/raid1/www/Hosts/bankrupt/TCR_Public/240322.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, March 22, 2024, Vol. 28, No. 81
Headlines
17841 PALORA: Court OKs Sale of Sherman Oaks Property for $3.17MM
4G PROPERTIES: Unsecureds to be Paid in Full over 12 Months
99 CENTS: S&P Affirms 'CCC' Rating on $350MM Senior Secured Notes
AAA TREE: Gets OK to Sell Six Vehicles to Imperial Trade Links
AIG FINANCIAL: Seeks to Extend Plan Exclusivity to June 14
AMERIFIRST FINANCIAL: Seeks to Extend Plan Exclusivity to May 20
AVINGER INC: Posts $18.3 Million Net Loss in 2023
BAGBY 3015: Voluntary Chapter 11 Case Summary
BAYTEX ENERGY: Fitch Assigns 'BB-' Rating on Sr. Unsecured Notes
BETTER POOL: Seeks to Hire Stiberman Law as Bankruptcy Counsel
BIOLASE INC: Incurs $20.6 Million Net Loss in 2023
BOULDER DENTISTRY: Mark Dennis Named Subchapter V Trustee
BURGESS BIOPOWER: U.S. Trustee Unable to Appoint Committee
CANO HEALTH: S&P Assigns 'B+' Rating on $150MM DIP Term Loan
CARETRUST REIT: S&P Alters Outlook to Pos., Affirms 'BB' ICR
COLES OF LA JOLLA: Hires Law Offices of Kit J. Gardner as Counsel
CORLEY NISSAN: Hires RE/MAX Combined Investments as Broker
CREDIT LENDING: Case Summary & Four Unsecured Creditors
CURO GROUP: Extends Forbearance to March 25
D AND J'S HASH: Hires Weiner Law Firm PC as Counsel
DG EDWARDS: Hires Eric A. Liepins, P.C. as Counsel
DIRECTBUY HOME: Plan Exclusivity Period Extended to June 12
DIXON HOLDINGS: Court OKs Sale of North Port Property
DODD DRILLING: Hires Theodore N. Stapleton P.C. as Counsel
ENVIVA INC: Davis Polk Advises Creditors in Chapter 11
ENVIVA INC: Delays Filing of Annual Report for Year Ended Dec. 31
ENVIVA INC: Fitch Lowers LongTerm IDR to 'D' on Bankruptcy Filing
EXELA TECHNOLOGIES: Receives Nasdaq Noncompliance Notice
EXQUISITE QUARTERS: Hires Richard B. Rosenblatt as Legal Counsel
FANATICS HOLDINGS:S&P Cuts Secured Credit Facility Rating to 'BB-'
FARM LLC: Hires BransonLaw PLLC as Bankruptcy Counsel
FB RIVERSIDE: Public Auction Sale Set for May 1
FINANCE OF AMERICA: Adds More Class A Shares Under Incentive Plan
FLANNERY LLC: Seeks to Hire Safe Way Tax Service as Accountant
FORZA PIPELINE: Case Summary & 20 Largest Unsecured Creditors
FPG COLONNADE: Puts North Dallas Property for Sale on April 2
FTX TRADING: Seeks to Extend Plan Exclusivity to May 13
GENESIS GLOBAL: McDermott Updates List of Genesis Crypto Creditors
GENIE INVESTMENTS: Hires Mickler & Mickler LLP as Counsel
GOGO INC: S&P Alters Outlook to Stable, Affirms 'B+' ICR
GRAFTECH INTERNATIONAL: S&P Lowers ICR to 'B-', Outlook Negative
GRANDEUR TRINITY: Alexandra Garrett Named Subchapter V Trustee
GREATER WESTCHESTER: Hires Howard Hanna as Real Estate Broker
HAGA-MOF LLC: Hires Desai Law Firm LLC as its Counsel
HAMMER FIBER: Incurs $90K Net Loss in First Quarter
HENDRIX FARMING: Seeks to Hire Riles Auctions as Auctioneer
HERBALIFE NUTRITION: S&P Lowers ICR to 'B', On Watch Negative
IIG GLOBAL: San Agustin Contract Enforceable, SDNY Judge Says
INNOVATIVE NURSING: Unsecureds to Get $1k per Month for 36 Months
JAZI KAT: Seeks Approval to Hire Degnan Law as Special Counsel
JJ ARCH LLC: Eric Huebscher Named Subchapter V Trustee
JL TEXAS PALLETS: Hires Lane Law Firm PLLC as Counsel
JOANN INC: Gibson Dunn & Morris Nichols Advise Term Loan Group
JUDSON COLLEGE: Gets OK to Sell Marion Property for $92,000
KBS REAL: Incurs $157.5 Million Net Loss in 2023
LA SALLE UNIVERSITY: Fitch Rates $44MM Series 2024 Bonds 'BB'
LECLAIRRYAN PLLC: Segregated Funds Claims Deadline Set for April 12
LEXARIA BIOSCIENCE: CFO Holds 200,000 Stock Options
MAXLINEAR INC: S&P Alters Outlook to Negative, Affirms 'BB-' ICR
MEDICAL HEALING: Hires Sanders Holloway & Ryan as Accountant
MERCY HOSPITAL: Seeks to Extend Plan Exclusivity to June 3
MIWD HOLDCO II: Fitch Rates New Sr. Secured Term Loan 'BB+'
MOVING & STORAGE: Hires Neeleman Law Group as Legal Counsel
MVK FARMCO: $27MM DIP Loan from Wilmington Wins Interim OK
MYRTLE HOMOSASSA: Case Summary & One Unsecured Creditor
NICNAT LLC: Unsecured Creditors to Get 0% in Liquidating Plan
NP WILDCAT: Property Sale Proceeds to Fund Plan
PERFECT NICHE: Hires Tarpy Cox Fleishman as Legal Counsel
PM MANAGEMENT: Seeks to Hire Gutnicki LLP as Counsel
PROOFPOINT INC: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
QSAM BIOSCIENCES: Assurance Dimensions Raise Going Concern Doubt
R & D TIMBER: Hires Walker Accounting as Accountant
REPMGMT INC: Hires Hirschler Fleischer as Special Counsel
REVELARE LLC: Stephen Coffin Named Subchapter V Trustee
ROBERTSHAW US: Hires Guggenheim as Investment Banker
ROBERTSHAW US: Hires Hunton Andrews as Bankruptcy Co-Counsel
ROBERTSHAW US: Hires Latham & Watkins as Counsel
ROBERTSHAW US: Seeks to Hire AlixPartners as Financial Advisor
SALISH COAST: Gets OK to Hire Williams & Nulle as Accountant
SALTWIRE NETWORK: Inability to Pay Debt Prompts CCAA Proceedings
SAND LANE: Hires Cicero LoVerde & Pacifico as Accountant
SAND LANE: Hires Law Office of Gregory A. Flood as Counsel
SAS AB: US Bankruptcy Court Approves Chapter 11 Plan
SC HEALTHCARE: Case Summary & 40 Largest Unsecured Creditors
SHARKFIN REAL: Case Summary & 20 Largest Unsecured Creditors
SHERLOCK STORAGE: Gets OK to Sell Missoula Property for $2.6MM
SIMPLIFIED SOFTWARE: Hires Shan Shikarpuri as Accountant
SKYLINK EXPRESS: Liquidity Challenges Cue CCAA Filing
SNC LAVALIN: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
SPI ENERGY: Agrees to Repay $10.5 Million to Streeterville
STERLING CONSULTING: Seeks to Hire Martillaro Raub as Accountant
STOP SMACKN: Angela Shortall of 3Cubed Named Subchapter V Trustee
SUNLAND MEDICAL: Unsecureds to Recover 5% to 17% in Plan
SUPPLYONE HOLDINGS: S&P Assigns 'B' ICR, Outlook Stable
TARGET GROUP: Fruci & Associates II Raises Going Concern Doubt
TERRESTRIAL BREWING: Taps George Roman Auctioneers as Auctioneers
THORNBEAR HOLDINGS: Hires Weiss Law Group as Bankruptcy Counsel
TOPPOS LLC: Court OKs Sale of Property to Red Fox for $2.4MM
TRP BRANDS: Hires Kreshmore Group as Real Estate Professional
TRUCK & TRAILER: Voluntary Chapter 11 Case Summary
TRUIST INSURANCE: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
TWINLAB CONSOLIDATED: Tanner LLC Raises Going Concern Doubt
VERMILLION ENERGY: Fitch Affirms BB- LongTerm IDR, Outlook Stable
WAVEDANCER INC: CohnReznick Raises Going Concern Doubt
WOODLAND PLACE: U.S. Trustee Unable to Appoint Committee
YERUSHA LLC: Hires Bach Law Offices Inc. as Legal Counsel
ZION OIL: RBSM LLP Raises Going Concern Doubt
[*] James H. M. Sprayregen to Join Hilco Global as Vice Chairman
[*] Teresa C. Kohl Bags M&A Advisor's 2024 Leadership Award
[^] BOOK REVIEW: The Turnaround Manager's Handbook
*********
17841 PALORA: Court OKs Sale of Sherman Oaks Property for $3.17MM
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Arturo Cisneros, the Subchapter V trustee for 17841 Palora Manor,
LLC, got the green light from a U.S. bankruptcy judge to sell the
company's real property located at 14520 Greenleaf Street, Sherman
Oaks, Calif.
Judge Sheri Bluebond of the U.S. Bankruptcy Court for the Central
District of California on March 20 approved the sale of the
property to Rishma Chand and Vamsi Kumar Kotla for $3.17 million,
with escrow to close within 30 days of the date of approval of the
sale.
The property is being sold "free and clear" of liens and interests,
according to court filings.
17841 Palora Manor estimates the net proceeds from the sale to be
$159,072.85, after deducting the sale costs, property taxes, broker
commissions and payments to Jerry Fan, a lienholder, who will
receive $2.7 million from the proceeds.
About 17841 Palora Manor
17841 Palora Manor, LLC is a real estate lessor based in Los
Angeles, Calif.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-15519) on Aug. 28,
2023, with $1 million to $10 million in both assets and
liabilities. Arturo Cisneros serves as Subchapter V trustee.
