/raid1/www/Hosts/bankrupt/TCR_Public/240208.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, February 8, 2024, Vol. 28, No. 38
Headlines
1001 WL LLC: Voluntary Chapter 11 Case Summary
124 PENN RESIDENCE: Voluntary Chapter 11 Case Summary
1719 CORCORAN: Case Summary & Six Unsecured Creditors
2335 INVESTMENTS: Seeks Chapter 11 Bankruptcy Protection
511 ALABAMA: U.S. Trustee Unable to Appoint Committee
ADELANTE FITNESS: Unsecureds Will Get 12% of Claims over 60 Months
AINOS INC: Submits Clinical Hold Complete Response to US FDA
ALEXANDER DEMOLITION: Unsecureds to Split $62K over 36 Months
ARAGORN HOLDING: S&P Stays 'B' ICR on New M&G Modifier
ART OF GRANITE: Unsecureds Will Get 100% of Claims over 5 Years
ARTIFICIAL INTELLIGENCE: Major Order Arrives Ahead of Schedule
ASHFORD HOSPITALITY: Updates on Strategic Financing Payoff Plan
ASTRO INTERMEDIATE: S&P Cuts ICR to 'SD' on Missed Loan Payments
ATLANTA PEDIATRIC: Case Summary & 20 Largest Unsecured Creditors
ATLAS LITHIUM: Waratah Capital Reports 6.16% Equity Stake
AVIATION SAFETY: Creditors to Get Proceeds From Liquidation
BAUSCH HEALTH: Names New Members in Board Refreshment
BI HOLDINGS: Voluntary Chapter 11 Case Summary
BIOLASE INC: Registers 8.8 Million Units for Offering
BOND PENNZOIL: Case Summary & Six Unsecured Creditors
BRIGHT STEPS: Voluntary Chapter 11 Case Summary
CANO HEALTH: Owns 40% of Class A Common Shares of MSP Recovery
CARVANA CO: Goldman Sachs Entities Hold 1.2% of Class A Shares
CATALENT PHARMA: Moody's Puts 'B1' CFR Under Review for Upgrade
CBS TRUCKING: Voluntary Chapter 11 Case Summary
CHENIERE ENERGY: Announces Uplisting to New York Stock Exchange
CHPPR MIDCO: S&P Assigns Preliminary 'B-' ICR, Outlook Negative
COMMUNITY HEALTH: Wayne Smith Reports 5.7% Equity Stake
CONSTITUTION PLAZA: Voluntary Chapter 11 Case Summary
CURO GROUP: S&P Downgrades LT ICR to 'CCC-', Outlook Negative
CYXTERA TECHNOLOGIES: Law Firms, Advisers Want $23-Mil. in Fees
DIGICEL HOLDINGS: Completes $3.8-Bil. Debt Consensual Restructuring
DIGICEL LIMITED: Davis Polk Served as Adviser in Restructuring
DIGITAL ALLY: Board Sets Annual Base Salaries for Top Execs
DIGITAL ALLY: Michael Caulfield Resigns as Director
DOMUS BWW: Files Amended Plan; Confirmation Hearing April 3
DRAIN SERVICES: Continued Operations to Fund Plan
EAST WEST MANUFACTURING: Moody's Affirms 'B3' CFR, Outlook Stable
EBIX INC: Chapter 11 Funding Survives $70 Million Roll Up Challenge
EVE FINANCIAL: Unsecureds to Split $90K in Subchapter V Plan
EVE FINANCIAL: Winstead PC Advises Judgment Creditors
FINANCE OF AMERICA: Blackstone Financing Increased to $85MM
FORWARD AIR: S&P Downgrades ICR to 'B+', Outlook Stable
FTX GROUP: Unloads CryptoAssets to Funds to Pay Back Customers
GAUCHO GROUP: Noteholder Hikes Beneficial Ownership Cap to 9.99%
GENESIS GLOBAL: UST Opposes Releases of 3rd Parties
GENESYS CLOUD: Moody's Affirms 'B2' CFR, Outlook Remains Stable
GLOBAL CONSULTING: Files for Chapter 11 Bankruptcy
GOL LINHAS: Dechert LLP Represents Abra Noteholders
GYP HOLDINGS III: Moody's Raises CFR to 'Ba1', Outlook Stable
HIS STORY: Voluntary Chapter 11 Case Summary
INPIXON: Amends XTI Note to Hike Maximum Principal Amount to $4M
KARPATIA TRUCKS: Business Revenue to Fund Plan
KENNESAW FALLS: Case Summary & One Unsecured Creditor
KIDDE-FENWAL: Wants Chapter 11 Mediation Extended Another Month
KNP HOLDINGS: Case Summary & Eight Unsecured Creditors
KNS MOTEL: Unsecureds to Get 35 Cents on Dollar in Plan
KRONOS WORLDWIDE: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
LEGAL RECOVERY: Voluntary Chapter 11 Case Summary
MALLINCKRODT PLC: Names New Board Members
MERCURITY FINTECH: Agrees to Extend Maturity of $9M Note to 2025
MVK FARMCO: Gears for Liquidation If Sale Failed
MYRA PARK 635: Case Summary & Nine Unsecured Creditors
NATIONAL RIFLE: Ex-CEO LaPierre Takes Blame During Fraud Trial
NGL ENERGY: Fitch Rates Proposed 2029/2032 Secured Notes 'BB-'
OFFICE PROPERTIES: S&P Lowers ICR to to 'CCC', Outlook Negative
OIL STATES: Palisade Capital Management Holds 6.28% Equity Stake
OMNIQ CORP: Unit Acquires CodeBlocks for US$1.28 Million
ORIGINAL MONTANA: Unsecureds to Get 100 Cents on Dollar in Plan
ORYX MIDSTREAM: Moody's Rates New $1.84BB Secured Term Loan 'Ba3'
PAX THERAPY: Claims to be Paid From Available Cash and Income
PLUTO ACQUISITION: S&P Downgrades ICR to 'CC', Outlook Negative
PPWC ENTERPRISES: Unsecureds Will Get 100% of Claims in 24 Months
PROTERRA INC: Completes Sale of Powered Business to Volvo
PROTERRA INC: Justin Pugh Named Acting Chief Financial Officer
PUERTO RICO: Bondholder Fight Puts PREPA' Future Revenue at Risk
REMARK HOLDINGS: Registers 20MM Common Shares for Possible Resale
RISKON INTERNATIONAL: Robert Smith Holds 6,667 Common Shares
RITE AID: Taps Liquidators as Possible Buyer Talks Continue
ROBINHOOD PROPERTIES: Voluntary Chapter 11 Case Summary
SAGO VENTURES: Executes Settlement Agreement; Files Amended Plan
SECURE ENERGY: S&P Raises ICR to 'B+' on Material Debt Reduction
SIGNATURE BANK: N.Y. Sues FDIC for Unpaid $44-Mil. Bank Tax
SIR TAJ: Voluntary Chapter 11 Case Summary
SIRVA WORLDWIDE: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
SPIRIT AIRLINES: Fitch Lowers LongTerm IDR to B-, Outlook Negative
STIMWAVE TECHNOLOGIES: Court Might Screen Ex-CEO, Relatives in Case
STREAM TV NETWORKS: Trustee Ordered to Take Over Chapter 11 Process
TACORA RESOURCES: S&P Withdraws 'D' Long-Term Issuer Credit Rating
TALOS PRODUCTION: Fitch Rates New $1BB New 2nd Lien Sec. Notes 'B+'
TELEPHONE USA: Case Summary & Six Unsecured Creditors
TEXAS REIT: Case Summary & Two Unsecured Creditors
TOOLOTS INC: Case Summary & 20 Largest Unsecured Creditors
TROIKA MEDIA GROUP: Unsecured Creditors Slam Sale Proposal
TRULITE HOLDING: S&P Assigns 'B' ICR on Acquisition, Outlook Stable
TUPPERWARE BRANDS: SVP Holds 6,689 Common Shares as of Feb. 1
UKG INC: Fitch Assigns 'B+' First-Time LongTerm IDR, Outlook Stable
UNIVERSITY OF THE ARTS: Fitch Cuts Rating on $46MM 2017 Bonds to B+
URBAN ONE: BlackRock Holds 5.1% Class A Common Shares
VERTEX ENERGY: Fitch Lowers LongTerm IDR to 'CCC+'
WALTER'S TRANSPORT: Voluntary Chapter 11 Case Summary
WEWORK INC: Wants to Keep Cash in Foreign Banks Over DOJ Concerns
WRENCH GROUP: Moody's Rates Amended Sec. First Lien Term Loans 'B2'
WRENCH GROUP: S&P Affirms 'B-' ICR, Outlook Stable
YELLOW CORP: Central State Pension Arbitration Demand 'Nonsense'
[*] Venable LLP Names New Bankruptcy Group Co-Leaders
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
1001 WL LLC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: 1001 WL, LLC
2450 Wickersham Lane, Suite 202
Austin, TX 78741
Business Description: 1001 WL, LLC is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 24-10119
Judge: Hon. Shad Robinson
Debtor's Counsel: Stephen W Sather, Esq.
BARRON & NEWBERGER, P.C.
7320 N. MoPac Expressway 400
Austin TX 78731
Tel: (512) 649-3243
Email: ssather@bn-lawyers.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Drew Dennett as Authorized Signatory.
The Debtor filed an empty 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/UP3HV7A/1001_WL_LLC__txwbke-24-10119__0001.0.pdf?mcid=tGE4TAMA
124 PENN RESIDENCE: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: 124 Penn Residence LLC
331 Rutledge Street
#208
Brooklyn NY 11211
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-40559
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: Leo Fox, Esq.
LAW OFFICE OF LEO FOX
630 Third Avenue - 18th Floor
New York NY 10017
Tel: 212-867-9595
Email: leo@leofoxlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Israel Perlmutter as sole
member-manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YPJJDLI/124_Penn_Residence_LLC__nyebke-24-40559__0001.0.pdf?mcid=tGE4TAMA
1719 CORCORAN: Case Summary & Six Unsecured Creditors
-----------------------------------------------------
Debtor: 1719 Corcoran Limited Liability Company
1629 K Street NW
Suite 300
Washington, DC 20006
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00034
Debtor's Counsel: Justin P. Fasano, Esq.
MCNAMEE HOSEA, P.A.
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Tel: 301-441-2420
Fax: 301-982-9450
Email: jfasano@mhlawyers.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Justin Thornton as Managing Member of
Bansir Capital LLC, Managing Member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/RMQYBLA/1719_Corcoran_Limited_Liability__dcbke-24-00034__0001.0.pdf?mcid=tGE4TAMA
2335 INVESTMENTS: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------
2335 Investments LLC filed for chapter 11 protection in the
Northern District of California.
The Debtor disclosed $1,687,587 in debt owed to 1 and 49 creditors.
The petition states funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated
for
April 16, 2023, at 11:00 AM, Tele/Videoconference -
www.canb.uscourts.gov/calendars.
About 2335 Investments
2335 Investments LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)). 2335 Investments is the
owner of the real property located at 795 Russell Lane Milpitas, CA
95035, valued at $1.8 million.
2335 Investments LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 24-50088) on Jan. 25,
2024. In the petition filed by Daniel Shaw, as managing member,
the Debtor reported total assets of $1,819,744 and total
liabilities amounting to $1,687,587.
The Debtor is represented by:
Lars T. Fuller, Esq.
The Fuller Law Firm
15700 Winchester Blvd.
Los Gatos, CA 95030
Tel: lars@fullerlawfirm.net
511 ALABAMA: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------
The U.S. Trustee for Region 21 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of 511 Alabama Ave, LLC.
About 511 Alabama Ave
511 Alabama Ave, LLC filed Chapter 11 petition (Bankr. N.D. Ga.
Case No. 24-10032) on Jan. 5, 2024, with up to $50,000 in assets
and $500,001 to $1 million in liabilities.
Judge Paul Baisier oversees the case.
J. Nevin Smith, Esq., at Smith Conerly, LLP is the Debtor's legal
counsel.
ADELANTE FITNESS: Unsecureds Will Get 12% of Claims over 60 Months
------------------------------------------------------------------
Adelante Fitness, LLC and Michael Adelante, filed with the U.S.
Bankruptcy Court for the District of New Jersey a Joint Plan of
Reorganization for Small Business dated January 30, 2024.
Adelante Fitness, LLC is a gymnasium operating out of 753
Boulevard, Kenilworth, NJ 07033. Michael Adelante owns 100% of the
membership interests in Adelante Fitness, LLC.
The Gym derives substantially all its income through membership
fees, as well as personal training/coaching sessions, sales of
merchandise, and occasionally concessions sales. Adelante Fitness,
LLC employs approximately 7 people, all of whom are part time
employees. The space currently occupied by the Gym is rented
pursuant to a lease agreement.
Adelante Fitness, LLC maintains that the value of its tangible and
intangible personal property (including deposit accounts) is
comprised of $963.35 in cash deposits, tangible personal property
with an appraised value of $60,530.00, and accounts receivable in
the amount of $1,040.00, for a total of $62,533.35.
After some investigation, Adelante Fitness, LLC has determined that
the lien held by Stripe, Inc. is not properly secured as a UCC was
never filed by the creditor. As such, Stripe, Inc. will be treated
as unsecured creditor under the plan.
Adelante Fitness, LLC further proposes to pay the secured claim of
J. Hemmen Associates, LLC, by way of a Landlord's Lien, and cure
and reinstate the lease by making payment to J Hemmen Associate,
LLC in the amount of $87,896.64 over a 60-month terms, in monthly
installments of $1,464.95 commencing 30 days after the Effective
Date of the Plan on account of J. Hemmen Associate, LLC claim as
landlord for Adelante Fitness, LLC.
Michael Adelante propose to pay the allowed claims of Santander
Consumer USA, which is secured by Michael's personal vehicle, in
compliance with the loan documents forming the claim.
The Debtors propose to treat all other allowed claims as general
unsecured claims under Bankruptcy Code Sec. 506(a). The Debtors
will make sixty monthly payments of $200.00 for distribution on
account of allowed unsecured claims; the holders of such claims
will share in the fund pro rata.
Class 3 consists of Priority Unsecured Claims. Debtors propose to
pay the full amount of necessary to repay the claims in cash on the
Effective Date.
Class 4 consists of General Unsecured Claims against Jointly
Administered Debtors. This Class shall receive a monthly payment of
$200.00 for 60 months. This Class will receive a distribution of
12% of their allowed claims. This Class is impaired.
Debtor will retain all equity interests in Adelante Fitness, LLC.
The Debtor Adelante Fitness, LLC will fund the payments to Classes
1 and 4 by contributing postconfirmation income realized through
its operations.
The Individual Debtor will fund the payments to Classes 2 and 4 by
contributing post-confirmation income realized through his
employment.
On Confirmation of the Plan, all property of the Debtors, tangible
and intangible, including, without limitation, licenses, furniture,
fixtures and equipment, will revert, free and clear of all Claims
and Equitable Interests except as provided in the Plan, to the
respective Debtor. The Debtors expects to have sufficient cash on
hand to make the payments required on the Effective Date.
A full-text copy of the Joint Plan dated January 30, 2024 is
available at https://urlcurt.com/u?l=NmbFvS from PacerMonitor.com
at no charge.
Counsel to Debtor:
Brian G. Hannon, Esq.
Norgaard O'Boyle & Hannon
184 Grand Avenue
Englewood, NJ 07631
Phone: (201) 871-1333
About Adelante Fitness
Adelante Fitness, LLC is a gymnasium operating out of 753
Boulevard, Kenilworth, NJ 07033. Michael Adelante owns 100% of the
membership interests in Adelante Fitness, LLC.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.J. Case No. 23-19741) on November 1,
2023. In the petition signed by Michael Adelante, owner, the Debtor
disclosed up to $100,000 in assets and up to $500,000 in
liabilities.
Judge Stacey L. Meisel oversees the case.
Brian G Hannon, Esq., at Norgaard OBoyle Hannon, is the Debtor's
legal counsel.
AINOS INC: Submits Clinical Hold Complete Response to US FDA
------------------------------------------------------------
Ainos, Inc. announced that it has submitted the clinical hold
complete response to the U.S. Food and Drug Administration for
conducting a Phase II trial of its low-dose oral interferon
(IFN)-alpha formulation, VELDONA, for treatment of mild COVID-19
symptoms.
If approved, the Company's Phase II trial is expected to involve a
multicenter, parallel, randomized study conducted in Taiwan to
evaluate the efficacy of VELDONA in subjects with mild COVID-19
symptoms during the third quarter of 2024.
Mr. Chun-Hsien (Eddy) Tsai, Chairman, president and CEO of Ainos,
commented, "Our submission of a clinical hold complete response to
the US FDA marks a significant step for Ainos. This key milestone
comes on the heels of our successful manufacturing of a GMP
Clinical Batch of our VELDONA investigational new drug. We are
confident that our response robustly and comprehensively addresses
the issues raised by the FDA, and we anticipate receiving its
feedback in due course. Resolving the comments raised by the FDA
will expedite our clinical study plan assessing VELDONA's
effectiveness in individuals exhibiting mild COVID-19 symptoms. We
remain committed to advancing and monetizing our product pipeline
to create long-term shareholder value."
Ainos' recently-commenced VELDONA manufacturing process fully
complies with both Pharmaceutical Inspection Co-operation Scheme
Good Manufacturing Practice ("PIC/S GMP") and the U.S. FDA's
Current Good Manufacturing Practice regulations. The updated
Chemistry, Manufacturing, and Controls ("CMC") information
indicates that the stability of VELDONA can exceed the minimum
shelf life of biologicals. Ainos intends to submit a number of
additional IND applications during the second half of 2024,
including Phase II/III studies for treatment of oral warts in
HIV-seropositive patients (designated an orphan drug by the U.S.
FDA), and Phase II/III studies for Sjogren's syndrome.
Ainos continues to build on its prior studies on influenza and the
common cold. Given VELDONA's promising results to date, the
Company is optimistic that it may become a potential treatment for
mild COVID-19 symptoms in the future. Ainos plans to expand its
VELDONA platform for treatment of other viral infections, as a key
component of its long-term strategy to enhance and realize the
value of this unique compound.
Ainos' low-dose oral VELDONA formulation is designed to enhance a
patient's immune response and boost their ability to fight viral
infections, while also potentially reducing the side effects and
risks caused by high-dose interferons and other small molecule
drugs. The Company's previous studies have demonstrated that
VELDONA could inhibit respiratory virus infection, including
influenza A. Human studies have shown that IFNα given orally is
effective against viral and autoimmune diseases, without the side
effects associated with high-dose injections of IFNα. To date, 68
clinical trials have been conducted with low-dose oral IFNa.
Nearly 6,000 patients with one of 16 different disease indications
and/or healthy volunteers participated in these trials, including a
total of 4,600 subjects exposed to IFNα at a dose level ranging
from three to 2,000 international units given daily for up to five
years. The safety of orally administered IFNα has been
consistently demonstrated in these trials.
About Ainos
Ainos, Inc. (www.ainos.com), formerly known as Amarillo
Biosciences, Inc., is a diversified healthcare company engaged in
the research and development and sales and marketing of
pharmaceutical and biotech products. The Company is engaged in
developing medical technologies for point-of-care testing and safe
and novel medical treatment for a broad range of disease
indications. The Company is a Texas corporation ncorporated in
1984. The Company has historically been involved in extensive
research and development of low-dose oral interferon as a
therapeutic. The Company continues to develop its VELDONA platform
and other pharmaceutical platforms and recently have acquired
intellectual properties to expand our POCT business. In 2021 and
2022, the Company acquired significant intellectual property from
its majority shareholder, Ainos KY, to expand its potential product
portfolio into Volatile Organic Compounds and COVID-19 POCTs.
Ainos reported a net loss of $14.01 million for the year ended Dec.
31, 2022, compared to a net loss of $3.89 million for the year
ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $33.86
million in total assets, $6.18 million in total liabilities, and
$27.68 million in total stockholders' equity.
Houston, Texas-based PWR CPA, LLP, the Company's auditor since
2020, issued a "going concern" qualification in its report dated
March 31, 2023, citing that the Company has incurred recurring
losses and recurring negative cash flow from operating activities,
and has an accumulated deficit which raises substantial doubt about
its ability to continue as a going concern.
The Company has incurred net operating losses in every year since
inception and has an accumulated deficit as of September 30, 2023
of $31,961,654 and expects to incur additional losses and negative
operating cash flows for at least the next 12 months. The
Company's ability to meet its obligations is dependent upon its
ability to generate sufficient cash flows from operations and
future financing transactions. Although management expects the
Company will continue as a going concern, there is no assurance
that management's plans will be successful since the availability
and amount of such funding is not certain. Accordingly,
substantial doubt exists about the Company's ability to continue as
a going concern for at least one year from the issuance of its
financial statements, according to the Company's Quarterly Report
for the period ended Sept. 30, 2023.
ALEXANDER DEMOLITION: Unsecureds to Split $62K over 36 Months
-------------------------------------------------------------
Alexander Demolition and Hauling, Inc., filed with the U.S.
Bankruptcy Court for the Central District of California a Plan of
Reorganization for Small Business dated January 30, 2024.
The Debtor operates as a contractor and bids on projects with
subcontractors doing part of the work.
The Debtor allegedly has a total of approximately $21,405.55 in
secured claims, $9,794.19 in priority claims, and $155,723.07 in
general unsecured claims, all subject to review during the claim
objection process.
The Plan Proponent's financial projections show that the Debtor
will have Projected Disposable Income from its operations of three
years of approximately $123,301 subtracting 10% for contingencies.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cashflow from operations.
Class 3 consists of non-priority unsecured creditors. An aggregate
$62,000 to all claimholders over 36 months due and payable every 3
months, who shall receive a proportionate share. This amount may
increase as required by law or pursuant to order of the Court. This
Class is impaired.
Class 4 consists of Convenience Class of non-priority unsecured
creditors. This Class shall be paid in full on the effective date.
This Class is impaired.
Class 5 consists of the interests of the holders of equity in
property of the estate. All of Debtor's equity interests shall vest
in the Debtor's members as of the petition date in the same
percentage they held as of that time.
The Plan will be funded by the Debtor's disposable income from
business earnings.
A full-text copy of the Plan of Reorganization dated January 30,
2024 is available at https://urlcurt.com/u?l=KObkLY from
PacerMonitor.com at no charge.
Attorney for the Plan Proponent:
Giovanni Orantes, Esq.
THE ORANTES LAW FIRM, PC
3435 Wilshire Blvd., Suite 2920
Los Angeles, CA 90010
Telephone: (213) 389-4362
Facsimile: (877) 789-5776
Email: go@gobklaw.com
About Alexander Demolition
Alexander Demolition and Hauling, Inc., operates as a contractor
and bids on projects with subcontractors doing part of the work.
Alexander Demolition and Hauling filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
23-15815) on Sept. 7, 2023, with as much as $50,000 in assets and
$100,001 to $500,000 in liabilities.
Judge Deborah J. Saltzman oversees the case.
Giovanni Orantes, Esq., at Orantes Law Firm, PC, is the Debtor's
bankruptcy counsel.
ARAGORN HOLDING: S&P Stays 'B' ICR on New M&G Modifier
------------------------------------------------------
S&P Global Ratings retained its ratings and outlook on Aragorn
Holding Parent Corp., including its 'B' issuer credit rating,
remain unchanged following the assignment of the new M&G
assessment.
S&P Global Ratings assigned a new M&G modifier assessment of
moderately negative to Aragorn following the revision to S&P's
criteria for evaluating the credit risks. The terms management and
governance encompass the broad range of oversight and direction
conducted by an entity's owners, board representatives, and
executive managers. These activities and practices can impact an
entity's creditworthiness and, as such, the M&G modifier is an
important component of its analysis.
S&P said, "Our M&G assessment of moderately negative points to
certain management and governance weaknesses that weigh down
creditworthiness for Aragorn. Aragorn is a sponsor-owned company,
and we believe sponsor ownership can lead to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects the generally finite holding periods and
a focus on maximizing shareholder returns."
All other ratings on Aragorn remain unchanged.
S&P said, "The stable outlook reflects our expectation that
increasing digital consumption will result in mid-single-digit
percent organic revenue growth from public libraries and
educational institutions. As such, we expect mid-single-digit
percent organic revenue growth for OverDrive, as well as S&P Global
Ratings-adjusted leverage of low-5x and free operating cash flow
(FOCF) to debt of 8%-9% for fiscal year ended, Dec. 31, 2024."
S&P could lower the rating on OverDrive within the next 12 months
if:
-- Its operating performance significantly underperforms S&P's
expectations such that FOCF to debt declines below its 5% threshold
for the rating.
Although unlikely within the next 12 months, we could raise the
rating on OverDrive if:
-- Its operating performance significantly overperforms S&P's
expectations such that S&P Global Ratings-adjusted leverage
declines below 5x and FOCF to debt increases to above 10%.
-- It adopts a financial policy that maintains S&P Global
Ratings-adjusted leverage below 5x, inclusive of acquisitions and
shareholder returns.
ART OF GRANITE: Unsecureds Will Get 100% of Claims over 5 Years
---------------------------------------------------------------
Art of Granite Counter Tops Inc., filed with the U.S. Bankruptcy
Court for the Middle District of Florida a Plan of Reorganization
dated January 30, 2024.
Debtor primarily operates from a leased warehouse in Jacksonville,
Florida. It manufactures, installs and extracts counter tops in
residential and commercial properties.
This Plan provides for 1 class of Priority claims, 8 classes of
secured claims, and 1 class of unsecured claims. Unsecured
creditors holding allowed claims will receive distribution under
this Plan as determined by Section 1129(a)(15) of the Bankruptcy
Code and pursuant to this Plan. This Plan also provides for the
payment of administrative and priority claims either upon the
effective date of the Plan, as agreed or as allowed under the
Bankruptcy Code.
Class 10 consists of General Unsecured Claims. This Class is
Unimpaired.
* Consensual Plan Treatment: The liquidation value or amount
that unsecured creditors would receive in a hypothetical chapter 7
case is $0.00. However, the Debtor is proposing to pay these
creditors at 100%. Payments shall commence on the fifteenth day of
the month, on the first month that begins after the Effective Date.
Pursuant to Section 1191 of the Bankruptcy Code, the value to be
distributed to unsecured creditors is greater than the Debtor's
projected disposable income to be received in the 5-year period
beginning on the date that the first payment is due under the
Plan.
* Nonconsensual Plan Treatment: The liquidation value or
amount that unsecured creditors would receive in a hypothetical
chapter 7 case is $0.00. However, the Debtor is proposing to pay
these creditors in full at 100%. If the Debtor remains in
possession, plan payments shall include the Subchapter V Trustee's
administrative fee which will be billed hourly at the Subchapter V
Trustee's then current allowable blended rate, which shall not
exceed the Disposable Income. Plan Payments shall commence on the
fifteenth day of the month, on the first month that is thirty days
after the Effective Date and shall continue quarterly payments for
60 months.
The Debtor will retain all property of the estate and such property
shall re-vest in the Debtor at discharge. Thereafter, the Debtor
may use, acquire and dispose of their property free of any
restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the
Bankruptcy Court. As of the effective date of this Plan, all
property retained by the Debtors and sold shall be free and clear
of any and all liens and interests except as specifically provided
in the Plan or the order confirming the Plan.
A full-text copy of the Plan of Reorganization dated January 30,
2024 is available at https://urlcurt.com/u?l=fVRpBw from
PacerMonitor.com at no charge.
Counsel for Debtor:
Donald M. DuFresne, Esq.
Parker & Dufresne, PA
8777 San Jose Blvd., Suite 301
Jacksonville, FL 32217
Telephone: (904) 733-7766
Email: dufresne@jaxlawcenter.com
About Art of Granite Countertops
Art of Granite Countertops, Inc. provides countertops to various
contractors- for residential and commercial purposes. The Debtor
also provides services for de-fabricating existing countertops and
installing the newly ordered product.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 3:23-bk-02706) on
November 2, 2023. In the petition signed by Marco Damas, president,
the Debtor disclosed up to $500,000 in assets and up to $1 million
in liabilities.
Judge Jason A. Burgess oversees the case.
Donald M. DuFresne, Esq., at Parker & DuFresne, P.A., is the
Debtor's legal counsel.
ARTIFICIAL INTELLIGENCE: Major Order Arrives Ahead of Schedule
--------------------------------------------------------------
Robotic Assistance Devices, Inc. (RAD), a subsidiary of Artificial
Intelligence Technology Solutions, Inc., announced the surprise
expansion of its relationship with its esteemed Fortune 50 client.
Specifically, RAD received orders for additional 34 RIO units, and
encouragement from the client to continue to accelerate deployment
as even more orders may be forthcoming. This new order expands the
already robust partnership between RAD and the client, which has
previously placed over 100 RIO orders, as well as setting
expectations for continued rapid expansion.
The request for an accelerated rollout comes as RAD has been
approximately one month ahead of expectations in the delivery
schedule for Phase 2 and Phase 3 of the client's deployment plan.
These additional 34 units are slated for deployment across 9 new
sites, contributing to RAD's growing presence in potentially
hundreds of the client's locations nationwide. Currently, RAD is
on track to having its devices operational in approximately 50 of
the client's sites per existing contracts.
Mark Folmer, CPP, PSP, FSyI, President of RAD, expressed optimism
about the Company's performance and its impact on future business:
"Our team's ability to exceed the rollout expectations has
positioned us favorably for future opportunities. We are hopeful
that our continued success will pave the way for further orders,
potentially covering hundreds more of the client's job sites."
The expansion of RAD's production capabilities is timely, with Troy
McCanna, Sr. Vice President of Revenue Operations at RAD,
highlighting the team's scalability: "The addition of two new
business development managers to our team this month enhances our
capacity to meet the growing demand from our clients. We're
scaling up production to ensure we can deliver on our commitments
without delay."
Steve Reinharz, CEO of AITX and RAD, shared insights into the
Company's production goals and future developments: "We are
actively working to increase our production capacity for RIO units
to up to 20 units per week. This ramp-up is crucial as we prepare
to introduce 'Generation 4' of our RIO and ROSA, which promises not
only enhanced features but also more efficient production
processes."
These 34 additional RIO orders are expected to generate over
$50,000 in recurring monthly revenue (RMR), significantly
contributing to RAD's near-term goal of achieving $700,000 in RMR.
"With these latest orders, there's a strong possibility that the
fourth quarter could record our largest booking of contracts to
date," McCanna added.
Reinharz also hinted at the upcoming innovations: "Our team is hard
at work finalizing RIO Generation 4 and transitioning ROSA 4 to
production. These next-generation devices will boast fewer parts,
reduced costs, faster production times, and new features, marking
significant advancements in our product offerings and further
increasing our technical lead."
This series of successful orders and the anticipation of new
product generations underscore RAD's commitment to leading the
security and surveillance industry with innovative solutions that
meet the evolving needs of its clients.
RMR is money earned from customers who pay for a subscription to a
service or product. RAD's solutions are generally offered as a
recurring monthly subscription, typically with a minimum 12-month
subscription contract.
As stated, sitting atop a standard RIO 360 configuration are dual
ROSA units. ROSA is a multiple award-winning, compact,
self-contained, portable, security and communication solution that
can be installed and activated in about 15 minutes. ROSA's
AI-driven security analytics include human, firearm, vehicle
detection, license plate recognition, responsive digital signage
and audio messaging, and complete integration with RAD's software
suite notification and autonomous response library. Two-way
communication is optimized for cellular, including live video from
ROSA's high-resolution, full-color, always-on cameras. RAD has
published five Case Studies detailing how ROSA has helped eliminate
instances of theft, trespassing and loitering at hospital campuses,
multi-family communities, car rental locations and construction
sites across the country.
AITX, through its subsidiary, Robotic Assistance Devices, Inc.
(RAD), is redefining the $25 billion (US) security and guarding
services industry through its broad lineup of innovative, AI-driven
Solutions-as-a-Service business model. RAD solutions are
specifically designed to provide cost savings to businesses of
between 35%-80% when compared to the industry's existing and costly
manned security guarding and monitoring model. RAD delivers these
tremendous cost savings via a suite of stationary and mobile
robotic solutions that complement, and at times, directly replace
the need for human personnel in environments better suited for
machines. All RAD technologies, AI-based analytics and software
platforms are developed in-house.
RAD has a prospective sales pipeline of over 35 Fortune 500
companies and numerous other client opportunities. RAD expects to
continue to attract new business as it converts its existing sales
opportunities into deployed clients generating a recurring revenue
stream. Each Fortune 500 client has the potential of making
numerous reorders over time.
About Artificial Intelligence Technology
Headquartered in Ferndale, MI, Artificial Intelligence Technology
Solutions Inc. is an innovator in the delivery of artificial
intelligence-based solutions that empower organizations to gain new
insight, solve complex challenges and fuel new business ideas.
Through its next-generation robotic product offerings, AITX's RAD,
RAD-M and RAD-G companies help organizations streamline operations,
increase ROI, and strengthen business. AITX technology improves
the simplicity and economics of patrolling and guard services and
allows experienced personnel to focus on more strategic tasks.
Customers augment the capabilities of existing staff and gain
higher levels of situational awareness, all at drastically reduced
cost. AITX solutions are well suited for use in multiple industries
such as enterprises, government, transportation, critical
infrastructure, education, and healthcare.
Deer Park, Illinois-based L J Soldinger Associates, LLC, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated June 14, 2023, citing that the
Company had a net loss of approximately $18 million, an accumulated
deficit of approximately $112 million and stockholders' deficit of
approximately $32 million as of and for the year ended February 28,
2023, and therefore there is substantial doubt about the ability of
the Company to continue as a going concern.
For the nine months ended Nov. 30, 2023, the Company had negative
cash flow from operating activities of $9,378,427. As of Nov. 30,
2023, the Company has an accumulated deficit of $125,535,116, and
negative working capital of $12,944,810. Management does not
anticipate having positive cash flow from operations in the near
future. The Company said these factors raise a substantial doubt
about the Company's ability to continue as a going concern for the
twelve months following the issuance of these financial statements.
ASHFORD HOSPITALITY: Updates on Strategic Financing Payoff Plan
---------------------------------------------------------------
Ashford Hospitality Trust, Inc. provided an update on its plan to
pay off its strategic financing, which has a final maturity date in
January 2026. This plan includes raising sufficient capital through
a combination of asset sales, mortgage debt refinancings, and
non-traded preferred capital raising.
The Company currently has several assets at various stages of being
available for sale:
* 390-room Hilton Boston Back Bay – Boston, MA
* 444-room Ritz-Carlton Atlanta – Atlanta, GA
* 296-room Westin Princeton – Princeton, NJ
* 351-room Hyatt Savannah – Savannah, GA
* 193-room One Ocean – Atlantic Beach, FL
* 350-room Residence Inn Sea World Orlando – Orlando, FL
* 144-room Residence Inn Salt Lake City – Salt Lake City,
UT
* 168-room Courtyard Overland Park – Overland Park, KS
* 90-room Courtyard Manchester – Manchester, CT
* 86-room Hampton Inn Lawrenceville – Lawrenceville, GA
* 90-room SpringHill Suites Kennesaw – Kennesaw, GA
* 87-room Fairfield Inn Kennesaw – Kennesaw, GA
Through these asset sales the Company intends to generate
incremental proceeds which will be used:
1) to pay down the strategic financing
2) to deleverage the balance sheet, and
3) for general corporate purposes.
The Company is unlikely to sell all of these assets but plans to
determine which assets are capturing the most attractive valuations
and providing sufficient proceeds levels above allocated debt
balances and mortgage release prices.
The Company is also working with lenders to refinance its loan
secured by the Renaissance Nashville in Nashville, Tennessee, its
Morgan Stanley Pool Loan with 17 hotels located in several states,
its loan secured by the Marriott Gateway in Arlington, Virginia,
and its loan secured by the Indigo Atlanta in Atlanta, Georgia. The
Company believes there could be substantial excess proceeds from
the refinancing of the Renaissance Nashville loan which can be used
to pay down the Company's strategic financing.
"As we enter 2024, we are focused on paying off our strategic
corporate financing," commented Rob Hays, Ashford Trust's President
and Chief Executive Officer. "Between the excess proceeds from
planned asset sales, excess proceeds from planned property
refinancings, and proceeds from our non-traded preferred capital
raise, we believe we have a viable path to pay off our strategic
financing this year. Our hotel portfolio also continues to benefit
from its geographic diversification, and I believe we are
well-positioned to continue to outperform."
About Ashford Hospitality
Headquartered in Dallas, Texas, Ashford Hospitality Trust, Inc.
operates as a self-advised real estate investment trust focusing on
the lodging industry. As of September 30, 2023, the Trust had $3.7
billion in total assets against $3.9 billion in total liabilities.
Egan-Jones Ratings Company, on May 5, 2023, maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Ashford Hospitality Trust, Inc.
ASTRO INTERMEDIATE: S&P Cuts ICR to 'SD' on Missed Loan Payments
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating to 'SD'
(selective default) from 'CCC' on Astro Intermediate Holding II
Corp.
S&P lowered the issue-level ratings on Astro's first-lien term loan
and second-lien term loan to 'D', from 'CCC' and 'CC',
respectively.
The failure to pay principal and interest due Dec. 31, 2023, on
first-lien and second-lien term loans is a default.
Since principal and interest payments were not made when due or
within the earlier of the original stated grace period or 30 days
there is a breach of an imputed promise relative to the
obligations. Despite S&P's belief the company's credit agreements
have been amended to extend the original grace period, the failure
to pay contractual principal and interest within 30 days of the due
date represents a default.
ATLANTA PEDIATRIC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Atlanta Pediatric Therapy, Inc.
6035 Peachtree Rd
Atlanta, GA 30360
Case No.: 24-51457
Business Description: The Debtor is a speech pathologist located
in Georgia.
Chapter 11 Petition Date: February 7, 2024
Court: United States Bankruptcy Court
Northern District of Georgia
Judge: Hon. Wendy L Hagenau
Debtor's Counsel: Cameron M. McCord, Esq.
JONES & WALDEN, LLC
699 Piedmont Avenue NE
Atlanta, GA 30308
Tel: 404-564-9300
Email: info@joneswalden.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by George Rosero as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/3RWTYWI/Atlanta_Pediatric_Therapy_Inc__ganbke-24-51457__0001.0.pdf?mcid=tGE4TAMA
ATLAS LITHIUM: Waratah Capital Reports 6.16% Equity Stake
---------------------------------------------------------
In a Schedule 13G Report filed with the U.S. Securities and
Exchange Commission, Waratah Capital Advisors Ltd. disclosed that
as of July 17, 2023, it beneficially owned 661,158 shares of Atlas
Lithium Corporation's Common Stock, representing 6.16% of the
shares outstanding.
The Shares are owned by a private investment fund for which Waratah
Capital Advisors Ltd. provides discretionary advisory services and
has proxy voting authority, which cannot be withdrawn by the fund
within 60 days. Accordingly, for purposes of Rule 13d-3 under the
Securities Exchange Act of 1934, Waratah may be deemed to
beneficially own the Shares. In accordance with Rule 13d-4 under
the Exchange Act, Waratah expressly disclaims beneficial ownership
of the Shares for purposes of Sections 13(d) or 13(g) of the
Exchange Act.
The percentage is based on 10,729,260 Common Shares outstanding as
of October 20, 2023, and assuming the conversion of all Shares held
into Common Shares, in accordance with Rule 13d-3 of the Act.
A full-text copy of the Report is available at
http://tinyurl.com/tvst6u63
About Atlas Lithium
Atlas Lithium Corporations formerly Brazil Minerals, Inc. is a
mineral exploration and development company with lithium projects
and exploration properties in other critical and battery minerals,
including nickel, rare earths, graphite, and titanium, to power the
increased demand for electrification. The Company's current focus
is on developing its hard-rock lithium project located in Minas
Gerais State in Brazil at a well-known, premier pegmatitic district
in Brazil. The Company intends to produce and sell lithium
concentrate, a key ingredient for the global battery supply chain.
Atlas Lithium reported a net loss of $5.66 million in 2022 and a
net loss of $4.03 million in 2021. As of Sept. 30, 2023, the
Company had $29.13 million in total assets, $22.70 million in total
liabilities, and $6.42 million in total stockholders' equity.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Atlas Lithium said that it may need to seek additional equity or
debt financing to the extent that its current resources are
insufficient to satisfy its cash requirements. If the needed
financing is not available, or if the terms of financing are less
desirable than it expects, the Company may be forced to scale back
its existing operations and growth plans, which could have an
adverse impact on its business and financial prospects and could
raise substantial doubt about its ability to continue as a going
concern.
AVIATION SAFETY: Creditors to Get Proceeds From Liquidation
-----------------------------------------------------------
Aviation Safety Resources, Inc., S.E., Inc. d/b/a Strong
Enterprises, and Pioneer Aerospace Corporation, filed with the U.S.
Bankruptcy Court for the Middle District of Florida a Joint Plan of
Liquidation for Small Businesses dated January 30, 2024.
ASR is a Florida corporation formed in December of 2018. ASR
acquired the stock of two other parachute and related equipment
manufacturing companies, Strong in April 2021 and Pioneer in March
2022, through which all manufacturing and other operations are
effectively conducted.
Strong is a Florida corporation. On the Petition Date, Strong
manufactured parachutes and related products for both military
solutions and commercial customers.
Pioneer is a Delaware corporation and is authorized to do business
in Florida. On the Petition Date, Pioneer was engaged in the design
and manufacture of state-of-the-art aerodynamic deceleration
systems supporting specialized tactical, personnel, cargo,
humanitarian, weapons, and space exploration programs.
The Debtors filed these chapter 11 cases in order to close on sales
of substantially all of their operating assets under a process
approved by the Court.
Pioneer and Strong entered into an Asset Purchase Agreement (the
"Paradigm APA"), with Paradigm Parachute and Defense, Inc.,
providing for the sale by Pioneer and Strong, and the purchase by
the Paradigm, pursuant to Section 363 of the Bankruptcy Code and
subject to Court approval and subject to higher or better offers,
of the assets involved in the operation of or located at the Milton
Location, the Mississippi Location, and the Orlando Location (as
set forth in the Paradigm APA), free and clear of any and all
claims, except for the Permitted Liens and the Assumed Liabilities.
The consideration to be paid for the assets under the Paradigm APA
is the amount of $2,250,000 allocated as follows: Milton Location
($1,200,000), the Mississippi Location ($200,000), and the Orlando
Location ($850,000).
Separately, Pioneer entered into an Asset Purchase Agreement (the
"Connecticut APA"), with Space Exploration Technologies Corp., a
Delaware corporation or its designee (the "Connecticut Purchaser"
or "SpaceX"), providing for the sale by Pioneer, and the purchase
by SpaceX, pursuant to Section 363 of the Bankruptcy Code and
subject to Court approval and subject to higher or better offers,
of the assets at or used in the operations of the Connecticut
Location (as set forth in the Connecticut APA), free and clear of
any and all claims, except for the Assumed Liabilities. The
consideration to be paid for the Purchased Assets under the
Connecticut APA is the amount of $2,200,000.00.
Pioneer and Strong closed under the Sale Orders on Friday December
8, 2023. At closing, Pioneer and Strong had sale proceeds
(collectively, the "Sale Proceeds") of $4,450,000.00, allocated
between Pioneer and Strong as $3.6 million and $850,000,
respectively.
The Debtors have sold substantially all of their operating assets
pursuant to the Sale Orders. The remaining operations of the
Debtors are limited to compliance with the Sale Orders, liquidating
remaining assets, including but not limited to claims and causes of
action, resolving disputed claims, and distributing the net sale
proceeds and any other proceeds of recoveries consistent with the
Plan. As a result, the Debtors will be able to make the payments
required under the Plan, and no further reorganization will be
required because this is a liquidating plan.
This Plan under subchapter V of chapter 11 of the Bankruptcy Code
proposes to pay creditors of the Debtors from (i) existing cash on
hand on the Effective Date, including the Sale Proceeds and
proceeds from any causes of action recovered before the Effective
Date; and (ii) proceeds from the liquidation of remaining assets,
including recoveries under the ERTCs and from Causes of Action.
Class 9 consists of all unsecured claims allowed in the ASR case.
The scheduled and filed Class 9 claims total approximately
$670,000.00. Every holder of an allowed Class 9 Claim shall receive
its pro-rata share of the Liquidation Proceeds after payment in
full of all senior claims allowed in the ASR Case. All such
distributions will be made by the Liquidating Agent. Class 9 is
impaired by the Plan.
Class 10 consists of all unsecured claims allowed in the Strong
case. The scheduled and filed Class 10 claims total approximately
$225,000.00. Every holder of an allowed Class 10 Claim shall
receive its pro-rata share of the Liquidation Proceeds after
payment in full of all senior claims allowed in the Strong Case.
All such distributions will be made by the Liquidating Agent. Class
10 is impaired by the Plan.
