability
to continue as a going concern.
In its Quarterly Report for the period ended Sept. 30, 2023, Bright
Mountain said its current cash and working capital, as of the
filing of the Quarterly Report, is not expected to be sufficient to
fund its anticipated level of operations over the next 12 months.
As a result, such matters create a substantial doubt regarding the
Company's ability to meet its financial needs and continue as a
going concern, according to the Company.
CAESARS ENTERTAINMENT: S&P Rates $1.5BB Senior Secured Notes
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Caesars Entertainment Inc.'s proposed $1.5
billion senior secured notes due in 2032 and placed it on
CreditWatch with positive implications. The '3' recovery rating
indicates its expectation for meaningful (50%-70%; rounded
estimate: 60%) recovery for secured lenders in the event of a
payment default.
The company plans to use proceeds from the new senior secured notes
along with the previously proposed term loan B to be issued at the
parent to repay $3.4 billion of parent-secured notes due in 2025
and pay fees and expenses.
Caesars' secured debt ratings remain on CreditWatch positive
because assets at subsidiary Caesars Resort Collection LLC (CRC)
will become available to satisfy parent-secured debt claims once
CRC's remaining $1 billion of secured debt is repaid and assets at
the subsidiary are unencumbered.
S&P said, "We expect to resolve the CreditWatch on the secured debt
when management refinances CRC's secured debt at parent Caesars,
likely in 2024. At this point, we expect CRC to guarantee Caesars'
debt and to provide collateral to its secured debt, implying
improved recovery prospects for secured lenders. We believe an
upgrade of the secured debt would likely be limited to one notch.
At the same time, repayment of the remaining outstanding CRC debt
would likely impair recovery prospects for unsecured lenders, who
share CRC's residual value pro rata with secured lenders. As a
result, we expect to lower our ratings on Caesars' unsecured debt
once CRC's debt is repaid, likely limited to one notch.
"The proposed refinancing transaction is largely debt for debt and
therefore leverage neutral. As a result, it does not affect our
'B+' issuer credit rating on Caesars. However, the transaction will
extend the company's maturity profile."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P said, "We assigned our 'B+' issue-level rating and '3'
recovery rating to Caesars' proposed senior secured notes due in
2032 and placed the issue-level rating on CreditWatch with positive
implications. The '3' recovery rating indicates our expectation for
meaningful (50%-70%; rounded estimate: 60%) recovery for secured
lenders in the event of a payment default."
-- S&P's 'B+' issue-level ratings on Caesars' proposed term loan,
existing secured credit facility, and senior secured notes remain
on CreditWatch with positive implications. The recovery rating on
these instruments remain '3'.
-- The CreditWatch reflects the likelihood that we could raise the
rating on Caesars' secured debt if it refinances CRC's remaining
outstanding secured debt at Caesars. The company indicated it
intends to pursue a refinancing soon. S&P expects an upgrade would
likely be limited to one notch.
CRC is an excluded subsidiary under Caesars' debt agreements and
does not provide security or a guarantee on Caesars' debt. As a
result, Caesars' secured and unsecured lenders have a pro rata
claim to any residual CRC value. Under the terms of Caesars'
secured debt issued in 2023, this ceases to apply when the CRC
secured indenture is no longer in effect. S&P said, "If Caesars
refinances the remaining $1 billion of outstanding CRC secured debt
at Caesars, we expect CRC would guarantee Caesars' debt and secure
Caesars' secured debt. Caesars' secured lenders would have a
priority claim to CRC's enterprise value. This would improve
recovery prospects for secured lenders but impair recovery
prospects for unsecured lenders."
S&P said, "As a result, our 'B' issue-level rating on Caesars'
unsecured notes remains on CreditWatch with negative implications.
Caesars' unsecured notes are composed of $1.6 billion senior notes
due in 2027 and $1.2 billion senior notes due in 2029. We expect a
downgrade would likely be limited to one notch.
"Our 'BB' issue-level rating and '1' recovery rating on CRC's
secured debt indicates our expectation for very high (90%-100%;
rounded estimate: 95%) recovery."
Simulated default assumptions
-- S&P's simulated default scenario assumes a default by 2028, in
line with its typical timeline to default for issuers rated 'B+',
due to prolonged economic weakness or significantly greater
competitive pressures in the company's various markets and in the
online gaming segment, or both.
-- S&P does not expect Caesars to reject its leases and anticipate
it will continue to pay rent because of the importance of the
leased assets to its operations.
-- S&P said, "We assume a gross enterprise value at emergence of
$9.5 billion, calculated by applying a 7x multiple to our estimated
EBITDA at emergence (calculated after rent payments). We use a
multiple at the high end of our range for leisure companies to
reflect the combined company's good scale and geographic diversity
in the U.S. and its favorable competitive position given it has the
largest player loyalty program in the country."
-- S&P assumes about 77% of the gross enterprise value at default
is attributable to CRC's properties and about 23% to Caesars'
legacy Eldorado properties and its Forum convention center based on
our forecast for combined EBITDAR.
-- CRC does not guarantee Caesars' debt, therefore Caesars' debt
at default will primarily be satisfied by value at Caesars. S&P
assumes that as long as CRC's secured notes remain outstanding,
residual value from CRC would be available to satisfy Caesars'
unsecured claims and pari passu secured deficiency claims on a pro
rata basis.
-- S&P assumes Caesars' $2.3 billion revolver is 85% drawn at
default.
-- The simplified waterfall represents the company's current
capital structure and does not assume a refinancing of CRC's
secured notes.
Simplified waterfall
-- Emergence EBITDA: About $1.4 billion
-- EBITDA multiple: 7x
-- Gross enterprise value: $9.5 billion
-- Net enterprise value after administrative expenses (5%): $9
billion
-- Value attributable to CRC: About $7 billion
-- Estimated CRC secured debt claims at default: $1 billion
--Recovery range: 90%-100% (rounded estimate: 95%)
-- Residual value from CRC available to satisfy Caesars' unsecured
debt claims and pari passu secured deficiency claims: $6 billion
-- Value attributable to Caesars' secured debt claims: $2 billion
-- Pro rata share of CRC's residual value: $4.5 billion
-- Total value available to Caesars' secured debt claims: $6.5
billion
-- Estimated Caesars' secured debt claims at default: $10.6
billion
--Recovery range: 50%-70% (rounded estimate: 60%)
-- Pro rata share of CRC's residual value available to Caesars'
unsecured debt claims: $1.5 billion
-- Estimated Caesars unsecured debt claims: $2.9 billion
--Recovery range: 30%-50% (rounded estimate: 45%)
Note: All debt amounts include six months of prepetition interest.
CAMELOT UK: S&P Upgrades ICR to 'BB-', Outlook Stable
-----------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S- based
information, analytics, and workflow solutions provider Camelot UK
Holdco Ltd.(doing business as Clarivate) to 'BB-' from 'B+'. At the
same time, we also raised our issue-level ratings on the company's
senior secured notes to 'BB-' from 'B+' and its senior unsecured
debt to 'B' from 'B-'.
S&P said, "Additionally, we assigned a 'BB-' rating and '3'
recovery rating (65% recovery) to Camelot Finance S.A.'s proposed
$2.15 billion senior secured term loan due in 2031.
"Our stable outlook reflects our expectation that Clarivate will
continue to organically grow its revenue in the low-single digits
and continue to generate substantial cash flow such that FOCF to
debt remains above the 10% area and leverage declines to the mid-4x
area in 2024.
"The upgrade reflects our view that Clarivate's net leverage will
decline to around the 5x area in 2023 and mid 4-x area in 2024 due
to continued cash flow generation and the expected conversion of
preferred shares to equity. Although we expect the company's total
revenue and EBITDA to be relatively flat in 2023 and 2024 as the
company has seen a slowdown in transaction activity due to
macroeconomic headwinds, we still forecast S&P Global
Ratings-adjusted net leverage to decline to around 5x at the end of
2023 due to increased cash flow generation and our updated
treatment of the mandatory convertible shares. As of Sept. 30,
2023, the company's S&P Global Ratings-adjusted debt totaled
approximately $4.6 million, which no longer includes the $1.4
billion in debt-like series A mandatory convertible preferred
shares that it raised to partially fund the ProQuest LLC
acquisition in 2021. We removed the preferred shares from our debt
adjustments 12 months prior to the expected conversation date in
June 2024. Also, although we forecast EBITDA and EBITDA margins to
remain flat in the mid-30% area in 2023 and 2024 as the modest
organic revenue growth is partially offset by the continued
increase in investments for product and development cost, we expect
cash flow generation to remain strong, leading to a further decline
in leverage in 2024.
"We believe the company will continue to prioritize leverage
reduction over the next year or so, although sizeable shareholder
returns and acquisitions are possible in the future. We expect the
company to achieve its publicly stated goal to reduce its net
leverage below 4x by the end of 2023. Management has outlined its
plans to allocate most of the company's free operating cash flow
toward reinvestment in the business to enhance its existing product
offerings as well as ongoing debt reduction to decrease its
floating rate exposure. The management team has publicly stated
their goal of reducing its net leverage to below 3x by the end of
2025. Additionally, Clarivate extended its share repurchase
authorization through December 31, 2024, but reduced the
authorization on the program from $1 billion to $500 million. We
assume modest levels of share buybacks over the next 12 months.
"Management has stated its expectation of increasing the company's
revenue base to $3 billion by the end of 2025 from both organic and
inorganic growth. We view this as consistent with its track record
of supplementing organic revenue growth with acquisitions that add
capabilities, improve its client reach, and diversify revenues.
While potential future acquisitions may enhance the scale or
diversification of the business, we note the company has partially
funded its past three acquisitions of Decisions Resources Group
(DRG), CPA Global, and ProQuest with debt and debt-like securities.
We believe the ultimate impact to the company's future leverage
profile will greatly depend on how it chooses to fund future
acquisitions by using a mix of equity, debt, or debt-like
securities. In addition to the mix of debt funding, we also
highlight that ongoing acquisition activity may increase the risk
of operational missteps or accounting misstatements (as experienced
with the CPA Global acquisition).
"Clarivate's tech-enabled data offerings are diverse and provide
good revenue visibility, supporting our expectation for
low-single-digit organic revenue growth over the next two years.
Despite macroeconomic headwinds in the Intellectual Property
segment and the loss of revenue from the divestiture of MarkMonitor
in 2022, we expect Clarivate's total revenue to remain flat in
2023. However, we expect the company to grow organic revenue in the
low-single digits in 2024 and 2025 due to continued capital
investments." This revenue base is supported by the company's
market approach and client demand for its tech-enabled data
offerings proffered by its three operating segments. Clarivate's
Academia & Government segment, which comprises nearly half of
revenue in the first nine months of 2023 provides products and
services to organizations that plan, fund, implement, and utilize
education and research at a global, national, institutional, and
individual level. The Intellectual Property segment, comprising
slightly over one-third of the company's revenues, provides
intellectual property management services including patent,
trademark, and domain services and expertise. The Life Sciences &
Healthcare segment, comprising roughly 17% of total revenue,
includes products and solutions that provide insight and foresight
across the drug and device lifecycle for life sciences and
healthcare organizations. In total, the company services a diverse
array of clients, roughly 50,000, in over 180 countries. Also,
roughly 80% of the company's sales are either subscription based or
recurring (thus providing predictable annual renewals). The
remaining 20% are transaction-based services and subject to more
direct one-off interactions by the company's sales teams. S&P said,
"Overall, we view this revenue platform as favorable because it
increases the predictability of revenues and reduces the risk of
substantial operating performance declines due to events such as
client losses. Nevertheless, in our view, the most relevant risks
to revenue growth are an unforeseen deterioration in service
capabilities, a loss of perceived quality by clients, reductions in
spending by budget-conscious clients during economic downturns, or
operational missteps regarding transaction revenues."
S&P said, "The stable outlook reflects our expectation that
Clarivate will continue to organically grow its revenue in the
low-single digits and generate substantial cash flow, while keeping
a conservative financial policy such that FOCF to debt remains
above 10% and leverage declines to the mid-4x area in 2024."
S&P could lower the rating if it expects leverage to remain above
5x due to:
-- Partially debt-funded acquisitions.
-- Substantial shareholder rewarding activities; or
-- A substantial pullback in transactional activity or operational
missteps that reduce EBITDA and cash flow generation.
Although unlikely, S&P could raise its rating on Clarivate within
the next 12 months if:
-- S&P anticipates it will reduce its leverage below 4x and
sustain it at the level—including the potential for future
acquisitions and shareholder rewarding activities; and
-- It generates FOCF to debt around the 15% area on a sustained
basis.
CAPROCK LAND: Trustee Taps Rochelle McCullough as Legal Counsel
---------------------------------------------------------------
Laurie Dahl Rea, the Chapter 11 Trustee of Caprock Land Company,
LLC seeks approval from the U.S. Bankruptcy Court for the Northern
District of Texas to hire Rochelle McCullough, LLP as her counsel.
The firm will render these services:
a. advise and consult with the Trustee concerning questions
arising in the conduct of the administration of the bankruptcy
estate and concerning the Trustee's rights and remedies with regard
to the estate's assets and the claims of secured, priority, and/or
unsecured creditors and other parties-in-interest;
b. appear for, prosecute, defend, and represent the Trustee's
interest in all matters related to the Bankruptcy Case;
c. assist in the preparation of such pleadings, motions,
notices, and orders as are required for the orderly administration
of this estate;
d. investigate what means may be necessary to preserve certain
property rights owned by the estate and to determine and take all
necessary and reasonable action for the preservation and/or
liquidation of such assets where necessary;
e. perform all other legal services for and on the Trustee's
behalf that may be necessary or appropriate in the administration
of the Bankruptcy Case;
f. file and prosecute claim objections as necessary;
g. file any avoidance actions as necessary; and
h. sell property of the estate.
The firm will render these services:
Partners $550 to $700 per hour
Associates $325 to $600 per hour
Paralegals $225 per hour
Rochelle McCullough is a "disinterested person" as defined in Sec.
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Kevin D. McCullough, Esq.
Shannon S. Thomas, Esq.
ROCHELLE MCCULLOUGH, LLP
901 Main Street, Suite 3200
Dallas, TX 75202
Telephone: (214) 953-0182
Facsimile: (888) 467-5979
Email: kdm@romclaw.com
sthomas@romclaw.com
About CapRock Land Company, LLC
CapRock Land Company, LLC is a global logistics company that
manages organic feed ingredients around the world to the benefit of
its end customers. CapRock operates seven storage facilities across
the U.S.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-20172) on August 25,
2023. In the petition signed by Thomas Bunkley, owner, the Debtor
disclosed up to $10 million in assets and $50 million in
liabilities.
Judge Robert L. Jones oversees the case.
Steven L. Hoard, Esq., at Mullin Hoard & Brown, LLP, represents the
Debtor as legal counsel.
StoneX Commodity Solutions LLC, as lender, is represented by
Polsinelli PC.
CHAMPIONS FINANCING: S&P Assigns 'B-' ICR, Outlook Stable
---------------------------------------------------------
S&P Global Ratings assigned a 'B-' issuer credit rating to
Champions Financing Inc. operating as Crash Champions, with a
stable outlook.
S&P said, "We also assigned our 'B-' issue-level rating and '3'
recovery rating (rounded estimate recovery: 50%) to the company's
proposed senior secured debt facilities.
"The stable outlook reflects our expectations that free operating
cash flow (FOCF) improves within the next 12-24 months due to
strong demand dynamics, the combined company's ability to improve
margins, and lower cash debt service costs.
"We expect Crash Champions to generate positive free cash flow in
2024. Following the consolidation, we expect to see material cash
flow improvement as the company benefits from improved supplier
contracts, labor stability, and debt servicing costs. Favorable
market conditions and the company's strong relationship with
insurance carriers has also led to stronger volumes. We also expect
that one-time cash charges related to the integration process that
hindered cash flow in 2023 will not recur. Additionally, the
improved pricing on the proposed debt and payment-in-kind option on
the preferred equity will reduce cash interest. We expect these
improvements to drive positive free cash flow in 2024. We forecast
the company will generate between $35 million and $45 million of
FOCF in 2024, and between $20 million and $25 million in 2025.
"We forecast Crash Champions' credit metrics will improve in 2024
due to the consolidated company's position with the market. Steady
increases in the volumes of vehicle miles traveled and a rise in
accident severity have provided a tailwind for the vehicle
collision repair market. Vehicle miles traveled have normalized
following a significant decline during the COVID-19 pandemic. As
the complexity of newer vehicles increases, cost for repairs also
rise. The highly technical exteriors require scanning and
recalibration that independent shop operators do not have the
resources to invest in the requisite equipment or capabilities to
perform. We expect Crash to continue to invest in its in house
calibration and scanning capabilities, allowing it to capitalize on
the growing demand for the high margin service. We expect market
fundamentals to continue to be strong for the next 12-24 months,
while Crash's strong relationship with insurance carriers and
ability to negotiate favorable pricing within direct repair pricing
contracts will drive EBITDA growth and margin expansion. We expect
debt to EBITDA to measure between 7.0x and 7.5x in 2024, down from
above 8x in 2023. We expect leverage to improve further in 2025 to
between 6.5x and 7x in 2025. We also expect free cash flow to debt
to between 1% and 4% in 2024 and 2025.
"We expect the company's liquidity to be adequate over the
forecasted period. We assess the company's liquidity as adequate,
supported by balance sheet cash, a fully undrawn revolving credit
facility, and forecasted free operating cash flow. We expect the
company will use proceeds from the proposed transaction to repay
existing debt held by the two operating entities, and that
maturities will be pushed out at least five years. With no material
debt maturity on the horizon and a lower cash interest burden, the
company can allocate cash towards acquisitions, reinvesting in the
existing platform, and greenfielding or brownfielding additional
shops.
"The stable outlook reflects our view that favorable market
conditions will be a tailwind for Crash Champions over the next
12-24 months. We expect the momentum built during the end of 2023
to drive credit metric improvement, most importantly positive free
cash flow during 2024 and beyond. The proposed transaction will
also benefit cash flows due to lower cash debt service.
"We could lower our rating on Champions Financing Inc. should free
operating cash flow turn negative for a period such that liquidity
becomes pressured."
Such a scenario could occur if;
-- EBITDA margins diminish due to higher operating costs and/or
higher-than-expected integration costs; or
-- The financial sponsor pursues a more aggressive debt-funded
acquisition strategy than expected.
S&P could raise its rating on Champions Financing Inc. should the
company's performance stabilize such that FOCF to debt approaches
5% and debt to EBITDA measures below 7.0x on a sustained basis.
Performance stability could be achieved through continued focus on
improving revenue mix, labor retention, and smooth integration of
acquired service centers.
CHARIOT BUYER: Fitch Assigns B Rating on Incremental 1st Lien Loan
------------------------------------------------------------------
Fitch Ratings has assigned a 'B'/'RR3' rating to Chariot Buyer
LLC's proposed offering of an incremental first lien term loan. The
incremental term loan will have the same maturity and amortization
as the existing first lien term loan and will be pari passu with
the existing first lien term loan and revolver. Net proceeds from
the incremental first lien term loan will be used to repay the
company's $600 million second lien term loan.
Fitch has also affirmed the ratings of Chariot Parent LLC and
Chariot Buyer LLC (dba Chamberlain Group), including the Long-Term
Issuer Default Ratings (IDR) at 'B-'. Fitch has also affirmed the
'B'/'RR3' rating of the company's first lien secured revolver and
existing term loan. The Rating Outlook is Stable.
Chamberlain Group's 'B-' IDR and Stable Outlook reflect its high,
although improving, leverage, which is counterbalanced by its
strong profitability and FCF margins, its solid competitive
position, and diversified endmarkets. Chamberlain's extended
maturity schedule, adequate liquidity and manufacturing
concentration risk are also factored into the ratings and Outlook.
Fitch will withdraw the 'CCC'/'RR6' rating of Chariot's second lien
term loan upon completion of the transaction.
KEY RATING DRIVERS
High Leverage Levels: Fitch expects EBITDA leverage to situate
between 6.5x-7.0x during the next few years compared with 7.5x at
the end of 2022 and 6.9x for the LTM ending Sept. 30, 2023. Top
line growth combined with EBITDA margin expansion contributes to
Fitch's expectation of modestly lower leverage in the coming years.
Fitch's rating case forecast does not assume debt repayment beyond
the required TL amortization or repayment of its revolving credit
facilities, so further debt reduction and/or margin improvement
exceeding Fitch's expectations may result in lower leverage and
positive rating momentum.
Improving Margins: Fitch expects EBITDA margins to expand to around
21.5%-22.0% in 2023 from 20.3% in 2022 as input cost inflation
moderates, offset in part by higher labor costs. Chamberlain
implemented pricing increases in 2022 to offset cost inflation,
which should further benefit margins during 2023 as these increases
are fully realized. Fitch expects EBITDA margins will stay around
21.5%-22.5% in 2023 and 2024 as the company realizes synergies from
Blackstone's ownership.
Modest Cash Flow Generation: Fitch expects Chamberlain will
generate a FCF margin of 1%-2% in 2023 and 2024 due to higher
profitability and reduced working capital investment, offset in
part by dividend payments to its sponsor. Chamberlain made a $130
million dividend payment to its shareholders during 1Q23 and
Fitch's rating case forecast assumes continued annual dividend
payments. The company generated a 2.2% FCF margin in 2022 as higher
working capital requirements reduced cash flow from operations.
Solid Overall Competitive Position: Chamberlain has well-recognized
brand names with leadership positions in the residential and
commercial garage door opener markets. The company also has a
well-diversified distribution network comprised of dealers and
installers, distributors, OEMs and large retailers, including The
Home Depot and Lowe's. Fitch believes these attributes provide
Chamberlain with a solid position in the value chain and help drive
stable to growing margins.
Exposure to Repair Segment Limits Cyclicality: Fitch views
Chamberlain's well diversified end-market exposure positively as
the residential and commercial construction markets typically have
differing cycles and the retrofit market is less cyclical than the
new construction market. This should allow the company to generate
more stable revenues and cash flow through the cycle. Management
estimates that about half of revenues are directed to the
residential market, 40% to the commercial market, and the remainder
to the automotive market and to international operations. Within
its residential segment, about 76% is directed to the retrofit
market, which includes a high proportion of non-discretionary
break-fix activity.
Manufacturing and Distribution Footprint: A vast majority of
Chamberlain's products are manufactured at its facility in Nogales,
Mexico and finished goods are shipped from this location to seven
distribution centers across North America. The strategic
manufacturing footprint allows the company to produce high-quality
products at competitive costs. However, it also exposes Chamberlain
to significant risks should disruptions occur at this facility.
During the early part of the pandemic, Chamberlain's production
facility in Nogales was shut down for six weeks. Additionally, the
company's sales were temporarily disrupted during 2022 due to an
order by the International Trade Commission (ITC) requiring the
company to cease from importing, selling and distributing certain
products that the ITC found infringed on certain patents maintained
by a competitor. The company has since resolved issues related to
the ITC disruption and the ITC orders have been vacated. Fitch
expects management will evaluate alternatives to hedge against the
manufacturing concentration risk.
Blackstone Ownership: Fitch expects the sponsor will maintain a
relatively high leverage tolerance as evidenced by the high
leverage multiple for the company's acquisition by Blackstone.
Fitch expects the company will lower leverage through EBITDA
growth, but will likely remain in the 6x-7x range during the rating
horizon. Fitch expects continued dividend payment to the sponsor,
which will limit FCF generation that can be used for debt reduction
beyond the required amortizations. Further realization of margin
improvement in the next few years, combined with a commitment from
the sponsor to reduce debt modestly beyond the required quarterly
amortization, could provide positive momentum for the ratings.
Fitch also expects Chamberlain will benefit from Blackstone's
ownership, including accelerating the company's growth in the
commercial garage door opener and access solutions market.
DERIVATION SUMMARY
Chamberlain has similar profitability and FCF metrics, but
meaningfully higher leverage than Fitch's publicly-rated universe
of building products manufacturers, which are concentrated in the
low-investment-grade rating categories. These peers typically have
EBITDA leverage of less than or equal to 3.0x and global operating
profiles.
Chamberlain has slightly lower leverage than Park River Holdings,
Inc. (B-/Stable), but higher leverage compared with LBM
Acquisition, LLC (B/Stable). Chamberlain is smaller in scale but is
better positioned in the value chain and has meaningfully higher
profitability and FCF metrics compared with these building products
distributors.
Fitch applies its Parent and Subsidiary Linkage Criteria and uses a
consolidated approach in determining the ratings of Chariot Parent
LLC and Chariot Buyer LLC. The linkage follows a weak parent/strong
subsidiary approach, and strong overall linkage between Chariot
Parent and Chariot Buyer. Fitch rates Chariot Parent as it is the
issuer of the financial statements and either directly or
indirectly owns Chariot Buyer (borrower under the credit
agreements) and all of its operating subsidiaries.
KEY ASSUMPTIONS
- Revenues grow 1.0%-1.5% in 2023 and flat in 2024;
- EBITDA margin of 21%-22% in 2023 and 21.5%-22.5% in 2024;
- FCF margin of 1.0%-2.0% in 2023 and 2024;
- EBITDA leverage of around 7.0x at the end of 2023 and 6.5x-7.0x
at the end of 2024;
- EBITDA interest coverage of around 2.0x during 2023 and 2024.
RECOVERY ANALYSIS
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Chamberlain would be considered
a going-concern (GC) in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim.
Chamberlain's GC EBITDA estimate of $275 million projects a
post-restructuring sustainable cash flow and is about 27% below
Fitch's estimated Sept. 30, 2023 LTM EBITDA and 28% below Fitch's
projected 2023 EBITDA.
Fitch assumes that a default would occur from a meaningful and
continued decline in residential and commercial construction
activity, combined with the loss of one of its top customers. Fitch
estimates revenues that are 20% lower ($1.4 billion) and an EBITDA
margin of about 19.4% (200 bps below Sept. 30, 2023 LTM EBITDA
margin) would result in about $275 million GC EBITDA. This would
capture the lower revenue base of the company after emerging from a
downturn, plus a sustainable margin profile after right sizing.
Fitch has revised the GC EBITDA assumption to $275 million from
$250 million to account for the improvement in EBITDA and EBITDA
margin from realization of cost savings as well as strong revenue
growth following its acquisition by Blackstone in 2021. The
Fitch-calculated EBITDA margin improved from about 20% on a pro
forma basis in 2021 to 21.4% for the LTM ending Sept. 30, 2023.
Additionally, the company has meaningfully grown its commercial
business since 2020 and the overall size of the company has also
grown at more than 9% annually since 2018 through the Sept. 30,
2023 LTM period. Fitch's previous GC EBITDA of $250 million assumed
revenues of $1.32 billion and EBITDA margin of 19%.
An Enterprise Value (EV) multiple of 6.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization enterprise value. The
6.5x multiple is below the 14.7x purchase multiple for the
Chamberlain Group. The EV multiple is higher than the 6.0x multiple
Fitch uses for LBM Acquisition, LLC and Park River Holdings,
respectively. Fitch believes Chariot has a stronger competitive
position in the value chain as a manufacturer compared with LBM and
Park River, both of which are distributors. The company also
benefits from a dominant market share, which is reflected in EBITDA
margins in the high-teens.
The revolver is assumed to be fully drawn at default. The analysis
results in a recovery corresponding to a rating of 'RR3' for the
$250 million first lien revolver and the existing $2.015 billion
first lien secured term loan and the incremental first lien secured
term loan. The distributable value was reduced by the company's
$125 million Accounts Receivables Securitization facility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation that EBITDA leverage will be sustained below
6.5x;
- EBITDA interest coverage sustained above 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA interest coverage sustained below 1.5x;
- Fitch's expectation that FCF generation will be sustained at
neutral or negative levels, leading to liquidity issues or
concerns.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity Position: Chamberlain had an adequate liquidity
position as of Sept. 30, 2023 with cash of $36 million and no
borrowings under its $250 million revolving credit facility that
matures in 2026. The company also has a $125 million accounts
receivable securitization facility, of which $83.9 million was
outstanding as of Sept. 30, 2023.
Fitch expects the company to generate FCF margin of 1%-2% in 2023
and 2024, and, together with cash on hand, is sufficient to cover
annual amortization of $20.15 million under the existing 1L TL as
well as the incremental TL. The company has no debt maturities
until 2028, when the 1L TL matures.
ISSUER PROFILE
Chariot Parent, LLC (dba The Chamberlain Group) is a leading North
American provider of access control solutions, with the number-one
positions in residential garage door openers, commercial garage
door openers, commercial gate controls, and automotive garage
access remotes.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Chariot Buyer LLC LT IDR B- Affirmed B-
senior secured LT B New Rating RR3
senior secured LT B Affirmed RR3 B
Chariot Parent LLC LT IDR B- Affirmed B-
CONNEXA SPORTS: Inks $16.5 Million Securities Purchase Agreements
-----------------------------------------------------------------
Connexa Sports Technologies Inc. disclosed in a Form 8-K filed with
the Securities and Exchange Commission that on Jan. 19, 2024, it
entered into securities purchase agreements with three investors
for the issuance and sale to each investor of (i) 2,330,200 shares
of common stock and (ii) pre-funded warrants to purchase an
aggregate of 25,169,800 shares of its common stock at a combined
purchase price of $0.20 per share of the common stock for an
aggregate amount of approximately $16.5 million. The Pre-Funded
Warrants have an exercise price of $0.00001 per share of common
stock and are exercisable beginning on the date stockholder
approval is received and effective allowing exercisability of
Pre-Funded Warrants under Nasdaq rules until the Pre-Funded
Warrants are exercised in full. The aggregate number of Common
Stock Shares to be issued is 6,990,600 and the aggregate number of
Pre-Funded Warrant Shares is 75,509,400.
In connection with the Securities Purchase Agreement, the Company
and the Investors entered into voting rights agreements, pursuant
to which the Investors have agreed to vote in favor of any
resolution presented to the shareholders of the Company to approve
(i) the issuance of the Pre-Funded Warrant Shares which will allow
the issuance to each of the three investors of more than 19.99% of
the number of shares of common stock of the Company outstanding on
the date of closing pursuant to the Securities Purchase Agreements
(which will be considered a change in control pursuant to Nasdaq
Listing Rule 5635(b)) and the other agreements entered into in
connection therewith or as otherwise may be required by the
applicable rules and regulations of the Nasdaq Stock Market and
(ii) increasing the shares available to be issued pursuant to the
Company's incentive plan by up to 20 million shares of common
stock.
Consulting Agreement
On Jan. 21, 2024, the Company entered into a consulting agreement
with Smartsports LLC pursuant to which Smartsports has agreed to
provide the Company certain consulting services in exchange for
200,000 shares of its common stock which the Company has agreed to
use its commercially reasonable efforts to prepare and file with
the Securities Exchange Commission a registration statement
covering the resale of all of the Smartsports Shares on Form S-1 as
soon as is reasonably practicable.
Change of Control of the Company
As a result of the transactions contemplated by the Securities
Purchase Agreements and the issuance of the Shares and Pre-Funded
Warrants, control of the company now rests with each of (i) Andy
and Lion Co., Ltd., (ii) Junjie Enterprise Management Co., Limited
and (iii) Xinsheng Enterprise Management Services Co., Ltd., each
of whom acquired for a cash investment of $5.5 million (i) 19.99%
of the Company's issued and outstanding shares of the Company's
common stock and (ii) warrants to purchase an additional 25,169,800
shares of the Company's common stock. Prior to the foregoing
transactions, the largest shareholder in the company held 236,855
shares or 2.032% of the then outstanding shares. To the Company's
knowledge, the source of funds used to purchase the Shares and
Pre-Funded Warrants is cash held by each Investor on the date of
acquisition. The Company confirms that there are no arrangements
or understandings among the Investors and their associates with
respect to the election of directors, other than the Voting Rights
Agreement.
About Connexa Sports
Headquartered in Windsor Mill, Maryland, Connexa Sports --
www.connexasports.com -- is a connected sports company delivering
products, technologies, and services across a range of activities
in sports.
The Company has an accumulated deficit of $150,835,256 as of Oct.
31, 2023, and more losses are anticipated in the development of the
business. Accordingly, the Company concluded there is substantial
doubt about its ability to continue as a going concern.
CORE SCIENTIFIC: To Leave Chapter 11 Bankruptcy as Coin Rally
-------------------------------------------------------------
Jonathan Randles of Bloomberg Law reports that crypto mining firm
Core Scientific Inc. won court approval to exit bankruptcy and
implement a restructuring plan that trims about $400 million in
debt from its balance sheet and fully repays company creditors
thanks largely to a turnaround in Bitcoin prices over the last
year.
Judge Christopher Lopez said Tuesday, January 16, 2024, he'd
confirm Core Scientific's Chapter 11 exit plan, a decision that
clears the firm to emerge from bankruptcy later this month. Core
Scientific said during a court hearing the company anticipates its
shares will be re-listed on the Nasdaq on January 24, 2024.
About Core Scientific
Core Scientific, Inc. (OTCMKTS: CORZQ) is the largest U.S.
publicly-traded Bitcoin mining company in computing power. Core
Scientific, which was formed following a business combination in
July 2021 with blank check company XPDI, is a large-scale operator
of dedicated, purpose-built facilities for digital asset mining
colocation services and a provider of blockchain infrastructure,
software solutions and services. Core mines Bitcoin, Ethereum and
other digital assets for third-party hosting customers and for its
own account at its six fully operational data centers in North
Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core
was formed following a business combination in July 2021 with XPDI,
a blank check company.
In July 2022, one of the Company's largest customers, Celsius
Mining LLC, filed for Chapter 11 bankruptcy in New York. With low
Bitcoin prices depressing mining revenue to a record low, Core
Scientific first warned in October 2022 that it may have to file
for bankruptcy if the company can't find more funding to repay its
debt that amounts to over $1 billion. Core Scientific did not make
payments that came due in late October and early November 2022 with
respect to several of its equipment and other financings, including
its two bridge promissory notes.
Core Scientific and its affiliates filed petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
22-90341) on Dec. 21, 2022. As of Sept. 30, 2022, Core Scientific
had total assets of US$1.4 billion and total liabilities of US$1.3
billion.
Judge Christopher M. Lopez oversees the cases.
The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT
Partners, LP as investment banker; and AlixPartners, LLP as
financial advisor. Stretto is the claims agent.
A group of Core Scientific convertible bondholders is working with
restructuring lawyers at Paul Hastings. Meanwhile, B. Riley
Commercial Capital, LLC, as administrative agent under the
Replacement DIP facility, is represented by Choate, Hall & Stewart,
LLP.
On Jan. 9, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee tapped Willkie Farr & Gallagher,
LLP as legal counsel and Ducera Partners, LLC as investment
banker.
The U.S. Trustee for Region 7 appointed an official committee of
equity security holders. The equity committee is represented by
Vinson & Elkins, LLP.