Judge Sheri Bluebond oversees the case.
Jon H. Freis, Esq., at the Law Offices of Jon H. Freis represents
the Debtor as legal counsel.
4G PROPERTIES: Unsecureds to be Paid in Full over 12 Months
-----------------------------------------------------------
4G Properties, LLC, filed with the U.S. Bankruptcy Court for the
District of Idaho a Plan of Reorganization dated March 12, 2024.
4G Properties, LLC owns an approximately 5-acre piece of property
in Rupert, Idaho containing three facilities: 1) a meat processing
one, with the ability to slaughter and process meat, and an
affiliated retail operation 2) a separate shop; and 3) a stick
built home ("Property").
The principal is Brian Jensen whose father opened the meat
operation and originally bought the Property. Mr. Jensen is the
owner of the Debtor and Jensen Meat Company, LLC, the meat plant
operator. The Debtor is the 100% owner of Fusion Metalworks LLC,
which builds custom trailers and which was acquired last year, and
was relocated from Caldwell. Mr. Jensen also occupies the home on
the property.
Historically, Jensen Meat had an oral lease with the Debtor, paid
for the expenses of the Property, and provided revenue to the
Debtor to meet its financial obligations. The meat side slowed down
and Jensen was unable to make the payments necessary to pay the
lender on the Property, Hopkins Mortgage Fund, LLC. That lender
commenced foreclosure which precipitated the bankruptcy filing.
The Debtor is now in the position to resolve its outstanding
financial issues. Jensen Meat has entered into an agreement with a
third party to do additional work which has stabilized and enhanced
its cash flow. Fusion Metalworks is now generating revenue in
Rupert by building custom trailers. Both entities are willing to
commit to provide the funds to make the required plan payments.
General Unsecured Claims Class 1 are the claims of Orton Industries
in the amount of $7,000.00 for work on the well on the Property and
S&S Sporting Goods in the amount of $9,500.00 for corral work on
the Property. Such will be paid by dividing the total amount by 12
and including interest of 6% from the Effective Date, and paying
the amount then due over 12 months, by the 15th of each month,
beginning the month after the Effective Date. Payments will be
through the Trustee if the plan is nonconsensual or directly by the
Debtor if the plan is consensual.
By the Effective Date, the Debtor will place with his counsel, to
be held in his trust account, two months of payments to this class.
In the event that Debtor defaults in making the specified payments
for more than 60 days, the individual creditors in this class may
request the amount in the trust account pro-rated between their
claim sand Debtor’s counsel shall be obligated to turn over the
same. In that event these creditors can do so without seeking
bankruptcy court approval. Once these creditors are paid in full,
the funds remaining, if any, will be replaced back to the Debtor.
Brian E. Jensen, Sr. shall retain his ownership interest in the
Debtor and shall continue to manage the Debtor, at his discretion,
as long as the Plan is complied with and fulfilled.
Pursuant to the Confirmation Order and upon Confirmation of this
Plan, the Debtor shall be authorized to take all necessary steps,
and perform all necessary acts, to consummate the terms and
conditions of this Plan, in accordance with its terms. On or before
the Effective Date, Debtor may file with the Bankruptcy Court such
agreements and other documents as may be necessary or appropriate
to effectuate or further evidence the terms and conditions of this
Plan and the other agreements. Debtor shall execute such documents
and take such other actions as necessary to effectuate the
transactions provided for in this Plan, without the need for any
additional approvals, lien releases, authorizations or consents.
The Debtor's financial obligations can be broken into three
elements and are addressed in the Plan as follows:
* As to Hopkins: Reinstate monthly payments on the loan
obligation; and Make up the outstanding default over 24 months
calculated as of the Effective Date.
* As to the two parties who provided work on the Property,
Orton Industries and S&S Sporting Goods, their joint outstanding
balances will be paid in full over 12 months after the Effective
Date.
A full-text copy of the Plan of Reorganization dated March 12, 2024
is available at https://urlcurt.com/u?l=HZOW0J from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Steven L. Taggart, Esq.
OLSEN TAGGART PLLC
P. O. Box 3005
Idaho Falls, ID 83403
Telephone: (208) 552-6442
Facsimile: (208) 524-6095
Email: staggart@olsentaggart.com
About 4G Properties
4G Properties, LLC, owns an approximately 5-acre piece of property
in Rupert, Idaho containing three facilities.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Idaho Case No. 23-40578) on Dec. 13,
2023, with $500,001 to $1 million in assets and $100,001 to
$500,000 in liabilities.
Judge Noah G. Hillen oversees the case.
Steven L. Taggart, Esq., at Olsen Taggart, PLLC, is the Debtor's
legal counsel.
99 CENTS: S&P Affirms 'CCC' Rating on $350MM Senior Secured Notes
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S&P Global Ratings affirmed its 'CCC' issue-level rating on 99
Cents Only Stores' $350 million senior secured notes due January
2026 following the company's completion of a sale-leaseback
transaction of its Commerce, California distribution center for
$190 million. S&P revised its recovery rating on the notes to '4'
from '3', reflecting lower recovery prospects following the sale of
a meaningful asset without a reduction in the facility outstanding
amount.
S&P said, "The '4' recovery rating indicates our expectation for
average (30%-50%; rounded estimate: 35%) recovery for the notes in
the event of a default. The company used the sale-leaseback
proceeds to pay down about $60 million under its asset-based
lending (ABL) facility, support its turnaround initiatives, and
purchase incremental inventory. 99 Cents Only Stores has heavily
relied on asset monetization to generate liquidity while the
company's turnaround initiatives have been unable to produce
meaningful performance improvement. The company's year-to-date
reported free operating cash flow (FOCF) deficit was about $194
million in the quarter ended on Oct. 27, 2023. We forecast FOCF
deficit will continue in the foreseeable future as lease expenses
increase, leading to elevated risk of a near-term liquidity
crunch.
"Our 'CCC' issuer credit rating and negative outlook on 99 Cents
Only Stores are unchanged. The company has faced persistent decline
in revenue, operating margins pressures, and cash flow deficit in
the last three years. We believe increasing pressure on
lower-income consumers and execution issues will challenge the
company's ability to stabilize its operating performance.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors:
-- S&P affirmed its 'CCC' issue-level rating on 99 Cents Only
Stores' outstanding $350 million senior secured notes. The recovery
rating of '4' indicates its expectation for average recovery
(30%-50%; rounded estimate: 35%) in the event of a payment default
or bankruptcy. S&P revised the recovery rating to '4' from '3'
based on its updated view of the company's valuation following a
default.
-- S&P simulates a default in 2025 resulting from a failure to
successfully turn around its performance, leading to ongoing cash
burn and a liquidity shortage.
-- S&P uses a discrete asset valuation approach to arrive at the
company's total enterprise value. Under this approach it assessed
realization rates against the company's assets, in particular its
working capital assets, which is allocated to the ABL revolver
(unrated) and the first-in last-out (FILO) facility (unrated) and
its net property and equipment, which is allocated to the senior
secured notes.
-- S&P assumes the value attributable to overall fixed assets
(including land, buildings, fixtures, and equipment) contract in a
default because of continued competitive pressures in the retail
industry.
Simulated default assumptions:
-- Simulated year of default: 2025
-- Negligible cash and investments at the point of default
-- Working capital assets are used to pay the ABL and FILO
facilities with residual amount going to the senior secured notes.
-- Net property, plant, and equipment yield almost 75% realization
rate, which reflects a multiple on the balance sheet net value of
land, warehouses, and stores, diluted by lower rates on its
leasehold improvements, fixtures, and equipment.
-- Discrete asset valuation: about $240 million
Simplified waterfall
-- Net enterprise value after 5% administrative costs: about $228
million
-- Priority debt claims: $100 million
-- Total collateral available to the secured notes: $128 million
-- Secured debt claims: $363 million
--Recovery expectations: 30%-50%; rounded estimate: 35%
All debt amounts include six months of prepetition interest.
Ratings List
ISSUE-LEVEL RATINGS AFFIRMED; RECOVERY RATINGS REVISED
99 CENTS ONLY STORES LLC
Senior Secured CCC
Recovery Rating 4(35%) 3(50%)
AAA TREE: Gets OK to Sell Six Vehicles to Imperial Trade Links
--------------------------------------------------------------
AAA Tree Service, LLC got the green light from the U.S. Bankruptcy
Court for the Central District of California to sell six Ford
trucks to Imperial Trade Links, Inc.
Imperial offered to buy the vehicles for $270,000 or $45,000 each.
AAA Tree Service estimates the net proceeds from the sale to be
$52,515, after payment of liens of Ford Motor Credit Company, LLC.
Ford Motor, which holds a lien in the amount of $217,485, will be
paid in full from the sale proceeds.
"The sale is an arms-length transaction at fair market value of
unneeded equipment, which allows [AAA Tree Service] to generate
funds for its reorganization," Robert Goe, Esq., the company's
attorney, said in court papers.
About AAA Tree Service
AAA Tree Service, LLC provides tree removals and trimming services
in Winchester, Calif.
AAA Tree Service sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-12229) on May 25,
2023. In the petition signed by CEO Stacy Manqueros, the Debtor
disclosed up to $50 million in assets and up to $10 million in
liabilities.
Judge Magdalena Reyes Bordeaux oversees the case.
Robert P. Goe, Esq., at Goe Forsythe and Hodges, LLP, represents
the Debtor as legal counsel.
AIG FINANCIAL: Seeks to Extend Plan Exclusivity to June 14
----------------------------------------------------------
AIG Financial Products Corp. asked the U.S. Bankruptcy Court for
the District of Delaware to extend its exclusivity periods to file
a plan of reorganization and obtain acceptance thereof to June 14
and August 14, 2024, respectively.
The ultimate goal of the Debtor's Chapter 11 Case is to achieve an
orderly, efficient, and value-maximizing reorganization of AIG FP's
balance sheet, which will benefit the Debtor's estate and provide
the most robust recoveries possible to creditors in accordance with
contractual and bankruptcy priorities.