Class 11 consists of all unsecured claims allowed in the Pioneer
case. The scheduled and filed Class 11 claims total approximately
$576,000.00. Every holder of an allowed Class 11 Claim shall
receive its pro-rata share of the Liquidation Proceeds after
payment in full of all senior claims allowed in the Pioneer Case.
All such distributions will be made by the Liquidating Agent. Class
11 is impaired by the Plan.
Payments required under the Plan will be funded from the
Liquidation Proceeds, including (i) existing cash on hand in
Debtors' operating accounts on the Effective Date, including from
the Sale Proceeds; (ii) proceeds from the ERTC refunds; and (iii)
proceeds from recoveries on Causes of Action. Liquidation Proceeds
from each of the Debtors shall be used to make distributions to
claimants and creditors of that applicable Debtor, respectively.
A full-text copy of the Liquidating Plan dated January 30, 2024 is
available at https://urlcurt.com/u?l=EKTN5R from PacerMonitor.com
at no charge.
Debtor's Counsel:
Daniel R. Fogarty, Esq.
STICHTER, RIEDL, BLAIN & POSTLER, P.A.
110 E. Madison St.
Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
E-mail: dfogarty@srbp.com
About Aviation Safety Resources
Aviation Safety Resources, Inc., is a Florida corporation formed in
December of 2018.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-04639) on November 1,
2023. In the petition signed by Michael Rinaldi, president, the
Debtor disclosed up to $100,000 in assets and up to $10 million in
liabilities.
Judge Grace E. Robson oversees the case.
Daniel R. Fogarty, Esq., at Stichter, Riedl, Blain & Postler, PA.,
represents the Debtor as legal counsel.
BAUSCH HEALTH: Names New Members in Board Refreshment
-----------------------------------------------------
Bausch Health Companies Inc. announced, as part of its ongoing
commitment to board refreshment and board diversity, its nomination
of two independent and diverse candidates to stand for election to
its Board of Directors at the Company's 2024 Annual Meeting of
Shareholders: Christian A. Garcia, Former Executive Vice President
and Chief Financial Officer of BrandSafway Industries, LLC, and
Frank D. Lee, Chief Executive Officer of Pacira Biosciences, Inc.
In addition, Russel C. Robertson and Thomas W. Ross, Sr. will be
retiring from the Board and will not stand for re-election at the
Company's 2024 Annual Meeting. They will, however, continue to
serve on the Board of Bausch + Lomb Corporation. Messrs. Robertson
and Ross have served as members of the Board since 2016. To fill
the resulting committee vacancies, subject to the election of
Messrs. Garcia and Lee to the Board, the Company expects that
Garcia will serve as the Audit and Risk Committee chair and Lee
will serve on the Talent and Compensation Committee. Lee is also
expected to serve on the Science and Technology Committee.
"The nomination of these two new independent directors demonstrates
Bausch Health's ongoing commitment to refreshment, excellence and
board diversity," John A. Paulson, Chairperson of the Bausch Health
Board, said. "Additionally, I want to thank Russ and Tom, two
long-term, valued members of our Board, who helped navigate the
Company through periods of significant change. Their service to the
Company has been greatly appreciated."
Bausch Health's 2024 Annual Meeting has not yet been scheduled.
Additional information regarding Messrs. Garcia and Lee, as well as
the Company's other director nominees, will be included in the
Company's proxy statement for its 2024 Annual Meeting, when
available.
About Bausch Health Companies Inc.
Bausch Health Companies Inc. develops drugs for unmet medical needs
in central nervous system disorders, eye health and
gastrointestinal diseases, as well as contact lenses, intraocular
lenses, ophthalmic surgical equipment, and aesthetic devices.
In March 2023, S&P Global Ratings raised the issuer credit rating
on Bausch Health Cos. Inc. to 'CCC' from 'SD'. "The 'CCC' issuer
credit rating reflects the risk that the company will continue to
pursue subpar debt repurchases that we view as tantamount to a
default over the next 12 months," the ratings firm explained. "We
would likely view the repurchases as distressed exchanges as we no
longer believe BHC would be viewed as an anonymous buyer, given its
accumulated open market purchases to date. We see heightened risk
that BHC will complete more below par debt repurchases over the
next 12 months, given the price at which the longer dated unsecured
notes continue to trade (between 40 to 50 cents on the dollar). We
believe it is likely that BHC will look to capture this significant
discount as it generates cash to reduce its upcoming large
maturities."
S&P said its negative outlook reflects the heightened risk that BHC
could complete more distressed exchanges over the next 12 months.
S&P said, "We continue to believe the capital structure could be
unsustainable longer term. Our base-case scenario still assumes
Norwich Pharmaceuticals will launch its generic version of Xifaxan
at-risk as early as mid-2024, causing a material decline in
revenues and EBITDA. We do not believe there are sufficient
candidates in the development pipeline to cover lost sales of
Xifaxan. BHC also appears committed to completing the B+L spin off
as soon as possible, which we view as a credit negative for BHC
given our expectation for an increase in leverage and reduction in
scale and diversity pro forma the separation. We believe BHC could
have trouble refinancing its still sizeable debt maturities as they
come due in 2025 and beyond, especially if the spinoff is
completed."
BI HOLDINGS: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: BI Holdings, LLC
25200 Bernard Road
New Ulm TX 78950
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 24-30521
Debtor's Counsel: Matthew Hoffman, Esq.
HOFFMAN & SAWERIS, P.C.
2777 Allen Parkway, Suite 1000
Houston TX 77019
Tel: (713) 654-9990
Email: matthew@mhsawlaw.com
Total Assets as of Dec. 31, 2023: $4,378,697
Total Liabilities as of Dec. 31, 2023: $3,779,493
The petition was signed by Jason Brown as managing member.
A copy of the Debtor's list of 20 largest unsecured creditors is
now available for download at PacerMonitor.com.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/WRUUDII/BI_Holdings_LLC__txsbke-24-30521__0001.0.pdf?mcid=tGE4TAMA
BIOLASE INC: Registers 8.8 Million Units for Offering
-----------------------------------------------------
Biolase, Inc. filed Amendment No. 1 to its Form S-1 registration
statement filed with the U.S. Securities and Exchange Commission
relating to the offering on a best efforts basis up to 8,800,000
units, each unit consisting of one share of the Company's common
stock, par value $0.001 per share and one warrant to purchase one
share of the Company's common stock.
The assumed public offering price for each Unit is $0.85, which
represents the approximate closing price of the Company's common
stock on the Nasdaq Capital Market on January 25, 2024. The Units
have no stand-alone rights and will not be certificated or issued
as stand-alone securities. The common stock and Warrants are
immediately separable and will be issued separately in this
offering. The Warrants offered hereby will be immediately
exercisable on the date of issuance and will expire five years from
the date of issuance.
The Company is also offering to those purchasers, if any, whose
purchase of Units in this offering would otherwise result in the
purchaser, together with its affiliates and related parties,
beneficially owning more than 4.99% of its outstanding common stock
immediately following the consummation of this offering, the
opportunity to purchase, if they so choose pre-funded units in lieu
of the Units that would otherwise result in ownership in excess of
4.99% (or, at the election of the purchaser, 9.99%) of its
outstanding common stock, with each Pre-Funded Unit consisting of
one pre-funded warrant to purchase one share of its common stock,
and a Warrant. The purchase price of each Pre-Funded Unit will
equal the price per Unit, minus $0.001, and the exercise price of
each Pre-Funded Warrant included in the Pre-Funded Unit will be
$0.001 per share of its common stock. The Pre-Funded Units have no
stand-alone rights and will not be certificated or issued as
stand-alone securities. The Pre-Funded Warrants and Warrants are
immediately separable and will be issued separately in this
offering. There can be no assurance that the Company will sell any
of the Pre-Funded Units being offered. The Pre-Funded Warrants
offered hereby will be immediately exercisable and may be exercised
at any time until exercised in full.
For each Pre-Funded Unit the Company sell, the number of Units the
Company are offering will be decreased on a one-for-one basis.
Because the Company will issue a Warrant as part of each Unit or
Pre-Funded Unit, the number of Warrants sold in this offering will
not change as a result of a change in the mix of the Units and
Pre-Funded Units sold.
This offering also includes the common stock issuable from time to
time upon exercise of the Warrants and Pre-Funded Warrants.
The Company refers to the shares of its common stock, the Warrants,
the Pre-Funded Warrants and the shares of its common stock issued
or issuable upon exercise of the Warrants and Pre-Funded Warrants,
collectively, as the securities.
Because this is a best efforts offering, the placement agents do
not have an obligation to purchase any securities, and, as a
result, there is a possibility that the Company may not be able to
sell the securities. The securities will be offered at a fixed
price and are expected to be issued in a single closing. The
offering will terminate upon the earlier of: (i) March 31, 2024;
and (ii) the closing of the offering. The offering will settle
delivery versus payment ("DVP")/receipt versus payment ("RVP").
Accordingly, the Company and the placement agents have not made any
arrangements to place investor funds in an escrow account or trust
account since the placement agents will not receive investor funds
in connection with the sale of the securities offered hereunder.
The Company engaged Lake Street Capital Markets, LLC and Maxim
Group LLC to act as its placement agents in connection with this
offering. The placement agents have agreed to use their reasonable
best efforts to arrange for the sale of the securities offered by
this prospectus. The placement agents are not purchasing or selling
any of the securities the Company are offering, and the placement
agents are not required to arrange the purchase or sale of any
specific number or dollar amount of securities. The Company agreed
to pay to the placement agents the placement agent fees set forth
in the table below, which assumes that the Company sells all of the
securities offered by this prospectus. There is no arrangement for
funds to be received in escrow, trust or similar arrangement. The
Company will bear all costs associated with the offering.
The Company's common stock is traded on the Nasdaq Capital Market
under the symbol "BIOL." On January 25, 2024, the last reported
sale price for its common stock on the Nasdaq Capital Market was
$0.8486 per share. There is no established trading market for the
Pre-Funded Warrants or the Warrants and the Company does not expect
a market to develop. In addition, the Company does not intend to
apply to list the Pre-Funded Warrants or the Warrants on the Nasdaq
Capital Market or any other national securities exchange or any
other nationally recognized trading system.
The actual public offering price Unit and the actual public
offering price per Pre-Funded Unit will be determined between the
Company, the placement agents and investors in this offering based
on market conditions at the time of pricing and may be at a
discount to the current market price of its common stock.
Therefore, the recent market price used throughout this prospectus
may not be indicative of the final offering price.
A full-text copy of the Prospectus is available at
http://tinyurl.com/4nx42782
About Biolase
Biolase, Inc. -- http://www.biolase.com-- is a medical device
company that develops, manufactures, markets, and sells laser
systems in dentistry and medicine. BIOLASE's products advance the
practice of dentistry and medicine for patients and healthcare
professionals. BIOLASE's proprietary laser products incorporate
approximately 259 actively patented and 24 patent-pending
technologies designed to provide biologically and clinically
superior performance with less pain and faster recovery times.
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, 2023, the Company had $38.74
million in total assets, $32.86 million in total liabilities, $5.55
million in total mezzanine equity, and $332,000 in total
stockholders' equity. The Company had cash and cash equivalents of
approximately $7.8 million on Sept. 30, 2023.
Biolase incurred losses from operations and used cash in operating
activities for the three and nine months ended September 30, 2023
and for the years ended December 31, 2022, 2021, and 2020. The
Company's 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, according to the Company's Quarterly Report for
the three months ended Sept. 30, 2023.
BOND PENNZOIL: Case Summary & Six Unsecured Creditors
-----------------------------------------------------
Debtor: Bond Pennzoil Place LLC
55 Broadway, FL 3
New York, NY 10006
Case No.: 24-40572
Business Description: Bond Pennzoil is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: February 7, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Judge: Hon. Elizabeth S Stong
Debtor's Counsel: Avrum J. Rosen, Esq.
LAW OFFICES OF AVRUM J. ROSEN, PLLC
38 New St
Huntington, NY 11743-3327
Tel: 631-423-8527
Fax: 631-423-4536
Email: arosen@ajrlawny.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by David Goldwasser as chief restructuring
officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/YWJCF7Y/Bond_Pennzoil_Place_LLC__nyebke-24-40572__0001.0.pdf?mcid=tGE4TAMA
BRIGHT STEPS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Bright Steps Therapy, LLC
1227 South Main Street, Suite A
Poplarville MS 39470
Business Description: The Debtor offers physical therapy and
occupational therapy services.
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Middle District of Mississippi
Case No.: 24-50150
Judge: Hon. Katharine M. Samson
Debtor's Counsel: Nicholas T. Grillo, Esq.
GRILLO LAW FIRM
P.O. Box 1104
Hattiesburg, MS 39403
Tel: (769) 390-7935
Email: grillolawms@gmail.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Marcus R. Houston as owner/operator.
A copy of the Debtor's list of 20 largest unsecured creditors is
now available for download at PacerMonitor.com.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/APB6XXA/Bright_Steps_Therapy_LLC__mssbke-24-50150__0001.0.pdf?mcid=tGE4TAMA
CANO HEALTH: Owns 40% of Class A Common Shares of MSP Recovery
--------------------------------------------------------------
Cano Health, Inc. disclosed in a Schedule 13D/A filed with the U.S.
Securities and Exchange Commission that it beneficially owned
5,759,630 shares of MSP Recovery, Inc.'s Class A Common Stock,
representing 40% of the Class A Shares outstanding.
The percentage of beneficial ownership of the Class A Shares
reported assumes 14,415,930 Class A Shares outstanding as of
November 27, 2023, based on information set forth in the Form S-1/A
filed by MSP Recovery on December 8, 2023.
As of January 30, 2024, the aggregate number and percentage of
Class A Shares beneficially owned by Cano Health, Inc. and, for
Cano Health, Inc., the number of shares as to which there is sole
power to vote or to direct the vote, shared power to vote or to
direct the vote, sole power to dispose or to direct the
disposition, or shared power to dispose or to direct the
disposition are set forth on rows 7 through 11 and row 13 of the
cover page of this Schedule 13D and are incorporated herein by
reference.
As of January 30, 2024, Cano Health, LLC, an indirect subsidiary of
Cano Health, Inc., directly owns the 5,759,630 Class A Shares
reported herein representing approximately 40.0% of the Class A
Shares outstanding.
The 5,759,630 Class A Shares beneficially owned by Cano Health,
Inc. represent approximately 4.2% of MSP Recovery's total
outstanding voting shares. Cano Health, Inc.'s voting power
percentage assumes an aggregate of 138,669,106 shares of MSP's
voting stock outstanding, consisting of (x) 14,415,930 Class A
Shares outstanding as of November 27, 2023, based on information
set forth in the Form S-1/A, and (y) 124,253,176 shares of MSP
Recovery's Class V common stock, par value $0.0001 per share (the
"Class V Shares") outstanding as of November 27, 2023, based on
information set forth in the Form S-1/A. The Class A Shares and
Class V Shares each are entitled to one vote per share on matters
submitted to a vote of MSP Recovery's stockholders.
A full-text copy of the Report is available at
http://tinyurl.com/54s5dud9
About Cano Health
Cano Health, Inc. (NYSE: CANO) -- canohealth.com -- is a primary
care-centric, technology-powered healthcare delivery and population
health management platform. Founded in 2009, with its headquarters
in Miami, Florida, Cano Health is transforming healthcare by
delivering primary care that measurably improves the health,
wellness, and quality of life of its patients and the communities
it serves through its primary care medical centers and supporting
affiliated providers.
Cano Health reported a net loss of $428.39 million in 2022, a net
loss of $116.74 million in 2021, a net loss of $71.06 million in
2020, and a net loss of $19.78 million in 2019.
* * *
As reported by the TCR on Aug. 17, 2023, S&P Global Ratings lowered
its issuer credit rating on Cano Health Inc. to 'CCC-' from 'B-'.
S&P said, "We based our negative outlook on our expectation for
continued weak operating performance and cash flow deficits. Given
the company's current liquidity position, we believe there is
heightened risk of a near-term default such as a bankruptcy filing,
debt restructuring, or missed interest payment."
CARVANA CO: Goldman Sachs Entities Hold 1.2% of Class A Shares
--------------------------------------------------------------
The Goldman Sachs Group, Inc. and Goldman Sachs & Co. LLC disclosed
in a Schedule 13G/A filed with the Securities and Exchange
Commission that as of Dec. 29, 2023, they beneficially owned
1,343,679 shares of Class A common stock of Carvana Co.,
representing 1.2 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/1690820/000076999324000007/Carvana.txt
About Carvana
Founded in 2012 and based in Tempe, Arizona, Carvana Co. --
http://www.carvana.com-- is an e-commerce platform for buying and
selling used cars. Carvana.com allows someone to purchase a
vehicle from the comfort of their home, completing the entire
process online, benefiting from a 7-day money back guarantee, home
delivery, nationwide inventory selection and more. Customers also
have the option to sell or trade-in their vehicle across all
Carvana locations, including its patented Car Vending Machines, in
more than 300 U.S. markets.
Carvana Co. reported a net loss of $2.89 billion for the year ended
Dec. 31, 2022, a net loss of $287 million for the year ended Dec.
31, 2021, and a net loss of $462 million for the year ended Dec.
31, 2020. As of Sept. 30, 2023, Carvana had $7.02 billion in total
assets, $7.23 billion in total liabilities, and a total
stockholders' deficit of $202 million.
* * *
As reported by the TCR on Sept. 13, 2023, S&P Global Ratings raised
its issuer credit rating on U.S.-based Carvana Co. to 'CCC+' from
'D'. S&P said, "The negative outlook reflects our expectation that
we could downgrade the company if the company's performance were to
deteriorate further such that we believe liquidity would become
constrained or if we believe there is a likelihood the company
could conduct a distressed restructuring over the next 12 months.
The upgrade to 'CCC+' reflects the near-term improvement in the
company's liquidity position, though the capital structure remains
unsustainable."
Moody's Investors Service upgraded Carvana Co.'s corporate family
rating to Caa3 from Ca, the TCR reported on Sept. 22, 2023.
Moody's said the upgrade of Carvana's CFR to Caa3 reflects the
completion of its debt exchange that pushes out some near-term
maturities, reduces outstanding debt and materially reduces cash
interest expense in the two years following the exchange.
CATALENT PHARMA: Moody's Puts 'B1' CFR Under Review for Upgrade
---------------------------------------------------------------
Moody's Investors Service placed the ratings of Catalent Pharma
Solutions, Inc. on review for upgrade following the announcement by
Novo Holdings (NR), that it has entered into a definitive agreement
to acquire Catalent. The ratings placed under review for upgrade
include the B1 Corporate Family Rating, B1-PD Probability of
Default Rating, the Ba2 rating on existing senior secured bank
credit facilities, and the B3 senior unsecured rating. The
Speculative Grade Liquidity Rating (SGL) is unchanged at SGL-2,
signifying good liquidity. Previously, the outlook was stable.
On February 5, 2024, Novo Holdings announced that it has entered
into a definitive agreement to acquire Catalent for $16.5 billion.
The transaction was recommended by Catalent's Board of Directors,
and is still subject to shareholders and regulatory approvals. The
companies expect the deal to close by the end of 2024.
The review for upgrade reflects Moody's expectation that, should
the acquisition by Novo close, Catalent will become part of a
larger company and will benefit from greater scale and diversity.
The review for upgrade also reflects that regulatory and
shareholder approvals are required for the deal to close. The
review will focus on the final post-transaction capital structure
of Catalent. The ratings could be withdrawn if Catalent's debt
instruments are repaid on or before the transaction closes.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Excluding the ratings review, the B1 CFR rating reflects Catalent's
high financial leverage and modest free cash flow relative to debt.
The B1 CFR rating is also constrained by the volatility inherent in
the pharmaceutical contract manufacturing industry, and high fixed
costs that can create volatility in net profit and cash flows. The
rating also reflects Catalent's acquisitive strategy and
willingness to increase leverage to fulfill its expansion
strategy.
Catalent's rating is supported by its good size and scale, breadth
of services and strong reputation as one of the largest contract
development management organizations (CDMOs) globally. The company
also maintains a diversified customer base and commands a large
library of patents, know-how, and other intellectual property that
raise barriers to entry and enhance margins. While managing
expansion has proved challenging as COVID-related revenue sharply
declined in 2023, recent investment in capacity will support future
earnings growth.
The review for upgrade reflects Moody's expectation that, should
the acquisition by Novo Holdings close, Catalent will become part
of a larger company and will benefit from greater scale and
diversity. The review for upgrade also reflects that regulatory and
shareholder approvals are required for the deal to close. The
review will focus on the final post-transaction capital structure
of Catalent including the treatment by Novo Holdings of Catalent's
obligations including any guarantees or other arrangements.
ESG CONSIDERATIONS
Catalent's CIS-4 indicates the rating is lower than it would have
been if ESG risk exposures did not exist. Catalent's exposure to
governance risk considerations (G-4) is a constraining factor for
the rating. This reflects a material increase in governance risk
following the April 2023 profit warning, internal control issues
and delays in financial reporting (now resolved). Catalent has also
significant exposure to social risk considerations (S-4) which is
another factor constraining the rating. Social risk considerations
resolve around responsible production, and specifically product
quality and supply chain reliability.
Catalent Pharma Solutions, Inc. is a leading contract development
and manufacturing organization (CDMO) company and a global provider
of advanced delivery technologies and development and manufacturing
solutions for drugs; protein, cell, and gene therapy biologics; and
consumer health products. These include the company's formulation,
development and manufacturing of softgels and other products for
the prescription drug and consumer health industries. The company
reported revenue of approximately $4.2 billion for the LTM period
ended September 30, 2023.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CBS TRUCKING: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: CBS Trucking, Inc.
3 Enterprise Drive
Newburgh, NY 12550
Business Description: The Debtor is part of the general freight
trucking industry.
Chapter 11 Petition Date: February 7, 2024
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 24-35118
Debtor's Counsel: James J. Rufo, Esq.
LAW OFFICE OF JAMES J. RUFO
222 Bloomingdale Road 202
White Plains, NY 10605
Tel: (914) 600-7161
Email: jrufo@jamesrufolaw.com
Debtor's
Special
Counsel: Charles A. Higgs, Esq.
LAW OFFICE OF CHARLES A. HIGGS
Total Assets: $301,000
Total Liabilities: $1,277,852
The petition was signed by Sokol Bala as president.
The Debtor filed an empty 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/ENZ7P3Y/CBS_Trucking_Inc__nysbke-24-35118__0001.0.pdf?mcid=tGE4TAMA
CHENIERE ENERGY: Announces Uplisting to New York Stock Exchange
---------------------------------------------------------------
Cheniere Energy, Inc. and Cheniere Energy Partners, L.P. announced
that each company has been approved for uplisting to the New York
Stock Exchange from the NYSE American.
The common stock of Cheniere and the common units of Cheniere
Partners ceased trading on the NYSE American at market close on
February 2, 2024, and commenced trading on the NYSE at market open
on February 5, 2024. Cheniere and Cheniere Partners continue to
trade under the symbols "LNG" and "CQP" respectively.
"Cheniere has been listed on the NYSE American or its predecessors
for over two decades, and we thank the NYSE American for the many
years of cooperation and being a key part of the Cheniere success
story," said Zach Davis, Cheniere's Executive Vice President and
Chief Financial Officer. "We look forward to furthering that
success as part of the NYSE family with our uplisting to NYSE."
About Cheniere Energy
Headquartered in Houston, Texas, Cheniere Energy, Inc. is a leading
producer and exporter of liquefied natural gas in the United
States, reliably providing a clean, secure, and affordable solution
to the growing global need for natural gas. Cheniere is a
full-service LNG provider, with capabilities that include gas
procurement and transportation, liquefaction, vessel chartering,
and LNG delivery.
Egan-Jones Ratings Company on May 8, 2023, maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Cheniere Energy, Inc.
CHPPR MIDCO: S&P Assigns Preliminary 'B-' ICR, Outlook Negative
---------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B-' issuer credit
rating to CHPPR MidCo Inc., parent company to Air Methods LLC,
following the latter's emergence from chapter 11 bankruptcy. S&P
expects to finalize the rating once audited fresh-start financial
statements are issued.
S&P said, "The 'B-' rating reflects our expectation for
significantly reduced interest expense and material realization of
cost savings in 2024, supporting operating cash flow generation
that covers fixed costs.
We also assigned our preliminary 'B-' issue-level rating and '3'
recovery rating to the newly issued $250 million exit term loan. At
the same time, we withdrew our existing 'D' ratings on Air Methods
LLC.
"The outlook on CHPPR MidCo is negative, reflecting reimbursement
rate uncertainty in the near term and downside risk to our base
case of significant operational improvement.
"Our preliminary 'B-' issuer credit rating reflects significantly
improved financial metrics and liquidity but lingering risks to the
business and industry. The company lowered its debt burden by
around $1.7 billion to just over $500 million following its
emergence from chapter 11 bankruptcy on Dec. 28, 2023. We forecast
annual cash interest expense will decrease by about $90 million
compared to the 12-month period ended Sept. 30, 2023. We also
expect S&P Global Ratings-adjusted EBITDA margin will dramatically
improve to around 15% in 2024 from 9% for last 12 months (LTM)
ended September 2023, due to growth and the roll off of one-time
fees and retention bonuses related to the bankruptcy. This results
in S&P Global Ratings-adjusted debt to EBITDA of around 3x by
year-end 2024,materially lower than the 18.9x from just before the
filing.
"We expect free operating cash flow (FOCF) will remain impaired by
high capital spending. We expect positive FOCF of around $50
million in 2024 and moderately negative to breakeven cash flow
through 2027, as capital expenditures (capex) increase back to
pre-2023 levels mainly due to significant growth investments.
Despite negative cash flow, we expect CHPPR MidCo will be able to
adequately cover its fixed costs (maintenance capex, mandatory debt
amortization, and principal payments on finance leases) over the
next several years."
Reimbursement remains a key risk in the near term. The Veteran's
Administration (VA) is a key government payor for CHPPR MidCo with
an outsized share of revenue relative to volumes. The VA is
currently moving forward with plans to lower its reimbursement rate
on air medical services to parity with Medicare, which if
implemented would materially lower CHPPR MidCo's overall net
revenue per transport (NRPT) and S&P Global Ratings-adjusted
EBITDA. The implementation has already been delayed from February
2024 to February 2025 and CHPPR MidCo (along with many others in
the air ambulance industry) are currently working with congress
members on bipartisan legislation to ensure that any VA rate
adjustment does not result in lesser care for veterans in rural
locations.
S&P said, "Our base-case scenario conservatively assumes that the
VA will implement its reimbursement rate reduction in 2025, to
somewhere between current market rates and the below-cost Medicare
rate. We assume this will result in a decrease in NRPT of around
4%, resulting in overall revenue declining by 1%, EBITDA margin
falling to around 14%, and S&P Global Ratings-adjusted debt to
EBITDA increasing to around 4x."
The air ambulance industry remains inherently more volatile than
other health care services subsectors. CHPPR MidCo's operating
results are often impacted by inclement weather, including
significant wildfire activity during 2023, making year-over-year
forecasting difficult. The company also faces risks related to
fatal aircraft crashes, which could result in temporary base
closures. Finally, CHPPR MidCo has not been exempt from labor
pressures in recent years, as competition for pilots has
contributed to strained margins. S&P expects all these risks to
persist throughout the forecast period.
S&P said, "Our negative outlook on CHPPR MidCo reflects
reimbursement rate uncertainty in the near term and downside risk
to our base case of significant operational improvement. Any
material underperformance relative to our base case could lead us
to believe that operating cash flow would not be sufficient to
cover maintenance capex, mandatory debt amortization, and the
principal payments on finance leases."
COMMUNITY HEALTH: Wayne Smith Reports 5.7% Equity Stake
-------------------------------------------------------
In a Schedule 13G/A filed with the Securities and Exchange
Commission, Wayne T. Smith disclosed that as of December 31, 2023,
he beneficially owned 7,837,614 shares of Community Health Systems,
Inc.'s Common Stock, par value $0.01 per share, representing 5.7%
of the shares outstanding.
The percent of the class is based on 136,800,913 shares outstanding
as of October 20, 2023, as disclosed in the Quarterly Report on
Form 10-Q filed by the Company on October 26, 2023, and 281,250
shares issuable upon the exercise of options granted to Smith under
the Issuer's 2009 Stock Option and Award Plan, which were
exercisable as of December 31, 2023 or will become exercisable
within 60 days thereafter.
A full-text copy of the Report is available at
http://tinyurl.com/29ndk2cr
About Community Health Systems Inc.
Community Health Systems, Inc. -- http://www.chs.net-- is a
publicly traded hospital company and an operator of general acute
care hospitals in communities across the country. As of Oct. 25,
2023, the Company's subsidiaries own or lease 76 affiliated
hospitals with over 12,000 beds and operate more than 1,000 sites
of care, including physician practices, urgent care centers,
freestanding emergency departments, occupational medicine clinics,
imaging centers, cancer centers and ambulatory surgery centers.
As of Sept. 30, 2023, the Company had $14.67 billion in total
assets, $15.56 billion in total liabilities, $329 million in
redeemable noncontrolling interests in equity of consolidated
subsidiaries, and a total stockholders' deficit of $1.22 billion.
* * *
As reported by the TCR on Dec. 15, 2023, Moody's Investors Service
downgraded CHS/Community Health Systems, Inc.'s Corporate Family
Rating to Caa2 from Caa1. Moody's said the downgrade of Community
Health's ratings reflects the company's very high level of the
financial leverage and the company's inability to generate positive
free cash flow despite some industrywide easing of labor pressure
in recent quarters.
As reported by the TCR on Dec. 20, 2023, S&P Global Ratings raised
its rating on Community Health Systems Inc. to 'CCC+' from 'SD'
(selective default). S&P said, "We believe Community Health's
capital structure is currently unsustainable. The company remains
highly leveraged with S&P Global Ratings-adjusted debt to EBITDA of
8.4x. In addition, the company has not established a track record
of sustained positive free cash flow generation. While we expect
improved EBITDA margins and positive cash flow in 2024, leverage
will remain high while the company has a significant interest
burden and maturities starting in 2026."
CONSTITUTION PLAZA: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Constitution Plaza Mezz LLC
9 Jeffrey Place
Monsey, NY 10952
Case No.: 24-22101
Business Description: The Debtor is the mezzanine entity holding
the 100% membership interest of Constitution
Plaza Holding LLC, which is the owner of an
office building located at 100 Constitution
Plaza, Hartford, CT.
Chapter 11 Petition Date: February 7, 2024
Court: United States Bankruptcy Court
Southern District of New York
Judge: Hon. Sean H Lane
Debtor's Counsel: Kevin Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
125 Park Ave
New York, NY 10017-5690
Email: knash@gwfglaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Goldwasser as restructuring
officer.
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/6YL2W4A/Constitution_Plaza_Mezz_LLC__nysbke-24-22101__0001.0.pdf?mcid=tGE4TAMA
CURO GROUP: S&P Downgrades LT ICR to 'CCC-', Outlook Negative
-------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Curo Group Holdings Corp. to 'CCC-' from 'CCC+'. The outlook is
negative. S&P also lowered its issue ratings on the company's
1.5-lien notes to 'CC' from 'CCC' and on the company's junior notes
to 'C' from 'CCC-'.
The negative outlook reflects our expectation that, over the next
six months, Curo could default on its interest payments, execute
exchange offers or debt restructurings that S&P would view as
distressed, or its liquidity could deteriorate further.
S&P said, "We expect Curo could default on its interest payments in
the next six months. As of Jan. 31, 2024, the company reported it
had potentially breached its minimum liquidity covenant of $75
million. Curo had $84.6 million of unrestricted cash on balance
sheet as of Dec. 31, 2023. The company has to make $37.5 million of
combined interest payments on its 1.5-lien notes and junior secured
notes on a semiannual basis, and we think that even if Curo
successfully amended the grace period for the 1.5-lien notes to 30
days, it could have insufficient liquidity within six months."
Curo's other debt facilities, including its funding debt and senior
secured term loan, also have the $75 million minimum liquidity
covenant. As a result, the company is also in potential breach of
covenants for those debt facilities, which could result in events
of default without waivers or amendments.
S&P said, "We expect to reevaluate our issuer credit rating and
debt ratings on Curo when further details on its restructuring plan
become available. The company announced it could undertake a
comprehensive financial restructuring to strengthen its balance
sheet and financial position.
"The negative outlook reflects our expectation that, over the next
six months, Curo could default on its interest payments, execute
exchange offers or debt restructurings that we would view as
distressed, or its liquidity could deteriorate further. We also
think Curo could fail to receive the necessary waivers and
amendments to its debt covenants such that a default is imminent.
"We could lower the ratings over the next six months if Curo fails
to make its interest payments or engages in debt restructurings
that we view as distressed and tantamount to default. We could also
lower the ratings if the company is unable to get covenant waivers
and amendments such that a default is imminent.
"We could revise the outlook to stable if we believe Curo will
maintain sufficient covenant cushion and enough liquidity to meet
its ongoing interest expense and operational needs while having
limited risk of a distressed restructuring."
CYXTERA TECHNOLOGIES: Law Firms, Advisers Want $23-Mil. in Fees
---------------------------------------------------------------
Jonathan Romeo of Law360 reports that law firms and professional
advisers have filed final fee applications exceeding $23 million in
the New Jersey bankruptcy case of data center provider Cyxtera
Technologies Inc., including a request from Kirkland & Ellis LLP
for $14.5 million in legal fees.
About Cyxtera Technologies
Headquartered in Coral Gables, Fla., Cyxtera Technologies, Inc. --
https://www.cyxtera.com/ -- is a global data center company
providing retail colocation and interconnection services. The
Company provides a suite of connected and automated infrastructure
and interconnection solutions to more than 2,300 enterprises,
service providers and government agencies around the world --
enabling them to scale faster, meet rising consumer expectations
and gain a competitive edge.
Cyxtera and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-14853) on
June 4, 2023. In the petition signed by Eric Koza, chief
restructuring officer, the Debtor disclosed up to $131 million in
assets and up to $2.679 billion in liabilities.
Judge John K. Sherwood oversees the case.
The Debtors tapped Kirkland and Ellis LLP and Kirkland and Ellis
International LLP as general bankruptcy counsel, Cole Schotz P.C.
as co-bankruptcy counsel, Guggenheim Securities, LLC as investment
banker, AlixPartners LLP as restructuring advisor, and Kurtzman
Carson Consultants LLC as noticing and claims agent.
An ad hoc group of first lien lenders is represented by Gibson,
Dunn & Crutcher LLP as legal counsel and Houlihan Lokey, Inc., as
financial advisor.
On June 20, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors. The committee
tapped Pachulski Stang Ziehl & Jones, LLP as its legal counsel and
Alvarez & Marsal North America, LLC, as financial advisor.
DIGICEL HOLDINGS: Completes $3.8-Bil. Debt Consensual Restructuring
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Digicel Holdings (Bermuda) Limited and its board of directors
announced Jan. 29, 2024, that Digicel has successfully completed
its consensual financial restructuring (the "Restructuring") and
Bermuda schemes of arrangement (the "Schemes"). The completion of
the Restructuring marks an important milestone for the Group, which
now has a substantially strengthened capital structure, positioning
the Group for long-term success. Together with the 2023
restructuring of Digicel Group Holdings Limited ("DGHL"), the
Schemes have reduced the Group's consolidated debt by approximately
$1.7 billion and its annual cash interest expense will be reduced
by approximately $120 million.
As a result of the Restructuring, the Group extended certain
secured and unsecured debt issued by Digicel International Finance
Limited ("DIFL") and Digicel Intermediate Holdings Limited
("DIHL"). In addition, certain notes issued by Digicel Limited
("DL") and subordinated notes issued by DIFL were equitized. As
part of the Restructuring, DHL has become the Group's new holding
company.
In connection with the Restructuring, the board of directors of the
reorganized Group has been reconstituted as a nine-member board,
including Rajeev Suri as Chairman. The Company welcomes Mr. Suri as
Chairman and would also like to express its appreciation to
Digicel's former board of directors and to Mr. Denis O'Brien as
Digicel's founder and Executive Chairman since inception. Mr. Denis
O'Brien will continue to be involved in Digicel both as an equity
holder in the recapitalized business and as a director of the
Company's reconstituted board.
Digicel Interim Group CEO, Maarten Boute, comments, "it's good news
today for our customers, our communities and all our staff with
Digicel on a more solid financial footing enabling it to maintain
and increase its longstanding commitments to the region. We are now
well poised to continue our proud legacy of impact investing to
connect people and build communities, delivering so many benefits
to millions of people. I am excited about this new chapter for
Digicel and want to take this moment to thank our customers for
their loyalty and to convey a very special thank you to the 5,000
amazing Digicel staff members across the region for their continued
hard work and dedication."
Completion of the Restructuring enhances the Group's ability to
compete and thrive in the communications, broadcasting, and
financial services sectors, now as a substantially deleveraged
company with a right-sized balance sheet. With the support of its
new owners, the Group will continue to operate as an unparalleled
service provider in all of its operating markets.
Davis Polk & Wardwell LLP and Conyers Dill & Pearman acted as legal
counsel and DC Advisory acted as financial advisor for the Company.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Akin Gump LLP
acted as legal counsel and Greenhill & Co., LLC acted as financial
advisor for the PCG AHG. Paul Hastings LLP acted as legal counsel
and Evercore Group L.L.C. acted as financial advisor for the DIFL
Secured AHG.
About Digicel Group
Digicel Group Holdings Ltd. is the leading digital provider in 25
markets across the Caribbean, Central America, and Asia Pacific.
The company is owned by the Irish billionaire Denis O'Brien, is
incorporated in Bermuda, and based in Jamaica.
Digicel Group sought relief under Chapter 15 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 23-114479). The petition was signed
by Lawrence Hickey, as foreign representative.
The Debtor's counsel in the Chapter 15 case is:
Timothy E. Graulich
Davis Polk & Wardwell LLP
212-450-4639
timothy.graulich@davispolk.com
DIGICEL LIMITED: Davis Polk Served as Adviser in Restructuring
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Davis Polk advised Digicel Limited ("DL"), Digicel International
Finance Limited ("DIFL") and certain affiliated entities
(collectively "Digicel") in connection with a consensual
cross-border restructuring of approximately $3.8 billion of
Digicel’s indebtedness, which closed on January 29, 2024. The
restructuring, which was implemented through two consolidated
schemes of arrangement in Bermuda (the "Schemes") and recognition
proceedings in the United States, was previously sanctioned by the
Supreme Court of Bermuda on November 6, 2023, and subsequently
recognized in the United States under chapter 15 of the U.S.
Bankruptcy Code on November 9, 2023, in a jointly administered
proceeding before the United States Bankruptcy Court for the
Southern District of New York.
As a result of the restructuring, Digicel equitized approximately
$1.7 billion of indebtedness and reduced its cash interest expense
by approximately $120 million. In connection with the
restructuring, Digicel issued (i) new senior secured first-lien
notes in an aggregate principal amount of approximately $1.2
billion, (ii) a new senior secured first-lien term loan facility in
an aggregate principal amount of approximately $1 billion and (iii)
new senior unsecured notes in an aggregate principal amount of
approximately $419 million. Digicel also conducted an approximately
$85 million fully subscribed equity rights offering as part of the
restructuring. The effectiveness of the Schemes marks the final
step of a comprehensive restructuring, which also included the
approximately $1.2 billion cross-border restructuring of
Digicel’s former parent company, Digicel Group Holdings Limited,
that was consummated on November 14, 2023.
Enabling customers to live, work, play and flourish in a connected
world, Digicel’s world class LTE and fibre networks deliver
state-of-the-art mobile, home and business solutions. Serving 10
million consumer and business customers in 25 markets in the
Caribbean and Central America, its investments of over US$5 billion
and a commitment to its communities through its Digicel Foundations
in Haiti, Jamaica and Trinidad & Tobago have contributed to
positive outcomes for over two million people to date.
The Davis Polk restructuring team included partners Timothy
Graulich and Darren S. Klein, counsel Stephen D. Piraino and Robert
(Bodie) Stewart and associates Richard J. Steinberg, Amber Leary,
Kate Fine and Kayleigh Yerdon. The capital markets team included
partner Michael Kaplan and counsel Joseph S. Payne. The finance
team included partner Hilary Dengel and counsel David J. Kennedy.
Corporate advice was provided by partner Daniel Brass. The tax team
included partner Lucy W. Farr and counsel Tracy L. Matlock. Members
of the Davis Polk team are based in the New York office.
Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited
liability partnership, and its associated entities.
About Digicel Limited
Incorporated in Hamilton, Bermuda, with headquarters in Kingston,
Jamaica, W.I., Digicel Limited is the largest provider of wireless
telecommunication services in the Caribbean. Revenue for the
twelve months ended September 30, 2014 totaled $2.8 billion.
* * *
As reported in the Troubled Company Reporter-Latin America on Feb.
27, 2015, Moody's Investors Service assigned a B1 rating to Digicel
Limited's proposed offering of $925 million Senior Unsecured Notes
due 2023. The use of proceeds will be used to redeem 100% of the
existing Digicel Limited 8.25% Senior Unsecured Notes due 2017,
including redemption premiums, accrued interest and fees, and the
remaining net proceeds will be used to add cash to the balance
sheet to be used for general corporate purposes.
DIGITAL ALLY: Board Sets Annual Base Salaries for Top Execs
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Digital Ally disclosed in a Form 8-K filed with the Securities and
Exchange Commission that effective Jan. 31, 2024, the Compensation
Committee of the Board of Directors of the Company set the annual
base salaries of Stanton E. Ross, chief executive officer, Peng
Han, chief operating officer and, and Thomas J. Heckman, chief
financial officer, treasurer and secretary, at $250,000, $250,000
and $120,000, respectively for 2024.
The Committee determined that Stanton E. Ross will be eligible for
bonuses of up to a total of $250,000 in 2024, and Peng Han will be
eligible for bonuses of up to a total of $125,000 in 2024, based on
each person's performance during the year. The Committee will
review each executive officer's performance on a periodic basis
during 2024 and determine what, if any, portion of the bonus he has
earned and will be paid as of such point.
The Committee awarded Stanton E. Ross 20,000 shares of restricted
common stock that will vest in full on Jan. 31, 2025, or in full at
the completion of the previously disclosed transaction entered into
by the Company's wholly-owned subsidiary, Kustom Entertainment,
Inc., pursuant to an Agreement and Plan of Merger, by and among
Clover Leaf Capital Corp., a Delaware corporation, CL Merger Sub,
Inc., a Nevada corporation and a wholly-owned subsidiary of the
Purchaser, Yntegra Capital Investments LLC, a Delaware limited
liability company (the "Purchaser Representative"), Kustom
Entertainment, and the Company, whichever occurs first, provided
that he remains an officer on such dates. Peng Han was awarded
15,000 shares of restricted common stock that will vest in full on
Jan. 31, 2025, or in full at the completion of the Transaction,
whichever occurs first, provided that he remains an officer on such
dates.
About Digital Ally
Digital Ally (NASDAQ: DGLY) provides law enforcement agencies,
commercial fleet companies and event security teams with video
solutions and software management. Product lines include
body-cameras, vehicle video systems, IP video surveillance systems,
flexible storage solutions and patented VuLink automatic activation
technology.
New York, NY-based RBSM LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company has incurred substantial
operating losses and will require additional capital to continue as
a going concern. This raises substantial doubt about the Company's
ability to continue as a going concern.
Digital Ally has experienced net losses and cash outflows from
operating activities since inception. Based upon its current
operating forecast, the Company anticipates that it will need to
restore positive operating cash flows or raise additional capital
in the short-term to fund operations, meet its customary payment
obligations and otherwise execute its business plan over the next
12 months. The Company is continuously in discussions to raise
additional capital, which may include a variety of equity and debt
instruments; however, there can be no assurance that its capital
raising initiatives will be successful. The Company's recurring
losses and level of cash used in operations, along with
uncertainties concerning its ability to raise additional capital,
raise substantial doubt about its ability to continue as a going
concern, according to the Company's Quarterly Report for the period
ended Sept. 30, 2023.
DIGITAL ALLY: Michael Caulfield Resigns as Director
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Digital Ally, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on Jan. 31, 2024, Michael
J. Caulfield resigned as a director of the Board of Directors of
the Company, effective immediately.
About Digital Ally
Digital Ally (NASDAQ: DGLY) provides law enforcement agencies,
commercial fleet companies and event security teams with video
solutions and software management. Product lines include
body-cameras, vehicle video systems, IP video surveillance systems,
flexible storage solutions and patented VuLink automatic activation
technology.
New York, NY-based RBSM LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company has incurred substantial
operating losses and will require additional capital to continue as
a going concern. This raises substantial doubt about the Company's
ability to continue as a going concern.