CROWN JEWEL: Seeks to Hire SM Realty Advisors as Real Estate Agent
------------------------------------------------------------------
Crown Jewel Properties, LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ SM Realty
Advisors Corp as its real estate agent and financial advisor.
SM Realty will assist the Debtor to arrange a capital event for the
property, a vacant 12.5 acre contiguous site located in Northern
San Diego County, California, which may include obtaining
financing, finding a buyer for a sale of the Property, or another
strategy.
SM Realty will be compensated as follows:
(i) Debt - If SMRA arranges financing that refinances all or a
portion of the existing first trust deed loan with Buchanan
Mortgage Holdings (the "Buchanan Loan"), but excluding an extension
of any portion of the current Buchanan Loan, and SMRA secures a
loan commitment for a new senior loan (the "Senior Debt") then
Debtor agrees to pay SMRA a Fee equal to 1 percent of the gross
amount of the Senior Debt committed to by the capital source. If
SMRA arranges financing that would be subordinate to either the
Buchanan Loan or the senior debt, i.e. a mezzanine loan or
preferred equity (the "Structured Capital"), then Debtor agrees to
pay SMRA a Fee equal to 3e percent of the gross amount of the
Structured Capital committed to and funded by the capital source.
In the event all or a portion of the Structured Capital is
subordinated by the Buchanan Loan, then, SMRA shall not be paid any
Fee(s) on the Buchanan portion of the Structured Capital
investment.
(ii) Joint Venture - if SMRA arranges for a joint venture with
a capital source that invests capital for a partnership interest in
either the existing ownership entity or a newly formed entity in
which the Debtor and the capital source are partners (the "Joint
Venture"), then, Debtor agrees to pay SMRA a Fee equal to 5 percent
of the amount committed by the capital source.
(iii) Sale - If SMRA arranges an outright sale of the Property
with a capital source that acquires the property in whole, (the
"Sale"), then, the Debtor agrees to pay SMRA a Fee equal to 3
percent of the amount of the gross sales price committed by the
capital source.
(iv) Monthly Advisory Fees -- The Debtor agrees to pay SMRA a
monthly financial advisory fee (the "Monthly Financial Advisory
Fee") in the amount of $10,000 per month. The Monthly Advisory Fee
shall be due and payable on the first day of each month beginning
Jan. 1, 2023 and the 1st day of each succeeding month thereafter
until Letter Agreement terminates.
In the event SMRA secures on behalf of the Debtor, and the Debtor
closes on any of the capital events described in the Agreement, or
any other to be determined financial structure, the advisory fees
earned by, and due and payable to SMRA, shall be offset by the
total amount of Monthly Advisory Fees that were paid to SMRA by the
Debtor.
SM Realty Advisors Corp is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code and does not hold
any interest adverse to the estate, as disclosed in the court
filings.
The firm can be reached through:
Barry Simson
SM REALTY ADVISORS CORP.
Real Estate Investment Banking
5739 Kanan Road, # 464
Agoura Hills, CA 91301
Phone: (310) 457-9441
Email: barry@smrealtyadvisors.com
About Crown Jewel Properties
Crown Jewel Properties, LLC is a single asset real estate debtor
(as defined in 11 U.S.C. Section 101(51B)) based in Signal Hill,
Calif.
Crown Jewel Properties filed its voluntary petition for Chapter 11
protection (Bankr. C.D. Calif. Case No. 21-17872) on Oct. 12, 2021,
listing up to $50 million in assets and up to $10 million in
liabilities. James Eleopoulos, managing member, signed the
petition.
Judge Neil W. Bason presides over the case.
Douglas M. Neistat, Esq., at G&B Law, LLP represents the Debtor as
legal counsel.
CUPCAKE QUILTS: Tom Howley of Howley Law Named Subchapter V Trustee
-------------------------------------------------------------------
The U.S. Trustee for Region 7 appointed Tom Howley, Esq., at Howley
Law, PLLC as Subchapter V trustee for Cupcake Quilts, LLC.
Mr. Howley will be paid an hourly fee of $550 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Howley declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tom Howley, Esq.
Howley Law, PLLC
711 Louisiana Street, Suite 1850
Houston, TX 77002
Telephone: (713) 333-9120
Email: tom@howley-law.com
About Cupcake Quilts
Cupcake Quilts, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Case No. 24-30200) on January
20, 2024, with $1 million to $10 million in both assets and
liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Vicky M. Fealy, Esq., at Fealy Law Firm, PC represents the Debtor
as legal counsel.
DIAMOND SPORTS: Reaches Chapter 11 Plan Deal With Amazon
--------------------------------------------------------
Bally Sports Network parent Diamond Sports Group LLC said
Wednesday, January 17, 2024, it has reached a "comprehensive" deal
for a debt-for-equity Chapter 11 restructuring plan, a $495 million
settlement with its own parent company, and a future streaming
partnership with Amazon.
Diamond Sports Group announced that it has entered into a
Restructuring Support Agreement ("RSA") with its largest creditor
groups, including over 85% of the Company's first lien debt
holders, over 50% of the Company's second lien debt holders, and
over 66% of unsecured bond holders, which provides a framework for
a reorganization plan that would enable Diamond to emerge from
bankruptcy as a going concern and continue its operations.
The RSA includes a commitment from certain of the Company's debt
holders to provide $450 million of junior secured superpriority
debtor-in-possession financing. The proceeds of this financing will
be used to support Diamond's operations as the Company finalizes a
comprehensive reorganization plan and to repay $350 million of
Diamond's existing first lien indebtedness to facilitate the
restructuring. In addition, Diamond's key creditors have reached
agreement on financial terms and a go-forward capital structure
that will be the foundation of the reorganization plan to
facilitate Diamond’s emergence from bankruptcy as a going
concern. Certain large holders of Diamond's debt have committed to
make a substantial investment in the company and exchange their
debt into equity to be issued by reorganized Diamond.
Under the terms of the RSA, Amazon also has committed to make a
minority investment in Diamond and enter into a commercial
arrangement to provide access to Diamond's services via Prime
Video. Under this arrangement, Prime Video will become Diamond's
primary partner through which customers will be able to purchase
direct-to-consumer (DTC) access to stream local Diamond channels.
Customers will be able to access all local DTC content, including
live MLB, NBA and NHL games, and pre- and post-game programming,
for the teams for which Diamond retains DTC rights, through Prime
Video Channels. Additional details regarding pricing and
availability will be announced at a later date. In addition,
Diamond looks forward to continuing to partner with its existing
MVPD distribution partners to broadcast its MLB, NBA and NHL
content.
Diamond also announced that it has an agreement in principle with
its parent, Sinclair Inc., to settle the pending litigation between
the companies and the other named defendants, which settlement is
supported by Diamond’s creditors that are parties to the RSA.
Under the settlement, among other things, Sinclair will pay Diamond
$495 million in cash and provide ongoing management and transition
services to support Diamond’s reorganization and separation from
Sinclair’s operations. Under the RSA, the proceeds from the
Sinclair settlement will be used to support the reorganization plan
and fund distributions to certain creditors.
David Preschlack, CEO of Diamond stated: "We are thrilled to have
reached a comprehensive restructuring agreement that provides a
detailed framework for a reorganization plan and substantial new
financing that will enable Diamond to operate and thrive beyond
2024. We are grateful for the support from Amazon and a group of
our largest creditors who clearly believe in the value-creating
potential of this business. Diamond’s near-term focus will be on
implementing the RSA and emerging from bankruptcy as a going
concern for the benefit of our investors, our employees, our team,
league and distribution partners, and the millions of fans who will
continue to enjoy our broadcasts."
The RSA, the Amazon investment and commercial agreements, and the
Sinclair litigation settlement are subject to conditions, and the
transactions described therein are subject to approval by the U.S.
Bankruptcy Court for the Southern District of Texas. Additional
information regarding Diamond’s Chapter 11 cases, including court
filings and information about the claims process are available at
https://cases.ra.kroll.com/DSG.
Settlement With Parent
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 (DSG) 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, LLC (STG) 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, LLC 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.
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 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.
DIOCESE OF ALBANY: Hearing on Sale of NY Property Set for Feb. 14
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York is
set to hold a hearing on Feb. 14 to consider the sale of real
property owned by The Roman Catholic Diocese of Albany, New York.
The diocese is selling its property, which consists of a mixed-use
building situated on 0.26 acres located at 465 State St., Albany,
N.Y.
Argot Property Group, LLC, through its member Carmen Sharpe,
offered to buy the property for $775,000.
The sale contract executed on Nov. 17 last year requires the
diocese to, among other things, obtain municipal zoning approval
for converting the property to 15 residential apartment units, and
approval for NYS Historical Tax Credits.
The sale is not subject to "higher and better offers" at the sale
hearing, according to the diocese's attorney, Francis Brennan,
Esq., at Nolan Heller Kauffman, LLP.
The diocese's estate will receive the entire net proceeds after
payment of closing costs.
About The Roman Catholic Diocese
of Albany, New York
The Roman Catholic Diocese of Albany is a religious organization in
Albany, N.Y. It covers 13 counties in Eastern New York, including a
portion of the 14th county. Its Mother Church is the Cathedral of
the Immaculate Conception in the city of Albany.
New York's Child Victims Act, which took effect in August 2019,
temporarily sets aside the usual statute of limitations for
lawsuits to give victims of childhood sexual abuse a year to pursue
even decades-old claims. Hundreds of new lawsuits have been filed
against churches and other institutions since the law took effect
on Aug. 14, 2019.
Facing the financial weight of new sexual misconduct lawsuits, at
least four of the eight Roman Catholic dioceses in the state, has
already sought Chapter 11 protection. The dioceses that have
declared bankruptcy include the Diocese of Rochester and the
Diocese of Rockville Centre on Long Island.
The Catholic Diocese of Albany sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10244) on
March 15, 2023. In the petition filed by Fr. Robert P. Longobucco,
the Debtor estimated assets between $10 million and $50 million and
liabilities between $50 million and $100 million.
Judge Robert E. Littlefield, Jr. oversees the case.
The Debtor tapped Nolan Heller Kauffman, LLP as bankruptcy counsel;
Tobin and Dempf, LLP as special litigation counsel; Keegan Linscott
& Associates, PC as financial advisor; and Bonadio & Co., LLP as
accountant. Donlin, Recano & Company, Inc. is the claims and
noticing agent.
On April 17, 2023, the U.S. Trustee for Region 2 appointed two
separate committees to represent unsecured creditors and tort
claimants in the Debtor's Chapter 11 case. Lemery Greisler, LLC
represents the unsecured creditors' committee while Stinson, LLP
represents the tort committee. OneDigital Investment Advisors, LLC
is the committees' special investment consultant.
DIRECT TEXTILE: Unsecureds Will Get 1.47% of Claims over 5 Years
----------------------------------------------------------------
Direct Textile Store, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Texas a Plan of Reorganization dated
January 22, 2024.
The Debtor started operations in July 2021. The Debtor is a
wholesale textile supplier that operates exclusively online. Debtor
receives online orders from customers and fills those orders by
having textile manufacturers or wholesalers ship directly to the
customers.
The Debtor is currently owned 100% by Henrie Capital LLC. John Lee
is the Debtor's sole manager and representative of Debtor. John Lee
is also manager of Henrie Capital LLC. Post-confirmation management
will not change.
The Debtor filed this case on October 24, 2023 due its inability to
service its debt.
Debtor proposes to pay allowed unsecured claims based on the
liquidation analysis and cash available. Debtor anticipates having
enough business and cash available to fund the plan and pay the
creditors pursuant to the proposed plan. It is anticipated that
after confirmation, the Debtor will continue in business. Based
upon the projections, the Debtor believes it can service the debt
to the creditors.
The Debtor will continue operating its business. The Debtor's Plan
will break the existing claims into six classes of Claimants. These
claimants will receive cash repayments over a period of time
beginning on the Effective Date. While Debtor's Plan proposes to
pay claims not to exceed 5 years, nothing prevents Debtor from
prepaying its claims.
Class 5 consists of Allowed Unsecured Claims. All allowed unsecured
creditors shall receive a pro rata distribution at zero percent per
annum over the next 5 years beginning not later than the 15th day
of the first full calendar month following 30 days after the
effective date of the plan and continuing every year thereafter.
Debtor may begin on the 15th day of the month after the effective
date of confirmation, to begin disbursements to the Class 4 claims.
Debtor will distribute up to $52,500.00 to the general allowed
unsecured creditor pool over the 5-year term of the plan. The
Debtor will make monthly payments as to the Class 4 Claimants. The
Debtor's General Allowed Unsecured Claimants will receive 1.47% of
their allowed claims under this plan. The allowed unsecured claims
total $3,568,646.76.
Class 6 consists of Equity Interest Holders (Current Owner). The
current owner will receive no payments under the Plan; however,
they will be allowed to retain their ownership in the Debtor. Class
6 Claimants are not impaired under the Plan.
Debtor anticipates the continued operations of the business to fund
the Plan.
All guarantees and other obligations shall be deemed modified to
reflect the restructuring of the primary obligations under the
Plan. If the plan is confirmed, a creditor may not enforce
liability under a guaranty or other third-party claim unless the
Debtor defaults under the Plan for that creditor. In the event of
default, only the amount owing under the Plan shall be recovered
from the guarantor. This provision is intended to apply to
creditors who had previously recovered judgments against the
guarantor.
A full-text copy of the Plan of Reorganization dated January 22,
2024 is available at https://urlcurt.com/u?l=lpuN30 from
PacerMonitor.com at no charge.
Counsel to Debtor:
Robert C. Lane, Esq.
Joshua D. Gordon, Esq.
A. Zachary Casas, Esq.
THE LANE LAW FIRM, PLLC
6200 Savoy, Suite 1150
Houston, TX 77036
Telephone: (713) 595-8200
Facsimile: (713) 595-8201
Email: notifications@lanelaw.com
joshua.gordon@lanelaw.com
zach.casas@lanelaw.com
About Direct Textile Store
Direct Textile Store, LLC is a wholesale supplier of bed linens,
towels, bed sheets, and textile supplies.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-43225) on Oct. 24,
2023. In the petition signed by John Henry Lee III, president, the
Debtor disclosed $165,587 in assets and $3,737,648 in liabilities.
Judge Edward L. Morris oversees the case.
Robert C. Lane, Esq., at The Lane Law Firm, is the Debtor's legal
counsel.
DISH NETWORK: Parent EchoStar Starts New Distressed Debt Swap
-------------------------------------------------------------
Michael Tobin of Bloomberg News reports that Dish Network Corp.
parent EchoStar Corp. proposed swapping more than $5 billion of
debt due in the coming years for new notes, the second such offer
in less than a week as the company looks to address looming
maturities.
The Englewood, Colorado-company is offering holders of Dish notes
due 2024, 2026, 2028 and 2029 the opportunity to swap their notes
for new instruments -- issued by a new legal entity backed by 3
million television subscribers -- that carry a 10% coupon,
according to a statement early Tuesday.
About Dish Network Corp.
DISH Network Corporation is a holding company that operate two
primary business segments namely Pay-TV and wireless the latter of
which consists of retail wireless and 5G network deployment.
EBIX INC: Okayed to Pay Employee Bonuses in Chapter 11
------------------------------------------------------
Emily Lever of Law360 reports that a Texas bankruptcy judge on
Tuesday, January 16, 2024, allowed bankrupt insurance software
company Ebix Inc. to shell out for employee bonuses and payments
owed to directors of the company, overruling a lone objection from
the Office of the U. S. Trustee that the payments were over the
legal limit, premature and vaguely defined.
About Ebix Inc.
Ebix Inc. -- https://www.ebix.com/ -- is headquartered in Atlanta,
Georgia, and it supplies software and electronic commerce solutions
to the insurance industry. With approximately 200 offices across 6
continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to provide
on-demand infrastructure exchanges to the insurance, financial
services, travel and healthcare industries.
Ebix Inc. and its affiliates sought relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 23-80004) on Dec.
17, 2023. In the petition filed by Amit K. Garg, as secretary and
authorized signatory, Ebix listed assets and liabilities between
$500 million and $1 billion.
The Honorable Bankruptcy Judge Scott W Everett oversees the case.
The Debtors tapped SIDLEY AUSTIN LLP as bankruptcy counsel;
ALIXPARTNERS, LLP, as financial advisor; and JEFFERIES LLC as
investment banker. OMNI AGENT SOLUTIONS, INC., is the claims
agent.
EMINENT CYCLES: Auctions Its Remaining Assets Online in Chapter 11
------------------------------------------------------------------
Bicycle Retailer reports that almost three years after the brand
filed for Chapter 11 bankruptcy, Eminent Cycles' remaining frames,
bikes and parts are being auctioned this month.
Eminent's initial Chapter 11 filing showed debts of $1.4 million
and assets of $139,000. At the time the company said it planned to
continue operating and servicing customers during a reorganization.
Fischer Auction Co. Inc. is listing about 400 lots available in an
online auction starting January 17, 2024. The lots include
individual bikes, frames and crates containing multiple Fox
suspension parts. An auction preview will be held Jan. 16 at the
Eminent headquarters in San Marcos.
In a December 2023 filing with the Bankruptcy Court for Southern
California, Eminent Cycles owner Jeff Soncrant said that since the
bankruptcy initial filing he has invested more than $300,000 in the
company and worked without salary for two and a half years. He said
Eminent sales grew rapidly during the COVID-19 pandemic but then
the company was unable to obtain additional inventory for several
months due to supply chain challenges. Later, Eminent was
challenged by tariffs on China-made frames and high shipping costs
that resulted in higher pricing. He said factories also prioritized
orders from larger brands during this period.
"However, because there were back orders from customers, it
provided Eminent confidence that business growth would increase,"
he said of the 2022 scenario.
When inventory began arriving in June 2022, more than half of
customers canceled their orders, he said in the filing. By early
2023, he said, "there was no demand for bikes."
In the filing, Soncrant estimated that the net value of the
remaining inventory to be auctioned is $133,000 after liquidation
costs.
Soncrant also filed a motion to dismiss the bankruptcy case, with a
hearing on that motion planned for 2 p.m. on January 17, 2024. The
motion said that in the best case, about $16,000 in cash will
remain after liquidation proceeds are used to pay off a secured
claim by Stella Mondo, LLC. Stella Mondo is a San Diego company
formed by Kevin Sigismondo, an industry veteran whose LinkedIn
profile says was a founder of Eminent and of Valiant Components.
The motion said that the bankruptcy trustee fees have already been
paid and Eminent does not expect there to be any money left for
unsecured creditors.
About Eminent Cycles
Based in San Marcos, California, Eminent Bicycles LLC, doing
business as Eminent Cycles, sells mountain bikes. Its factory is
in San Diego, California. It sells bikes via dealers and direct
through its Web site https://www.eminentcycles.com/
Eminent Bicycles LLC filed a Chapter 11 petition (Bankr. S.D. Cal.
Case No. 21-01006) on March 16, 2021.
The company lists debts of $1.4 million and assets of $139,000.
Gupta, Evans And Associates, PC, led by Ajay Gupta, is the Debtor's
counsel.
ENVIVA INC: Skips Interest Payment on 6.5% Senior Notes
-------------------------------------------------------
Enviva Inc. said in a regulatory filing on Jan. 16, 2024, that it
skipped a roughly $24.4 million interest payment due on its 6.5%
senior notes, electing to enter a 30-day grace period.
The wood pellet producer said that since Nov. 9, 2023, its
leadership and advisors have been actively engaged in negotiations
with potential strategic partners, customers, and other
stakeholders in connection with the Company’s previously
announced comprehensive review of alternatives to strengthen its
capital structure, augment liquidity, address contractual
liabilities, and increase long-term profitability.
As such, the Company elected to take advantage of its contractual
30-day grace period and not make the semiannual interest payment of
approximately $24.4 million due on January 16, 2024, with respect
to the Company’s outstanding 6.5% Senior Notes due 2026,
notwithstanding that the Company has sufficient cash on hand to
make the Interest Payment.
The decision to utilize the grace period does not trigger an event
of default under the indenture governing the Senior Notes nor does
it result in a cross-default under any of the Company's other debt
facilities, and the Company retains the right to make the Interest
Payment through the end of the grace period. The Company has
continued to make interest payments when due on other debt
facilities.
About Enviva Inc.
Enviva Inc. supplies utility-grade wood pellets primarily to major
power generators under long-term, take-or-pay off-take contracts.
It procures wood fiber and processes it into utility-grade wood
pellets and loads the finished wood pellets into railcars, trucks,
and barges for transportation to deep-water marine terminals, where
they are received, stored, and ultimately loaded onto oceangoing
vessels for delivery to customers principally in the United
Kingdom, the European Union, and Japan.
Enviva owns and operates 10 industrial-scale wood pellet production
plants located in the Southeastern United States. In addition to
the volumes from its plants, it also procures wood pellets from
third parties. Wood pellets are exported from its wholly owned
deep-water marine terminal at the Port of Chesapeake, Virginia,
terminal assets at the Port of Wilmington, North Carolina, and at
the Port of Pascagoula, Mississippi, and from third-party
deep-water marine terminals in Mobile, Alabama, Panama City,
Florida, and Savannah, Georgia under a short-term contract, a
long-term contract, and a lease and associated terminal services
agreement, respectively.
EQUALTOX LLC: Seeks Approval to Hire Lab Zen LLC as Broker
----------------------------------------------------------
Equaltox, LLC seeks approval from the U.S. Bankruptcy Court for the
Central District of California to employ Lab Zen, LLC as its
broker.
Lab Zen will market and sell the Debtor's lab equipment, consisting
of a 1 AB Sciex Triple Quad 6500, SN: CF22591704H1.
The Debtor shall pay the Broker a fee of 5 percent of the final
sales price of the equipment.
Lab Zen is disinterested within the meaning of 11 U.S.C. Secs.
327(a) and 101(14), according to court filings.
The firm can be reached through:
Adam Floyd
Lab Zen, LLC
5199 Fulton Drive, Suite D
Fairfield, CA 94537
Telephone: (707) 731-9296
About Equaltox, LLC
Equaltox, LLC is a full service reference laboratory that can
provide almost any type of blood testing.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 8:23-bk-12243) on
October 27, 2023. In the petition signed by Sulaiman Masood, member
and manager, the Debtor disclosed up to $10 million in both assets
and liabilities.
Robert S. Marticello, Esq., at Smiley Wang-Ekvall, LLP, represents
the Debtor as legal counsel.
FL RHW ERIE: Mark Dennis of SL Biggs Named Subchapter V Trustee
---------------------------------------------------------------
The U.S. Trustee for Region 11 appointed Mark Dennis, a certified
public accountant at SL Biggs, as Subchapter V trustee for FL RHW
Erie, LLC and its affiliates, FL RHW Boulder, LLC and FL RHW Cherry
Creek, 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 FL RHW Erie
FL RHW Erie, LLC, and its affiliates, FL RHW Boulder, LLC and FL
RHW Cherry Creek, LLC, filed petitions under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D. Colo. Lead Case No. 24-10251)
on January 19, 2024. At the time of the filing, FL RHW Erie
reported $430,984 in assets and $2,162,897 in liabilities.
Judge Joseph G. Rosania Jr. oversees the cases.
David V. Wadsworth, Esq., at Wadsworth Garber Warner Conrardy, P.C.
represents the Debtors as legal counsel.
FRANCISCAN FRIARS: Seeks to Hire Ordinary Course Professionals
--------------------------------------------------------------
Franciscan Friars of California, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
professionals utilized in the ordinary course of business.
The OCPs to be employed are AccountingDepartment.com LLC, which
provides accounting and controller services, and George Dooley, who
is the Debtor's acting Chief Financial Officer and manages the
accounting close and reporting processes, oversees third party
resource relationships, assists in the sourcing and development of
court requested materials, and provides historical context on FFCI
financial strategies and initiatives.
The requested authority for amounts to be paid without separate
application would be limited to $40,000 per month per
professional.
The Debtor does not believe that any of the OCPs have an interest
materially adverse to the Debtor, its creditors, or other parties
in interest with respect to the matters on which they are to be
employed.
About Franciscan Friars of California, Inc.
The Debtor is a tax-exempt religious organization. The Debtor was
formed to provide religious, charitable, and educational acts,
ministry, and service to the poor.
Franciscan Friars of California, Inc. in Oakland, CA, filed its
voluntary petition for Chapter 11 protection (Bankr. N.D. Cal. Case
No. 23-41723) on December 31, 2023, listing $1 million to $10
million in assets and $10 million to $50 million in liabilities.
David Gaa, OFM, president of the Debtor, signed the petition.
Judge William J Lafferty oversees the case.
BINDER & MALTER, LLP serve as the Debtor's legal counsel.
FREE SPEECH: Creditors, Alex Jones Will Present Chapter 11 Plans
----------------------------------------------------------------
Vince Sullivan of Law360 reports that right-wing radio personality
Alex Jones will present a Chapter 11 plan disclosure statement to a
Texas bankruptcy court in the third week of January 2024, competing
with a proposal from the official committee of unsecured creditors
in the case as they each seek to move forward with their own plan
to resolve more than $1.5 billion of defamation liabilities.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on
Dec. 2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C.,
led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan,
and Antonio Ortiz are representing Alex Jones.
FREE SPEECH: Trustee Taps Law Office of Liz Freeman as Counsel
--------------------------------------------------------------
Melissa Haselden, Subchapter V Trustee appointed in the Chapter 11
case of Free Speech Systems, LLC, seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ The
Law Office of Liz Freeman as her co-general bankruptcy counsel.
The firm's services include:
a) conducting an investigation required by the court;
b) assisting the Trustee in analyzing claims owned by the
estate against third parties arising under chapter 5 of the
Bankruptcy Code and other applicable law;
c) conducting appropriate examinations of witnesses,
claimants, and other parties-in-interest in connection with the
Trustee's duties in the case;
d) representing the Trustee in the bankruptcy case, any
adversary proceedings, and other proceedings before the Bankruptcy
Court, and in any other judicial or administrative proceeding;
e) performing any other legal services that may be appropriate
in connection with the foregoing.
The firm will be paid at the rate of $750 per hour.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Elizabeth C. (Liz) Freeman, a partner at Liz Freeman, PLLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Elizabeth C. Freeman, Esq.
LIZ FREEMAN, PLLC
P.O. Box 61209 700 Smith St.
Houston, TX 77208
Tel: (832) 779-3580
Email: liz@lizfreemanlaw.com
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on
Dec. 2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C.,
led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan,
and Antonio Ortiz are representing Alex Jones.
FREEDOM MORTGAGE: S&P Rates New $500MM Senior Unsecured Notes 'B'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue rating and a '4' recovery
rating to Freedom Mortgage Holdings LLC's proposed $500 million
senior unsecured notes due 2029. The '4' recovery rating indicates
our expectation of average (30%-50%; rounded estimate: 40%)
recovery in the event of a default.
The company plans to use the net proceeds to partially repay
outstanding borrowings under its mortgage servicing rights (MSR)
facilities, which had a combined outstanding balance of about $2.9
billion as of Sept. 30, 2023. In our base case we don't expect the
proceeds to be used for dividend distributions.
S&P said, "At the same time, we also affirmed our 'B' issue-level
rating on Freedom's existing senior unsecured notes and revised the
recovery rating on those notes to '4' from '3'. While the company
is diversifying its funding by issuing unsecured notes, in our
view, the new notes would reduce the collateral value available to
the existing unsecured noteholders in a default scenario.
"As of Sept. 30, 2023, Freedom's debt to EBITDA (on a
trailing-12-month basis) was 5.5x, and debt to tangible equity was
1.4x. Pro forma for this transaction, we expect that debt to EBITDA
and debt to tangible equity will remain around 5.0x and 1.5x,
respectively. The company has limited cushion to our downside
debt-to-tangible-equity and debt-to-EBITDA thresholds."
Like its peers, Freedom continues to adapt to an environment with
low origination volume and continues to focus on its servicing
business. The company has conducted cost-cutting measures ranging
from mortgage operation closures to staff reductions. Any
improvement in profitability in 2024 would follow a year of cost
savings.
S&P said, "The stable outlook on the issuer credit rating reflects
our expectation that, in the next 12 months, Freedom will continue
to have low mortgage originations while maintaining debt to EBITDA
around 5x, debt to tangible equity below 1.5x, and EBITDA interest
coverage above 2x. We also expect Freedom will continue to build
its servicing book organically and through purchases while
maintaining sufficient liquidity.
"We could lower the ratings over the next 12 months if we expect
the company to keep debt to tangible equity above 1.5x, EBITDA
interest coverage below 2x, or debt to EBITDA significantly above
5x. We could also lower the ratings if Freedom encounters
additional regulatory actions or scrutiny, or if the company buys
back debt at distressed levels--which we could view as a de facto
restructuring tantamount to default."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a default in 2027
due to a rapid decline in MSR valuations. Financial pressure could
also arise from regulatory changes or operational issues.
-- As the company approaches default, we assume its assets will
shrink as it sells MSRs for additional liquidity to fund
operations.
-- Ultimately, we assume the company will breach the advance rates
on its secured funding facilities, leading to covenant violations.
This would activate cross-acceleration provisions, allowing
unsecured creditors to submit a claim for excess collateral after
selling MSR assets pledged as collateral for priority claims.
-- S&P believes that in a default scenario, creditors would
liquidate the company's assets. The challenge of selling assets
when the company is distressed incurs an additional realization
factor, or discount.
Simulated default assumptions
-- High delinquency rates leading to depressed MSR valuations
-- A sustained period of rapid amortization of MSRs with limited
ability to refinance the repayments
-- Limited new originations, an increase in borrower
delinquencies, and an increase in the discount rate to value MSRs
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $5.87
billion
-- Collateral value available to secured debt: $5.84 billion
-- Total first-lien debt at default: $4.57 billion
-- Collateral value available to senior unsecured note claims:
$1.28 billion
-- Total unsecured debt at default: $2.9 billion
-- Recovery expectations: 40% ('4')
Note: All debt amounts include six months of prepetition interest.
FTX GROUP: Clashes With IRS Over Tax Fight Burden
-------------------------------------------------
Rick Archer of Law360 reports that FTX and the Internal Revenue
Service clashed Wednesday, January 17, 2024, before a Delaware
bankruptcy judge, each arguing the other should bear the burden of
proof in an upcoming battle over the government's claim that the
failed cryptocurrency giant owes billions of dollars in taxes.
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.
FTX GROUP: Ex-Customers Want Fair Cryptocurrency Boom Repayment
---------------------------------------------------------------
Steve Muchoki of Crypto News Flash reports that the distressed FTX
customers and creditors have decided to formally fight the motion
that seeks to deny them crypto profits registered last year.
Recently, FTX submitted an estimation motion that dollarizes
customer claims as of November 11, 2022, when the crypto exchange
filed for Chapter 11 bankruptcy protection in the United States.
The crypto exchange wants to reset the crypto prices to Bitcoin at
$16,871, ETH at $1,258, and Solana (SOL) at $16.2. The estimation
motion argued that the rest of the assets should be allocated to
non-customer creditors including shareholders.
However, FTX customers have vehemently disagreed with the motion as
it would be unfair considering the notable gains made by the
respective crypto assets in the past year, especially SOL. The FTX
customers wrote an objection to the motion directed to the
presiding Judge Dorsey, indicating that the debtor's arguments
could lead to unfair compensation and, thus should be denied. The
FTX estate held about 10 percent of SOL’s total circulating
supply, with the majority ready to be unlocked through 2028.
What's Ahead for FTX Crypto Exchange
The future of FTX is gradually shaping out with the court
restricting process ensuring a fair process to the creditors and
debtors. The FTX relaunch has sparked significant speculations
from the crypto industry, thus helping the native token rally
despite lacking intrinsic value.
Current holders of FTT do not have any use case apart from mere
speculation of the near future relaunch of FTX. Additionally, the
US justice system has found SBF guilty of all the charges and now
awaits the final sentencing.
Nonetheless, the reopening of the FTX exchange faces several
hurdles including a tarnished reputation amid heightened
competition in the web3 sector. Moreover, there are dozens of
crypto exchanges led by Binance, Coinbase, and Gemini that have
thrived through the 2022/2023 cryptocurrency bear market.
The distressed crypto exchange could benefit from the fast-growing
web3 industry, its deep crypto liquidity, and the change of
leadership. Notably, the appointment of John Ray III to facilitate
the restructuring process has instilled confidence in the FTX
crypto exchange.
FTT Market Outlook and Price Action
The FTX's native token FTT has registered notable trading volume in
the past few months in anticipation of the full relaunch of the
distressed cryptocurrency exchange. As of this report, FTT token
traded around $3.25, up about 20 percent in the past seven days.
Notably, the FTT token has a fully diluted valuation of about $1
billion and an average 24-hour trading volume of around $133
million. The small-cap altcoin faces a steep hill climb ahead as
its reputation has significantly been tarnished since its sudden
collapse. Nonetheless, the company still holds a significant amount
of valuable digital assets like Bitcoin, Ethereum, Solana, and
stablecoins.
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.
FTX GROUP: Parents of Bankman-Fried Want Bankruptcy Suit Tossed
---------------------------------------------------------------
Evan Ochsner of Bloomberg Law reports that Sam Bankman-Fried's
parents moved to dismiss a lawsuit brought by FTX's bankrupt
estate, saying it fails to show they had a formal role at the
fallen crypto exchange or breached any fiduciary duty.
Allan Joseph Bankman can't be held liable for alleged breaches of
fiduciary duty because he didn’t hold an official role at FTX, he
argued in a Monday filing in the US Bankruptcy Court for the
District of Delaware. The complaint also fails to allege that
Bankman and Barbara Fried intended to conduct a fraudulent
transfer, the filing says.
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.
FUSION GALAXY: Hires Integrity Business Systems as Accountant
-------------------------------------------------------------
Fusion Galaxy, LLC and Robert Lyle Agnew received approval from the
U.S. Bankruptcy Court for the District of Arizona to employ Cathy
Manhard and Integrity Business Systems LLC to provide accounting
services.
The services rendered by the accountant for Fusion shall include
bookkeeping services to reconcile and review all 2023 information
at $85 per hour, estimated to be 10 hours, for a total of $850, and
preparation of the 2022 business tax return for a flat fee of
$500.
The services rendered by the accountant for Agnew shall include
preparation of the 2022 individual tax return for a flat fee of
$325.
As disclosed in the court filings, Integrity Business Systems LLC
has no connection with the creditors, or any other party in
interest, or any of their respective attorneys, or any person
employed in the office of the United States Trustee, and represents
no interest adverse to either Debtor or the bankruptcy estate.
The firm can be reached through:
Cathy Manhard
Integrity Business Systems LLC
1410 W Guadalupe Rd
Gilbert, AZ 85233
Phone: (480) 497-0844
About Fusion Galaxy
Fusion Galaxy, LLC is a full service, eco-friendly dry cleaner in
Arizona.
Fusion Galaxy filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-05010) on July 26,
2023, with $342,116 in assets and $1,686,283 in liabilities. Robert
Lyle Agnew, manager, signed the petition.
Judge Madeleine C. Wanslee oversees the case.