The Debtor has already formulated and filed its Plan that achieves
this result, which it intends to solicit with this Court's
approval, while also running a parallel process towards a possible
sale of all or substantially all of the Debtor's assets in the
event the Plan cannot be confirmed or consummated.
The Debtor explains that it has yet to commence solicitation of
votes on the Plan due to the Adversary Proceeding. Since the
Petition Date, the Debtor has also continued to manage its
remaining business, including negotiating with various remaining
counterparties, while litigating the Motion to Dismiss and
progressing the Adversary Proceeding. Accordingly, the Debtor
submits that the almost exclusive focus on the Motion to Dismiss,
the mediation, and the pending Adversary Proceeding weighs in favor
of extending the Exclusive Periods.
The Debtor asserts that extension of the Exclusive Periods will not
prejudice the legitimate interests of postpetition creditors
because the Debtor continues to make timely payments on their
undisputed postpetition obligations. The Debtor continues to have
access to the sufficient liquidity needed to support its ongoing
operations. As such, this factor weighs in favor of allowing the
Debtor to extend the Exclusive Periods.
The Debtor further asserts that the outcome of the Adversary
Proceeding constitutes an unresolved contingency that must occur in
order for the Chapter 11 Case to proceed. Resolution of the issues
raised by the Debtor in the Adversary Proceeding remains condition
precedent to confirmation of the Plan. The Debtor believes the
issues set forth in the Adversary Proceeding will have to be
decided by the Court before any other party is permitted to put
forth an alternative chapter 11 plan.
In addition, termination of the Exclusive Periods in the Chapter 11
Case would adversely impact the Debtor's administration of the
Chapter 11 Case. Simply put, if the Court were to deny the Debtor's
request for an extension of the Exclusive Periods, any party in
interest would be free to propose a chapter 11 plan for the Debtor
and solicit acceptances thereof.
AIG Financial Products Corp. is represented by:
Michael R. Nestor, Esq.
Kara Hammond Coyle, Esq.
Shane M. Reil, Esq.
Catherine C. Lyons, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Email: mnestor@ycst.com
kcoyle@ycst.com
sreil@ycst.com
clyons@ycst.com
- and -
George A. Davis, Esq.
Keith A. Simon, Esq.
David Hammerman, Esq.
Annemarie V. Reilly, Esq.
Madeleine C. Parish, Esq.
LATHAM & WATKINS LLP
1271 Avenue of the Americas
New York, NY 10020
Tel: (212) 906-1200
Email: george.davis@lw.com
keith.simon@lw.com
david.hammerman@lw.com
annemarie.reilly@lw.com
madeleine.parish@lw.com
About AIG Financial Products Corp.
AIG Financial Products Corp. is a wholly- owned, direct subsidiary
of American International Group, Inc. It is a Delaware corporation
founded in 1987 and based in Wilton, Conn., is a financial products
company. It was founded for the purpose of trading in the capital
markets and offering corporate finance, structured finance, and
financial risk management products, including complex derivatives
transactions.
AIG Financial Products filed a petition under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 22-11309) on Dec. 14,
2022, with $100 million to $500 million in assets and $10 billion
to $50 billion liabilities.
Judge Mary F. Walrath oversees the case.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Latham &
Watkins, LLP as bankruptcy counsels; Debevoise & Plimpton, LLP as
special litigation counsel; and Alvarez & Marsal North America, LLC
as financial advisor. William C. Kosturos, managing director at
Alvarez & Marsal, serves as the Debtor's chief restructuring
officer. Epiq Corporate Restructuring, LLC is the claims and
noticing agent.
AMERIFIRST FINANCIAL: Seeks to Extend Plan Exclusivity to May 20
----------------------------------------------------------------
AmeriFirst Financial, Inc., and Phoenix 1040 LLC asked the U.S.
Bankruptcy Court for the District of Delaware to extend their
exclusivity periods to file a plan of reorganization and obtain
acceptance thereof to May 20 and July 20, 2024, respectively.
The Debtors explain that they continue to make good-faith progress.
Early on in these cases, the Debtors obtained approval to continue
certain business operations in the ordinary course. The Debtors
also consummated a sale of the bulk of their commercial line of
business. In addition, the Debtors recently concluded the sale of
their most valuable asset, their mortgage servicing rights (the
"MSR Sale").
The Debtors assert that despite litigation with the Committee
regarding the Committee's motion seeking standing to pursue estate
causes of action, which the Court has taken under advisement, the
Debtors remain hopeful that negotiations with their key
stakeholders to effectuate an orderly wind down of the Debtors'
estates through a plan of liquidation will progress.
The Debtors further assert that while negotiations between the
Committee and RCP seem to have stalled pending issuance of the
Court's ruling on the standing motion, allowing the expiration of
the Exclusive Periods now would serve only to interfere with, or
delay the progress the Debtors have made to date towards a
successful emergence from these cases.
The Debtors claim that they are not seeking to delay these chapter
11 cases by requesting the relief sought herein. Rather, the
Debtors intend to use the extensions of the Exclusive Periods to
ultimately seek confirmation of a plan of liquidation and exit
chapter 11 in a timely manner, without the unnecessary costs and
distraction of a competing plan process.
The Debtors state that they seek to extend the Exclusive Periods to
enable them to maximize the value of their estates through
consummation of a plan of liquidation. All stakeholders would
benefit from the continued stability and predictability of having
the Debtors as the sole plan proponents, and the Debtors will
continue to work constructively with their creditors and all
parties in interest to resolve any outstanding issues on a
consensual basis whenever possible.
Counsel for the Debtors:
Laura Davis Jones, Esq.
David M. Bertenthal, Esq.
Timothy P. Cairns, Esq.
Pachulski Stang Ziehl & Jones, LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
Email: ljones@pszjlaw.com
About AmeriFirst Financial
AmeriFirst Financial, Inc., is a mid-sized independent mortgage
company in Mesa, Ariz.
AmeriFirst and its affiliate Phoenix 1040, LLC, filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-11240) on Aug. 24, 2023.
In the petitions signed by T. Scott Avila, chief restructuring
officer, each Debtor disclosed between $50 million and $100 million
in both assets and liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones, LLP as bankruptcy counsel; and Paladin Management
Group, LLC as restructuring advisor. Omni Agent Solutions, Inc.,
is the claims, noticing and administrative agent.
On Sept. 15, 2023, the Office of the United States Trustee
appointed an official committee of unsecured creditors. The
committee tapped Morris, Nichols, Arsht & Tunnell LLP as its
counsel.
AVINGER INC: Posts $18.3 Million Net Loss in 2023
-------------------------------------------------
Avinger, Inc. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K reporting a net loss applicable to
common stockholders of $18.32 million on $7.65 million of revenues
for the year ended Dec. 31, 2023, compared to a net loss applicable
to common stockholders of $27.24 million on $8.27 million of
revenues for the year ended Dec. 31, 2022.
As of Dec. 31, 2023, the Company had $13.77 million in total
assets, $19.97 million in total liabilities, and a total
stockholders' deficit of $6.20 million.
San Francisco, California-based Moss Adams LLP, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated March 20, 2024, citing that the Company's recurring
losses from operations and its need for additional capital raise
substantial doubt about its ability to continue as a going
concern.
"To date, we have financed our operations primarily through net
proceeds from the issuance of our preferred stock, common stock and
debt financings, our at the market program, our initial public
offering ("IPO"), our follow-on public offerings and warrant
issuances. We do not know when or if our operations will generate
sufficient cash to fund our ongoing operations. We will need to
raise additional capital through future equity or debt financings
in the near future to meet our operational needs and capital
requirements for product development, clinical trials and
commercialization, and to regain compliance with the Equity
Requirement of the Nasdaq Listing Rules. Additional debt
financing, if available, may involve covenants restricting our
operations or our ability to incur additional debt. Any additional
debt financing or additional equity that we raise may contain terms
that are not favorable to us or our stockholders and require
significant debt service payments, which divert resources from
other activities. Additional financing may not be available at all,
or if available, may not be in amounts or on terms acceptable to
us. If we are unable to obtain additional financing, we may be
required to delay the development, commercialization and marketing
of our products and we may be required to significantly scale back
our business and operations. In the event we determine that
additional sources of liquidity will not be available to us or will
not allow us to meet our obligations as they become due, we may
need to file a voluntary petition for relief under the United
States Bankruptcy Code in order to implement a restructuring plan
or liquidation."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001506928/000143774924008711/avgr20231231_10k.htm
About Avinger
Headquartered in Redwood City, California, Avinger, Inc. --
http://www.avinger.com-- is a commercial-stage medical device
company that designs and develops image-guided, catheter-based
system for the diagnosis and treatment of patients with Peripheral
Artery Disease (PAD). The Company designs, manufactures, and sells
a suite of products in the United States and select international
markets.
BAGBY 3015: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Bagby 3015, LLC
905 Hickorywood Lane
Houston TX 77024
Business Description: Bagby 3015 is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: March 21, 2024
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 24-31232
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
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Amir Ansari as president.
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/ANU5JRI/Bagby_3015_LLC__txsbke-24-31232__0001.0.pdf?mcid=tGE4TAMA
BAYTEX ENERGY: Fitch Assigns 'BB-' Rating on Sr. Unsecured Notes
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR3' rating to Baytex Energy
Corp.'s (B+/Positive) proposed senior unsecured notes offering. Net
proceeds from the notes will be used to redeem the company's 8.75%
2027 senior notes, as well as repay a portion of credit facility
borrowings. The notes will be guaranteed by all material
subsidiaries of Baytex.
Baytex's rating reflects its asset diversity and headroom under
Fitch's upgrade EBITDA leverage sensitivity with leverage expected
below 1.5x during Fitch's forecast period. The Positive Outlook is
based on the increased production scale and expected progress
toward its CAD1.5 billion debt target, improvement in the liquidity
position and successful execution as an operator in the Eagle Ford
trend.