Digital Ally has experienced net losses and cash outflows from
operating activities since inception. Based upon its current
operating forecast, the Company anticipates that it will need to
restore positive operating cash flows or raise additional capital
in the short-term to fund operations, meet its customary payment
obligations and otherwise execute its business plan over the next
12 months. The Company is continuously in discussions to raise
additional capital, which may include a variety of equity and debt
instruments; however, there can be no assurance that its capital
raising initiatives will be successful. The Company's recurring
losses and level of cash used in operations, along with
uncertainties concerning its ability to raise additional capital,
raise substantial doubt about its ability to continue as a going
concern, according to the Company's Quarterly Report for the period
ended Sept. 30, 2023.
DOMUS BWW: Files Amended Plan; Confirmation Hearing April 3
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Domus BWW Funding, LLC, and 1801 Admin, LLC, submitted a Third
Amended Disclosure Statement with respect to Amended Joint Plan of
Reorganization dated February 1, 2024.
The Debtors commenced the Chapter 11 Cases to protect and preserve
their business, maximize property available to satisfy their
creditors and to reorganize their affairs while embroiled in
litigation on multiple fronts, including coverage actions against
their insurance companies who denied the Debtors' claims in
connection with the costly and time-consuming litigation.
On October 23, 2023, 47 East filed a Motion for (1) Leave to
Reargue; (2) Leave to Renew or Reconsider; and (3) Leave to Appeal
to the Court of Appeals with the First Department (the "Motion for
Leave"). On January 16, 2024, the First Department denied the
Motion for Leave. It is Debtors' position that 47 East has no
further right to appeal the First Department Decision and Order. 47
East disputes these legal conclusions and contentions raised by the
Debtors.
On December 21, 2023, the Debtors filed the Objection of (I) Domus
BWW Funding, LLC to Proof of Claim No. 11 filed by 47 East 47th
Street (NY), L.P. in its Bankruptcy Proceeding, and (II) 1801
Admin, LLC to Proof of Claim No. 6 filed by 47 East 47th Street
(NY), L.P. in its Bankruptcy Proceeding]. The objection is pending
before the Bankruptcy Court and is scheduled for hearing on March
6, 2024.
Like in the prior iteration of the Plan, holder of Class 2A Allowed
Ongoing General Unsecured Claim shall receive, in full and final
satisfaction, compromise, settlement, release, and discharge of,
and in exchange for its Claim, subject to the Holder's ability to
elect Convenience Claim treatment on account of its Allowed Ongoing
General Unsecured Claim, its Pro Rata Share of the Class 2A Fund
within 45 days following the later of (a) the Effective Date or (b)
the date that such Ongoing General Unsecured Claim becomes Allowed
(if such Claim becomes Allowed after the Effective Date). This
Class will receive a distribution of 28% of their allowed claims.
Class 2B consists of Other General Unsecured Litigation Claims.
Except to the extent that a Holder of an Other General Unsecured
Litigation Claim and the Debtor against which such Allowed Other
General Unsecured Litigation Claim is asserted agree to less
favorable treatment, each Holder of an Allowed Other General
Unsecured Litigation Claim shall receive, in full and final
satisfaction, compromise, settlement, release, and discharge of,
and in exchange for, such Allowed Other General Unsecured
Litigation Claim, its Pro Rata Share of the Class 2B Fund within 45
days following the later of (a) the Effective Date, or (b) the date
that such Other General Unsecured Litigation Claim becomes Allowed
(if such Claim becomes Allowed after the Effective Date), or (c)
the Reorganized Debtors' deposit of the Net Proceeds from the
Adversary Proceeding.
Class 3 consists of Convenience Claims. In full and final
satisfaction, compromise, settlement, release and discharge of, and
in exchange for an Allowed Convenience Claim, each Holder of an
Allowed Convenience Claim shall receive within 45 days following
the later of (a) the Effective Date or (b) the date that such
Convenience Claims becomes Allowed (if such Claim becomes Allowed
after the Effective Date), Cash in an amount equal to the 100% of
such Holder's Allowed Convenience Claim.
Pursuant to 1123 of the Bankruptcy Code and Bankruptcy Rule 9019,
and in consideration for the classification, distribution,
releases, and other benefits provided under the Plan, upon the
Effective Date, the provisions of the Plan shall constitute and be
deemed a good-faith compromise and settlement of all Claims,
Interests, and controversies released, settled, compromised, or
otherwise resolved pursuant to the Plan.
All amounts necessary for each Reorganized Debtor to establish,
fund or pay (as applicable), as they come due, on or after the
Effective Date in accordance with the terms of the Plan and
Confirmation Order: (a) the Professional Fee Escrow Accounts; (b)
the Class 2A Funds, (c) the Class 2B Funds, (d) the Allowed Class 1
Other Priority Claims, (e) the Allowed Class 3 Convenience Claims,
(f) Allowed Administrative Expense Claims (including Professional
Fee Claims and Quarterly Fees), (g) the Allowed Priority Tax
Claims, and (g) the Allowed DIP Claims shall be funded from the
proceeds of the Exit Facility, the Equity Security Holders
Contribution, the English Insolvency Matters Settlement, the
Adversary Proceeding, the Carve-Out, and Cash on hand.
The Confirmation Hearing will be held on April 3, 2024 at 12:30
p.m., before the Honorable Ashely M. Chan, United States Bankruptcy
Judge for the Eastern District of Pennsylvania, in the Bankruptcy
Court, located at 900 Market Street, Courtroom 4, Philadelphia, PA
19107.
Any objection to Confirmation of the Plan must be filed on or
before the Plan Objection Deadline on March 15, 2024 at 4:00 p.m.
A full-text copy of the Third Amended Disclosure Statement dated
February 1, 2024 is available at https://urlcurt.com/u?l=aSlHkb
from PacerMonitor.com at no charge.
Attorneys for the Debtors:
Aris J. Karalis, Esq.
Robert W. Seitzer, Esq.
Robert M. Greenbaum, Esq.
KARALIS PC
1900 Spruce St.
Philadelphia, PA 19103
Tel: (215) 546-4500
About Domus BWW Funding
Domus BWW Funding, LLC, and 1801 Admin, LLC, filed their voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Pa. Lead Case No. 22-11162) on May 3, 2022, listing up
to $500,000 in assets and up to $50,000 in liabilities.
Judge Eric L. Frank presides over the cases.
The Debtors tapped Aris J. Karlis, Esq., at Karalis PC as
bankruptcy counsel. Dinsmore & Shohl LLP, McGuireWoods LLP, Landis
Rath & Cobb LLP, Perkins Coie LLP, Gateley Plc, Anderson Kill PC,
and Dechert LLP serve as special counsel.
DRAIN SERVICES: Continued Operations to Fund Plan
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Drain Services, Inc., filed with the U.S. Bankruptcy Court for the
District of North Dakota a Second Amended Subchapter V Plan of
Reorganization dated January 30, 2024.
The Debtor is a preeminent commercial, municipal, and residential
sewer replacement company. Owned by Caitlyn Cameron and chiefly
operated by her husband, Kevin Cameron, the Debtor has a sturdy
reputation amongst its versatile client base, boasting of more than
a decade in service to the greater North Dakota community.
Since commencing this case, the Debtor has continued ordinary
operations, servicing the needs of the communities in which the
entity operates, making regular payroll, and paying its
postpetition obligations as they come due. The case has, no doubt,
experienced certain anomalous constructs, including Drain Services
departing the contours of the first interim cash collateral order
and then, shortly thereafter, acquiring an expensive piece of
machinery through a transaction that flirts intimately with the
contours of the ordinary course limitations set forth in Title 11
of the United States Code.
Accordingly, this Plan may be most simply summarized as follows:
the Debtor will (a) pay its non-defaulted obligation, on a 30 year
note held by the United States Small Business Administration (the
"SBA"), in accord with the terms of that note; (ii) pay the nominal
priority claim of the IRS (being $52.44) on the effective date;
(iii) pay all other secured claims over a period of seven years, in
irregular intervals designed to allow for the payment of
administrative expenses; (iv) pay allowed administrative expense
claims over three months; (v) pay $78,099.21 toward the claims of
general unsecured creditors during the five year life of this Plan;
(vi) pay certain excess monies, if any, toward the claims of
general unsecured creditors, during the five year life of this
Plan; and (vii) create a trust, for the benefit of general
unsecured creditors, to be given a promissory note for $60,999.12,
payable and amortized over two years, without interest, at the
conclusion of the life of this Plan.
This Plan proposes to pay creditors of the Debtor from the general
cash flow of the Debtor.
Class 3 consists of General unsecured claims, excluding DSI
Investments, LLC but including the general unsecured claim of the
IRS. This Class is impaired. The Debtor will pay the allowed claims
of Class 3 constituents, pro rata, the sum of $1,305.08 per month,
commencing in May 2024, each month to and through October 2028. For
the months of November and December 2028, as well as January 2029,
the Debtor shall pay $2,541.63 (with these being months in which
the Debtor will no longer be making payments to the IRS).
The Debtor will also establish a trust for the benefit of Class 3
creditors (the "Drain Services Class 3 Trust"). The Drain Services
Class 3 Trust will be funded with a promissory note in the amount
of $60,999.12 (the "Class 3 Note"). The Class 3 Note will have a
maturity date of January 15, 2031, with payments thereupon being
amortized over the period of February 14, 2029 through January 15,
2031 and paid in a straight line manner during that two-year
period, without interest. This will result in additional payments
of $2,541.63, each month, being made to Class 3 creditors during
the two-year period following the conclusion of the life of this
Plan.
Additionally, should there come a time during the five-year life of
this Plan when the Debtor has an average operating account balance
in excess of $75,000.00, as measured on a trailing 90-day basis,
the Debtor will apply the difference between said balance and
$75,000.00 to the making of early payments under this Plan (the
"Cash Overflow Mechanism"). Said payments will be used to pay the
allowed claims of Class 3 constituents, pro rata.
Class 4 consists of the claim of DSI Investments, LLC. This insider
class will take nothing under this Plan. This Class is impaired.
Class 5 consists of Equity interests in the Debtor. Caitlyn Cameron
shall retain her membership interest in the Debtor.
The primary means for implementing this Plan will be the Debtor's
continued operation of its business, furnishing services and
materials to municipal, corporate and residential customers
throughout the Upper Midwest.
Commencing on the fifteenth calendar day of the first calendar
month succeeding the effective date the Debtor will make payments,
pursuant to the terms of this Plan, in the sum of $10,050.00, each
month, for 59 months. These monies will be first applied to the
retirement of administrative expense claims and then applied to the
retirement of secured claims and general unsecured claims, except
part of the payment of the claim of the SBA will overlap with the
payment of administrative expense claims.
The Debtor will use the Cash Overflow Mechanism to apply any monies
in its operating account, over and above the sum of $75,000.00
(measured on a trailing basis, as extrapolated upon supra) to the
additional payment of general unsecured claims.
A full-text copy of the Second Amended Subchapter V Plan dated
January 30, 2024 is available at https://urlcurt.com/u?l=bXk2zS
from PacerMonitor.com at no charge.
Counsel for the Debtor:
Maurice B. VerStandig, Esq.
The Dakota Bankruptcy Firm
1630 1st Avenue N, Suite B PMB 24
Fargo, ND 58102
Telephone: (701) 394-3215
Email: mac@dakotabankruptcy.com
About Drain Services
Drain Services Inc. offers residential, commercial, industrial, and
municipal pipe laying and lining to Minnesota, North Dakota, and
South Dakota customers. The company is based in West Fargo, N.D.
Drain Services filed Chapter 11 petition (Bankr. D.N.D. Case No.
23-30352) on Oct. 2, 2023, with up to $10 million in assets and up
to $1 million in liabilities. Kevin Cameron, vice president, signed
the petition.
Judge Shon Hastings oversees the case.
Maurice B. VerStandig, Esq., at The Dakota Bankruptcy Firm, serves
as the Debtor's counsel.
EAST WEST MANUFACTURING: Moody's Affirms 'B3' CFR, Outlook Stable
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Moody's Investors Service affirmed East West Manufacturing LLC's
(EWM) B3 corporate family rating and B3-PD probability of default
rating. Concurrently, Moody's affirmed the B3 ratings on the
company's senior secured bank credit facilities. The outlook is
stable.
The ratings affirmations reflect EWM's adequate liquidity despite a
challenging operating environment since its leveraged buyout (LBO)
in December 2021. EWM has generated new business wins that mostly
replace lost revenue from key customers following a period of
destocking elevated inventory levels. The company will continue to
manage its cost base to maintain profitability at current levels.
Moody's expects EWM's adjusted debt/EBITDA to moderate in the
quarters ahead from very high levels (-9 times for the nine months
ended September 30, 2023).
RATINGS RATIONALE
EWM's B3 CFR reflects high financial leverage and modest scale. The
company generates less than $500 million of revenue annually, which
is considerably lower than similarly rated peers. EWM operates in
the competitive and fragmented outsourced design and manufacturing
segment. Moody's forecasts EWM's adjusted debt/EBITDA to be high at
about 6.5 times over the next 12 to 18 months. Flat revenue growth
and breakeven free cash flow have been below Moody's expectations
since the December 2021 LBO due to a decline in demand from key
customers driven by destocking elevated inventory levels to
mitigate supply chain challenges.
The rating is supported by the company's deep and enduring
relationships with customers that rely on EWM's engineering and
design expertise as well as its global manufacturing footprint.
Moody's believes that EWM's customer relationships are sticky with
high switching costs. EWM also has good diversity by industry with
customers largely in growing markets such as health and wellness,
automation, HVAC and industrial technologies.
Moody's expects EWM will maintain adequate liquidity supported by
modestly positive free cash flow and an undrawn $40 million
revolving credit facility with no near-term maturities. Mandatory
expenditures will remain manageable with low maintenance capital
expenditure requirements and term loan amortization.
The stable outlook reflects Moody's expectation of at least
adequate liquidity supported by modestly positive free cash flow
over the next 12 to 18 months. EWM will continue to generate new
business wins without diluting profitability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings may be upgraded if EWM effectively manages its growth.
Adjusted debt/EBITDA sustained below 5.5 times, EBITA/interest
expense approaching 2.0 times or sustained positive free cash flow
may also support an upgrade.
Ratings may be downgraded with any deterioration in liquidity or if
debt/EBITDA is sustained above 7.5 times. EBITA/Interest expense
below 1.0 times or aggressive financial policies such as a
debt-financed dividend may also result in a downgrade.
East West Manufacturing LLC is an outsourced product design and
manufacturing company that assists customers in designing and
manufacturing products as well as logistical support. Revenue for
the 12 months ended September 30, 2023 was approximately $421
million.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
EBIX INC: Chapter 11 Funding Survives $70 Million Roll Up Challenge
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Vince Sullivan of Law360 reports that a Texas bankruptcy judge
approved a $105 million post-petition financing package in the case
of insurance software company Ebix Inc. on Friday, January 26,
2024, overruling an objection from the Office of the U.S. Trustee
concerning a rolling up of $70 million in existing debt.
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.
EVE FINANCIAL: Unsecureds to Split $90K in Subchapter V Plan
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Eve Financial, Inc., filed with the U.S. Bankruptcy Court for the
Northern District of Texas a Subchapter V Plan of Reorganization
dated January 30, 2024.
The Debtor is a local Lehi, Utah business which operates a
financial services tech company, founded in November 2019. Eve is
focused on helping service businesses finance their customers'
purchases at the point of sale.
Eve launched the beta of its credit card in March 2022, and began
raising money in order to successfully conduct a market launch of
the new program, following the final closing of its debt facility
with Encina. Relationships with Eve's two earliest investors,
Stephen Yacktman and Jason Subotky, deteriorated to the point that
Mr. Yacktman and Mr. Subotky exercised a blocking right to prevent
Eve from raising money and closing its debt facility with Encina,
preventing the launch of Eve's new primary product, the Eve Credit
Card.
Since filing for bankruptcy, the Debtor has continued to operate
its business in the ordinary course. No significant post-petition
events have occurred.
This Plan proposes to pay the Debtor's creditors from future income
for 44 months.
Creditors holding General Unsecured Claims will receive
distributions. The Plan proposes to pay the General Unsecured
Creditors a pro-rata share of approximately $90,000 via monthly
payments beginning in month 22 (January 2026) of the Plan and
continuing through the end of the Plan. This Plan also provides for
the payment of certain Administrative Expense Claims and Priority
Claims.
The Debtor, as a reorganized debtor, will retain all property of
the Estate. The retained property shall be used and employed by the
Debtor in the continuance of its business. The majority of the Plan
payments contemplated hereunder will be funded from disposable
income derived from future business operations.
Class 2 consists of General Unsecured Creditors. The Debtor
estimates that this class consists of 21 creditors, with claims
totaling $630,577.46. Holders of General Unsecured Claims shall
receive payments beginning January 2026 and shall receive pro-rata
monthly payments of: 1) $2,500 per month from January 2026 through
December 2026 (totaling $30,000 for the 2026 12-month period); and
2) $5,000 per month from January 2027 through December 2027
(totaling $60,000 for the 2027 12-month period). Class 2 is
impaired and entitled to vote.
Class 3 consists of Judgment Creditors' Claim. The Debtor currently
estimates this class to consist of 1 claim totaling $2,898,204.65.
Pursuant to Section 510(b), this claim is subordinated to all other
creditor claims in the instant bankruptcy. Because the Debtor’s
projected disposable income is exhausted by the end of year four by
payments to the Class 2 General Unsecured Creditors, Class 3 shall
receive nothing under the Plan. For the avoidance of doubt, the
Judgment Creditors have converted their equity position to a claim
in the instant case and shall not retain any equity in the Debtor.
Class 4 consists of Allowed Equity Interests in the Debtor. The
equity interest holders in Eve Financial, Inc. will retain their
interests in the Reorganized Debtor except, however, with respect
to the Judgment Creditors, whose claim and equity interests shall
be treated in accordance with Class 3. For the avoidance of doubt,
the Judgment Creditors have, and shall have, no equity interest in
the Debtor.
A full-text copy of the Subchapter V Plan dated January 30, 2024 is
available at https://urlcurt.com/u?l=C0Jg9N from PacerMonitor.com
at no charge.
Counsel for Debtor:
Charlie Shelton, Esq.
HAYWARD PLLC
7600 Burnet Road, Suite 530
Austin, TX 78757
Phone: (737) 881-7100
Fax: cshelton@haywardfirm.com
About Eve Financial
Eve Financial, Inc., is a financial service company that helps
companies and consumers receive financing to pay for services. It
is based in American Fork, Utah.
Eve Financial filed Chapter 11 petition (Bankr. N.D. Texas Case No.
23-43335) on Nov. 1, 2023, with $100,000 to $500,000 in assets and
$1 million to $10 million in liabilities.
Judge Mark X. Mullin oversees the case.
Charlie Shelton, Esq., at Hayward, PLLC, is the Debtor's legal
counsel.
EVE FINANCIAL: Winstead PC Advises Judgment Creditors
-----------------------------------------------------
The law firm Winstead PC filed a verified statement pursuant to
Rule 2019 of the Federal Rules of Bankruptcy Procedure to disclose
that in the Chapter 11 case of Eve Financial, Inc., the firm
represents the Judgment Creditors.
The Judgment Creditors are comprised of Jason Subotky, in his
capacity as Trustee for the Jason Subotky Family Remainder Trust,
Stephen Yacktman, in his capacity as Trustee for the Stephen
Yacktman Family Remainder Trust and the Ellyn Yacktman Family
Remainder Trust, and Ellyn Yacktman.
On August 7, 2023, the State Court entered the Order Granting Final
Summary Judgment (the "State Court Judgment") against the Debtor,
awarding the Judgment Creditors $2,464,673.46, together with
interest in the amount of 18 percent per annum to accrue from
December 4, 2022, until and unless such judgment is satisfied in
its entirety, plus $30,000.00 for attorneys' fees and court costs
(collectively, the "Judgment Amount").
As of the Petition Date, the Debtor was indebted to the Judgment
Creditors in the amount of at least $2,898,204.65, less all
applicable credits, plus all other fees, interest, costs, and
expenses incurred and that continue to accrue with respect to the
State Court Judgment, including, but not limited to, attorneys'
fees and costs, in addition to the Judgment Creditors' future
attorneys' fees and costs in an as yet to be determined amount, to
the extent permitted by the Bankruptcy Code and applicable law
(collectively, the "Claim"). On January 7, 2024, the Judgment
Creditors filed their Proof of Claim at Claim No. 3-1.
Winstead represented the Judgment Creditors in connection with the
transaction that underlies the State Court Judgment, the State
Court proceedings, and now this bankruptcy case.
Winstead represents only the Judgment Creditors and does not
represent or purport to represent any entities other than the
Judgment Creditors in connection with these cases. In addition, the
Judgment Creditors do not claim or purport to represent any other
entity.
The law firm can be reached at:
Annmarie Chiarello, Esq.
Steffen R. Sowell, Esq.
WINSTEAD PC
500 Winstead Building
2728 N. Harwood Street
Dallas, Texas 75201
Telephone: (214) 745-5400
Facsimile: (214) 745-5390
E-mail: achiarello@winstead.com
E-mail: ssowell@winstead.com
About Eve Financial
Eve Financial, Inc. is a financial service company that helps
companies and consumers receive financing to pay for services. It
is based in American Fork, Utah.
Eve Financial filed Chapter 11 petition (Bankr. N.D. Texas Case No.
23-43335) on Nov. 1, 2023, with $100,000 to $500,000 in assets and
$1 million to $10 million in liabilities.
Judge Mark X. Mullin oversees the case.
Charlie Shelton, Esq., at Hayward, PLLC represents the Debtor as
legal counsel.
FINANCE OF AMERICA: Blackstone Financing Increased to $85MM
-----------------------------------------------------------
As previously disclosed, in June 2019, Finance of America Equity
Capital LLC ("FoA Equity"), a subsidiary of Finance of America
Companies Inc. (the "Company"), entered into Revolving Working
Capital Promissory Notes (as amended from time to time, the
"Original Promissory Notes") with certain funds affiliated with
Blackstone Inc. and an entity controlled by Brian L. Libman ("LFH"
and together with Blackstone, the "Lenders"). The Original
Promissory Notes provided for aggregate commitments for revolving
borrowings of $60.0 million, a maturity date of November 30, 2024
and an interest rate per annum of 10% increasing to 15% per annum,
effective May 15, 2024. The Original Promissory Notes were secured
by tangible assets of FoA Equity, excluding pledges of equity
interests, and certain Pledged Risk Retention Securities held by MM
Risk Retention LLC, a wholly owned subsidiary of FoA Equity ("MM
Risk").
On January 30, 2024, FoA Equity, MM Risk and the Lenders entered
into an omnibus amendment (the "Amendment") to the Original
Promissory Notes to, among other things, increase the aggregate
commitments for revolving borrowings under the Original Promissory
Notes from $60.0 million to $85.0 million and extend their maturity
date from November 30, 2024 to May 25, 2025 (the Original
Promissory Notes as amended by the Amendment, the "Amended
Promissory Notes"). The Amended Promissory Notes continue to bear
interest at a rate per annum equal to 10% increasing to 15% per
annum, effective May 15, 2024.
In addition, the Amended Promissory Notes have the benefit of a new
guarantee and security agreement and include certain restrictive
covenants and mandatory prepayment events, in each case, as more
particularly described under "Covenants and Events of Default" and
"Mandatory Prepayment," respectively.
The terms of the Amendment and Amended Promissory Notes were
approved by the Audit Committee of the Board of Directors of the
Company in accordance with the Company's policy regarding
transactions with related persons.
Collateral and Guarantees
As required under the Amendment, on January 30, 2024, FoA Equity,
the Guarantors and Blackstone, as administrative agent under the
Amended Promissory Notes, entered into a new guarantee and security
agreement for the benefit of the Lenders to add the Guarantors as
guarantors of the Amended Promissory Notes and pledge additional
collateral to secure the obligations under the Amended Promissory
Notes, as described herein. The Amended Promissory Notes are
guaranteed by certain current and future wholly owned subsidiaries
of FoA Equity, in each case, except for certain subsidiaries,
including those subsidiaries which are not wholly owned
subsidiaries, securitization subsidiaries, warehouse facility
subsidiaries, foreign subsidiaries and other excluded subsidiaries.
The guarantors under the Amended Promissory Notes as of the date of
the Amendment include Finance of America Funding LLC ("FoA
Funding"), the issuer of the Company's existing unsecured 7.875%
senior notes due 2025 (the "2025 Notes"), Finance of America
Reverse LLC ("FoA Reverse"), Finance of America Mortgage LLC ("FoA
Mortgage"), the other guarantors under the 2025 Notes (subject to
certain exceptions) and MM Risk (collectively, the "Guarantors").
Each Amended Promissory Note is secured on a first-priority basis,
subject to permitted liens, by substantially all of the
unencumbered assets owned by FoA Equity and each of the Guarantors
(except for FoA Reverse and FoA Mortgage) (collectively, the "All
Assets Collateral"). The All Assets Collateral includes pledges of
the equity interests of each Guarantor and the equity instruments
required to be retained by MM Risk (presently and in the future) in
connection with the issuance of proprietary reverse loan
asset-backed securitizations (the "Pledged Risk Retention
Securities"). Each Amended Promissory Note is also secured on a
first-priority basis, subject to permitted liens, by pledges of the
equity interests of the direct subsidiaries of FoA Reverse and FoA
Mortgage, subject to certain exceptions (together with the All
Assets Collateral, the "Collateral"). The Guarantors are also
required to transfer any unrestricted cash in excess of $90 million
that the Guarantors hold on an aggregate basis to an account that
will be subject to a springing control agreement with Blackstone,
as the administrative agent.
Mandatory Prepayment
The Amended Promissory Notes are required to be partially or fully
repaid, and the commitments under such Amended Promissory Notes
reduced by the same amount, in connection with the occurrence of
certain specified events described herein.
In the event of (a) a transaction relating to the sale or financing
of certain reverse mortgage servicing rights owned by FoA Equity or
any restricted subsidiary that results in FoA Equity or any
restricted subsidiary receiving any cash proceeds from such
transaction, excluding any refinancing, for the same principal
amount, of indebtedness already secured by such reverse mortgage
servicing rights and the ordinary course sale, pooling or financing
of reverse mortgage loans, including tail pools, buyout loans or
related securitizations, (b) any public or private sale or issuance
of capital stock or preferred stock by FoA Funding, FoA Equity or
any of its direct or indirect parent companies, subject to
customary exceptions for intercompany issuances, registrations on
Form S-8 and certain issuances in connection with FoA Equity or its
subsidiaries existing acquisition agreements, (c) any casualty
event and certain asset dispositions, (d) the incurrence of
indebtedness by FoA Equity or any of its restricted subsidiaries
not permitted to be incurred under the covenants of the Amended
Promissory Notes or (e) the disposition of Collateral for fair
market value (for which the consideration must be cash), FoA Equity
must, within three business days of such event, apply 100% of the
proceeds received by FoA Equity or any of its restricted
subsidiaries in connection with such event, in each case, net of
certain related fees and expenses, as a prepayment of the Amended
Promissory Notes.
In the event of the incurrence of permitted indebtedness through
the issuance of proprietary reverse mortgage loan securitizations
not involving the cancellation of Pledged Risk Retention
Securities, (x) to the extent immediately prior to such incurrence,
the Guarantors hold more than $80 million, but less than $100
million, in unrestricted cash (the "Pre-Securitization Cash"), FoA
Equity must, within three business days of such event, apply 50% of
the net cash proceeds received by (or that could be made available
to) a Guarantor as a prepayment of the Amended Promissory Notes or
(y) to the extent Pre-Securitization Cash is more than $100
million, FoA Equity must, within three business days of such event,
apply 100% of the net cash proceeds received by (or that could be
made available to) a Guarantor as a prepayment of the Amended
Promissory Notes.
In the event of the incurrence of permitted indebtedness through
the issuance of proprietary reverse mortgage loan securitizations
in connection with the cancellation of Pledged Risk Retention
Securities, (xx) to the extent the cumulative net cash proceeds
received by (or made available to) the Guarantors allocable to the
proprietary reverse mortgage loans underlying the cancelled Pledged
Risk Retention Securities (the "Cumulative Proceeds") are greater
than $25 million but less than or equal to $50 million, FoA Equity
must, within three business days of such event, apply 50% of such
Cumulative Proceeds in excess of $25 million as a prepayment of the
Amended Promissory Notes and (yy) to the extent Cumulative Proceeds
are greater than $50 million, FoA Equity must, within three
business days of such event, apply the sum of (A) $12.5 million
plus (B) 100% of such Cumulative Proceeds in excess of $50 million
as a prepayment of the Amended Promissory Notes.
Covenants and Events of Default
The Amended Promissory Notes contain restrictive covenants that
limit, among other things, and in each case, subject to certain
exceptions for transactions in the ordinary course business, the
ability of FoA Equity and certain of its subsidiaries, including
the Guarantors, to incur additional indebtedness, repay
indebtedness before its respective stated maturity, make restricted
payments (including investments), sell or dispose of assets, incur
liens and enter into certain transactions with affiliates. The
Amended Promissory Notes also prohibit FoA Equity from permitting
any restricted subsidiary (other than a foreign subsidiary) that is
not a Guarantor from holding unrestricted cash unless the transfer
of the cash to a Guarantor is prohibited by law or contracts with
non-affiliates in the ordinary course of business.
Each Amended Promissory Note contains customary events of default
which would permit each of the Lenders to declare such Lender's
Amended Promissory Note to be immediately due and payable if not
cured within applicable grace periods, including, but not limited
to, the failure to make timely payments on the Amended Promissory
Notes or certain other indebtedness, the failure to satisfy
covenants, breach of representations and warranties, acceleration
of certain other indebtedness, the existence of certain final
judgments or orders, the failure of the documents granting security
for the Amended Promissory Notes to be in full force and effect,
the failure of the liens on the Collateral to be valid and
perfected and specified events of bankruptcy and insolvency (which
specified events would result in immediate acceleration of the
Amended Promissory Notes without any further action by the
Lenders).
About Finance of America
Plano, Texas-based, Finance of America Companies Inc. is a
financial services holding company which, through its operating
subsidiaries, is a modern retirement solutions platform that
provides customers with access to an innovative range of retirement
offerings centered on the home. In addition, FoA offers capital
markets and portfolio management capabilities to optimize
distribution to investors.
As of September 30, 2023, Finance of America has $26.4 billion in
total assets and $26.3 billion in total liabilities.
As reported by the Troubled Company Reporter on Oct. 20, 2023,
Fitch Ratings has downgraded the Long-Term Issuer Default Ratings
(IDRs) of Finance of America Companies Inc. and its subsidiaries,
Finance of America Equity Capital LLC and Finance of America
Funding LLC, to 'CCC+' from 'B-'. Fitch has also downgraded Finance
of America Funding LLC's senior unsecured debt rating to
'CCC-'/'RR6' from 'CCC+'/'RR5'. The Rating Outlook remains
Negative. The rating actions have been taken as part of a periodic
peer review of non-bank mortgage companies, which is comprised of
six publicly rated firms.
The rating downgrade reflects the operating losses and resulting
erosion of tangible equity FOA has experienced over the last year,
which has resulted in continuing covenant breaches, which may limit
the company's ability to extend debt maturities and secure future
funding. High interest rates and borrower affordability challenges
have reduced origination volumes, which, along with widening credit
spreads, have resulted in significant negative fair value
adjustments to FOA's assets. Tangible equity has decreased to
negative $5 million at 2Q23, down from $288 million in 2Q22 and
$480 million at YE21.
The Negative Outlook reflects Fitch's expectation that FOA's
profitability will remain weak, challenging its ability to rebuild
tangible capital levels over the Outlook horizon. Additionally,
Fitch's believes execution risk remains with regard to the
integration of American Advisors Group (AAG) and the restructuring
of FOA's continuing business segments, which could impact its
long-term franchise and market position.
FORWARD AIR: S&P Downgrades ICR to 'B+', Outlook Stable
-------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Forward Air
Corp. to 'B+' from 'BB-' and its issue-level rating on its senior
secured debt to 'B+' from 'BB-'. The '3' recovery rating is
unchanged, indicating its expectation of meaningful (50%-70%;
rounded estimate: 60%) recovery in the event of a default.
The stable outlook reflects S&P's expectation that the company is
likely to achieve FFO to debt in line with the rating over the next
12 months despite the current freight recession.
Following a period of litigation resulting in an amendment to the
merger agreement for Omni Logistics LLC, Forward Air Corp. closed
the merger on Jan. 25, 2024. S&P expects Forward Air's S&P Global
Ratings-adjusted funds from operations (FFO) to debt will be 8.2%,
well below previous expectations for the mid-teens percent area in
2024 due to weaker demand and an elevated cost structure at Omni.
S&P said, "The downgrade reflects our expectation for weaker
metrics than originally anticipated in the near term as Forward Air
works through integration and a weaker-than-expected earnings
contribution from Omni Logistics. Pro forma for the transaction we
previously forecast S&P Global Ratings-adjusted debt to EBITDA of
9.7x for 2023 and 5.6x for 2024 (6.3x and 3.4x, respectively,
excluding preferred shares from the adjusted debt calculation). We
also previously forecast FFO to debt at 7.3% in 2023 and 11.3% in
2024 (11.2% and 18.5%, respectively, excluding preferred shares).
We now expect S&P Global Ratings-adjusted debt to EBITDA of 8.6x in
2023 and 6.2x in 2024 (7.2x and 5.1x, respectively, excluding
preferred shares) and FFO to debt at 4.5% in 2023 and 8.2% in 2024
(5.4% and 9.9%, respectively, excluding preferred shares)."
The impact on its credit metrics from the amended merger agreement
is immaterial. The amended merger agreement reduced the cash
consideration and total equity to Omni shareholders included in the
transaction to $20 million and 35% of Forward Air's common
outstanding shares on a converted basis (roughly $660 million of
equity [$460 million preferred equity]) from $150 million and 37.7%
of Forward's shares (about $1.7 billion [$1.2 billion preferred]).
The lower portion of preferred equity largely reflects the decline
in Forward's share price from about $110 to about $46 at the close
of the transaction.
S&P said, "The timing for recovery out of the current freight
recession remains uncertain, and we forecast lower revenue growth
at Forward and Omni in 2024. Subsequent to our previous forecast,
Forward Air has divested its Final Mile segment (roughly $290
million of revenue). Excluding this, we forecast combined Forward's
revenue to decline 24% to 26% in 2023 (previously a 20% decline)
and revenue growth of 3%-5% in 2024 (previously 9% growth)."
Stand-alone Forward's 2023 revenue is in line with previous
expectations of an 18%-20% decline. All segments were affected by
weaker freight demand. S&P said, "We expect revenue growth of about
4%-6% in 2024 (previously 8%-10% growth) as demand for freight
improves. This reflects growth of 8%-10% (in line with the previous
forecast) in the company's Expedited Freight segment offset by
normalizing accessorial revenue (related to storage and
consolidation of freight for dray moves) in the company's
Intermodal segment, which we expect to decline about 8%-10%
(previously 8%-10% growth). We note accessorial revenue was
elevated in 2022 through the first quarter of 2023 and decreased as
capacity at docks improved."
S&P said, "We believe Forward Air's less-than-truckload (LTL)
tonnage, which improved sequentially through the third quarter of
2023, will continue to improve through 2024 as it benefits from
demand from former Yellow Corp. customers. Freight continues to
resettle in the LTL market and the specific timing for recovery in
the macroeconomic environment remains uncertain, but we believe
demand could begin to improve in the back half of 2024."
Stand-alone Omni's 2023 revenue declined 30%-32% (previously a
22%-24% decline). S&P said, "Omni's Value Added Warehousing and
Distribution segment performed in line with our previous forecast
(which was flat to modestly declining revenue). We forecast Omni's
Freight Forwarding segment to decline 35% (previously a 25%
decline) in 2023, reflecting substantially weaker demand across all
of Omni's domestic forwarding businesses (the expedited and
truckload businesses were particularly soft relative to previous
expectations)." This also reflects the impact of weaker volume (as
demand softened in the broader freight market) in its international
freight forwarding businesses as ocean and air freight rates
deteriorated after peaking in the years following the onset of the
pandemic.
S&P said, "We now forecast 2024 revenue growth of 1%-3% (previously
a 7%-9% increase) at stand-alone Omni. This reflects revenue growth
of 1%-3% in Omni's Value-Added Warehousing and Distribution segment
(in line with the previous forecast). We expect revenue growth of
1%-3% at Omni's Freight Forwarding segment (previously an 8%-10%
increase), reflecting modest growth in domestic and international
freight volume with some potential for improvement in freight
rates. We believe there is likely to be more competition to serve
these lanes such that volumes and pricing improvements at Omni will
be more in line with the broader freight forwarding market.
"Elevated labor and transaction expenses, combined with weaker
growth prospects at Omni Logistics, are driving weaker than
previously expected reported EBITDA and free cash flow in 2023 and
2024. We previously assumed pro forma for the merger Forward Air
would generate reported EBITDA of about $220 million in 2023
(includes about $20 million in cost synergies), improving to about
$470 million in 2024 (with $60 million in cost synergies). We now
forecast reported EBITDA of about $175 million in 2023 (virtually
all from Forward Air) and $300 million in 2024 (about two-thirds
from Forward Air, includes about $20 million in cost synergies).
"The rapid deterioration of ocean and air freight rates going into
2023 left Omni with a bloated cost structure in a softer demand
environment. This reflects labor-related expenses in its selling,
general, and administrative costs that we now expect to be above
$500 million compared with about $400 million in our previous
forecast. We understand while under agreement to be acquired Omni
was planning to begin rightsizing its cost structure earlier than
it actually started. Instead, Omni's management chose to invest in
its International air sales resources -- delaying targeted cost
reduction.
"We expect Forward will look to reduce headcount and rightsize the
cost structure at the legacy Omni business, which we believe is
likely to include additional headcount reduction. We also now
expect the integration will take longer to complete and will also
be more expensive than previously considered. We previously assumed
transaction expenses of $130 million, all incurred in 2023, and now
forecast transaction expenses of about $150 million, with about
half recognized in 2023 and the balance in 2024. Lastly, we assume
Forward Air will lose about $25 million of EBITDA with the
divestiture of Final Mile in December 2023.
"Accordingly, we have revised our reported free operating cash flow
(FOCF) forecast to $0 million- $20 million in 2023 (from $55
million-$95 million) and $10 million-$50 million in 2024 (from $180
million-$220 million for 2024).
"Our assessment of Forward Air's financial risk as aggressive
continues to reflect our expectation that the company will be able
to convert the preferred equity before the one-year anniversary of
the transaction close. We include preferred shares in our adjusted
debt calculation. We continue to expect Forward Air will be able to
convert the preferred equity before the one-year anniversary of the
transaction close. In our view, the longer the preferred shares
remain outstanding in the capital structure, the greater the
likelihood of them being replaced with debt becomes. If the
preferred shares do not convert as we anticipate before the
one-year anniversary of the transaction close, it would result in
an additional $55 million hit to Forward Air's cash flow or an
increase our adjusted debt calculation (contingent on Forward Air
electing to pay an estimated 13% dividend or make payments in kind,
which could compound further in future years). That said, we
currently expect shareholders will likely accept the dilution from
the preferred share conversion, given the high 13% dividend, which
could further dilute their positions, or materially reduce the
company's cash flow."
Recent litigation between Forward Air and Omni has delayed the
start of integration between the companies amid a rapidly evolving
freight environment, likely delaying deleveraging. S&P said, "We
believe management's execution of its previously stated strategy
also continues to shift with changes to growth prospects at Omni.
The executive team, after the close of the merger and following a
period of litigation between the companies, is uncertain as of the
current writing. We understand J.J. Schickel will no longer join
Forward Air as part of the executive team following the close of
the merger. We continue to monitor the extent to which Forward Air
will come under additional pressure from activist investors as it
gives up four board seats to Omni. That said, we expect management
will continue to work toward its stated leverage target of 2x,
which we expect would be over a turn higher on an S&P Global
Ratings-adjusted basis."
Forward Air has discussed the potential for divestitures. It sold
its Final Mile business for $262 million in late December 2023 and
could seek to divest more businesses that are outside of its core
less-than-truckload operations over time, with proceeds likely used
toward debt repayment. Accordingly, S&P could revise the business
risk lower if the company continues to divest businesses that lead
to its reduced scale and likely lower earnings and cash flow
generation.
S&P said, "We continue to believe the merger with Omni has the
potential to complement Forward Air's less-than-truckload
capabilities and lends itself to expanding the company's expedited
freight service offerings in the long run.During its 2023
third-quarter earnings call, the company indicated it was not
seeing customer attrition at that time. That said, the risk around
execution and customer attrition remain as its customers (freight
forwarders who compete with Omni) could seek alternatives to move
freight outside of Forward's network over time. Service quality (as
measured by on-time delivery and a damage claims ratio) remains an
important differentiator among LTL providers. Forward Air remains
among the leaders in service quality within the industry and its
network remains more robust than its smaller regional peers. We
continue to monitor if there were any concessions made in the way
of pricing to customers to assuage concerns following the merger
announcement.
"The stable outlook reflects our expectation that the company is
likely to achieve FFO to debt in line with the rating over the next
12 months. Pro forma for the transaction, we forecast S&P Global
Ratings-adjusted FFO to debt in the low-single-digit percent area
in 2023 (5.4% excluding preferred shares as debt), improving to
8.2% in 2024 (9.9% excluding preferred shares as debt).
"We could downgrade Forward Air within the next 12 months if its
operating performance weakened due to softer-than-expected
macroeconomic conditions, the recovery out of the current freight
recession were more protracted than currently envisioned, or if
management revised its previously stated financial policy and
continued to divest businesses without sufficiently offsetting with
debt repayment. We could also look to take a negative rating action
if the integration were more expensive and lengthier than currently
considered, or if the company were unable to convert its preferred
shares to common equity such that we expected FFO to debt would be
sustained below 10%.
"While unlikely, we could upgrade Forward Air within the next 12
months if it could improve FFO to debt comfortably above the
mid-teens percent area and we expected it would remain there. This
could occur if operational performance, including revenue and cost
synergies, improved above our current expectations, or if the
company were able to repay debt with excess cash flow."
FTX GROUP: Unloads CryptoAssets to Funds to Pay Back Customers
--------------------------------------------------------------
Jonathan Randles of Bloomberg Law reports that FTX is unloading
cryptoassets and hoarding cash as bankruptcy advisers look for a
way to repay customers whose accounts have been frozen since the
platform collapsed in 2022.
The fraud-tainted crypto firm's four largest affiliates —
including FTX Trading Ltd. and Alameda Research LLC — together
nearly doubled the group's cash pile to $4.4 billion at the end of
2023 from about $2.3 billion in late October 2023, according to
Chapter 11 monthly operating reports. The company's total cash is
likely higher including the rest of its affiliates.
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.
GAUCHO GROUP: Noteholder Hikes Beneficial Ownership Cap to 9.99%
----------------------------------------------------------------
Gaucho Group Holdings, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that effective Feb. 5, 2024,
pursuant to the Senior Secured Convertible Note issued by the
Company to that certain investor on Feb. 21, 2023, the Holder
elected to increase the cap on its beneficial ownership of the
Company from 4.99% to 9.99% per Section 3(d)(i) of the Note by
providing written notice to the Company. Such increase in the
Maximum Percentage will not be effective until the 61st day after
such notice is delivered to the Company.
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. was
incorporated on April 5, 1999. Effective Oct. 1, 2018, the Company
changed its name from Algodon Wines & Luxury Development, Inc. to
Algodon Group, Inc., and effective March 11, 2019, the Company
changed its name from Algodon Group, Inc. to Gaucho Group Holdings,
Inc. Through its wholly-owned subsidiaries, GGH invests in,
develops and operates real estate projects in Argentina. GGH
operates a hotel, golf and tennis resort, vineyard and producing
winery in addition to developing residential lots located near the
resort. In 2016, GGH formed a new subsidiary, Gaucho Group, Inc.
and in 2018, established an e-commerce platform for the manufacture
and sale of high-end fashion and accessories. In February 2022,
the Company acquired 100% of Hollywood Burger Argentina, S.R.L.,
now Gaucho Development S.R.L ("GD"), through InvestProperty Group,
LLC and Algodon Wine Estates S.R.L., which is an Argentine real
estate holding company. In addition to GD, the activities in
Argentina are conducted through its operating entities:
InvestProperty Group, LLC, Algodon Global Properties, LLC, The
Algodon Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon
Wine Estates S.R.L. Algodon distributes its wines in Europe under
the name Algodon Wines (Europe). On March 20, 2020, the Company
formed a wholly-owned Delaware subsidiary corporation, Bacchus
Collection, Inc., which was dissolved on March 23, 2021. On June
14, 2021, the Company formed a wholly-owned Delaware limited
liability company subsidiary, Gaucho Ventures I Las Vegas, LLC, for
purposes of holding the Company's interest in LVH Holdings LLC.