Guidant Law, PLC represents the Debtor as bankruptcy counsel.
GENESIS GLOBAL: Inks $8-Mil. NY Lawsuit Settlement With Regulators
------------------------------------------------------------------
Steve Anderrson of The Coin Republic reports that cryptocurrency
lending firm Genesis Global Trading has reached a settlement deal
with New York financial regulators over allegations that it failed
to maintain proper anti-money laundering (AML) safeguards. Genesis
will pay an $8 million penalty and cease operations in the state as
part of the agreement.
New York State Department of Financial Services (DFS)
Superintendent Adrienne A. Harris announced the settlement on
Friday. According to a DFS statement, Genesis violated multiple
state banking laws related to maintaining an effective AML and
Office of Foreign Assets Control (OFAC) compliance program.
"Genesis Global Trading's failure to maintain a functional
compliance program demonstrated a disregard for the Department's
regulatory requirements and exposed the company and its customers
to potential threats," Superintendent Harris asserted.
Genesis Made No Admission of Wrongdoing
Genesis neither admitted nor denied the DFS allegations as part of
the deal. However, the firm consented to pay the $8 million fine
and gave up its coveted BitLicense, allowing it to transact
business with New York customers.
It said the entity named in the DFS lawsuit had ceased operations
last September. It addressed the compliance issues raised before
winding down for "business reasons."
Ongoing Legal Challenges Faced by Genesis
The settlement with New York regulators comes as Genesis faces
escalating legal troubles tied to its cryptocurrency lending
products on multiple fronts.
In January, Genesis Global Capital — the lending arm of Genesis
Global Trading — filed for Chapter 11 bankruptcy protection. It
followed the stunning collapse of crypto exchange FTX, which caused
Genesis to abruptly suspend customer redemptions in November amidst
an industry-wide liquidity crunch.
The U.S. Securities and Exchange Commission (SEC) brought charges
against Genesis the same month for the unlawful sale of crypto
lending products to unaccredited investors. The regulator accused
Genesis of raising over $300 million from hundreds of thousands of
investors without adequately registering the securities.
Meanwhile, the New York Attorney General’s office filed a fraud
lawsuit against Genesis Global Capital in October, seeking to
recover over $1 billion in investor funds. The case also names
Genesis parent company Digital Currency Group (DCG) and crypto
exchange Gemini, run by the famous Winklevoss twins.
Whether the DFS settlement has any bearing on the ongoing federal
and New York state lawsuits against Genesis and its affiliated
companies remains unclear. However, the payout and loss of its
BitLicense signals continued legal headwinds for the once
high-flying crypto lender.
With old allies turning against it and creditors still owed
billions in unpaid debts, Genesis now faces a long road to rebuild
trust as it works through bankruptcy reorganization. The journey
back for Genesis starts with accounting for past mistakes to
regulators, so the crypto finance pioneer may someday return with
better safeguards.
Conclusion
The $8 million settlement and surrendering of its BitLicense in New
York marks yet another blow for the embattled Genesis Global
Trading. With bankruptcy proceedings ongoing, other lawsuits
pending, and its operations now halted in a major US state, the
former crypto lending giant faces immense challenges. Only time
will tell if Genesis can restructure and emerge from its legal
troubles to regain a foothold in the digital asset industry it
helped pioneer.
About Genesis Global
Genesis Global Holdco, LLC, through its subsidiaries, and Global
Trading, Inc., provide lending and borrowing, spot trading,
derivatives and custody services for digital assets and fiat
currency.
Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE.
LTD. (GAP) provide lending and borrowing, spot trading, derivatives
and custody services for digital assets and fiat currency. Genesis
Global Holdco, LLC owns 100% of GGC and GAP.
Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are
pending before the Honorable Sean H. Lane.
At the time of the filing, Genesis Holdco reported $100 million to
$500 million in both assets and liabilities.
Genesis Holdco is a sister company of Genesis Global Trading, Inc.
("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG").
GGT, DCG and certain of the Holdco subsidiaries are not included in
the Chapter 11 filings. The non-debtor subsidiaries include
Genesis UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia
(Hong Kong) Limited, Genesis Bermuda Holdco Limited, Genesis
Custody Limited ("GCL"), GGC International Limited ("GGCI"), GGA
International Limited, Genesis Global Markets Limited, GSB 2022 II
LLC, GSB 2022 III LLC and GSB 2022 I LLC.
The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as
bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez
& Marsal Holdings, LLC as financial advisor; and Moelis & Company,
LLC as investment banker. Kroll Restructuring Administration, LLC,
is the Debtors' claims and noticing agent and administrative
advisor.
The ad hoc group of creditors is represented by Kirkland & Ellis,
LLP and Kirkland & Ellis International, LLP. The ad hoc group of
Genesis lenders is represented by Proskauer Rose, LLP. The U.S.
Trustee for Region 2 appointed an official committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped White & Case, LLP as bankruptcy counsel; Houlihan
Lokey Capital, Inc., as investment banker; Berkeley Research Group,
LLC as financial advisor; and Kroll as information agent.
GENESISCARE: Shareholder Ordered to Comply With Chapter 11 Plan
---------------------------------------------------------------
Ben Zigterman of Law360 reports that a Texas bankruptcy judge on
Tuesday, January 16, 2024, ordered a shareholder in the bankrupt
healthcare company GenesisCare to comply with the company's Chapter
11 plan after GenesisCare said the investor was preventing it from
emerging from bankruptcy.
About GenesisCare
One of the world's largest integrated oncology networks,
GenesisCare -- http://www.genesiscare.com-- includes 300+
locations in the U.S., the UK, Australia, and Spain. With
investments in advanced technology and expanded access to clinical
trials, more than 5,500 highly trained GenesisCare physicians and
support staff offer comprehensive, coordinated care in radiation
oncology, medical oncology, hematology, urology, diagnostics, and
surgical oncology.
Genesis Care Pty Ltd. and its affiliated debtors sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas
Lead Case No. 23-90614) on June 1, 2023. In the petition signed by
Richard Briggs, as authorized signatory, Genesis Care disclosed up
to $10 billion in both assets and liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Kirkland and Ellis, LLP, Kirkland and Ellis
International, LLP and Jackson Walker, LLP as general bankruptcy
counsel; PJT Partners, LP as investment banker; Alvarez and Marsal
North America, LLC as restructuring advisor; Herbert Smith
Freehills, LLP as foreign legal counsel; Teneo as communications
advisor; and Clayton Utz as special investigation counsel. Kroll
Restructuring Administration, LLC is the notice and claims agent.
On June 15, 2023, the U.S. Trustee for the Southern District of
Texas appointed an official committee of unsecured creditors. The
trustee tapped Kramer Levin as its counsel, Locke Lord LLP as local
counsel, and Berkeley Research Group, LLC as financial advisor.
Susan N. Goodman is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
GNSP CORP: Michael Markham Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 21 appointed Michael Markham, Esq., as
Subchapter V trustee for GNSP Corp.
Mr. Markham, a partner at Johnson Pope Bokor Ruppel & Burns, LLP,
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. Markham declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Michael C. Markham, Esq.
Johnson Pope Bokor Ruppel & Burns, LLP
401 E. Jackson Street, Suite 3100
Tampa, FL 33602
Phone: (727) 480-5118
Email: Mikem@jpfirm.com
About GNSP Corp.
GNSP Corp. filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00300) on January 22,
2024, with $1 million to $10 million in both assets and
liabilities. Todd Tortoretti, president, signed the petition.
Judge Catherine Peek Mcewen oversees the case.
Amy Denton Mayer, Esq., at Stichter, Riedel, Blain & Postler, P.A.
represents the Debtor as legal counsel.
GOL LINHAS: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------
Thirteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
GOL Linhas Aereas Inteligentes S.A. (Lead Case) 24-10118
Praca Comandante Linneu Gomes, S/N, Portaria 3
Jardim Aeroporto
Sao Paulo, Sao Paulo 04626-020
Brazil
GOL Linhas Aereas S.A. 24-10119
GTX S.A. 24-10121
GAC, Inc. 24-10120
Gol Finance (Luxembourg) 24-10117
Gol Finance (Cayman) 24-10122
Smiles Fidelidade S.A. 24-10124
Smiles Viagens e Turismo S.A. 24-10125
Smiles Fidelidade Argentina S.A. 24-10126
Smiles Viajes y Turismo S.A. 24-10127
Capitania Air Fundo De Investimento
Multimercado Credito Privado
Investimento no Exterior 24-10128
Sorriso Fundo De Investimento Em Cotas De Fundos
De Investimento Multimercado
Credito Privado Investimento No Exterior 24-10130
Gol Equity Finance 24-10131
Business Description: The Debtors are the leading low-cost airline
in South America and one of Brazil's largest
domestic carriers. Having pioneered the
low-cost carrier model in South America upon
its founding in 2000, GOL has grown to
include over 14,000 employees, a fleet of
141 aircraft, and an extensive flight
network focused on routes within Brazil and
South America more broadly. GOL's flight
network also includes destinations in the
United States and the Caribbean.
Chapter 11 Petition Date: January 25, 2024
Court: United States Bankruptcy Court
Southern District of New York
Judge: Hon. Martin Glenn
Debtors' Counsel: Evan R. Fleck, Esq.
Andrew C. Harmeyer, Esq.
Bryan V. Uelk, Esq.
MILBANK LLP
55 Hudson Yards
New York, NY 10001
Telephone: (212) 530-5000
Facsimile: (212) 530-5219
Email: efleck@milbank.com
aharmeyer@milbank.com
buelk@milbank.com
- and -
Gregory A. Bray, Esq.
MILBANK LLP
2029 Century Park East, 33rd Floor
Los Angeles, CA 90067
Telephone: (424) 386-4000
Facsimile: (213) 629-5063
Email: gbray@milbank.com
- and -
Andrew M. Leblanc, Esq.
Erin E. Dexter, Esq.
MILBANK LLP
1850 K St. NW, Suite 1100
Washington, DC 20006
Telephone: (202) 835-7500
Facsimile: (202) 263-7586
Email: aleblanc@milbank.com
edexter@milbank.com
Debtors'
Aviation-Related
Counsel: HUGHES HUBBARD & REED LLP
Debtors'
Investment Bank
and Financial
Advisor: SEABURY SECURITIES LLC
Debtors'
Financial
Advisor: ALIXPARTNERS, LLP
Debtors'
Notice &
Claims Agent: KROLL RESTRUCTURING ADMINISTRATION LLC
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $1 billion to $10 million
The petition was signed by Joseph W. Bliley as authorized
signatory.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/RTB3B4Q/GOL_Linhas_Areas_Inteligentes__nysbke-24-10118__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. The Bank of New York Mellon Senior Notes Due $353,815,797
Attn: Costa, Carlos & Kovacheva, 2025
Reneta
101 Barclay Street
Floor 7 East
New York, NY 10286
Email: CARLOS.COSTA@BNYMELLON.COM;
RENETA.KOVACHEVA@BNYMELLON.COM
2. Comando Da Aeronautica Trade Debt $222,542,075
Attn: President or General Counsel
Rua Gen Justo 160
Rio De Janeiro, RJ 20021-130
Brazil
Phone: 55 (11) 50982000
EMAIL: NAOINFORMADO@NAOINFORMADO.COM.BR
3. The Bank of New York Mellon Perpetual Bonds $142,185,235
Attn: Costa, Carlos & Kovacheva,
Reneta
101 Barclay Street
Floor 7 East
New York, NY 10286
EMAIL: CARLOS.COSTA@BNYMELLON.COM;
RENETA.KOVACHEVA@BNYMELLON.COM
4. Vibra Energia S/A Trade Debt $91,463,414
Attn: President or General Counsel
Rua Correia Vasques 250
Rio De Janeiro, RJ 20211-140
Brazil
PHONE: (85) 695325468
EMAIL: sac@sac.com.br; ISAACC@BR‐
PETROBRAS.COM.BR
5. The Bank of New York Mellon Senior Notes $42,953,404
Attn: Costa, Carlos & Kovacheva, Due 2024
Reneta
101 Barclay Street
Floor 7 East
New York, NY 10286
EMAIL: CARLOS.COSTA@BNYMELLON.COM;
RENETA.KOVACHEVA@BNYMELLON.COM
6. Boeing Commercial Airplanes Trade Debt $15,249,149
Attn: Tammy A. Breaux
Sn Rua 7500
East Marginal Way
Seattle, WA 98124-2207
EMAIL: tammy.a.breaux@boeing.com;
ROBERT.A.SOKOLIK@BOEING.COM
7. Empresa Brasileira De Trade Debt $15,046,519
Infraestrutur
Attn: President or General Counsel
Aeroporto Setor De Conc
Lt 5 ED SE Brasilia, DF
71608-050
Brazil
PHONE: (61) 33122562
EMAIL: presidencia@infraero.gov.br
8. CFM International Inc. Trade Debt $13,585,437
Attn: President or General Counsel
SN Rua Po Box 15514
Interstate Cincinnati, OH 45215
PHONE: 55 (577) 77800000
EMAIL: monthlyreports@ses.ie
9. Concessionaria Do Aeroporto Trade Debt $11,995,623
Interna
Attn: Camila Yamaguti
Avenida Deputado
Dimoacio Frei 3393
Floriana-Polis, SC
88047-402
Brazil
PHONE: (48) 33314114
EMAIL: camila.yamaguti@floripa‐airport.com
10. Securities and Exchange Tax Liability $9,392,588
Commission
Attn: President or General Counsel
95800 Rua Release No 95800
Washington, DC 20549
EMAIL: ogc_legal@sec.gov.ph
11. Ministerio Da Fazenda Tax Liability $7,388,167
Attn: President or General Counsel
Avenida Av. Presidente 375
Sala 214
Rio De Janeiro, RJ 20020-010
Brazil
PHONE: 55 (21) 2334‐4300
EMAIL: gabinete.ministro@fazenda.gov.br
12. Sabre GLBL Inc. Trade Debt $5,691,380
Attn: Eduardo Wakami
S/N 10A Rua 3150 Sabre
DR Southlake, TX 76092
PHONE: 55 (11) 31461541
EMAIL: eduardo.wakami@sabre.com
13. Almap BBDO Publicidade E Trade Debt $4,050,512
Comunicaco
Attn: President or General Counsel
Avenida Roque Petron 999
And 3 5 E
Sao Paulo, SP 04707-000
Brazil
HONE: (11) 23954000
EMAIL: almap@almapbbdo.com.b
14. Honeywell Aircraft Landing Trade Debt $2,526,766
Systems
Attn: Cesar Basler
SN Rua E. Sky Harbor Circle
Phoenix, AZ 85034
EMAIL: cesar.basler@honeywell.com
15. Jeppesen Sanderson, Inc. Trade Debt $2,433,414
Attn: President or General Counsel
Rua 55
Inverness Drive
Englewood, CO 80122
EMAIL: captain@jeppesen.com
16. Jeppesen Systems AB Trade Debt $2,374,675
Attn: President or General Counsel
Rua Box 192
401 23 GOT
Nao Informado, Ex 1 Sweden
EMAIL: captain@jeppesen.com
17. KLM Royal Dutch Airlines Trade Debt $2,367,281
Attn: President or General Counsel
Rua PO Box 7700
The Netherlands
EMAIL: mail@klm‐info.com
18. Master Freight Transportes Trade Debt $2,337,537
Internac
Attn: President or General Counsel
Rua 8925 NW 26 Street
Miami, FL 33172
PHONE: 55 (11) 50980000
EMAIL: contact@masterfreight.com
19. Safran Landing Systems MRO Trade Debt $2,304,029
Attn: President or General Counsel
SN Rua Batiment 60
A Rond-Point, SN
Chatellerault, France
PHONE: 55 (11) 50982000
EMAIL: aogcsc.sls@safrangroup.com
20. Localiza Rent A Car SA Trade Debt $2,129,173
Attn: President or General Counsel
Avenida Bernardo De Vasconcelos 377
Belo Horizonte, MG 31150-900
Brazil
PHONE: (11) 50943325
EMAIL: acatibaia@speedycorp.com.br
21. Inframerica Concessionaria Do Trade Debt $2,110,367
Aerop
Attn: President or General Counsel
Aeroporto International
De B S/N, A Brasalia, DF
71608-900
Brazil
PHONE: (61) 32146913
EMAIL: financeiro@inframerica.aero
22. Banco Do Brasil S/A Trade Debt $1,811,102
Attn: President or General Counsel
Avenida Paulista 2300
3 and Part
Saso Paulo, SP 01310-300 Brazil
EMAIL: bbasset@bb.com.br
23. Concessionaria Aeoporto Trade Debt $1,607,504
Rio De Jan
Attn: President or General Counsel
Avenida Vinte De Ja S/N
Aer Intern Rio De Janeiro, RJ
21941-570
Brazil
PHONE: (21) 37219227
EMAIL: info@bnamericas.com
24. Pallas Operadora Trade Debt $1,579,914
Turistica Ltda
Attn: President or General Counsel
Avenida DAS Americ 3434
BL 5 SL 51
Rio De Janeiro, RJ 22640-102 Brazil
PHONE: (21) 994674896
EMAIL: campeonatos@pallastur.com.br
25. Intelsat Inflight LLC Trade Debt $1,543,839
Attn: President or General Counsel
111 Rua
111 N Canal Street
Chicago, IL 60606
PHONE: 312 (0) 5176482
EMAIL: paula.duran@intelsat.com
26. Akad Seguros S.A. Trade Debt $1,464,924
Attn: President or General Counsel
Rua DAS Nacoes
Uni 12995, and 24 ED Sao Paulo, SP
04578-911
Brazil
PHONE: (11) 30565534
EMAIL: atendimento@akadseguros.com.br
27. RM Servicos Auxiliares De Trade Debt $1,422,568
Transport
Attn: President or General Counsel
Estrada Do Aeorporto S/N
Porto Seguro, BA 45810-000
Brazil
PHONE: (61) 99243780
EMAIL: contato@rmghs.com.br
28. Delta Airlines Inc. Trade Debt $1,343,786
Attn: President or General Counsel
1775 Rua M
H Jackson Service Ro
Atlanta, GA 30354
EMAIL: edilene.nogueira@uol.com.br
29. Goodyear Do Brasil Produtos Trade Debt $1,277,289
De Borr
Attn: Fernando Miranda
Avenida Juscelino Kubitschek
De 550 Santa Barbara
D Oeste, SP
13457-190
Brazil
PHONE: (11) 28184153
EMAIL: fernando.miranda@goodyear.com
30. Mathex Solucoes, Trade Debt $1,223,556
Technologicas Ltda
Attn: President or General Counsel
Rua Rio Negro 503
SL 2020
Barueri, SP 06454-000 Brazil
PHONE: (11) 985319185
EMAIL: atendimento@mathex.com.br
GOL LINHAS: Files for Chapter 11 Bankruptcy
-------------------------------------------
GOL Linhas Aéreas Inteligentes S.A. (B3: GOLL4, NYSE: GOL), on
Jan. 25, 2024, announced that GOL and its subsidiaries have
voluntarily filed for Chapter 11 in the United States Bankruptcy
Court for the Southern District of New York. Chapter 11 is a U.S.
legal process that businesses use to raise capital, restructure
their finances and strengthen their business operations for the
long term, while continuing to operate as normal.
GOL enters the U.S. legal process with a financing commitment for
US$950 million in new debtor-in-possession ("DIP") financing from
members of the Ad Hoc Group of Abra Bondholders, as well as certain
other Abra bondholders. The Company will seek access to this
funding as part of its First Day hearing in the coming days. The
financing is subject to court approval and, along with cash
generated from ongoing operations, will provide substantial
liquidity to support operations in the normal course during the
Chapter 11 process.
With the support of the court-supervised process and the additional
liquidity from the DIP financing, GOL's passenger flights, its
GOLLOG cargo flights, Smiles Loyalty program and other company
operations are continuing in the normal course. The Company will
continue providing safe and reliable air travel service at a low
cost, providing the best travel experience to its customers.
Customers will be able to continue to arrange travel and fly in the
same manner they always have, including the use of tickets and
vouchers, and the accrual, purchase and use of miles earned through
Smiles. GOL's codeshare and interline agreements will also continue
to be available to customers.
"GOL has undertaken significant efforts to provide the best travel
experience for our customers, while improving our profitability and
financial position," said Celso Ferrer, Chief Executive Officer.
"We have made outstanding progress to date and believe that this
process will allow us to fully address the challenges caused by the
pandemic while we maintain our high standard of service to our
customers. This process will enable GOL to further expand our
position as a leading Latin American airline while maintaining our
purpose of 'Being the First for All.' We are confident the steps we
are taking will allow us to offer the lowest cost fares with
exceptional travel experiences to our customers across an
increasing number of routes. Our Employees will keep handling their
daily activities looking after GOL and the Safety and quality of
its flights. We are pleased to be moving forward with commitments
for new capital that will help advance our long-term strategies,
including improving affordability, the travel experience and
Customer choice."
GOL will use this process to restructure its near-term financial
obligations and strengthen its capital structure for long-term
sustainability. The Company expects to emerge from this process
with a significant investment of new capital, inclusive of the new
US$950 million in DIP financing, enabling GOL to expand its
position as a leading airline serving Latin America.
Despite challenges to its capital structure and in a scenario of
lower aircraft availability, GOL's operating performance remains
strong. In 3Q23, GOL delivered among the best operating results for
airlines in Latin America, and the fourth consecutive quarter of
high and consistent operating margins. The company's net operating
revenue reached a historic record of R$4.7 billion, with growth of
16.4% compared to the same period of the previous year, primarily
due to the significant contribution of revenues coming from the
Smiles and GOLLOG cargo operations, which together grew a total of
65.1% in 3Q23 (vs. 3Q22) and totaled R$412.6 million in the period.
In December 2023, the occupancy rate reached 82.7%, an increase of
4.8% compared to the same period of the previous year. GOL's
operational indicators related to punctuality, regularity,
occupancy rates and daily use of the operational fleet demonstrate
its focus on efficiency and productivity, even in a scenario of
lower aircraft availability.
Protecting Its Employees
GOL will continue to operate normally during the supervision
process conducted by the U.S. Court. The Company will pay salaries
and benefits to Employees normally throughout this process, as
nothing will change in the routine activities of our Employees.
Protecting Its Suppliers and All Its Partners
GOL's business will continue as normal during the U.S. Court
oversight process and the company will honor commitments to
business partners and suppliers of goods and services provided on
or after the Chapter 11 filing date.
Continuing to Serve Customers as Usual
GOL customers should continue to arrange travel and fly in the same
manner they always have, including the use of tickets and vouchers.
GOL customers will continue to accrue miles when they fly with GOL
and can continue to purchase and redeem miles earned through
Smiles. GOL plans to honor customer obligations, including ticket
refunds, travel coupons and payments or credits associated with
baggage or service claims, in adherence with the Company's current
policies.
Information on Chapter 11
The U.S. Chapter 11 process is a well-established and flexible
legal framework for restructuring businesses with operations in
multiple jurisdictions. The legal process allows for companies to
strengthen their financial position while continuing to operate as
usual, subject to supervision and approval by the U.S. court
system. The Chapter 11 process has been used successfully by many
international airlines, including LATAM, United Airlines, Delta,
Aeroméxico and Avianca Colombia.
GOL is confident that this process is in the best interests of its
stakeholders, including employees and customers, who will continue
to benefit from the Company's affordable, safe and reliable flights
as well as its best-in-class service.
About Gol GOLL4.SA
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircrafts and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
programs to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircrafts with 674 daily flights. The company was founded in 2000
and is headquartered in São Paulo, Brazil.
GROWING AND LEARNING: Seeks to Hire Aprio LLP as Accountant
-----------------------------------------------------------
Growing and Learning Academy, LLC seeks approval from the U.S.
Bankruptcy Court for the District of New Jersey to employ Aprio,
LLP as its accountant.
The firm's services include:
a. provide set-up and maintenance of accounting records on
Quickbooks;
b. manage credit card and bank account reconciliation;
c. offer assistance in preparation of budget and monthly
operating reports;
d. attend meeting with creditors, as needed; and
e. provide other services upon request.
The firm will be paid as follows:
Partner $385 - $460/hr
Director/Manager $205 - $350/hr
Senior Associate $155 - $170/hr
Associate $155 - $170/hr
Bookkeeper $140/hr
Michael Linder, a member at Aprio, disclosed in a court filing that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Michael Linder
Aprio, LLP
350 Fifth Avenue, Suite 3920
New York, NY 10118
Phone: (212) 697-8540
About Growing and Learning Academy
Growing and Learning Academy, LLC sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No.
24-10309) on Jan. 11, 2024, listing 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 counsel.
GROWING AND LEARNING: Taps Kenneth L. Baum LLC as Legal Counsel
---------------------------------------------------------------
Growing and Learning Academy, LLC seeks approval from the U.S.
Bankruptcy Court for the District of New Jersey to employ the Law
Offices of Kenneth L. Baum LLC as its counsel.
The firm will represent the Debtor in its Chapter 11 case and
render legal advice.
The firm will be paid at these rates:
Kenneth L. Baum, Member $395 per hour
Deborah DiPiazza, Paralegal $150 per hour
As disclosed in the court filings, the Law Offices of Kenneth L.
Baum is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code,
The firm can be reached through:
Kenneth L. Baum, Esq.
LAW OFFICES OF KENNETH L. BAUM, LLC
201 W. Passaic Street, Suite 104
Rochelle Park, NJ 07662
Telephone: (201) 853-3030
Facsimile: (201) 584-0297
Email: kbaum@kenbaumdebtsolutions.com
About Growing and Learning Academy
Growing and Learning Academy, LLC sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No.
24-10309) on Jan. 11, 2024, listing 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 counsel.
HARLEM PROPERTIES: Seeks to Hire Morrison Tenenbaum as Counsel
--------------------------------------------------------------
Harlem Properties, L.L.C seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ Morrison
Tenenbaum PLLC as counsel.
The firm's services include:
a. advising the Debtor with respect to its powers and duties
as Debtor-in-possession in the management of its estate;
b. assisting in any amendments of Schedules and other
financial disclosures and in the preparation/review/amendment of a
disclosure statement and plan of reorganization;
c. negotiating with the Debtor's creditors and taking the
necessary legal steps to confirm and consummate a plan of
reorganization;
d. preparing on behalf of the Debtor all necessary motions,
applications, answers, proposed orders, reports and other papers to
be filed by the Debtor in this case;
e. appearing before the Bankruptcy Court to represent and
protect the interests of the Debtor and the estate; and
f. performing all other legal services for the Debtor that may
be necessary and proper for an effective reorganization.
The firm will be paid at these rates:
Lawrence F. Morrison $595 per hour
Brian J. Hufnagel $495 per hour
Associates $380 per hour
Paraprofessionals $250 per hour
The firm received a retainer in the amount of $15,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Lawrence F. Morrison, Esq., a partner at Morrison Tenenbaum PLLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Lawrence F. Morrison, Esq.
Brian J. Hufnagel, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, NY 10013
Tel: (212) 620-0938
Email: lmorrison@m-t-law.com
bjhufnagel@m-t-law.com
About Harlem Properties, L.L.C
Harlem Properties, L.L.C filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y. Case No.
23-22887) on Nov. 30, 2023, listing $1 million to $10 million in
both assets and liabilities. The petition was signed by Janine
Zargar as member.
Lawrence Morrison, Esq. at MORRISON TENENBAUM PLLC represents the
Debtor as counsel.
HIJOLE FOODS: Hires Juan C. Bigas Law Office as Legal Counsel
-------------------------------------------------------------
Hijole Foods Bistro, Corp. seeks approval from the U.S. Bankruptcy
Court for the District of Puerto Rico to employ Juan C. Bigas Law
Office to handle its Chapter 11 case.
Juan C. Bigas Law Office received a retainer in the amount pf
$5,000, against which the firm will bill on the basis of $300 per
hour.
In addition, the firm will seek reimbursement for work-related
expenses.
As disclosed in court filings, Juan C. Bigas Law Office is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Juan Carlos Bigas Valedon, Esq.
Juan C Bigas Law Office
P.O. Box 7462
Ponce, PR 00732-7462
Phone: (787) 259-1000
Email: cortequiebra@yahoo.com
About Hijole Foods Bistro, Corp.
Hijole Foods Bistro, Corp. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 24-0015)
on Jan. 19, 2024, listing $100,001 to $500,000 in assets and
$500,001 to $1 million in liabilities.
Juan C. Bigas Valedon, Esq. at Juan C. Bigas Law Office represents
the Debtor as counsel.
INCLAN PAINTING: Tarek Kiem of Kiem Law Named Subchapter V Trustee
------------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tarek Kiem, Esq., at Kiem
Law, PLLC as Subchapter V trustee for Inclan Painting and
Waterproofing Corp.
Mr. Kiem 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. Kiem declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tarek Kiem, Esq.
Kiem Law, PLLC
8461 Lake Worth Road, Suite 114
Lake Worth, FL 33467
Tel: (561) 600-0406
Email: tarek@kiemlaw.com
About Inclan Painting and Waterproofing
Inclan Painting and Waterproofing Corp. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla.
Case No. 24-10488) on January 19, 2024, with up to $50,000 in
assets and $1 million to $10 million in liabilities. Luis Inclan,
president, signed the petition.
Judge Laurel M. Isicoff oversees the case.
Richard Siegmeister, Esq., at Richard Siegmeister, PA represents
the Debtor as legal counsel.
INDIEV INC: Hearing on Sale of Personal Property Set for Jan. 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California is
set to hold a hearing on Jan. 31 to consider the sale of personal
property owned by INDIEV, Inc.
The property up for sale consists of electric vehicle components
and manufacturing supplies, which are stored in the company's
warehouse in Costa Mesa, Calif.
The company is selling the property to Zachery Coats who offered
$100,000, or to another buyer with a better offer.
Any overbidder must contact the company's legal counsel at least 24
hours before the Jan. 31 hearing.
Overbid must be all cash, $10,000 over the proposed sale price in
the first increment, and $5,000 in every subsequent bidding
increment.
INDIEV said it will use the proceeds from the sale to fund its
liquidating plan.
About Indiev Inc.
Indiev Inc. filed Chapter 11 petition (Bankr. C.D. Calif. Case No.
23-12036) on Oct. 2, 2023, with $1 million to $10 million in assets
and $10 million to $50 million in liabilities.
Judge Scott C. Clarkson oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
and Jennifer Liu, owner of JMLIU CPA Accountancy Corp., serve as
the Debtor's bankruptcy counsel and accountant, respectively.
JERSEY WHOLESALE: Brian Hofmeister Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Brian Hofmeister,
Esq., as Subchapter V trustee for Jersey Wholesale Tire
Corporation.
Mr. Hofmeister 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. Hofmeister declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Brian W. Hofmeister, Esq.
3131 Princeton Pike
Building 5, Suite 110
Lawrenceville, NJ 08648
Phone: (609) 890-1500
Email: bwh@hofmeisterfirm.com
About Jersey Wholesale Tire
Jersey Wholesale Tire Corporation is a merchant wholesaler of motor
vehicle and motor vehicle parts and supplies. It is based in
Parlin, N.J.
Jersey Wholesale Tire sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 24-10343) on January
12, 2024, with $1 million to $10 million in both assets and
liabilities. Michael Tortajada, chief executive officer, signed the
petition.
Donald F. Campbell, Jr., Esq., at Giordano, Halleran & Ciesla, P.C.
represents the Debtor as legal counsel.
JINZHENG GROUP: Seeks to Hire Leech Tishman as Special Counsel
--------------------------------------------------------------
Jinzheng Group (USA), LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Leech
Tishman as its special litigation counsel.
The firm will advise and represent the Debtor with respect to the
adversary proceedings, one against Testa et al., Adv No.
2:22-ap-01088-ER, and the other against Betula Lenta, Inc. et al.,
Adv No. 2:22-ap-01090-ER, and coordinate with general bankruptcy
counsel regarding other litigation matters and mediation.
Leech Tishman requires a retainer of $60,000.
The rates for the primary attorney for this matter will be as
follows:
Damian J. Martinez $550/hour
Attorneys $400 to $450/hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Damian Martinez, Esq., a partner at Leech Tishman, disclosed in
court filings that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Damian J. Martinez, Esq.
LEECH TISHMAN
200 S. Los Robles Avenue, Suite 300
Pasadena, CA 91101
Tel: (626) 796-4000
Fax: (626) 795-6321
About Jinzheng Group (USA)
Jinzheng Group (USA) LLC, owner of multiple properties in Los
Angeles County, Cal., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-16674) on Aug. 24,
2021, listing up to $50 million in both assets and liabilities.
Judge Ernest M. Robles oversees the case.
Danning Gill Israel & Krasnoff, LLP, Atkinson Andelson Loya Ruud &
Romo, and Koo, Chow & Company, LLP serve as the Debtor's bankruptcy
counsel, special counsel and accountant, respectively. Stephen Eng,
a real estate professional at Convoy Property Management and Re/Max
of Cerritos, is the Debtor's property manager.
The U.S. Trustee for Region 16 appointed an official committee of
unsecured creditors on Jan. 25, 2022. The committee is represented
by Pachulski Stang Ziehl & Jones, LLP.
JLM COUTURE: $1.5M Unsecured Claims to Get Share of Income
----------------------------------------------------------
JLM Couture, Inc., submitted a First Amended Subchapter V Plan of
Reorganization dated January 22, 2024.
The Debtor's assets primarily consist of cash, receivables,
inventory and intellectual property. The Debtor is also pursuing
litigation against a former designer, Hayley Paige Gutman,
primarily related to the Debtor's intellectual property and the
agreements between the Debtor and Ms. Gutman. If the Debtor is
successful in this litigation, it could bring additional value to
the Debtor's Estate.
In pursuit of its claims against Ms. Gutman, the Debtor has brought
an action in the United States District Court for the Southern
District of New York against Ms. Gutman for federal and common law
dilution, federal and common law unfair competition, conversion,
breach of contract, conversion, trespass to chattels, breach of
fidelity, breach of contract, breach of fiduciary duty and unjust
enrichment, tortious interference with existing contract, tortious
interference with prospective economic advantage, aiding and
abetting a breach of fiduciary duty, defamation, trademark
infringement and contributory trademark infringement. The Debtor
also seeks the return from Ms. Gutman of compensation paid to her
that the Debtor was not contractually required to pay her and which
the Debtor is entitled to be reimbursed. The Debtor seeks damages
totaling over $20 million.
Ms. Gutman has asserted various counterclaims that the Debtor
believes lack merit. While the Debtor is confident in its position
in this litigation, it has been in discussions with Ms. Gutman's
representatives in an attempt to resolve the parties' issues. While
the parties have not yet been able to resolve this matter,
discussions continue. The recovery of any funds from Ms. Gutman,
whether through litigation or settlement, will be reinvested into
the company for the Debtor's future operations and payment to
creditors.