KEY RATING DRIVERS
Scale Enhancing Merger: Baytex's acquisition of Ranger Oil
Corporation, which closed in June 2023, considerably increased its
production scale. The company's production reached 160 thousand
barrels of oil equivalent (kboe/d; 83% liquids) in 4Q23, up from 87
kboe/d in 4Q22. This maintains Baytex's favorable standalone
liquids weighting and meaningfully increases its scale to a level
more typical of the 'BB' rating category.
Debt Increase: Baytex's EBITDA increased to 1.4x at YE 2023 from
0.7x at YE 2022, although it would be lower in 2023 if a full year
of Ranger's results were included in the consolidated financials.
Fitch expects Baytex's leverage to stay below 1.5x in 2024-2027,
leaving significant headroom below the company's negative rating
sensitivity.
Shareholder Distributions: Baytex has increased its shareholder
return target to 50% of FCF, which includes a CAD0.09 annual fixed
per-share dividend and share buybacks. Under its stated financial
policy, shareholder distributions may increase to 75% of FCF if the
company meets its target of CAD1.5 billion total debt.
Standalone Diversified Assets: Baytex has a meaningfully diverse
asset base by geography and hydrocarbon. In 4Q23, 60% of production
came from the Eagle Ford. The remaining 40% was Canadian production
split most of which was heavy oil, with heavy oil prices discounted
due to quality and transportation differentials.
Hedged Differentials and Commodity Prices: Baytex intends to hedge
approximately 40% of its net oil exposure, helping provide cash
flow visibility. The company also partially hedges Canadian
differentials between Western Canadian Select and MSW to West Texas
Intermediate (WTI). Baytex has U.S. dollar to Canadian dollar FX
exposure due to its Eagle Ford assets, U.S. dollar-denominated
debts and Canadian dollar reporting.
DERIVATION SUMMARY
After the Ranger acquisition, Baytex has differentiated itself in
size from Canadian peers MEG Energy Corp. (BB-/Stable; 101 kboe/d;
100% liquids) and Vermilion Energy Inc. (BB-/Stable; 84 kboe/d in
2023; 46% liquids), whose rating benefits from its exposure to
European benchmarked oil and gas. Baytex is comparable to
'BB-'/Stable peer SM Energy Company, which averaged 154 kboe/d in
2023, but is expected to generate weaker netbacks due to the
production mix differences, including stronger economic benefits
from SM Energy's Permian Basin exposure.
A differentiating factor for Baytex has historically been the
non-operating status portion of production relating to its Eagle
Ford trend assets, which is not typical at the 'B+' rating level.
However, this is expected to be less of a forward-looking concern.
KEY ASSUMPTIONS
- West Texas Intermediate of $75 per barrel (bbl) in 2024, $65/bbl
in 2025, $60/bbl in 2026 and $57/bbl thereafter;
- Henry Hub of $3.25 per thousand cubic feet (mcf) in 2024,
$3.00/mcf in 2025 and $2.75/mcf thereafter;
- Alberta Energy Company (AECO) differentials steady as a
percentage of HH during the majority of forecast;
- Low single-digit annual production growth through the forecast;
- Modest dividend growth during the forecast;
- Capex averaging CAD1.2 billion annually in 2024-2027.
RECOVERY ANALYSIS
Key Recovery Rating Assumptions
The recovery analysis assumes Baytex would be reorganized as a
going concern (GC) in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim and a 100% draw on its secured
revolving facility, reflecting that Baytex's facilities are not
affected by redetermination risk.
GC Approach
Baytex's GC EBITDA assumption of CAD750 million reflects Fitch's
view of sustainable, post-reorganization EBITDA upon which the
agency bases the enterprise valuation (EV).
Baytex's bankruptcy scenario considers a structurally lower-priced
crude oil and natural gas environment, resulting in reduced
operational and financial flexibility, in line with stress case
assumptions beyond the existing production hedged period. Fitch
believes the lower price environment supports a lower capital
program, modest production declines and negative FCF.
The GC assumption reflects Fitch's stressed case price deck. An EV
multiple of 4.0x EBITDA is applied to the GC EBITDA to calculate a
post-reorganization EV. The choice of this multiple considered the
following factors:
The historical bankruptcy case study exit multiples for peers
ranged from 2.8x to 7.0x, with an average of 5.2x and a median of
5.4x;
Selection of a 4.0x multiple is consistent with similarly rated
Canadian peers, historically lower Proved Developing Producing
reserves, limited operator history in the Eagle Ford and exposure
to lower-netback heavy oil in Canada.
Liquidation Approach
The liquidation estimate reflects Fitch's view of transactional and
asset-based valuations, including recent transactions in the
Canadian oil sands, Viking, Duvernay and the Eagle Ford Basin on a
Canadian dollar/boepd and CAD/acre basis, as well as Baytex's
standardized measure of net cash flows (PV-10) estimates. This data
was used to determine a reasonable sales price for the company's
assets.
The allocation of value in the liability waterfall results in an
'BB-'/'RR3' rating for Baytex's senior unsecured notes, notching up
one level from Baytex's 'B+' Issuer Default Rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Meaningful progress toward management-stated gross debt-reduction
financial policy;
- Improved liquidity and reduced revolver utilization;
- Production growth resulting in average daily production over 125
mboepd;
- Midcycle EBITDA leverage below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Failure to complete the Ranger acquisition largely as
contemplated could result in an Outlook revision to Stable;
- Sustained increased revolver borrowings and the inability to live
within cash flow over the next 12-18 months;
- Loss of operational momentum or evidence of execution weaknesses
on its operated Eagle Ford assets.
- Midcycle EBITDA leverage sustained over 2.5x
LIQUIDITY AND DEBT STRUCTURE
Enhanced Liquidity After Refinancing: Baytex does not have debt
maturities until 2026 when its credit facility is due. The amount
drawn under the facility was CAD865 million, and it may decrease if
part of the proposed notes is used for credit facility repayment.
Baytex had CAD56 million of cash available at YE 2023. Its
liquidity was further strengthened by positive FCF projected by
Fitch in 2024-2027.
ISSUER PROFILE
Baytex Energy is mid-sized a Canadian E&P company with a production
mix including heavy oil, light oil and condensate, NGLs and natural
gas. Its operations in Canada are in the U.S. within the Eagle Ford
trend and in Western Canadian Sedimentary Basin.
DATE OF RELEVANT COMMITTEE
28 February 2023
ESG CONSIDERATIONS
Baytex Energy Corp. has an ESG Relevance Score of '4' for Energy
Management, reflecting the company's relatively smaller scale and
heavy oil exposure, which may expose it to impending energy
transition risks. These factors have 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
----------- ------ --------
Baytex Energy Corp.
senior unsecured LT BB- New Rating RR3
BETTER POOL: Seeks to Hire Stiberman Law as Bankruptcy Counsel
--------------------------------------------------------------
The Better Pool Guy and Home Solutions, Inc. seeks approval from
the U.S. Bankruptcy Court for the Middle District of Florida to
employ Stiberman Law, P.A. as its counsel.
The firm will render these services:
a. advise the Debtor with respect to its responsibilities in
complying with the United States Trustee's Guidelines and Reporting
Requirements and with the rules of the court;
b. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of this case;
c. protect the interests of the Debtor in all matters pending
before the court; and
d. represent the Debtor in negotiations with its creditors and
in the preparation and confirmation of a plan.
The firm received a retainer in the amount of $10,000.
The firm can be reached through:
Robert A. Stiberman, Esq.
Stiberman Law, P.A.
2601 Hollywood Blvd.
Hollywood, FL 33020
Tel: (954) 922-2283
Fax: (954) 302-8707
Email: ras@stibermanlaw.com
About The Better Pool Guy and Home Solutions, Inc.
The Better Pool Guy and Home Solutions, Inc. offers swimming pool
services to residential and commercial customers. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Fla. Case No. 24-01148) on March 8, 2024. In the petition
signed by Timothy J. Cope, president, the Debtor disclosed up to
$500,000 in assets and up to $10 million in liabilities.
Judge Grace E. Robson oversees the case.
Robert A. Stiberman, Esq., at STIBERMAN LAW, P.A., represents the
Debtor as legal counsel.
BIOLASE INC: Incurs $20.6 Million Net Loss in 2023
--------------------------------------------------
Biolase, Inc. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K reporting a net loss of $20.63 million
on $49.16 million of net revenue for the year ended Dec. 31, 2023,
compared to a net loss of $28.63 million on $48.46 million of net
revenue for the year ended Dec. 31, 2022.
As of Dec. 31, 2023, the Company had $35.10 million in total
assets, $33.14 million in total liabilities, $2.20 million in total
mezzanine equity, and a total stockholders' deficit of $247,000.
On Dec. 31, 2023, the company had cash and cash equivalents of
approximately $6.6 million. Following its February 2024 equity
raise of an additional $7.0 million in gross proceeds, the Company
believes it has sufficient liquidity to execute its near-term
growth strategies and reach positive adjusted EBITDA for the full
year 2024.
Irvine, CA-based Macias Gini & O'Connell, LLP, the Company's
auditor since 2023, issued a "going concern" qualification in its
report dated March 21, 2024, citing that the Company has suffered
recurring losses from operations and has had negative cash flows
from operations for each of the three years ended Dec. 31, 2023.
This raises substantial doubt about the Company's ability to
continue as a going concern.
Management Comments
"We were operating in a challenging spending environment given
higher interest rates. However, our initiatives enabled us to grow
full-year 2023 revenue modestly," commented John Beaver, president
and chief executive officer of BIOLASE. "Our continuing efforts to
heighten the interest in our industry-leading dental lasers are
driving greater awareness and interest in our award-winning lasers,
which we believe will continue in 2024 and allow us to accelerate
our revenue growth as we return to a more normalized business
climate. The increased utilization of our installed base is a
bullish sentiment, as evidenced by the 20% increase in our
consumable sales during the year, so our goal is to accelerate
growth while continuing to improve our operations. Greater
adoption of our dental lasers, coupled with the expansion of our
gross margins and lower operating expenses, will allow us to meet
our revenue and profitability objectives for 2024."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000811240/000095017024034812/biol-20231231.htm
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.