Gaucho reported a net loss of $21.83 million for the year ended
Dec. 31, 2022, compared to a net loss of $2.39 million for the year
ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $18.91
million in total assets, $11.02 million in total liabilities, and
$7.89 million in total stockholders' equity.
New York, NY-based Marcum LLP, the Company's auditor since 2013,
issued a "going concern" qualification in its report dated April
17, 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.
The Company's operating needs include the planned costs to operate
its business, including amounts required to fund working capital
and capital expenditures. Based upon projected revenues and
expenses, the Company believes that it may not have sufficient
funds to operate for the next twelve months from the date these
financial statements are made available. Since inception, the
Company's operations have primarily been funded through proceeds
received from equity and debt financings. The Company believes it
has access to capital resources and continues to evaluate
additional financing opportunities. There is no assurance that the
Company will be able to obtain funds on commercially acceptable
terms, if at all. There is also no assurance that the amount of
funds the Company might raise will enable the Company to complete
its development initiatives or attain profitable operations. The
aforementioned factors raise substantial doubt about the Company's
ability to continue as a going concern for a period of one year
from the issuance of these financial statements, according to the
Company's Quarterly Report for the period ended Sept. 30, 2023.
GENESIS GLOBAL: UST Opposes Releases of 3rd Parties
---------------------------------------------------
Randi Love of Bloomberg Law reports that the Justice Department
argues that bankrupt cryptocurrency lender Genesis Global Holdco
LLC shouldn’t be allowed to release third parties from liability
or pay legal fees outside the court’s purview, the Justice
Department argues.
The Office of the US Trustee on Monday, January 29, 2024, objected
to Genesis’ amended joint Chapter 11 plan in a filing in the US
Bankruptcy Court for the Southern District of New York. The
federal watchdog, which monitors corporate bankruptcies, argued the
crypto lender's plan from November also imposes additional burdens
and requirements on certain creditors.
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.
GENESYS CLOUD: Moody's Affirms 'B2' CFR, Outlook Remains Stable
---------------------------------------------------------------
Moody's Investors Service affirmed Genesys Cloud Services Holdings
I, LLC's (Genesys Cloud) B2 corporate family rating and probability
of default rating of B2-PD following the company's proposed
recapitalization. Moody's also affirmed Genesys Cloud Services
Holdings II, LLC's B2 backed senior secured credit facility rating.
The outlook is maintained at stable. Net proceeds from incremental
borrowings as proposed, along with balance sheet cash, will be used
to fund a shareholder distribution.
RATINGS RATIONALE
The B2 CFR reflects Genesys Cloud's elevated financial leverage as
a result of the proposed transaction resulting in pro forma
debt/EBITDA (Moody's adjusted, expensing capitalized software
development costs) of approximately 7.3x, compared with 5.9x at
October 31, 2023. However, Moody's expects Genesys Cloud's
debt/EBITDA will decrease to around 6.3x by the end of fiscal 2025
(ending January 31, 2025.) This will be aided by continued strong
revenue growth of at least mid- to high-single digit revenue at or
above current margins.
Genesys Cloud's revenue growth and margin are supported by the
company's position as a leading contact center software provider,
greater than 90% recurring revenue, a sizable market share, and
recognition by industry analysts which influence enterprise buying
decisions. Additionally, the market in which Genesys is operating
is forecast to expand at mid-teens growth rate over the next
several years. Further, cloud penetration among companies with the
largest number of agents, a large and important customer segment
for Genesys, is low and growing faster at a strong low- to
mid-double digit rate.
ESG factors are a consideration in the rating and Genesys'
corporate governance risk is high. Moody's expects Genesys'
financial policies to remain aggressive under concentrated
ownership as evidenced by the proposed recapitalization
transaction. The aggressive financial policies expose the company
to high event risk, reduce financial flexibility, and increase
vulnerability to customer spending reductions.
The stable outlook reflects Moody's expectation that debt/EBITDA
will decline to around 6.3x by the end of fiscal 2025 (ending
January 31, 2025) driven by mid- to high-single digit revenue and
earnings growth, while maintaining FCF to debt of around 5%, in
light of higher interest expense.
Genesys Cloud's liquidity is viewed as very good, supported by a
pro forma cash balance of $200 million, Moody's expectation of
approximately $150 million of free cash flow in FY25 (before the
one time shareholder distribution), and a new proposed $400 million
revolver due February 2029 that is expected to remain undrawn.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Genesys reduces Debt/EBITDA
(Moody's adjusted) to below 4.5x and sustains annual free cash flow
approaching 10% of total debt.
The ratings could be downgraded if revenue contracts materially
from current levels or the company adopts more aggressive financial
strategies, resulting in Debt/EBITDA (Moody's adjusted) exceeding
7x and annual free cash flow sustained below 5% of total debt.
The B2 ratings for the first lien bank debt issued by the company's
Genesys Cloud Services Holdings II, LLC subsidiary reflect the
B2-PD probability of default rating of the borrower's parent and a
LGD assessment of LGD3 for the bank credit facility. The B2 first
lien ratings are consistent with the CFR as the bank loans account
for the preponderance of the consolidated debt structure.
Based in Menlo Park, CA, Genesys is a provider of customer
experience and contact center solutions through both cloud services
and software licensing, primarily serving the enterprise market.
Genesys was acquired in 2012 by private equity firm Permira.
Private equity firm Hellman & Friedman LLC acquired an interest in
Genesys in 2016. The company generated revenues of approximately
$2.1 billion in the fiscal year ending January 31, 2023.
The principal methodology used in these ratings was Software
published in June 2022.
GLOBAL CONSULTING: Files for Chapter 11 Bankruptcy
--------------------------------------------------
Global Consulting LLC filed for chapter 11 protection in the Middle
District of Florida.
According to court documents, the Debtor reported between $500,000
and $1 million in debt owed to 1 to 49 creditors. The petition
states funds will be available to unsecured creditors.
About Global Consulting
Global Consulting LLC is an independent advisory firm.
Global Consulting sought relief under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 24-00353) on Jan. 25, 2023. In the
petition filed by Pedro Alfonsim, as manager, the Debtor estimated
assets between $1 million and $10 million and liabilities between
$500,000 and $1 million.
The Honorable Bankruptcy Judge Grace E Robson oversees the case.
The Debtor is represented by:
Kenneth D Herron, Jr, Esq.
Herron Hill Law Group, PLLC
13506 Summerport Village Pkwy Suite 409
Windermere, FL 34786
GOL LINHAS: Dechert LLP Represents Abra Noteholders
---------------------------------------------------
In the Chapter 11 cases of GOL Linhas Aereas Inteligentes S.A., et
al., the Ad Hoc Group of Abra Noteholders filed a verified
statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure.
Starting in December 2023, members of the Ad Hoc Group retained
attorneys with the firm of Dechert LLP to represent them as counsel
in connection with their Abra Notes which benefit from security
interests in certain of the assets of the Debtors.
The members of the Ad Hoc Group beneficially own or manage (or are
the investment advisors or managers for funds or accounts that
beneficially own or manage) approximately $982.0 million in
principal amount of Abra Notes including $699.9 million in
principal amount of SSNs and $276.2 million in principal amount of
SSENs.
The Abra Notes benefit from security interests granted to secure
the obligations under the Abra Notes by each of Abra Finance, Abra,
and the Debtors GOL Linhas Aereas Inteligentes S.A., GOL Linhas
Aereas S.A., Gol Finance (Luxembourg), Smiles Fidelidade S.A., and
Gol Equity Finance (collectively, the "Abra Lien Debtors") pursuant
to security agreements (the "Security Agreements") dated as of
March 2, 2023 between the Abra Lien Grantors, Abra Finance, Abra,
and the Abra Collateral Agent.
Accordingly, the members of the Ad Hoc Group hold direct security
interests in the assets of the Abra Lien Debtors pledged to secure
the obligations under the Abra Notes. In addition, the members of
the Ad Hoc Group hold economic interests in the Debtors indirectly
by virtue of Abra's claims against, and security interests in the
assets of, the Abra Lien Debtors which provide credit support for
the obligations under the GOL 2028 Notes.
In addition, pursuant to a Backstop Commitment Letter for
Superpriority Senior Secured Priming Debtor-in-Possession Financing
Facility, dated as of January 25, 2023 and as amended,
supplemented, or otherwise modified from time to time (the "DIP
Commitment Letter"), all of the members of the Ad Hoc Group have
provided backstop commitments to provide the Debtors with
debtor-in-possession financing totaling $950 million in aggregate
principal amount (the "DIP Financing") under the terms and subject
to the conditions contained in the DIP Commitment Letter.
The names and addresses of each of the members of the Ad Hoc Group
of Abra Noteholders, together with the nature and amount of the
disclosable economic interests held by each of them in relation to
the Debtors, are as follows:
1. Certain funds and accounts managed or advised by
AMUNDI ASSET MANAGEMENT US, INC.
60 State Street
Boston, MA 02109
* Senior Secured Notes due 2028 ($88,408,352)
* Senior Secured Exchangeable Notes due 2028 ($889,523)
2. AMUNDI IRELAND LIMITED, acting solely in its capacity
as investment manager for and on behalf of the funds it
manages that hold the Abra Notes
c/o Amundi (UK) Limited
77 Coleman Street
London, EC2R 5BJ United Kingdom
* Senior Secured Notes due 2028 ($2,366,383)
3. AMUNDI (UK) LIMITED, acting solely in its capacity as
investment manager for and on behalf of certain funds
it manages that hold Abra Notes
77 Coleman Street
London, EC2R 5BJ United Kingdom
* Senior Secured Notes due 2028 ($5,791,945)
4. Certain funds and accounts managed or advised by
BLACKROCK FINANCIAL MANAGEMENT, INC. – FIXED INCOME
GROUP
50 Hudson Yards
New York, NY 10001
* Senior Secured Notes due 2028 ($14,368,601)
5. Certain funds and accounts managed or advised by
CARRONADE CAPITAL MANAGEMENT, LP
17 Old Kings Highway South, Suite 140
Darien, CT 06820
* Senior Secured Notes due 2028 ($9,761,250)
* Senior Secured Exchange Notes due 2028 ($41,690,286)
* Abra Common Shares (13,547,889 shares)
6. Certain funds and accounts managed or advised by DSC
MERIDIAN CAPITAL LP
888 Seventh Ave, 16th Floor
New York, NY 10106
* Abra Senior Secured Notes due 2028 ($76,943,472)
7. Certain funds and accounts managed or advised by
FORTRESS INVESTMENT GROUP LLC
1345 Avenue of the Americas 26th Floor
New York, NY 10105
* Senior Secured Exchangeable Notes due 2028
($45,846,123)
* Abra Common Shares (24,750,013 shares)
8. Certain funds and accounts managed by GLENDON CAPITAL
MANAGEMENT L.P.
2425 Olympic Blvd.
Suite 500E
Santa Monica, CA 90404
* Senior Secured Notes due 2028 ($98,459,407)
* Senior Secured Exchangeable Notes due 2028
($6,803,241)
* GOL Notes due 2026 ($5,000,000)
9. Certain funds and accounts managed or advised by GLG
PARTNERS LIMITED, in its capacity as investment manager
or sub-investment manager (as applicable), on behalf of
certain funds
Riverbank House, 2 Swan Lane
London EC4R 3AD, United Kingdom
* Senior Secured Notes due 2028 ($1,423,270)
* Senior Secured Exchangeable Notes due 2028
($72,797,536)
10. Certain funds and accounts managed or advised by KING
STREET CAPITAL MANAGEMENT
299 Park Avenue, 40th Floor
New York, NY 10171
* Senior Secured Notes due 2028 ($66,501,155)
11. MOORE GLOBAL INVESTMENTS, LLC
11 Times Square
New York, NY 10036
* Abra Senior Secured Notes due 2028 ($9,833,543)
* Senior Secured Exchangeable Notes due 2028
($5,729,480)
* Short – GOL Shares (ADS) (535,000 shares)
12. Certain funds and accounts managed or advised by NUT
TREE CAPITAL MANAGEMENT, LP
55 Hudson Yards
New York, NY 10001
* Abra Senior Secured Notes due 2028 ($84,228,115)
13. Certain funds and accounts managed or advised by
OLYMPUS PEAK ASSET MANAGEMENT LP
177 West Putnam Ave Suite 2622-S1
Greenwich, CT 06831
* Abra Senior Secured Notes due 2028 ($8,928,246)
* Senior Secured Exchangeable Notes due 2028
($17,493,396)
* Abra Common Shares (ADS) (2,722,276 shares)
14. Certain funds and accounts managed or advised by
READYSTATE ASSET MANAGEMENT, LP
936 West Fulton Market Suite 200
Chicago, IL 60607
* Abra Senior Secured Notes due 2028 ($39,787,864)
15. Certain funds and accounts managed or advised by
REDWOOD CAPITAL MANAGEMENT, LLC
250 West 55th Street, Floor 26
New York, NY 10019
* Abra Senior Secured Notes due 2028 ($82,944,390)
16. Certain funds and accounts managed or advised by
CAPITAL VENTURES INTERNATIONAL C/O SUSQUEHANNA ADVISORS
GROUP, INC.
401 City Avenue, Suite 220
Bala Cynwyd, PA 19004
* Abra Senior Secured Notes due 2028 ($5,137,500)
* Senior Secured Exchangeable Notes due 2028
($58,568,270)
17. VR GLOBAL PARTNERS, L.P.
One Nexus Way, Camana Bay
Grand Cayman, KY1-9005, Cayman Islands
c/o VR Advisory Services (USA) LLC,
601 Lexington Avenue 59th Floor
New York, NY 10022
* Abra Senior Secured Notes due 2028 ($76,520,491)
* Senior Secured Exchangeable Notes due 2028
($26,388,975)
* Abra Common Shares (1,272,329 shares)
* GOL Notes due 2026 ($25,838,000)
18. Certain funds and accounts managed or advised by
WHITEBOX ADVISORS LLC
3033 Excelsior Boulevard, Suite 500
Minneapolis, MN 55416
* Senior Secured Notes due 2028 ($32,397,387)
* GOL Bonds due 2026 ($3,523,000)
* GOL Bonds due 2024 ($13,200,000)
* Short - GOL Shares (ADS) (1,145,628 shares)
Counsel to the Ad Hoc Group of Abra Noteholders:
Allan S. Brilliant, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, NY 10036-6797
Email: allan.brilliant@dechert.com
Tel: (212) 698-3500
Fax: (212) 698-3599
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
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes S.A. and its affiliates and its
subsidiaries voluntarily filed for Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024.
GOL Linhas estimated $1 billion to $10 billion in assets as of the
bankruptcy filing.
The Debtors tapped MILBANK LLP as counsel, SEABURY SECURITIES LLC
as restructuring advisor, financial advisor and investment banker,
ALIXPARTNERS, LLP, as financial advisor, and HUGHES HUBBARD & REED
LLP as aviation related counsel. KROLL RESTRUCTURING
ADMINISTRATION LLC is the claims agent.
GYP HOLDINGS III: Moody's Raises CFR to 'Ba1', Outlook Stable
-------------------------------------------------------------
Moody's Investors Service upgraded GYP Holdings III Corp.'s
(operating as GMS Inc.) corporate family rating to Ba1 from Ba2 and
probability of default rating to Ba1-PD from Ba2-PD. At the same
time, Moody's upgraded the rating on the company's existing backed
senior secured first lien term loan due 2030 to Ba1 from Ba2 and
senior unsecured notes due 2029 to Ba2 from B1. Moody's also
assigned a Ba1 rating to the company's repriced backed senior
secured first lien term loan due 2030. Ratings on the existing
senior secured first lien term loan due 2030 will be withdrawn. The
company's speculative grade liquidity (SGL) rating remains
unchanged at SGL-1. The outlook is maintained at stable.
The upgrade of GMS's CFR to Ba1 reflects Moody's expectations that
GMS will continue to perform well and maintain low leverage and
very good liquidity reflecting the company's ability to generate
strong free cash flow. Moody's adjusted debt-to-EBITDA of around 2x
demonstrates the company's commitment to conservative financial
strategies, which further supports the upgrade. Moody's expects
leverage to be maintained at about 2x over the next two years.
RATINGS RATIONALE
GMS' Ba1 CFR reflects good operating performance, with adjusted
EBITDA margin sustained in the range of 11% - 12%, and low
leverage over the next two years. GMS is well positioned to take
advantage of the improving trends in new single-family home
construction, the main demand driver of wallboard. The US
Homebuilding sector and the commercial construction sector are both
very cyclical and poses a significant credit risk. At the same
time, GMS faces execution risk to its operating plan amid strong
competition, making it difficult to expand market share
organically. The company has had success in growing through
acquisitions but this strategy adds operational and integration
risk. Also, GMS is modestly sized in terms of revenue, limiting
absolute levels of earnings and dictating that the company maintain
low leverage and fixed charges.
Moody's expects GMS will have very good liquidity over the next two
years reflecting healthy free cash flow generation and access to a
$950 million asset based revolving credit facility that Moody's
expects will be utilized for acquisitions.
The stable outlook reflects Moody's expectation that GMS will
continue to perform well, generating good operating margins and
cash flow. Very good liquidity and maintaining conservative
financial policies further support the stable outlook.
The Ba1 rating assignment on the repriced senior secured first lien
term loan due 2030, the same as the CFR, reflects its position as
the preponderance of debt in the company's capital structure. The
term loan has a first lien on substantially all noncurrent assets
and a second lien on assets securing the company's revolving credit
facility (ABL priority collateral). The Ba2 rating on the company's
senior unsecured notes, one notch below the CFR, results from their
subordination to GMS' secured debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of GMS' ratings could ensue if end markets remain
supportive of organic growth such that adjusted debt-to-EBITDA is
below 2x. Upwards rating movement also requires preservation of
very good liquidity, a capital structure that ensures maximum
financial flexibility, including a predominantly unsecured capital
structure, and maintaining conservative financial strategies.
A downgrade could occur if there is a sustained erosion of
operating margins, adjusted debt-to-EBITDA remains above 3x,
liquidity deteriorates or the company pursues more aggressive
financial strategies.
GMS Inc., headquartered in Tucker, Georgia, is a North American
distributor of wallboard, steel framing, ceiling systems and other
related building products.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
HIS STORY: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: His Story Development LLC
2365 Sailfish Cove Drive
West Palm Beach FL 33411
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 24-40288
Debtor's Counsel: John Paul Stanford, Esq.
QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER,
P.C.
2001 Bryan Street, Suite 1800
Dallas TX 75201
Tel: (214) 871-2100
Email: jstanford@qslwm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Bruce Lazarus, Managing Member of
Evergreen Five LLC, the Managing Member of His Story Development
LLC.
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/TWAHHBA/His_Story_Development_LLC__txebke-24-40288__0001.0.pdf?mcid=tGE4TAMA
INPIXON: Amends XTI Note to Hike Maximum Principal Amount to $4M
----------------------------------------------------------------
Inpixon disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on Feb. 2, 2024, Inpixon and XTI Aircraft
Company executed a further amendment to the XTI Note, dated
effective as of Jan. 30, 2024, to increase the Maximum Principal
Amount from $2,313,407 to $4,000,000 and to revise the date
"January 30, 2024" in the definition of Maturity Date to "March 31,
2024".
XTI Aircraft Company issued a Senior Secured Promissory Note to
Inpixon, dated July 24, 2023, which was amended by that certain
First Amendment to Senior Secured Promissory Note dated Dec. 30,
2023.
About Inpixon
Headquartered in Palo Alto, Calif., Inpixon (Nasdaq: INPX) --
inpixon.com -- is an indoor data company and specializes in indoor
intelligence. The company's Indoor Intelligence and industrial
real-time location system (RTLS) solutions are leveraged by a
multitude of industries to optimize operations, increase
productivity, and enhance safety. Inpixon customers can take
advantage of industry leading location awareness, analytics, sensor
fusion, IIoT and the IoT to create exceptional experiences and to
do good with indoor data.
Inpixon reported a net loss of $66.3 million in 2022, a net loss of
$70.13 million in 2021, a net loss of $29.21 million in 2020, a net
loss of $33.98 million in 2019, and a net loss of $24.56 million in
2018.
KARPATIA TRUCKS: Business Revenue to Fund Plan
----------------------------------------------
Karpatia Trucks USA LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Georgia a Plan of Reorganization dated
January 30, 2024.
Debtor registered as a Limited Liability Company in the State of
Georgia in 2021. As its business, Debtor is a manufacturer of
custom food trucks, food trailers, kitchen and bar containers, and
other concession or food vending units (the "Business").
The increase in equipment and materials costs in addition to delays
in the supply chain resulted in Debtor being unable to complete
projects within the timelines and budgets originally contracted
for. This caused many customers to demand refunds for initial
deposits paid to Debtor. As of the Petition Date, Debtor was
indebted to various customers for the amounts of their initial
deposits.
Debtor filed bankruptcy on November 1, 2023 to reorganize its
financial affairs without the threat of collection.
This Plan deals with all property of Debtor and provides for
treatment of all Claims against Debtor and its property.
Class 3 shall consist claims for General Unsecured Claims not
otherwise classified in the Plan. Debtor will pay the Holders of
Class 3 General Unsecured Claims a pro-rata share of the Total
Unsecured Distribution (i.e. $15,150.57) based on such Holder's
Allowed Class 3 Claim as compared to the total of all Allowed
Unsecured Claims in Class 3. Debtor shall pay such Unsecured Total
Distribution in annual pro-rata payments commencing on the 15th day
of December following the Effective Date and continuing each
December thereafter for a total of 3 payments.
Debtor anticipates and projects but does not warrant the following
Holders of Class 3 Claims under Class 3: Aerotek Inc. ($50,083.53);
Bennett Thrasher ($7,500.00); Bigmet Project Owner LLC ($8,058.00);
Taylor English Duma LLP ($5,000.00); US Customs & Border Protection
($8,528.28); Milyan, LLC ($5,000.00); and Tai Beuchamp ($15,670).
Class 5 consists of the Interest Claims. United Food Concepts
Holding Korlatolt Felelossegu Tarsasag, a Hungarian limited
liability company will remain the sole member of the Debtor.
Upon confirmation, Debtor will be charged with administration of
the Case. Debtor will be authorized and empowered to take such
actions as are required to effectuate the Plan. Debtor will file
all post-confirmation reports required by the United States
Trustee's office. Debtor will also file the necessary final reports
and may apply for a final decree after substantial consummation at
such time as debtor deems appropriate unless otherwise required by
the Bankruptcy Court. Debtor shall be authorized to reopen this
case after the entry of a Final Decree to enforce the terms of the
Plan including for the purpose of seeking to hold a party in
contempt or to enforce the confirmation or discharge injunction or
otherwise afford relief to Debtor.
The source of funds for the payments pursuant to the Plan is
Debtor's revenue.
A full-text copy of the Plan of Reorganization dated January 30,
2024 is available at https://urlcurt.com/u?l=O3dJ4t from
PacerMonitor.com at no charge.
Attorney for Debtor:
JONES & WALDEN LLC
Cameron M. McCord, Esq.
699 Piedmont Ave NE
Atlanta, Georgia 30308
Phone: (404) 564-9300
About Karpatia Trucks
Karpatia Trucks USA, LLC is a manufacturer and refurbisher of food
trucks, trailers, containers, and other mobile food vehicles. It
has locations in the USA (Atlanta), Europe (Rotterdam, Budapest and
Sofia) and Mexico (Mexico City).
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-21234) on Nov. 1,
2023, with up to $50,000 in assets and $1 million to $10 million in
liabilities. Tim de Visser, manager, signed the petition.
Cameron M. McCord, Esq., at Jones & Walden, LLC represents the
Debtor as legal counsel.
KENNESAW FALLS: Case Summary & One Unsecured Creditor
-----------------------------------------------------
Debtor: Kennesaw Falls Holdings, LLC
4425 South Cobb Drive SE
Smyrna, GA 30080
Business Description: Kennesaw Falls is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 24-51415
Judge: Hon. Lisa Ritchey Craig
Debtor's Counsel: Paul Reece Marr, Esq.
PAUL REECE MARR, P.C.
6075 Barfield Road
Suite 213
Sandy Springs, GA 30328-4402
Tel: (770) 984-2255
Fax: (678) 623-5109
E-mail: paul.marr@marrlegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Brenda Carter as manager.
The Debtor listed Cobb County Tax Commissioner Property Tax
Division, located at Marietta, GA 30064 as its sole unsecured
creditor.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/5Y7Z4GY/KENNESAW_FALLS_HOLDINGS_LLC__ganbke-24-51415__0001.0.pdf?mcid=tGE4TAMA
KIDDE-FENWAL: Wants Chapter 11 Mediation Extended Another Month
---------------------------------------------------------------
Yun Park of Law360 reports that bankrupt fire-suppression system
company Kidde-Fenwal Inc. asked a Delaware judge on Monday, January
29, 2024, to extend ongoing mediation between the company,
unsecured creditors, plaintiffs in litigation who say they were
injured by so-called forever chemicals in firefighting foam and
government claimants in its Chapter 11 case.
About Kidde-Fenwal, Inc.
Kidde-Fenwal Inc. -- https://www.kidde-fenwal.com/ -- manufactures
fire protection systems. It offers products such as fire control
systems, explosion aircraft protection, laser-based smoke detection
devices, electronic gas ignitions, and fire suppressions.
Kidde-Fenwal markets its products to mining, manufacturing,
education, and commercial sectors.
Kidde-Fenwal sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 23-10638) on May 14, 2023. In the
petition filed by its chief transformation officer, James
Mesterharm, the Debtor reported assets between $100 million and
$500 million and estimated liabilities between $1 billion and $10
billion.
The Debtor tapped Sullivan & Cromwell, LLP and Morris Nichols Arsht
& Tunnell, LLP as legal counsels; and Guggenheim Securities, LLC,
as investment banker. Stretto, Inc., is the claims and noticing
agent and administrative advisor.
KNP HOLDINGS: Case Summary & Eight Unsecured Creditors
------------------------------------------------------
Debtor: KNP Holdings, LLC
3334 Oak Glen Drive
Los Angeles, CA 90068
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-10898
Judge: Hon. Barry Russell
Debtor's Counsel: Charles Shamash, Esq.
CACERES & SHAMASH, LLP
9701 Wilshire Boulevard
Suite 1000
Beverly Hills, CA 90212
Tel: (310) 205-3400
Fax: (310) 878-8308
Email: cs@locs.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jayesh Kumar as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/NYWFELA/KNP_Holdings_LLC__cacbke-24-10898__0001.0.pdf?mcid=tGE4TAMA
KNS MOTEL: Unsecureds to Get 35 Cents on Dollar in Plan
-------------------------------------------------------
KNS Motel, Inc., d/b/a Fairfield Inn & Suites, filed with the U.S.
Bankruptcy Court for the Southern District of Indiana a First
Amended Subchapter V Plan of Reorganization dated January 30,
2024.
The Debtor is a closely held corporation that operates a single,
77-room hotel in Jeffersonville, Indiana. The Company is a
franchisee of Marriott International, Inc., and historically has
performed at a steady pace in its market.
Factors leading to the Debtor's Chapter 11 proceeding center around
its variable-rate mortgage that in recent months has led to
significantly increased monthly mortgage payments, and labor costs
that the Company believes have been too high. Through negotiations
with the Debtor's secured lender, the Debtor will obtain temporary
relief from its variable-rate mortgage to enable the Debtor to free
up cash flow.
The Debtor's financial projections show that the Debtor will have
projected disposable income of approximately $4,886.39 per month.
This Plan of Reorganization provides for annual payments to secured
creditors and 20 quarterly payments to unsecured creditors over a
60-month term commencing on April 15, 2024, with the final Plan
payment to be paid on or before January 15, 2029. The Debtor shall
make the Plan payments from its business operations following
payment of the Debtor's normal and customary expenses as they come
due.
This Plan provides for payment of administrative claims of
approximately $39,530.65, priority unsecured claims totaling
$33,817.06, 1 class of secured claims totaling approximately
$246,599.18, and 1 class of non-priority unsecured claims totaling
$242,792.52.
Under the terms of this plan, general non-priority unsecured
creditors shall receive payments from the Debtor's remaining
disposable income as set forth above on a pro rata basis, which the
proponent of this Plan has valued at approximately 35 cents on the
dollar.
Class 2 consists of general unsecured claims totaling $242,430.57.
General unsecured claims are impaired under this Plan. General
unsecured claimants shall receive payment on a pro rata basis from
the Debtor's final 56 payments.
The Debtor shall make quarterly payments under the Plan from its
disposable income.
A full-text copy of the First Amended Subchapter V Plan dated
January 30, 2024 is available at https://urlcurt.com/u?l=h0f9Yh
from PacerMonitor.com at no charge.
Counsel for Debtor:
Michael W. McClain, Esq.
GOLDBERG SIMPSON, LLC
9301 Dayflower Street
Prospect, KY 40059
Tel: (502) 589-4440
Email: mmcclain@goldbergsimpson.com
About KNS Motel
KNS Motel, Inc., operates in the traveler accommodation industry.
It owns in fee simple interest a real property located at 619 N.
Shore Drive, Jeffersonville, Ind., valued at $6.1 million.
KNS Motel filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-90897) on Sept. 13,
2023, with $6,193,078 in assets and $5,006,679 in liabilities.
Indravadan Patel, president, signed the petition.
Judge Andrea K. Mccord oversees the case.
Michael W. McClain, Esq., at Goldberg Simpson, LLC, is the Debtor's
legal counsel.
KRONOS WORLDWIDE: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Kronos Worldwide, Inc. (Kronos) and its
wholly-owned subsidiary, Kronos International, Inc.'s Long-Term
Issuer Default Rating (IDRs) at 'B+'. Fitch has also upgraded the
issue ratings of Kronos International Inc.'s senior secured notes
due 2025 to 'BB+'/'RR1' from 'BB'/'RR2'.
Fitch has also assigned a 'BB+'/'RR1' rating to the approximately
EUR275 million in proposed new senior secured notes due 2029, to be
issued to complete the company's announced bond exchange offering.
Fitch has also affirmed the issue rating of Kronos Worldwide,
Inc.'s $225 million senior secured asset-backed lending (ABL)
facility at 'BB+'/'RR1'. The Rating Outlook remains Stable.
The ratings reflect Kronos' strong pro forma liquidity position,
conservative financial policy and low capex requirements. The
company's full exposure to the cyclical titanium dioxide (TiO2)
industry will continue to present cash flow variability. Fitch
forecasts a slow TiO2 market recovery to drive a continued, but
improving, trend of negative FCF.
The Stable Outlook reflects Fitch's expectations for EBITDA
Leverage to improve towards the 4.0x-5.0x range in the near term,
driven by modest expected improvements in EBITDA generation and the
company's light pro forma capital structure.
KEY RATING DRIVERS
Exchange Offer Considerations: Kronos' contemplated bond exchange
extends the issuer's only meaningful debt maturity to 2029 and
results in improved prospective recoveries for senior secured
bondholders, given the unsecured term loan component and modestly
reduced senior secured note sizing. Kronos' pro forma cash interest
burden will increase due to a higher expected coupon for the new
notes, but remain manageable relative to forecasted EBITDA
generation.
Kronos International announced an offering to existing holders of
the EUR400 million senior secured notes due 2025 to exchange up to
EUR325 million in existing notes for up to approximately EUR275
million in newly issued senior secured notes due 2029, to be issued
by Kronos International, and cash. Kronos International also plans
to issue a EUR50 million unsecured term loan funded by its ultimate
parent, Contran Corporation, to fund cash payments to participating
holders.
The transactions are targeted to result in a reduced pro forma
total senior secured note size of approximately EUR350 million,
which includes a modest EUR75 million remaining stub portion of the
senior secured notes due 2025.
Upon review of the exchange offer memorandum, Fitch believes the
contemplated transactions do not impose a material reduction in
terms compared with the existing contractual terms. The terms of
the new notes will be substantially similar to the existing notes,
aside from changes to limitations on restricted payments and debt
incurrence, which Fitch considers minor. The terms of the existing
notes will conform to the terms of the modestly-adjusted terms of
the new notes.
Volatile FCF Forecast: Kronos' projected FCF is negative over the
medium term due to higher interest costs and slow rebounds in
EBITDA generation, but approaches neutral FCF by 2027F. Kronos'
pre-dividend FCF is projected to return to solid positive
generation by 2025. Fitch expects that Kronos' majority owner would
support a reduction in dividend payments should operating
conditions worsen on an extended basis.
Kronos' financial flexibility remains supported by a strong total
pro forma total liquidity position of over $400 million and
forecasts for comfortable EBITDA interest coverage of above 3.0x.
Declining Performance: Kronos' operating performance sharply
declined in 2023, as shown by negative Fitch-calculated EBITDA
generation of around ($10 million) and yoy declines in sales of
over 10%. Consistent with similar North American TiO2 peers, the
recent earnings deterioration largely stemmed from sharp declines
in sales volumes caused by an extended period of customer inventory
destocking and soft organic demand, while pricing remained
resilient. Fitch expects the destocking phase to fully abate by
1Q24, but that organic demand will continue to be soft in 2024,
informing its forecast for only modest near-term recoveries in
sales volumes.
Fitch estimates that Kronos' realized unit price only slightly
decreased by 1%, evidencing a shift towards a more supportive
operating approach undertaken by leading North American TiO2
producers in recent years. This includes a demonstrated a
commitment to better aligning production rates with demand, and an
increasing presence of value stabilization contracts. Fitch
believes this could potentially indicate a structural improvement
in the TiO2 industry, compared to historical trends marred by
extreme price volatility.
Easing Energy, Feedstock Costs: While Kronos' 2023 EBITDA
generation was negative due to a period of significant increases in
costs for chlorine, ores, and energy beginning in 2022, inflation
in these costs began to ease in 2H23. With around 80% of total
identifiable assets located in Europe, the issuer is materially
exposed to the region's evolving energy supply landscape. Kronos'
EBITDA margin is projected to modestly improve to around 5% in 2023
due to reduced ore and energy costs and better fixed cost
absorption resulting from increased asset utilization.
Kronos purchases its chloride-grade feedstock on the open market,
but is able to offset some of its third-party exposure through its
ilmenite mines in Norway, which supply nearly all of its European
sulfate needs. Fitch estimates Kronos is exposed to third-party
feedstock suppliers for at least 75% of its feedstock
requirements.
Modest Debt Load: Fitch views Kronos' pro forma debt load as modest
when compared with Fitch's view of a normalized EBITDA for the
company. Fitch expects for EBITDA leverage to recover to between
4.0x-5.0x in 2024 assuming a modest recovery in EBITDA, followed by
a trend towards Kronos' typical ranges of around 2.0x-3.0x
thereafter.
Limited Diversification: Kronos is a pure-play pigment producer
that has no other business segments to act as a buffer in periods
of volatility in the TiO2 industry. Fitch believes this exposure
adds cash flow risk to the company's credit profile, as its
financial results are highly dependent on the health of the pigment
market.
This concern is partially offset by Fitch's expectation that Kronos
maintains solid liquidity throughout the forecast. Kronos believes
it has leading market positions in both Europe and North America;
however, Fitch views the company as having limited ability to
affect global market dynamics. Fitch estimates the company's EBITDA
generation at its European plants was severely limited during the
2015-2016 downturn in TiO2 prices, despite management's indication
it is the largest TiO2 producer in Europe.
DERIVATION SUMMARY
Kronos' ratings reflect its relatively small size and limited
diversification compared with peers in the TiO2 segment, while also
reflecting its typically healthy 2.0x-3.0x leverage and generally
neutral-to-positive cash flow profile. Compared with industry
leaders The Chemours Co. and Tronox Ltd. (both unrated), Kronos has
limited ability to influence TiO2 supply dynamics and, as a
pure-play pigment producer. The company also has no other business
segments to act as a buffer during periods of significant
volatility in the TiO2 industry. Tronox also benefits from a
relatively greater degree of vertical integration, resulting in a
stronger EBITDA margin profile than Kronos.
Fitch believes Kronos' asset profile compares favorably to Venator
Materials PLC (unrated), which emerged from a chapter 11
restructuring process in 2023, due to a higher production capacity
of chloride-process TiO2 assets. Chloride-process TiO2 is
considered a preferred product for most high-end applications and
is produced at lower conversion costs.
KEY ASSUMPTIONS
- Sales volumes improve but remain below historical norms in 2024,
as a customer inventory rebuild post destocking is partially offset
by continued soft demand, while TiO2 pricing remains resilient.
Volumes continue to grow towards historical averages thereafter
assuming rebounds in macroeconomic activity;
- Modest positive EBITDA generation in 2024 with EBITDA margins of
5%, as lower ore and energy costs are partially offset by continued
weak fixed cost absorption as asset utilization remains below
average levels. EBITDA margins approach the 10% range thereafter as
asset utilization improves towards the historical average of around
90%;
- Capex of around $60 million annually, with no major growth
projects planned;
- Dividends of around $88 million annually.
RECOVERY ANALYSIS
Key Recovery Rating Assumptions:
The recovery analysis assumes Kronos would be reorganized as a
going-concern in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.
Fitch assumes Kronos draws approximately $190 million under its
ABL, representing about 85% of the full $225 million amount. This
is due to the likelihood the ABL borrowing base will be lessened in
a distressed scenario as the TiO2 pricing environment declines over
time, which would gradually reduce the borrowing base.
Going-Concern (GC) Approach
Fitch used a going-concern EBITDA of $132 million to reflect what
Fitch would view as a mid-cycle amount in a post-bankruptcy
scenario, which would likely be around 2014/2016 levels.
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which it bases the enterprise
valuation. Specifically, the GC EBITDA depicts a sustained economic
contraction in North America and EMEA, resulting in an extended
period of severe volume headwinds, which leads to a material
decline in EBITDA and cash generation.
An enterprise value multiple of 5.5x EBITDA is applied to the GC
EBITDA to calculate a post-reorganization enterprise value. The
5.5x multiple acknowledges the commoditized nature of Kronos' TiO2
products and its lack of diversification. The choice of this
multiple considered historical bankruptcy case study exit multiples
for peer companies, including Tronox Incorporated (2011) and
Venator Materials PLC (2023).
Under the pro forma scenario, Kronos' ABL and senior secured note
recoveries both correspond to an 'RR1'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade
- Increases in size, scale, or diversification leading to improved
mid-cycle EBITDA size or cost position;
- Maintenance of current financial policies, leading to mid-cycle
EBITDA Leverage sustained below 3.0x and continued robust financial
flexibility;
- A structurally improved sector outlook that results in EBITDA
margin resiliency and reduced FCF variability.
Factors that could, individually or collectively, lead to negative
rating action/downgrade
- Failure to successfully refinance upcoming maturities in a timely
manner;
- Mid-cycle EBITDA Leverage sustained above 4.0x, potentially
stemming from material debt-funded acquisition activity;
- EBITDA Interest Coverage sustained below 3.5x, or sustained high
utilization under the ABL, signaling deteriorating liquidity;
- Expectations of sustained negative FCF generation, potentially
stemming from continued maintenance of dividend payments under
persistently weak operating conditions, or a structural
deterioration in the TiO2 market.
LIQUIDITY AND DEBT STRUCTURE
Comfortable Liquidity: Pro forma for the transactions, Kronos is
expected to retain around $200 million of cash and cash equivalents
on its balance sheet, and full availability under its $225 million
global ABL revolver. In an extended period of stress, the company
has the ability to cut its dividend payment, and paired with modest
capex requirements and a light maturity schedule, Fitch believes
the company will maintain sufficient liquidity throughout the
forecast period.
Kronos has low exposure to an elevated interest rate environment
over the medium-term, given that all of pro forma total debt is
fixed rate. Fitch expects a higher coupon for the new notes to
increase Kronos' cash interest burden, but remain manageable
relative to EBITDA generation.
ISSUER PROFILE
Kronos Worldwide, Inc. is a pure-play TiO2 producer estimated to be
the fifth largest producer of TiO2 in the world.
ESG CONSIDERATIONS
Kronos Worldwide, Inc. has a revised ESG Relevance Score of '4'
from '3' for Governance Structure due to significant "key man risk"
presented by its dominant shareholder. Approximately 81% of Kronos'
common stock is indirectly owned by a family trust. While Kronos'
current dividends remain high relative to its underlying earnings,
Fitch expects the family trust to continue to be supportive of
Kronos' conservative capital allocation policy and current
operating strategy. This factor 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 Prior
----------- ------ -------- -----
Kronos International
Inc. LT IDR B+ Affirmed B+
senior secured LT BB+ New Rating RR1
senior secured LT BB+ Upgrade RR1 BB
Kronos Worldwide,
Inc. LT IDR B+ Affirmed B+
senior secured LT BB+ Affirmed RR1 BB+
LEGAL RECOVERY: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Legal Recovery LLC
1433 7th Ave
San Francisco CA 94122
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Northern District of California
Case No.: 24-30074
Judge: Hon. Dennis Montali
Debtor's Counsel: Leeds Disston, Esq.
300 Frank H Ogawa Plz, Ste 205
Oakland CA 94612-2060
Tel: 510-835-8110
Email: casdiss@yahoo.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Demas Yan as manager.
The Debtor filed an empty 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/DRHJCKI/Legal_Recovery_LLC__canbke-24-30074__0001.0.pdf?mcid=tGE4TAMA
MALLINCKRODT PLC: Names New Board Members
-----------------------------------------
Mallinckrodt plc disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchage Commission the appointment of Paul Bisaro,
Katina Dorton, Abbas Hussein, and Wesley Wheeler to Mallinckrodt's
Board of Directors effective as of February 2, 2024. Mr. Bisaro
will serve as Chair of the Board. Mallinckrodt also announced that
Sigurdur (Siggi) Olafsson has agreed to remain as Mallinckrodt's
President and Chief Executive Officer and a member of the Board.
Mr. Bisaro, Ms. Dorton, Mr. Hussein, and Mr. Wheeler were selected
to serve on the Board by the Nominating and Selection Committee
established by Mallinckrodt's Articles of Association, which
determined that each of these new non-employee members of the Board
qualifies as an independent director.
* Mr. Bisaro is a healthcare industry leader with more than
three decades of leadership experience at generic and branded
pharmaceutical companies. He served as Mallinckrodt's Board Chair
from June 2022 to November 2023. Mr. Bisaro previously served as
President, CEO and a director of Impax Laboratories, Executive
Chairman of Amneal Pharmaceuticals, Executive Chairman of Allergan,
President and CEO of Actavis (formerly Watson Pharmaceuticals), and
President, Chief Operating Officer and a director of Barr
Pharmaceuticals. Mr. Bisaro serves on the boards of Zoetis and
Myriad Genetics and previously served on the boards of
TherapeuticsMD and Zimmer Biomet.
In addition to his service as Chair of the Board, Mr. Bisaro will
serve as a member of the Board's Audit Committee and its
Transaction Review Committee.
* Ms. Dorton has more than 20 years of finance and healthcare
experience across fundraising, mergers and acquisitions, and
business development, most recently serving as Chief Financial
Officer of NodThera, a private biotechnology company. She
previously served as CFO of Repare Therapeutics, AVROBIO and
Inmatics and, earlier in her career, was a healthcare investment
banker at Morgan Stanley and Needham. Ms. Dorton serves on the
boards of Fulcrum Therapeutics and TScan Therapeutics and
previously served on the board of Pandion Therapeutics and US
Ecology, among others.
Ms. Dorton will serve as Chair of the Board's Audit Committee and
a member of its Human Resources and Compensation Committee.
* Mr. Hussein has more than 30 years of leadership and
operating experience in healthcare, most recently serving as CEO of
Vifor. He previously served as GlaxoSmithKline's Global President,
Pharmaceuticals & Vaccines and, earlier in his career, in various
leadership roles at Eli Lilly and Company. Mr. Hussain also has
served on the boards of Teva Pharmaceuticals, Aspen Pharmacare,
Vifor, ViiV Healthcare and Cochlear, among others.
Mr. Hussein will serve as Chair of the Board's Human Resources and
Compensation Committee and a member of its Governance and
Compliance Committee.
* Mr. Wheeler has more than 40 years of diversified leadership
experience in healthcare, including business turnarounds and
transformations, manufacturing, marketing, engineering, R&D and
supply chain. He is currently a Pharmaceutical Services Consultant
to KKR. He previously served as President of UPS Healthcare and its
subsidiary Marken LLP, CEO, President and Director of Patheon (now
a Thermo Fisher Scientific company), and President, R&D and Global
Manufacturing at Valeant Pharmaceuticals. Earlier in his career, he
held various leadership roles at GlaxoSmithKline and ExxonMobil in
engineering, marketing and manufacturing.
Mr. Wheeler will serve as Chair of the Board's Governance and
Compliance Committee and a member of its Audit Committee.
In connection with these Board appointments, the Board adopted a
compensation program for the non-employee members of the Board.