The Debtor's landlord has asserted that the Debtor owes
approximately $840,072.37 to such landlord pursuant to the
expiration of the Debtor's lease agreement and the Debtor's holding
over. The Debtor disputes this purported amount. Pre-petition, the
Debtor's landlord initiated an action in the Civil Court of the
City of New York, seeking possession of the Debtor's premises, back
rent, and other amounts, which was stayed by the filing of the
Debtor's bankruptcy case. While the Debtor identified the purported
$840,072.37 debt in its schedules of assets and liabilities, the
Debtor indicated that the amount is contingent, unliquidated and
disputed. As the landlord has failed to timely file a proof of
claim in the Debtor's bankruptcy proceedings, for the purposes of
this Plan, the Debtor has estimated the pre-petition amount due to
the landlord at $357,673.33.
Under the Plan, the Debtor will devote all of its projected
Disposable Income toward the payment of Creditors. The Plan will be
funded with the funds that are not for the payment of expenditures
necessary for the continuation, preservation, or operation of the
business of the Debtor.
The Plan provides for payment of Administrative Expenses and
Priority Tax Claims in accordance with the Bankruptcy Code, and
projects payment to Allowed General Unsecured Claims. Furthermore,
Holders of Equity Interests will retain their Equity Interests as
they existed on the Commencement Date.
Class 2 consists of General Unsecured Claims. Except to the extent
that a Holder of an Allowed General Unsecured Claim agrees to a
different treatment, all Allowed General Unsecured Claims shall be
paid pro rata in quarterly installments from Disposable Income
commencing in Q2 2024 and ending on the Last Distribution Date. The
allowed unsecured claims total $1,470,589.79. This Class is
impaired.
The Plan will be funded by the proceeds realized from the
operations of the Debtor. On Confirmation of the Plan, all property
of the Debtor, tangible and intangible, including, without
limitation, will revert, free and clear of all Claims and Equitable
Interests except as provided in the Plan, to the Debtor.
The officers and directors of the Debtor immediately prior to the
Effective Date shall serve as the initial officers and directors of
the Reorganized Debtor on and after the Effective Date. Each
officer and director shall serve in accordance with applicable
non-bankruptcy law and the Debtor's corporate governance documents,
as each of the same may be amended from time to time.
A full-text copy of the First Amended Subchapter V Plan dated
January 22, 2024 is available at https://urlcurt.com/u?l=T4CvzX
from PacerMonitor.com at no charge.
Counsel to the Debtor:
Kevin S. Mann, Esq.
Cross & Simon, LLC
1105 N. Market Street, Suite 901
Wilmington, DE 19801
Telephone: (302) 777-4200
Email: kmann@crosslaw.com
About JLM Couture
JLM Couture, Inc., operates a bridal design and manufacturing
business in New York. It operates 12 collections, nine of which
are bridal lines, one bridesmaid line and one flower girl line.
JLM Couture filed its voluntary petition for relief under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. D. Del. Case No.
23-11659) on Oct. 2, 2023, with $2,850,196 in total assets and
$2,115,305 in total liabilities. Joseph L. Murphy, president,
signed the petition.
Judge J. Kate Stickles oversees the case.
The Debtor tapped Cross & Simon, LLC as its legal counsel.
KARBONX CORP: Recurring Losses Raise Going Concern Doubt
--------------------------------------------------------
Karbon-X Corp. disclosed in a Form 10-Q Report filed with the U.S.
Securities and Exchange Commission for the quarterly period ended
November 30, 2023, that substantial doubt exists about its ability
to continue as a going concern.
To date, the Company has just recently commenced to generate
revenues from its business operations and has incurred operating
losses since inception of $3,896,931.
For the three months ended November 30, 2023, the Company reported
a net loss of $1,354,793 om total revenue of $36,082, compared to a
net loss of $141,922 on zero revenue for the same period in 2022.
For the six months ended November 30, 2023, the Company incurred a
net loss of $1,704,824 on total revenue of $39,840, compared to a
net loss of $337,790 on zero revenue for the six months ended
November 30, 2022.
As of November 30, 2023, the Company has $1,503,900 in total
assets, $322,423 in total liabilities and total shareholders'
equity of $1,181,478.
The Company will require additional funding to meet its ongoing
obligations and to fund anticipated operating losses. The ability
of the Company to continue as a going concern is dependent on
raising capital to fund its initial business plan and ultimately to
attain profitable operations. Accordingly, these factors raise
substantial doubt as to the Company's ability to continue as a
going concern.
The Company intends to continue to fund its business through
private placements and advances from related parties as may be
required.
A full-text copy of the Form 10-Q is available at
http://tinyurl.com/yxzduths
About Karbon-X
Calgary, Canada-based Karbon-X Corp. provides customized
transactional options, tailored insights, and scalable access to
the Verified Emissions Reduction markets.
KENNETH THOMPSON: Rental Income to Fund Plan Payments
-----------------------------------------------------
Kenneth Thompson, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of New York a Disclosure Statement describing
Chapter 11 Plan dated January 22, 2024.
The Debtor was formed in 2004 and is a real estate holding company.
Kenneth Thompson, LLC owns commercial real property located at 208
Route 44, Millerton, New York (the "Property").
The Property consists of an approximately 3 acre, mixed use parcel
with a 23,000 square foot building (housing 7 rentable spaces).
Prior to the filing of the Chapter 11 petition, as a result of
Covid-19, the debtor's commercial tenants suffered a downturn in
business and subsequently, stopped rental payments for a period.
The debtor's first mortgage obligation with KEYBANK matured and the
debtor entered into a forebearance period.
The debtor has exerted substantial time, energy, and funds to
manage and maintain the property. In recent months, the Property
has demonstrated an ability to support itself and the KEYBANK
mortgage obligation. The Chapter 11 filing has provided Kenneth
Thompson LLC with the opportunity to pay KEYBANK in full, now that
its tenants have resumed paying rent.
The Plan provides for the creation of 3 classes of claims and
interests to be paid in the following manner:
Class 1 consists of costs and expenses of administration as defined
in the Bankruptcy Code, including, among other things, legal fees
and accounting fees, post-petition accounts payable and
post-petition taxes, will be paid in full or in accordance with an
agreement with said creditor. At the present time, it is estimated
that administration expenses will consist of the following: 1)
approximately $15,000.00 in attorneys' fees owed to GENOVA, MALIN &
TRIER LLP, counsel to the Chapter 11 debtor, subject to allowance
by this Court. Said firm received a retainer of $10,238.00; and 2)
U.S. Trustee quarterly fees, if any, shall be paid on the effective
date of the Plan and shall continue to be paid post-confirmation,
until such time as the Court enters a final decree closing the
case. Total unpaid administrative debt is estimated at $5,000.00.
Class 2 consists of the secured claim of KEYBANK NATIONAL
ASSOCIATION as secured by a first mortgage lien against the
debtor's real property located at 208 Route 44, Millerton, New York
(the "Property"). The total of the obligation due to KEYBANK is
approximately $375,000.00. KEYBANK shall retain its first mortgage
lien against the Property and the debtor shall pay claim as
follows:
* Upon the Effective Date of the Plan, the debtor shall pay
the sum of $60,000.00 to KEYBANK. The balance of KEYBANK's secured
claim, in the approximate sum of $315,000.00 shall be paid (with 6%
interest) over the debtor's 60-month Plan of Reorganization,
resulting in monthly payments of $6,090.00. Payments shall be due
on the fifteenth of each month, with the first payment due in the
month following confirmation of the debtor's Plan.
* The debtor shall maintain appropriate insurance on the
Property and pay the property and school taxes to the
municipalities directly.
Class 3 consists of the interest of the stockholders of the debtor,
Kenneth Thompson (100%). Said individual will retain 100% of his
ownership interest in the reorganized debtor, but shall not receive
any dividends or payments under the Plan. Said individual noted
above owns 100% of the outstanding shares of the debtor
corporation, and is an insider as defined by the Bankruptcy Code.
The funds necessary for the satisfaction of creditors' claims shall
be generated from the rent received in the ordinary course of the
debtor's business. Distributions necessary to creditors in all
classes shall require a monthly reserve of approximately $6,100.00
over the life of the Plan.
The maximum amount of cash that will be necessary to confirm the
Plan is expected to be approximately $71,000.00 as and for the
initial payments to Classes 1 and 2 claims. Said funds shall be
generated from the monthly rental income of the debtor and reserves
built up by the debtor. Upon confirmation, the reorganized debtor
shall be entitled to manage its affairs without further Order of
this Court.
A full-text copy of the Disclosure Statement dated January 22, 2024
is available at https://urlcurt.com/u?l=WjdfOP from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Michelle L. Trier, Esq.
Andrea B. Malin, Esq.
Genova, Malin & Trier LLP
1136 Route 9, Suite 1
Wappingers Falls, NY 12590
Tel: (845) 298-1600
Fax: (845) 298-1600
About Kenneth Thompson
Kenneth Thompson, LLC owns three acre mixed-use (retail) parcel
located at 208 Route 44, Millerton, New York, consisting of a 23K
square foot building, 2 stories (75' x 200')7 rentable spaces
valued at $1.14 million in the aggregate.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-36025) on December 13,
2023. In the petition signed by Kenneth Thompson, managing member,
the Debtor disclosed $1,195,989 in assets and $389,584 in
liabilities.
Michelle L. Trier, Esq., at Genova, Malin & Trier, LLP, represents
the Debtor as legal counsel.
KINFOLKS EVENT: Deborah Caruso Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 10 appointed Deborah Caruso, Esq., at
Rubin & Levin as Subchapter V trustee for Kinfolks Event Center,
LLC.
Ms. Caruso will be paid an hourly fee of $350 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Caruso declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Deborah J. Caruso, Esq.
Rubin & Levin
135 N. Pennsylvania St., Suite 1400
Indianapolis, IN 46204
Phone: (317) 860-2928
Email: dcaruso@rubin-levin.net
About Kinfolks Event Center
Kinfolks Event Center, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Ind. Case No. 24-00282) on
January 22, 2024, with $100,001 to $500,000 in both assets and
liabilities.
Judge James M. Carr oversees the case.
Eric C. Welch, Esq., at Welch, Gregg & Company, LLC represents the
Debtor as legal counsel.
LAREDO OIL: Recurring Losses Raise Going Concern Doubt
------------------------------------------------------
Laredo Oil, Inc. disclosed in a Form 10-Q Report filed with the
U.S. Securities and Exchange Commission for the quarterly period
ended November 30, 2023, that substantial doubt exists about its
ability to continue as a going concern within the next 12 months.
According to the Company, it has routinely incurred losses since
inception, resulting in an accumulated deficit, and historically
was dependent on one customer for its revenue. There is no
assurance that in the future any financing will be available to
meet the Company's needs. This situation raises substantial doubt
about the Company's ability to continue as a going concern within
one year of the issuance date of these consolidated financial
statements.
For the three months ended November 30, 2023, the Company incurred
a net loss of $685,765, compared to a net loss of $749,768 for the
same period in 2022.
For the six months ended November 30, 2023, the Company incurred a
net loss of $1,804,555, compared to a net loss of $1,624,393 for
the same period in 2022.
As of November 30, 2023, the Company had $5,049,898 in total
assets, $10,810,549 in total liabilities and $5,760,651 in total
stockholders' deficit.
"Our management has undertaken steps to improve operations, with
the goal of sustaining operations for the next 12 months and
beyond," the Company explained. "These steps include an ongoing
effort to raise funds through the issuance of debt to fund our well
development program and maintain operations. We have attracted and
retained key personnel with significant experience in the industry.
At the same time, in an effort to control costs, we have required a
number of our personnel to multi-task and cover a wider range of
responsibilities in an effort to restrict the growth of our
headcount. There can be no assurance that we can successfully
accomplish these steps, and it is uncertain that we will achieve a
profitable level of operations and obtain additional financing. We
cannot assure you that any additional financing will be available
to us on satisfactory terms and conditions, if at all."
A full-text copy of the Form 10-Q is available at
http://tinyurl.com/3unkyt6w
About Laredo Oil Inc.
Austin, TX-based Laredo Oil, Inc. is an oil exploration and
production company, primarily engaged in acquisition and
exploration efforts to find mineral reserves on various properties.
LGX ENERGY: Cumulative Operating Losses Raise Going Concern Doubt
-----------------------------------------------------------------
LGX Energy Corp. disclosed in a Form 1-SA Report filed with the
U.S. Securities and Exchange Commission for the fiscal semi-annual
period ended October 31, 2023, that substantial doubt exists about
its ability to continue as a going concern.
According to the Company, it has incurred cumulative operating
losses since inception. As of October 31, 2023, the Company had
limited financial resources with which to achieve its objectives
and attain profitability and positive cash flows from operations.
The Company had an accumulated deficit of $2,303,780 at October 31,
2023.
The Company reported a net loss of $410,611 for the six months
ended October 31, 2023, and a net loss of $823,693 for the same
period in 2022.
As of October 31, 2023, the Company has $1,649,865 in total assets,
$832,329 in total liabilities and $817,536 in total stockholders'
equity.
Achievement of the Company's objectives will depend on its ability
to obtain additional financing to generate revenue from current and
planned business operations.
The Company plans to fund its future operations by potential sales
of its common stock, preferred stock or by issuing debt securities.
However, there is no assurance that the Company will be able to
achieve these objectives, therefore substantial doubt about its
ability to continue as a going concern exists.
A full-text copy of the Form 1-SA is available at
http://tinyurl.com/kd45mmpe
About LGX Energy Corp.
Walla Walla, WA-based LGX Energy Corp. was incorporated under the
laws of the State of Nevada on November 3, 2021. The Company was
incorporated for the purpose of exploration and development of oil
and gas properties.
LIGADO NETWORKS: Seeks Additional Financing from Creditors
----------------------------------------------------------
Reshmi Basu of Bloomberg News reports that Ligado Networks is
seeking $30.5 million in incremental financing from its creditors
to help support the struggling satellite company as it sues the
U.S. over spectrum rights, according to people familiar with
knowledge of the matter.
The proposed cash injection will be structured as a first-out
first-lien term loan, said the people, who asked not to be
identified discussing a private matter.
The debt will be allocated in four installments, including a $7.2
million initial payment on January 19, 2024 and additional funding
in February, March and April 2024.
About Ligado Networks
Ligado Networks LLC operates as a special-purpose entity. The
Company provides mobile satellite coverage, as well as develops
innovative solutions that will accelerate 5G and IoT network
deployments.
LUMMUS TECHNOLOGY: Moody's Rates Extended $1BB Sec. Term Loan 'B1'
------------------------------------------------------------------
Moody's Investors Service assigned B1 ratings to Lummus Technology
Holdings V LLC's amended and extended $1 billion backed senior
secured first lien term loan and $175 million backed senior secured
first lien revolving bank credit facility. The facility also
includes an unrated $200 million senior secured first lien letter
of credit facility. The proceeds from the term loan and revolver
will be used to repay existing borrowings, pay fees and add a small
amount of cash to the balance sheet. The refinancing will extend
maturities of the term loan to 2029 and the revolver to 2027. The
company's B2 Corporate Family Rating and Caa1 rating on its senior
unsecured notes remain unchanged. The outlook is stable.
The assigned ratings are subject to receipt and review of the final
documentation.
"Despite a weaker macroeconomic environment, Lummus has
demonstrated continued growth in revenue and earnings, along with
an increasing backlog of new projects, which provide solid support
for the current ratings," stated John Rogers, Moody's Senior Vice
President and lead analyst for Lummus Technology Holdings V LLC.
RATINGS RATIONALE
The B1 senior secured first lien bank credit facility ratings and
B2 CFR reflect Lummus' strong platform in refining and
petrochemicals that includes technology licensing, catalyst supply
and proprietary equipment sales. Lummus' ratings also incorporates
a solid and growing backlog of contract related to new projects,
expansions and upgrades, which should provide greater visibility on
future revenues. Existing contracts, along with new contract wins
over the past two years have significantly increased the backlog
since Moody's initially rated the company in 2020; however
financial performance and credit metrics have improved more slowly.
As of September 30, 2023 Lummus' Debt/EBITDA was 6.1x and Retain
Cash Flow/Debt (RCF/Debt) was 5%, solidly supportive of the B2
rating. The rating also factors in the company's elevated EBITDA
margins and asset light business model relative to most similarly
rated chemical companies. Furthermore, the rating incorporates a
healthy product and geographic revenue mix with increasing growth
in the Middle East and Asia.
The B2 rating is tempered by Lummus' small scale and exposure to
project delays or cancellations in a more substantial recession.
Furthermore, the company faces longer term headwinds in its two
major end markets: petrochemicals and refining, which may face a
reduction in new world-scale projects given the potential for
slower demand growth in China relative to prior periods.
Lummus has good liquidity with cash on the balance sheet of
approximately $47 million and no borrowings under its $175 million
revolving bank credit facility due June 2025 as of September 30,
2023. The company's liquidity is expected to be sufficient to meet
short term working capital requirements, capital expenditures and
interest payments. A majority of the assets are encumbered by the
senior secured debt, leaving few sources of alternative liquidity.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following: Incremental pari passu
debt capacity up to 100% of EBITDA, plus debt to fund acquisitions
providing that it does not increase leverage. The marketing terms
will include "blocker" provisions, which will prohibit the transfer
of specified assets to unrestricted subsidiaries. The marketing
terms do not indicate any protective provisions restricting an
up-tiering transaction.
The stable outlook reflects Moody's expectations that despite
macrcoeconomic headwinds in 2024 that the company's credit metrics
will improve modestly, as free cash flow will likely be held for
future dividends similar to the $140 million dividend in 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would likely consider a downgrade if Debt/EBITDA is
sustained above 7.0x, the company faces operational challenges due
to a sustained downturn in revenues and EBITDA. Moody's could
upgrade the ratings if Debt/EBITDA, including standard adjustments,
is sustained below 5.5x, free cash flow-to-debt (FCF/Debt) is
sustained above 10% and the sponsors commit to maining leverage
below 5.5x.
ESG CONSIDERATIONS
Environmental, social, and governance factors are important factors
influencing Lummus' credit quality, but not driver of the actions.
Lummus' (CIS-4) score indicates that the rating is lower than it
would have been if ESG risk exposures did not exist. Governance
risks are the most significant and stems from the sponsors'
willingness to maintain a significant amount of debt in the capital
structure, which weakens credit metrics. As a provider of services,
equipment and catalysts to the refining and petrochemical
industries environmental risks are limited but expected to increase
over the longer term. Similarly, social risks are limites as well
but expected to increase over time due to the company's end
markets.
Lummus Technology Holdings V LLC, based in Houston, Texas, is a
leading technology licensing, catalyst and equipment supplier for
the refining and petrochemical industries. Through the Chevron
Lummus Global joint venture, it is a leading technology provider
for the production of renewable and conventional transportation
fuels, premium base oils and lubricants. The company is owned by
The Chatterjee Group ("TCG") and Rhône Capital. Lummus reported
revenue of $584 million for the last twelve months ended September
30, 2023.
The principal methodology used in these ratings was Chemicals
published in October 2023.
MAJESTIC COACH: Michael Coury Named Subchapter V Trustee
--------------------------------------------------------
The Acting U.S. Trustee for Region 8 appointed Michael Coury of
Glankler Brown, PLLC as Subchapter V trustee for Majestic Coach,
LLC.
Mr. Coury will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Coury declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Michael P. Coury
Glankler Brown, PLLC
6000 Poplar Ave., Suite 499
Memphis, TN 38119
Phone: (901) 525-1322
Fax: (901) 525-2386
Email; mcoury@glankler.com
About Majestic Coach
Majestic Coach, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tenn. Case No. 23-25926) on Dec. 5,
2023, with $100,001 to $500,000 in both assets and liabilities.
Judge Denise E Barnett oversees the case.
Curtis D. Johnson, Jr., Esq., at the Law Office of Johnson and
Brown, P.C. represents the Debtor as bankruptcy counsel.
MERCON COFFEE: Seeks to Hire Chipman Brown Cicero as Co-Counsel
---------------------------------------------------------------
Mercon Coffee Corp. and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Chipman Brown Cicero & Cole, LLP as co-counsel.
The firm's services include:
(a) advising the Debtors with respect to matters involving or
implicating the automatic stay, including actions by creditors,
customers, and other parties in interest, and the Debtors' powers
and duties as debtors in possession;
(b) attending meetings and negotiating with representatives of
creditors and other parties in interest;
(c) taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf (including without limitation actions for turnover of
property, collections, violations of the automatic stay, and
actions under Chapter 5 of the Bankruptcy Code), defending actions
commenced against the Debtors, and representing the Debtors in
negotiations concerning litigation in which the Debtors are
involved, including objections to claims filed against the Debtors'
estates;
(d) preparing pleadings in connection with these chapter 11
cases, including motions, applications, answers, orders, reports,
and papers necessary or otherwise beneficial to the administration
of the Debtors' estates; and
(e) performing all other necessary legal services for the
Debtors in connection with the prosecution of these chapter 11
cases, including:
(i) analyzing the Debtors' leases and contracts and the
assumption and assignment or rejection thereof and seeking
appropriate orders relating to the same;
(ii) analyzing the validity of liens against the Debtors;
and
(iii) advising the Debtors on related litigation matters.
The firm will charge these hourly fees:
Adam D. Cole $795
Robert A. Weber $775
Kristi J. Doughty $475
Michelle M. Dero $300
Partners $550 to $850
Associates $395 to $525
Paralegals $250 to $300
Consistent with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Chipman
disclosed the following information:
(a) Chipman Brown did not agree to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement;
(b) None of Chipman Brown's professionals included in this
engagement have varied their rate based on the geographic location
for these Chapter 11 Cases; and
(c) Chipman Brown first began representing the Debtors on Dec.
13, 2023. The 2023 and 2024 billing rates then in effect are set
forth below.
2023 2024
Adam D. Cole $775 $795
Robert A. Weber $725 $775
Kristi J. Doughty $475 $475
Michelle M. Dero $275 $300
(d) Chipman Brown will work with the Debtors and lead counsel
to develop a budget and staffing plan in the coming weeks.
As disclosed in court filings, Chipman is a "disinterested person"
pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Adam D. Cole , Esq.
CHIPMAN BROWN CICERO & COLE, LLP
501 Fifth Avenue, 15th Floor
New York, NY 10017
Tel: (646) 685-8363
Email: Cole@ChipmanBrown.com
About Mercon Coffee
Mercon Coffee Corp. -- https://www.merconcoffeegroup.com/ -- is a
supplier of green coffee to the international coffee roasting
industry. Mercon is headquartered in the Netherlands and has
offices around the globe.
Mercon Coffee Corp. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-11945) on Dec. 7,
2023. In the petition filed by CRO Harve Light, the Debtor
reported assets and liabilities between $100 million and $500
million each.
Judge Michael E. Wiles oversees the case.
The Debtors are represented by Blaire Cahn, Esq. at Baker &
McKenzie LLP.
MERCY HOSPITAL: Bondholders Want 96% of Sale Proceeds
-----------------------------------------------------
Following the $28 million sale of Mercy Iowa City to the University
of Iowa, the 150-year-old community hospital's largest bondholders
are seeking court affirmation they will get the vast majority of
that money "promptly."
Computershare Trust Company, serving as master trustee for bonds
issued to Mercy in 2011 and 2018, along with Mercy's largest
bondholder, Preston Hollow Community Capital, filed with the U.S.
Bankruptcy Court for the Northern District of Iowa a motion
directing the Debtors to direct the distribution of the sale
proceeds attributable to their collateral promptly after closing.
The sale to the University is anticipated to close on or around
January 31, 2024. The University of Iowa in October 2023 emerged
as the winning bidder for Mercy Iowa City hospital. The Bankruptcy
Court approved the sale to the winning bidder on Nov. 7, 2023. The
total purchase price is "$28,000,000, plus the Cure Amounts, plus
an amount equal to the actual net operating losses (exclusive of
restructuring professional fees and all other costs and
expenses relating to the bankruptcy cases) incurred by the Debtors
from December 1, 2023 until the Closing Date . . . ."
Computershare and Preston want the U.S. Bankruptcy judge to direct
Mercy to give them $26.8 million of the sale proceeds "either at
closing or as soon as practicable following closing."
Computershare notes that pursuant to the Second Interim Cash
Collateral Order entered on Nov. 27, 2023, the Debtors consented to
the distribution of the Debtors "agree to not object or otherwise
assert an objection to a motion filed by the Master Trustee that
seeks a distribution to the Trustee at closing of such sale;
provided that such distribution of sale proceeds is not in excess
of $26,800,000, minus the Carve-Out."
"It is undisputed that the master trustee holds valid, perfected,
and enforceable first-priority liens upon and security interests in
substantially all of (Mercy Hospital's) real and personal property
assets," according to the request filed in U.S. Bankruptcy Court.
"Distribution of the Collateral Proceeds to the Master Trustee and
bondholders is authorized and appropriate under section 362(d) of
the Bankruptcy Code where, as here, the proceeds are derived from
sale of the real and personal property upon which the Master
Trustee holds unassailable first-priority liens. The Debtors have
consented to the distribution of the
Collateral Proceeds to the Master Trustee. See Second Interim Cash
Collateral Order at ¶ 4(f). Moreover, the partial satisfaction of
the bondholders' claims on account of the proposed distribution
will, inter alia, benefit the estates by reducing the amount of
interest accrual on the
Master Trustee's secured claim."
About Mercy Hospital
Mercy Hospital operates the general acute care hospital known as
Mercy Hospital & Medical Center located at 2525 South Michigan
Ave., Chicago. The hospital offers inpatient and outpatient
services. Mercy Health System of Chicago, an Illinois
not-for-profit corporation, is the sole member of Mercy Hospital.
The health care facilities are part of Trinity Health's network of
health care providers. On the Web: http://www.mercy-chicago.org/
Mercy Hospital and Medical Center and Mercy Health System of
Chicago sought Chapter 11 protection (Bankr. N.D. Ill. Case Nos.
21-01805 and 21-01806) on Feb. 10, 2021. Mercy Hospital estimated
$100 million to $500 million in assets and liabilities as of the
bankruptcy filing. Judge Timothy A. Barnes oversees the cases.
Foley Lardner LLP, led by Matthew J. Stockl, is the Debtors' legal
counsel. Epiq Corporate Restructuring, LLC is the claims,
noticing, solicitation and administrative agent.
The U.S. Trustee for Region 11 appointed an official committee of
unsecured creditors on March 3, 2021. The committee is represented
by Sills Cummis & Gross, P.C. and Perkins Coie LLP.
David N. Crapo is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases. The PCO is represented by Sugar
Felsenthal Grais & Helsinger, LLP.
MR@M1 LLC: Seeks to Hire Buddy D. Ford as Legal Counsel
-------------------------------------------------------
MR@M1, LLC seeks approval from the U.S. Bankruptcy Court for the
Middle District of Florida to hire Buddy D. Ford, P. A. as its
counsel.
The Debtor requires legal counsel to:
a. analyze the financial situation, and rendering advice and
assistance to the Debtor in determining whether to file a petition
under Title 11, United States Code;
b. advise the Debtor with regard to the powers and duties of
the debtor and as Debtor-in-Possession in the continued operation
of the business and management of the property of the estate;
c. prepare and file of the petition, schedules of assets and
liabilities, statement of affairs, and other documents required by
the Court;
d. represent the Debtor at the Section 341 Creditors'
meeting;
e. advise the Debtor with respect to its responsibilities in
complying with the United States Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
f. prepare necessary motions, pleadings, applications,
answers, orders, complaints, and other legal papers and appear at
hearings thereon;
g. protect the interest of the Debtor in all matters pending
before the court;
h. represent the Debtor in negotiation with its creditors in
the preparation of the Chapter 11 Plan; and
i. perform all other legal services for Debtor as
Debtor-in-Possession which may be necessary, and it is necessary
for Debtor as Debtor-in-Possession to employ this attorney for such
professional services.
The firm will be paid at these rates:
Buddy D. Ford, Esq. $450 per hour
Attorneys $450 per hour
Senior Associate Attorneys $400 per hour
Junior Associate Attorneys $350 per hour
Senior paralegal $150 per hour
Junior paralegal $100 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The Debtor paid the firm a retainer of $3,000.
As disclosed in court filings, Buddy D. Ford is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Buddy D. Ford, Esq.
Jonathan A. Semach, Esq.
Heather M. Reel, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Telephone: (813) 877-4669
Email: Buddy@tampaesq.com
Jonathan@tampaesq.com
Heather@tampaesq.com
About MR@M1, LLC
MR@M1, LLC sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-05794) on Dec. 21,
2023, listing up to $50,000 in both assets and liabilities.
Judge Catherine Peek Mcewen oversees the case.
Buddy D Ford, Esq. at Buddy D. Ford, P.A. represents the Debtor as
counsel.
MULLEN AUTOMOTIVE: 2023 Fiscal Year Ended on Sept. 30
-----------------------------------------------------
Mullen Automotive Inc. filed a Current Report on Form 8-K with the
Securities and Exchange Commission to clarify that (1) the
Company's 2023 fiscal year ended on Sept. 30, 2023; and (2) since
the reverse stock split of its common stock that was effected on
Dec. 21, 2023, the Company has not issued any new warrants and no
existing warrants have been exercised or converted.
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.
MULLEN AUTOMOTIVE: Regains Compliance With Nasdaq Bid Price Rule
----------------------------------------------------------------
Mullen Automotive Inc. announced that it has received formal notice
from The Nasdaq Stock Market LLC confirming the Company has
regained compliance with the minimum bid price requirement set
forth in Nasdaq Listing Rule 5550(a)(2). Mullen will continue to
be listed and traded on The Nasdaq Capital Market.
As previously disclosed, the Nasdaq Hearings Panel has also granted
the Company until March 8, 2024, to demonstrate compliance with the
annual shareholder meeting requirement set forth in Nasdaq Listing
Rule 5620(a). Mullen has scheduled its Annual Meeting of
Stockholders to be held on Feb. 29, 2024.
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.
MUZIK INC: Seeks to Hire Otaigbe Group as Accountant
----------------------------------------------------
Muzik, Inc. seeks approval from the U.S. Bankruptcy Court for the
Central District of California to employ The Otaigbe Group as its
accountant.
Otaigbe has agreed to charge a flat fee of $3,000 to prepare and
file the federal and state income tax returns for the tax years
2022 and 2023. With regards to the other services, the firm will
bill the Debtor at the hourly rate of $175.
Otaigbe Group is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Anthony O. Otaigbe
The Otaigbe Group
9720 Capital Court Suite #100
Manassas, VA 20110
Phone: (703) 368-4000
Email: inquiry@otaigbe.com
About Muzik Inc.
Muzik Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-16304) on Sept. 27,
2023. In the petition signed by Jason Hardi, chief executive
officer, the Debtor disclosed up to $10 million in estimated assets
and liabilities.
Judge Vincent P. Zurzolo oversees the case.
The Debtor tapped Eve H. Karasik, Esq., at Levene, Neale, Bender,
Yoo & Golubchik LLP as counsel and Erceg Partners, LLC as financial
advisor.
MVK FARMCO: Seeks Court Okay for $22-Mil. DIP Financing
-------------------------------------------------------
Ben Zigterman of Law360 reports that with its cash expected to run
out by the third week of January 2024, stone fruit producer Prima
Wawona asked a Delaware bankruptcy judge this week to approve a $22
million debtor-in-possession loan from some of its prepetition
lenders.
About MVK FarmCo
MVK FarmCo, LLC and its affiliates -- https://prima.com/ -- are
providers of stone fruit, operating an integrated network of farms,
ranches and packaging facilities. Founded in 1999 and
headquartered in Fresno, Calif., the Debtors cultivate
approximately 18,000 acres of land nestled throughout the San
Joaquin Valley.
The Debtors filed Chapter 11 petitions (Bankr. D. Del. Lead Case
No. 23-11721) on Oct. 13, 2023. John Boken, chief executive
officer, signed the petitions.
At the time of the filing, the Debtors reported consolidated assets
of $500 million to $1 billion and consolidated liabilities of $1
billion to $10 billion.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankruptcy counsel; Young Conaway Stargatt &
Taylor, LLP as local counsel; Houlihan Lokey as investment banker;
and Stretto, Inc., as claims and noticing agent. AP Services, LLC,
provides interim management and restructuring support services to
the Debtors.
NABORS INDUSTRIES: BlackRock Has 15.1% Stake as of Dec. 31
----------------------------------------------------------
BlackRock, Inc. disclosed in a Schedule 13G/A filed with the
Securities and Exchange Commission that as of Dec. 31, 2023, it
beneficially owned 1,485,766 shares of common stock of Nabors
Industries Ltd. representing 15.1 percent of the Shares
outstanding.
A full-text copy of the regulatory is available for free at:
https://www.sec.gov/Archives/edgar/data/1163739/000108636424001075/bmg6359f1370_012224.txt
About Nabors
Nabors Industries Ltd. (NYSE: NBR) owns and operates land-based
drilling rig fleets and provides offshore platform rigs in the
United States and several international markets. Nabors also
provides directional drilling services, tubular services,
performance software, and innovative technologies for its own rig
fleet and those of third parties.
Nabors Industries reported a net loss of $307.22 million in 2022, a
net loss $543.69 million in 2021, a net loss of $762.85 million in
2020, a net loss of $680.51 million in 2019, a net loss of $612.73
million in 2018, and a net loss of $540.63 million in 2017. As of
Sept. 30, 2023, the Company had $4.72 billion in total assets,
$3.34 billion in total liabilities, $834.19 million in redeemable
noncontrolling interest in subsidiary, and $548.17 million in total
equity.
NABORS INDUSTRIES: State Street Has 5.42% Stake as of Dec. 31
-------------------------------------------------------------
State Street Corporation disclosed in a Schedule 13G filed with the
Securities and Exchange Commission that as of Dec. 31, 2023, it
beneficially owned 512,993 shares of common stock of Nabors
Industries Ltd., representing 5.42 percent of the Shares
outstanding. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/93751/000009375124000125/Nabors_Ind_Ltd.txt
About Nabors
Nabors Industries Ltd. (NYSE: NBR) owns and operates land-based
drilling rig fleets and provides offshore platform rigs in the
United States and several international markets. Nabors also
provides directional drilling services, tubular services,
performance software, and innovative technologies for its own rig
fleet and those of third parties.
Nabors Industries reported a net loss of $307.22 million in 2022, a
net loss $543.69 million in 2021, a net loss of $762.85 million in
2020, a net loss of $680.51 million in 2019, a net loss of $612.73
million in 2018, and a net loss of $540.63 million in 2017. As of
Sept. 30, 2023, the Company had $4.72 billion in total assets,
$3.34 billion in total liabilities, $834.19 million in redeemable
noncontrolling interest in subsidiary, and $548.17 million in total
equity.
NEW ALEXANDRIA: Seeks to Hire Baker & Associates as Attorney
------------------------------------------------------------
New Alexandria Holdings, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ Baker
& Associates as its attorney.