BOULDER DENTISTRY: Mark Dennis Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 11 appointed Mark Dennis, a certified
public accountant at SL Biggs, as Subchapter V trustee for Boulder
Dentistry, P.C.
Mr. Dennis will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Dennis declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark D. Dennis, CPA
SL Biggs, A Division of SingerLewak, LLP
2000 S. Colorado Blvd., Tower 2, Ste. 200
Denver, CO 80222
Phone: 303-226-5471
Email: mdennis@slbiggs.com
About Boulder Dentistry
Boulder Dentistry, P.C. is a Colorado professional corporation that
owns and operates a dental practice located at 1651 28th Street,
Boulder, Colo. It provides cosmetic dentistry, digital x-rays,
laser cavity detection, porcelain implant crowns, and other dental
related services. Michael A. Bentz, DDS, has been practicing
dentistry for over 25 years.
Boulder Dentistry filed a voluntary Chapter 11 petition (Bankr. D.
Colo. Case No. 19-19126) on Oct.22, 2019, with up to $50,000 in
assets and up to $1 million in liabilities.
Judge Joseph G. Rosania, Jr. oversees the case.
The Debtor is represented by Aaron A. Garber, Esq., at Wadsworth
Garber Warner Conrardy, P.C.
BURGESS BIOPOWER: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------
The U.S. Trustee for Region 3 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Burgess BioPower, LLC.
About Burgess BioPower
Burgess BioPower, LLC and its affiliates are renewable energy power
companies that own and operate a 75-megawatt biomass-fueled power
plant located on an approximately 62-acre site in Berlin, New
Hampshire. Berlin Station owns the facility and the facility site,
and Burgess BioPower leases the facility pursuant to a long-term
lease. Burgess BioPower also holds the necessary regulatory
licenses for the operation of the facility.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10235) on February
9, 2024, with $10 million to $50 million in assets and $100 million
to $500 million in liabilities. Dean Vomero, chief restructuring
officer, signed the petitions.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Foley Hoag, LLP as general bankruptcy counsel;
Gibbons P.C. as Delaware counsel; and SSG Capital Advisors, L.P. as
investment banker.
CANO HEALTH: S&P Assigns 'B+' Rating on $150MM DIP Term Loan
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' point-in-time rating to the
$150 million debtor-in-possession (DIP) term loan issued by
Florida-based Cano Health LLC, a subsidiary of Medicare
Advantage-focused primary care service provider Cano Health Inc.
Cano is currently operating under the protection of Chapter 11 of
the U.S. Bankruptcy Code following a pre-negotiated filing on Feb.
4, 2024.
S&P said, "Our 'B+' rating on Cano's DIP term loan reflects the
credit risk borne by the DIP lenders. The rating is based on our
view of the company's ability to meet its financial requirements
during bankruptcy through our debtor credit profile (DCP)
assessment. This reflects the prospects for full repayment through
the company's reorganization and emergence from Chapter 11 using
our capacity for repayment at emergence (CRE) assessment and the
prospects for full repayment in a liquidation scenario using our
additional protection in a liquidation scenario (APLS) assessment."
S&P's assessment of each of these factors is as follows:
-- S&P's DCP of 'b-' reflects its view of the company's weak
business risk profile and highly leveraged financial risk profile,
together with our consideration of applicable ratings modifiers in
bankruptcy.
-- S&P believes the DIP term loan has strong potential for full
coverage in an emergence scenario for its CRE assessment (CRE >=
250%). S&P's CRE assessment provides an uplift of two notches over
the DCP. It assesses repayment prospects for the CRE assessment as
if the DIP facilities are required to be repaid in full in cash at
emergence.
--S&P's APLS assessment indicates more than 125% total value
coverage in a liquidation scenario and provides an additional one
notch of uplift over the DCP.
If the restructuring is completed as expected under the
restructuring support agreement, the DIP will roll into a larger
exit facility of $225 million and have junior payment status to the
planned exit revolving facility. S&P has made a one-notch DIP issue
adjustment (DIA) to reflect the incremental risk that results from
these terms.
S&P said, "Our business risk assessment of weak reflects our view
that Cano operates with a narrow focus and a high geographic
concentration. Cano Health specializes in providing primary care
services to Medicare Advantage patients and primarily operates in
markets across Florida. While Florida is the largest Medicare
Advantage market in the U.S., and Cano Health has a leading
position within it, the market remains highly fragmented, and the
company has a small market share. Cano Health derives a significant
portion of its revenue (over 95%) from value-based contracts, in
which it takes on capitated risk in managing the health care of
Medicare Advantage and Medicaid plan enrollees for a monthly per
enrollee fee. This leaves the company exposed to changes in medical
utilization rates and/or medical costs.
"Our financial risk assessment of highly leveraged reflects our
expectation that EBITDA will be negative throughout the bankruptcy.
Despite a substantially reduced debt burden during bankruptcy due
to a stay on prepetition debt (about $1.2 billion) and the
comparatively lower amount of DIP debt ($150 million), we expect
the company's EBITDA and cash flow will remain negative throughout
the bankruptcy. Cano does not have a track record of generating
positive free cash flows because the company focused on
aggressively expanding its operations via new site growth and
acquisitions, pushing adjusted leverage to over 20x at the end of
2022. The company exited 75 centers in 2023, refocusing on its most
profitable centers and core markets. Cano's transformation plan
includes re-negotiating its payor contracts to more adequately
price risks and implementing further cost-reduction initiatives in
bankruptcy. However, the cost reductions have significant costs to
achieve in 2024 and the improvement to profitability will not be
realized until 2025 at the earliest."
CARETRUST REIT: S&P Alters Outlook to Pos., Affirms 'BB' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook on CareTrust REIT Inc. to
positive from stable and affirmed all of its ratings, including the
'BB' issuer credit rating on the company and the 'BB+' issue-level
rating on its senior unsecured notes.
S&P said, "The positive outlook reflects our expectation that
CareTrust will continue to expand its portfolio while maintaining
strong credit protection measures. Furthermore, we expect the
company's operating performance will remain steady, supported by
solid rent collections and limited tenant disruptions over the next
12 months."
CareTrust's significant equity issuances in 2023 have positioned it
for robust growth in 2024 while it maintains strong credit
protection metrics. The company generated net proceeds of more than
$634 million by issuing equity through its at-the-market program in
2023 and ended the year with approximately $294 million of cash and
cash equivalents. This improved its S&P Global Ratings-adjusted
debt to EBITDA to 3.1x as of year-end 2023 from 4.3x as of the end
of 2022. Given our assessment of its business risk profile, we do
not net the company's cash against its debt when calculating this
metric. Therefore, when the company uses its cash on hand to fund
investment activity, this will lead to further deleveraging on an
S&P Global Ratings-adjusted basis.
CareTrust has already completed approximately $119 million of
investments in 2024 and maintains a pipeline of $200 million-$250
million of investment opportunities. S&P said, "We expect the
company's net investment activity in 2024 will well surpass the
approximately $250 million it spent in 2023. We anticipate
management will fund these investments with a mix of free cash
flow, equity, and borrowings from its revolving credit facility. As
such, we expect CareTrust's S&P Global Ratings-adjusted debt to
EBITDA will decline further to the mid- to high-2x area over the
next 12 months, while its fixed-charge coverage ratio further
improves from its already strong level of 4.7x as of year-end
2023."
S&P said, "CareTrust has largely completed its portfolio
repositioning efforts and we expect a steady operating performance
in 2024.The company spent a large part of the last two years
working through operator transitions and asset sales due to the
detrimental effects of the COVID-19 pandemic on its operators. As
of year-end 2023, CareTrust had just four facilities left to
re-tenant or convert to behavioral health, with another 12 on the
market for sale. Furthermore, the company collected 100% of its
contractual rents in the fourth quarter of 2023 and 97.7% of its
rents for the year, which compares with 95.5% and 95.2% (inclusive
of security deposits), respectively, in 2022. This demonstrates not
only the success of the company's repositioning work but also the
overall improvement in its tenants' health, given that its
occupancy and coverage metrics largely improved in 2023. We expect
CareTrust's occupancy will continue to improve toward pre-COVID
levels in 2024, with the improvement in its coverage metrics
further supported by easing labor pressures and an extended period
of declining bed supply in the skilled nursing space.
"The positive outlook reflects our expectation that CareTrust will
continue to expand its portfolio while maintaining strong credit
protection measures. Furthermore, we expect the company's operating
performance will remain steady, with solid rent collections and
limited tenant disruptions over the next 12 months."
S&P would consider revising its outlook on CareTrust to stable if:
-- The company finances its investment activity with a greater
proportion of debt such that its S&P Global Ratings-adjusted debt
to EBITDA rises to and is sustained at or above 4.5x; or
-- Its operating performance deteriorates significantly, with
coverage metrics, occupancy, and rent collections pressured.
S&P would consider raising its issuer credit rating on CareTrust
if:
-- It executes on its investment pipeline and increases its scale
while reducing its tenant concentration risk;
-- The company maintains its conservative financial policy such
that it sustains S&P Global Ratings-adjusted debt to EBITDA below
4.5x; and
-- Its operating performance remains in-line with its
expectations, including solid rent collections and improving
occupancy.
COLES OF LA JOLLA: Hires Law Offices of Kit J. Gardner as Counsel
-----------------------------------------------------------------
Coles of La Jolla, Inc. dba Coles Fine Flooring, seeks approval
from the U.S. Bankruptcy Court for the Southern District of Florida
to employ Law Offices of Kit J. Gardner as counsel.