Each non-employee director is entitled to receive an annual
retainer of $150,000, with an additional annual retainer of
$100,000 for the Chair of the Board. The chairs of the Board's
Human Resources and Compensation Committee and the Board's
Governance and Compliance Committee will be entitled to receive an
additional annual retainer of $25,000, the chairs of the Board's
Audit Committee and the Board's Transaction Review Committee will
be entitled to receive an additional annual retainer of $50,000,
and the other members of each of the standing committees of the
Board will be entitled to receive an annual retainer of $15,000 for
service on each committee. Each member of the Board will also
participate in our Stock Incentive Plan and Transaction Incentive
Plan.
Furthermore, Mallinckrodt and each of the new directors will enter
into customary indemnification arrangements.
Each of the new directors of the Board were appointed pursuant to
the process described in Mallinckrodt's Current Report on Form 8-K
filed on November 15, 2023 under the heading "Size and Composition
of the Board".
Additionally, on February 2, 2024, Mallinckrodt's indirect
subsidiary ST Shared Services LLC entered into a new Employment
Agreement (the "Employment Agreement") with Mr. Olafsson dated
February 2, 2024, pursuant to which Mr. Olafsson will continue to
serve as Mallinckrodt's President and Chief Executive Officer. In
connection with Mallinckrodt's recent emergence from bankruptcy and
pursuant to the terms of his prior employment agreement with ST
Shared Services (the "Prior Agreement"), Mr. Olafsson had
previously provided written notice of his intention to resign as an
employee. As a result of entering into the Employment Agreement,
the Prior Agreement has been superseded and Mr. Olafsson will
remain in his role for an indefinite term pursuant to the terms of
the Employment Agreement.
The Employment Agreement provides for the following compensatory
arrangements for Mr. Olafsson:
* Cash Compensation. Mr. Olafsson will be entitled to the same
annual base salary and annual incentives as under his Prior
Agreement, which is described under the heading "Narrative
Disclosure to Summary Compensation Table and Grants of Plan-Based
Awards Table" on page 49 of Mallinckrodt's proxy statement for its
2023 Annual General Meeting of Shareholders filed with the SEC on
April 5, 2023 (the "2023 Proxy Statement").
* Equity Grant. Mr. Olafsson will be granted a one-time equity
award described below under the heading "Stock Incentive Plan." The
Employment Agreement contemplates that Mr. Olafsson will not
receive any additional equity awards for fiscal years 2024, 2025
and 2026.
* Transaction Incentives. Mr. Olafsson will be a participant
in the Transaction Incentive Plan.
* Future Incentives. The Employment Agreement provides that
Mr. Olafsson can exercise his right to terminate for Good Reason
if, in the long-term incentive plans established by the Board for
fiscal years 2027 and beyond, Mr. Olafsson does not receive
incentive compensation with a target value of at least $7,000,000
per year, subject to the vesting, performance and other terms and
conditions established by the Board at the time, or if he receives
less than 35% of the management pool established for long-term
incentives.
* Sign-On Bonus. Mr. Olafsson will receive a sign-on bonus on
or about February 9, 2024 in an amount of $6,588,970, which is
consistent with the severance payment that Mr. Olafsson would have
received on or about that date under his Prior Agreement if he were
not continuing his employment. Mr. Olafsson also previously
declined to participate in the Company's Key Employee Retention
Program and Key Employee Incentive Program approved by the Board of
Directors in June 2023.
Mr. Olafsson will be entitled to the same severance arrangements as
under his Prior Agreement, which are described in the first two
paragraphs under the heading "Potential Payments upon
Termination—Mr. Olafsson's Severance" on page 53 of the 2023
Proxy Statement, except that references to the New CEO Employment
Agreement should be read as references to the Employment Agreement
and references to equity awards should be disregarded. That
description is incorporated in this Current Report on Form 8-K by
reference. Mr. Olafsson's receipt of severance compensation and
benefits is subject to Mr. Olafsson's execution and non-revocation
of a general release of claims against Mallinckrodt and his
continued compliance with the restrictive covenants described
below. The treatment of Mr. Olafsson's incentive awards on a
qualifying termination is described below under the headings "Stock
Incentive Plan" and "Transaction Incentive Plan."
The Employment Agreement provides that Mr. Olafsson will be
restricted from soliciting Mallinckrodt's employees and business
partners during the 12-month period following his termination of
employment for any reason (the "Restricted Period"). The Employment
Agreement also provides that Mr. Olafsson will be restricted from
competing with Mallinckrodt during the Restricted Period, provided
that the Restricted Period will be reduced to six months for
terminations that occur between January 1, 2025 and December 31,
2025, and shall not apply following Mr. Olafsson's termination of
employment if the date of termination is on or after January 1,
2026 or if Mr. Olafsson's employment is terminated by Mallinckrodt
without Cause (as defined in the Employment Agreement) or by Mr.
Olafsson with Good Reason (as defined in the Employment
Agreement).
Other Executive Employment Arrangements
On February 2, 2024, Mallinckrodt also authorized amended and
restated employment agreements (the "A&R Executive Agreements")
with certain of its executive officers, including Bryan M. Reasons,
Executive Vice President and Chief Financial Officer, Mark A.
Tyndall, Executive Vice President, Chief Legal Officer and
Corporate Secretary, Stephen A. Welch, Executive Vice President and
Head of Specialty Generics, and Henriette Nielsen, Executive Vice
President and Chief Transformation Officer.
The A&R Executive Agreements provide that the executives will
participate in the Stock Incentive Plan and the Transaction
Incentive Plan, and they provide that each executive is entitled to
eighteen months of severance in connection with terminations
without Cause or by the executive with Good Reason (each as defined
in the A&R Executive Agreements). The A&R Executive Agreements also
provide that the executives will be restricted from soliciting
Mallinckrodt's employees and business partners during the 12-month
period following termination of employment for any reason (the
"Executive Restricted Period"). Under A&R Executive Agreements the
executives will also be restricted from competing with Mallinckrodt
during the Executive Restricted Period, provided that the Executive
Restricted Period will be reduced to six months for terminations
that occur after June 20, 2025 and shall not apply following the
applicable executive's termination of employment by Mallinckrodt
without Cause (as defined in the A&R Executive Agreements) or by
the executive with Good Reason (as defined in the A&R Executive
Agreements).
Stock Incentive Plan
On February 2, 2024, consistent with the First Amended Prepackaged
Joint Chapter 11 Plan of Reorganization of Mallinckrodt Plc and Its
Debtor Affiliates, which provided that Mallinckrodt would adopt a
new incentive plan for equity awards upon emergence from
bankruptcy, the Board adopted the Mallinckrodt Pharmaceuticals 2024
Stock and Incentive Plan (the "Equity Plan") and reserved an
aggregate of 1,036,649 ordinary shares of Mallinckrodt (the
"Ordinary Shares") (subject to adjustment in accordance with the
terms of the Equity Plan) for the issuance of equity awards
thereunder to employees and directors.
Mallinckrodt granted equity awards to its executive officers and
members of the Board (each, an "Equity Grant") in an aggregate
amount of 820,689 Ordinary Shares (equaling in aggregate
approximately 3.8% of the fully diluted Ordinary Shares), with
215,960 additional Ordinary Shares (totaling approximately 1% of
the fully diluted Ordinary Shares) unallocated but available for
future grants at the discretion of the Board pursuant to the terms
of the Equity Plan. The fully diluted count of Ordinary Shares was
determined by taking the outstanding Ordinary Shares together with
shares subject to the Equity Plan, but not including shares that
could be issuable pursuant to Mallinckrodt's outstanding contingent
value rights held by the Opioid Master Disbursement Trust II. Each
Equity Grant is a mix of one-third restricted stock units that vest
in equal annual portions over three years (the "RSUs") and
two-thirds performance stock units (the "PSUs"), 50% of which (the
"Cash Flow PSUs") vest based on Mallinckrodt's attainment of
aggregate adjusted operating cash flow targets for the three-year
period of fiscal 2024 through fiscal 2026 (the "Performance
Period") and 50% of which vest based on Mallinckrodt's attainment
of total realized value targets measured at the end of fiscal year
2026 (the "Realized Value PSUs"). For purposes of the Enterprise
Value PSUs, total realized value will be determined based on an
independent valuation of Mallinckrodt as of the end of fiscal year
2026 plus the after-tax cash and marketable securities proceeds of
any assets sold during the Performance Period.
The Equity Grants comprised of one-third RSUs and two-thirds PSUs
included grants to Mallinckrodt's Named Executive Officers in the
following amounts of Ordinary Shares:
1) Sigurdur Olafsson, President, Chief Executive Officer:
246,205
2) Bryan M. Reasons, Executive Vice President and Chief
Financial Officer: 61,552
3) Mark A. Tyndall, Executive Vice President, Chief Legal
Officer and Corporate Secretary: 49,241
4) Stephen A. Welch, Executive Vice President and Head of
Specialty Generics: 49,241
5) Henriette Nielsen, Executive Vice President and Chief
Transformation Officer: 49,241
Each non-employee member of the Board, other than the Chair,
received an Equity Grant comprised of one-third RSUs and two-thirds
PSUs of 24,621 Ordinary Shares, and the Chair of the Board received
an Equity Grant comprised of one-third RSUs and two-thirds PSUs of
41,034 Ordinary Shares. The Chair of the Transaction Review
Committee also received an additional Equity Grant comprised of
one-third RSUs and two-thirds PSUs of 8,207 Ordinary Shares.
Equity awards granted pursuant to the Equity Plan are subject to
the terms of the Equity Plan and individual written award
agreements thereunder. Awards granted to executives under the
Equity Plan are subject to forfeiture and recoupment upon a
termination of the executive for Cause (as defined in the Equity
Plan) or the executive's engagement in certain significant
misconduct under the terms of Mallinckrodt's recoupment policy.
The applicable forms of award agreements for the executives other
than Mr. Olafsson provide that in the event of an executive's
termination of service by Mallinckrodt without Cause or by the
holder for Good Reason (each as defined in the Equity Plan) other
than in connection with a Change in Control that occurs before the
end of December 25, 2026, the executive's unvested awards will vest
pro-rata based on the date of termination, subject, with respect to
the PSUs, to achievement of the performance targets. In the event
of an executive's termination of service for Normal Retirement (as
defined in the Equity Plan), death or disability, the executive's
unvested RSUs will vest in full and the executive's unvested PSUs
will remain outstanding and will be eligible to vest and be settled
based on Mallinckrodt's achievement of the performance targets. In
the event of an executive's termination of service for Early
Retirement (as defined in the Equity Plan), a pro-rata portion of
the executive's unvested awards will remain outstanding and will be
eligible to vest and be settled based on Mallinckrodt's achievement
of the performance targets. The Equity Plan further provides that
in the event of a Change in Control (as defined in the Equity
Plan), awards that are not assumed or substituted will become fully
vested and payable, subject, with respect to the PSUs, to
achievement of the performance targets.
The applicable forms of award agreements for Mr. Olafsson provide
that, in the event of his termination of service as a result of
death, disability or Normal Retirement (as defined in his
Employment Agreement), or by Mallinckrodt without Cause or by Mr.
Olafsson for Good Reason (each as defined in the Equity Plan) other
than in connection with a Change in Control (as defined in the
Equity Plan), Mr. Olafsson's unvested RSUs will vest in full and
Mr. Olafsson's unvested PSUs will remain outstanding and will be
eligible to vest and be settled based on Mallinckrodt's achievement
of the performance targets, subject, in the case of Mr. Olafsson's
termination of employment without Cause or for Good Reason, to Mr.
Olafsson signing and not revoking a release of claims. In the event
of a termination by Mallinckrodt without Cause or by the holder for
Good Reason in connection a Change in Control, awards will become
fully vested and payable, subject to the Realized Value PSUs, which
shall be subject to achieving the relevant performance targets.
During the 12-month period following a participant's termination of
employment or service for any reason other than for Cause (and the
absence of any Covenant Breach, as defined below), Mallinckrodt has
a right but not an obligation to repurchase all or any portion of
the participant's vested Ordinary Shares at Fair Market Value (as
defined in the Equity Plan). In the event of a termination of the
participant's employment or service for Cause or for the material
breach by the participant of any restrictive covenants in their
operative agreements with Mallinckrodt (a "Covenant Breach"),
Mallinckrodt has the right to repurchase the vested Ordinary Shares
at the lesser of the price paid by the participant for the Ordinary
Shares, which is expected to be $0, and the Fair Market Value of
the Ordinary Shares. In recognition of the expected illiquidity of
the Ordinary Shares at the end of the Performance Period under the
Equity Plan, the forms of award agreements also provide the
participants with certain rights to require Mallinckrodt to
repurchase at the Fair Market Value the vested Ordinary Shares
within ninety days after each of the third and fifth anniversaries
of the grant date of the award, subject to, among other conditions,
such purchase not violating the terms of Mallinckrodt's debt
instruments and the Board's determination that doing so would
neither reasonably be expected to result in an event of default
under Mallinckrodt's debt instruments or otherwise impair
Mallinckrodt's ability to meet its operating goals.
Transaction Incentive Plan
On February 2, 2024, the Board adopted a Transaction Incentive Plan
(the "Transaction Incentive Plan") intended to compensate
designated Mallinckrodt executive officers and directors with bonus
payments to be made upon the consummation of qualifying asset sale
transactions or a Change of Control (as defined in Mallinckrodt's
Credit Agreement filed to Mallinckrodt's Current Report on Form 8-K
filed on November 15, 2023) (each, a "Transaction"). The aggregate
value of the bonuses payable under the Transaction Incentive Plan
will vary based on the amount of proceeds received in connection
with the Transaction and when the Transaction signs or closes, but
in no instance shall the aggregate value of bonuses payable to
executive officers and directors with respect to a Transaction
exceed three percent of the after-tax cash or marketable securities
proceeds received by Mallinckrodt in that Transaction. Each bonus
payment earned under the Transaction Incentive Plan will be
delivered 50% in connection with closing of the applicable
Transaction and 50% at the end of the Transaction Incentive plan,
if the recipient remains in service to Mallinckrodt on that date,
was terminated without Cause (as defined in the Transaction
Incentive Plan) or by reason of death or disability, or, in the
case of an employee, an employee who departed for Good Reason (as
defined in the Transaction Incentive Plan), provided that bonuses
that relate to deferred proceeds that are received within five
years of the initial closing of the applicable Transaction will
generally be paid in connection with the receipt of those proceeds
subject to the participant's continued service through the payment
date. In the event of a participant's termination of employment
without Cause, by the participant for Good Reason, or as a result
of death or disability, the participant will be entitled to receive
all earned and unpaid Transaction bonuses and all bonuses that
would have been earned for Transactions that signed before the date
of termination or, for Mr. Olafsson, that signed within three
months after the date of termination. In the event of a Change of
Control, the participants in the Transaction Incentive Plan will be
entitled to bonus payments under the Transaction Incentive Plan as
if certain assets were sold in the Change of Control transaction.
Mallinckrodt has designated specified executive officers as
participants under the Transaction Incentive Plan, including
designating the following executive officers with the allocations
indicated:
1) Sigurdur Olafsson, President, Chief Executive Officer:
31.75%
2) Bryan M. Reasons, Executive Vice President and Chief
Financial Officer: 7.5%
3) Mark A. Tyndall, Executive Vice President, Chief Legal
Officer and Corporate Secretary: 6%
4) Stephen A. Welch, Executive Vice President and Head of
Specialty Generics: 6%
5) Henriette Nielsen, Executive Vice President and Chief
Transformation Officer: 6%
Each non-employee member of the Board will be designated a
participant in the Transaction Incentive Plan. Each non-employee
member of the Board other than the Chair will be entitled to
receive 3% of the benefits under the plan, the Chair of the Board
will be entitled to receive 5% of the benefits under the plan, and
the Chair of the Transaction Review Committee will receive an
additional allocation of 1% of the benefits under the plan.
About Mallinckrodt plc
Mallinckrodt (OTCMKTS: MNKTQ) -- http://www.mallinckrodt.com/-- is
a global business consisting of multiple wholly-owned subsidiaries
that develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The Company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics; and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case
No. 20-12522) to seek approval of a restructuring that would
reducetotal debt by $1.3 billion and resolve opioid-related claims
against them. Mallinckrodt in mid-June 2022 successfully completed
its reorganization process, emerged from Chapter 11 and completed
the Irish Examinership proceedings.
Mallinckrodt Plc said in a regulatory filing in early June 2023
that it was considering a second bankruptcy filing and other
options after its lenders raised concerns over an upcoming $200
million payment related to opioid-related litigation.
Mallinckrodt plc and certain of its affiliates again sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 23-11258) on Aug. 28,
2023. Mallinckrodt disclosed $5,106,900,000 in assets and
$3,512,000,000 in liabilities as of June 30, 2023.
Judge John T. Dorsey oversees the new cases.
In the prior Chapter 11 cases, the Debtors tapped Latham & Watkins,
LLP and Richards, Layton & Finger, P.A. as their bankruptcy
counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate
and finance counsel; Ropes & Gray, LLP as litigation counsel;
Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as
investment banker; and AlixPartners, LLP, as restructuring
advisor.
In the new Chapter 11 cases, the Debtors tapped Latham & Watkins,
LLP and Richards, Layton & Finger, P.A., as their bankruptcy
counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate
and finance counsel; Guggenheim Securities, LLC as investment
banker; and AlixPartners, LLP, as restructuring advisor. Kroll is
the claims agent.
MERCURITY FINTECH: Agrees to Extend Maturity of $9M Note to 2025
----------------------------------------------------------------
Mercurity Fintech Holding Inc. disclosed in a Form 8-K filed with
the Securities and Exchange Commission that on Feb. 2, 2024, it
entered into an amendment agreement with a noteholder to amend the
terms of its unsecured convertible promissory note issued on Feb.
2, 2023 with a principal amount of $9 million.
In connection with such amendment, the Company will repay $1.5
million of the principal amount to the noteholder, and the parties
have agreed to extend the maturity date for the repayment of the
Note to Feb. 1, 2025, and update the conversion price of the Note
to $0.68 per ordinary share. The Note shall continue to bear
non-compounding interest at a rate per annum equal to 5%.
About Mercurity
Formerly known as JMU Limited, Mercurity Fintech Holding Inc. is a
digital fintech company with subsidiaries specializing in
distributed computing and digital consultation across North America
and the Asia-Pacific region and is in the process of applying for
FINRA approval to add brokerage services to its business. The
Company's focus is on delivering innovative financial solutions
while adhering to principles of compliance, professionalism, and
operational efficiency. Its aim is to contribute to the evolution
of digital finance by providing secure and innovative financial
services to individuals and businesses.
Mercurity reported a net loss of US$5.63 million in 2022, compared
to a net loss of US$21.66 million in 2021. As of June 30, 2023,
the Company has US$30,078,695 in total assets, US$11,052,529 in
total liabilities, and US$19,026,166 in total shareholders'
equity.
Singapore-based Onestop Assurance PAC, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
April 25, 2023, citing that the Company has incurred recurring
operating losses and negative cash flows from operating activities
and has an accumulated deficit, which raise substantial doubt about
its ability to continue as a going concern.
In its unaudited financial report for the six months ended June 30,
2023, Mercurity disclosed it had an accumulated deficit of
approximately $670 million as of June 30, 2023 and had a net loss
of approximately $2.55 million for the six months ended June 30,
2023. The Company has incurred recurring operating losses and
negative cash flows from operating activities and has an
accumulated deficit, management has determined that these
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
MVK FARMCO: Gears for Liquidation If Sale Failed
------------------------------------------------
Randi Love of Bloomberg Law reports that California fruit grower
MVK Farmco LLC aims for liquidation after sale failed.
Prima Wawona has devised a plan to settle outstanding claims
stemming from its efforts to liquidate the fruit-growing business
after it couldn't find a party willing to purchase the company.
The settlement motion aims to establish a creditor trust of $2.2
million for claims between the company, unsecured creditors,
lenders, and private equity firm Paine Schwartz Partners LLC. The
filing Friday, January 26, 2024, in the US Bankruptcy Court for the
District of Delaware is designed to facilitate a Chapter 11
liquidation of Fresno, Calif.-based Prima Wawona, one of the
largest US growers of peaches, plums, and other stone fruits.
About MVK FarmCo LLC
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.
MYRA PARK 635: Case Summary & Nine Unsecured Creditors
------------------------------------------------------
Debtor: Myra Park 635, LLC
9100 Southwest Freeway
Houston, TX 77074
Business Description: Myra Park 635 is a real estate development
company.
Chapter 11 Petition Date: February 5, 2024
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 24-30503
Judge: Hon. Eduardo V Rodriguez
Debtor's Counsel: Robert C Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston TX 77036-3369
Tel: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
Total Assets: $11,000,100
Total Debts: $14,143,067
The petition was signed by Sohail Hassan as manager.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/CPM3MAY/Myra_Park_635_LLC__txsbke-24-30503__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Nine Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Big D Ready Mix Vendor/Supplier- $19,672
10361 Bickham Road Concrete/Stone
Dallas, TX 75220
2. CIVE General $2,208,606
5444 Westheimer Road Suite 1440 Contractor
Houston, TX 77056
3. H&A Insurance Insurance $84,841
325 N. St Paul Street Suite 3100
Dallas, TX 75201
4. Kalkan Capital Second Lien Note $241,478
8600 Woodway Drive
Houston, TX 77063
5. MCD Construction Construction $252,610
302 McCarthur Drive
Leander, TX 78641
6. Mid Valley Concrete Pumping Vendor/Supplier- $2,693
4100 Eldorado Pkwy Concrete/Stone
Mckinney, TX 75070
7. Old Castle/Jewell Vendor/Supplier- $29,668
2561 SW Grapevine Pkwy Suite 200 Concrete/Stone
Grapevine, TX 76051
8. RDC Paving Vendor Supplier- $158,496
120 Iron Horse Dr Asphalt
Hutto, TX 78634
9. Stermer Vendor $145,000
c/o Thomas McMurry P.C.
109 S. Woodrow Lane Suite 700
Denton, TX 76205
NATIONAL RIFLE: Ex-CEO LaPierre Takes Blame During Fraud Trial
--------------------------------------------------------------
Rachel Scharf of Law360 reports that former longtime National Rifle
Association CEO Wayne LaPierre told jurors in the New York attorney
general's fraud trial Monday, January 29, 2024, that he failed to
tell the NRA board about certain private jet spending and vendor
relationships, aligning with the gun group's defense that it was in
the dark about his wrongdoing.
About National Rifle Association
Founded in 1871 in New York, the National Rifle Association of
America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, the National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. Norton Rose Fulbright US, LLP
and AlixPartners, LLP serve as the committee's legal counsel and
financial advisor, respectively.
* * *
Following a 12-day trial, U.S. Bankruptcy Judge Harlin D. Hale
dismissed the National Rifle Association's Chapter 11 case Tuesday,
May 11, 2021, after finding the group filed its petition in bad
faith in order to gain advantage in litigation brought by New
York's attorney general. New York Attorney General Letitia James
sought the dismissal of the case. The judge condemned the NRA's
attempts to avoid accountability, making clear that the
organization's actions were "not an appropriate use of bankruptcy."
NGL ENERGY: Fitch Rates Proposed 2029/2032 Secured Notes 'BB-'
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR2' rating to NGL Energy
Operating LLC's (Operating) proposed offering of senior secured
notes due in 2029 and 2032. The notes are co-issued by NGL Energy
Finance Corp (Finance) and are guaranteed by Operating's operating
subsidiaries. Other ratings and the Stable Outlook remain
unchanged, including the 'B' Long-Term Issuer Default Ratings (IDR)
of both NGL Energy Partners, LP (NGL) and Operating.
The company will use the net proceeds from the proposed notes to
repay a large portion of its outstanding $2.05 billion senior
secured notes due in 2026. Fitch believes that the proposed notes
issuance will de-risk the upcoming maturity and improve NGL's
financial flexibility.
Fitch has reviewed preliminary terms for the proposed senior
secured notes and assumes no material variations in the final
terms.
KEY RATING DRIVERS
Pari-Passu Transaction: Total debt balance and EBITDA leverage are
not affected by this refinancing transaction. The 'BB-' rating on
the proposed senior secured notes is consistent with the ratings of
Operating's existing senior secured notes. The proposed notes will
rank equal in right of payment with Operating's proposed term loan
facility.
Capital Structure: NGL's capital structure is comprised of sizable,
cumulative high-coupon preferred units, including class D, which
features an investor put option effective in FY 2028. Fitch views
the complex capital structure as a credit negative due to its
potential impact on the partnership's financial health and
investment strategies.
Fitch views the subject notes offering in conjunction with a term
loan B offering launched last week as positive. Once closed, these
capital raises will facilitate NGL's addressing the preferreds
arrearages. These arrearages are now accruing at high interest
rates. Once the arrearages are cleared away, NGL can address the
potential medium-term liquidity overhang posed by the class D
preferred units, which have a term that constrains NGL's
liquidity.
Sustained Focus on Delevering: Management employed credit
supportive measures in recent years, including operating costs
control, capex reduction and dividends suspension. In addition, NGL
continues to sell non-core assets and use the proceeds to
accelerate debt reduction. The company has achieved positive cash
flow since FY 2022, and Fitch anticipates sustained positive FCF
over the forecast period. Fitch anticipates that NGL remains
dedicated in improving the balance sheet.
Fitch calculates leverage of around 6.0x as of FYE March 31, 2023,
and forecasts a decline to approximately 5.8x post the refinancing
transaction by FYE March 31, 2024. Fitch anticipates leverage to
further drop below 5.5x in the medium term. Management expects the
leverage to be at approximately 4.5x by FYE 2024.
Fitch's leverage calculation differs from management's, as Fitch
includes the following in its calculation: i) 50% of class B and
class C preferred units (including accumulated unpaid
distribution); ii) the entirety of class D preferred units
(including accumulated unpaid distributions of the class D
preferred units) in the debt balance. The different treatment of
the preferred units resulted in an approximately $935 million
higher debt balance at FYE 2023 compared with management
calculations.
Volumetric Risks and Customer Profile: Approximately 70% of NGL's
businesses are fee-based with over 33% pipeline contracts
containing minimum volume commitments (MVCs). Over 90% of NGL's
water pipeline volumes are contracted with acreage dedication and a
weighted average remaining tenor of approximately nine years. The
partnership's businesses are largely tied to the crude oil
production activities and subject to volumetric risk. NGL benefits
from its strategic location in the highly economic Permian Basin,
where the partnership derives close to 90% of its water volumes.
Fitch anticipates the growth in Permian will sustain in the near to
medium term, albeit at a slower pace.
Another mitigating factor to the volumetric risk is NGL's
diversified customer base, which includes a high percentage of
public and investment-grade companies. Approximately 77% of NGL's
Water Solutions revenues are generated by investment-grade
counterparties. Additionally, compared with the private producers,
the partnership's publicly traded producer customers tend to remain
more disciplined in production when facing headwinds of declining
commodity prices.
Commodity Price Exposure: NGL sells the skim oil recovered from the
water volumes, and the margin is directly exposed to the commodity
price volatility. Skim oil contributes approximately 20% of
revenues to the Water Solutions segment in FYE 2023. The Crude
Logistics and Liquids segments contributed over 20% of NGL's FYE
2023 EBITDA, and was mainly from activities that vary on the
relationships between two prices for a commodity or commodities.
The spreads can relate to location or time. The partnership
leverages back-to-back contracts and financial derivatives to fully
hedge the exposure in these two segments.
Size and Scale: With EBITDA generation of over $500 million, NGL is
larger than many single B midstream issuers rated by Fitch and with
footprints in multiple basins. Fitch views size and geographic
diversification as credit-positive factors, as they mitigate the
cash flow volatilities typical for gathering and processing focused
pipeline companies. Fitch expects an increased stability in NGL's
cash flow as the partnership continues to grow its predominantly
fee-based Water Solutions business and adding MVCs to the
contracts.
DERIVATION SUMMARY
WaterBridge Midstream Operating LLC (WATOPE; B/Stable) is a
midstream company solely focused on water solutions and operates
predominantly in the Southern Delaware region of Permian Basin. It
is much smaller in size (around $200 million of EBITDA generated at
the end of 2022) and less diversified in terms of footprints and
business lines.
WATOPE has higher volumetric risk with an immaterial MVCs compared
to NGL which has over one third of its contracts supported by MVCs.
However, WATOPE has limited commodity price exposure whereas NGL's
exposure is approximately 30%.
WATOPE's leverage is forecast to decline below into the lower 6x
range by YE 2023. Fitch anticipates that NGL's leverage will be
approximately 2-3 ticks lower during the same period after the
proposed term loan B offering.
NGL has the same IDR as WATOPE, as they have similar business and
financial risks. NGL's larger size and lower volumetric risks are
offset by its higher commodity price exposure and execution risk in
the Crude and Liquids segments. NGL's slightly lower leverage is
offset by the potentially higher medium-term liquidity overhang
posed by the class D preferred units.
KEY ASSUMPTIONS
- Fitch Oil and Gas Price Deck: WTI (USD/bbl) $75 in calendar year
2024, $65 in 2025, and $60 in 2026;
- Base interest rates reflect Fitch Global Economic Outlook, e.g.,
4.75% for calendar year 2024, and 3.50% for 2025;
- Mid-single digit growth for Water Solutions business in FY 2024;
- Capital spending largely in line with management expectations;
- Asset sales of $150 million in FY 2024;
- Proactive financing to repay $280 million 2025 unsecured notes,
$2.05 billion 2026 secured notes and $320 million 2026 unsecured
notes.
RECOVERY ANALYSIS
The recovery analysis assumes that NGL would be considered a
going-concern in bankruptcy and that the partnership would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim (standard). The going-concern EBITDA estimate
of approximately $500 million represents an approximately 24%
discount to FY 2023 EBITDA. It reflects Fitch's view of a mid-cycle
estimate of a sustainable EBITDA level post default and bankruptcy
emergence. This level assumes an EBITDA run rate of approximately
$500 million, slightly higher than the post pandemic EBITDA when
the last significant oil price decline happened, reflecting the
increasing contribution from fee-based revenues since then.
Fitch used a 6x EBITDA multiple to arrive at NGL's going-concern
enterprise value. The multiple reflects the recent reorganization
multiples of 6x in the energy sector.
There have been a limited number of bankruptcies and
reorganizations within the midstream space but in the limited
sample such as bankruptcies of Azure Midstream and Southcross
Holdco, the reorganization multiples were between 5x and 7x by
Fitch's best estimates. In Fitch's recent bankruptcy case study
report "Energy, Power and Commodities Bankruptcies Enterprise Value
and Creditor Recoveries," published in September 2023, the median
enterprise valuation exit multiplies for 51 energy cases for which
this was available was 5.3x, with a wide range of multiples
observed.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade
- EBITDA leverage sustained below 5.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade
- Inability to proactively improve liquidity profile;
- EBITDA Leverage is expected to sustain above 6.5x;
- EBITDA interest coverage is expected to sustain below 2.0x.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Satisfactory: As of Sept. 30, 2023, NGL had approximately
$446.7 million of liquidity consisting of $2.7 million cash on the
balance sheet and approximately $444 million undrawn capacity in
the ABL.
The ABL is subject to a borrowing base. The commitments under the
ABL totaled $600 million and the sub-limit for letter of credit was
$250 million. NGL is currently extending the ABL for another five
years.
The cash flow in NGL's Liquids Logistics segment is highly
seasonal. The cash needs are high when the partnership builds
inventory for its marketing businesses in the non-winter seasons.
Fitch believes NGL will be able to fund its operation needs through
cash in hand and capacity of the ABL through the forecast period.
Fitch believes the partnership will be able to comply with the ABL
financial covenants in the forecast period. Upon the occurrence and
during the continuance of a Cash Dominion Event (as defined in the
ABL agreement), the company shall not permit the Fixed Charge
Coverage Ratio to be less than 1.0x. At Sept. 30, 2023, no Cash
Dominion Event had occurred.
The ABL features a springing maturity of 91 days prior to the
earliest maturity date in respect to any of NGL's indebtedness in
an aggregate principal amount of $50 million or greater, if such
indebtedness is outstanding at such time. The ABL can mature as
early as Nov. 31, 2024 (based on 2025 unsecured notes maturity) or
Nov. 2, 2025 (based on 2026 secured notes maturity).
The partnership's next maturity is approximately $280 million 2025
unsecured notes due on March 1, 2025.
The subsequent maturity after 2025 notes is the $2.05 billion
senior secured notes due on Feb. 1, 2026 and approximately $320
million unsecured notes due on April 15, 2026.
Fitch assumes prompt debt issuance (which may be supplemented by
application of FCF or asset divestiture proceeds to fully repay the
2026 secured notes, 2025 unsecured notes and the 2026 unsecured
notes.
In the medium term, the company faces potential liquidity overhang
triggered by the put option embedded in the series D preferreds
units on and after July 2, 2027.
ISSUER PROFILE
NGL Energy Partners LP (NGL) is a publicly traded MLP headquartered
in Tulsa, Oklahoma. The partnership provides services in waste
water disposal, crude oil storage and transportation, as well as
marketing of crude oil, natural gas liquids and refined product.
DATE OF RELEVANT COMMITTEE
January 16, 2024
ESG CONSIDERATIONS
NGL Energy Partners LP has an ESG Relevance Score of '4' for
Governance Structure due to {DESCRIPTION OF ISSUE/RATIONALE}, which
has a negative impact on the credit profile, and is relevant to the
rating[s] 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
----------- ------ --------
NGL Energy
Finance Corp.
senior secured LT BB- New Rating RR2
NGL Energy
Operating LLC
senior secured LT BB- New Rating RR2
OFFICE PROPERTIES: S&P Lowers ICR to to 'CCC', Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Office
Properties Income Trust (OPI) to 'CCC' from 'CCC+' and removed all
of its ratings from CreditWatch, where S&P placed them with
negative implications on Dec. 5, 2023.
At the same time, S&P lowered its issue-level rating on the
company's senior unsecured notes to 'CCC' from 'CCC+'. The '3'
recovery rating is unchanged.
The negative outlook reflects that OPI continues to face liquidity
pressure and refinancing risk due to its material debt maturities
over the new few years. The outlook also reflects S&P's expectation
that the company's operating performance will remain pressured due
to secular headwinds and significant lease expirations.
OPI faces multiple near-term debt maturities with limited liquidity
and financing options. The company's recently amended and restated
credit facilities slightly improve its liquidity position, though
it downsized the facility to $425 million from $750 million as part
of the transaction. The new facility comprises a $325 million
secured revolving credit facility and a $100 million secured term
loan maturing in 2027 (the revolver can be extended by a year)
secured by 19 office properties with a gross carrying value of $942
million. S&P expects OPI will use the proceeds and revolver
capacity to help repay its $350 million senior unsecured notes due
May 2024. Additionally, the company recently announced a reduction
to its quarterly dividend to $0.01 per common share from $0.25
previously. This will likely provide it with savings of
approximately $47 million per year.
S&P said, "While we view these actions positively, there remains
significant uncertainty around OPI's ability to refinance its
future debt maturities, beginning with its $650 million senior
unsecured notes due February 2025. We expect the company will
pursue asset sales and secured debt, as it did in 2023, to fund the
repayment, though the conditions in the transaction market continue
to be challenging and the capital markets remain constrained for
many office REITs. Moreover, OPI will need to raise more capital
than it did last year, which may prove difficult.
"The company's operating performance has been weak, which is a
trend we expect will continue. For the three months and nine months
ended Sept. 30, 2023, OPI's same-property cash net operating income
(NOI) declined by 9.2% and 5.5%, respectively. The company's
operating performance has been negatively affected by lease
expirations, high free rent levels, and elevated operating costs.
OPI's same-property leased percentage declined by 140 basis points
(bps) to 93.3% over the past 12 months, while its total portfolio
leased percentage declined by 80 bps to 89.9% over the same period.
The company faces substantial lease expirations in 2024 and 2025 (a
combined 23.6% of its annualized rental income) as cyclical and
secular headwinds continue to pressure office assets. We expect
OPI's operating performance and occupancy will continue to be
significantly stressed over the next few years and anticipate it
will underperform its office REIT peers, given our weaker view of
its asset quality.
"The negative outlook reflects that OPI continues to face liquidity
pressure and refinancing risk due to its material debt maturities
over the new few years. The outlook also reflects our expectation
the company's operating performance will remain pressured due to
secular headwinds and significant lease expirations.
"We could lower our ratings on OPI as its February 2025 debt
maturity approaches if we expect a payment default, debt
restructuring, or distressed exchange will occur.
"We could take a positive action if the company successfully
refinances its upcoming debt maturities and improves its liquidity
position such that it alleviates our near-term concerns."
OIL STATES: Palisade Capital Management Holds 6.28% Equity Stake
----------------------------------------------------------------
Palisade Capital Management, LP, disclosed in a Schedule 13G/A
filed with the Securities and Exchange Commission that as of
December 31, 2023, it beneficially owned 4,010,164 shares of Oil
States International, Inc.'s Common Stock, representing 6.28%,
based on 63,889,176 outstanding shares of common stock as of
October 20, 2023, as reported in the Oil States' Quarterly Report
on Form 10-Q filed with the SEC on October 27, 2023.
A full-text copy of the Report is available at
http://tinyurl.com/569ck4kn
About Oil States
Headquartered in Houston, Texas, Oil States International, Inc.
provides specialty products and services to oil and gas drilling
and production companies.
As of September 30, 2023, the Company had $1.048 billion in total
assets against $349.6 million in total liabilities.
Egan-Jones Ratings Company on September 19, 2023, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Oil States International, Inc.
OMNIQ CORP: Unit Acquires CodeBlocks for US$1.28 Million
--------------------------------------------------------
OMNIQ Corp. announced that its wholly owned subsidiary acquired
CodeBlocks Ltd (CodeBlocks), a Fintech software company with over
80,000 deployments.
OmniQ acquired CodeBlocks in exchange for NIS 4,666,664
(approximately US$1,275,044 based on Jan. 5, 2024's exchange rate).
The consideration is payable in seven equal installments with the
final payment due on Jan. 11, 2025. The purchase Agreement closed
on Feb. 1, 2024.
Shai Lustgarten, CEO, of omniQ commented "We are excited to welcome
the CodeBlocks scientists to our team as we see the Fintech market
as a significant growth engine and profit generator for omniQ. We
will enjoy immediate cost savings by utilizing CodeBlocks
technology, replacing historical licensing fees. In addition, as
we integrate our proprietary software, we believe that we will have
the opportunity to capture a bigger market share as well as
introduce our solution to the US and other markets globally."
Erez Attia CEO of CodeBlocks commented: "Following years of
successfully developing our proprietary Fintech software, we are
excited to join forces with a strong team and a dynamic company
like ominQ in order to provide innovative solutions to the modern
Fintech market."
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.
ORIGINAL MONTANA: Unsecureds to Get 100 Cents on Dollar in Plan
---------------------------------------------------------------
The Original Montana Club Cooperative Association filed with the
U.S. Bankruptcy Court for the District of Montana a Plan of
Reorganization for Small Business dated January 30, 2024.
The Debtor is a Montana Cooperative Association, with shareholders,
formed on June 28, 2017. The Montana Club was formed to provide
social, food and drink services initially only to members of the
Club and their guests; in 2017 the reorganized Club no longer
required formal memberships to utilize the Club's facilities and
the Club was open to the public.
The Club operates in the historic Montana Club Building on Last
Chance Gulch in Helena, Montana. Currently the Club owns
Condominium Units 001, 201, 301, 601, 701, and Commercial Unit 101
of the Montana Club Condominium. Unit 001 is a subterranean all
service bar and lounge, the Rathskeller which is not currently
operating. Units 201 and 301 are operating dining rooms and a bar
and lounge and kitchen. Unit 601 is a banquet hall and Until 701 is
not occupied.
General unsecured claims were filed by Integrity Electrical
Contractors, Inc. in the amount of $1663.50; MRG Financial Services
in the amount of $6115.25; Credit Associates in the amount of
$5578.59; Goodrich & Reely PLLC in the amount of $16,617.00; and
CB1, Inc. in the amount of $8835.14.
The Club is liquidating at least its real property interests in the
Montana Club Building which it believes have sufficient value to
satisfy in full all claims of all creditors in this case. The total
debts, secured and unsecured, of the Club total $1,402,240.47. The
total value of the Montana Club's property is $2,368,249.18
although such sum includes cash and financial equivalents, deposits
and prepayments, and inventory, all of which may change from day to
day totaling $105,397. The liquidation net proceeds will fund this
Plan.
As noted, the Montana Club will engage in limited operations and
will sell personal property with little utility to the Club's
operations during the time the Club's other personal property and
real property is being marketed. The Club will seek the employment,
subject to Court approval, of a real estate broker to sell the real
property and the same, or a separate broker, to sell the Club's
all-beverage liquor license. The Club believes offering the liquor
license and the real property for sale at the same time may attract
additional potential buyers.
The Debtor's financial projections show that the Debtor will have
net total liquidation proceeds of $497,629 which will be sufficient
to fund the secured creditors, priority unsecured creditors, and
should pay something to general unsecured creditors. The final Plan
payment is expected to be paid on May 1, 2025 from the proceeds of
sale of the Club's real property interests.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative claims.
Class 1 consists of non-priority unsecured claims. Class 1 non
priority unsecured claims will receive a prorate distribution of
the remaining funds not exceeding the amounts after full payment of
the Class 2 priority unsecured claims; interest will accrue on the
claims at the Federal Judgment Rate as of the Confirmation Date.
This Class is impaired.
Class 2 consists of priority unsecured claims. Class 2 priority
unsecured claims will receive a prorate distribution of the
remaining funds not exceeding the amounts below after full payment
of the Class 3 and 4 secured claims; interest will accrue on the
claims at the Federal Judgment Rate as of the Confirmation Date.
This Class is impaired.
The Debtor will implement this Plan the liquidation of sufficient
portions of its personal and real property interests sufficient to
pay all administrative, secured, priority unsecured and
non-priority unsecured claims.
A full-text copy of the Plan of Liquidation dated January 30, 2024
is available at https://urlcurt.com/u?l=mBresQ from
PacerMonitor.com at no charge.
Counsel for the Debtor:
James A. Patten, Esq.
Molly S. Considine, Esq.
Patten, Peterman, Bekkedahl & Green, PLLC
2817 2nd Avenue North, Ste. 300
P.O. Box 1239
Billings, MT 59103
Telephone: (406) 252-8500
Facsimile: (406) 294-9500
Email: apatten@ppbglaw.com
mconsidine@ppbglaw.com
About The Original Montana Club
Cooperative Association
The Original Montana Club Cooperative Association is a co operative
association opened to the public in June 2018 for a la carte
dining, private dining, weddings, celebrations and business
meetings.
Original Montana Club Cooperative Association sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mon. Case No.
23-20145) on Nov. 1, 2023. In the petition filed by Charles
Robison, as president, the Debtor reported assets between $1
million and $10 million and estimated liabilities between $500,000
and $1 million.
The Honorable Bankruptcy Judge Benjamin P. Hursh handles the case.
The Debtor is represented by PATTEN PETERMAN BEKKEDAHL & GREEN.
ORYX MIDSTREAM: Moody's Rates New $1.84BB Secured Term Loan 'Ba3'
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Oryx Midstream
Services Permian Basin LLC's new $1.84 billion senior secured term
loan due 2028 and Ba1 rating to its new $50 million senior secured
super priority revolving credit facility expiring in 2026. The
company's Ba3 Corporate Family Rating and stable rating outlook are
unaffected. Moody's expects to withdraw ratings on Oryx's existing
Term Loan and existing $50 million super priority revolver
following their extinguishment.
RATINGS RATIONALE
The term loan is rated Ba3, the same as the CFR because of the
small size of the revolver relative to the term loan. The $50
million revolver is rated Ba1, reflective of its super-senior
priority to the company's assets over the term loan.
Oryx Midstream's Ba3 CFR reflects its 35% ownership in Plains Oryx
Permian Basin LLC (the Permian JV), its strong contractual rights
and ability to influence key decisions, and the Permian JV's strong
position as a provider of crude oil gathering and transportation
services in one of the most advantaged basins in North America. The
Permian JV is a joint venture between Plains All American Pipeline
L.P. (Plains, Baa3 Positive) and Oryx Midstream Holdings LLC
(unrated; a portfolio company of Stonepeak Partners LP) and is
among the largest midstream services providers in the Permian
basin. The Permian JV's financial and operational performance is
expected to continue benefit from production growth in the Permian
basin. The JV is structured as a debt-free entity and Moody's
believes it to be of strong Ba credit quality given its business
profile and the implicit burden to support its owners' debts. Oryx
Midstream is reliant on JV distributions to service its term loan
debt. The term loan includes an excess cash flow seep to protect
lenders, however, term loan repayments may be limited to the
required minimum amortization of certain leverage triggers are
hit.