The firm's services include:
a. analyzing the financial situation, and rendering advice and
assistance to the Debtor;
b. advising the Debtor with respect to its duties as debtor;
c. preparing and filing of all appropriate petitions,
schedules of assets and liabilities, statements of affairs,
answers, motions and other legal papers;
d. representing the Debtor at the first meeting of creditors
and such other services as may be required during the course of the
bankruptcy proceedings;
e. representing the Debtor in all proceedings before the Court
and in any other judicial or administrative proceeding where the
rights of the Debtor may be litigated or otherwise affected,
including all adversary proceedings in which the Debtor is a
plaintiff, defendant or otherwise a party or party in interest;
f. preparing and filing of a Disclosure Statement (if
required) and Chapter 11 Plan of Reorganization; and
g. assisting to the Debtor in any matters relating to or
arising out of the captioned case.
Prior to the filing of the case, the Debtor paid the firm the
amount of $4,000.
Reese Baker, Esq., an attorney at Baker & Associates, disclosed in
a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Reese W. Baker, Esq.
BAKER & ASSOCIATES
950 Echo Lane, Ste. 300
Houston, TX 770024
Telephone: (713) 869-9200
Facsimile: (713) 869-9100
Email: courtdocs@bakerassociates.net
About New Alexandria Holdings, LLC
New Alexandria Holdings, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
24-30026) on Jan. 2, 2024, listing $50,001 to $100,000 in both
assets and liabilities. The petition was signed by Jared Grogan as
manager.
Reese W Baker, Esq. at Baker & Associates represents the Debtor as
counsel.
NEW TROJAN: S&P Downgrades ICR to 'D' on Chapter 11 Filing
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
medical scrubs provider New Trojan Parent Inc. to 'D' from 'CCC-'.
At the same time, S&P lowered its issue-level ratings on the
company's first-lien secured term loan to 'D' from 'CCC-' and
second-lien secured term loan to 'D' from 'C'.
S&P downgraded New Trojan after it filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code.
This follows a deterioration in liquidity driven by material free
operating cash flow deficits and high debt service requirements.
NGL ENERGY: S&P Rates $2.1BB Senior Secured Notes 'B+'
------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '2'
recovery rating to NGL Energy Partners L.P. subsidiaries NGL Energy
Operating LLC's and NGL Energy Finance Corp.'s proposed $2.1
billion senior secured notes due in 2029 and 2032. The '2' recovery
rating indicates its expectation of substantial (70%-90%; rounded
estimate: 70%) recovery in the event of a default. The final amount
on each tranche of notes will be determined at close.
NGL Energy intends to use the net proceeds of the transaction,
along with the proceeds from the term loan B issuance this month,
to fund the redemption of the 2026 notes, pay fees in connection
with transaction, and repay a portion of the borrowings under the
asset-based lending (ABL) facility.
The issuer credit rating on NGL Energy is 'B' with a stable
outlook.
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulation assumes a default arising from sharply lower
commodity prices that persist for a prolonged period and reduce the
cash flow from NGL's crude oil and water businesses.
-- S&P's simulated default assumes that NGL emerges from
bankruptcy as a going concern to maximize the value to creditors.
-- At the point of default, S&P assumes approximately $230 million
of borrowings outstanding on the ABL facility.
Simulated default assumptions
-- Year of default: 2027
-- Default year EBITDA: About $365 million
-- Default enterprise value multiple: 6.5x
-- Estimated gross enterprise value at emergence: About $2.4
billion
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $2.27
billion
-- Priority debt claims (ABL): about $230 million (not rated)
-- Value available for first-lien debt claims: $2.05 billion
-- Secured first-lien debt claims: $2.9 billion
--Recovery expectations: 70%-90% (rounded estimate: 70%)
Note: All debt amounts include six months of prepetition interest
NOGIN INC: $35M Unsecured Claims to Get 0% in Joint Plan
--------------------------------------------------------
Nogin, Inc., and Its Debtor Affiliates submitted a Disclosure
Statement for Joint Chapter 11 Plan dated January 22, 2024.
On Nov. 16, 2023, after hard fought and good faith negotiations
between the Company, BR Investments and the Ad Hoc Committee of
Noteholders, the Strategic Transactions Committee approved that
certain Chapter 11 Restructuring Support Agreement, dated November
16, 2023, by and between the Company, BR Investments and the Ad Hoc
Committee of Noteholders (the "RSA").
Material terms of the Restructuring Transactions contemplated by
the RSA and embodied under the Plan include, among other things:
* On the Effective Date, among other consideration to be
provided, the DIP Claims will either equitize into 100% ownership
of the Reorganized Equity Interests in the "Reorganized Debtors" or
will be used to acquire all or substantially all of the Debtors'
Assets;
* On the Effective Date, except to the extent a Senior
Noteholder agrees to less favorable treatment, each Senior
Noteholder shall receive its Pro Rata share of the Cash Settlement
Consideration plus its Pro Rata share of Creditor Litigation Trust
Beneficial Interests. In the event the Senior Notes Recovery
exceeds the Allowed Senior Notes Claims, Holders of Allowed General
Unsecured Claims would receive, on a Pro Rata basis, their share of
the Excess Recovery;
* Establishment of the Creditor Litigation Trust consisting of
(a) the Retained Causes of Action, including any and all proceeds
thereof, together with all privileges related thereto (including,
but not limited to, any lawyer client and work product privileges),
and the Creditor Litigation Trust Initial Funding Amount, if any,
(b) all Assets of the Estates that are (i) not transferred to the
Buyer, (ii) not transferred to the Debtor Liquidating Trust or the
Post-Effective Date Debtor(s), as applicable; (iii) not the
Professional Fee Account, and (iv) not Distributed to Holders of
Claims on the Effective Date, (c) rights of access to all of the
Debtors' books and records relating to periods ending on or before
the Effective Date, and (d) the proceeds from any recovery under
the D&O Liability Insurance Policies providing coverage for any
Retained Causes of Action;
* Establishment of the Debtor Liquidating Trust consisting of
(a) the Debtor Liquidating Trust Initial Funding Amount and (b) all
Assets not transferred to the Buyer or the Creditor Litigation
Trust; or the Post-Effective Date Debtor(s) consisting of (x) the
Post-Effective Date Debtor Initial Funding Amount and (b) all
Assets not transferred to the Buyer or the Creditor Litigation
Trust; and
* On the Effective Date, (i) BR Investments and its Affiliates
and (ii) the Ad Hoc Committee of Noteholders and their members,
affiliates, and professionals shall receive a release of all estate
claims and causes of action.
The Debtors believe that their Cash on hand and the Sale
Transaction Proceeds will provide adequate sources of consideration
to fund the payments under the Plan. Accordingly, the Debtors
believe that the transactions discussed and embodied in the Plan
maximize value for their estates and creditors while simultaneously
bringing these Chapter 11 Cases to an expeditious and fair
resolution.
Class 4 consists of all General Unsecured Claims. On the Effective
Date, (i) each Allowed General Unsecured Claim will be released and
extinguished, and (ii) each holder of an Allowed General Unsecured
Claim shall not receive any distribution on account of its General
Unsecured Claim, unless the Senior Notes Recovery exceeds the
Allowed Senior Notes Claims, which, in such circumstance, Holders
of Allowed General Unsecured Claims would receive, on a Pro Rata
basis, their share of the Excess Recovery, if any. Class 4 is
Impaired. This Class will receive a distribution of 0% of their
allowed claims. The allowed unsecured claims total $35,000,000.
Class 6 consists of Existing Equity Interests. On the Effective
Date, Equity Interests shall be cancelled, released, and
extinguished, and be of no further force or effect, whether
surrendered for cancellation or otherwise; provided, however, that,
in the event the Debtors consummate an Equity Sale Transaction
pursuant to an Equity Purchase Agreement, the Reorganized Debtors'
corporate structure shall be reflected in the Restructuring Steps
Memorandum and shall not otherwise be adversely affected by the
Plan.
The Distribution Agent shall fund Distributions and satisfy Allowed
Claims under the Plan using Available Cash or Net Cash Proceeds,
including Sale Transaction Proceeds, and if applicable, the Cash
Settlement Differential, as applicable; provided, however, that,
any post-Effective Date obligations of the (i) Creditor Litigation
Trust shall be paid by Creditor Litigation Trustee (ii) the Debtor
Liquidating Trust shall be paid by the Debtor Liquidating Trustee,
and (iii) the Post-Effective Date Debtor(s) shall be paid by the
Plan Administrator. The Debtors shall make an initial distribution
of Available Cash or Net Cash Proceeds on the Effective Date (or as
soon thereafter as is practicable).
A full-text copy of the Disclosure Statement dated January 22, 2024
is available at https://urlcurt.com/u?l=zP8egQ from Donlin, Recano
& Company, Inc., claims agent.
Attorneys for Debtors:
Daniel J. DeFransceschi, Esq.
John H. Knight, Esq.
Michael J. Merchant, Esq.
David T. Queroli, Esq.
Matthew P. Milana, Esq.
RICHARDS, LAYTON & FINGER, P.A.
920 North King Street
Wilmington DE 19801
Tel: (302) 651-7700
E-mail: defranceschi@rlf.com
About Nogin Inc.
Nogin, Inc., provides enterprise-class ecommerce technology and
services for consumer products through its Intelligent Commerce
technology, a cloud-based ecommerce environment purpose-built for
brands selling direct-to-consumer (D2C) and business-to-business
(B2B).
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11945) on Dec. 5,
2023, with $47,263,000 in assets and $142,815,000 in liabilities.
Vladimir Kasparov, chief restructuring officer, signed the
petitions.
The Debtor tapped Daniel J. DeFransceschi, Esq. of RICHARDS, LAYTON
& FINGER, P.A. as legal counsel; and Donlin, Recano & Company,
Inc., as claims & noticing agent.
NOGIN INC: Committee Seeks to Hire Morris James as Co-Counsel
-------------------------------------------------------------
The official committee of unsecured creditors of Nogin, Inc. and
its affiliates seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to employ Morris James LLP as its
co-counsel.
The firm's services include:
a. providing legal advice and assistance to the Committee in
its consultations with the Debtors relative to the Debtors'
administration of its reorganization;
b. reviewing and analyzing all applications, motions, orders,
statements of operations and schedules filed with the Court by the
Debtors or third parties, advising the Committee as to their
propriety, and, after consultation with the Committee, taking
appropriate action;
c. preparing necessary applications, motions, answers, orders,
reports, and other legal papers on behalf of the Committee;
d. representing the Committee at hearings held before the
Court and communicating with the Committee regarding the issues
raised, as well as the decisions of the Court; and
e. performing other legal services for the Committee which may
be reasonably required in this proceeding.
The principal attorneys and paralegals presently expected to
represent the Committee are as follows:
Eric J. Monzo, Partner $795 per hour
Brya M. Keilson, Partner $750 per hour
Jason S. Levin, Associate $450 per hour
Stephanie Lisko, Paralegal $350 per hour
Douglas J. Depta, Paralegal $350 per hour
Morris James has agreed to provide a voluntary courtesy discount of
10 percent to its partners' standard hourly rates.
Eric J. Monzo, Esq., a partner at Morris James LLP, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Eric J. Monzo, Esq.
Brya M. Keilson, Esq.
MORRIS JAMES LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Tel: (302) 888-6800
Fax: (302) 571-1750
Email: emonzo@morrisjames.com
bkeilson@morrisjames.com
About Nogin, Inc.
Nogin, Inc., provides enterprise-class ecommerce technology and
services for consumer products through its Intelligent Commerce
technology, a cloud-based ecommerce environment purpose-built for
brands selling direct-to-consumer (D2C) and business-to-business
(B2B).
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11945) on December 5,
2023, with $47,263,000 in assets and $142,815,000 in liabilities.
Vladimir Kasparov, chief restructuring officer, signed the
petitions.
The Debtor tapped Daniel J. DeFransceschi, Esq. of RICHARDS, LAYTON
& FINGER, P.A. as legal counsel; and Donlin, Recano & Company, Inc.
as claims & noticing agent.
NOGIN INC: Committee Taps Dundon Advisers as Financial Advisor
--------------------------------------------------------------
The official committee of unsecured creditors of Nogin, Inc. and
its affiliates seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to employ Dundon Advisers LLC as its
financial advisor.
The firm will provide these services:
a. assist in the analysis, review, and monitoring of the
restructuring process, including, but not limited to, an assessment
of the unsecured claims pool and potential recoveries for unsecured
creditors;
b. develop a complete understanding of the Debtors' businesses
and their valuations;
c. determine whether there are viable alternative paths for
the disposition of the Debtors' assets from those currently or in
the future proposed by any Debtor;
d. monitor and, to the extent appropriate, assist the Debtors
in efforts to develop and solicit transactions that would support
unsecured creditor recovery;
e. assist the Committee in identifying, valuing, and pursuing
estate causes of action, including, but not limited to, relating to
prepetition transactions, control person liability, and lender
liability;
f. assist the Committee to analyze, classify and address
claims against the Debtors and to participate effectively in any
effort in these chapter 11 cases to estimate (in any formal or
informal sense) contingent, unliquidated, and disputed claims;
g. assist the Committee to identify, preserve, value, and
monetize tax assets of the Debtors, if any;
h. advise the Committee in negotiations with the Debtors,
certain of the Debtors' lenders, and third parties;
i. assist the Committee in reviewing the Debtors' financial
reports;
h. assist the Committee in reviewing the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
j. review and provide analysis of the present and any
subsequently proposed debtor-in-possession financing or use of cash
collateral;
k. assist the Committee in evaluating and analyzing avoidance
actions, including fraudulent conveyances and preferential
transfers;
l. assist the Committee in investigating whether any
unencumbered assets at Nogin, Inc. or any of its affiliated Debtors
exist;
m. review and provide analysis of any proposed disclosure
statement and chapter 11 plan and, if appropriate, assist the
Committee in developing an alternative chapter 11 plan;
n. attend meetings and assist in discussions with the
Committee, the Debtors, the secured lenders, the U.S. Trustee and
other parties in interest and professionals;
o. present at meetings of the Committee, as well as meetings
with other key stakeholders and parties;
q. perform such other advisory services for the Committee as
may be necessary or proper in these proceedings, subject to the
aforementioned scope; and
r. provide testimony on behalf of the Committee as and when
may be deemed appropriate.
The firm will be paid at these rates:
Principal $890 per hour
Managing Director $790 per hour
Senior Adviser $790 per hour
Senior Director $700 per hour
Director $650 per hour
Associate Director $550 per hour
Senior Associate $475 per hour
Associate $350 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Joshua Nahas, managing directo at Dundon Advisers, disclosed in a
court filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Joshua Nahas
DUNDON ADVISERS, LLC
Ten Bank Street, Suite 1100
White Plains, NY 10606
Tel: (917) 650-2968
Email: jn@dundon.com
About Nogin, Inc.
Nogin, Inc., provides enterprise-class ecommerce technology and
services for consumer products through its Intelligent Commerce
technology, a cloud-based ecommerce environment purpose-built for
brands selling direct-to-consumer (D2C) and business-to-business
(B2B).
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11945) on December 5,
2023, with $47,263,000 in assets and $142,815,000 in liabilities.
Vladimir Kasparov, chief restructuring officer, signed the
petitions.
The Debtor tapped Daniel J. DeFransceschi, Esq. of RICHARDS, LAYTON
& FINGER, P.A. as legal counsel; and Donlin, Recano & Company, Inc.
as claims & noticing agent.
NOGIN INC: Committee Taps Lowenstein Sandler as Co-Counsel
----------------------------------------------------------
The official committee of unsecured creditors of Nogin, Inc. and
its affiliates seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to employ Lowenstein Sandler LLP as its
co-counsel.
The firm's services include:
(a) advising the Committee with respect to its rights, duties,
and powers in the Chapter 11 Cases;
(b) assisting and advising the Committee in its consultations
with the Debtors relative to the administration of the Chapter 11
Cases;
(c) assisting the Committee in analyzing the claims of the
Debtors' creditors, the Debtors' capital structure, and in
negotiating with holders of claims and equity interests;
(d) assisting the Committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors and of the operation of the Debtors' business;
(e) assisting the Committee in analyzing the Debtors' (i)
prepetition financing, (ii) proposed use of cash collateral, (iii)
proposed debtor-in-possession financing, and (iv) the adequacy of
the proposed budget;
(f) assisting the Committee in its investigation of the liens
and claims of the holders of the Debtors' prepetition debt and the
prosecution of any claims or causes of action revealed by such
investigation;
(g) assisting the Committee in its analysis of, and
negotiations with, the Debtors, or any third party, concerning
matters related to, among other things, the assumption or rejection
of certain leases of nonresidential real property and executory
contracts, asset dispositions, sale of assets, financing of other
transactions and the terms of one or more plans of liquidation or
reorganization for the Debtors and accompanying disclosure
statements and related plan documents;
(h) assisting and advising the Committee as to its
communications to unsecured creditors regarding significant matters
in the Chapter 11 Cases;
(i) representing the Committee at hearings and other
proceedings;
(j) reviewing and analyzing applications, orders, statements
of operations, and schedules filed with the Court and advising the
Committee as to their propriety;
(k) assisting the Committee in preparing pleadings and
applications as may be necessary in furtherance of the Committee's
interests and objectives in the Chapter 11 Cases, including without
limitation, the preparation of retention papers and fee
applications for the Committee's professionals, including
Lowenstein Sandler;
(l) preparing, on behalf of the Committee, any pleadings,
including without limitation, motions, memoranda, complaints,
adversary complaints, objections, or comments in connection with
any of the foregoing; and
(m) performing such other legal services as may be required or
are otherwise deemed to be in the interests of the Committee in
accordance with the Committee's powers and duties as set forth in
the Bankruptcy Code, Bankruptcy Rules, or other applicable law.
Lowenstein Sandler's hourly rates are as follows:
Partners $690 to $1,835
Of Counsel $810 to $1,475
Senior Counsel and Counsel $575 to $1,410
Associates $475 to $965
Paralegals, Practice Support
and Assistants $240 to $425
Lowenstein Sandler has agreed to discount its partner rates by 10
percent. There will be no limitation on the firm's right to seek
reimbursement of all out-of-pocket disbursements and expenses.
Jeffrey Cohen, a partner of Lowenstein Sandler, assured the court
that the firm is a "disinterested person" as that term is defined
in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeffrey L. Cohen, Esq.
LOWENSTEIN SANDLER LLP
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 262-6700
Fax: (212) 262-7402
Email: jcohen@lowenstein.com
About Nogin, Inc.
Nogin, Inc., provides enterprise-class ecommerce technology and
services for consumer products through its Intelligent Commerce
technology, a cloud-based ecommerce environment purpose-built for
brands selling direct-to-consumer (D2C) and business-to-business
(B2B).
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11945) on December 5,
2023, with $47,263,000 in assets and $142,815,000 in liabilities.
Vladimir Kasparov, chief restructuring officer, signed the
petitions.
The Debtor tapped Daniel J. DeFransceschi, Esq. of RICHARDS, LAYTON
& FINGER, P.A. as legal counsel; and Donlin, Recano & Company, Inc.
as claims & noticing agent.
NOVO INTEGRATED: Incurs $4.7MM Net Loss in First Quarter
--------------------------------------------------------
Novo Integrated Sciences, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $4,660,723 for the three months ended November 30,
2023, compared to a net loss of $3,936,736 for the same period in
2022.
As of November 30, 2023, the Company had $37,244,384 in total
assets, $13,960,336 in total liabilities, and $23,284,048 in total
stockholders' equity.
The Company has incurred recurring losses from operations, has
negative cash flows from operating activities, and has an
accumulated deficit as of November 30, 2023. The Company believes
that its cash and other available resources may not be sufficient
to meet its operating needs and the payment of obligations related
to various business acquisitions as they come due within one year
after the date the unaudited condensed consolidated financial
statements are issued.
In an effort to alleviate these conditions, the Company has
considered equity and/or debt financing and/or asset monetization.
There can be no assurance that funding would be available, or that
the terms of such funding would be on favorable terms if available.
Even if the Company is able to obtain additional financing, it may
contain undue restrictions on our operations, in the case of debt
financing, or cause substantial dilution for our stockholders, in
the case of equity financing. These conditions, along with the
matters noted above, raise substantial doubt about the Company's
ability to continue as a going concern within one year after the
date the unaudited condensed consolidated financial statements are
issued.
While management has developed and is in process to implement plans
that management believes could alleviate in the future the
substantial doubt that was raised, management concluded at the date
of the issuance of the unaudited condensed consolidated financial
statements that substantial doubt exists as those plans are not
completely within the control of management.
A full-text copy of the Form 10-Q is available at
http://tinyurl.com/fpydethc
About Novo Integrated Sciences
Headquartered in Bellevue, Washington, Novo Integrated Sciences,
Inc. (NASDAQ: NVOS), together with its subsidiaries, provides
primary healthcare services. The company offers physiotherapy,
chiropractic care, occupational therapy, eldercare, laser
therapeutics, massage therapy, acupuncture, chiropodist,
neurological functions, kinesiology, concussion management and
baseline testing, women's pelvic health, sports medicine therapy
assistive devices, and private personal training services. It also
operates 16 owned clinics, 88 contracted clinics, and 234 eldercare
centric homes located in Canada. Novo Integrated Sciences, Inc., is
a subsidiary of Mattacchione Family Trust.
As of August 31, 2023, the Company had $35,563,047 in total assets
and $11,063,972 in total liabilities.
Spokane, WA-based Fruci & Associates II, the Company's auditor
since 2022, issued a "going concern" qualification in its report
dated August 31, 2023, citing that the Company has incurred
recurring losses from operations, has negative cash flows from
operating activities, and has an accumulated deficit as of August
31, 2023. These factors, among others, raise substantial doubt
about the Company's ability to continue as a going concern.
OMNIQ CORP: Receives $5M Purchase Orders From Food and Drug Chains
------------------------------------------------------------------
OMNIQ Corp. announced that it received $5.0M in Purchase Orders for
Hardware, software, IT licenses and services from one of the
largest Food and Drugs chains in the US.
The order includes IOT Supply Chain devices, software, services and
support, which omniQ will provide. The project aims to modernize
and upgrade the customer's equipment based on handheld devices,
used in managing the customer's total supply chain level operations
within its warehouses, distribution centers, and up to the point of
delivery to their customer. The software manages the devices
deployed throughout the customer's operations and stores. With
State-of-the-Art capabilities, it allows for total device tracking
and tracing while providing proactive, preventive maintenance by
real-time hardware monitoring and remote capabilities. In
addition, the software solution provides data analytics which
allows for customizable reports and ultimately drives further
efficiencies.
Shai Lustgarten, CEO, of omniQ commented "We are proud to announce
this order with innovative features from one of the largest and
most prestigious corporations worldwide. Our team's dedication to
meeting the evolving demands of our long-standing customers has
been instrumental in fostering enduring partnerships and
significant orders."
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic and parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Omniq Corp reported a net loss of $13.61 million for the year ended
Dec. 31, 2022, compared to a net loss of $13.14 million for the
year ended Dec. 31, 2021. As of March 31, 2023, the Company had
$68.47 million in total assets, $81.31 million in total
liabilities, and a total stockholders' deficit of $12.84 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 30, 2023, citing that the Company has a deficit in
stockholders' equity, and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
OMNIQ CORP: Unit Sells Accounts Receivables to Prestige
-------------------------------------------------------
Omniq Corp disclosed in a Form 8-K filed with the Securities and
Exchange Commission that its wholly owned subsidiary, Quest
Marketing, Inc., and Prestige Capital Finance, LLC entered into a
Purchase and Sale Agreement in which Quest has sold, transferred
and assigned all of its right, title and interest to specific
accounts receivable owed to Quest, as set forth on the assignment
forms provided by Prestige together with all rights of action
accrued or to accrue thereon, including without limitation, full
power to collect, sue for, compromise, assign or in any other
manner enforce collection thereof in Prestige's name or otherwise.
In exchange for those specific accounts receivables owed to Quest,
Prestige has paid to Quest 80% of the face value of the accounts.
Notwithstanding anything to the contrary contained in this
Agreement, the maximum outstanding balance of Quest to Prestige
shall be $7,500,000.
In addition, Prestige's purchase from Quest shall be at a discount,
which such discount shall be based on the number of days an account
is outstanding from the date of the down payment. The discount fee
will be as follows: If paid within 30 days a discount fee of 1.50%
plus an additional .50% for each 10-day period thereafter up to a
maximum of 90 days. Notwithstanding the foregoing, if an account
is not repaid in accordance with a chargeback of such account (as
further provided in the Purchase and Sale Agreement), then the
discount fee will increase by 1.5% for each 10-day period
thereafter, until the account is paid in full.
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic and parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Omniq Corp reported a net loss of $13.61 million for the year ended
Dec. 31, 2022, compared to a net loss of $13.14 million for the
year ended Dec. 31, 2021. As of March 31, 2023, the Company had
$68.47 million in total assets, $81.31 million in total
liabilities, and a total stockholders' deficit of $12.84 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 30, 2023, citing that the Company has a deficit in
stockholders' equity, and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
PHUNWARE INC: Board Appoints Elloit Han as Class II Director
------------------------------------------------------------
Phunware, Inc., disclosed in a Form 8-K filed with the Securities
and Exchange Commission that on Jan. 21, 2024, the Board of
Directors of the Company appointed Elloit Han to serve as a Class
II director with a term expiring at the 2026 annual meeting of
stockholders and until his successor has been duly elected and
qualified. The Board anticipates Mr. Han will serve on its audit
committee, compensation committee and nominating and corporate
governance committee.
Mr. Han's compensation for service as non-employee director will be
consistent with that of the Company's other non-employee directors,
subject to proration to reflect the commencement date of his
service on the Board.
About Phunware
Headquartered in Austin, Texas, Phunware, Inc. --
http://www.phunware.com-- offers a fully integrated software
platform that equips companies with the products, solutions, and
services necessary to engage, manage, and monetize their mobile
application portfolios globally at scale.
Phunware reported a net loss of $50.89 million for the year ended
Dec. 31, 2022, compared to a net loss of $53.52 million for the
year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had
$27.81 million in total assets, $21.26 million in total
liabilities, and $6.55 million in total stockholders' equity.
Houston, Texas-based Marcum LLP, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Phunware reported that for the nine months ended September 30,
2023, the Company incurred a net loss of [$29,772,000] used
[$15,869,000] in cash for operations and have a working capital
deficiency of [$12,721,000]. These conditions, the Company said,
raise substantial doubt about its ability to meet its financial
obligations as they become due.
PLANET HOLDCO 2: S&P Assigns 'B' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to Wood
Mackenzie. At the same time, S&P assigned its 'B+' issue-level and
'2' recovery ratings to the company's proposed credit facilities.
S&P said, "The stable outlook reflects our expectation that
operating performance will improve, driven by elevated demand and
price increases, with EBITDA margins advancing to the 40% area.
"A leveraged capital structure and financial sponsor ownership
constrain our view of financial policy. Following the debt
issuance, we expect leverage to spike temporarily and then improve
to the 5x area in 2024. We believe financial sponsor ownership will
limit the company pursuing prudent financial risk policies, given
the tendency for financial sponsors to distribute cash to
shareholders. We believe modest deleveraging will be propelled by
EBITDA growth since its cash flows will be limited by its high
capital expenditures (capex).
"Elevated capital spending constrains free operating cash flow
(FOCF) in the near term. We expect the company to invest about 11%
of its revenue into product development, which will result in
negligible FOCF in 2024. Wood Mackenzie has accelerated its
investments in software development, and we expect capex to be
about $70 million in 2024 as it builds and expands its data
analytics (Lens) platform. The company is integrating its power and
renewables and commodities products into Lens, which we forecast
will continue to keep capital investments high. We do believe the
company can cut back its spending because maintenance capex remains
about 1.5% of overall capital spending."
Wood Mackenzie's small scale in a competitive market constrains
S&P's view of business risk. The company largely operates in four
segments, including upstream, power and renewables, commodities and
consulting and transactional, where it provides data analytics and
research. It faces significant competition in its segments, and it
lacks the diversity and scale of larger peers like S&P Platts, and
Bloomberg energy. Offsetting these factors are its branding power,
leading market position, geographic diversity, and strong customer
relationships.
High recurring revenue supports revenue predictability. Wood
Mackenzie has long-tenured relationships with its customers and a
high recurring revenue base of above 90% from its contractual
relationships. A large proportion of its contracts are multiyear,
and Wood Mackenzie's services represent a small expense for its
clients, which aids with retention. Its large data base of
propriety data and its technology platform enable it to be deeply
integrated in the customers' workflow system, thereby creating a
sticky revenue base and allowing it a gross retention rate of about
94%.
Favorable industry tailwinds and an ability to shift costs to
customers will drive operating performance. S&P said, "We expect
shifts in trends toward renewable energy to drive elevated demand,
leading to revenue growth of 10% in the next two years. As a global
provider of research and data analytics, the company already has a
substantial customer base. As such, we expect organic growth to be
driven by increased usage and the proliferation of products to
existing customers. The company has been able to pass average price
increases of about 3%, which we expect to drive profit growth."
S&P said, "The stable rating outlook reflects our expectation that
Wood Mackenzie will display good organic revenue growth from
favorable industry tailwinds and business initiatives, with
adjusted EBITDA margins growing to the 40% area."
PMHC II: S&P Affirms 'B-' Issuer Credit Rating, Outlook Negative
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on PMHC
II Inc. (d/b/a Vibrantz Technologies Inc.), its 'B-' issue-level
rating on its senior secured debt, and its 'CCC+' issue-level
rating on its senior unsecured debt.
The outlook remains negative reflecting the potential for a lower
rating on the company in the next 12 months if its operating
performance continues to deteriorate such that its weighted-average
credit metrics and liquidity weaken below appropriate levels for
the current rating.
The negative outlook reflects S&P's expectation that the company's
credit metrics will remain stretched over the next few quarters.
Vibrantz's operating performance was weaker than expected in 2023
due to the weak macroeconomic environment in its key geographic
regions and its lower overall volumes stemming from prolonged
customer de-stocking. The company partially offset its volume
headwinds with higher overall selling prices that exceeded the
increases in its raw material costs across the business, with the
exception being its performance coatings segment (where its raw
material cost increases exceeded the expansion in its pricing).
Vibrantz's continued realization of cost synergies from the
combination with Ferro and Chromaflo remains a key support for its
earnings amid the challenging demand environment and we expect the
pace and magnitude of its synergy capture, as well as its ability
to expand its EBITDA margins in the 20%-25% range, will materially
influence its credit metrics in 2024. That said, we expect the
ongoing weak economic conditions in the company's key regions will
hinder the improvement in its demand and cause its metrics to
remain pressured over the near term. S&P's negative outlook
reflects these lingering risks in 2024, as well as the limited
cushion in Vibrantz's credit metrics for further underperformance
at the current rating.
The company's debt leverage will remain high but improve in the
second half of the year while its debt servicing costs continue to
burden its free cash flow generation.
S&P said, "We expect Vibrantz's S&P Global Ratings-adjusted debt to
EBITDA will be in the higher end of the 7x-8x range in 2024, which
will leave it with a limited leverage cushion at the current
rating. While we project the company will modestly increase its
earnings year over year, supported by its continued realization of
cost synergies, the intensity of the demand headwinds over the
coming quarters could pressure its leverage, which is higher than
that of similarly rated peer Potters Borrower L.P. While we expect
the company will continue to benefit from interest rate caps in
coming years, we anticipate its debt servicing costs will remain
high in 2024 and, in turn, continue to constrain its funds from
operations (FFO) to debt. At the same time, we project Vibrantz
will generate positive free operating cash flow (FOCF) in 2023 and
2024, supported by the release of its previously built-up
inventories, and maintain adequate liquidity (with sources of cash
exceeding uses by more than 1.2x). In addition, we believe the
company will remain in compliance with its financial covenant over
the next 12 months."
The company benefits from its leading market positions in niche
markets and synergistic opportunities.
Vibrantz holds leading market positions in color solutions,
functional coatings, and specialty minerals. S&P said, "Although
the company is smaller in scale than the market leaders in color
solutions, such as Sherwin-Williams Co., RPM International Inc.,
and PPG Industries Inc.(who are also more diversified), we view it
has having moderate geographic diversity because it derives about
half of its revenue from the Americas, with the remainder split
between Europe, the Middle East, and Africa (EMEA) and Asia
Pacific. While Vibrantz currently has more than 60 operational
facilities globally, it is looking to optimize its manufacturing
footprint in near future. The company has good product and
end-market diversity, low customer and supplier concentrations, and
benefits from a somewhat variable raw material cost structure.
Conversely, it has a significant exposure to cyclical end markets,
such as building and construction, oil and gas, refractory and
steel, and agriculture, which is partially offset by its exposure
to less-cyclical battery, electronics, and surface technology
markets. We expect the company will continue to work toward its
identified cost savings targets over the coming years, in areas
including headcount optimization, procurement, manufacturing
footprint rationalization, and non-headcount related sales,
general, and administrative (SG&A) expenses."
S&P said, "The outlook remains negative on Vibrantz reflects our
expectation its weighted-average S&P Global Ratings-adjusted debt
to EBITDA will remain in the higher end of the 7x-8x range over the
next 12 months. We expect the company's earnings in 2024 will
continue to benefit from the realization of targeted synergies and
the cost reduction actions that supported its EBITDA margin
expansion in 2023. At the same time, we expect the current weak
operating environment will persist over at least the next few
quarters, which will hinder Vibrantz's revenue and earnings growth
and cause its leverage to reman high. Furthermore, we believe the
company's interest coverage ratios will remain weak over the next
12 months due to its sizable interest expense following the
interest rate hikes over last couple of years. We expect Vibrantz
will maintain adequate liquidity and remain in compliance with its
financial covenant."
S&P could take a negative rating action on Vibrantz in the next 12
months if:
-- Its consolidated earnings are lower than S&P projects due to
prolonged weak volumes, pronounced weakness in its end-market
demand, or an inability to improve its EBITDA margins amid the
unfavorable economic environment in its key geographic areas;
-- The company is unable to achieve its targeted synergies on a
timely basis, execute other growth initiatives, or maintain its
margins. In such a scenario, S&P would expect Vibrantz's S&P Global
Ratings-adjusted debt to EBITDA to remain consistently above 8.5x;
-- The company generates persistently negative FOCF that
constricts its liquidity such that S&P views a financial covenant
breach on the revolving credit facility as likely over the next 12
months. The covenant would spring if Vibrantz's borrowings under
the $325 million revolving credit facility rise above 35% of the
facility's commitment. Coupled with weaker-than-expected EBITDA,
this might lead to a tight covenant cushion; or
-- The company pursues shareholder rewards or a debt exchange or
repurchase transaction that S&P views as distressed.