The firm will provide these services:
a. represent the Debtor at its Initial Debtor Interview;
b. represent the Debtor at its meeting of creditors pursuant
to Bankruptcy Code Section 341(a), or any continuance thereof;
c. represent the Debtor at all hearings before the United
States Bankruptcy Court involving Applicant as a Chapter 11 debtor,
debtor in possession, and as a reorganized debtor, as applicable;
d. prepare on behalf of the Debtor, as Chapter 11 debtor and
debtor in possession, is applicable, all necessary applications,
motions, orders, and other legal papers;
e. advise the Debtor regarding matters of bankruptcy law,
including the Debtor's rights and remedies with respect to
Applicant's assets and the claims of its creditors;
f. represent the Debtor with regard to all contested matters;
g. represent the Debtor with regard to the preparation of a
plan of reorganization and the negotiation and implementation of a
plan of reorganization;
h. analyze any secured, priority, or general unsecured claims
that have been filed in the Debtor's bankruptcy case;
i. negotiate with the Debtor's secured and unsecured creditors
regarding the amount and payment of their claims;
j. object to claims as may be appropriate; and
k. perform all other legal services for the Debtor as a Chapter
11 debtor and debtor in possession, as applicable, as may be
necessary, other than adversary proceedings which would require a
further written agreement.
The firm will be paid at these rates:
Stella Havkin $550 per hour
David Jacob $375 per hour
Kit Gardner $495 per hour
Paralegals $90 to $210 per hour
The firm will be paid a retainer in the amount of $40,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Kit J. Gardner, Esq., a partner at Law Offices of Kit J. Gardner,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Kit J. Gardner, Esq.
Law Offices of Kit J. Gardner
The Koll Center
501 West Broadway, Suite 800
San Diego, CA 92101
Telephone: (619) 525-9900
Facsimile: (619) 374-2241
Email: kgardner@gardnerlegal.com
About Coles of La Jola Inc
Coles of La Jolla, Inc., doing business as Coles Fine Flooring, is
a family-owned and operated carpet, fine furniture and gift store
specializing in specializing in fine flooring. The company is based
in San Diego, Calif.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Calif. Case No. 24-00613) on Feb. 26,
2024, with $4,941,193 in assets and $3,329,830 in liabilities.
Stephen M. Coles, president, signed the petition.
Stella Havkin, Esq., represents the Debtor as legal counsel.
CORLEY NISSAN: Hires RE/MAX Combined Investments as Broker
----------------------------------------------------------
Corley Nissan, LLC, seeks approval from the U.S. Bankruptcy Court
for the District of New Mexico to employ RE/MAX Combined
Investments as broker.
The firm will provide these services:
a. represent and to render advice to Debtor regarding the
negotiation, agreement and final sale of the Debtor's corporate
real estate, and including, without limitation, the negotiation,
preparation of sale agreement, and transfer of corporate real
estate of the Debtor;
b. communicate any offers, counter-offers, sale terms, and any
other services necessary to effectuate the sale of the Debtor's
corporate real estate;
c. perform any other services to the Debtor, the Debtor's
bankruptcy counsel and the firm deem necessary and appropriate
under the applicable state laws as well as the Bankruptcy Code to
effectuate the sale of Debtor's real property.
The firm will be paid a commission of 5 percent the total sales
price.
Dan K. Frady CDPE GRI QB, a partner at RE/MAX Combined Investments,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Dan K. Frady
RE/MAX Combined Investments
1638 South 2nd St
Gallup, NM 87301
Telephone:(505) 722-7811
About CORLEY NISSAN, LLC
Corley Nissan is an automotive dealer in Gallup, New Mexico.
Corley Nissan, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.M. Case No. 23-10975) on Oct 31, 2023,
listing $50,001 to $100,000 in assets and $1,000,001 to $10 million
in liabilities.
Judge Robert H Jacobvitz oversees the case.
Christopher M Gatton, Esq. at Giddens & Gatton Law, P.C., is the
Debtor's counsel.
CREDIT LENDING: Case Summary & Four Unsecured Creditors
-------------------------------------------------------
Debtor: Credit Lending Services, Inc.
335 N. 3rd Street
Burbank, CA 91502
Business Description: Credit Lending is a provider of auto loans
in California specializing in the purchase
and servicing of auto loans through its
network of automobile dealers, who have non-
prime customers purchasing new and used
vehicles.
Chapter 11 Petition Date: March 21, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-12182
Judge: Hon. Julia W. Brand
Debtor's Counsel: Tamar Terzian, Esq.
HANSON BRIDGETT, LLP
777 S. Figueroa Street
Los Angeles, CA 90017
Tel: (323) 210-7747
Email: tterzian@hansonbridgett.com
Total Assets: $9,008,914
Total Liabilities: $10,521,125
The petition was signed by Chad Spindler as shareholder.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/4XVQN7A/Credit_Lending_Services_Inc__cacbke-24-12182__0001.0.pdf?mcid=tGE4TAMA
CURO GROUP: Extends Forbearance to March 25
-------------------------------------------
CURO Group Holdings Corp. announced that it has received notice on
behalf of certain holders of the Company's 7.500% Senior 1.5 Lien
Secured Notes due 2028 (the "1.5L Noteholders") and certain holders
of the Company's 7.500% Senior Secured Notes due 2028 (the "2.0L
Noteholders") that the requisite 1.5L Noteholders and requisite
2.0L Noteholders, in each case, consent to an extension of the
scheduled expiration date under the forbearance agreements entered
into on March 1, 2024 and that lenders holding at least a majority
in amount of term loans under the Company's 1.0 Lien Credit
Agreement have delivered an amendment to the March 1, 2024 waiver
of certain events of default under the Credit Agreement to extend
the scheduled waiver expiration date thereunder.
Under the terms of the Amendments to the Forbearance Agreements and
the Waiver Amendment, the Lenders have agreed not to exercise any
remedies against the Company and its affiliates until March 25,
2024, subject to certain terms and conditions.
Additional details regarding the Amendments to the Forbearance
Agreements and the Waiver Amendment are set forth in the Form 8-K
filed by the Company with the SEC, which includes the full text of
Waiver Amendment. A full-text copy of the Form 8-K is available at
https://tinyurl.com/bdf47ccy
About Curo Group
Headquartered in Chicago, IL, Curo Group Holdings Corp. is a
tech-enabled, omni-channel consumer finance company serving a full
spectrum of non-prime, near-prime and prime consumers in portions
of the U.S. and Canada. CURO was founded over 25 years ago to meet
the growing needs of consumers looking for alternative access to
credit. The Company continuously updates its products and
technology platform to offer a variety of convenient, accessible
financial and loan services.
Curo Group reported a net loss of $185.48 million for the year
ended Dec. 31, 2022. As of Dec. 31, 2022, the Company had $2.79
billion in total assets, $2.84 billion in total liabilities, and a
total stockholders' deficit of $54.13 million.
* * *
As reported by the TCR on Mar. 7, 2024, S&P Global Ratings lowered
its issuer credit rating on Curo Group Holdings Corp. to 'SD' from
'CCC-'. S&P also lowered its issue ratings on the company's
1.5-lien and junior notes to 'D' from 'CC' and 'C', respectively.
"The downgrade reflects that Curo has not made interest payments
for its 1.5-lien notes and junior notes within 30 days of their due
date of Feb. 1, 2024, which we view as an event of default. The
company is in discussions with its lenders and key stakeholders
regarding a potential comprehensive financial restructuring. It
also entered in forbearance agreements on March 1, 2024, with its
noteholders, which will end on the earlier of March 18, 2024, or
the occurrence of specified events. Curo also received waivers from
the lenders of its senior 1.0-lien term loan and funding debt for
the cross-defaults and potential breach of the $75 million minimum
liquidity covenant requirement."
As reported by the TCR on Feb. 15, 2024, Moody's Investors Service
has downgraded Curo Group Holdings Corp.'s corporate family rating
to Ca from Caa2. The senior secured debt rating was downgraded to
Caa3 from Caa1 and the senior unsecured rating was downgraded to C
from Caa3. The outlook remains negative.
D AND J'S HASH: Hires Weiner Law Firm PC as Counsel
---------------------------------------------------
D and J's Hash House, Inc. d/b/a D&J's Hash House seeks approval
from the U.S. Bankruptcy Court for the District of Massachusetts to
employ Weiner Law Firm PC as its counsel.
The firm's services include:
(a) advise the Debtor with respect to its powers and duties in
the continued operation of its business;
(b) represent the interest of the Debtor at hearings scheduled
before this honorable court;
(c) assist the Debtor in complying with the procedural
requirements of the Office of the United States Trustee;
(d) assist the Debtor in the resolution of its financial
problems and the implementation of the Plan of Reorganization which
it anticipates filing in the case;
(e) represent the Debtor in its dealing with regulatory
authorities, agencies, and taxing authorities;
(f) prepare on behalf of the Debtor legal papers; and
(g) perform all other bankruptcy related legal services for
the Debtor which may be necessary in the usual course of the
administration of this estate.
The firm received a retainer of $9,615.
will be paid based upon its normal and usual hourly billing rates.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert Girvan II, Esq., an attorney at Weiner Law Firm, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Gary M. Weiner, Esq.
Robert E. Girvan III, Esq.
Weiner Law Firm, PC
1441 Main Street, Suite 610
Springfield, MA 01103
Tel: (413) 732-6840
Fax: (413) 785-5666
Email: gweiner@weinerlegal.com
rgirvan@weinerlegal.com
About D and J's Hash House, Inc.
D and J's Hash House, Inc. operates D&J's Hash House restaurant in
Southwick, Mass., which is open for breakfast and lunch.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Mass. Case No. 24-30072) on February 23,
2024, with up to $50,000 in assets and up to $500,000 in
liabilities. Susan Duffy, president, signed the petition.
Judge Elizabeth D. Katz oversees the case.
Robert E. Girvan III, Esq., at Weiner Law Firm, P.C., represents
the Debtor as bankruptcy counsel.
DG EDWARDS: Hires Eric A. Liepins, P.C. as Counsel
--------------------------------------------------
DG Edwards, PLLC d/b/a Marsalis Avenue Urgent Care Clinic seeks
approval from the U.S. Bankruptcy Court for the Northern District
of Texas to employ Eric A. Liepins, P.C. as counsel.
The Debtor requires legal assistance for the purpose of orderly
liquidating the assets, reorganizing the claims of the estate, and
determining the validity of claims asserted in the estate.
The firm will be paid at these rates:
Eric A. Liepins $275 per hour
Paralegals and Legal Assistants $30 to $50 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The firm has been paid a retainer of $5,000 plus filing fee.