The stable outlook reflects Moody's expectation that volume and
earnings growth of the JV will lead to improved cash flow and
leverage at Oryx Midstream.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Oryx Midstream's ratings could be upgraded if the JV strengthens
its credit profile by meaningfully growing EBITDA scale and
lowering volumetric risk, while Oryx Midstream's stand-alone
financial leverage based on its distributions received remained
below 4x. The ratings could be downgraded if the JV takes on
material financial leverage or if cash flow generation and
distributions are more volatile than expected, or if Plains is
downgraded.
Oryx Midstream Services Permian Basin LLC, headquartered in
Midland, Texas, owns a 35% ownership stake in a joint venture with
a large crude oil gathering and transportation system in the
Permian basin. The company is majority-owned by affiliates of
Stonepeak Partners LP and ownership stakes are also held by an
affiliate of the Qatar Investment Authority and management.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
PAX THERAPY: Claims to be Paid From Available Cash and Income
-------------------------------------------------------------
Pax Therapy and Family Services, Inc., filed with the U.S.
Bankruptcy Court for the Central District of California a
Subchapter V Plan of Reorganization dated January 30, 2024.
The Debtor was founded in June of 2017, by Kristin Martinez, a
California licensed marriage and family therapist, to meet the need
of mounting mental health demands in Los Angeles County.
Pre-bankruptcy, the Debtor had accumulated outstanding loan debt of
more than $510,000, all due within a very short-term period. The
effective interest rates that accrued on that debt ranged from a
low of 19.9% to over 60% per year. By contrast, under the Plan, the
Debtor will service over a seven-year period secured loan debt of
approximately $149,148. $72,673 of that amount will be on account
of SBFS's Class 1 Secured Claim, will accrue interest at a rate of
9% per annum.
The remaining $76,475 of that amount will be on account of TAB's
Class 2 Secured Claim, which will accrue interest at a rate of 14%
per annum. The Debtor will distribute its disposable net income
over a three-year period to pay chapter 11 administrative expenses
and priority claims in full, and to pay $75,000 to general
unsecured creditors. The Debtor projects to operate profitably on a
cashflow basis over the expected life of the Plan, as shown in the
36-month cashflow projections.
The Plan proposes to pay the Secured Claims on a monthly basis for
approximately seven years following the Effective Date. The Plan
proposes to pay holders of Allowed Administrative Claims, Priority
Tax Claims, Unsecured Priority Claims and General Unsecured Claims
an amount equal to Debtor's projected disposable income5 for three
years (the "Total Plan Payments"). The amount of the Total Plan
Payments over three years will equal $188,265. Such payments will
be made on an approximately monthly basis (each a "Monthly
Payment") for three years.
Class 3 consists of All allowed Other Priority Unsecured Claims. In
full and final satisfaction of the allowed Class 3 claim against
the Debtor, the holder of that Class 3 claim shall receive $800 of
the Monthly Payments commencing in or about October 2025 and ending
in or about August 2026. The Monthly Payments shall commence after
payment in full of all Allowed Administrative Claims. Class 3 will
not receive interest on its claim.
Total amount of Class 3 claims is $8,897.62 (estimated and subject
to claim objections), which is comprised of the unpaid priority
prepetition wage claim of Ms. Martinez. This Class is impaired.
Class 4 consists of all allowed general unsecured claims of the
Debtor not included in any other class. In full and final
satisfaction of all allowed Class 4 claims against the Debtor, each
holder of an allowed Class 4 claim shall receive a pro rata share
of the Monthly Payments for up to three years, after payment in
full of (1) all Allowed Administrative Claims, (2) all Allowed
Priority Tax Claims and (3) all Allowed Priority Unsecured Claims.
Class 4 will not receive interest on their claims.
Total aggregate amount of Class 4 claims is approximately $724,325
(estimated and subject to claim objections). The Debtor may prepay
amounts due Class 4 at any time without prepayment penalty. This
Class is impaired.
Class 5 interest holders will retain their rights and interests
without impairment. No member of Class 5 will be entitled to
receive cash payments on account of its equity interests under the
Plan.
The Plan will be funded from the Debtor's cash on hand as of the
Effective Date and from the Debtor's income from operations.
A full-text copy of the Subchapter V Plan dated January 30, 2024 is
available at https://urlcurt.com/u?l=haDOLI from PacerMonitor.com
at no charge.
General Bankruptcy Counsel to Debtor:
David B. Zolkin, Esq.
Weintraub Zolkin Talerico & Selth LLP
11766 Wilshire Boulevard, Suite 450
Los Angeles, CA 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
Email: dzolkin@wztslaw.com
About Pax Therapy and Family Services
Pax Therapy and Family Services, Inc., provides mental health
therapy services through its licensed professionals from its
offices located in Whittier, Calif.
The Debtor filed a Chapter 11 petition (Bankr. C.D. Cal. Case No.
23-17284) on Nov. 2, 2023, with up to $100,000 in assets and up to
$1 million in liabilities. Kristin Martinez, president, signed the
petition.
Judge Deborah J. Saltzman oversees the case.
David B. Zolkin, Esq., at Weintraub Zolin Talerico & Selth, LLP, is
the Debtor's legal counsel.
Tamar Terzian is the patient care ombudsman appointed in the
Debtor's bankruptcy case.
PLUTO ACQUISITION: S&P Downgrades ICR to 'CC', Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Pluto
Acquisition I Inc. (AccentCare) to 'CC' from 'B-'. S&P also lowered
the issue-level rating on the first-lien term loan to 'CC' from
'B-'. Its 'B-' rating on the revolving credit facility is
unchanged. We do not rate Pluto's second-lien term loan.
The negative outlook reflects S&P's expectation that upon
completion of the exchanges, it will lower the issuer credit rating
to 'SD' (selective default) and the rating on the first-lien term
loan to 'D'.
S&P said, "We view the proposed first- and second-lien term loan
exchanges as distressed. We see the proposed maturity extensions as
coming without adequate compensation." Under the proposed
transaction, current first-lien term loan lenders will receive 100%
of their principal and the same interest rate, with a new maturity
27 months later. Second-lien lenders will receive 100% of the
principal with a delayed maturity of one year until 2028. Interest
will convert to payment-in-kind with an additional 50 basis points
added to the interest rate for the first 10 months and 150 basis
points added for months 11-22. These lenders will receive fees only
at debt maturity.
Existing lenders will lose collateral priorities under new
structure. Under the restructuring, existing first-lien lenders'
priority claim will be lowered to second-out status, below both a
new money first-out super-priority facility and the refinanced $40
million revolving credit facility. Second-lien lenders will fall to
third-out status, behind the new money issue, revolving credit
facility, and new second-out term loan.
S&P said, "We do not view the extension of Pluto Acquisition's cash
flow revolver as distressed. The only other rated debt, a $40
million revolving credit facility, will get a maturity extension.
However, there will be no outstanding balance upon completion of
the transaction.
"The negative outlook reflects our expectation that we will lower
our issuer credit rating on Pluto Acquisition to 'SD' and the
rating on the first-lien term loan to 'D' upon completion of the
exchanges."
PPWC ENTERPRISES: Unsecureds Will Get 100% of Claims in 24 Months
-----------------------------------------------------------------
PPWC Enterprises, Inc., filed with the U.S. Bankruptcy Court for
the Northern District of Ohio a Plan of Reorganization for Small
Business under Subchapter V dated January 30, 2024.
The Debtor is an Ohio corporation formed in 2021. LaCora Turner
Murphy has been the sole shareholder of Debtor since its
inception.
Debtor is a childcare facility located in Twinsburg, Ohio that
primarily serves families with limited means that qualify for state
subsidies to pay tuition. Debtor began accepting child enrollees in
October 2022 and has grown significantly in recent months with
enrollment more than quadrupling since August 2023.
Though the Debtor had seen its revenue increasing significantly in
the months leading up to filing, it was unable to reach an
agreement with its landlord to stay an eviction action filed in
early October 2023. The pending eviction necessitated the filing of
this case.
This Plan of Reorganization proposes to pay creditors of the Debtor
from Debtor's projected disposable income.
Debtor shall assume its commercial real estate lease and cure any
outstanding arrearages in equal monthly installments over 36
months. The claim of BHG shall be bifurcated into secured and
unsecured claims: the secured claim shall be paid in equal
installments over a period of 12 months with interest at the rate
of 10.5%, and the unsecured claim paid with other general unsecured
creditors.
Non-priority unsecured creditors holding allowed claims will
receive equal installments over a period of 24 months, beginning 12
months after the commencement of payments under the Plan. This Plan
also provides for the payment of unclassified administrative and
priority claims in full on the Effective Date of this Plan with
respect to any such claim.
Class 3 consists of General Unsecured Claims. Class 3 is Impaired
by this Plan. The Debtor shall pay Class 3 claimants 100% of their
claim, in equal installments over the course of 24 months,
beginning May 1, 2025. The allowed unsecured claims total
$38,948.79.
Class 4 consists of Equity interest holders. Class 4 is unimpaired
by this Plan. The holder of an equity interest in the Debtor shall
retain their interest in the reorganized debtor upon confirmation
of the Plan.
Since the date of filing, the Debtor has enrolled 14 new children,
with 6 additional children scheduled to start in mid-February. The
Debtor anticipates the addition of these children will provide the
Debtor with the funds necessary to complete its Plan.
Upon the effective date of the Plan, or May 1, 2024, whichever
occurs later, Debtor shall begin making the following payments:
* Payments in equal monthly installments of $1,808.53 for a
period of 36 months to Class 1 claimant for rent arrearages, along
with ongoing payments due under the lease as they become due and
payable.
* Payments in equal monthly installments of $1,300.00 for a
period of 12 months to Class 2 claimant on account of its secured
claim, which shall accrue simple interest of 10.5%.
Beginning May 1, 2025, Debtor shall commence payments to Class 3
claimants in equal monthly installments for a period of 24 months.
Debtor shall distribute, pro rata, the monthly sum of $1,623.00 to
all Class 3 claimants.
A full-text copy of the Plan of Reorganization dated January 30,
2024 is available at https://urlcurt.com/u?l=Ytb5fc from
PacerMonitor.com at no charge.
Attorney for Debtor:
Steven J. Heimberger, Esq.
Roderick Linton Belfance, LLP
50 S. Main Street, 10th Floor
Akron, OH 44308
Telephone: (330) 434-3000
Facsimile: (330) 434-9220
Email: sheimberger@rlbllp.com
About PPWC Enterprises
PPWC Enterprises, Inc., is a childcare facility located in
Twinsburg, Ohio that primarily serves families with limited means
that qualify for state subsidies to pay tuition.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-51524) on Nov. 1,
2023, with up to $50,000 in assets and up to $500,000 in
liabilities. Frederic Schwieg, Esq., has been appointed as
Subchapter V trustee.
Judge Alan M. Koschik oversees the case.
Steven J. Heimberger, Esq., at Roderick Linton Belfance, LLP,
represents the Debtor as legal counsel.
PROTERRA INC: Completes Sale of Powered Business to Volvo
---------------------------------------------------------
Proterra Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchnage Commission that on February 1, 2024, the
Company, and its subsidiary Proterra Operating Company, Inc.,
(collectively, the "Debtors"), consummated the Powered Sale with
Volvo Battery Solutions LLC.
As previously disclosed, on November 9, 2023, following a
Bankruptcy Court-supervised process pursuant to Bankruptcy
Court-approved bidding procedures, the Debtors entered into a
certain asset purchase agreement (the "Powered APA") with Volvo
Battery Solutions LLC ("Volvo"), part of Volvo Group, and Mack
Trucks, Inc., as guarantor of certain obligations of Volvo under
the Powered APA, for the sale of substantially all of the Debtors'
assets used in the conduct of the Proterra Powered business (the
"Powered Assets") to Volvo as described in the Powered APA (the
"Powered Sale"). The Powered Sale was subject to the approval of
the Bankruptcy Court. The Bankruptcy Court entered an order
approving the Powered Sale on November 29, 2023.
The purchase price for the Powered Assets was approximately $223
million, plus the assumption of certain liabilities and the payment
of certain cure amounts.
The financial impact to the Company of the disposition of the
Powered Assets will be reflected in the monthly operating reports
of the Company commencing for the month of February 2024.
The Company expects that no proceeds from the Powered Sale will be
distributed to the Company's stockholders. The Chapter 11 Cases
remain pending. The terms of the proposed Third Amended Joint
Chapter 11 Plan of Reorganization for Proterra Inc and its Debtor
Affiliate, as filed with the Bankruptcy Court on January 25, 2024,
provide that holders of the Company's common stock will not receive
any recovery on account of those shares following the conclusion of
the Chapter 11 Cases.
In connection with the closing of the Powered Sale, several key
resignations were announced at Proterra Inc.: David S. Black
resigned as Chief Financial Officer, Christopher L. Bailey resigned
as Chief Business Officer, Jeffrey D. Embt resigned as Chief
Accounting Officer, and Jeffrey E. Mitchell resigned as General
Counsel of the Company.
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 its affiliate, Proterra Operating Company, Inc.,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11120) on August 7, 2023. At the
time of the filing, the Debtors reported $500 million to $1 billion
in both assets and liabilities.
Judge Brendan Linehan Shannon oversees the cases.
Young Conaway Stargatt & Taylor, LLP and Paul Weiss Rifkind Wharton
& Garrison, LLP represent the Debtors as legal counsels. The
Debtors also tapped FTI Consulting, Inc. as financial advisor;
Moelis & Company, LLC as investment banker; and Kurtzman Carson
Consultants, LLC as claims, noticing and administrative agent.
Andrew Vara, Acting U.S. Trustee for Regions 3 and 9, appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee is represented by the law firms of
Morris James, LLP and Lowenstein Sandler, LLP.
PROTERRA INC: Justin Pugh Named Acting Chief Financial Officer
--------------------------------------------------------------
Proterra Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that Julian R. Soell, Chief
Operating Officer of the Company, has resigned, and the resignation
has been revised to take effect on February 2, 2024. As previously
disclosed, Julian R. Soell's resignation as Chief Operating Officer
of the Company was set to be effective in March 15, 2024.
Additionally, Justin Pugh has been appointed as Acting Chief
Financial Officer.
Justin Pugh, has served as Chief Transformation Officer of the
Debtors since August 7, 2023. In his capacity as Chief
Transformation Officer of the Debtors, Pugh has authority to act on
behalf of the Debtors in connection with activities related to
operational analysis and reporting, negotiation with
counterparties, and any other activities related to the Debtors
Chapter 11 Cases, in each case as may be requested by the Debtors'
Chief Executive Officer.
Effective as of February 1, 2024, the Restructuring Committee of
the Boards of Directors of the Debtors (which has been vested with
the full power and authority of the Boards of Directors of the
Debtors with respect to certain activities related to the Debtors'
Chapter 11 Cases) approved that Pugh, in his capacity as the
Debtors' Chief Transformation Officer, shall assume all of the
responsibilities, and the authority to act on behalf of the
Debtors, of the Debtors' acting Chief Financial Officer until a
permanent Chief Financial Officer is appointed; provided that, for
the avoidance of doubt, Pugh's compensation as Chief Transformation
Officer shall continue to be governed by the terms of that certain
Chief Transformation Officer and Support Personnel agreement, dated
as of August 7, 2023, between the Debtors and FTI Consulting, Inc.
("FTI").
Pugh, age 42, is a Senior Managing Director at FTI, a global
consulting firm, where he has worked since 2017. Pugh earned a
bachelor's degree in finance and a master's degree in finance and
mathematics from Louisiana State University and an MBA from the
University of Rochester. He is a chartered financial analyst and
certified public accountant. As previously disclosed by the Company
in its Third Amended Disclosure Statement for Third Amended
Proposed Joint Chapter 11 Plan of Reorganization for Proterra Inc
and its Debtor Affiliate (Solicitation Version), FTI serves as
financial advisor to the Company to support their contingency
planning efforts.
There is no family relationship between Pugh and any director,
executive officer, or person nominated or chosen by the Company to
become a director or executive officer, nor are there any
arrangements between any of Pugh and any other persons pursuant to
which Pugh was selected to serve as an officer.
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 its affiliate, Proterra Operating Company, Inc.,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11120) on August 7, 2023. At the
time of the filing, the Debtors reported $500 million to $1 billion
in both assets and liabilities.
Judge Brendan Linehan Shannon oversees the cases.
Young Conaway Stargatt & Taylor, LLP and Paul Weiss Rifkind Wharton
& Garrison, LLP represent the Debtors as legal counsels. The
Debtors also tapped FTI Consulting, Inc. as financial advisor;
Moelis & Company, LLC as investment banker; and Kurtzman Carson
Consultants, LLC as claims, noticing and administrative agent.
Andrew Vara, Acting U.S. Trustee for Regions 3 and 9, appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee is represented by the law firms of
Morris James, LLP and Lowenstein Sandler, LLP.
PUERTO RICO: Bondholder Fight Puts PREPA' Future Revenue at Risk
----------------------------------------------------------------
Michelle Kaske of Bloomberg News reports that Puerto Rico's
bankrupt power utility and its creditors squared off in court
Monday, January 29, 2024, on whether bondholders have a legal right
to the electricity provider’s future revenue.
The debate before the US Court of Appeals for the First Circuit
centers around whether the island's main energy supplier, Electric
Power Authority or Prepa, must repay its creditors more than just
the roughly $19 million sitting in reserve accounts that a
bankruptcy court last year ruled was the bondholders' only secured
lien.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case Website https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
REMARK HOLDINGS: Registers 20MM Common Shares for Possible Resale
-----------------------------------------------------------------
Remark Holdings, Inc. filed a Form S-1 Report with the U.S.
Securities and Exchange Commission relating to the proposed resale
by the selling stockholder, Ionic Ventures, LLC, or its permitted
assigns of up to an aggregate of 20,000,000 shares of the Company's
common stock, with a par value of $0.001 per share, which may be
issued pursuant to a purchase agreement dated as of October 6, 2022
(the "Original ELOC Purchase Agreement"), as amended by those
certain letter agreements (the "Letter Agreements") by and between
Remark Holdings, Inc. and Ionic Ventures LLC, dated as of January
5, 2023; July 12, 2023; August 10, 2023 and September 15, 2023, and
by the first amendment, dated January 9, 2024, to the purchase
agreement dated as of October 6, 2022 (as amended, the "Amended
ELOC Purchase Agreement"), including (A) shares of common stock
which may be issued and sold to Ionic for cash (the "Purchase
Shares"), (B) additional shares of common stock (equal to 2.5% of
the number of Purchase Shares) issued for no consideration (the
"Commitment Shares"), (C) shares of common stock which may be
issued upon termination of the Amended ELOC Purchase Agreement
under certain circumstances to satisfy the termination fee (the
"Additional Commitment Shares"), and (D) shares of common stock
which are issuable to Ionic if the Company fails to file a resale
registration statement covering the shares issuable to Ionic
pursuant to the Amended ELOC Purchase Agreement (the "Filing
Default Shares") or have such resale registration statement
declared effective (the "Effectiveness Default Shares") by the
deadlines specified in a registration rights agreement, dated
October 6, 2022, by and between Remark and Ionic (the "Registration
Rights Agreement").
Shares issuable under the Amended ELOC Purchase Agreement, if and
when they are sold pursuant to the terms of the Amended ELOC
Purchase Agreement, will be sold at a per share price equal to 80%
(subject to decrease under certain circumstances) of the average of
the two lowest VWAPs over a specified measurement period.
On January 24, 2024, Ionic notified the Company that it was in
default under the Amended ELOC Purchase Agreement such that the per
share price under currently outstanding Purchase Notices (as
defined on page 20) is 60% of the average of the two lowest VWAPs
over the specified measurement period. Any additional shares sold
pursuant to Purchase Notices submitted prior to the date when the
registration statement of which this prospectus forms a part is
declared effective will be sold at a per share price equal to 60%
of the average of the two lowest VWAPs over a specified measurement
period, while any shares sold pursuant to Purchase Notices
submitted subsequent to the date when the registration statement of
which this prospectus forms a part is declared effective will be
sold at a per share price equal to 80% (subject to decrease under
certain circumstances).
The Company is not selling any securities under this prospectus and
will not receive any proceeds from the sale of securities by the
selling stockholder. The selling stockholder may offer all or a
portion of the shares for resale from time to time through public
or private transactions, at then prevailing market prices (and not
fixed prices). The selling stockholder will bear all commissions
and discounts, if any, attributable to the sale of the Company's
securities. The Company will bear all costs, expenses and fees in
connection with the registration of the securities registered
hereunder.
Ionic is an "underwriter" within the meaning of Section 2(a)(11) of
the Securities Act of 1933, as amended (the "Securities Act").
The securities being offered hereby may be sold by the selling
stockholder to or through underwriters or dealers, directly to
purchasers or through agents designated from time to time.
The Company may amend or supplement the prospectus from time to
time by filing amendments or supplements as required.
A full-text copy of the prospectus is available at
http://tinyurl.com/yw5ttudj
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com-- is a diversified global technology
business with leading artificial intelligence and data-analytics,
as well as a portfolio of digital media properties. The Company's
innovative artificial intelligence ("AI") and data analytics
solutions continue to gain worldwide awareness and recognition
through comparative testing, product demonstrations, media
exposure, and word of mouth. The Company continues to see positive
responses and increased acceptance of its software and applications
in a growing number of industries.
Remark Holdings reported a net loss of $55.48 million for the year
ended Dec. 31, 2022, compared to net income of $27.47 million for
the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had
$12.40 million in total assets, $45.32 million in total
liabilities, and a total stockholders' deficit of $32.92 million.
In its Quarterly Report for the period ended Sept. 30, 2023, Remark
Holdings said its history of recurring operating losses, working
capital deficiencies and negative cash flows from operating
activities give rise to, and management has concluded that there
is, substantial doubt regarding the Company's ability to continue
as a going concern. The Company's independent registered public
accounting firm, in its report on the Company's consolidated
financial statements for the year ended December 31, 2022, has also
expressed substantial doubt about the Company's ability to continue
as a going concern.
RISKON INTERNATIONAL: Robert Smith Holds 6,667 Common Shares
------------------------------------------------------------
Robert O. Smith, Director of RiskOn International, Inc., filed a
Form 3 Report with the U.S. Securities and Exchange Commission,
disclosing direct ownership of 6,667 shares of RiskOn
International's Common Stock. Additionally, Mr. Smith holds Series
C Convertible Preferred Stock in the Company.
Pursuant to a Share Exchange Agreement, as amended, by and among
RiskOn and Ault Alliance, Inc. as majority shareholder of
BitNile.com, Inc., and certain minority shareholders of
BitNile.com, Inc. including the Robert O. Smith, Smith acquired 5
shares of the RiskOn's Series C Convertible Preferred Stock in
exchange for 5,000 shares of BitNile.com, Inc. Each share of the
RiskOn's Series C is convertible by dividing the stated value of
$10,000 by $7.50, subject to a 4.99% beneficial ownership
limitation.
The Series C Convertible Preferred Stock is not convertible until
one day after the record date for shareholder approval of the Share
Exchange Agreement, as amended. The conversion rights are also
subject to certain beneficial ownership limitations contained in
the Certificate of Designation for the Series C and the 19.9%
beneficial ownership limitation imposed by the Rules of the Nasdaq
Stock Market without shareholder approval. The Series C has no
expiration date. In addition, this number of shares of common stock
does not include shares of common stock that may be issued in lieu
of cash for dividend payments. The conversion price will be subject
to certain adjustments, including potential downward adjustment if
RiskOn closes a qualified financing resulting in at least
$25,000,000 in gross proceeds at a price per share that is lower
than the conversion price then in effect.
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 period ended Sept. 30, 2023, RiskOn
disclosed $1,554 in cash and cash equivalents as of September 30,
2023. 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, raising
substantial doubt about its ability to continue as a going concern.
RITE AID: Taps Liquidators as Possible Buyer Talks Continue
-----------------------------------------------------------
Steven Church of Bloomberg News reports that bankrupt pharmacy
chain Rite Aid Corp. hired liquidators at the request of company
lenders even as the retailer continues negotiating with at least
two potential buyers, a person familiar with the chain's revival
efforts said.
Two liquidation consultants — Hilco Merchant Resources and SB360
Capital Partners — will help the company run
going-out-of-business sales for any stores to be shuttered. US
Bankruptcy Judge Michael Kaplan gave the company permission to hire
the liquidators during a court hearing held by video on Monday,
January 29, 2024.
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.
ROBINHOOD PROPERTIES: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Robinhood Properties, LLC
c/o David Raven
133 Main St
Mountain Dale, NY 12763-5110
Business Description: Robinhood Properties owns multiple rental
properties.
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Northern District of New York
Case No.: 24-60078
Debtor's Counsel: Raymond Ragues, Esq.
RAGUES PLLC
42 Crown Kingston, NY 12401
Kingston, NY 12401
Tel: (845) 481-0086
Email: ray@ragueslaw.com
Total Assets: $2,026,550
Total Debts: $930,000
The petition was signed by David Raven as sole member.
The Debtor filed an empty 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/ZTJJ2NY/Robinhood_Properties_LLC__nynbke-24-60078__0001.0.pdf?mcid=tGE4TAMA
SAGO VENTURES: Executes Settlement Agreement; Files Amended Plan
----------------------------------------------------------------
Sago Ventures, LLC, submitted an Amended Plan for Small Business
dated January 30, 2024.
The Debtor operates the Happy Homes Mobile Park located at 2900
Highway 92 in Plant City, Florida (the "Mobile Home Park") pursuant
to that certain Property Management Agreement dated May 21, 2020
(the "PMA") by and between Land Trust Services Corporation, as
Trustee of the St Thomas of St Petersburg of Lake Wales, Florida
("LTSC"), as the owner of the Mobile Home Park, and the Debtor.
On November 17, 2023, the Debtor filed its Motion to Reconsider
Order Remanding and Abstaining from Removed Action and Granting
Relied from the Automatic Stay, which remains pending. On November
17, 2023, the Debtor filed its Notice of Removal of the State Court
Action in the Bankruptcy Case and thereby initiated the Second
Removal Action, which remains pending.
On December 4, 2023, the Parties mediated all disputes between them
at a mediation conducted by The Honorable (Retired) Gregory P.
Holder, Esquire (the "Mediation"). At the conclusion of the
Mediation, the Parties executed that certain Mediation Term Sheet.
On January 24, 2024, the Parties executed that certain Mediation
Settlement Agreement which attached and incorporated the schedules
with the exhibits attached thereto (the "Settlement Agreement"). On
January 26, 2024, the Debtor filed a motion to approve the
compromise between the Parties, as reflected by the Settlement
Agreement (the "Compromise Motion").
The Settlement Agreement resolves all disputes between the Parties
regarding the Mobile Home Park. It envisions that the Debtor will
timely close on the Mobile Home Park. If the Debtor fails to timely
close on the Mobile Home Park, all Termination Procedures as
described in the Settlement Agreement shall be applicable
including, but not limited to: (i) termination of any and all
rights of the Debtor to the Mobile Home Park and all property
associated therewith, and (ii) the Escrow Agent shall (a) record
the Assignment Agreement and (b) provide LTSC with the Debtor
Escrow Bill of Sale, Debtor MH Titles, and Debtor TPP Titles.
The Debtor projects sufficient funds from its operation of the
Mobile Home Park to pay all Continued Interim Payment(s), as that
term is defined in the Settlement Agreement, in the monthly amount
of $14,000 to LTSC through the date of closing or, in the
alternative, assignment of the PMA and to make necessary
maintenance and repairs at the Mobile Home Park. The Debtor will
continue to pay the Continued Interim Payments and make necessary
maintenance and repairs at the Mobile Home Park in conformance with
the Settlement Agreement and PMA.
Class 2 consists of All Non-Priority Unsecured Claims. If the
Compromise Motion is approved and the Debtor closes in accordance
with the terms of the Settlement Agreement and Purchase and Sale
Agreement, each holder of an allowed Class 2 claim will be paid in
full in 5 annual installments commencing on the first anniversary
of the Effective Date, or on such other terms as may be agreed on
by the holder of the claim and the Debtor. Allowed Class 2 claims
may be prepaid in whole or in part at any time without penalty at
the discounted present value in accordance with Section 1191(c)(2)
of the Bankruptcy Code. If the Compromise Motion is not approved or
the Debtor is unable to close in accordance with the terms of the
Settlement Agreement and Purchase and Sale Agreement, then each
holder of an allowed Class 2 claim will be paid pro-rata from the
proceeds from the liquidation of the Debtor's assets (if any) in
accordance with the priority scheme set forth in the Bankruptcy
Code.
The liquidated, scheduled and filed Class 2 unsecured claims total
$357,731.28. Pursuant to the Settlement Agreement, if the
Settlement Agreement is approved by the Bankruptcy Court granting
the Compromise Motion, then Claim No. 10 filed by LTSC in the
amount of $2,975,253.35 is disallowed in its entirety, whether the
Debtor closes on the Mobile Home Park or not. The Parties shall
submit an agreed motion and order to the Bankruptcy Court so
reflecting. Class 2 is impaired by the Plan.
Class 3 is comprised of all membership interests in the Debtor,
which are owned by Glenn T. Goff (50%) and George Allen Spearman
(50%). Existing members will retain their membership interests in
the Debtor, however, no distributions (except for salaries,
benefits, and pass-through distributions for tax attributable to
income earned by the Debtor to the extent that the Debtor is
operating) will be made during the Plan term to Class 3 until all
senior claims have been paid in full.
Payments required under the Plan will be funded from: (i) the
proceeds from exit financing, or (ii) proceeds from the liquidation
of the Debtor's assets.
A full-text copy of the Amended Plan dated January 30, 2024 is
available at https://urlcurt.com/u?l=nBPf5u from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Amy Denton Mayer, Esq.
STICHTER, RIEDEL, BLAIN & POSTLER, P.A.
110 East Madison Street, Suite 200
Tampa, Florida 33602
Telephone: (813) 229-0144
Facsimile: (813) 229-1811
Email: amayer(srbp.com
About Sago Venture
Sago Ventures, LLC, operates the Happy Homes Mobile Park located at
2900 Highway 92 in Plant City, Florida.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-03489) on Aug. 14,
2023, with $50,001 to $100,000 in assets and $500,001 to $1 million
in liabilities. Judge Catherine Peek Mcewen oversees the case.
Amy Denton Mayer, Esq., at Stichter Riedel Blain & Postler, P.A.,
is the Debtor's legal counsel.
SECURE ENERGY: S&P Raises ICR to 'B+' on Material Debt Reduction
----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Secure Energy
Services Inc. to 'B+' from 'B'. At the same time, S&P raised its
issue-level ratings on the company's senior secured second-lien
notes to 'BB' from 'BB-' and the senior unsecured notes to 'BB-'
from 'B+'.
S&P said, "The stable outlook reflects our view that Secure will
maintain credit measures commensurate with our rating, with an
adjusted funds from operations (FFO)-to-debt ratio averaging about
60% and adjusted debt to EBITDA averaging close to 1.5x over the
next two years.
"The upgrade reflects our expectation for materially improved
financial measures, led by gross debt reduction. Secure recently
closed its previously announced asset sale to Waste Connections
(BBB+/Stable) for C$1.075 billion. The asset sale follows Secure's
merger with Tervita Corp., which closed on July 2, 2021, and
subsequent order by the Competition Tribunal to divest certain
facilities. We expect Secure to use a portion of the proceeds to
pay down the credit facility (C$400 million outstanding as of Sept.
30, 2023) and repay the remaining outstanding second-lien senior
notes in 2024 (about C$220 million outstanding as of Sept. 30). We
believe the material reduction in debt (about 65% lower gross debt
relative to year-end 2023) will more than offset the loss in EBITDA
from these divestitures (C$154 million for the 12 months ended
Sept. 30). Accordingly, we project adjusted FFO to debt to average
about 60% and debt to EBITDA close to 1.5x over the next two years.
Our projections also assume significant share buybacks using a
portion of the proceeds, but do not expect absolute debt to
materially increase, resulting in our improved financial risk
assessment.
"Our rating action also assumes steady industry activity and
expectation that management will continue to maintain moderate
financial policies. We believe industry activity levels will remain
steady over the next two years, supported by healthy commodity
prices and increased egress in Canada as the Trans Mountain
Expansion (TMX) Project comes online by the second half of this
year; TMX's incremental 590,000 barrels per day takeaway capacity
will support higher production. We forecast EBITDA averaging C$450
million annually over the next two years. Although we believe the
company will increase growth spending to recover some of the EBITDA
loss, we estimate meaningful free cash flow of C$150 million-C$200
million each of the next two years. However, we believe management
will use most of the free cash flow toward dividends and share
buybacks. While we do not assume any acquisitions in our forecast,
they remain a possibility, but believe management will adhere to
moderate financial policies such that leverage remains well below
the long-term target of 2x-2.5x.
"Our assessment of the company's business risk profile is supported
by Secure's leading market position as an environmental services
producer in Western Canada, with complementary midstream services.
Secure serves a diverse customer base across key active plays
(Montney, Duvernay, Deep Basin, Viking, and Oil Sands). It has a
broad product offering, with a substantial portion of its revenues
derived from production-related activity. In addition, the company
has complementary midstream services, including the Kerrobert Light
Pipeline System, East Kaybob oil pipeline, and recently completed
Nipisi terminal in the Clearwater oil region of Alberta, all of
which are contracted for 10-year average tenures with multiple
anchor tenants. In our view, the long-term contracts and exposure
to production-related activity provide some resiliency in a
volatile hydrocarbon environment. In addition, Secure has a
flexible cost structure, with most of its costs being variable
(primarily personnel), which can temper margin volatility. We
project EBITDA margins in the 30%-35% range, in the top quartile of
the global peer group.
"The stable outlook reflects our view that material gross debt
reduction and expectation of continued steady industry activity
will more than offset the EBITDA loss from asset disposition
enabling Secure to generate an adjusted-FFO-to-debt ratio averaging
60% and adjusted debt to EBITDA averaging close to 1.5x over the
next two years. The stable outlook also reflects our expectation
that Secure will manage total spending (capital expenditure and
shareholder remuneration) within available cash flow.
"We could lower our rating on Secure within the next 12 months if
FFO to debt falls below 30% with limited prospects of improvement.
This would most likely occur from weakness in commodity prices that
leads to additional and prolonged cutbacks in exploration and
production spending, reducing demand for Secure's services."
Although unlikely over the next 12 months, S&P could raise its
rating on Secure if it:
-- Strengthens its operational scale in line with higher-rated
peers while maintaining FFO to debt above 45%. This would most
likely occur from growth projects and/or mergers and acquisitions;
-- Adheres to moderate financial policies, such that it sustains
credit measures through a commodity cycle; and
-- Maintains EBITDA margins at or above 25%.
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis of Secure. Although most of Secure's
revenues are from environmental services, the company's cash flow
relies on oil and gas activity. Accordingly, the energy transition
and accelerating adoption of renewable energy will reduce demand
for oilfield services in the long term, reflected in our industry
risk assessment and credit rating. Secure is investing in process
efficiencies and technology to reduce emissions and has a net-zero
target by 2050, with short term target of reducing greenhouse gas
intensity by 15% by the end of 2024. Secure also has good
governance practices, targeting 30% board membership to be women
and tying executive compensation to business and ESG performance."
SIGNATURE BANK: N.Y. Sues FDIC for Unpaid $44-Mil. Bank Tax
-----------------------------------------------------------
Sally Bakewell of Bloomberg News reports that New York City sued
the Federal Deposit Insurance Corp. in its capacity as receiver for
the failed Signature Bank, saying the US regulator owes about $44
million in unpaid municipal taxes.
The city's department of finance audited Signature after the bank
shuttered in March and found tax deficiencies for years 2015
through 2021 related to unreported income allocation and
adjustments to investment and capital income, according to a
lawsuit filed Monday, January 29, 2024, in federal court in
Manhattan.
About Signature Bank
Headquartered in New York, Signature Bank, New York NY, was a full
service commercial bank that serves privately owned business
clients and their owners and senior managers. Signature Bank had
40 branches across the country in New York, California,
Connecticut, North Carolina, and Nevada.
Signature Bank, New York, NY, was closed March 12, 2023, by the New
York State Department of Financial Services, which appointed the
Federal Deposit Insurance Corporation (FDIC) as receiver. To
protect depositors, the FDIC transferred all the deposits and
substantially all of the assets of Signature Bank to Signature
Bridge Bank, N.A., a full-service bank that will be operated by the
FDIC as it markets the institution to potential bidders.
SIR TAJ: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: Sir Taj, LLC
120 South Reeves Drive
Beverly Hills CA 90212
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-10874
Debtor's Counsel: Michael Kwasigroch, Esq.
LAW OFFICES OF MICHAEL D. KWASIGROCH
1975 Royal Ave Suite 4
Simi Valley CA 93065
Tel: 805-522-1800
E-mail: attorneyforlife@aol.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Sergey Vershinin as manager.
The Debtor filed an empty 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/ZF43CAA/Sir_Taj_LLC__cacbke-24-10874__0001.0.pdf?mcid=tGE4TAMA
SIRVA WORLDWIDE: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
------------------------------------------------------------------
Moody's Investors Service downgraded SIRVA Worldwide, Inc.'s
corporate family rating to Caa1 from B3 and its probability of
default rating to Caa1-PD from B3-PD. Concurrently, Moody's
downgraded its ratings on SIRVA's senior secured first lien credit
facilities (revolver due May 2025, term loan due August 2025) to B3
from B2 and downgraded the rating on the company's senior secured
second lien term loan due 2026 to Caa3 from Caa2. The outlook was
changed to negative from stable. The company provides outsourced
relocation and moving services to the corporate, consumer, and
government sectors.
The ratings downgrade and negative outlook reflect Moody's concern
that SIRVA's financial performance will remain challenged over the
next 12-18 months as corporate relocation and moving volumes remain
soft while the company's high interest expense costs weaken its
liquidity profile. Moody's concerns related to the company's credit
quality are further exacerbated by SIRVA's elevated debt leverage
(Moody's adjusted debt/EBITDA of over 8x as of September 30, 2023,
more than 13x including securitization and mortgage warehouse debt)
and growing uncertainty with respect to the company's ability to
refinance its debt which substantially is set to mature in 2025. In
Moody's view, SIRVA's willingness to continue to sustain very high
debt levels while liquidity weakens and refinancing risk grows are
indicative of the company's aggressive financial strategies,
reflected in the governance score change to G-5 from G-4.
Governance was a driver of the rating action.
RATINGS RATIONALE
SIRVA's ratings are primarily constrained by the company's very
highly levered capital structure, which may be unsustainable, as
well as corporate governance risks related to the parent company
SIRVA BGRS Worldwide, Inc.'s ("SIRVA BGRS") concentrated equity
ownership by affiliates of Madison Dearborn Partners, LLC ("MDP")
with a minority stake held by the Relo Group ("Relo"). Additional
credit risks stem from SIRVA's modest profitability (relative to
gross revenues) and anticipated free cash flow deficits over the
next 12-15 months. The risks presented by the potential
deterioration in the company's liquidity profile could become more
significant over this period if SIRVA is unable to refinance its
upcoming debt maturities and reduce its high interest burden. SIRVA
is also exposed to business cyclicality and volatility in housing
market pricing due to the nature of the contracts the company has
with clients where SIRVA takes on home selling and purchasing risk
for relocating employees. These risks are somewhat offset by the
company's global market presence and integrated service offerings
which provide a competitive advantage to support a broad, diverse
customer base and maintain high client retention rates above 95%.
Moody's considers SIRVA's liquidity profile to be weak given
expectations of continued cash burn over the next 12-15 months. The
company's cash balance has declined from $119.7 million as of
December 31, 2022 to $97.3 million as of September 30, 2023 and
Moody's projects further contraction as the company will incur a
free cash flow deficits during 2024. Moody's concerns with respect
to the company's ability to refinance a substantial portion of its
debt maturing in 2025 contributes significantly to the risks
related to SIRVA's liquidity profile. SIRVA maintains access to a
$55.5 million secured revolver expiring in May 2025 and a $32.5
million unsecured revolver maturing November 2026. These revolvers
were largely drawn as of September 30, 2023 with an aggregate of
approximately $20 million of remaining borrowing capacity. There
are seasonal swings in working capital, typically seen in Q1 and Q4
that could increase the reliance on the revolver. There is
currently good cushion under the first lien net leverage springing
financial covenant (3.45x as of September 30, 2023), which applies
when revolver utilization is above 35% and is set at 5.9x, but
Moody's anticipates that the company's projected cash burn will
narrow this cushion in 2024.In addition, SIRVA, through SIRVA
Relocation Credit, LLC ("SRC"), a subsidiary of SIRVA BGRS, has a
$500 million accounts receivable securitization facility expiring
in July 2025 that has approximately $210 million in availability
(as of September 30, 2023) that is used for pass-through expenses
related to the relocation segment. SRC transfers its ownership in
all of its receivables on a non-recourse basis to a third party
financial institution in exchange for a cash advance and a
securitization receivable. Additionally, subsidiary SIRVA Mortgage
("SM") obtains short-term mortgage warehouse facilities to fund
mortgages for clients until the underlying properties are sold.
SIRVA also sells non-mortgage receivables into the securitization
facility. Continued access to these facilities are key to SIRVA's
ability to provide certain services to its customers.
The B3 rating on SIRVA's senior secured first lien bank credit
facility, one notch above the CFR, reflects a priority lien on
collateral (substantially all domestic assets excluding the
securitization facility) relative to the senior secured second lien
term loan due 2026, which is rated Caa3. The first lien and second
lien instrument ratings reflect a one notch downgrade override to
the LGD model-implied outcome. The override reflects the
uncertainty of loss absorption support from the trade payables in a
default scenario. The parent company's SRC and SM subsidiaries are
special purpose vehicles to be the borrowers of the securitization
facility and the warehouse lines. These facilities are non-recourse
to SIRVA.
The negative outlook reflects Moody's expectation that SIRVA will
be challenged to generate organic growth in revenues and EBITDA
over the coming 12-18 months as corporate relocation and moving
volumes remain soft. Accordingly, debt-to-EBITDA is expected to
remain elevated in 2024 while refinancing risk continues to
intensify and free cash flow remains negative. The outlook could be
changed to stable from negative if SIRVA improves its operating
performance such that Moody's expects the company will generate
positive free cash flow on a sustained basis and address
refinancing risk.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade is unlikely in the near term. Over the longer
term, the ratings could be upgraded if SIRVA is able to generate
healthy revenue and EBITDA growth, meaningfully reduce debt/EBITDA,
sustain positive free cash flow, strengthen its liquidity profile,
and meaningfully extend its debt maturities.
The ratings could be downgraded if SIRVA experiences a weakening
competitive position or a deterioration in financial performance
resulting in further weakening of the company's liquidity profile,
heightened refinancing risk, and Moody's expectation of a rising
probability of a default over the near term.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
SIRVA's parent company, SIRVA BGRS, headquartered in Oakbrook
Terrace, Illinois, provides outsourced relocation and moving
services to the corporate, consumer, and government sectors.
Moody's expects the company to generate revenues of $1.7 billion in
2024.
SPIRIT AIRLINES: Fitch Lowers LongTerm IDR to B-, Outlook Negative
------------------------------------------------------------------
Fitch Ratings has downgraded Spirit Airlines' Long-Term Issuer
Default Rating (IDR) to 'B-' from 'B'. The Rating Outlook remains
Negative. Fitch has downgraded Spirit IP Cayman Ltd.'s and Spirit
Loyalty Cayman Ltd.'s senior secured debt to 'BB-'/'RR1' from
'BB'/'RR1', and Spirit Airlines Pass Through Trust Certificates
Series 2015-1 and 2017-1 class B certificates to 'BB' from BB+' and
2017-1 class AA certificates to 'A+' from 'AA-' following the
downgrade of the IDR. Fitch has affirmed the 2017-1and 2015-1 class
A certificates at 'A'.
The downgrade reflects Fitch's updated rating case forecasting
structurally weaker operating profits. Credit metrics affected
include EBITDAR fixed-charged coverage sustained below 1.5x
,inconsistent with a 'B' rating. The Negative Outlook reflects
Fitch's view that Spirit faces increased turnaround risk following
a judge's decision to block Spirit's merger with JetBlue.
Fitch believes Spirit needs to articulate a near-term plan to
preserve liquidity. The company must also address its September
2025 refinancing risk, and improve profitability to avoid further
negative rating action. In addition, the company must address the
medium-term potential that it could pursue a distressed debt
exchange, as defined in Fitch's "Corporate Rating Criteria," if
Spirit is unable to improve profitability.
Concerns are partly tempered by Spirit's adequate liquidity balance
and limited options to raise further capital. The ratings also
reflect the potential for market conditions to ease and refinancing
options to expand, should Spirit exhibit an ability to improve
profitability.
KEY RATING DRIVERS
Diminishing Financial Flexibility: Fitch believes Spirit's
financial flexibility has diminished as profit recovery remains
elusive and operating losses continue. The company needs to address
the September 2025 maturity of its $1.1 billion 8% bonds.