S&P could consider revising its outlook on Vibrantz to stable in
the next 12 months if:
-- Stronger-than-projected end market demand or a
quicker-than-expected recovery in the macroeconomic environment
support a strong rebound in the company's cyclical end markets,
resulting in an inflexion in its volumes;
-- The company continues to improve its EBITDA margins in the
20%-25% range via a combination of favorable pricing actions and
cost structure improvements such that it sustains S&P Global
Ratings-adjusted debt to EBITDA consistently in the 7x-8x range;
-- The company's cash flow generation improves, leading to a
sustained improvement in its EBITDA interest coverage;
-- The company develops a track record of stable operations
following its merger and integration with Ferro and Chromaflo in
2022; and
-- S&P is confident the company's financial policies will support
its maintenance of the aforementioned credit measures.
PRESCOTT WHISPERING: Hires Citypoint Arizona as Real Estate Broker
------------------------------------------------------------------
Prescott Whispering Rock, LLC seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Citypoint Arizona LLC as its real estate broker.
Citypoint will market and sell the Debtor's property known as 3825
and 3855 Willow Creek Road, Prescott, Arizona.
Citypoint's commission is 4 percent of the gross sales price and
the broker intends to offer compensation of 2 percent of the gross
purchase price to a buyer's broker.
Summer Beydler, broker of Citypoint, disclosed that the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Summer Beydler
Citypoint Arizona LLC
6601 E McDowell Rd
Scottsdale, AZ 85257
Phone: (480) 710-3995
About Prescott Whispering Rock, LLC
The Debtor is a Single Asset Real Estate debtor (as defined in 11
U.S.C. Section 101(51B)).
Prescott Whispering Rock, LLC in Beverly Hills CA, filed its
voluntary petition for Chapter 11 protection (Bankr. C.D. Cal. Case
No. 23-17083) on October 27, 2023, listing $10 million to $50
million in assets and $1 million to $10 million in liabilities.
Hojat Askari, MD, as managing member, signed the petition.
Judge Vincent P. Zurzolo oversees the case.
PORTILLO RONK LEGAL TEAM serve as the Debtor's legal counsel.
PROTERRA INC: Updates Other Secured Claims Pay Details
------------------------------------------------------
Proterra Inc. and Proterra Operating Company, Inc., submitted a
Third Amended Disclosure Statement for its Third Amended Joint
Chapter 11 Plan dated January 22, 2024.
The Debtors believe that the distributions under the Plan will
provide all Holders of Claims against and Interests in the Debtors
at least the same recovery on account of Allowed Claims as would a
liquidation of the Debtors' assets conducted under chapter 7 of the
Bankruptcy Code.
Furthermore, distributions under the Plan to Holders of Claims and
Interests would be made more quickly than distributions by a
chapter 7 trustee and a chapter 7 trustee would charge a
substantial fee, reducing the amount available for distribution on
account of Allowed Claims and Interests. Thus, the Debtors believe
that confirmation and consummation of the Plan is in the best
interests of all Holders of Claims and Interests.
Class 1 consists of Other Secured Claims. Except to the extent that
a holder of an Allowed Other Secured Claim agrees to a less
favorable treatment, in full and final satisfaction of such Allowed
Other Secured Claim, at the option of the Debtors in consultation
with the Second Lien Agent and the Committee, each such holder will
receive, in full and final satisfaction and discharge of such
Allowed Other Secured Claim, one of the following alternative
treatments:
* payment in full in Cash, on the later of the Effective Date
and the date that is ten Business Days after the date on which such
Other Secured Claim becomes an Allowed Other Secured Claim or, in
each case, as soon as reasonably practicable thereafter, and, if
such payment is not made on the Effective Date, from the
Distribution Trust;
* Reinstatement of its Allowed Other Secured Claim;
* return of the collateral securing such Allowed Other Secured
Claim; or
* such other treatment so as to render such Holder’s Allowed
Other Secured Claim unimpaired pursuant to section 1124 of the
Bankruptcy Code.
Like in the prior iteration of the Plan, each holder of an Allowed
General Unsecured Claim in Class 5 shall receive its Pro Rata share
of the Second Priority Distribution Trust Beneficiaries' interests
in the Distribution Trust. This Class will receive a distribution
of 15.7% to 24.8% of their allowed claims.
The transactions contemplated by the Plan shall be approved and
effective as of the Effective Date, without the need for any
further state or local regulatory approvals or approvals by any
non-Debtor parties, and without any requirement for further action
by the Debtors, their boards of directors, their stockholders, or
any other person or entity.
If a Plan Support Agreement Termination does not occur, all
distributions under the Plan will be (a) made by the Distribution
Trustee from the Distribution Trust Assets, the Distribution Trust
Expense Reserve, the Professional Compensation Escrow Account, or
the Self-Insured Reserve Account, (b) paid in full in Cash on or
before the Effective Date, by the Debtors, pursuant to the terms of
the Plan, or (c) effected through the issuance and distribution of
the New Common Stock.
On the Effective Date, the Debtors shall fund the Distribution
Trust Expense Reserve, the Professional Compensation Escrow
Account, and the Self-Insured Reserve Account in full in Cash, and
transfer the Distribution Trust Assets to the Distribution Trust.
Cash payments to be made on the Effective Date shall be funded by
(a) Cash proceeds of any Sale, and (b) Cash on hand as of the
Effective Date.
If a Plan Support Agreement Termination occurs, all distributions
under the Plan to effect the Plan Support Agreement Termination
Distribution will be (a) made by the Distribution Trustee from the
Distribution Trust Assets, the Distribution Trust Expense Reserve,
the Professional Compensation Escrow Account, or the Self-Insured
Reserve Account, or (b) paid in full in Cash on or before the
Effective Date, by the Debtors, pursuant to the terms of the Plan.
On the Effective Date, the Debtors shall fund the Distribution
Trust Expense Reserve, the Professional Compensation Escrow
Account, and the Self-Insured Reserve Account in full in Cash, and
transfer the Distribution Trust Assets to the Distribution Trust.
Cash payments to be made on the Effective Date shall be funded by
(a) Cash proceeds of any Sale, and (b) Cash on hand as of the
Effective Date.
A full-text copy of the Third Amended Disclosure Statement dated
January 22, 2024 is available at https://urlcurt.com/u?l=J6WALd
from Kurtzman Carson Consultants LLC, claims agent.
Debtors' Co-Counsel:
Pauline K. Morgan, Esq.
Andrew L. Magaziner, Esq.
Shella Borovinskaya, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: pmorgan@ycst.com
amagaziner@ycst.com
sborovinskaya@ycst.com
- and -
Paul M. Basta, Esq.
Robert A. Britton, Esq.
Michael Colarossi, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, New York 10019
Tel: (212) 373-3000
Fax: (212) 757-3990
E-mail: pbasta@paulweiss.com
rbritton@paulweiss.com
mcolarossi@paulweiss.com
About Proterra Inc.
Proterra Inc.'s business involves designing, manufacturing, and
selling electric transit buses and components, batteries, and
electric drive trains, and providing and selling related products
and services.
Proterra Inc. and Proterra Operating Company, Inc., sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead
Case No. 23-11120) on August 7, 2023. In the petition filed by
Gareth T. Joyce, chief executive officer, the Debtor reported total
assets as of June 30, 2023 amounting to $818,773,679 and total debt
as of June 30, 2023 of $609,498,207.
The Honorable Bankruptcy Judge Brendan Linehan Shannon handles the
cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP, and Paul,
Weiss, Rifkind, Wharton & Garrison LLP, as counsel; FTI Consulting,
Inc., as financial advisor; Moelis & Company, LLC, as investment
banker; and Slaughter and May as special corporate counsel.
Kurtzman Carson Consultants LLC is the claims agent.
RESTORATION HOUSE: Case Summary & One Unsecured Creditor
--------------------------------------------------------
Debtor: Restoration House, LLC
171 Greendale Lane
McDonald, TN 37353
Business Description: The Debtor is the owner of the real property
located at 171 Greendale Lane, McDonald TN
37353 valued at $1.9 million.
Chapter 11 Petition Date: January 24, 2024
Court: United States Bankruptcy Court
Eastern District of Tennessee
Case No.: 24-10164
Debtor's Counsel: Amanda M. Stofan, Esq.
FARINASH AND STOFAN
100 West ML King Blvd Ste 816
Chattanooga, TN 37402
Tel: (423) 805-3100
Fax: (423) 805-3101
Email: amanda@8053100.com
Total Assets: $1,905,100
Total Liabilities: $856,297
The petition was signed by Greg Vogel as member manager.
The Debtor listed the Internal Revenue Service Centralized
Insolvency Operation, PO Box 7346, Philadelphia, PA 19101-7346
as its sole unsecured creditor holding a claim of $0.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/7SQDLXY/Restoration_House_LLC__tnebke-24-10164__0001.0.pdf?mcid=tGE4TAMA
RICE OIL: Frederic Schwieg Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Frederic Schwieg,
Esq., at Schwieg Law, as Subchapter V trustee for Rice Oil Company,
LLC.
Mr. Schwieg 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. Schwieg declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Frederic P. Schwieg, Esq.
Schwieg Law
2705 Gibson Drive
Rocky River, OH 44116-1815
Phone: (440) 499-4506
Email: fschwieg@schwieglaw.com
About Rice Oil Company
Rice Oil Company, LLC, doing business as Rice Oil & Environmental,
offers products and services that span the following: oils and
lubricants delivery; used oil and oily water collection; and vacuum
cleaning services for oil-water separators.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-50084) on January 22,
2024, with $500,000 to $1 million in assets and $1 million to $10
million in liabilities. David K. Charlton, president, signed the
petition.
Judge Alan M. Koschik oversees the case.
Michael A. Steel, Esq., represents the Debtor as legal counsel.
RISKON INTERNATIONAL: Registers 40M Shares for Possible Resale
--------------------------------------------------------------
RiskOn International, Inc. filed with the Securities and Exchange
Commission a Form S-1 registration statement relating to the offer
and resale of up to 40,000,000 shares of common stock, par value
$0.001 per share, of the Company (f/k/a BitNile Metaverse, Inc.),
by Arena Business Solutions Global SPC II, Ltd., on behalf of and
for the account of Segregated Portfolio #3 – SPC #3.
The shares included in this prospectus consist of (i) shares of the
Company's common stock that the Company may, in its discretion,
elect to issue and sell to the Selling Stockholder, from time to
time after the date of this prospectus, pursuant to a Purchase
Agreement it entered into with the Selling Stockholder on Aug. 24,
2023, as amended by that Amendment No. 1 to Purchase Agreement,
dated Oct. 18, 2023, in which the Selling Stockholder has committed
to purchase from the Company, at its direction, up to an aggregate
of $96,993,004 of shares of common stock and (ii) an aggregate of
$2,633,669 of shares of the Company's common stock to be issued to
the Selling Stockholder as consideration for its irrevocable
commitment to purchase shares of the Company's common stock at the
Company's election in its sole discretion, from time to time after
the date of this prospectus. The Company is registering the resale
of up to 40,000,000 of common stock issuable to the Selling
Stockholder under the Purchase Agreement. The Purchase Agreement
provides that the Company has the right to direct the Selling
Stockholder to purchase up to an aggregate of $100 million of
shares of the Company's common stock, of which $3,006,996 was
previously registered, and, as consideration for the Selling
Stockholder entering into the Purchase Agreement, the Company is
required to issue to the Selling Stockholder, as a commitment fee,
a number of shares of common stock having an aggregate dollar value
equal to $4 million, of which $1,366,331 was previously
registered.
Pursuant to the Purchase Agreement, the Company previously
registered on Form S-1 under Registration No. 333-275122, the
resale of up to 25,000,000 shares of common stock issuable to the
Selling Stockholder. The Prior Registration Statement was filed
with the SEC on Oct. 20, 2023 and was declared effective by the SEC
on Oct. 30, 2023. As of Jan. 19, 2024, the Company issued and sold
20,538,845 shares of common stock to the Selling Stockholder
pursuant to the Purchase Agreement, for total gross proceeds of
$3,006,996, and the Company issued 4,461,155 shares of common stock
to the Selling Stockholder as consideration for its irrevocable
commitment to purchase shares of the Company's common stock at its
election in its sole discretion, which equated to a value of
$1,366,331. As of Jan. 19, 2024, $96,993,004 worth of shares of
common stock remains available for future sales under the Purchase
Agreement.
The Company is not selling any shares of common stock being offered
by this prospectus and will not receive any of the proceeds from
the sale of such shares by the Selling Stockholder. However, the
Company may receive up to $100 million in aggregate gross proceeds
from sales of its common stock to the Selling Stockholder,
inclusive of sales previously made as disclosed above, in its sole
and absolute discretion, elect to make, from time to time over the
approximately 36-month period commencing on the date of the
Purchase Agreement, provided that this registration statement, of
which this prospectus forms a part, and any other registration
statement the Company may file from time to time, covering the
resale by the Selling Stockholder of the shares of the Company's
common stock purchased from the Company by the Selling Stockholder
pursuant to the Purchase Agreement is declared effective by the SEC
and remains effective, and the other conditions set forth in the
Purchase Agreement are satisfied.
A full-text copy of the Registration Statement is available for
free at:
https://www.sec.gov/Archives/edgar/data/1437491/000121465924001131/p120240s1.htm
About RiskOn International
Founded in 2011, RiskOn International, Inc. (formerly known as
BitNile Metaverse, Inc.) owns 100% of BNC, including the
BitNile.com metaverse platform. The Platform, which went live to
the public on March 1, 2023, allows users to engage with a new
social networking community and purchase both digital and physical
products while playing 3D immersive games. In addition to BNC, the
Company also owns two non-core subsidiaries: approximately 66% of
Wolf Energy Services Inc. (OTCQB: WOEN) indirectly and
approximately 89% of Agora Digital Holdings, Inc. directly. RiskOn
also owns approximately 70% of White River Energy Corp (OTCQB:
WTRV).
RiskOn reported a net loss of $87.36 million on zero revenue for
the year ended March 31, 2023, compared to a net loss of $10.55
million on $27,182 of revenues for the year ended March 31, 2022.
As of Sept. 30, 2023, the Company had $16.80 million in total
assets, $35.86 million in total liabilities, and a total
shareholders' deficit of $19.05 million.
In its Quarterly Report for the three months ended Sept. 30, 2023,
RiskOn said there is substantial doubt about its ability to
continue as a going concern. The Company believes that the current
cash on hand is not sufficient to conduct planned operations for
one year from the issuance of the condensed consolidated financial
statements, and it needs to raise capital to support its
operations.
RITE AID: Investors Say Chapter 11 Stay Does Not Apply to Execs
---------------------------------------------------------------
Emily Lever of Law360 reports that Rite Aid shareholders urged a
Pennsylvania federal court to not pause their class claims alleging
company executives made misleading statements about the pharmacy
retailer's opioid-related liabilities, asserting that the
individuals named in the lawsuit are not covered by an automatic
stay in the firm's ongoing Chapter 11 case.
About Rite Aid Corp.
Rite Aid -- http://www.riteaid.com/-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15, 2023. In
the petition signed by Jeffrey S. Stein, chief executive officer
and chief restructuring officer, Rite Aid disclosed $7,650,418,000
in total assets and $8,597,866,000 in total liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, and Alvarez & Marsal North America, LLC, as financial, tax
and restructuring advisor. Kroll Restructuring Administration is
the claims and noticing agent.
RITE AID: Wants to Market 3 Free-Owned Properties, 8 Store Leases
-----------------------------------------------------------------
Lara Sanli of Bloomberg Law reports that Rite Aid's real estate
adviser, A&G Real Estate Partners, plans to offer eight additional
Rite Aid store leases and three new fee-owned properties, pending
bankruptcy court approval.
Total of 55 Rite Aid leases and 24 fee-owned properties now
available across the country in connection with drugstore chain’s
financial restructuring.
From October 17, 2023, A&G will sell some leases due to Rite Aid's
restructuring.
About Rite Aid Corp.
Rite Aid -- http://www.riteaid.com/-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15, 2023. In
the petition signed by Jeffrey S. Stein, chief executive officer
and chief restructuring officer, Rite Aid disclosed $7,650,418,000
in total assets and $8,597,866,000 in total liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, and Alvarez & Marsal North America, LLC, as financial, tax
and restructuring advisor. Kroll Restructuring Administration is
the claims and noticing agent.
SAL ATX: Amends Magnolia BridgeCo Secured Claim Pay Details
-----------------------------------------------------------
SAL ATX, LLC submitted an Amended Disclosure Statement for the
Amended Plan of Reorganization.
The Debtor was formed on March 31, 2022 for the purpose of
purchasing and developing real estate located at 903 Edgecliff
Terrace, Austin, TX 78704.
The Plan which this Disclosure Statement accompanies is being
promulgated by the Debtor. It has attempted to provide the maximum
recovery to each Class of Claims in light of the assets and
anticipated funds available for distribution to Creditors. The
Debtor believes that the Plan permits the maximum possible recovery
for all Classes of Claims while facilitating the reorganization of
the Debtor.
Debtor intends to develop its property to construct a three-story
luxury home and sell such property. Plans for the proposed
construction are attached. The funds to develop the property will
come from NIA ATX, LLC, another company owned by Ali Choudhri. The
Debtor estimates that permitting will take 12 to 18 months, that
teardown and construction of the new structure will take 12 to 18
months and that the property could be sold within three to six
months once construction is completed. The Debtor will begin
seeking a sale or refinance of the property once permitting is
completed.
The Plan proposes to redevelop the property with a three-story
luxury home and sell the property. NIA ATX, LLC will contribute
funds to pay the ad valorem taxes and make interest payments to
Magnolia during the construction and sale process and fund
construction. The costs to make plan payments prior to sale of the
home will be approximately $600,000.00 and the construction costs
will be approximately $900,000.00. The Magnolia claim will be paid
from sale of the new home. The amounts listed for payments to
Magnolia under the plan are only the interim payments to be made
prior sale of the property.
Class 4 consists of the Secured Claim of Magnolia BridgeCo, LLC.
Magnolia has filed a proof of claim in the amount of $1,587,039.67.
Class 4 shall retain its liens. Class 4 is an oversecured claim and
is entitled to recover post-petition interest at the non-default
contract rate as well as reasonable fees and expenses as provided
in the contract. All post-petition interest accrued as well as any
reasonable fees and expenses allowed by the Court shall be added to
the amount of the Allowed Claim.
Class 4 shall receive payment of its Allowed Claim as of the
Effective Date in 41 equal monthly installments calculated based
upon a Market Rate of Interest and a thirty-year amortization with
the remaining balance of the Allowed Claim being fully due and
payable 42 months after the Effective Date; provided, however, that
the balance of the Allowed Claim shall become fully due and payable
upon the closing of a sale of the Debtor's real property. Assuming
a claim of $1,587,039.67, an interest rate of 10.0% and a
thirty-year amortization, the monthly payments will be $13,225.33.
At the conclusion of forty-two months, the balloon payment will be
$1,551,906.74. Class 4 is impaired.
Like in the prior iteration of the Plan, Class 6 Allowed Claims of
Unsecured Creditors shall receive payment of their Allowed Claims
90 days after the Effective Date or on the date on which the claim
becomes an Allowed Claim whichever is later.
The Plan depends upon NIA ATX, LLC being able to fund the
development costs and other payments under the Plan. NIA will
provide proof of its ability to contribute the required funds at
the confirmation hearing. The project is expected to last up to
forty-two months but could be sold or refinanced sooner depending
upon market conditions.
A full-text copy of the Amended Disclosure Statement dated January
21, 2024 is available at https://urlcurt.com/u?l=Qp6Hpt from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Stephen Sather, Esq.
BARRON & NEWBURGER, PC
7320 N. MoPac Expy, Suite 400
Austin, TX 78731
Tel: (512) 476-9103
Fax: (512) 279-0310
Email: gsiemankowski@bn-lawyers.com
About SAL ATX
SAL ATX is a Single Asset Real Estate debtor (as defined in 11
U.S.C. Section 101(51B)).
SAL ATX LLC filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10736) on
Sep. 5, 2023. The petition was signed by Drew Dennet as manager. At
the time of filing, the Debtor estimated $1 million to $10 million
in both assets and liabilities.
Judge Shad Robinson presides over the case.
James Q. Pope, Esq. at THE POPE LAW FIRM serves as the Debtor's
counsel.
SBG BURGER: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of SBG Burger
Opco, LLC and its affiliates.
The committee members are:
1. AB SR Tampa, LLC
Attn: Justin Luna, Esq.
Latham, Luna, Eden & Beaudine, LLP
201 S. Orange Ave, Suite 1400,
Orlando, FL 32801
Phone: (407) 481-5800
Email: jluna@lathamluna.com
2. AL QSR RE Owner, LLC
Attn: Esther McKean, Esq.
Akerman LLP
420 S. Orange Ave., Ste. 1200
Orlando, FL 32801
Phone: (407) 423-4000
Email: esther.mckean@akerman.com
3. EJT Enterprises, LLC
Attn: Andrew S. Ballentine, Esq.
Cornerstone Law Firm, PLLC
1511 E. State Road 434, Suite 3049
Winter Springs, FL 32708
Phone: (407) 986-0529
Email: aballentine@mycornerstonelaw.com
4. NCR Voyix Corporation
Attn: Todd Atkinson, Esq.
Womble Bond Dickinson
1313 North Market Street, Suite 1200
Wilmington, DA 19801
Phone: (770) 212-5034
Email: todd.atkinson@wbd-us.com
5. K & M of South Florida, Inc.
Attn: L. William Porter III, Esq.
Law Offices of L. William Porter III
2014 Edgewater Dr, Suite 119
Orlando, FL 32804
Phone: (407) 603-5769
Email: bill@billporterlaw.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About SBG Burger Opco, LLC
SBG Burger Opco, LLC and affiliates operate 73 Wendy's, 6
McAlister's Deli, 15 Subway, 5 Fuzzy's Taco Shop and 22 CiCi's
Pizza restaurants across Alabama, Florida, Illinois, Missouri,
Louisiana, Wisconsin and Texas. The Debtors sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Lead Case
No. 23-04797) on November 14, 2023.
The Debtors are Starboard Group of Space Coast, LLC; Starboard
Group of Southeast Florida, LLC; Starboard Group of Tampa, LLC;
Starboard Group of Tampa II, LLC; Starboard Group of Alabama, LLC;
7 S & M Foods, LLC; 9 S & M Foods, LLC; 10 S & M Foods, LLC;
Starboard with Cheese, LLC; and SBG Burger Opco, LLC.
In the petition signed by Andrew Levy, manager, lead Debtor SBG
Burger Opco, LLC disclosed up to $50,000 in both assets and
liabilities. SBG Alabama listed $1 billion to $10 billion in
estimated assets and $1 billion to $10 billion in estimated
liabilities. SBG Spacecoast listed $10 million to $50 million in
estimated assets and $1 million to $10 million in estimated
liabilities. SBG Cheese listed $1 million to $10 million in
estimated assets and $1 million to $10 million in estimated
liabilities. SBG Tampa listed $1 million to $10 million in
estimated assets and $1 million to $10 million in estimated
liabilities. SBG SE Florida listed $1 million to $10 million in
estimated assets and $1 million to $10 million in estimated
liabilities.
Judge Tiffany P. Geyer oversees the case.
Scott A. Underwood, Esq., at Underwood Murray, PA, is the Debtor's
legal counsel.
SDPBC ACQUISITION: To Auction Assets on Jan. 29
-----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
is set to hold a hearing on Jan. 29 to consider SDPBC Acquisition,
LP's motion to sell its assets through an auction.
The assets up for sale include equipment and machine used to
operate SDPBC's manufacturing business.
SDPBC said it has accepted offers from Advanced Print Technologies,
LLC and four other buyers who will serve as stalking horse bidders
at the auction.
The other buyers are K Flex de Mexico S de RL de CV, Active Apparel
Inc., TJ Box S de RL de CV and Jorge Ochoa.
Advanced Print Technologies offered to buy the bulk of the assets
for $755,000. In the event it is not selected as the winning
bidder, the company will be paid a breakup fee of $10,000 or
approximately 1.3 percent of the sale price.
The sale to the proposed buyers is expected to yield $790,800.
The sale is subject to overbids and any party who wants to submit
an overbid may do so at the hearing, according to SDPBC's attorney,
Kit Gardner, Esq., at the Law Offices of Kit J. Gardner.
"Because the sale of the property is subject to overbids, [SDPBC]
will be asking the court to treat the hearing as an auction of the
property," Mr. Gardner said in a motion filed in court.
SDPBC will use the proceeds from the sale to pay creditors,
including Flagstar Financial, LLC, as assignee of Liberty Capital
Group Inc., which is owed $216,765.38.
About SDPBC Acquisition
SDPBC Acquisition, LP provides optimized design and manufacturing
of retail and specialty packaging. It is based in San Diego,
Calif.
SDPBC filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Calif. Case No. 23-03065) on Oct. 5,
2023, with $1 million to $10 million in both assets and
liabilities. Jeanne Goddard serves as Subchapter V trustee.
Judge Christopher B. Latham oversees the case.
Kit James Gardner, Esq., at the Law Offices of Kit J. Gardner is
the Debtor's bankruptcy counsel.
SHIFT TECHNOLOGIES: Court OKs Bid Rules for Sale of Assets
----------------------------------------------------------
Shift Technologies, Inc. and its affiliates received approval from
the U.S. Bankruptcy Court for the Northern District of California
to solicit bids for their assets.
Under the court-approved bid procedures, the deadline for potential
buyers to place their bids on the assets is on Feb. 1. Potential
buyers are required to provide a deposit, which is at least 10% of
the purchase price to be paid.
From the pool of these bids, one or more stalking horse bidders
will be selected.
In the event it is not selected as the winning bidder at the
auction on Feb. 5, the stalking horse bidder will receive a
break-up fee of no more than 3% of the purchase price and expense
reimbursement of up to $50,000.
The sale of the companies' assets to the winning bidder will be
considered at a court hearing set for Feb. 22, at 10:00 a.m.
Objections to the sale are due by Feb. 15.
The assets contemplated to be sold include the companies' interests
in their brands and trademarks, domain names, customer data or
transaction data, if any, patents, proprietary software, and other
similar assets.
The companies will use the proceeds from the sale to, among other
things, pay all priority and administrative claims and provide for
a small distribution to unsecured creditors.
About Shift Technologies
Shift Technologies, Inc. is a consumer-centric omnichannel used car
retailer. It operates the website www.shift.com and two locations
in Oakland and Pomona, California.
Shift Technologies and its affiliates filed Chapter 11 petitions
(Bankr. N.D. Calif. Lead Case No. 23-30687) on Oct. 9, 2023. In the
petitions signed by its chief financial officer, Jason Curtis,
Shift Technologies disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Hannah L. Blumenstiel oversees the cases.
The Debtors tapped Thomas B. Rupp, Esq., at Keller Benvenutti Kim
LLP as legal counsel; AlixPartners, LLC as financial advisor; and
Omni Agent Solutions, Inc. as claims and noticing agent.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Michael Sweet, Esq., at Fox Rothschild,
LLP.
SHOWFIELDS INC: Closes Stores for Good in Chapter 11
----------------------------------------------------
Kelly Kovack of Beauty Matters reports that Showfields, the
self-described "most interesting store in the world," is closing
for good after its plan to dig out of bankruptcy, precipitated by
the pandemic and the combination of declining sales and mounting
debt fails, failed to come to pass. The retailer shuttered its
remaining locations in Brooklyn, Washington, DC, and Los Angeles
over the weekend. The retailer joins companies across sectors in
the US that collapsed at record rates in 2023.
At the time of the filing, CEO and co-founder Tal Nathanel said in
a statement, "It pains me to leave our NoHo and Miami stores but we
see great things ahead. While it took us a few years to fine-tune,
today we know the right economic structure for new locations, as we
have shown in our newest stores. We remain dedicated to our mission
of redefining the way people discover and experience retail."
Nathanel attributed many of the retailer's challenges to the fact
that the company signed leases for its first two locations before
COVID that proved too expensive post-pandemic. "That left us paying
unsustainable rent, and therefore leaving us vulnerable and barely
over water in other parts of the business that were actually
healthy," he explained.
The stores in Miami and Manhattan were closed in October when the
business announced it had filed for bankruptcy and lined up
financing from existing investors to restructure through a
subchapter of the Chapter 11 process. The Small Business
Reorganization Act, Subchapter V, a form of Chapter 11 bankruptcy,
was devised during the COVID-19 era to help small businesses keep
operating, reorganize, and maintain control of their finances
without creditors taking over. According to the court filing,
Showfields had a little over $3,000 in cash on hand when it filed
on October 6 and owes between $1 and $10 million.
The plan hit a snag at the end of the year when landlords had an
issue with its bankruptcy financing. The Brooklyn landlord filed an
objection on December 5,2023 to the final approval of its
debtor-in-possession financing "to be provided by an entity
controlled by one or more insiders" at Showfields. A group of
investors cited a similar concern in an objection filed at the end
of November. The DIP lender is listed as Showfields Investment LLC,
with the loan agreement between the lender and Showfields for up to
$2.5 million.
A company-wide memo confirming the closures that was shared with
Retail Dive and posted on X by Jeanna Liu, the founder of Cowbell
Plant Co., told vendors that there was no update on the bankruptcy
proceedings and advised them on the potential to file claims as
creditors. They also communicated an inability to cover
return-to-vendor shipping costs.
The Showfields email also said, "While we successfully built custom
experiences for over 1,000 brands and welcomed over a million
visitors, the business model of the flagship store has proved
challenging."
Backed by $9 million in seed funding led by Hanaco Ventures, with
participation from Swan & Legend Venture Partners, Rainfall
Ventures, Communitas Capital, and IMAX CEO Richard Gelfond,
Showfields opened its first 14,000-square-foot flagship in New York
City’s NoHo neighborhood in 2019.
The concept was launched by a trio of visionary founders -- Tal
Nathanel, real estate developer Amir Zwickel, and Katie Hunt, a
marketer and co-founder of The Fund venture capital firm -- with a
disruptive idea: talking a big game and setting a very high bar for
themselves.
Described as the "most interesting store in the world," Showfields
set out to reinvent the staid department store model, creating an
interactive space that took cues from art museums and immersive
theater performances and focusing on everything that e-commerce
cannot do well—enabling discovery, trial, and using all five
senses to inform a purchasing decision.
The lifestyle discovery store featured rotating, themed curations
of mission-driven products, art, and events to make the retail
experience more interactive and engaging. The merchandising
assortment flipped every six months and was built around wellness,
home, food and beverage, beauty, ready-to-wear, accessories, and
tech brands that were not widely distributed. The products were
displayed amid unconventional decor, oversized sculptures and
artwork. Showfields also reinvented the traditional wholesale
model predicated on purchasing inventory. Their model charged a fee
based on the scope of the presentation to merchandise a brand's
product in the store.
In March 2022, Showfields raised $20 million with Hanco Ventures,
Swan and Legend Ventures, MUFG Capital, and others to fuel
expansion. The concept rolled out to Miami, Washington, DC,
Brooklyn, and a pop-up in Los Angeles.
News that Showfields would be unable to make it through to the
other side of bankruptcy is a blow to retail innovation and
start-up consumer brands looking for distribution partners that
provide an accessible path to physical retail. While customers
went to brick-and-mortar stores in droves post-pandemic, squashing
predictions that shopping would continue to move online, the
department store model that Showfields ambitiously set out to
disrupt in 2019 remains relatively unchanged and continues to
struggle for relevance in the US market.
Showfields' struggles and unfortunate demise are reminders of the
investment required to create meaningful disruption in a landscape
owned by incumbents as well as the volatility of the retail sector.
For a moment, Showfields provided a glimmer of hope for what a
department store could be.
About Showfields, Inc
Showfields Inc. filed a Chapter 11 petition (Bankr. E.D.N.Y. Case
No. 23-43643) on Oct. 6, 2023, with $8,117 in assets and $2,725,810
in liabilities. Tal Zvi Nathanel, chief executive officer, signed
the petition.
Judge Jil Mazer-Marino oversees the case.
Rachel S. Blumenfeld, Esq., at the Law Office of Rachel S.
Blumenfeld, PLLC, is the Debtor's bankruptcy counsel.
SOLENIS HOLDING: S&P Assigns 'B-' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating and
stable outlook to Solenis Holding Ltd., the parent company of
Olympus Water Holdings IV L.P. (B-/Stable/--) following the
company's recent decision to publish financials at current parent
Solenis Holding Ltd. S&P will now publish rating reports at
Solenis.
There is no change to the company's business, financials, or
management following this change in filing entity. Consequently,
S&P's rating considerations--including its view of the business
risk profile, financial risk profile, and liquidity--remain
unchanged.
S&P said, "Our stable outlook on Solenis reflects our expectation
that debt leverage will be appropriate for the rating over the next
12 months.
"We anticipate Solenis' S&P Global Ratings-adjusted debt to EBITDA
will be 6.0x-7.0x on a weighted average basis.
"While the timing of the close of the Diversey acquisition elevates
the leverage level for 2023, we anticipate S&P Global
Ratings-adjusted debt to EBITDA for 2024 on an annual basis will
decline to between 7.0x-8.0x. We believe company's ability to
deleverage will primarily depend on the level of successful
integration of the Diversey business, which would help expand
EBITDA due to portfolio rationalization and cost synergies while it
navigates an inflationary raw materials market. We expect free cash
flow generation will be deployed toward integrating the businesses
and investing in expansion of facilities.
"Our view of Solenis' business risk is identical to that of
Olympus."
The acquisition of Diversey provides the company the opportunity to
cross-sell products globally across hygiene and infection
prevention solutions, as well as water treatment solutions.
However, it faces structural challenges in certain segments of its
pulp and paper business and an increased exposure to volatile
hydrocarbon prices.
An additional consideration in S&P's ratings is the combination of
high leverage and potential integration risks, which are inherent
in a transformative acquisition.
The company's propensity toward large scale mergers and
acquisitions to grow its business makes this a key risk for the
company; the risk is greater than for companies at a similar rating
level.
S&P said, "The stable outlook reflects our expectation that the
transaction will be leverage neutral, with credit metrics remaining
in line with the 'B-' rating. We project stable to slightly
improving credit metrics over the next few years as the company
integrates Diversey's operations into its business and realizes
modest synergies from the acquisition. Under our base-case
forecast, we assume S&P Global Ratings-adjusted weighted average
debt to EBITDA remains 6.0x-7.0x. Our outlook also reflects
Solenis' average EBITDA margins, its ability to pass through price
increases, and our forecast for relatively stable demand across its
end markets."
S&P could lower its ratings on Solenis over the next year if:
-- Its leverage begins to trend materially higher, or its
liquidity materially weakens. S&P believes such a scenario could
occur if end-market demand weakens, reducing volumes, or if the
company faces unexpected challenges integrating Diversey's
business, resulting in a slower-than-anticipated realization of
synergies and cost-reduction measures;
-- The company pursues additional debt-financed acquisitions or
shareholder rewards that increase leverage materially; or
-- Solenis' leverage approaches double digits, S&P believes there
is an increased likelihood of a covenant breach, or the company's
liquidity weakens materially.