Mr. Liepins, the sole shareholder of the firm, disclosed in a court
filing that his firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Eric A. Liepins, Esq.
Eric A. Liepins, PC
12770 Coit Road, Suite 850
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Email: eric@ealpc.com
About DG Edwards, PLLC
D.G. Edwards, PLLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. N.D. Texas Case No. 24-30525) on
February 27, 2024, with up to $50,000 in assets and up to $1
million in liabilities.
Eric A. Liepins, Esq., at Eric A. Liepins, P.C. represents the
Debtor as legal counsel.
DIRECTBUY HOME: Plan Exclusivity Period Extended to June 12
-----------------------------------------------------------
Judge Stacey L. Meisel of the U.S. Bankruptcy Court for the
District of New Jersey extended DirectBuy Home Improvement, Inc.'s
exclusive periods to file its plan of reorganization, and solicit
acceptances thereof to June 12 and August 9, 2024, respectively.
As shared by Troubled Company Reporter, the Debtor explains that
the Chapter 11 Case is merely four months old. The Debtor has spent
the past three months actively engaged in efforts to sell
substantially all its assets and, the closing of the sale of its
eCommerce business, which closing only occurred in late January
2024. The Debtor has since been assisting with the transition of
that business to Karat, as well as reconciling amounts to be paid
to it under the Purchase Agreement and Addendum.
In addition, the consideration received from the sale, will be
critical components of the Debtor's Chapter 11 plan. The Debtor has
also been focused on preparing its Schedules and Statements,
testifying at its 341 meeting of creditors, complying with various
discovery demands, reconciling claims, and fulfilling its various
other obligations as a chapter 11 debtor in possession.
The Debtor asserts that it is optimistic that the sale of its
assets and the consideration provided will allow it to negotiate
with its lender and the Committee as to whether a plan of
liquidation in the near future is viable. Therefore, the Debtor
submits that its prospects for filing a confirmable plan are
reasonable.
DirectBuy Home Improvement, Inc. is represented by:
Michael D. Sirota, Esq.
COLE SCHOTZ P.C.
Court Plaza North
25 Main Street
P.O. Box 800
Hackensack, NJ 07602-0800
Phone: (201) 489-3000
Fax: (201) 489-1536
Email: msirota@coleschotz.com
About DirectBuy Home Improvement
DirectBuy Home Improvement, Inc., doing business as Z Gallerie, is
a specialty retailer focused on fashion and art-inspired home
décor and home furnishings. The company is based in Gardena,
Calif.
DirectBuy Home Improvement sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 23-19159) on
October 16, 2023. In the petition signed by Robert Fetterman, chief
financial officer and interim chief executive officer, the Debtor
disclosed up to $100 million in both assets and liabilities.
The Debtor tapped Michael D. Sirota, Esq., at Cole Schotz PC as
legal counsel and Stretto, Inc. as administrative advisor.
ZG Lending SPV, LLC, as DIP agent and prepetition agent, is
represented by Lowenstein Sandler LLP's Robert M. Hirsh, Esq., and
Phillip Khezri, Esq.
DIXON HOLDINGS: Court OKs Sale of North Port Property
-----------------------------------------------------
A U.S. bankruptcy judge has given the go-signal for Dixon Holdings,
LLC to sell its real property in North Port, Fla.
Judge Roberta Colton of the U.S. Bankruptcy Court for the Middle
District of Florida approved the sale transaction between the
company and the buyer, Almir Hot, who offered $48,000 for the
property.
The property is raw land, consisting of two lots: Lot 89 and Lot 90
located at Harland Avenue, North Port, Fla.
The property is being sold "free and clear" of liens and other
interests, according to the sale agreement.
Regina Melman of Re/Max Palm Realty of Venice assisted the company
in the sale. The broker will get a commission of 5% of the purchase
price.
"The purchase price constitutes the highest and best offer that
[Dixon] received for the property and will provide a greater
recovery for [Dixon's] estate than would any other available
alternative," Steven Berman, Esq., the company's attorney, said.
About Dixon Holdings
Dixon Holdings, LLC is a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)). The company is based in
North Port, Fla.
Dixon Holdings sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00011) on January 2,
2024, with up to $10 million in assets and up to $1 million in
liabilities. Roberta Masnyj, manager, signed the petition.
Judge Roberta A. Colton oversees the case.
Steven M. Berman, Esq., at Shumaker, Loop & Kendrick, LLP,
represents the Debtor as legal counsel.
DODD DRILLING: Hires Theodore N. Stapleton P.C. as Counsel
----------------------------------------------------------
Dodd Drilling, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Theodore N.
Stapleton, P.C. as counsel.
The firm will provide these services:
a. advise the Debtor generally regarding matters of
bankruptcy law, including, but not limited to, the rights, each,
obligations, and remedies of the Debtor as Debtor-in-Possession,
both with regard to her assets and with respect to the claims of
its creditors;
b. prepare and assist in the preparation of pleadings,
exhibits, applications, reports, and accounting in connection with
the Debtor's schedules, and other documents necessary to the
administration of these proceedings as required by the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure, the local rules of
this Court, in the requirements of the United States Trustee's
Office;
c. investigate, analyze and evaluate potential claims of the
estate, including claims for recovery of avoidable transfers under
the Bankruptcy Code;
d. advise the Debtor concerning Chapter 11 plans and
alternatives thereto;
e. represent the Debtor at hearings and conferences with
regard to administration of this case and any of the foregoing
matters and prepare pleadings and papers in connection therewith;
and
f. represent and assist the Debtor with regard to any and all
other matters relating to administration of the case
The firm will be paid at these rates:
Theodore N. Stapleton $500 per hour
Attorneys $200 to $500 per hour
Paralegals and Project Assistants $50 to $75 per hour
The firm will be paid a retainer in the amount of $28,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Theodore N. Stapleton, Esq., a partner at Theodore N. Stapleton,
P.C., disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Theodore N. Stapleton, Esq.
Theodore N. Stapleton, P.C.
2802 Paces Ferry Road SE, Suite 100-B
Atlanta, GA 30339
Telephone: (770) 436-3334
Email: tstaple@tstaple.com
About Dodd Drilling, LLC
Dodd Drilling, LLC owns and operates a construction drilling
company specializing in drilling boreholes into the soil to allow
subsurface site investigation and data collection.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-20212) on Feb. 23,
2024, with as much as $10 million in both assets and liabilities.
Dustin Dodd, managing member, signed the petition.
Judge James R. Sacca oversees the case.
Theodore N. Stapleton, Esq., at Theodore N. Stapleton, P.C.,
represents the Debtor as legal counsel.
ENVIVA INC: Davis Polk Advises Creditors in Chapter 11
------------------------------------------------------
Davis Polk is advising an ad hoc group of creditors in connection
with the chapter 11 restructuring of Enviva Inc.
On March 12, 2024, Enviva Inc. and certain of its subsidiaries
(collectively, "Enviva") filed voluntary chapter 11 petitions in
the United States Bankruptcy Court for the Eastern District of
Virginia. Shortly before the filing, the ad hoc group, which holds
approximately 97% of Enviva's prepetition senior notes, 45% of
exempt facilities revenue bonds issued by the Mississippi Business
Finance Corporation, 78% of exempt facilities revenue bonds issued
by the Industrial Development Authority of Sumter County, Florida,
and 72% of Enviva's prepetition senior secured credit facility,
executed a restructuring support agreement with Enviva. The
restructuring support agreement provides for a comprehensive
restructuring of Enviva's capital structure, including the
reduction of Enviva's debt by approximately $1 billion.
Certain members of the ad hoc group are providing and backstopping
a $500 million debtor-in-possession (DIP) financing to Enviva. The
DIP financing was approved on an interim basis at Enviva's "first
day" hearing on March 14, 2024, along with other first-day relief.
Enviva is the world's largest producer of industrial wood pellets,
a renewable and sustainable energy source produced by aggregating a
natural resource -- wood fiber -- and processing it into a
transportable form. Enviva owns and operates 10 industrial-scale
wood pellet production plants with annual production of
approximately five million metric tons in in Virginia, North
Carolina, South Carolina, Georgia, Florida and Mississippi, and is
constructing its 11th plant in Epes, Alabama. Enviva sells most of
its wood pellets through long-term, take-or-pay off-take contracts
with customers located primarily in the United Kingdom, the
European Union and Japan.
The Davis Polk restructuring team includes partners Damian S.
Schaible and David Schiff and associates Joseph W. Brown, Hailey W.
Klabo and James Nirappel. The finance team includes partner
Christian Fischer and associates Alexander K.B. Shimamura and Carly
(Yoona) Cha. Counsel Robert (Bodie) Stewart is providing capital
markets advice. Partner Patrick E. Sigmon is providing tax advice.
The litigation team includes partner Elliot Moskowitz. 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 Enviva Inc.
Headquartered in Bethesda, Md., Enviva Inc. --
https://www.envivabiomass.com -- is a producer of industrial wood
pellets, a renewable and sustainable energy source produced by
aggregating a natural resource, wood fiber, and processing it into
a transportable form, wood pellets. Enviva exports its wood pellets
to global markets through its deep-water marine terminals at the
Port of Chesapeake, Virginia, the Port of Wilmington, North
Carolina, and the Port of Pascagoula, Mississippi, and from
third-party deep-water marine terminals in Savannah, Georgia,
Mobile, Alabama, and Panama City, Florida.
Enviva Inc. and certain affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Lead Case No.
24-10453) on March 13, 2024. In the petition signed by Glenn T.
Nunziata, interim chief executive officer and chief financial
officer, Enviva Inc. disclosed $2,893,581,000 in assets and
$2,631,263,000 in liabilities.
Judge Brian F. Kenney oversees the cases.
The Debtors tapped VINSON & ELKINS LLP as general bankruptcy
counsel, KUTAK ROCK LLP as local counsel, LAZARD FRERES & CO., LLC
as investment banker, ALVAREZ & MARSAL HOLDINGS, LLC as financial
advisor, and KURTZMAN CARSOON CONSULTANTS LLC as notice and claims
agent.