Refinancing options are limited given current market sentiment with
the bonds currently trading at a steep discount. The company
reported a cash and short-term investments balance of roughly $1
billion at year-end, which is down from $1.45 billion at year-end
2022.
Spirit also had $300 million available under its revolving credit
facility. Spirit's revolver contains a $450 million minimum
liquidity covenant. Fitch views near-term liquidity as adequate, as
the agency currently projects cash burn to moderate in 2024
assuming some improvement in profitability.
Fitch expects the company to focus on shoring up liquidity in the
near term. The company recently entered into sale-leaseback
transactions for 25 aircraft, which netted roughly $419 million in
cash, $320 million of which was recognized in fiscal 2023. Other
sources of liquidity could include additional sale-leasebacks, EETC
offerings, financing the Dania Pointe headquarters campus, and
engine-linked payments from Pratt & Whitney. However, these options
are limited given the company has few unencumbered assets and has
already leveraged its loyalty program.
Near-term Profit Headwinds: Spirit faces headwinds toward improving
its profitability including engine availability issues,
overcapacity in certain leisure markets, and intense competition.
Overall, Fitch expects some limited margin improvement this year as
Spirit prioritizes its most profitable flying with its limited
fleet base, and benefits from a likely return of some domestic
leisure demand that shifted heavily towards international travel in
2023.
Fitch currently forecasts limited profit improvement in 2024. Pratt
& Whitney engine issues in particular create uncertainty as Spirit
is already carrying costs associated with aircraft that it cannot
fly. Spirit expects an average of 26 out of service aircraft
through 2024, rising to a peak of 41 aircraft by year-end. Fitch
ultimately expects Spirit to receive compensation from Pratt for
these issues, although the magnitude and timing remains uncertain.
Spirit recently released an investor update that states it expects
compensation from Pratt to be a "significant source of liquidity
over the next couple of years".
Spirit's profitability underperformed throughout 2023, with the
carrier reporting a negative operating margin of -15% in the third
quarter, with guidance towards further losses, albeit narrower than
initial expectations, in the fourth quarter. The company was last
profitable prior to the pandemic. Unlike other carriers, Spirit has
not rebounded, due to a confluence of issues, including pilot
availability, engine outages, softness/overcapacity in certain
domestic markets and heavy exposure to areas impacted by air
traffic control challenges.
Modestly Negative Near-Term FCF: Fitch expects cash burn to improve
from 2023 levels but remain modestly negative in 2024, as operating
margins remain well below historical levels. Spirit plans to use
sale-leaseback financing or direct operating leases for the bulk of
its aircraft deliveries, limiting its upfront capex. However,
weaker than expected results may keep FCF negative into 2024,
before potentially turning positive in 2025. In addition, aircraft
lease expenditures are expected to increase through the forecast as
the proportion of leased aircraft grows, keeping pressure on
Spirit's lease-adjusted leverage.
Weaker Leverage, Coverage Metrics: Spirit's leverage and fixed
charge coverage metrics are expected to remain weaker than
previously expected throughout 2024. Fitch's base case anticipates
that EBITDAR leverage may remain above 10x through 2024, with
potential to improve thereafter assuming improvement off of current
trough levels of profitability. EBITDAR interest coverage may end
2024 around 1x.
EETC Ratings:
2017-1 Class AA and Class A Certificates: Although the class AA
certificate ratings are primarily driven by the top-down approach,
the downgrade of Spirit's IDR to 'B-' led to the downgrade of the
class AA certificates to 'A+', given senior tranches are typically
precluded from reaching the 'AA' category under Fitch's EETC
criteria if the underlying airline is rated 'B-' or lower.
The class A certificates are derived through Fitch's top-down
approach, while the class B certificates are notched off of the
underlying airline rating. The class A certificates remain
supported by healthy levels of overcollateralization.
Loan-to-values for both the 2017-1 and 2015-1 transactions remain
steady since Fitch's last review, and base values for the A321s and
A320s in these portfolios have performed in line with Fitch's
standard depreciation assumptions over the last year. Meanwhile,
the debt has continued to amortize, leading to slightly improved
collateral coverage.
Class B Certificates:
The downgrade of the class B certificates is driven by Fitch's
downgrade of Spirit's IDR to 'B-' from 'B'. These ratings could be
revised downward further if the Negative Outlook leads to an
additional downgrade of Spirit's IDR.
Fitch notches subordinated tranche EETC ratings from the airline's
IDR based on the following three primary variables: 1) the
affirmation factor (0-3 notches) 2) the presence of a liquidity
facility, (0-1 notch) and 3) recovery prospects (0-1 notch). The
four-notch uplift from Spirit's 'B' IDR reflects a moderate-to-high
affirmation factor (+2 notches), the benefit of a liquidity
facility (+1 notch), and solid recovery prospects in a stress
scenario (+1).
Affirmation Factor: Fitch has not assigned the maximum +3 notch
affirmation factor uplift for these two transactions. While Fitch
views the likelihood of an affirmation in a distress scenario to be
substantial, the uplift is limited by the shrinking proportion of
Spirit's total fleet represented by the two transactions as Spirit
continues to grow. The collateral aircraft are also becoming
marginally less attractive as Spirit takes delivery of more A320
and A321 NEOs, which are more fuel efficient.
Although Spirit's fleet is growing, the two EETCs still make up a
sizeable proportion of Spirit's assets, supporting the +2-notch
uplift. The Spirit 2015-1 pool contains 15 aircraft, which makes up
around 8% of the company's current fleet. The 2017-1 pool contains
12 aircraft, or around 7% of Spirit's fleet. The two pools also
contain 17 A321s, which represents more than half of Spirit's owned
A321s as of September 2023. The A321's larger size allows Spirit to
add capacity on denser routes without necessarily adding additional
frequencies. The larger gauge of the A321 also leads to a lower
cost per available seat mile compared to its smaller cousins, which
is key to Spirit's low-cost strategy.
DERIVATION SUMMARY
Spirit's 'B-' rating is two notches below competitors such as
American Airlines and United Airlines and is in line with Hawaiian
Holdings. Fitch views Spirit as weaker than the network airlines
rated 'B+', due to higher near-term leverage , weaker profit
margins and less financial flexibility. Spirit has less access to
capital markets than its larger peers, and limited finance-able
unencumbered assets. Like Hawaiian, Spirit has struggled to return
to profitability following the pandemic and faces near-term
refinancing risks.
KEY ASSUMPTIONS
- Fitch's base case incorporates flat capacity growth in 2024
followed by 10% annual growth thereafter;
- Fitch expects modestly higher unit revenues in 2024 driven by
Spirit's lack of capacity growth and prioritization of higher
margin flying;
- Jet fuel is assumed at $2.80/gallon through the forecast.
RECOVERY ANALYSIS
Fitch's recovery analysis assumes Spirit would be reorganized as a
going concern (GC) in bankruptcy rather than liquidated. The
analysis incorporates a going-concern EBITDA estimate of $425
million and a 5x multiple.
Fitch's GC EBITDA estimate of $425 million reflects Fitch's view of
a sustainable, post-reorganization EBITDA level upon which it bases
the enterprise valuation. The GC EBITDA assumption is above levels
generated through the pandemic downturn and forecast EBITDA for
2024. Fitch believes that pandemic period profits through 2023 are
temporarily depressed due to a confluence of temporary factors.
Near-term influences include GTF engine availability, domestic
demand headwinds and ATC constraints. Spirit last generated an
EBITDAR below $500 million in 2014, when it was a significantly
smaller airline.
The choice of this multiple considered the following factors:
Historical bankruptcy case study exit multiples for peer companies
ranged from 3.1x to 6.8x.
Spirit's 5x multiple is at the mid-point of the range which is by
the company's potential growth over time, offset by profitability
and competitive headwinds.
The value available to holders of the loyalty program assets is
dependent upon the size of Spirit's loyalty member base and
associated cash flows. Actions that cause loyalty cash flows to
decline, including a shrinking footprint, asset sales, etc. may
cause the value available to the loyalty program debt to decrease
which could impact the recovery rating over time.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Successful refinancing of Spirit's 2025 bonds;
- EBITDAR leverage around 4.5x;
- EBITDAR fixed-charge coverage sustained above 1.5x;
- Improving operational stability leading to EBITDAR margins
trending towards the double digits.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Near-term failure to articulate refinancing plans for the 2025
maturities, or an increasing likelihood that Spirit may pursue a
DDE;
- EBITDAR fixed-charged coverage below 1.0x;
- Cash and revolver availability declining towards $600 million
and/or the decreasing likelihood of ability to access contingent
liquidity options.
EETC Sensitivities:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Class AA and A Certificates: The class AA and A certificate ratings
are primarily based on a top-down analysis based on the value of
the collateral. Ratings upgrades may be driven by stable or
increasing values for the A321 and A320 along with continued
principal amortization leading to improved collateral coverage. An
upgrade to the class AA's are unlikely, given Spirit's IDR is at
'B-'/Outlook Negative.
Underlying airline credit quality is a secondary consideration.
Positive rating actions could be driven by an upgrade of Spirit's
corporate credit rating.
Class B Certificates:
The class B certificates are linked to Spirit's corporate rating.
Therefore, if Spirit were upgraded to 'B' the class B certificates
would be upgraded as well.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Class AA and A Certificates:
Negative rating actions could be driven by an unexpected decline in
collateral values. Senior tranche ratings could also be affected by
a perceived change in the affirmation factor or deterioration in
the underlying airline credit. The transaction ratings may be
impacted in the future by pressures on A320 CEO family values or
changes in value stress rates utilized in Fitch's models as the
A320 NEO family becomes a more dominant presence in the global
aircraft market.
Class B Certificates:
The class B certificates are linked to Spirit's corporate rating.
Therefore, if Spirit were downgraded to 'CCC+' the class B
certificates would be downgraded as well. Fitch currently views the
Affirmation Factor for each Spirit EETC as moderate to high. This
could weaken over time as the collateral aircraft age and become a
smaller portion of Spirit's total fleet. Negative actions could be
driven by lower recovery prospects driven by weaker aircraft
values.
LIQUIDITY AND DEBT STRUCTURE
Declining Liquidity: As of Sept. 30, 2023, Spirit had cash and cash
equivalents of $818.3 million plus $110.9 million in short-term
investments. The company has full availability under its $300
million revolving credit facility though the facility matures in
September 2025. Spirit's short-term investments consist of U.S.
treasury and government agency securities with maturities of less
than 12 months.
Spirit's total liquidity (cash plus short-term investments) has
come down through the course of 2023 driven by operating cash
outflows and debt repayment. In prior forecasts, Fitch considered
Spirit's liquidity adequate assuming improving operating cash flows
over the course of 2024. However, continued cash burn absent other
capital injections could drive liquidity concerns over the course
of the next year.
ISSUER PROFILE
Spirit Airlines, Inc. is a Florida-based ultra-low cost air
carrier.
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
----------- ------ -------- -----
Spirit Airlines
Pass Through Trust
Certificates
Series 2017-1
senior secured LT A Affirmed A
senior secured LT A+ Downgrade AA-
senior secured LT BB Downgrade BB+
Spirit Loyalty
Cayman Ltd.
senior secured LT BB- Downgrade RR1 BB
Spirit IP Cayman Ltd.
senior secured LT BB- Downgrade RR1 BB
Spirit Airlines
Pass Through Trust
Certificates
Series 2015-1
senior secured LT A Affirmed A
senior secured LT BB Downgrade BB+
Spirit Airlines,
Inc. LT IDR B- Downgrade B
STIMWAVE TECHNOLOGIES: Court Might Screen Ex-CEO, Relatives in Case
-------------------------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge said
Monday, January 29, 2024, that filings from the ex-CEO of Stimwave
Technologies and two of her relatives had created "chaos" in the
pain management device venture's Chapter 11 case and he was
considering screening their motions.
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.
STREAM TV NETWORKS: Trustee Ordered to Take Over Chapter 11 Process
-------------------------------------------------------------------
Emily Lever of Law360 reports that a Pennsylvania bankruptcy judge
has ordered a trustee to take over the Chapter 11 bankruptcy
proceedings of 3D television maker Stream TV Networks and
subsidiary Technovative Inc., while also allowing a Delaware
Chancery Court case seeking to establish control of Technovative to
go forward.
About Stream TV Networks
Stream TV Networks, Inc. develops technology intended to display
three-dimensional content without the use of 3D glasses. The
company is based in Philadelphia, Pa.
Stream TV Networks and its affiliate, Technovative Media, Inc.,
filed Chapter 11 petitions (Bankr. E.D. Penn. Lead Case No.
23-10763) on March 15, 2023. In the petition filed by Mathu Rajan,
as director, Stream TV Networks reported assets between $500
million and $1 billion and estimated liabilities between $10
million and $50 million.
Judge Magdeline D. Coleman oversees the cases.
The Debtors are represented by Rafael X. Zahralddin-Aravena, Esq.,
at Lewis Brisbois Bisgaard & Smith.
TACORA RESOURCES: S&P Withdraws 'D' Long-Term Issuer Credit Rating
------------------------------------------------------------------
S&P Global Ratings withdrew its ratings on Tacora Resources Inc.,
including its 'D' (default) long-term issuer credit rating on the
company and its 'D' issue-level ratings on Tacora's senior secured
notes. This withdrawal follows S&P's lowering of its ratings on the
company to 'D' from 'CCC-' in June 2023 due to Tacora's missed
interest payment and the subordination of the company's secured
notes due 2026. Tacora subsequently filed for relief under the
Companies' Creditors Arrangement Act in October 2023.
TALOS PRODUCTION: Fitch Rates New $1BB New 2nd Lien Sec. Notes 'B+'
-------------------------------------------------------------------
Fitch Ratings has assigned a 'B+'/'RR3' rating to Talos Production
Inc.'s proposed $1 billion new second lien senior secured 2029 and
2031 notes, in line with Talos' existing second lien senior secured
debt ratings. This new issuance will be used to partially fund the
QuarterNorth Energy, Inc. acquisition, redeem Talos' outstanding
$650 million 12% second lien senior secured 2026 notes, with the
remainder used to pay fees and for other general corporate
purposes.
KEY RATING DRIVERS
Credit Friendly Acquisition: Talos previously 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, the
$400 million equity raised, $300 million draw under the RBL
facility, and the refinancing of the 12% second lien $638.5 million
2026 notes with the new $1 billion five and seven-year second lien
notes. The acquisition increases production scale by nearly 50%, is
credit accretive given the approximately 54% equity component, and
$50 million of expected synergies by 2025 and thereafter.
Improving Refinancing Risk: Talos proposed refinancing of their 12%
second lien $638.5 million 2026 note with a new $1 billion five and
seven-year second lien senior secured notes, with the increase used
to partially fund the QuarterNorth acquisition. This reduces their
refinancing risk with only the $242.5 million second lien note
remaining for 2026.
Under Fitch's price deck, 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, albeit reduced following the
$400 million equity raised following the announcement of the
acquisition. However, 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.
Upon QuarterNorth's exit from 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 million-$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 (GC) 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 U.S. Gulf of Mexico
(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
(proposed $1 billion notes and the $242.5 million 2026 note)
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: Pro forma the QuarterNorth acquisition and
refinancing, Talos' liquidity position is expected to be
approximately $57 million of cash on the balance sheet and $439
million available under the RBL to support any negative FCF. Fitch
believes Talos' liquidity position is comfortable following the
acquisition and proposed refinancing, with an ability to reduce the
RBL balance within 12 months with mostly positive FCF generation
forecast in the ratings case.
Pro forma the QuarterNorth acquisition and refinancing, Talos' debt
will consist of approximately $515 million first lien RBL
(borrowing base of $1.075 billion and $965 million elected
commitment) due March 2027, 11.75% second lien note due April 2026
and the proposed new $1 billion second lien notes due in 2029 and
2031.
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 and offshore Mexico. The company's focus is the
exploration, acquisition, exploitation and development of deep and
shallow water assets near existing infrastructure.
DATE OF RELEVANT COMMITTEE
12 January 2024
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
----------- ------ --------
Talos Production Inc.
Senior Secured
2nd Lien LT B+ New Rating RR3
TELEPHONE USA: Case Summary & Six Unsecured Creditors
-----------------------------------------------------
Debtor: Telephone USA Investments, Inc.
18600 S. Oak Park Avenue
Tinley Park, IL 60477
Chapter 11 Petition Date: February 7, 2024
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 24-01686
Judge: Hon. A Benjamin Goldgar
Debtor's Counsel: Susan Poll Klaessy, Esq.
FOLEY & LARDNER LLP
321 N. Clark Street
Suite 3000
Chicago, IL 60654
Tel: 312-832-4500
Fax: 312-832-4700
Email: spollklaessy@foley.com
Debtor's
Special
Corporate
Counsel &
Federal
Communications
Commission
Related Matters: TLP LAW
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $10 million
The petition was signed by Joseph Stroud as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZND7RZA/Telephone_USA_Investments_Inc__ilnbke-24-01686__0001.0.pdf?mcid=tGE4TAMA
TEXAS REIT: Case Summary & Two Unsecured Creditors
--------------------------------------------------
Debtor: Texas REIT, LLC
2450 Wickersham Lane, Suite 202
Austin, TX 78741
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 24-10120
Judge: Hon. Shad Robinson
Debtor's Counsel: Stephen W Sather, Esq.
BARRON & NEWBURGER, P.C.
7320 N. MoPac Expressway 400
Austin TX 78731
Tel: (512) 649-3243
Email: ssather@bn-lawyers.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Drew Dennett as authorized
representative.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/IDLLK6A/Texas_REIT_LLC__txwbke-24-10120__0001.0.pdf?mcid=tGE4TAMA
TOOLOTS INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Toolots Inc.
17785 Center Ct. Dr. N. Ste 305
Cerritos, CA 90703
Business Description: Toolots operates an online marketplace and
distribution channel for factory-direct
industrial tools, machinery and technology.
Chapter 11 Petition Date: February 6, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-10893
Debtor's Counsel: Christopher J. Langley, Esq.
SHIODA LANGLEY & CHANG LLP
1063 E. Las Tunas Dr.
San Gabriel, CA 91776
Tel: 951-383-3388
Fax: 877-483-4434
E-mail: chris@slclawoffice.com
Total Assets: $2,308,249
Total Liabilities: $7,026,470
The petition was signed by Jason Fu as CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/GGWOFIQ/Toolots_Inc__cacbke-24-10893__0001.0.pdf?mcid=tGE4TAMA
TROIKA MEDIA GROUP: Unsecured Creditors Slam Sale Proposal
----------------------------------------------------------
Yun Park of Law360 reports that the unsecured creditors in
Manhattan-based marketing firm Troika Media Group's Chapter 11 case
have asked a New York bankruptcy judge to reject the company's plan
for a sale to its secured lender, alleging the transaction would
only benefit secured lenders and leave the business
administratively insolvent.
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.
TRULITE HOLDING: S&P Assigns 'B' ICR on Acquisition, Outlook Stable
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
U.S.-based glass and aluminum fabricator and supplier of related
architectural products Trulite Glass & Aluminum Solutions.
At the same time, S&P assigned its 'B' issue-level rating and '3'
recovery rating to the proposed $400 million first-lien term loan
due in 2031.
S&P's stable outlook on Trulite reflects its forecast for debt to
EBITDA to remain between 4x and 5x and EBITDA interest coverage of
2x-3x over the next 12 months, supported by the company's growing
revenue base and stable EBITDA margins.
Truite's competitive risk reflects its limited scale of operation,
moderate scope and diversification, and high service in it markets.
S&P said, "We believe Trulite has limited scale, with annual
revenue of about $770 million pro forma for the acquisition, as
well as a narrow product focus within a subsegment of the building
materials industry. The company operates in a highly competitive
and fragmented industry, and we view its scale to be meaningful
compared with direct peers in architectural glass products. Trulite
is focused on the small to midsize product market and looking to
diversify in the repair and place market. Still, we regard Trulite
as smaller than similarly rated building material peers. We believe
smaller, less diverse companies could be more prone to volatility
during economic stress than larger, diversified peers. However,
somewhat offsetting these risks is the company's ability to provide
custom products with shorter lead times, enabling timely completion
of projects. We believe these aspects drive customer loyalty and
pricing power, ultimately resulting in robust profitability.
Further, like most of its peers, the company also has a diverse
customer base of over 6,000 customers with no customer accounting
for more than 1% of revenue."
S&P said, "We expect business performance to improve modestly over
the next 12 months. We expect positive trends from nonresidential
construction markets (both construction and repair and remodeling)
to continue benefiting revenue growth. While S&P Global Ratings
expects nonresidential and residential construction to slow, we
expect repair and remodeling spending to drive some recovery. Since
the company derives about 84% of its sales from commercial
construction activities, pro forma the transaction, we expect some
volume growth in 2023 such that overall pro forma revenues are
about $770 million-$780 million. Furthermore, Trulite is exposed to
volatile commodity costs, particularly aluminum and also flat
glass, and its ability to pass through higher costs would be key to
sustaining margins. We expect modestly higher volumes and continued
price realizations should result in adjusted EBITDA margins in the
mid-teens for 2024."
Nonetheless, the company has a highly variable cost structure
because about 70% of costs of good sold and 40% of selling, general
and administrative (SG&A) costs are variable. Variable costs are an
important counterbalance to its participation in cyclical end
markets such as residential and commercial construction because it
allows the company to reduce expenses as demand falls. The ability
to control SG&A costs in periods of rapid growth and to quickly
reduce them in periods of contraction can have a meaningful impact
on profitability. For Trulite, S&P expects SG&A as a percentage of
sales to remain high at above 20% in 2024.
S&P said, "We expect adjusted leverage to be 4x-5x over the next 12
months, but an aggressive financial policy could weaken credit
quality. Our expectations of the company's adjusted leverage being
between 4x and 5x is less aggressive than with typical financial
sponsor-backed companies. While the financial sponsor is relatively
new with a limited history, our view incorporates its ability to
dictate Trulite's strategy and cash flows. This could lead the
company to adopt a more aggressive financial policy, such as
pursuing debt-financed acquisitions or distributions, and result in
a deterioration in credit measures. Further, continued elevated
costs could pressure earnings and given the small earnings base,
even a small underperformance could result in a quick deterioration
in credit metrics. For instance, if earnings are 10% lower than our
base case expectations, adjusted leverage could trend toward 5x.
Nonetheless, we expect the company to generate annual free cash
flows of $30 million-$40 million and EBITDA interest coverage of
above 2x, which are some mitigating factors.
"Our stable outlook on Trulite reflects our forecast for debt to
EBITDA to remain between 4x and 5x and EBITDA interest coverage of
2x-3x over the next 12 months, supported by the company's growing
revenue base and stable EBITDA margins."
S&P may lower its rating over the next 12 months if:
-- Business conditions materially weakened and adjusted EBITDA
failed to increase, causing adjusted leverage to rise above 7x or
EBITDA interest coverage to be less than 2x, with little prospect
of rapid improvement. Such a scenario could come from a severe
recession, which S&P Global economists do not expect in the next 12
months, drastically reducing demand for the company's products, or
higher-than-expected inflation that cannot be passed on,
compressing EBITDA margins to under 7%; or
-- The company undertook a more aggressive financial policy such
as pursuing debt-financed dividends or acquisitions, that weaken
credit measures.
S&P views an upgrade as unlikely over the next 12 months, given the
company's ownership by a private equity firm and elevated leverage.
However, S&P could raise the rating if:
-- The company materially enhanced its scale and competitive
position while sustaining adjusted leverage of under 5x, and
-- S&P believed the financial sponsors were committed to
maintaining these credit measures.
TUPPERWARE BRANDS: SVP Holds 6,689 Common Shares as of Feb. 1
-------------------------------------------------------------
Martin Sambade, Senior Vice President and Chief Information Officer
of Tupperware Brands Corporation, filed a Form 3 Report with the
U.S. Securities and Exchange Commission, disclosing direct
beneficial ownership of 6,689 shares of the Company's common stock
as of February 1, 2024.
About Tupperware Brands
Tupperware Brands Corporation (NYSE: TUP) -- Tupperwarebrands.com
-- is a global consumer products company that designs innovative,
functional and environmentally responsible products. Founded in
1946, Tupperware's signature container created the modern food
storage category that revolutionized the way the world stores,
serves and prepares food. Today, this iconic brand has more than
8,500 functional design and utility patents for solution-oriented
kitchen and home products. With a purpose to nurture a better
future, Tupperware products are an alternative to single-use items.
The company distributes its products into nearly 70 countries,
primarily through independent representatives around the world.
On June 1, 2023, Tupperware Brands received a notice from the New
York Stock Exchange indicating the Company is not in compliance
with Sections 802.01B and Section 802.01C of the NYSE Listed
Company Manual because (i) the Company's average global market
capitalization over a consecutive 30 trading-day period was less
than $50 million and, at the same time, its last reported
stockholders' equity was less than $50 million, and (ii) the
average closing price of the Company's common stock was less than
$1.00 over a consecutive 30 trading-day period. The Notice has no
immediate effect on the listing of the Company's common stock.
Tupperware Brands reported a net loss of $232.5 million for the
year ended Dec. 31, 2022.
Tampa, Florida-based PricewaterhouseCoopers LLP, the Company's
auditor since 1995, issued a "going concern" qualification in its
report dated Oct. 13, 2023, citing that the Company has experienced
liquidity challenges and is uncertain about its ability to comply
with debt covenants, which resulted in the borrowings under the
Company's credit agreement being classified as current as of Dec.
31, 2022, and that also raises substantial doubt about its ability
to continue as a going concern.
UKG INC: Fitch Assigns 'B+' First-Time LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has assigned UKG Inc. a first-time 'B+' Long-Term
Issuer Default Rating (IDR). The Rating Outlook is Stable. Fitch
has also assigned 'BB'/'RR2' ratings to UKG's $4.885 billion
first-lien term loan and $945 million revolving credit facility
(undrawn at close). Proceeds from the transaction along with other
financing activities will be used to fully refinance the
outstanding $7 billion first-lien term loan and outstanding
revolving credit facility.
Fitch's ratings are supported by UKG's highly recurring revenue,
with high revenue retention rates that are consistent with
enterprise software peers. Fitch forecasts UKG's EBITDA leverage to
be near 5x in fiscal 2025 and (CFO-capex)/debt ratio to be over 7%,
consistent with 'B+' software peers.
KEY RATING DRIVERS
Moderate Financial Leverage: Fitch estimates UKG's gross leverage
to be near 6.5x for FY2024 and trends down to near 5x for FY2025,
driven primarily by EBITDA growth. Absent incremental debt, Fitch
estimates gross leverage to approach 4x for FY2026. Given the
private equity ownership that is likely to prioritize ROE, Fitch
does not anticipate accelerated debt repayment. Fitch expects
capital to be used for acquisitions, to accelerate growth, or for
dividends to equity owners with financial leverage remaining at
moderate levels.
Broad Product Coverage Supports Cross-Selling: UKG has identified
cross-selling and up-selling as components of its growth strategy.
At the time of the merger of Ultimate Software and Kronos, there
was limited customer overlap, with Ultimate Software's product
focused around core human capital management (HCM) and Kronos'
products focused around workforce management (WFM). Fitch believes
the complementary customer and product coverage provides UKG
substantial opportunities to cross-sell its products and should be
a meaningful growth driver in the coming years.
High Revenue Retention and Recurring Revenue: Consistent with
mission-critical enterprise software products, UKG has gross
retention in the mid-90's and net retention benefitting from
cross-selling and up-selling opportunities. As customers
transitioned to SaaS in recent years, recurring revenue has
increased to approximately 86% of total revenue for the past two
fiscal years. The strong revenue retention characteristics and high
levels of recurring revenue provide significant revenue visibility
enabling UKG to effectively manage its profitability.
Operating Leverage to Benefit Margins: UKG has largely integrated
and optimized its product platforms and operations after the merger
of Ultimate Software and Kronos exiting FY2023. The company expects
to pivot to margin expansion through increase in cloud subscription
revenue and operating leverage benefiting operating margins. Fitch
believes the projected operating leverage is consistent with
software peers operating at scale efficiency.
Resilient Market Exposure: Most of UKG's revenue is from
mid-market, enterprise, and large enterprise customers. Fitch
believes this customer base is more resilient through economic
cycles than the SMB segment. Fitch expects the Services and Other
segment, representing 13.6% of fiscal 2023 total revenue, to be
more variable as the segment includes implementation services and
time clock hardware sales.
The strong growth of the larger recurring software revenue should
more than offset potential variability from the Services and Other
segment. Fitch expects the contribution from Services and Other
segment to decline as perpetual license revenue declines and
recurring software revenue continues to outgrow overall growth
rate.
Significant Customer Diversification: UKG has a highly diversified
customer base of over 80,000, with no significant concentration in
any industry verticals. The diverse customer base effectively
minimizes idiosyncratic risks that are associated with individual
industry verticals and should reduce revenue volatility for UKG.
Competitive Landscape: The HCM industry is highly competitive and
fragmented with competitors of various scales. The company provides
HR employers with software tools that automate processes, including
payroll and taxation processing, employee hiring and engagement,
compliance and many more, encircling employee lifecycle management.
Fitch expects continued growth in demand for HCM software as
companies migrate to cloud-based solutions to automate
administrative functions to reduce costs and time spent, while
focusing more on strategic investment decisions.
DERIVATION SUMMARY
UKG's HCM products are considered mission-critical, as they
encompass the entire employee lifecycle management and workforce
management. Most of UKG's revenue is derived from the mid-market,
enterprise, and large enterprise segments, which are generally more
resilient than the SMB segment. The merger between Ultimate
Software and Kronos provides UKG with broad product coverage and
limited customer overlaps. This provides the company with
opportunities for cross-selling of products as a driver for revenue
growth. These benefits are demonstrated by UKG's gross revenue
retention in the mid-90%.
With the completion of integration between Ultimate Software and
Kronos, including product platform consolidation and operational
optimization, UKG is poised to benefit from operating leverage, as
Fitch expects revenue growth to remain in the teens through the
medium term with EBITDA margins expanding.
Within the HCM market, UKG competes with Automatic Data Processing
(ADP, AA-/Stable) and TriNet (BB+/Stable). ADP is substantially
larger than UKG with approximate gross leverage of 0.5x. Similar to
UKG, ADP also has significant enterprise exposure. UKG is similar
in revenue scale as TriNet. However, TriNet's EBITDA margins are
approximately half of UKG's margins primarily attributed to
difference in revenue mix. TriNet's gross leverage is in the 2x
range. While the three companies have product overlaps in some
areas, UKG has a more software-centric product and operating
profile compared to both ADP and TriNet.
Fitch also compares UKG to other software peers in the 'B' to 'B+'
rating categories. UKG's revenue scale compares favorably to peers.
Fitch believes software companies operating at scale efficiency
could achieve EBITDA margins near 40%, offering UKG upside
potential for margin expansion from current levels. UKG's gross
leverage and FCF generation are consistent with peers in the 'B' to
'B+' rating categories.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Organic revenue growth in the mid-teens declining to low-teens
through the forecast period;
- EBITDA margins gradually expands by 800 bps through fiscal 2027
from fiscal 2023 level;
- Aggregate capex and capitalized software expense in the range of
3%-4% of revenue;
- First-lien debt repayment limited to mandatory amortization;
- Second-lien debt repaid at maturity in fiscal 2027;
- Non-discretionary equity program is paid out as scheduled;
- No acquisitions assumed through fiscal 2027; although, internal
cash could support some acquisitions without external funding;
- No dividend payments through fiscal 2027.
RECOVERY ANALYSIS
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that UKG would be recognized as a
going concern in bankruptcy rather than liquidated;
- Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
- Fitch assumed a distress scenario where a combination of
operational under-performance and capital misallocation result in
unsustainable capital structure. This could be a result of elevated
customer churn, inability to maintain EBITDA margins, and
debt-financed dividends or M&As;
- In such event Fitch expects UKG's revenue base to decline
resulting in EBITDA margin contraction on lower revenue scale.
Fitch assumes that due to competitive pressure, revenue to suffer a
10% reduction along with margin contraction resulting in GC EBITDA
of $1.14 billion, approximately 15% lower than the forecasted
fiscal 2024 EBITDA.
- Fitch assumes that UKG will receive going-concern recovery
multiple of 7.0x. The estimate considers several factors, including
the highly recurring nature of the revenue, the high customer
retention, the secular growth drivers for the sector, the company's
strong FCF generation and the competitive dynamics. The EV multiple
is supported by:
- The historical bankruptcy case study exit multiples for
technology peer companies ranged from 2.6x to 10.8x;
- Of these companies, only three were in the Software sector: Allen
Systems Group, Inc., Avaya, Inc. and Aspect Software Parent, Inc.,
which received recovery multiples of 8.4x,8.1x and 5.5x,
respectively;
- The highly recurring nature of UKG's revenue and mission critical
nature of the product support the high-end of the range.
- Fitch arrived at an EV of $7.97 billion. After applying the 10%
administrative claim, adjusted EV of $7.18 billion is available for
claims by creditors.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation of EBITDA leverage sustaining below 4.0x;
- (CFO-Capex)/Debt ratio sustaining near 10%;
- Organic revenue growth sustaining above the high single digits.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation of EBITDA leverage sustaining above 5.5x;
- (CFO-Capex)/Debt ratio sustaining below 7%;
- Organic revenue growth sustaining near or below 5%.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The company's liquidity is projected to be
ample, supported by its FCF generation and an undrawn $945 million
RCF at closing of refinancing, and readily available cash and cash
equivalents. Fitch forecasts UKG's normalized FCF margins to remain
above 10% supported by EBITDA margin expanding to over 30%.
Debt Structure: Pro forma for the transaction, UKG's debt will
consist of $4.885 billion first-lien term loan, $1.45 billion
second-lien term loan, $2.5 billion of other secured debt, an
undrawn $945 million revolver. The earliest maturity is the
second-lien term loan due FY2027. Fitch forecasts the company to
have sufficient cash on balance sheet to repay the second-lien term
loan.
ISSUER PROFILE
UKG is a provider of mission-critical SaaS HCM solutions for
companies of all sizes. The company serves over 80,000 customers in
150 countries and diverse industry verticals. The company's
"People-first" culture anchors its approach to customers and
product offerings.
DATE OF RELEVANT COMMITTEE
January 18, 2024
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
----------- ------ --------
UKG Inc. LT IDR B+ New Rating
senior secured LT BB New Rating RR2
UNIVERSITY OF THE ARTS: Fitch Cuts Rating on $46MM 2017 Bonds to B+
-------------------------------------------------------------------
Fitch Ratings has downgraded approximately $46 million outstanding
par (FYE 2023) of Philadelphia Authority for Industrial
Development, PA series 2017 bonds issued on behalf of The
University of the Arts (UArts) to 'B+' from 'BB-'.
In addition, Fitch has downgraded UArts' Long-Term Issuer Default
Rating (IDR) to 'B+' from 'BB-'.
The Rating Outlook is Negative.
Entity/Debt Rating Prior
----------- ------ -----
The University of
the Arts (PA) LT IDR B+ Downgrade BB-
The University
of the Arts (PA)
/General Revenues/1 LT LT B+ Downgrade BB-
UArts' 'B+' IDR and bond rating reflect the university's
programmatic, operational and financial vulnerabilities, stemming
from its highly specialized arts focus, a small (1,165 FTEs in fall
2023) student base experiencing declines despite a rebound in
first-time matriculants in fall 2023, a program mix that requires
significant fixed plant costs, and modest available resources
against outstanding debt. UArts' Fitch-adjusted cash flow margin
weakened considerably in fiscal 2023, relying on a one-time
property sale to meet UArts' debt service coverage covenant of
1.1x. The ratings also incorporate a strong and consistent
philanthropic base that has both supported operating expenses and
maintenance of a solid endowment over time.
The Negative Outlook reflects Fitch's expectation that UArts'
weakening student enrollment and associated revenues will persist
in fiscal 2024. These revenue pressures, combined with stubborn
operating expenses, may compromise the university's already very
thin liquidity position and challenge its capacity to meet debt
service coverage in fiscal 2024, both on an economic basis from
recurring operations, and as calculated under bond covenants. Fitch
also considers the longer-term financial impacts of these trends in
a Fitch-modeled forward-looking scenario analysis that also
incorporates potential financial market stress.
SECURITY
The series 2017 bonds are secured by a pledge of UArts'
unrestricted revenues and a debt-service reserve that is
cash-funded to half of maximum annual debt service (MADS). At the
time of issuance, the series 2017 bonds were also secured by
mortgages on three university properties appraised in 2017 at $36
million in the center of Philadelphia, PA.
Unrestricted university revenues and the series 2017 mortgages are
pledged on a parity basis to a bank providing a $6 million line of
credit to UArts. $2 million had been drawn on the line of credit as
of June 30, 2023.
KEY RATING DRIVERS
Revenue Defensibility - bb
Pressured Demand in Niche Market; Solid Donor and Endowment
Support
Fall 2023 freshmen matriculants at UArts increased materially to
250 from 182 in fall 2022, but remains down around 40% from
pre-pandemic annual entrants. With similar patterns among transfer
matriculants and larger classes graduating out of the enrollment
base, total fall 2023 enrollment at UArts fell to 1,165 FTEs. The
uplift in new entrants in fall 2023 and the prospect for UArts to
enroll a modest number of students from the closure of a competing
institution indicate potential stabilization. However, fall 2023
enrollment shrunk by 24% from 1,528 FTEs in fall 2021 and is likely
to remain suppressed for several years as the university works to
maintain very early gains in the size of incoming classes.
Student-generated revenues declined to $42.4 million in fiscal
2023, declining 24% from their pre-pandemic peak, and Fitch expects
UArts' revenue base to remain challenged for years to come.
Student-generated revenues typically comprise over 66% of UArts'
operating income. In addition, UArts faces headwinds from a highly
competitive and narrow arts-focused academic niche, and its
location and draw mostly from the demographically weak Northeast
and Mid-Atlantic regions.
The steep drop in freshmen entrants between fiscal years 2018 and
2022 is attributed largely to pandemic-related pressure as well as
recruiting and financial aid strategies that took effect for fall
2022. Management has engaged a new enrollment and financial aid
consultant and aims to restore incoming freshmen to previous levels
with enhanced strategies. In FY 2023, the drop in revenues from
student sources was supplemented with a one-time gain from the
previously-planned sale of a small, outdated residence hall.
Management expects increased revenues in fiscal 2024 from an
existing student housing facility that was recently reconfigured to
expand capacity and accommodate higher-demand unit styles.
Supporting some stability in overall revenues, UArts benefits from
strong and consistent private grants, and annual operating
distributions from a sizeable endowment. Together, these sources
typically make up almost 30% of UArts' unrestricted operating
income. The university recently announced that $67 million was
raised in a campaign headed by UArts' outgoing President. After a
search, UArts' board appointed Kerry Walk, PhD, as president
following the retirement of David Yager in June 2023. UArts' board
voted to increase its endowment spending policy to 7% in fiscal
2024 on all funds that do not have a lower donor-imposed spending
restriction, increasing the aggregate draw nearer to 6% of a
rolling 12-quarter market value average across all endowment funds,
which is still considered sustainable by Fitch.
Operating Risk - bb
Limited Cash Flow; High but Manageable Capital Needs
UArts historically maintained relatively thin Fitch-calculated cash
flow margins of between 5%-10%. However, declining enrollment and
expense pressures resulted in a significant negative cash flow
margin of -6.8% in fiscal 2023, which was largely offset by the
gain on a building sale. Expense management and external funding
for capital projects will be critical to the institution's ability
to maintain adequate cash flows, particularly given UArts'
enrollment volatility, the associated vulnerability of
student-generated revenues, and the discontinuance of non-recurring
pandemic aid funds.
UArts has demonstrated willingness to close low-enrollment
programs, and Fitch expects further evaluation of programs and
expenses will occur. Two-thirds of UArts' roughly 725 employees,
including part-time faculty and staff, are members of the
Philadelphia chapter of the American Federation of Teachers. As
collective bargaining contracts are still under negotiation, it is
unclear what financial implications the final contract terms will
have for UArts' ongoing ability to manage expenses in line with
revenues. (For purposes of Fitch's current analysis, Fitch has
independently assumed that the final contract will result in
moderate additional costs, but that the university will maintain
spending flexibility if necessary. However, Fitch will incorporate
material deviations from these assumptions when known.)
UArts' buildings include several historic, grand buildings in the
heart of Philadelphia, PA's arts and entertainment district. This
contributes to the university's high age of plant and capital
needs. While unexpected costs from addressing deferred maintenance
have resulted in some spending from university funds, the
university is committed to funding capital projects with in-hand
donations and external sources, with the exception of some
Pennsylvania state capital support that is provided on a
reimbursement basis. UArts has a strong capital fundraising
record.
Financial Profile - bb
Thin Balance Sheet Cushion
UArts' 'bb' financial profile assessment reflects the university's
very high leverage in the context of its focused program offerings,
declining student and revenue base, and moderate flexibility to
make adjustments to generate stronger cash flows. UArts' available
funds (AF: cash and investment less permanently restricted net
assets) of $20.5 million stood at a modest 41% of total
Fitch-adjusted debt (including lease obligations and a $2 million
line of credit draw) of $49.6 million at FYE 2023. UArts has no
additional debt plans.
The university reports compliance with its 1.1x debt service
coverage ratio covenant from the 2017 bonds during fiscal 2023 that
was aided by the one-time property sale, and management projects
that the covenant will be met in fiscal 2024. Nevertheless, Fitch
anticipates enrollment declines combined with a stubborn expense
base may result in insufficient recurring revenues to meet economic
debt service coverage in fiscal 2024 or that UArts will remain
close to breaching the bond covenant. According to Fitch's reading
of the bond documents, breach of the 1.1x covenant in the first
instance would require a university-chosen consultant that majority
bondholders have the right to replace with an alternative.
Liquidity, as measured by Fitch as AF-to-Operating Expenses, stood
at a slim 27% at FYE 2023. The university maintains access to a $6
million bank line of credit, of which $2 million was drawn at FYE
2023. The remaining line is not included in Fitch's AF calculation
but does remain available to the university if needed, subject to
various tests and potential limitations under the loan agreement,
according to Fitch's reading of the documents.
Fitch's financial profile assessment for UArts is also based on the
results of a forward-looking, Fitch-modeled scenario that considers
the effects of possible financial market stress and future
assumptions of the university's revenues, expenses, debt and capex.
Absent significant changes in the trajectory of UArts' revenue
and/or expense profile over the next several years, this scenario
indicates that significant deterioration in leverage ratios is
likely, and that failure to achieve modest cash flows in fiscal
2024 and beyond could erode the university's very slim margin of
liquidity to untenable levels.
Asymmetric Additional Risk Considerations
Fitch views the repeated use of non-recurring revenue sources to
balance operations as an asymmetric risk-additive consideration for
Operating Risk.
Other asymmetric risks to the university's Financial Profile
include:
- An already thin liquidity position (calculated by Fitch as
AF-to-operating expenses), which is vulnerable to deterioration in
Fitch's forward-looking scenarios;
- The potential that economic and/or bond-contracted debt service
coverage may not be met in fiscal 2024.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to stabilize student-generated revenues in fiscal 2024
and beyond;
- Fitch-calculated cash flow margins that consistently fall below
5% or to levels that result in annual debt service coverage below
the 1.1x covenant threshold or below 1x economic debt service
coverage from recurring operations;
- Deterioration in leverage and/or liquidity ratios showing a trend
of AF-to-adjusted debt persistently below 30%, and/or
AF-to-operating expenses below 20%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A trend of increasing enrollment including improvement in
entering class sizes and stronger retention could support a Stable
Outlook;
- Improvement in recurring revenue growth and operating
performance, resulting in Fitch-calculated cash flow margins at
levels consistently around 10% and/or that generate debt service
coverage comfortably above the 1.1x covenant threshold and/or 1x
economic debt service coverage from recurring operations.
PROFILE
The University of the Arts is a private, co-educational university
established in 1876. The university occupies several buildings
within a five-block radius centered in the historic arts district
of downtown Philadelphia, PA. UArts offers undergraduate and
graduate programs through six schools: Design, Art, Film, Dance,
Theater, and Music. UArts' student body of 1,165 as of fall 2023 is
over 90% undergraduate. UArts has a primarily regional draw, with
roughly two-thirds of students coming from Pennsylvania and the
neighboring state of New Jersey, and the remaining one-third
primarily from the region. UArts currently maintains 600-beds of
university-owned housing and has no residency requirement, and most
students live off-campus.
UArts maintains institution-wide accreditation from Middle States
Commission on Higher Education, which most recently affirmed UArts'
accreditation in 2019. The university is governed by a 25-member
Board of Trustees with broad business and arts experience. Kerry
Walk, PhD, joined UArts as President in August, 2023 following the
retirement of the outgoing president, David Yager.