S&P said, "We could consider raising our rating on Solenis if its
operating performance exceeds our expectations such that on a pro
forma basis, weighted-average S&P Global Ratings-adjusted debt to
EBITDA falls below 6.5x on a sustained basis, and the company
successfully integrates Diversey while realizing anticipated cost
synergies. This could occur if global growth and end-market demand,
particularly in the company's industrial water business, is
stronger than we currently anticipate, or if the company
successfully executes on its cost-reduction measures such that
profitability improves, resulting in debt to EBITDA below 6.5x
along with sustained free cash flow generation.
"We would also expect Solenis's liquidity sources to remain 1.2x
its uses. Key considerations in any potential positive rating
action include our assessment of the company's and financial
sponsor's commitment to financial policies and leverage that would
allow it to sustain improved credit measures."
SOUTH COAST: Taps Sussman Shank as Bankruptcy Counsel
-----------------------------------------------------
South Coast Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Oregon to employ Christopher N. Coyle,
Esq. and Douglas R. Ricks, Esq. of Sussman Shank LLP as its
counsel.
The Court granted the application to employ the lawyers of Vanden
Bos & Chapman, LLP as its counsel on Oct. 16, 2023. The lawyers of
Vanden Bos, Christopher N. Coyle and Douglas R. Ricks, joined the
firm of Sussman Shank LLP on Jan. 1, 2024. The application is made
to continue the provision of legal services on behalf of the Debtor
by the attorneys previously appearing this case.
The lawyers will render these services:
(a) provide the Debtor with advice on its duties and
responsibilities as a debtor-in-possession,
(b) institute such adversary proceedings as are necessary in
the case,
(c) represent the Debtor generally in the proceedings and
propose on behalf of the Debtor as a debtor-in-possession necessary
applications, answers, orders, plans, reports, statements, and
other legal papers, and
(d) perform all other legal services for a
debtor-in-possession or to employ an attorney for such professional
services.
Mr. Coyle, as an attorney Vanden Bos & Chapman, received a retainer
on 09/06/23 of $5,020 from Debtor and $5,020 on 09/07/23, 2023 from
the Debtor. From that retainer ($10,040) applicant was paid $8,262
for prepetition fees and reimbursement of fees in the amounts of
$1,738 (filing fee) and $40 (wire fees).
Mr. Coyle disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The attorneys can be reached through:
Douglas R. Ricks, Esq.
Christopher N. Coyle, Esq.
SUSSMAN SHANK, LLP
1000 SW Broadway, Suite 1400
Portland, OR 97205-3089
Phone: (503) 227-1111
About South Coast Holdings
South Coast Holdings, LLC filed Chapter 11 petition (Bankr. D. Ore.
Case No. 23-61635) on Sept. 11, 2023, with $500,000 in assets and
up to $1 million in liabilities. Dianne Schofield, member, signed
the petition.
Judge Thomas M. Renn oversees the case.
Douglas R. Ricks, Esq., at Vanden Bos & Chapman, LLP serves as the
Debtor's legal counsel.
SPIRIT AIRLINES: Jetblue Airways Deal Blocked on Antitrust Cause
----------------------------------------------------------------
Madlin Mekelburg of Bloomberg News reports that a federal judge
blocked JetBlue Airways Corp.'s $3.8 billion acquisition of Spirit
Airlines Inc., saying the combination would stifle competition and
raise fares for consumers.
US District Judge William G. Young sided with the federal
government and said the merger would harm cost-conscious travelers
by eliminating the nation's dominant deep-fare discount airline and
drive up prices across the industry.
"If JetBlue were permitted to gobble up Spirit -- at least as
proposed -- it would eliminate one of the airline industry's few
primary competitors that provides unique innovation and price
discipline," Young wrote Tuesday. "Worse yet, the merger would
likely incentivize JetBlue further to abandon its roots as a
maverick, low-cost carrier."
The ruling follows a closely watched trial in November 2023, where
lawyers for the government argued that the merger would eliminate a
key incentive for bigger airlines to offer budget-friendly fares.
It represents a major win for the Biden administration's antitrust
enforcers, who have taken a more aggressive approach to mergers and
are currently reviewing Alaska Air Group Inc.'s proposed $1.9
billion acquisition of Hawaiian Holdings Inc.
Spirit's shares plunged 47% Tuesday, January 16, 2023, in New York,
the biggest decline since the stock began trading more than a
decade ago. JetBlue climbed 4.9%.
JetBlue and Spirit contended that consolidation is the only way
smaller airlines can effectively compete with the dominant
carriers. In a joint statement, the companies said they "are
evaluating our next steps as part of the legal process."
The companies can either appeal the ruling or abandon the deal,
though challenging the judge's decision would be a longshot,
especially with the merger agreement set to expire in six months.
Strategy Rebuffed
Tuesday's ruling was a major rebuff to JetBlue's growth strategy
under Chief Executive Officer Robin Hayes, who surprised investors
last week with his decision to step down on February 12, 2024.
Joanna Geraghty, the airline's president, will take over the top
job. Hayes said such an acquisition was JetBlue's only way to
quickly grow large enough to affect pricing by industry leaders.
It's the second time in less than a year that JetBlue has lost a
federal antitrust challenge. Its Northeast Alliance with American
Airlines Group Inc. was ruled illegal in May by a separate federal
judge, who ordered the partnership dismantled. American is
appealing the ruling. The carriers created the venture to compete
more effectively against United and Delta Air Lines Inc. on routes
to the New York City area and Boston.
Under the terms of the deal with Spirit, JetBlue will need to pay
$470 million to the rival carrier and its shareholders if the
merger isn't completed for antitrust reasons.
JetBlue and Spirit could appeal Young's decision to the First US
Circuit Court of Appeals in Boston. The final outcome could reshape
the competitive landscape for low-cost carriers in the US. The
agreement is set to expire in July.
"We continue to believe that our combination is the best
opportunity to increase much needed competition and choice by
bringing low fares and great service to more customers in more
markets while enhancing our ability to compete with the dominant,"
JetBlue and Spirit said in their statement.
However, an appeal would be "an uphill climb" for JetBlue and
Spirit given the way the judge interpreted the evidence in the
case, and because there may not be enough time before the merger
agreement expires, said Jennifer Rie, a senior analyst with
Bloomberg Intelligence. "It would be very difficult to win this."
The ruling also could spell trouble for the proposed Alaska
Air-Hawaiian Holdings deal. Hawaiian shares dropped almost 2% Jan.
16 to close at $13.47, 25% below Alaska's $18-per-share cash offer.
The widening gap indicates traders are increasingly concerned the
deal will run into antitrust challenges.
At trial, JetBlue executives said the company planned to eliminate
Spirit's low-fare business model and convert the carrier's aircraft
interiors to match JetBlue's layout, reducing the number of seats
per plane by 10% to 15%.
Young said that would result in substantial harm to cost-conscious
travelers who rely on Spirit's low fares — and to passengers on
other airlines, which have been forced to offer lower fare options
to compete with Spirit.
"Many such travelers would not be able to fly with higher-priced
fares," Young said. "If the proposed acquisition proceeds, these
consumer benefits would not only disappear from Spirit's existing
routes, but also not reach consumers in markets in which Spirit
planned to enter in the foreseeable future."
To assuage antitrust concerns, JetBlue pledged to sell several
airport gates and flying slots owned by Spirit to low-cost carriers
Frontier Group Holdings Inc. and Allegiant Airlines. Such assets
are notoriously difficult to acquire at high-traffic airports.
Industry Constraints
Young agreed with lawyers for the government that the proposed
divestitures wouldn't go far enough to replace the competition that
would be lost, considering the multitude of issues facing the
industry such as manufacturing delays, staffing issues and engine
problems.
"Constraints on airline growth suggest that although other airlines
are likely to enter markets left by Spirit and might even enter
some within two to three years, such entry might not be sufficient
to replace Spirit's current presence in the industry," the judge
wrote.
The federal government sued to block the deal in March as part of a
crackdown on consolidation in the airline industry. Decades of
mergers have resulted in four airlines controlling 80% of the
market for US ticket revenue: United Airlines Holdings Inc.,
American, Delta and Southwest Airlines Co.
JetBlue had considered a deal with Spirit since 2017, according to
testimony at trial, but the company made an all-cash offer last
year after Frontier made a bid to acquire Spirit.
Internal documents presented at trial showed leaders at Spirit
questioned the sincerity of JetBlue's bid and whether the true
motivation was to break up Spirit's pending deal with Frontier.
Executives at Spirit had also raised concerns that a merger with
JetBlue would face strict scrutiny from antitrust regulators.
Young declined to permanently bar JetBlue and Spirit from pursuing
a deal, writing in his opinion that such a move would interfere
with the free market.
The airlines are welcome to "take another run at a merger at any
time," the judge wrote. "The courthouse doors remain open should
the Defendant Airlines decide to try again, and the Government then
wishes to prevent such an attempt."
The case is US v. JetBlue, 23-cv-10511, US District Court, District
of Massachusetts (Boston).
(Updates share decline, analyst comment and outlook for Alaska Air
bid for Hawaiian Holdings.)
About JetBlue Airways Corp.
JetBlue Airways Corporation provides air transportation services
across the United States, the Caribbean, Latin America, Canada, and
Europe.
SREE AKSHAR: Case Summary & One Unsecured Creditor
--------------------------------------------------
Debtor: Sree Akshar, Inc.
d/b/a Four Points by Sheraton
211 SE Walton Blvd.
Bentonville, AR 72712
Business Description: Sree Akshar is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: January 24, 2024
Court: United States Bankruptcy Court
Western District of Arkansas
Case No.: 24-70105
Judge: Hon. Bianca M. Rucker
Debtor's Counsel: Stanley V. Bond, Esq.
BOND LAW OFFICE
525 S. School Ave.
Suite 100
Fayetteville, AR 72701
Tel: 479-444-0255
Fax: 479-235-2827
Email: attybond@me.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Kunal Mody as president.
The Debtor listed US Small Business Admin located at 2120
Riverfront Drive, Suite 100, Little Rock, AR 72202 as its sole
unsecured creditor holding a claim of $676,155.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/URJAR2Q/Sree_Akshar_Inc__arwbke-24-70105__0001.0.pdf?mcid=tGE4TAMA
STAGHORN OUTDOORS: Taps Seigfreid Bingham as Bankruptcy Counsel
---------------------------------------------------------------
Staghorn Outdoors, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Missouri to employ Seigfreid
Bingham P.C. as its counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor in the continued management and operation of its business
and properties;
b. attend meetings and negotiate with representatives of
creditors and other parties involved in the Debtor's Chapter 11
case on matters affecting the Debtor's business operations, claims
by and against the estate, and issues relating to the
reorganization;
c. prepare legal documents;
d. take all necessary action to protect and preserve Debtor's
estate including the prosecution of actions on its behalf, the
defense of any actions commenced against Debtor or the estate,
negotiations concerning litigation in which the Debtor may be
involved and objections to claims filed against the estate;
e. attend all hearings and advocate Debtor's positions on the
applicable issues, negotiate and prosecute on the Debtor's behalf,
contracts, lease agreements and all necessary documents;
f. formulate, negotiate, and seek approval of any disclosure
statements and plans of reorganization;
g. handle all appeals of the Debtor and appear before any
appellate courts;
h. address all requirements of the Office of the United States
Trustee in this proceeding; and
i. perform all other necessary legal services.
The firm will be paid at these rates:
Jonathan A. Margolies $515 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Jonathan Margolies, Esq., a partner at Seigfreid Bingham, disclosed
in a court filing that his firm is a "disinterested person"
pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jonathan A. Margolies, Esq.
SEIGFREID BINGHAM, P.C.
2323 Grand Boulevard, Suite 1000
Kansas City, MO 64108
Telephone: (816) 421-4460
Facsimile: (816) 474-3447
Email: jmargolies@sb-kc.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.
STIMWAVE TECHNOLOGIES: Trustee Wants Founders Sanctioned
--------------------------------------------------------
Jeff Montgomery of Law360 reports that citing a yearslong string of
"frivolous" and obstructive filings, the liquidating trustee in
pain management device venture Stimwave Technologies' Chapter 11
has petitioned for court prescreening and preapproval of
nonattorney court filings by founder Laura Perryman, two family
members or their affiliates.
About Stimwave
Stimwave Technologies Incorporated and Stimwave LLC manufacture,
distribute, and provide ongoing support for implantable, minimally
invasive neurostimulators, which are used as a treatment for
chronic intractable pain.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 22-10541) on June 15, 2022. In
the petition signed by Aure Bruneau, as manager, the Debtors
disclosed up to $100 million in assets and up to $50 million in
liabilities.
Young Conaway Stargatt and Taylor, LLP and Gibson, Dunn and
Crutcher LLP serve as the Debtors' legal counsel.
The Debtors also tapped Honigman LLP and Jones Day as special
counsel; Riverson RTS, LLC as financial advisor; and GLC Advisors
and Co., LLC and GLCA Securities, LLC as investment bankers. Kroll
Restructuring Administration is the Debtors' administrative advisor
and notice, claims, solicitation and balloting agent.
On July 6, 2022, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in these cases. Culhane
Meadows, PLLC and Province, LLC serve as the committee's legal
counsel and financial advisor, respectively.
SUPOR PROPERTIES: Plan Contemplates Four Scenarios
--------------------------------------------------
Supor Properties Bergen Avenue LLC ("SPBA" or "Debtor") and Joseph
Supor, III (the "Plan Proponents") filed with the U.S. Bankruptcy
Court for the District of New Jersey a Combined Disclosure
Statement and Plan of Reorganization or Liquidation for the Debtor
dated January 21, 2024.
Debtor is the sole owner of the Debtor Property. The Debtor
Property is a 10.86-acre site (7.63-acres usable) improved with
two, one-story industrial buildings containing a total of 66,682
square feet of rentable area.
Based upon recent discussions with appraisers and his knowledge of
the commercial real estate market in Northern New Jersey, Mr. Supor
believes that the current fair market value of the Debtor Property
is greater than $40,000,000.
The Debtor Property is encumbered by a Mortgage, Assignment of
Leases and Rents, Security Agreement, and Fixture Filing dated
August 4, 2021 (the "Mortgage"), originally held by BEB Credit
Group. The Mortgage secures a Promissory Note of Debtor to BEB
Credit Group dated August 4, 2021 in the original principal amount
of $13,500,000 (the "Note").
On or about June 14, 2022, BEB Credit Group commenced a foreclosure
action in the Superior Court of New Jersey – Chancery Division,
Hudson County against the Debtor and other parties commencing the
case captioned BEB Credit Group II, LLC v. Supor Properties Bergen
Avenue LLC, No. SWC- F-006021-22 (the "Foreclosure Case"). On
February 17, 2023, the State Court entered a Final Judgment in
Foreclosure in favor of BEB Credit Group against the Debtor for
$16,219,161.27 (the "Foreclosure Judgment").
Debtor filed the Chapter 11 Case primarily to preserve over $20
million in equity in the Debtor Property, over and above the
alleged secured claim of BEB Credit Group/BEB Bergen.
As part of this Plan, Mr. Supor proposes to list the Debtor
Property for sale with Sitar Realty, with consent of the Trustee,
along with the Supor Contributed Properties in furtherance of the
Sale-Leaseback Transaction.
Mr. Supor and Debtor propose to satisfy in full all Allowed Claims,
all costs associated with any transaction authorized under the
Plan, and all fees and expenses of the Plan Administrator, the
Post-Confirmation Professionals retained by the Plan Administrator
and any Post-Confirmation Professionals retained by the Debtor --
from one of the following: (i) a Sale-Leaseback Transaction; (ii) a
Refinance Transaction; (iii) an Equity Transaction; or (iv) a sale
of the Debtor Property by the Plan Administrator.
Under the first 3 of these scenarios, the Supor Op Co Tenants, and
their employees, would remain at the Debtor Property. If none of
those scenarios are accomplished as and when set forth in the Plan,
then the Debtor Property shall be sold by the Plan Administrator,
free and clear of the Supor Op Co Leases and occupancy of the
Debtor Property by the Supor Op Co Tenants.
Class 3 consists of any and all General Unsecured Claims which are
not classified as Administrative Claims or Priority Tax Claims.
This Class is impaired. After payment in full of Allowed Class 1
and Class 2 Claims, each Holder of an Allowed Class 3 Claim shall
receive, in full satisfaction, settlement and release of and in
exchange for such Allowed Class 3 Claim, Cash equal to the full
amount of such unpaid Allowed Class 3 Unsecured Claim, plus simple
interest of 2.25% per annum:
* on the later of: (a) a date within 10 days after such claim
becomes Allowed by Final Order; or (b) from the proceeds of a
Refinance Transaction, a Sale-Leaseback Transaction, an Equity
Transaction or sale of the Debtor Property via the Plan
Administrator Sale Process upon closing of the applicable
transaction; or
* such other treatment on such other terms and conditions as
may be agreed upon in writing by the Holder of such Allowed Class 3
Claim and the Plan Administrator.
Class 5 consists of the Equity Interests of Joseph Supor. After
payment in full of Allowed Class 1 - 4 Claims, the Holder of an
Allowed Class 5 Equity Interest shall receive: (i) upon closing of
the applicable transaction, any and all remaining proceeds from a
Refinance Transaction, a Sale-Leaseback Transaction, an Equity
Transaction, or sale of the Debtor Property via the Plan
Administrator Sale Process; or (ii) such other treatment on such
other terms and conditions as may be agreed upon in writing by the
Holder of such Allowed Class 5 Interest Claim and the Plan
Administrator.
The Plan shall be implemented by one of the scenarios:
* The Sale-Leaseback Option. Under this Plan implementation
scenario, the Debtor and/or Mr. Supor may sell the Debtor Property
for an amount sufficient to satisfy in full all Allowed Claims, all
claims associated with the sale of the Debtor Property, and all
fees and expenses of the Plan Administrator, the Post Confirmation
Professionals retained by the Plan Administrator and any
Post-Confirmation Professionals retained by the Debtor (the
"SaleLeaseback Amount"). Any such sale shall be subject to (i) the
Supor Op Co Leases, as modified by agreement of buyer and the Supor
Op Co Tenants, or (ii) termination of the Supor Op Co Leases and
entry of a lease of the Debtor Property from buyer to Debtor (a
"Sale Leaseback Transaction").
* The Equity Option. Under this Plan implementation scenario,
Mr. Supor may pay all Allowed Claims and all fees and expenses of
the Plan Administrator, the Post-Confirmation Professionals
retained by the Plan Administrator and any Post-Confirmation
Professionals retained by the Debtor (the "Equity Payment Amount")
from the proceeds of a capital infusion by Mr. Supor to the Debtor
or a loan by Mr. Supor to the Debtor (an "Equity Transaction").
* The Refinance Option. Under this Plan implementation
scenario, the Debtor and/or Mr. Supor may refinance of the Debtor
Property for an amount sufficient to satisfy in full all Allowed
Claims, all claims associated with the refinance of the Debtor
Property, and all fees and expenses of the Plan Administrator, the
Post-Confirmation Professionals retained by the Plan Administrator
and any Post-Confirmation Professionals retained by the Debtor (the
"Refinance Amount").
* Sale of the Debtor Property – The Plan Administrator Sale
Process. If the Plan is not implemented by a Refinance Transaction,
a Sale-Leaseback Transaction or an Equity Transaction by the
applicable deadline for those transactions, then, as of May 31,
2024, the Plan Administrator may commence the following ("Plan
Administrator Sale Process") to market or auction and sell the
Debtor Property vacant, and free and clear of the Supor Op Co
Leases and occupancy of the Debtor Property by the Supor Op Co
Tenants.
A full-text copy of the Combined Disclosure Statement and Plan
dated January 21, 2024 is available at
https://urlcurt.com/u?l=wFUVg5 from PacerMonitor.com at no charge.
Proposed Counsel for Supor Properties:
Forman Holt
Charles M. Forman, Esq.
Michael E. Holt, Esq.
365 West Passaic Street
Suite 400
Rochelle Park, NJ 07662
Telephone: (201) 857-7110
Facsimile: (201) 665-6650
Counsel for Joseph Supor III:
K&L Gates LLP
Daniel M. Eliades, Esq
David S. Catuogno, Esq.
Caitlin C. Conklin, Esq.
One Newark Center
1085 Raymond Boulevard, 10th Floor
Newark, NJ 07102
Telephone: (973) 848-4000
Facsimile: (973) 848-4001
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.
TALLGRASS ENERGY: Fitch Rates $700MM Sr. Unsecured Notes 'BB-'
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR4' rating to Tallgrass Energy
Partners, LP's (Tallgrass) proposed $700 million senior unsecured
notes due 2029. Tallgrass intends to use the net proceeds of the
notes offering to fund the purchase of 2025 notes in the tender
offer, deposit funds with the trustee sufficient to satisfy and
discharge the indenture and any 2025 notes outstanding after
completion of the tender offer until redeemed on Oct. 1, 2024 with
the funds deposited with the trustee, and to repay a portion of the
outstanding balance of its revolving credit facility, with any
excess to be used for general partnership purposes.
Fitch views this transaction as neutral to Tallgrass's credit
profile. The Ratings and Outlook continue to reflect the positive
and negative factors concerning the issuer, as previously stated in
Fitch's commentary published on Aug. 7, 2023.
Fitch has reviewed preliminary terms for the proposed transactions,
and the assigned ratings assume no material variations in the final
terms.
KEY RATING DRIVERS
Leverage Neutral Transaction: Total debt balance and EBITDA
leverage are not affected by this refinancing transaction. The
'BB-'/'RR4' rating for the proposed senior unsecured notes is
consistent with the ratings of Tallgrass's existing senior
unsecured notes. The notes are being co-issued by Tallgrass Energy
Finance Corp.
Contracts Provide Cashflow Stability: Fitch expects Tallgrass to
generate nearly 95% of its EBITDA from fee-based contracts, and
over 80% from long-term fee-based volume commitment type contracts.
Tallgrass's largest asset, ROCKIE, is expected to generate 95% of
its cash flows from take-or-pay contracts with a weighted average
(by volume) remaining life of nearly eight years.
The company's second largest asset, Liberty Express Pipeline (LEP),
is expected to generate over 80% of cash flows from minimum volume
commitment contracts (MVC), and has a weighted average remaining
life of roughly four years. The two assets are expected to account
for roughly 65%-70% of the EBITDA. Tallgrass's other assets are
also fairly contracted, featuring long-term fee-based volume
commitment type contracts.
ROCKIE and LEP are highly utilized, and Tallgrass's other assets
are also fairly utilized, demonstrating demand for its asset base.
Long-term fee-based volume assurance type contracts, along with
high asset utilization rate, reduces re-contracting, volumetric,
and commodity price risks, providing a greater stability and
visibility of future cash flows.
Counterparty Credit Quality Intact: The majority of Tallgrass's
EBITDA is driven by its credit worthy top customers. Most of the
company's top customers are rated investment grade. The customer
credit profile at both ROCKIE and LEP largely remained intact in
the last 12 months despite a softening of commodity prices. Fitch
upgraded the ratings of one of ROCKIE's top customers to investment
grade in the last 12 months, and another was assigned a Positive
Outlook. Fitch expects, Tallgrass's top customers will drive most
of the company's cash flows, and their credit quality will largely
remain intact in the near term.
Medium-Term Leverage Increasing: ROCKIE has a contract cliff in
mid-2024, when its most remunerative contract, along with some
other small contracts, expires. Fitch expects most of the expiring
capacity will be re-contracted at rates consistent with recent
contract wins in the last 12 months. Therefore, the new contract
rates are expected to be at a significant discount from the current
rates, which will lead to a decline in revenue at ROCKIE,
thereafter reducing distributions to Tallgrass, and impacting
leverage. In addition, growth capital spend is also expected to
weigh on leverage. These are salient factors given the senior
unsecured debt maturities at Tallgrass and ROCKIE in 2025.
Fitch measures leverage at Tallgrass with the HoldCo's debt
imputed, which is expected to trend approximately in the mid-to-low
7.0x range in 2024-2026. Fitch anticipates the management will
prudently address the debt maturities at Tallgrass and ROCKIE.
Growth Capital Spend: Tallgrass is pursuing growth projects in the
near to medium term, which is expected to increase capital
expenditures. In January 2023, the company acquired Ruby Pipeline,
LLC, primarily using a revolver draw, which Fitch deems leverage
neutral; however, it still leads to a higher debt balance. In May
2022, Tallgrass announced plans to convert the Trailblazer natural
gas pipeline into a CO2 transportation pipeline. The project
continues to pursue incremental milestones with a target in-service
date of 1H25. If successful, the project is expected to add
incremental revenues at both Tallgrass and ROCKIE.
Fitch expects, Tallgrass will strategically fund growth projects,
and could use a combination of member contributions, free cash
flows, and debt, which will temporarily increase debt levels, until
incremental EBITDA from growth projects benefits leverage.
Parent Subsidiary Linkage: There is a parent subsidiary
relationship between the HoldCo and Tallgrass. Fitch determines the
HoldCo's standalone credit profile (SCP) based on consolidated
metrics, and believes Tallgrass has the stronger SCP than the
HoldCo. Fitch considers legal ring-fencing to be open, given the
lack of regulatory ring-fencing, and that only the revolving credit
facility has a limitation on dividends.
Effective control is deemed open since the HoldCo controls the
general partner and the sole limited partner, effectively
controlling major transactions. Funding and cash management policy
is deemed porous due to Tallgrass's ability to obtain both internal
and external funding. Hence, access and control are deemed porous.
DERIVATION SUMMARY
There is a parent subsidiary linkage (PSL) between Tallgrass and
its parent. Given the PSL outcome, The Williams Companies, Inc.
(WMB; BBB/Stable) is a close peer to Tallgrass. Both WMB and
Tallgrass have two FERC-regulated long-distance pipelines at the
core of their credit, along with a gathering and processing
business. WMB and Tallgrass both feature highly contracted
long-term revenue profile with credit worthy customers. In
addition, both have stronger subsidiaries, rated higher than the
parent.
WMB has much larger relative operating scale, with EBITDA in the
most recent fiscal year at approximately $6.4 billion vs.
Tallgrass's at approximately $770 million. This is somewhat offset
by WMB having a much larger gathering and processing business,
which is considered riskier than FERC-regulated pipeline business.
Fitch forecasts WMB's 2023 leverage at approximately 3.8x, which is
much lower compared to the expectations for Tallgrass at
approximately 6.2x in 2023, increasing to approximately low-to-mid
7.0x in the medium term. Tallgrass's significantly smaller scale
and higher leverage expectations are the primary factors for the
difference in IDRs between the two companies.
NuStar Energy (NuStar; BB/Stable), which has a FERC-regulated
refined products pipeline, is another comparable peer. Both
companies have FERC-regulated pipelines, same PSL relationship, and
are comparable in size with EBITDA in the $700 million range in the
latest fiscal year. Both have a sizeable portion of cash flows
generated under long-term volume commitment type contracts,
although Tallgrass has a greater portion under such contracts
compared with NuStar.
However, NuStar's exposure to the Permian basin provides volume
stability. Leverage at NuStar is expected to be lower at
approximately 5.0x in the medium term compared with Tallgrass. The
lower expected leverage at NuStar is the primary driver for the
difference in NuStar and Tallgrass's IDRs.
KEY ASSUMPTIONS
- Fitch's base case of Natural Gas at Henry Hub of $2.8/mcf,
$3.25/mcf, $3/mcf, $2.75/mcf in 2023, 2024, 2025, and 2026 and
mid-cycle, respectively;
- Fitch's base case West Texas Intermediate (WTI) oil price of $78,
$75, $65, $60, and $57 in 2023, 2024, 2025, 2026, and mid-cycle,
respectively;
- Oil and Gas activity levels in the regions where Tallgrass
operates consistent with Fitch's base case for oil and gas prices;
- Base interest rate for the credit facility reflects Fitch's
Global Economic Outlook, e.g., 5.5%, 4.75%, and 3.5% for 2023,
2024, and 2025 respectively;
- A probabilistic estimate of successful growth projects;
- ROCKIE's EBITDA and distributions to Tallgrass consistent with
Fitch's expectations for ROCKIE, which among other things reflects
the re-contracting risks for 2024 contract cliff;
- Liberty Express Pipeline (Pony Express) transport volumes
consistent with the prevailing volumes in recent months;
- Distributions upstream consistent with the amounts required to
service the term loan at the HoldCo.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Proportionate consolidated EBITDA leverage (measured at the
HoldCo level) that is expected to be below 7.0x for a sustained
period;
- A decrease in business risk, such as might occur with ROCKIE
and/or Pony Express contracting a significant part of their
capacity in a long-term revenue-assured relationship with an
investment grade shipper.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Proportionate consolidated EBITDA leverage (measured at the
HoldCo level) that is expected to be above 8.0x for a sustained
period;
- A large customer with a long-term take or pay (ROCKIE) contract
or MVC (Liberty Express) contract has a financial condition that is
consistent with a potential bankruptcy filing, and the current
market for Tallgrass's transportation service indicates the
potential for a contract rejection;
- Inability to timely re-finance the upcoming debt maturities and
address the contract cliff at ROCKIE.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Tallgrass had a total liquidity of
approximately $1.23 billion as of Sept. 30, 2023. Tallgrass had
approximately $10 million of cash on the balance sheet, and had
approximately $1.22 billion available under its $1.5 billion
first-lien senior secured revolving credit facility (net of roughly
$25 million in outstanding letters of credit). The revolver matures
on the earlier of Nov. 26, 2026, or July 1, 2025, if any of the
$600 million 7.5% senior unsecured notes due Oct. 1, 2025 remain
outstanding on such date.
The covenants on the revolver requires Tallgrass to maintain a
maximum total leverage of 5.5x, senior secured leverage of 3.5x,
and a minimum interest coverage of 2.5x, as defined under the
credit agreement. As of Sept. 30, 2023, Tallgrass was compliant
with the covenants and had a leverage ratio of 3.8x, senior secured
leverage of 0.3x, and interest coverage of 4.27x.
ISSUER PROFILE
Tallgrass owns and operates a variety of midstream assets primarily
long-distance interstate pipelines located in the United States.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch measures leverage at Tallgrass with HoldCo's debt (Term Loan
at Prairie ECI Acquiror LP) imputed due to the PSL relationship.
DATE OF RELEVANT COMMITTEE
August 4, 2023
ESG CONSIDERATIONS
Tallgrass Energy Partners, LP has an ESG Relevance Scores of '4'
for Group Structure due to the high number of entities in the
family. This has a negative impact on the credit profile and is
relevant to the ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
Tallgrass Energy
Partners, LP
senior unsecured LT BB- New Rating RR4
Tallgrass Energy
Finance Corp.
senior unsecured LT BB- New Rating RR4
TALOS ENERGY: Fitch Alters Outlook on 'B' LongTerm IDR to Positive
------------------------------------------------------------------
Fitch Ratings has affirmed Talos Energy Inc. and Talos Production
Inc.'s Long-Term Issuer Default Rating (IDR) at 'B' and revised the
Outlook to Positive from Stable.
Talos has entered into a definitive agreement to acquire private
operator QuarterNorth Energy Inc. for approximately $1.3 billion.
This will result in a pro-forma company with increased production
size and scale.
Talos' rating reflects its increased size following the proposed
QuarterNorth acquisition with expected 2024 production in the low
100 thousand barrels of equivalent per day (mboepd), higher
margins, a liquids-focused asset profile, neutral to positive FCF
over the forecasted period, a conservative balance sheet,
attractive exploitation and exploration inventory, and adequate
liquidity. This is offset by potentially significant environmental
remediation costs relating to higher plugging and abandonment (P&A)
costs and relatively higher operating costs.
Following the closing of the EnVen acquisition in February 2023,
Fitch has affirmed the IDRs for EnVen Energy Corporation, Energy
Ventures GoM LLC, and EnVen Finance Corporation at 'B' and revised
the Outlook to Positive from Stable. Fitch has subsequently
withdrawn these ratings following the closing and incorporation of
the entities and debt into Talos Production Inc.
KEY RATING DRIVERS
Credit Friendly Acquisition: Talos announced that it has entered
into a definitive agreement to acquire QuarterNorth for
approximately $1.3 billion. The acquisition will be funded by the
issuance of approximately 24.8 million of Talos' common shares and
cash. The acquisition increases production scale by nearly 50% and
$50 million of expected synergies by 2025 and thereafter.
Financing Flexibility: Talos has secured $650 million in bridge
financing, which provides it with timing flexibility to structure
permanent financing of the transaction and potential refinancing of
existing notes. Under Fitch's price deck, the agency estimates
Talos will be mostly FCF-positive over the forecast horizon and
expects excess cash to be used to reduce revolver borrowings
following the acquisition. Uncertainty over access to capital
markets remains, as Talos bonds have a higher coupon and trade at
higher yields compared with other energy issuers'.
Enhanced Gulf of Mexico Position: Pro forma, Talos will materially
expand the combined company's size and scale in the Gulf of Mexico,
with total PDP of 228.3mmboe, an approximate 43% increase. Talos'
focus in the offshore Gulf of Mexico results in an asset profile
that is different from the typical shale-driven onshore exploration
and production (E&P) issuer. Differences include relatively low
asset acquisition costs, which may be offset by P&A obligations;
lower decline rates; and, typically, higher oil-price
realizations.
Challenges associated with the business model include execution
risk associated with new exploration projects, substantial capital
requirements, longer spud to first oil times, materially higher
environmental remediation costs, the need to post significant
financial assurances to third parties to guarantee remediation
work, and tail risks from hurricane activity and potential oil
spills.
Capex Supports FCF Generation: Talos is expected to generate
near-term positive FCF based on Fitch's oil price deck with
significant reduction in RBL borrowings expected for 2024. The
relatively low decline rate of its wells provides for enhanced
capital efficiency that somewhat offsets the effects during a
period of low oil prices and helps protect cash flow. The company's
normalized unit economics and lower capital-intensive projects,
such as asset management, in-field drilling and exploitation,
result in a cash flow profile that supports discretionary,
exploratory capital, which may potentially transform the
longer-term asset base in better commodity price environments.
Substantial Decommissioning Costs: Due to the company's focus on
mature offshore assets and active M&A strategy, Talos'
environmental remediation costs for P&A are elevated compared with
onshore peers. Asset retirement obligations (AROs) as of Sept. 30,
2023 totaled $816.8 million, which is not expected to increase
materially following the QuarterNorth acquisition. QuarterNorth
upon exit of bankruptcy in 2021, the restructuring plan
incorporated settlements with previous predecessors on the
decommissioning obligations associated with their assets so
manageable ARO expected. As of Sept. 30, Talos following the EnVen
acquisition currently has restricted cash of approximately $101.8
million held in escrow and P&A notes receivable of $15.8 million
for future P&A obligations.
Fitch expects annual P&A costs of approximately $80-100 million
over the forecast. Fitch believes there is potential for reduced
outlays to the degree the company is able to extend the lives of
fields through recompletions and workovers.
Hedge Book Supports RBL Repayment: Near-term FCF and reserve-based
lending (RBL) facility repayment is supported by the company's
hedge book. Talos is required to hedge approximately 50% of proved
developed production on a rolling 12-month basis, and if
consolidated debt/EBITDAX is greater than 1.0x, it must be 50%
hedged for the fifth and sixth quarter. Pro-forma the acquisition,
Talos is expected to layer on additional hedging and currently have
approximately 35% of its oil hedged at approximately $74/barrel
(bbl) West Texas Intermediate (WTI) for 2024, which steps down to
approximately 10% hedged at $74/bbl WTI for 2025.
Fitch believes the hedge book provides meaningful downside
protection and supports FCF generation in 2024, with a material
reduction in the RBL expected by YE 2024. Consistent hedging over
the longer term should be positive for the credit profile, as it
supports development funding and reduces cash flow risk.
Midcycle Leverage Below 1.5x: Fitch's base case forecasts EBITDA
leverage of 1.0x at YE 2024, which moderates toward 1.4x at Fitch's
$57/bbl midcycle WTI price assumption. Although post-close debt is
slightly higher, Fitch believes significant execution of RBL
repayment will happen over the next 12 months. Talos' maturity
profile remains clear until 2026, which provides the company
flexibility and opportunities to either repay or refinance the
maturities during optimal market conditions.
Carbon Capture and Storage: Talos has a subsidiary to explore
opportunities in carbon capture and storage and uses its expertise
in conventional oil and gas geology, engineering and project
delivery. The subsidiary would be deemed unrestricted and
nonrecourse to Talos debt. Management plans to fund the venture
with project financing debt, although the parent may make some
equity contributions. The venture does not benefit the restricted
group's credit profile directly, but could assuage investor ESG
concerns, provide a new growth prospect and increase
diversification.
DERIVATION SUMMARY
Talos' positioning against the Fitch-rated offshore, independent
E&P sector is mixed. Third quarter production was 63.7 mboepd with
83% liquids. Pro forma the proposed QuarterNorth acquisition Talos'
production size is expected to be approximately 100 mboepd in 2024.
This is similarly rated to onshore operators, such as HighPeak
Energy Inc. (B/Stable) at 53mboepd with 93% liquids, Moss Creek
(B/Stable) at 65mboepd with 73% liquids but larger than offshore
peer W&T Offshore Inc. (B-/Stable) at 36mboepd with 48% liquids.
Talos has historically managed debt levels below 2x on an EBITDA
leverage basis, and Fitch expects this to continue following the
QuarterNorth acquisition through the forecast horizon. Despite the
low leverage levels, Fitch remains concerned regarding the
potential challenging access to capital markets, albeit improving
scale following the proposed QuarterNorth acquisition.
The company's offshore footprint exposes it to significantly higher
remediation, or P&A costs, than onshore shale-based single 'B'
peers. Operational risks are also higher, given potentially adverse
effects of any oil spills or hurricane activity on a company of
Talos' size.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- WTI oil price of $75/barrel (bbl) in 2024, $65/bbl in 2025,
$60/bbl in 2026 and $57/bbl thereafter;
- Henry Hub natural gas price of $3.25 per thousand cubic feet
(mcf) in 2024, $3.00/mcf in 2025, and $2.75/mcf thereafter;
- Production increases in 2024 with the completion of the
QuarterNorth acquisition with flat to low single-digit increase
thereafter;
- No material additional M&A thereafter;
- FCF allocated toward paydown of revolver.
RECOVERY ANALYSIS
The recovery analysis assumes that Talos Energy, Inc. would be
reorganized as a going-concern in bankruptcy rather than
liquidated. Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
Pro forma the QuarterNorth acquisition, Fitch has assumed a
bankruptcy scenario exit EBITDA of $460 million which has increased
from $375 million. This estimate considers a prolonged commodity
price downturn ($32/WTI and $2.25/mcf gas lows in 2025, increasing
to $42/bbl WTI and $2.25/mcf gas in 2026) causing liquidity
constraints and inability to access capital markets to refinance
debt. The GC EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level upon which Fitch
bases the enterprise valuation.
An EV multiple of 3.75x is applied to the GC EBITDA to calculate a
post-reorganization enterprise value. This is below the median 5.3x
exit multiple for energy in Fitch's Energy, Power and Commodities
Bankruptcy Enterprise Value and Creditor Recoveries (Fitch Case
Studies - September 2023) but on par with a typical the multiple
used for oil and gas upstream companies. The lower multiple also
reflects the impact of Asset Retirement Obligations and Surety
bonds.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
Fitch used historical transaction data for the GoM blocks on a
$/bbl, $/1P, $/2P, $/acre and PDP PV-10 basis to attempt to
determine a reasonable sale, based on Talos' recent M&A
transactions, other recent offshore M&A transactions, and
valuations from emerging, offshore bankruptcies.
The GC approach results in a higher post-reorganization EV of
$1,725 million, which is greater than the liquidation valuation.
Waterfall Analysis
Pro forma the closing of the QuarterNorth acquisition, Fitch
assumed the $965 million revolving credit facility was drawn at 80%
to account for downward borrowing base redeterminations as the
company approaches a bankruptcy scenario. The senior secured
revolver recovers at an 'RR1' level while the second lien notes
recover at an 'RR3' level.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Increased size and scale, evidenced by production approaching
100mboepd;
- Reduction of the revolving credit facility through proceeds from
FCF generation;
- Demonstrated ability to manage P&A obligations and reduced AROs
per flowing barrel or proved reserves;
- Midcycle EBITDA leverage maintained below 2.0x.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to integrate the QuarterNorth acquisition or loss of
operational momentum, evidenced by production trending below
65mboepd;
- Inability to generate FCF and allocate capital that heightens
liquidity and refinancing risk or access to the capital markets;
- Unfavorable regulatory changes, such as increased bonding
requirements or accelerated P&A spending;
- Implementation of a more aggressive growth strategy operating
outside FCF;
- Midcycle EBITDA leverage above 3.0x on a sustained basis.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch does not see material near-term liquidity
needs and believes the company's refinance risk is low. At
end-3Q23, Talos had $13.6 million of cash on hand and approximately
$739.2 million of availability under its $965.0 million RBL
facility. Following the acquisition, the RBL facility borrowing
base is expected to remain at $1.075 billion and the elected
commitment at $965 million.
Fitch expects Talos will generate mostly positive FCF over the
forecasted horizon and use proceeds to further reduce the
outstanding amounts on the revolver. Management stated that capital
budgets would be determined on the ability to generate FCF even in
commodity price declines. The company's hedging program provides
some protection, but an enhanced program would provide more
comfort.
ISSUER PROFILE
Talos is a publicly traded, technically driven independent
exploration and production company with operations in the U.S. Gulf
of Mexico (GoM) and offshore Mexico. The company's focus in the GoM
is the exploration, acquisition, exploitation and development of
deep and shallow water assets near existing infrastructure.
ESG CONSIDERATIONS
Talos has an ESG Relevance Score of '4' for Waste and Hazardous
Materials Management/Ecological Impacts due to the enterprise-wide
solvency risks that an offshore oil spill poses for an E&P company.
This has a negative impact on the credit profile, and is relevant
to the rating in conjunction with other factors.
Talos has an ESG Relevance Score of '4' for Energy Management that
reflects the company's cost competitiveness and financial and
operational flexibility due to scale, business mix, and
diversification. This has a negative impact on the credit profile,
and is relevant to the rating in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
EnVen Finance
Corporation LT IDR B Affirmed B
LT IDR WD Withdrawn B
Talos Production
Inc. LT IDR B Affirmed B
senior secured LT BB Affirmed RR1 BB
Senior Secured
2nd Lien LT B+ Affirmed RR3 B+
Senior Secured
2nd Lien LT B+ Affirmed RR3 B+
EnVen Energy
Corporation LT IDR B Affirmed B
LT IDR WD Withdrawn B
Talos Energy Inc. LT IDR B Affirmed B
Energy Ventures
Gom LLC LT IDR B Affirmed B
LT IDR WD Withdrawn B
TALOS PRODUCTION: Moody's Gives B3 Rating on New Second Lien Notes
------------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Talos Production
Inc.'s (Talos) proposed offering of second lien notes, including
senior secured second lien notes due 2029 and senior secured second
lien notes due 2031. Talos' existing ratings, including its B2
Corporate Family Rating, B2-PD Probability of Default Rating,
existing B3 senior secured second lien rating, and SGL-3
Speculative Grade Liquidity Rating (SGL) and stable outlook are
unchanged. Similarly, Talos Energy Ventures GOM LLC's (Talos EnVen)
existing B3 senior secured second lien notes rating and stable
outlook are unchanged.
Talos intends to use net proceeds from its proposed offering to
refinance its existing second lien secured notes due January 2026
and fund a portion of the cash consideration of its QuarterNorth
Energy Holding Inc. (QuarterNorth, B3 ratings under review)
acquisition. Moody's ratings are subject to review of all final
documentation.
"Talos' notes issuance is opportunisitically refinancing existing
debt to extend maturities and provide a portion of the QuarterNorth
acquisition funding," commented Amol Joshi, Moody's Vice President
– Senior Credit Officer.
RATINGS RATIONALE
Talos' second lien notes are rated B3, one notch below the B2 CFR,
and reflect the notes' second lien claim on assets upon which
Talos' revolver (unrated) has a first lien. Talos and Talos EnVen's
second lien notes are pari passu in the capital structure as a
result of cross-guarantees, and are rated the same.
Talos should enhance its scale and deepwater Gulf of Mexico (GoM)
position through the acquisition of QuarterNorth. Talos has been an
active acquiror in the US GoM and had closed its EnVen Energy
Corporation acquisition in early 2023. The QuarterNorth acquisition
should add roughly 30 thousands barrels of oil equivalent (boe) per
day of oil-weighted production volumes and Talos' pro forma
production should approach 100 thousand boe per day in 2024.
Nonetheless, Talos will remain constrained by its production
concentration in offshore GoM, where challenging operating
conditions in the deepwater further magnify this concentration
risk.
Talos Energy has secured $650 million in bridge financing providing
it with flexibility with respect to the timing and structure of
permanent financing of the transaction. The company expects to fund
a portion of the cash consideration with availability under the
revolver, and opportunistic debt or equity financings depending on
market conditions. Proceeds from this proposed notes offering
following Talos Energy Inc.'s public equity offering priced on
January 17 should eliminate the need for the bridge financing
portion of the QuarterNorth acquisition. While pro forma debt
balances will increase materially, Moody's expects pro forma credit
metrics to not change meaningfully given the cash flow potential of
the combined operations as well as likely post acquisition debt
reduction and asset integration benefits into 2025.
Talos' B2 CFR reflects its moderate scale, asset concentration and
challenges of operating in the GoM, especially deepwater. Operating
in the GoM involves risks including relatively short-life reserves,
significant asset retirement obligations (ARO) as a result of its
ownership of several end-of-life offshore wells, and inherent storm
and geological risks. The company is supported by an active hedging
program, exposure to premium crude pricing, solid asset coverage,
relatively lower risk behind-pipe drilling and recompletion
opportunities, and an experienced management team that has a track
record of managing operations in the GoM. The company is
acquisitive and faces the prospect of additional spending to
explore and develop its assets and discoveries, including
potentially developing its oil & gas discovery in the Zama Field
offshore Mexico upon final investment decision. Talos' leverage
metrics are weaker after taking into consideration the company's
ARO liabilities. Credit metrics going forward will depend on how
the company funds its future spending and acquisitions as well as
the extent of potential debt reduction.
Talos' SGL-3 rating reflects its adequate liquidity into 2025.
Talos had $13.6 million in cash (excluding $101.8 million of
restricted cash) at September 30. The company's revolver matures in
March 2027, and includes a springing maturity commencing on the
91st day prior to the earliest stated maturity date of any of the
junior lien notes if such junior lien notes have not been
refinanced, redeemed or repaid in full. A refinancing of the second
lien notes due January 2026 will leave outstanding $242.5 million
of Talos EnVen's second lien notes due April 2026. The revolver has
a $1.1 billion borrowing base with $965 million in commitments,
with $215 million drawn and $10.8 million in letters of credit
issued under the revolver at September 30. Revolver borrowings will
increase significantly following QuarterNorth's acquisition and the
outstanding amount on the revolver will depend on the final capital
structure. Separately, Talos had secured performance bonds from
third party sureties primarily related to plugging and abandonment
of wells and removal of facilities totaling approximately $1.4
billion at September 30. Talos' financial covenants include a
maximum debt to EBITDAX of 3x and a minimum current ratio of 1x,
and Talos should be in compliance with these covenants into 2025.
Talos' stable outlook reflects Moody's expectation that Talos will
continue to maintain moderate leverage metrics
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Talos' ratings could be upgraded if it diversifies and grows
production, proved developed reserves and cash flow in a stable to
improving industry environment while integrating its acquisitions,
the company generates consistent free cash flow, its retained cash
flow (RCF) to debt ratio is above 50%, leveraged full cycle ratio
(LFCR) comfortably exceeds 1x providing sufficient returns on
projects while maintaining adequate liquidity.
Talos' ratings could be considered for a downgrade if the company's
production meaningfully declines, RCF/debt ratio falls below 25%,
liquidity deteriorates, leverage increases materially due to
capital spending or acquisitions, or the company's capital
productivity declines significantly.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
Talos Production Inc., a wholly-owned subsidiary of publicly-traded
Talos Energy Inc., is an exploration and production company whose
assets are primarily located on the continental shelf and deepwater
areas in the US Gulf of Mexico.
THERATECHNOLOGIES INC: Receives Complete Response Letter From FDA
-----------------------------------------------------------------
Theratechnologies Inc. announced that the U.S. Food and Drug
Administration (FDA) has issued a Complete Response Letter (CRL) in
response to the Company's supplemental Biologics License
Application (sBLA) for the F8 formulation of tesamorelin. The
Company will address the FDA's request and intends to pursue
approval of this newer formulation of tesamorelin.
The questions outlined in the CRL are largely related to chemistry,
manufacturing and controls (CMC) concerning the microbiology,
assays, impurities and stability for both the lyophilized product
and the final reconstituted drug product. In addition, the FDA
requested further information to understand the potential impact of
the proposed formulation on immunogenicity risk.
"While we are disappointed to receive a Complete Response Letter
from the FDA for the F8 formulation of tesamorelin containing
questions that were not raised during the review process, we plan
to address these new comments as swiftly as possible," said
Christian Marsolais, Ph.D., senior vice president and chief medical
officer at Theratechnologies. "We remain focused on bringing this
new formulation of tesamorelin to market as part of our commitment
to innovate and simplify treatments for people with HIV."
The Company will continue to commercialize EGRIFTA SV, which is the
only approved treatment in the U.S. for the reduction of excess
abdominal fat in adults with HIV who have lipodystrophy.
About Theratechnologies
Theratechnologies (TSX: TH) (NASDAQ: THTX) -- www.theratech.com --
is a biopharmaceutical company focused on the development and
commercialization of innovative therapies addressing unmet medical
needs.
Montreal, Canada-based KPMG LLP, the Company's auditor since 1993,
issued a "going concern" qualification in its report dated Feb. 27,
2023, citing that the Company's convertible notes mature in June
2023 and its Loan Facility contains various covenants, including
minimum liquidity covenants. There is material uncertainty related
to events or conditions that cast substantial doubt about its
ability to continue as a going concern.
TRC FARMS: Seeks to Hire IronHorse Auction as Auctioneer
--------------------------------------------------------
TRC Farms, Inc. seeks approval from the U.S. Bankruptcy Court for
the Eastern District of North Carolina to employ IronHorse Auction
Co., Inc. to auction at public sale or otherwise sell certain items
of personal property of the estate.
IronHorse will be compensated for personal property sold as
follows:
a. 5 percent commission on final bid price;
b. maximum advertising budget of $6,000; and
c. assessment of Buyer's Premium of 5 percent.
As disclosed in the court filings, IronHorse is a "disinterested
party" and does not hold any interest adverse to the Debtor or its
estate.
The firm can be reached through:
William B. Lilly, Jr.
IronHorse Auction Co., Inc.
174 Airport Rd
Rockingham, NC 28379
Phone: (910) 997-2248
About TRC Farms Inc.
TRC Farms, Inc. is a privately held company, which operates in the
livestock farming industry.
TRC Farms filed Chapter 11 petition (Bankr. E.D.N.C. Case No.
20-00309) on Jan. 23, 2020, with $3,846,275 in assets and
$5,412,282 in liabilities. Timmy R. Cox, president, signed the
petition.
Judge Joseph N. Callaway oversees the case.
The Debtor tapped Ayers & Haidt, PA as its legal counsel and Carr
Riggs & Ingram, LLC as its accountant.
TROIKA MEDIA: Committee Hires Troika Media as Financial Advisor
---------------------------------------------------------------
The official committee of unsecured creditors of Troika Media
Group, Inc. and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to retain M3
Advisory Partners, LP as its financial advisor.
The firm's services include:
a. reviewing financial-related disclosures required by the
Court, including the Schedules of Assets and Liabilities, the
Statement of Financial Affairs, and Monthly Operating Reports;
b. assessing and monitoring the Debtors' short-term cash flow,
liquidity, and operating results;
c. reviewing any proposed key employee retention or other
employee benefit programs;
d. analyzing the Debtors' core business assets and operations;
e. evaluating the Debtors' cost/benefit analysis with respect
to the affirmation or rejection of various executory contracts and
leases;
f. reviewing the Debtors' identification of potential cost
savings, including overhead and operating expense reductions and
efficiency improvements;
g. monitoring any asset sale process;
h. analyzing any claims reconciliation and estimation
processes;
i. reviewing financial information prepared by the Debtors,
including, but not limited to, cash flow projections and budgets,
business plans, cash receipts and disbursement analysis, asset and
liability analysis, and the economic analysis of proposed
transactions for which Court approval is sought;
j. attending meetings and assisting in discussions with the
Debtors, potential investors, secured lenders, the Committee and/or
any other official committees organized in the Chapter 11 Cases,
the U.S. Trustee, other parties in interest, and professionals
hired by the same, as requested;
k. reviewing and/or preparing information and analysis
necessary for the confirmation of a plan and related disclosure
statement in the Chapter 11 Cases;
l. investigating, evaluating, and analyzing of avoidance
actions or other potential causes of action, including fraudulent
conveyances and preferential transfers, as requested;
m. assisting with the prosecution of Committee
responses/objections to the Debtors' motions, including by
attending depositions and providing expert reports/testimony on
case issues as required by the Committee; and
n. rendering such other general business consulting or
providing such other assistance as the Committee or its counsel may
deem necessary that are consistent with the role of a financial
advisor and not duplicative of services provided by other
professionals in these proceedings.
The firm will be paid at these rates:
Managing Partner $1,415 per hour
Senior Managing Director $1,305 per hour
Managing Director $1,075 to $1,205 per hour
Director $880 to $990 per hour
Vice President $786 per hour
Senior Associate $680 per hour
Associate $575 per hour
Analyst $470 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert Winning, managing director at M3 Advisory Partners, LP,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Robert Winning
M3 Advisory Partners, LP
1700 Broadway, 19th Floor
New York, NY 10019
Phone: (212) 202-2200
Email: rwinning@m3-partners.com
About Troika Media Group
Troika Media Group, Inc., a New York-based company and its
affiliates, operate a media advertising professional services
company. Troika Media Group's core asset is the business segment
run by Converge Direct, LLC, which Troika Media Group acquired in
March 2022 for $125 million. Converge is a
data-and-audience-centric media buying agency. It differentiates
itself from the typical agency model in favor of deeper engagement
with its clients and investing in its own lead generating
activities. Converge provides complementary services such as
advertising strategy and customized advertising campaigns,
utilizing its proprietary attribution analytics software tool,
Helix.
Troika Media Group and its affiliates filed Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 23-11969) on Dec. 7, 2023. As of
Oct. 31, 2023, Troika Media Group had total assets of $86.5 million
and total debts of $130.7 million.
Judge David S. Jones oversees the cases.
The Debtors tapped Willkie Farr & Gallagher, LLP as legal counsel;
Jefferies, LLC as investment banker; and Arete Capital Partners,
LLC as financial advisor. Kroll Restructuring Administration, LLC
is the notice, claims, solicitation and balloting agent and
administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by McDermott Will & Emery, LLP.
King & Spalding represents the lenders and the agents under the
Debtors' prepetition secured credit facility and the lenders and
the agents under the Debtors' debtor-in-possession financing
facility.
TROIKA MEDIA: Committee Taps McDermott Will & Emery as Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of Troika Media
Group, Inc. and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to retain
McDermott Will & Emery LLP as its counsel.
The firm will render these services:
(a) advise the Committee with respect to its rights, duties
and powers in the Chapter 11 Cases;
(b) assist and advise the Committee in its consultations and
negotiations with the Debtors and other parties in interest
relative to the administration of the Chapter 11 Cases;
(c) assist the Committee in analyzing the claims of the
Debtors' creditors and the Debtors' capital structure and in
negotiating with holders of claims and equity interests;
(d) assist the Committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors and their insiders and of the operation of the Debtors'
businesses;
(e) assist the Committee in its analysis of, and negotiations
with, the Debtors or any third party concerning matters related to,
among other things, the assumption or rejection of certain leases
of non-residential real property and executory contracts, asset
dispositions, financing or other transactions, and the terms of one
or more plans of reorganization for the Debtors and accompanying
disclosure statements and related plan documents;
(f) assist and advise the Committee as to its communications
with the general creditor body regarding significant matters in the
Chapter 11 Cases;
(g) represent the Committee at all hearings and other
proceedings before this Court;
(h) review and analyze applications, orders, schedules, and
statements of financial affairs and operations filed with the
Court, advise the Committee as to their propriety and, to the
extent deemed appropriate by the Committee, support, join or object
thereto;
(i) assist the Committee in its review and analysis of the
Debtors' various agreements;
(j) prepare, on behalf of the Committee, any pleadings,
including, without limitation, motions, memoranda, complaints,
adversary complaints, objections, or comments in connection with
any matter related to the Debtors or the Chapter 11 Cases;
(k) investigate and analyze any claims belonging to the
Debtors' estates; and
(l) perform such other legal services as may be required or
are otherwise deemed to be in the interests of the Committee in
accordance with the Committee's powers and duties, as set forth in
the Bankruptcy Code, Bankruptcy Rules, or other applicable law.
The firm will bill these hourly rates:
Partners $1,425 - $1,575
Employee Counsel $1,255
Associates $725 - $1,160
Paraprofessionals $325 - $670
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the
following is provided in response to the request for additional
information:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: McDermott did not agree to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No rate for any of the professionals included in this
engagement varies based on the geographic location of the Chapter
11 Cases.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: McDermott did not represent the Committee, which was
appointed by the U.S. Trustee during the course of the Chapter 11
Cases, during the 12 months prepetition.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: The Committee and McDermott expect to develop a
prospective budget and staffing plan, recognizing that in the
course of large chapter 11 cases, unforeseeable fees and expenses
may arise that will need to be addressed by the Committee and
McDermott.
Kristin Going, Esq., partner of McDermott Will & Emery LLP, 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 Debtors and their estates.
The firm can be reached at:
Kristin K. Going, Esq.
MCDERMOTT WILL & EMERY LLP
One Vanderbilt Avenue
New York, NY 10017-3852
Tel: (212) 547-5429
Fax: (646) 417-7313
E-mail: kgoing@mwe.com
About Troika Media Group
Troika Media Group, Inc., a New York-based company and its
affiliates, operate a media advertising professional services
company. Troika Media Group's core asset is the business segment
run by Converge Direct, LLC, which Troika Media Group acquired in
March 2022 for $125 million. Converge is a
data-and-audience-centric media buying agency. It differentiates
itself from the typical agency model in favor of deeper engagement
with its clients and investing in its own lead generating
activities. Converge provides complementary services such as
advertising strategy and customized advertising campaigns,
utilizing its proprietary attribution analytics software tool,
Helix.
Troika Media Group and its affiliates filed Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 23-11969) on Dec. 7, 2023. As of
Oct. 31, 2023, Troika Media Group had total assets of $86.5 million
and total debts of $130.7 million.
Judge David S. Jones oversees the cases.
The Debtors tapped Willkie Farr & Gallagher, LLP as legal counsel;
Jefferies, LLC as investment banker; and Arete Capital Partners,
LLC as financial advisor. Kroll Restructuring Administration, LLC
is the notice, claims, solicitation and balloting agent and
administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by McDermott Will & Emery, LLP.
King & Spalding represents the lenders and the agents under the
Debtors' prepetition secured credit facility and the lenders and
the agents under the Debtors' debtor-in-possession financing
facility.
UPTOWN PARTNERS: Seeks to Hire MN Blum LLC as Accountant
--------------------------------------------------------
Uptown Partners, LP seeks approval from the U.S. Bankruptcy Court
for the Middle District of Pennsylvania to employ MN Blum, LLC to
prepare its federal and state tax returns and provide general
accounting consultation.
The firm will be paid at these rates:
Partners $480 per hour
Senior Accounts $280 per hour
Staff Accountants $180 to $200 per hour
As disclosed in court filings, MN Blum does not represent interests
adverse to the Debtor or its estate in the matters upon which it is
to be engaged.
The firm can be reached through:
Abba Blum
MN Blum LLC
1395 Piccard Drive, Suite 240
Rockville, MD 20850
Office: (301) 337-3300
(301) 337-3303
Mobile: (301 )461-0266
Email: abba@mnblum.com
About Uptown Partners
Harrisburg, Pa.-based Uptown Partners, LP is the owner of
Harrisburg housing complex Governor's Square.
Uptown Partners sought relief under Chapter 7 of the U.S.
Bankruptcy Code (Bankr. M.D. Pa. Case No. 23-00988) on May 2, 2023.
On Sept. 12, 2023, the case was converted to one under Chapter 11.
Judge Henry W. Van Eck oversees the case.
The Debtor's counsel is Robert E. Chernicoff, Esq., at Cunningham
and Chernicoff, PC.
VENUS CONCEPT: Board Reviewing Strategic Alternatives
-----------------------------------------------------
Venus Concept Inc. announced that its Board of Directors is
evaluating potential strategic alternatives to maximize shareholder
value. As part of the process, the Board is considering a full
range of strategic alternatives, which may include one or more
financings, mergers, reverse mergers, other business combinations,
sales of assets, licensings or other transactions.
The Company has retained Canaccord Genuity LLC as its financial
advisor to assist in evaluating potential strategic alternatives.
There can be no assurance that the evaluation of strategic
alternatives will result in any transaction, nor can there be any
assurance regarding any transaction's timing or ultimate outcome.
Venus Concept has not set a timetable for completion of the process
and does not intend to disclose developments related to the process
unless and until the Company executes a definitive agreement with
respect thereto, or the Board otherwise determines that further
disclosure is appropriate or required.
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.
WEALTH MANIFESTED: Norman Rouse Named Subchapter V Trustee
----------------------------------------------------------
The Acting U.S. Trustee for Region 13 appointed Norman E. Rouse as
Subchapter V trustee for Wealth Manifested, LLC.
Mr. Rouse 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. Rouse declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Norman E. Rouse
5957 East 20th Street
Joplin, Missouri 64802
Phone: 417.782.2222
Email: nrouse@cwrcave.com
About Wealth Manifested
Wealth Manifested, LLC, doing business as Senior Helpers of Lee's
Summit, sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Mo. Case No. 24-40076) on January 22, 2024, with
$100,001 to $500,000 in assets and $1,000,001 to $10 million in
liabilities.
Judge Cynthia A. Norton oversees the case.
Bradley D. McCormack, Esq., at Sader Law Firm, LLC represents the
Debtor as bankruptcy counsel.
WESCO AIRCRAFT: Can't Control Creditor Suit vs. Platinum
--------------------------------------------------------
Steven Church and Amelia Pollard of Bloomberg News report that
bankrupt aerospace supplier Wesco Aircraft Holdings doesn't have
the exclusive right to sue its private equity owner, Platinum
Equity, a judge ruled, potentially clearing the way for legal
claims by creditors who say they were harmed by a controversial
debt restructuring.
The ruling comes just as Wesco, which operates under the name
Incora, is preparing to seek court approval of its Chapter 11
reorganization plan. Last week, US Bankruptcy Judge Marvin Isgur
warned the company and its warring creditors that his ruling in the
complex debt fight may change Incora's reorganization strategy.
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. Texas 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.
WILLAMETTE VALLEY: Seeks to Hire Troutman Law as Legal Counsel
--------------------------------------------------------------
Willamette Valley Hops, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Oregon to hire Troutman Law Firm, PC to
handle its Chapter 11 case.
The firm will be compensated at $495 per hour for attorney time and
$220 per hour for paralegal time.
Prior to the petition date, the firm was paid a retainer of
$36,738.
Ted Troutman, Esq., an attorney at Troutman Law Firm, disclosed in
a court filing that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Ted A. Troutman, Esq.
TROUTMAN LAW FIRM, PC
5075 SW Griffith Dr., Suite 220
Beaverton, OR 97005
Telephone: (503) 292-6788
Facsimile: (503) 596-2371
Email: tedtroutman@sbcglobal.net
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.
Willamette Valley Hops, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No.
24-60110) on Jan. 19, 2024. The petition was signed by Paul Stevens
as managing member. At the time of filing, the Debtor estimated $10
million 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 counsel.
[] Smithtown Real Property Up for Sale on February 22
-----------------------------------------------------
Pursuant to a judgment of foreclosure and sale dated Dec. 5, 2022,
and entered on Dec. 14, 2022, Brian T. Egan, Esq., of Meltzer Lippe
Goldstein & Breitstone LLP, referee and attorney for Shaughnessy
Capital LLC, will sell at public auction at the front steps of the
Smithtown Town Hall 99 West Main Street, Smithtown, New York, on
Feb. 22, 2024, at 9:30 a.m., to be sold in separate parcels:
Parcel 1: All that certain piece or parcel of land, with the
buildings at Kings Park, in the Town of Smithtown, County of
Suffolk, State of New York, Described as follows: District: 0800
Section: 042.00 Block: 01.00 Lot: 012.00 and District 0800 Section:
042.00 Block: 01.00 Lot: 039.000, Said premises know as 263-265
Indian Head Road, Smithtown, New York.
Parcel 2: All that certain plot, piece or parcel of land situate,
lying and being a part of a condominium in Bohemia, Town of Islip,
County of Suffolk and State of New York, known as designated as
Unit No. 18 in Building known as 489 Johnson Avenue. Together with
a 0.3969% interest in the common elements. District: 0500 Section:
192.00 Block: 02.00 Lot: 018.000. Siad premises known as 489
Johnson Avenue, Bohemia, New York.
Parcel 3: All that certain piece or parcel of land, with the
buildings and improvements erected, situate, lying and being at
East Northport, Town of Huntington, County of Suffolk and State of
New York and designated as Lots 168 and 169 on a certain map
entitle, "Map of Belle Crest, Section B, situated at Northport,
Suffolk County, New York, belonging to the Houses and Home
Company", surveyed by C.P. Darling, CE&S and filed in the Suffolk
County Clerk's office on Dec. 21, 1908, as Map No. 321. District:
0400 Section: 120.00 Block: 01.00 Lot: 006.000. Said Premises
known as 122 Bellerose Avenue, East Northport, New York.
The referee does not accept cash. Only bank or certified checks
will be accepted. All certified funds must be made payable to
Brian T. Egan, Esq., as referee. Approximate amount of judgment is
$3,244,371 plus interest & costs. Premises will be sold subject to
provisions of filed judgment and terms of sale.
The referee can be reached at:
Brian T. Egan, Esq.
Meltzer Lippe Goldstein & Breitstone LLP
190 Willis Avenue
Mineola, New York 11501
[^] BOOK REVIEW: The First Junk Bond
------------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
http://www.beardbooks.com/beardbooks/the_first_junk_bond.html
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion.
This engrossing book follows the extraordinary journey of Texas
International, Inc. (known by its New York Stock Exchange stock
symbol, TEI), through its corporate growth and decline, debt
exchange offers, and corporate renaissance as Phoenix Resource
Companies, Inc. As Harlan Platt puts it, TEI "flourished for a
brief luminous moment but then crashed to earth and was consumed."
TEI's story features attention-grabbing characters, petroleum
exploration innovations, financial innovations, and lots of risk
taking.
The First Junk Bond was originally published in 1994 and received
solidly favorable reviews. The then-managing director of High Yield
Securities Research and Economics for Merrill Lynch said that the
book "is a richly detailed case study. Platt integrates corporate
history, industry fundamentals, financial analysis and bankruptcy
law on a scale that has rarely, if ever, been attempted." A retired
U.S. Bankruptcy Court judge noted, "[i]t should appeal as
supplementary reading to students in both business schools and law
schools. Even those who practice.in the areas of business law,
accounting and investments can obtain a greater understanding and
perspective of their professional expertise."
"TEI's saga is noteworthy because of the company's resilience and
ingenuity in coping with the changing environment of the 1980s, its
execution of innovative corporate strategies that were widely
imitated and its extraordinary trading history," says the author.
TEI issued the first junk bond. In 1986 it achieved the largest
percentage gain on the NYSE, and in 1987 suffered the largest
percentage loss. It issued one of the first bonds secured by a
physical commodity and then later issued one of the first PIK
(payment in kind) bonds. It was one of the first vulture investors,
to be targeted by vulture investors later on. Its president was
involved in an insider trading scandal. It innovated strip
financing. It engaged in several workouts to sell off operations
and raise cash to reduce debt. It completed three exchange offers
that converted debt in to equity.
In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever junk
bond. The fresh capital had allowed TEI to acquire a controlling
interest of Phoenix Resources Company, a part of King Resources
Company. TEI purchased creditors' claims against King that were
subsequently converted into stock under the terms of King's
reorganization plan. Only two years later, cash deficiencies forced
Phoenix to sell off its non-energy businesses. Vulture investors
tried to buy up outstanding TEI stock. TEI sold off its own
non-energy businesses, and focused on oil and gas exploration. An
enormous oil discovery in Egypt made the future look grand. The
value of TEI stock soared. Somehow, however, less than two years
later, TEI was in bankruptcy. What a ride!
All told, the book has 63 tables and 32 figures on all aspects of
TEI's rise, fall, and renaissance. Businesspeople will find
especially absorbing the details of how the company's bankruptcy
filing affected various stakeholders, the bankruptcy negotiation
process, and the alternative post-bankruptcy financial structures
that were considered. Those interested in the oil and gas industry
will find the book a primer on the subject, with an appendix
devoted to exploration and drilling, and another on oil and gas
accounting.
Dr. Harlan D. Platt is a professor of Finance at D'Amore-McKim
School of Business at Northeastern University. He is a member of
the Board of Directors of Millennium Chemicals Inc. and is on the
advisory board of the Millennium Liquidating Trust. He served as
the Associate Editor-Finance for the Journal of Business Research.
He received a Ph.D. from the University of Michigan, and holds a
B.A. degree from Northwestern University.
This book may be ordered by calling 888-563-4573 or by visiting
www.beardbooks.com or through your favorite Internet or local
bookseller.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
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.
Copyright 2024. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***