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.
URBAN ONE: BlackRock Holds 5.1% Class A Common Shares
-----------------------------------------------------
In a Schedule 13G Report filed with the U.S. Securities and
Exchange Commission, BlackRock, Inc. disclosed that as of December
31, 2023, it beneficially owned 498,748 shares of Urban One, Inc.'s
Class A Common Stock, representing 5.1% of the shares outstanding.
A full-text copy of the Report is available at
http://tinyurl.com/46kbz59u
About Urban One
Urban One, Inc., formerly known as Radio One, Inc., headquartered
in Silver Spring, Md., is an urban-oriented multimedia company that
operates or owns interests in radio broadcasting stations (32% of
revenue as of LTM Q4 2022) generated by 66 stations in 13 markets,
cable television networks (43% of revenue), an 80% ownership in
Reach Media (9% of revenue), and ownership of Interactive One, its
digital platform, as well as other internet-based properties (16%
of revenue), largely targeting an African-American and urban
audience. The Chairperson, Catherine L. Hughes, and President,
Alfred C. Liggins III (Chairperson's son), maintain voting control
and hold a significant ownership position. The company reported
consolidated revenue of $485 million as of LTM Q4, 2022.
As of September 30, 2023, Urban One had $1.19 billion in total
assets, $891.52 million in total liabilities, $21.82 million in
redeemable noncontrolling interests and $278.71 million in total
stockholders' equity.
* * *
Moody's Investors Service affirmed Urban One, Inc.'s B3 Corporate
Family Rating, B3-PD Probability of Default Rating, and B3 senior
secured notes rating. The speculative grade liquidity rating was
upgraded to SGL-1 from SGL-2 reflecting very good liquidity. The
outlook was changed to stable from positive.
The affirmation of the CFR and stable outlook reflect Urban One's
relatively high pro forma leverage (4.9x as of Q4 2022 pro forma
for sale of the company's minority ownership position in MGM
National Harbor, LLC (National Harbor) and including Moody's
standard adjustments) as well as Moody's expectations that
operating performance will decline in 2023 due to lower political
advertising revenue in a non-election year and from lower cable TV
revenue. Cable TV was a source of strength during the pandemic but
is likely to be pressured from lower ratings and a decline in
subscribers as consumers continue to migrate to streaming services
from cable TV. Social considerations were a key driver of the
rating action, as Moody's expects the negative secular pressures in
the cable TV division to increase as media consumption continues to
migrate to streaming services.
VERTEX ENERGY: Fitch Lowers LongTerm IDR to 'CCC+'
--------------------------------------------------
Fitch Ratings has downgraded Vertex Energy Inc.'s (Vertex) and
Vertex Refining Alabama LLC's Long-Term Issuer Default Ratings
(IDR) to 'CCC+' from 'B-'. Fitch has also downgraded the rating of
Vertex Refining Alabama's senior secured term loan to 'B-'/'RR3'
from 'B'/'RR3'.
The downgrade reflects Vertex's weaker liquidity buffer amid lower
U.S. Gulf Coast refining crack spreads and weak Fitch-expected
contribution from renewable diesel segment in 2024. The company's
FCF generation is highly sensitive to refining crack spreads that
declined in 4Q23 from abnormally high 2022-2023 levels. Its
unrestricted cash balance fell from $141 million at YE 2022 to
around $70-80 million at YE 2023. Fitch projects negative EBITDA
and FCF for Vertex in 2024 based on the assumptions of continued
crack spread normalization and weak renewable diesel
profitability.
KEY RATING DRIVERS
Weaker Liquidity: Vertex does not have a general-purpose revolver
and relies on intermediation facilities to finance inventory and
cash balance to fund other expenses. Its cash declined to roughly
$70-80 million at YE 2023 including the proceeds from the $50
million loan raised on Dec. 29, 2023. Vertex may experience
liquidity shortage if conventional and renewable diesel refining
margins decrease further.
Vertex has agreed an uncommitted $25 million term loan with its
lenders but Fitch does not treat it as available liquidity as the
lenders need to approve the loan before it is drawn. Fitch
estimates that Vertex generated $27 million of Fitch-adjusted
EBITDA in 2023 and spent around $250 million on investments in
renewable diesel unit, working capital and debt interest. To
support its transition to the renewables business, it sold part of
its legacy assets in 2023.
Refinancing Required Next Year: Vertex's $198 million term loan is
due April 2025 with $10 million of amortizations in 2024. After the
recent loan amendment, term loan floating interest was increased by
1% reaching 17.25% given the current prime rate. Vertex's
uncommitted intermediation facilities, which it uses to fund
conventional oil and renewable diesel inventories, can be
terminated with a 180-day notice at the lender's discretion.
Significant Renewable Fuel Exposure: Vertex has been operating its
renewable diesel facility below its 8,000 barrels per day (bpd)
since its completion. The recent level of heating oil-soybean oil
spread adjusted by relevant tax credits is challenging for Vertex
and the U.S. renewable diesel industry in general. Vertex plans to
optimize its production costs and diversify the feedstocks from
soybean oil. It has received the approvals for D4 renewable
identification numbers (RINs) and Californian LCFS credits in 2023.
Vertex has completed a hydrogen supply unit for its contemplated
expansion of renewable diesel capacity to 14,000 bpd. Fitch assumes
that renewable diesel profitability will bounce back from the
currently muted levels in 2025.
Crack Spread Uncertainty: U.S. Gulf Coast 2-1-1 light oil refining
crack spreads have been fluctuating since November 2023 with the
average around normal levels. Weakness in gasoline margins has been
compensated by above-average diesel crack. Vertex produces more
middle distillates (diesel and jet fuel) than gasoline, and
normalization of diesel crack spread can substantially damage its
profitability. Future crack spreads can be very volatile but Fitch
assumes that diesel crack will decline close to the pre-pandemic
average level by end-2024. However, continued high diesel prices
coupled with average gasoline margins closer to the current forward
curve can significantly boost Vertex's EBITDA in 2024.
Low Interest Coverage, Negative FCF: Under Fitch's current crack
spreads assumptions, Vertex should generate negative 2024 EBITDA
and FCF after interest, capex and working capital changes. Fitch
assumes that gross profit from renewable diesel is slightly
positive in 2024, operating costs are optimized and capex cut to
$20 million. Fitch expects Vertex's EBITDA interest coverage to be
close to zero in 2024 and 1.0x in 2025 assuming renewable diesel
EBITDA contribution becomes more significant.
Scale, Low Complexity Pressure Rating: Vertex's main EBITDA driver
is its Mobile refinery. Fitch expects its core profitability before
EBITDA from renewable diesel to be more sensitive to oil crack
spreads than peers' refineries, which are typically more complex.
Vertex partially hedges short-term prices but will be vulnerable to
longer-term market fluctuations. Vertex has strong market position
in its region but largely relies on a single asset for cash flow
generation because its other segments are substantially smaller in
scale.
Intermediation Liabilities Treated as Debt: Fitch adds the expected
amounts drawn under Vertex's intermediation agreements with
Macquarie bank to debt. Vertex uses these facilities to pay for
Mobile refinery conventional and renewable diesel inventory. The
outstanding liabilities under the facility were $183 million at the
end of 3Q23, which was commensurate with almost a half of Vertex's
Fitch-adjusted debt. Fitch expects that the facilities' size will
have reduced at YE 2023 due to falling prices. Macquarie charges
interest on the facilities, and the facilities expires in April and
June 2025 but can be cancelled earlier by each party.
Parent-Subsidiary Considerations: Fitch views Vertex Refining
Alabama LLC's (Vertex's subsidiary operating the Mobile refinery)
Standalone Credit Profile at the same level as Vertex's. Therefore,
Fitch assigns the same Issuer Default Ratings to both entities.
Vertex guarantees Vertex Refining Alabama LLC's term loan and
intermediation facility. The term loan is secured by the majority
of fixed assets of Vertex Renewables Alabama LLC, which is Vertex's
subsidiary that owns the renewable diesel unit.
No Equity Credit for Convertibles: Fitch does not assign any equity
credit to Vertex's $15 million outstanding convertible notes
because they do not have coupon deferral option, permanence
commitment and other necessary characteristics. Vertex reduced the
notes principal by $80 million in June 2023 primarily through
exchanging them for common shares.
DERIVATION SUMMARY
Vertex has smaller scale than PBF Holding Company LLC (BB/Stable),
Delek US Holdings, Inc. (BB-/Stable), CVR Energy, Inc. (BB-/Stable)
and CITGO Petroleum Corp. (B/Stable) due to reliance on a single
refinery that dominates its asset base despite presence of the
legacy recycling business. Vertex's Mobile refinery is also less
complex than those of its peers, therefore, Fitch expects it to be
more sensitive to price environment. Vertex liquidity is less
diversified than Delek's, CITGO's or PBF's due to its focus on FCF
generation to cover debt maturities or unexpected swings in working
capital. As market conditions deteriorated in 4Q23, Vertex's
liquidity has weakened considerably.
KEY ASSUMPTIONS
- Uninterrupted access to liquidity;
- Gasoline crack spread remaining flat and middle distillates crack
declining in 2024-2025 reaching $20/b in 2026;
- 72,600 barrels per day (b/d) throughput in 2024-2027;
- 6,600 b/d of renewable diesel production in 2024 increasing
thereafter;
- D4 RIN at $0.8 per gallon in 2024 and $1 in 2025-2027;
- LCFS at $75 per ton in 2024 increasing thereafter;
- Blenders tax credit at $1 per gallon in 2024-2027;
- Capex of $20 million in 2024-2027;
- No dividends or divestments in 2024-2027.
RECOVERY ANALYSIS
The recovery analysis assumes that Vertex would be liquidated
rather than reorganized as a going-concern (GC) in bankruptcy.
Fitch has assumed a 10% administrative claim.
Going-Concern Approach
Vertex's GC EBITDA reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation (EV). This value is based on mid-cycle
refining crack spreads and the successful hydrocracking unit
ramp-up.
An EV multiple of 3.5x was applied to the GC EBITDA to calculate a
post-reorganization EV. 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). It is below the multiple previously used for
Vertex's HY refining peer Par Pacific Holdings (5.5x). Fitch views
Par's business profile as stronger due its diversification and
higher margins.
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.
For liquidation value, Fitch applied an 85% advance rate to
Vertex's inventories as crude and refined products are standardized
and easily re-sellable. Fitch used 80% advance rate for the
company's receivables.
The maximum of these two approaches was the liquidation approach.
Inventory intermediation facility at level of Mobile refinery
(Vertex Refining Alabama LLC and Vertex Renewables Alabama LLC) of
$183 million has effective priority to the term loan and
convertible notes because it is secured by the most liquid assets
(i.e., oil inventory). Similar approach was applied to Vertex
Renewables Alabama LLC's new intermediation facility. The remaining
funds are used to cover Vertex Refining Alabama's $198 million term
loan secured by property, plant and equipment as well as other
assets. Fitch treats the $15 million unsecured convertible notes
issued by Vertex's HoldCo and $10 million insurance premium
financing as subordinated to the intermediation facility and the
term loan.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR3' for the secured term loan.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Stronger liquidity buffers that can absorb FCF fluctuation;
- EBITDA interest coverage above 1.5x at midcycle;
- EBITDA leverage below 5.0x at midcycle;
- Structural improvement in U.S. renewable diesel industry
fundamentals;
- Extension of 2025 debt maturities.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Weaker expected liquidity;
- Inability to pay interest or cover debt principal amortization,
working capital outflows, or capex;
- Failure to timely refinance the 2025 term loan closer to the end
of 2024;
- EBITDA interest coverage below 1.0x.
LIQUIDITY AND DEBT STRUCTURE
Liquidity with Minimal Headroom: Vertex had approximately $70-80
million of cash and equivalents at YE 2023. It does not have a
general-purpose revolver but relies on an uncommitted
intermediation facilities rollover to fund large amounts of
inventory at Mobile refinery. The facilities are secured by oil and
renewable diesel-related inventory and expire in April and June
2025.
The company has limited term loan amortization of $10 million in
2024 but $188 million of the term loan is due in April 2025. Fitch
expects that Vertex will rely on off-market options to refinance
its debt. Fitch currently expects Vertex to generate a $64 million
negative FCF in 2024 due to negative EBITDA generation, significant
interest payments and maintenance capex. Fitch did not assume a
working capital cash outflow but it can occur and not all of it can
be covered by intermediation facilities. Additionally, Vertex's
EBITDA generation is highly volatile and can surprise both on the
upside and downside.
Vertex's term loan agreement includes an uncommitted $25 term loan.
Fitch does not add leases to Vertex's adjusted debt. Instead, Fitch
deducts lease costs from its EBITDA as the company belongs to the
oil and gas production sector.
ISSUER PROFILE
Vertex is a small-scale company managing a 75 kb/d operable
capacity refinery located in Alabama that launched renewable diesel
production with 8 kb/d capacity in 2023. It also has legacy
businesses that process used oil products and metals and produces
ready-to-use recycled feedstock.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch adds obligations under inventory financing agreements to
Vertex's debt.
ESG CONSIDERATIONS
Vertex has an Environmental, Social and Corporate Governance (ESG)
Relevance Score of '4' under Environmental Factors, which reflects
its material exposure to extreme weather events (hurricanes) and
may lead to extended shutdowns. Its key Mobile refinery is located
on the Gulf Coast. The factor 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
----------- ------ -------- -----
Vertex Refining
Alabama LLC LT IDR CCC+ Downgrade B-
senior secured LT B- Downgrade RR3 B
Vertex Energy Inc. LT IDR CCC+ Downgrade B-
WALTER'S TRANSPORT: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Walter's Transport Inc.
513 Road 5138
Cleveland, TX 77327-1376
Business Description: Walter's Transport is a trucking and
logistics company operating since 2014.
Chapter 11 Petition Date: February 5, 2024
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 24-30507
Judge: Hon. Eduardo V Rodriguez
Debtor's Counsel: Michael L. Hardwick, Esq.
MICHAEL HARDWICK LAW, PLLC
2200 North Loop West Ste 345
Houston TX 77018-1757
Tel: (832) 930-9090
Email: michael@michaelhardwicklaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nicolas Di Pardo as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/BRHT3WY/Walters_Transport_Inc__txsbke-24-30507__0001.0.pdf?mcid=tGE4TAMA
WEWORK INC: Wants to Keep Cash in Foreign Banks Over DOJ Concerns
-----------------------------------------------------------------
Amelia Pollard of Bloomberg Law reports that WeWork should be
allowed to keep its cash in foreign bank accounts because moving
the money would harm its sprawling international business, the
bankrupt coworking giant said in response to a Justice Department
objection.
The US Trustee, the Justice Department's bankruptcy watchdog, has
argued the foreign accounts aren't insured by the US and therefore
put assets at risk, potentially leaving less money for the
bankruptcy estate. It cited a section of the bankruptcy code that
imposes requirement on where estate funds can be held.
About WeWork Inc.
New York, NY-based WeWork Inc. is a global flexible workspace
provider, serving a membership base of businesses large and small
through its network of 779 Systemwide Locations, including 622
Consolidated Locations as of December 2022.
WeWork Inc. and its affiliates sought relief under Chapter 11 of
the Bankruptcy Code (Bankr. D.N.J. Case No. 23-19865) on Nov. 6,
2023. In its petition, WeWork Inc. reported $19 billion of
liabilities and $15 billion of assets.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP, Cole Schotz PC, and Munger, Tolles & Olson LLP
as counsel; Alvarez & Marsal North America LLC and Province, LLC as
financial advisors; and PJT Partners LP as investment banker.
Softbank is represented by Weil Gotshal & Manges LLP and Wollmuth
Maher & Deutsch LLP as legal counsel and Houlihan Lokey Capital as
financial advisor.
The Ad Hoc Group of First Lien and Second Lien Lenders is
represented by Davis Polk & Wardwell LLP (Eli Vonnegut, Elliot
Moskowitz, Natasha Tsiouris, Jonah Peppiatt) and Greenberg Traurig
LLP (Alan Brody) as legal counsel and Ducera Partners LLC as
financial advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases.
WRENCH GROUP: Moody's Rates Amended Sec. First Lien Term Loans 'B2'
-------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Wrench Group
LLC's amended and extended backed senior secured first lien term
loan and backed senior secured first lien revolving credit
facility. There are no changes to Wrench Group's existing ratings,
including its B3 corporate family rating and B3-PD probability of
default rating. The outlook is unchanged at stable.
The leverage neutral transaction is credit positive since it
extends Wrench Group's debt maturities. The company is extending
its $893 million first lien senior secured term loan maturity by
two and a half years to October 2028. The company is also upsizing
its $75 million first lien senior secured revolving credit facility
to $100 million and extending the maturity by two years to April
2027.
RATINGS RATIONALE
Wrench Group's B3 CFR reflects the company's high leverage,
presence in a fragmented market with intense competition, and
industry seasonality with susceptibility to weather conditions.
The rating also considers Wrench's track record of debt funded
acquisitions, where the company has increased leverage above 7x.
Nevertheless, the company has a track record of acquiring and
integrating businesses effectively.
The B3 CFR also reflects the non-discretionary nature of Wrench
Group's home repair services (primarily heating, ventilation & air
conditioning (HVAC)) providing steady demand and a track record of
growth throughout the economic cycle. The B3 CFR also reflect the
company's ability to de-lever through earnings growth, and its
position as a larger player in the home services space with
stronger geographical and customer diversification relative to
smaller, local competitors.
The stable outlook reflects Moody's expectation that EBITDA and
free cash flow will improve in 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if debt to EBITDA is sustained below
6.0x, EBITA to interest is sustained above 2.0x, good liquidity is
maintained, and the company adopts a more conservative financial
policy.
The rating could be downgraded if operating performance
deteriorates, debt to EBITDA is sustained above 7.0x, EBITA to
interest is sustained below 1.0x, or liquidity deteriorates.
Headquartered in Marietta, Georgia, Wrench Group LLC through its
subsidiaries, operates as a provider of home repair services for
heating, ventilation and air conditioning, plumbing, water quality,
and electrical equipment in the US. The company is majority-owned
by Leonard Green & Partners, L.P.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
WRENCH GROUP: S&P Affirms 'B-' ICR, Outlook Stable
--------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
U.S.-based heating, ventilation, and air conditioning (HVAC) and
plumbing service provider Wrench Group LLC because it expects pro
forma S&P Global Ratings-adjusted leverage to continue to be high
at about 8x in fiscal 2024.
S&P said, "At the same time, we affirmed our 'B-' issue-level
ratings on the company's $893 million first-lien term loan and $100
million revolving credit facility. The recovery rating remains '3',
indicating our expectation for meaningful recovery (50%-70%;
rounded estimate: 50%) in the event of a default. We will withdraw
our rating on the $150 million incremental first-lien term loan at
close of the transaction.
"The stable outlook reflects our view that demand for
nondiscretionary residential HVAC and plumbing services will remain
steady. Wrench will continue to expand and operate as an effective
industry consolidator and take share from small competitors. We
expect leverage will remain about 8x in the next 12 months with
positive reported free operating cash flow (FOCF)."
Wrench proposes to amend and extend the maturities of its $769
million first-lien term loan, $150 million incremental first-lien
term loan, and $75 million revolving credit facility. The revolving
credit facility will also be upsized to $100 million from $75
million.
Wrench's proposed amended capital structure alleviates S&P's
concerns about looming debt maturities, but the company is still
highly leveraged and will likely remain acquisitive."
The proposed amendment and extension of its revolver maturity to
2027 from 2025 and first-lien debt to 2028 from 2026 addresses that
the revolver would have become current in 2024 and the first-lien
debt in 2025. The proposed amendment also includes springing
maturities ahead of the second-lien term loan due in 2027 if it is
not extended by January 2026 (springing maturity tied to revolver)
or January 2027 (springing maturity tied to first-lien term loan).
The revolver is also being upsized to support Wrench's acquisitive
growth strategy, which includes the recently closed acquisition.
The acquired company has a leading presence in HVAC and plumbing
across key markets for Wrench. The acquisition was funded through a
combination of balance sheet cash and a $15 million revolver draw.
S&P said, "Given its acquisitive growth strategy and financial
sponsor ownership, we forecast pro forma S&P Global
Ratings-adjusted leverage will remain at least over 7x long term
and about 8x for fiscal 2024, when we expect high-single-digit
percent organic revenue growth. Overall, we forecast demand to be
relatively healthy near term assuming more normalized weather
relative to 2023, when Wrench faced lower-than-expected HVAC
installation/repair volumes and excess technician headcount for its
nondiscretionary and essential services. Further, industrywide
underperformance led to depressed company valuations and ultimately
a lack of viable acquisition targets. Wrench had raised an
incremental $150 million first-lien term loan to fund potential
acquisitions. Consequently, Wrench only completed two tuck-in
acquisitions in 2023, which underperformed our previous
expectations. As such, we estimate pro forma S&P Global
Ratings-adjusted leverage of 9.1x in 2023.
"In general, we continue to expect Wrench to maintain a small
EBITDA base relative to its overall debt burden. It has a track
record of debt-funded acquisitions, completing 26 since 2017, more
than tripling revenue and increasing total debt since our initial
rating in 2019. Additionally, we believe industry dynamics continue
to align well with Wrench's acquisition-driven growth model. The
overall home services industry remains largely fragmented,
underpenetrated, and populated by undercapitalized mom-and-pop
businesses, indicating ample opportunity for further industry
consolidation.
"We expect interest coverage will be above our 1.5x downgrade
threshold and Wrench will continue to generate positive FOCF.
"We estimate pro forma S&P Global Ratings-adjusted EBITDA coverage
weakened to 1.4x in fiscal 2023 primarily due to higher interest
expense compared to 2022 given Wrench's floating-rate debt profile
amid rising interest rates throughout the year. During the latter
half of 2022, the company entered into an interest rate swap
agreement that provides substantial coverage to its total debt
burden. Historically, Wrench has been a good cash flow generator.
The underlying business is entirely service-based and can increase
prices to its customers to offset inflationary pressures. We
forecast reported FOCF of $52 million in 2023 and $18 million in
2024. Overall, we believe it has multiple options to avoid strained
interest coverage in the near term.
"The stable outlook reflects our view that demand for
nondiscretionary residential HVAC and plumbing services will remain
steady. Wrench will continue to expand and operate as an effective
industry consolidator and take share from small competitors. We
expect leverage will remain about 8x in the next 12 months with
positive reported free operating cash flow (FOCF).
"We could lower our ratings if we determine Wrench's capital
structure has become unsustainable, with leverage approaching
double digits and interest coverage ratio falling below 1.5x in
combination with an FOCF deficit." This could occur if:
-- Wrench exhibits further aggressive financial policies by
continuing to make debt-funded acquisitions at high multiples;
-- It has difficulties integrating acquired companies;
-- Operations suffer from deteriorating service, resulting in
customer losses; or
-- Inflation pressures erode profitability.
While unlikely in the next 12 months, S&P could raise its ratings
if Wrench reduces and sustains leverage below 8x. This could occur
if:
-- Financial policy becomes less aggressive, and Wrench
prioritizes debt repayment over acquisitions;
-- The private-equity sponsors contribute additional equity rather
than increase debt to support Wrench's acquisition strategy; or
-- The company substantially expands scale, products, and
geographic diversification, which S&P believes is not likely unless
it undertakes transformative acquisitions.
YELLOW CORP: Central State Pension Arbitration Demand 'Nonsense'
----------------------------------------------------------------
Yun Park of Law360 reports that bankrupt trucking firm Yellow Corp.
has called the Central States Pension Fund's arbitration demand for
$4.8 billion in pension liability claims "nonsense," because the
fund has already acquiesced in the bankruptcy court's jurisdiction
over the claims.
About Yellow Corporation
Yellow Corporation -- http://www.myyellow.com/-- operates
logistics and less-than-truckload (LTL) networks in North America,
providing customers with regional, national, and international
shipping services throughout. Yellow's principal office is in
Nashville, Tenn., and is the holding company for a portfolio of LTL
brands including Holland, New Penn, Reddaway, and YRC Freight, as
well as the logistics company Yellow Logistics.
Yellow Corporation and 23 affiliates concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before
the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow
Corporation had $2,152,200,000 in total assets against
$2,588,800,000 in total liabilities. The petitions were signed by
Matthew A. Doheny as chief restructuring officer.
The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel;
Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel;
Kasowitz, Benson and Torres, LLP as special litigation counsel;
Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as
investment banker; and Alvarez and Marsal as financial advisor.
Epiq Bankruptcy Solutions is the claims and noticing agent.
Milbank LLP serves as counsel to certain investment funds and
accounts managed by affiliates of Apollo Capital Management, L.P.
while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve
as counsels to Beal Bank USA and the U.S. Department of the
Treasury, respectively.
On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in the Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer & Feld, LLP and
Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller
Buckfire as investment banker; and Huron Consulting Services, LLC,
as financial advisor.
[*] Venable LLP Names New Bankruptcy Group Co-Leaders
-----------------------------------------------------
Venable LLP on Feb. 2, 2024, disclosed that Baltimore and Delaware
partner Laura S. Bouyea and Miami partner Glenn D. Moses have been
elevated to co-practice group leaders of the firm's Bankruptcy &
Creditors' Rights Group and will work with the group's chair,
Gregory A. Cross, to lead the growing practice.
"Laura and Glenn are highly respected by their clients and
colleagues for their legal expertise and strategic and
collaborative approach," Mr. Cross said. "I look forward to working
with them in their new roles to build on our track record of
success for our clients and to continue to develop and expand our
team."
Ms. Bouyea's experience in bankruptcy, CMBS, foreclosures, and
receiverships, coupled with her accounting background, makes her
go-to counsel for a wide variety of insolvency, loan enforcement,
and loan workout matters. The combination of her litigation and
financial background is invaluable in the restructuring field,
where disputes frequently result in complex, negotiated solutions.
She has represented clients in a variety of sectors and industries,
including real estate, retail, government, healthcare, and
manufacturing. Bouyea is also a recognized leader in the Baltimore
community, regularly contributing her problem-solving capabilities
and experienced legal counsel to nonprofit organizations and
individuals in need.
"Our Bankruptcy and Creditors' Rights team has recently added top
talent and expanded its expertise," said Bouyea. "I am delighted to
take on this new role at a terrific time for our group as we are
poised to build on the outstanding value and breath of services we
provide our clients."
Mr. Moses focuses on complex commercial bankruptcy, financial
restructuring, and insolvency matters, including related
litigation. He represents Chapter 11 debtors-in-possession (DIP),
official committees of unsecured creditors, Chapter 11 and Chapter
7 trustees, liquidating trusts, DIP lenders, secured creditors,
commercial landlords, equity interest holders, strategic investors,
and purchasers of assets from bankruptcy estates. He has
substantial experience in litigating a wide variety of
bankruptcy-related claims at both the trial and appellate levels,
including avoidance litigation, fraud, breach of fiduciary duty,
and professional negligence claims. He also has significant
experience representing franchisors in franchisee bankruptcies
throughout the country. Moses joined Venable in 2023, along with a
well-established group of attorneys, including some of the
country's leading restructuring and insolvency practitioners, that
launched Venable's presence in Florida.
"Our clients benefit from the broad experiences within our practice
group, assisted by specialists across the firm," Moses said. "I
look forward to working with Greg, Laura, and the rest of our group
to leverage these strengths across our offices while providing the
high-level, personalized service our clients have come to expect
from Venable."
Under Cross's leadership, the Bankruptcy and Creditors' Rights
Group has cemented its reputation as a leader in the industry,
representing clients in complex reorganizations throughout the
United States and abroad. The group has worked before state and
federal courts across the country at every level, including the
Supreme Court of the United States, handling numerous high-profile,
high-stakes, and precedent-setting cases.
Venable LLP -- https://www.venable.com/ -- is an American Lawyer
Global 100 law firm headquartered in Washington, DC that serves as
primary counsel to a worldwide clientele of large and mid-sized
organizations, nonprofits, high-net-worth entrepreneurs, and other
individuals. With more than 900 professionals across the country,
including in California, Delaware, Florida, Illinois, Maryland, New
York, Virginia, and Washington, DC, the firm strategically advances
its clients' objectives in the U.S. and around the globe. Venable,
which is celebrating its 121st anniversary, advises clients on a
broad range of business and regulatory law, legislative affairs,
complex litigation, and the full range of intellectual property
disciplines.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Andrew Modlin
Bankr. C.D. Cal. Case No. 24-10695
Chapter 11 Petition filed January 30, 2024
represented by: Summer Shaw, Esq.
In re Millenia Holding Group, LLC
Bankr. M.D. Fla. Case No. 24-00425
Chapter 11 Petition filed January 30, 2024
See
https://www.pacermonitor.com/view/ETR2MXQ/MILLENIA_HOLDING_GROUP_LLC__flmbke-24-00425__0001.0.pdf?mcid=tGE4TAMA
represented by: Lawrence M. Kosto, Esq.
KOSTO & ROTELLA
E-mail: lkosto@kostoandrotella.com
In re Shen's Peking II Restaurant, Inc.
Bankr. S.D. Fla. Case No. 24-10897
Chapter 11 Petition filed January 30, 2024
See
https://www.pacermonitor.com/view/AVBBOYA/Shens_Peking_II_Restaurant_Inc__flsbke-24-10897__0001.0.pdf?mcid=tGE4TAMA
represented by: Craig I. Kelley, Esq.
KELLEY KAPLAN & ELLER, PLLC
E-mail: craig@kelleylawoffice.com
In re Wood Wonders Custom Furniture, Inc.
Bankr. S.D. Fla. Case No. 24-10855
Chapter 11 Petition filed January 30, 2024
See
https://www.pacermonitor.com/view/6O5U4CI/Wood_Wonders_Custom_Furniture__flsbke-24-10855__0001.0.pdf?mcid=tGE4TAMA
represented by: Adam I. Skolnik, Esq.
LAW OFFICE OF ADAM I. SKOLNIK, PA
E-mail: askolnik@skolniklawpa.com
In re Investment Solutions Group, LLC
Bankr. D. Md. Case No. 24-10758
Chapter 11 Petition filed January 30, 2024
See
https://www.pacermonitor.com/view/ARMGENQ/Investment_Solutions_Group_LLC__mdbke-24-10758__0001.0.pdf?mcid=tGE4TAMA
represented by: Richard B. Rosenblatt, Esq.
LAW OFFICES OF RICHARD B. ROSENBLATT, PC
E-mail: rrosenblatt@rosenblattlaw.com
In re Felix A Torres Garcia and Frances Monllor Zambrana
Bankr. D.P.R. Case No. 24-00298
Chapter 11 Petition filed January 30, 2024
represented by: Modesto Bigas Mendez, Esq.
In re Thomas Dean Burns, Sr. and Donna Marie Burns
Bankr. E.D. Va. Case No. 24-10155
Chapter 11 Petition filed January 30, 2024
represented by: David Jones, Esq.
In re Shen Zen Tea, LLC
Bankr. W.D. Wash. Case No. 24-10211
Chapter 11 Petition filed January 30, 2024
See
https://www.pacermonitor.com/view/ZZS2EKA/Shen_Zen_Tea_LLC__wawbke-24-10211__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas D. Neeleman, Esq.
NEELEMAN LAW GROUP, P.C.
E-mail: courtmail@expresslaw.com
In re NJ Criminal Interdiction LLC
Bankr. M.D. Fla. Case No. 24-00468
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/5D6TDHY/NJ_Criminal_Interdiction_LLC__flmbke-24-00468__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: dvelasquez@lathamluna.com
In re Starboard Home, Inc.
Bankr. M.D. Fla. Case No. 24-00521
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/ECCLFSA/Starboard_Home_Inc__flmbke-24-00521__0001.0.pdf?mcid=tGE4TAMA
represented by: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
E-mail: All@tampaesq.com
In re Marc Wright & Company, LLC
Bankr. D. Md. Case No. 24-10803
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/YCRUCQA/Marc_Wright__Company_LLC__mdbke-24-10803__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel Staeven, Esq.
FROST LAW
E-mail: ann.jordan@askfrost.com
In re Sol and Rok, LLC
Bankr. D.P.R. Case No. 24-00328
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/RDKPDIQ/SOL_AND_ROK_LLC__prbke-24-00328__0001.0.pdf?mcid=tGE4TAMA
represented by: Juan M. Suarez-Cobo, Esq.
LEGAL PARTNERS, PSC
E-mail: suarezcobo@gmail.com
In re Fatina Cuisine LLC
Bankr. E.D. Tex. Case No. 24-60045
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/W6ZTOAA/Fatina_Cuisine_LLC__txebke-24-60045__0001.0.pdf?mcid=tGE4TAMA
represented by: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
E-mail: joyce@joycelindauer.com
In re Ability Autos LLC
Bankr. S.D. Tex. Case No. 24-30351
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/22UQTWY/Ability_Autos_LLC__txsbke-24-30351__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert C Lane, Esq.
THE LANE LAW FIRM
E-mail: notifications@lanelaw.com
In re R.A.M. Advertizing Inc.
Bankr. S.D. Tex. Case No. 24-30353
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/FJZ6BEA/RAM_Advertizing_Inc__txsbke-24-30353__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert C Lane, Esq.
THE LANE LAW FIRM
E-mail: notifications@lanelaw.com
In re Jawed Development LLC
Bankr. E.D. Va. Case No. 24-10165
Chapter 11 Petition filed January 31, 2024
See
https://www.pacermonitor.com/view/XEHEPBI/Jawed_Development_LLC__vaebke-24-10165__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Michael Stevphen Jones
Bankr. N.D. Ala. Case No. 24-40114
Chapter 11 Petition filed February 1, 2024
represented by: Robert D. McWhorter, Jr., Esq.
In re Jose A. Garcia
Bankr. D. Ariz. Case No. 24-00797
Chapter 11 Petition filed February 1, 2024
In re Aya Bakery LLC
Bankr. D. Del. Case No. 24-10147
Chapter 11 Petition filed February 1, 2024
See
https://www.pacermonitor.com/view/QD63POI/Aya_Bakery_LLC__debke-24-10147__0001.0.pdf?mcid=tGE4TAMA
represented by: Maria Aprile Sawczuk, Esq.
GOLDSTEIN & MCCLINTOCK LLLP
E-mail: marias@goldmclaw.com
In re Diamond Clean of Orlando, LLC
Bankr. M.D. Fla. Case No. 24-00501
Chapter 11 Petition filed February 1, 2024
See
https://www.pacermonitor.com/view/X74VNBY/Diamond_Clean_of_Orlando_LLC__flmbke-24-00501__0001.0.pdf?mcid=tGE4TAMA
represented by: Cole B. Branson, Esq.
BRANSONLAW, PLLC
E-mail: cole@bransonlaw.com
In re Eurobistro, LLC
Bankr. M.D. Fla. Case No. 24-00317
Chapter 11 Petition filed February 1, 2024
See
https://www.pacermonitor.com/view/RI3VWSI/Eurobistro_LLC__flmbke-24-00317__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas Adam, Esq.
THOMAS ADAM
E-mail: tadam@adamlawgroup.com
In re Shore Custom Homes Corp
Bankr. D.N.J. Case No. 24-10996
Chapter 11 Petition filed February 1, 2024
See
https://www.pacermonitor.com/view/AR7ZN3Y/Shore_Custom_Homes_Corp__njbke-24-10996__0001.0.pdf?mcid=tGE4TAMA
represented by: Eugene D. Roth, Esq.
LAW OFFICE OF EUGENE D. ROTH
E-mail: erothesq@gmail.com
In re Thomas P. Boller
Bankr. D.N.J. Case No. 24-10968
Chapter 11 Petition filed February 1, 2024
represented by: Andre Kydala, Esq.
In re 114-109 228 Street Corp
Bankr. E.D.N.Y. Case No. 24-70413
Chapter 11 Petition filed February 1, 2024
See
https://www.pacermonitor.com/view/VCFJN4A/114-109_228_Street_Corp__nyebke-24-70413__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Darmarc Limited Liability Company
Bankr. N.D. Ohio Case No. 24-30193
Chapter 11 Petition filed February 1, 2024
See
https://www.pacermonitor.com/view/SD63O3I/Darmarc_Limited_Liability_Company__ohnbke-24-30193__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven L. Diller, Esq.
DILLER AND RICE, LLC
E-mail: Steven@drlawllc.com;
Kim@drlawllc.com;
Eric@drlawllc.com
In re Bennett Motor Express TX, LLC
Bankr. E.D. Tex. Case No. 24-60048
Chapter 11 Petition filed February 1, 2024
See
https://www.pacermonitor.com/view/4NCHKNQ/Bennett_Motor_Express_TX_LLC__txebke-24-60048__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric Liepins, Esq.
ERIC A. LIEPINS
E-mail: agenda@ealpc.com
In re Max Warren Barber
Bankr. D. Utah Case No. 24-20418
Chapter 11 Petition filed February 1, 2024
In re 20 E Mariposa St LLC
Bankr. C.D. Cal. Case No. 24-10833
Chapter 11 Petition filed February 2, 2024
See
https://www.pacermonitor.com/view/LXOIPTI/20_E_Mariposa_St_LLC__cacbke-24-10833__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Yang Min Yang
Bankr. N.D. Cal. Case No. 24-50137
Chapter 11 Petition filed February 2, 2024
represented by: Arasto Farsad, Esq.
In re One Hour House Solutions LLC
Bankr. M.D. Fla. Case No. 24-00580
Chapter 11 Petition filed February 2, 2024
See
https://www.pacermonitor.com/view/JFVVQEQ/One_Hour_House_Solutions_LLC__flmbke-24-00580__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Paganus, LLC
Bankr. E.D. Mich. Case No. 24-30169
Chapter 11 Petition filed February 2, 2024
See
https://www.pacermonitor.com/view/KGGJKOY/Paganus_LLC__miebke-24-30169__0001.0.pdf?mcid=tGE4TAMA
represented by: George E. Jacobs, Esq.
BANKRUPTCY LAW OFFICES
E-mail: george@bklawoffice.com
In re Robert Donald Brunn and Louise Ann Brunn
Bankr. E.D.N.Y. Case No. 24-70425
Chapter 11 Petition filed February 2, 2024
In re Indira Velasquez
Bankr. E.D.N.C. Case No. 24-00360
Chapter 11 Petition filed February 2, 2024
In re Jason Patrick Minton and Marla Roberts
Bankr. M.D. Tenn. Case No. 24-00349
Chapter 11 Petition filed February 2, 2024
represented by: Jay Lefkovitz, Esq.
In re Vazquez & Rivera, Inc.
Bankr. N.D. Tex. Case No. 24-30327
Chapter 11 Petition filed February 2, 2024
See
https://www.pacermonitor.com/view/JY5SJ4I/Vazquez__Rivera_Inc__txnbke-24-30327__0001.0.pdf?mcid=tGE4TAMA
represented by: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
E-mail: joyce@joycelindauer.com
In re Traveling By Grace, LLC
Bankr. S.D. Tex. Case No. 24-30432
Chapter 11 Petition filed February 2, 2024
See
https://www.pacermonitor.com/view/APQ2RRI/Traveling_By_Grace_LLC__txsbke-24-30432__0001.0.pdf?mcid=tGE4TAMA
represented by: Vicky M. Fealy, Esq.
THE FEALY LAW FIRM, PC
E-mail: vfealy@fealylawfirm.com
In re Eric Bradford Dunn
Bankr. N.D. Cal. Case No. 24-30067
Chapter 11 Petition filed February 4, 2024
represented by: Ruth Auerbach, Esq.
In re Rodney F Ward, III
Bankr. N.D. Ga. Case No. 24-51283
Chapter 11 Petition filed February 4, 2024
represented by: William A. Rountree, Esq.
ROUNTREE LEITMAN KLEIN & GEER, LLC
In re Trinity Pharmacies, LLC
Bankr. W.D. Tex. Case No. 24-50144
Chapter 11 Petition filed February 4, 2024
See
https://www.pacermonitor.com/view/V7MP7IY/Trinity_Pharmacies_LLC__txwbke-24-50144__0001.0.pdf?mcid=tGE4TAMA
represented by: H. Anthony Hervol, Esq.
LAW OFFICE OF H. ANTHONY HERVOL
E-mail: hervol@sbcglobal.net
In re ZXC, LLC
Bankr. E.D. Wisc. Case No. 24-20494
Chapter 11 Petition filed February 4, 2024
See
https://www.pacermonitor.com/view/V73B7XY/ZXC_LLC__wiebke-24-20494__0001.0.pdf?mcid=tGE4TAMA
represented by: Jonathan V. Goodman, Esq.
LAW OFFICES OF JONATHAN V. GOODMAN
E-mail: jonathanvgoodman@gmail.com
In re Jessica R. Loomis
Bankr. D. Ariz. Case No. 24-00872
Chapter 11 Petition filed February 5, 2024
represented by: Christopher Simpson, Esq.
In re Amy Li Hsiao
Bankr. C.D. Cal. Case No. 24-10284
Chapter 11 Petition filed February 5, 2024
In re Global Group Properties, Inc., a California corporation
Bankr. C.D. Cal. Case No. 24-10855
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/DJTJXDQ/Global_Group_Properties_Inc_a__cacbke-24-10855__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael Cisneros, Esq.
MICHAEL A. CISNEROS, ATTORNEY AT LAW
E-mail: mcisneros@mac.com
In re Wolf Rigs, Inc.
Bankr. D. Colo. Case No. 24-10507
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/SAK4YYY/Wolf_Rigs_Inc__cobke-24-10507__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael R. Totaro, Esq.
TOTARO & SHANAHAN, LLP
E-mail: Ocbkatty@aol.com
In re 3D & Company
Bankr. N.D. Ga. Case No. 24-51352
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/QLKPLSY/3D__Company__ganbke-24-51352__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Jaspec Enterprises LLC
Bankr. N.D. Ga. Case No. 24-51346
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/VS6DMEQ/Jaspec_Enterprises_LLC__ganbke-24-51346__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Little Dollar, Inc.
Bankr. N.D. Ga. Case No. 24-51288
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/MVNIPIY/Little_Dollar_Inc__ganbke-24-51288__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Reign Pearson Homes LLC
Bankr. N.D. Ga. Case No. 24-51304
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/OKWL2FA/Reign_Pearson_Homes_LLC__ganbke-24-51304__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Smartroom2 Holding, LLC
Bankr. N.D. Ga. Case No. 24-51289
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/QXV5VVY/Smartroom2_Holding_LLC__ganbke-24-51289__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Nancy Prior
Bankr. N.D. Ill. Case No. 24-01563
Chapter 11 Petition filed February 5, 2024
represented by: David Herzog, Esq.
In re Austin Multi Portfolio LLC
Bankr. S.D.N.Y. Case No. 24-22098
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/LL2BMYQ/Austin_Multi_Portfolio_LLC__nysbke-24-22098__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Linda Schlesinger
Bankr. S.D.N.Y. Case No. 24-10190
Chapter 11 Petition filed February 5, 2024
represented by: Douglas Pick, Esq.
In re Nancy J. Haber
Bankr. S.D.N.Y. Case No. 24-10194
Chapter 11 Petition filed February 5, 2024
represented by: Julio Portilla, Esq.
LAW OFFICE OF JULIO E. PORTILLA, P.C.
In re S and K Contracting Service LLC
Bankr. D.S.C. Case No. 24-00434
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/55DOLVQ/S_and_K_Contracting_Service_LLC__scbke-24-00434__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Faith Community Development Center LLC
Bankr. E.D. Tex. Case No. 24-10058
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/B4HCCKA/Faith_Community_Development_Center__txebke-24-10058__0001.0.pdf?mcid=tGE4TAMA
represented by: C. Daniel Herrin, Esq.
HERRIN LAW, PLLC
E-mail: ecf@herrinlaw.com
In re Faith Christian Center Church of Beaumont
Bankr. E.D. Tex. Case No. 24-10057
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/6FHWKXQ/Faith_Christian_Center_Church__txebke-24-10057__0001.0.pdf?mcid=tGE4TAMA
represented by: C. Daniel Herrin, Esq.
HERRIN LAW, PLLC
E-mail: ecf@herrinlaw.com
In re Old School Power, LLC
Bankr. E.D. Tex. Case No. 24-40275
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/TXTWVKQ/Old_School_Power_LLC__txebke-24-40275__0001.0.pdf?mcid=tGE4TAMA
represented by: Jason P. Kathman, Esq.
SPENCER FANE
E-mail: jkathman@spencerfane.com
In re Cleburne Homes, LLC
Bankr. N.D. Tex. Case No. 24-40415
Chapter 11 Petition filed February 5, 2024
See
https://www.pacermonitor.com/view/2KKXTII/Cleburne_Homes_LLC__txnbke-24-40415__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric Liepins, Esq.
ERIC A. LIEPINS
E-mail: agenda@ealpc.com
*********
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
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liabilities delivered to nation's bankruptcy courts. The list
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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
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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.
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