ENVIVA INC: Delays Filing of Annual Report for Year Ended Dec. 31
-----------------------------------------------------------------
Enviva Inc. filed a Form 12b-25 with the U.S. Securities and
Exchange Commission notifying that it is unable to file its Annual
Report on Form 10-K for the fiscal year ended December 31, 2023,
within the prescribed time period without unreasonable effort or
expense.
The Company was unable to file its Form 10-K within the prescribed
time period because, as previously disclosed, on March 12, 2024,
the Company and certain of its subsidiaries filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court for the Eastern District of Virginia.
The Company intends to seek the required approval of the Bankruptcy
Court to retain the services of the Company's independent
registered public accounting firm. Given such Bankruptcy Court
approval requirement, as well as the considerable time and
resources of the Company's management devoted to the Chapter 11
Cases, the Company was unable to prepare and timely file its Form
10-K on or before the March 15, 2024, due date without unreasonable
effort or expense.
About Enviva Inc.
Headquartered in Bethesda, Md., Enviva Inc. --
https://www.envivabiomass.com -- is a producer of industrial wood
pellets, a renewable and sustainable energy source produced by
aggregating a natural resource, wood fiber, and processing it into
a transportable form, wood pellets. Enviva exports its wood pellets
to global markets through its deep-water marine terminals at the
Port of Chesapeake, Virginia, the Port of Wilmington, North
Carolina, and the Port of Pascagoula, Mississippi, and from
third-party deep-water marine terminals in Savannah, Georgia,
Mobile, Alabama, and Panama City, Florida.
Enviva Inc. and certain affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Lead Case No.
24-10453) on March 13, 2024. In the petition signed by Glenn T.
Nunziata, interim chief executive officer and chief financial
officer, Enviva Inc. disclosed $2,893,581,000 in assets and
$2,631,263,000 in liabilities.
Judge Brian F. Kenney oversees the cases.
The Debtors tapped Vinson & Elkins, LLP as general bankruptcy
counsel; Kutak Rock, LLP as local counsel; Lazard Freres & Co., LLC
as investment banker; Alvarez & Marsal Holdings, LLC as financial
advisor; and Kurtzman Carson Consultants, LLC as notice and claims
agent.
ENVIVA INC: Fitch Lowers LongTerm IDR to 'D' on Bankruptcy Filing
-----------------------------------------------------------------
Fitch Ratings has downgraded Enviva Inc.'s (EVA) Long-Term Issuer
Default Rating (IDR) to 'D' from 'RD'. Fitch has also affirmed
EVA's senior unsecured debt rating at 'C' and lowered the recovery
rating to 'RR6' from 'RR5'.
The 'D' IDR rating reflects EVA's announcement that it has
voluntarily filed for relief under Chapter 11 of the U.S.
Bankruptcy Code on March 12, 2024. The 'C'/'RR6' senior unsecured
note rating reflects Fitch's expected recovery.
The bankruptcy filing follows the announcement that Enviva has
failed to cure the missed interest payment on $750 million of 6.5%
senior notes due 2026 upon expiration of its original 30-day grace
period and multiple forbearance agreements with the company's
lenders, bondholders, and noteholders holding the requisite amount
of the aggregate principal amount outstanding or committed under
the applicable facilities. This development follows a material
contraction of cash flows over the last year and Enviva's
announcement last fall of substantial doubt regarding its ability
to continue as a going concern.
KEY RATING DRIVERS
Voluntary Chapter 11 Filing: On March 12, 2024, Enviva announced it
filed for bankruptcy relief under Chapter 11 of the U.S. Bankruptcy
Code. The company faced a significant and material cashflow
shortage as wood pellet prices plunged 50% to below $200 per metric
ton this year amid higher fixed costs which resulted in a capital
structure that Fitch viewed as untenable. As part of Enviva's
bankruptcy filing, the company has secured commitments for a $500
million Debtor In Possession (DIP) credit facility and reached two
restructuring support agreements (RSA) with a majority of lenders
and bondholders.
The first group represents the majority of debt and includes
approximately 72% of its senior secured credit facility,
approximately 95% of its 2026 senior notes, approximately 78% of
bonds related to its Epes, Alabama plant currently under
construction, and approximately 45% of bonds related to its
greenfield project near Bond, Mississippi; the second RSA with
certain holders represents more than 92% of bonds related to the
Bond project. The RSA's are designed to address EVA's untenable
capital structure by reducing the company's debt by approximately
$1 billion dollars and the restructuring process is expected to be
completed by YE.
Significant Earnings and Cash Flows Pressure in 2023; Untenable
Capital Structure: Enviva's cash flows have been under significant
pressure over the last 12 months, with Fitch projecting
approximately $100 million of EBITDA for 2023, a significant
decline from prior expectations of $225 million at the midpoint.
Management has missed earnings targets announced earlier this year
and anticipates 4Q23 results could potentially be weaker than
results for 3Q23.
Operating margins contracted significantly over the past year under
existing contracts due to challenging price dynamics, including the
4Q22 transaction, which has resulted in a significant EBITDA
decline and significant liquidity pressure. In Fitch's view,
successful customer contract renegotiations or sustainable leverage
reduction was essential for the company to exist as a financially
viable entity absent higher cashflows from a significant increase
in future wood pellet power prices.
Construction Updates: The DIP facility will be used in part to
complete construction of EVA's new wood pellet production plant in
Epes, Alabama while Enviva continues to delay construction on its
new 1.1 million MTPY pellet production plant in Bond, MS to
conserve liquidity. Given Enviva's stressed liquidity, the company
has identified completion of its Epes plant as a top priority with
an expected in-service date in the first half of 2025. The plant
was approximately 40% complete as of Sept. 30, 2023, and each plant
was expected to cost $375 million on average, which is up from $250
million estimated in early 2022.
The Bond plant is the anticipated third of four planned pellet
production facilities at the company's growing Pascagoula cluster
of assets, which includes a deepwater shipping terminal. Recent
costs overruns highlight continued execution risks.
Recovery Analysis: The recovery analysis assumes the enterprise
value of Enviva is maximized in a going-concern (GC) scenario
versus a liquidation scenario. Fitch contemplates a scenario in
which default may be caused by a breach of its covenants under its
secured credit facility as soon as Dec. 31, 2023. Continued
softness in spot wood pellet prices that are approximately 50%
lower than prices in 2022 has significantly eroded Enviva's
earnings and cash flows while heightening competitive pressures.
The GC analysis assumes new customer contracts with improved
margins, as wood pellet prices are anticipated to normalize to
recent midcycle levels. Under this scenario, Fitch estimates GC
EBITDA of approximately $220 million. Fitch assumes Enviva will
receive a GC recovery multiple of 5x EBITDA under this scenario, in
line with historical transaction multiples of 5x-6x for the energy
and utilities sector.
At this time, Enviva has fully drawn on its $570 million secured
credit revolver and has a $105 million term loan due under its
secured credit facility. Enviva also has a $500 million secured DIP
facility and approximately $1.1 billion of unsecured debt. Fitch
assumes a 10% administrative claim through a restructuring,
resulting in a 0% recovery for the unsecured debt and a rating of
the unsecured debt at 'C'/'RR6'.
ESG - Governance and Management Strategy: Fitch has maintained
Enviva's ESG relevance scores following ongoing management changes
following a significant reduction in FY23 earnings relative to
prior expectations. This change also reflects Fitch's concern over
the operational issues at the plants and the company's inability to
meet production levels and earnings targets as expected. This
material adjustment highlights greater than expected operating and
execution risks.
Enviva Inc. has an ESG Relevance Score of '5' for both Governance
and Management Strategy due to poor execution of corporate strategy
which has led to a change in management and resulted in a
significant and material decline in earnings and cash flows
relative to prior expectations, which has a negative impact on the
credit profile, and is highly relevant to the rating, resulting in
a series of ongoing rating downgrades.
DERIVATION SUMMARY
Enviva's downgrade to 'D' follows its March 12, 2024 Chapter 11
bankruptcy filing. The bankruptcy filing follows significant
earnings and cashflow pressures in 2023-2024 due to a roughly 50%
decline in wood pellet prices over the same period, which led to
elevated leverage and pressure on cash flows.
KEY ASSUMPTIONS
- Approximately $100 million of EBITDA in 2023;
- Post-bankruptcy Fitch assumes the completion of the Epes plant
and delay in the construction of the Bond wood pellet production
plant;
- No dividends;
- Base interest rate forecast in line with Fitch's Global Economic
Outlook.
RECOVERY ANALYSIS
Recovery Rating (RR) Assumptions: The recovery analysis assumes the
enterprise value of Enviva is maximized in a GC scenario versus a
liquidation scenario. Fitch contemplates a scenario in which
default may be caused by a breach of its covenants under its
secured credit facility as soon as Dec. 31, 2023. Continued
softness in spot wood pellet prices that are approximately 50%
lower than prices in 2022 has significantly eroded Enviva's
earnings and cash flows while heightening competitive pressures.
The GC analysis assumes new customer contracts with improved
margins, as wood pellet prices are anticipated to normalize to
recent midcycle levels. Under this scenario, Fitch estimates GC
EBITDA of approximately $220 million. Fitch assumes Enviva will
receive a GC recovery multiple of 5x EBITDA under this scenario, in
line with historical transaction multiples of 5x-6x for the energy
and utilities sector.
At this time, Enviva has fully drawn on its $570 million secured
credit revolver and has a $105 million term loan due under its
secured credit facility. Enviva also has a $500 million secured DIP
facility and $1.1 billion of unsecured debt. Fitch assumes a 10%
administrative claim through a restructuring, resulting in a 0%
recovery for the unsecured debt and a rating of the unsecured debt
at 'C'/'RR6'.
RATING SENSITIVITIES
Rating sensitivities are no longer applicable given the bankruptcy
filing.
LIQUIDITY AND DEBT STRUCTURE
Stressed Liquidity:
As of the petition date, the company had around $1.8 billion of
outstanding debt, including around $570 million of secured revolver
borrowings, a $105 million secured term loan, $750 million of 6.5%
unsecured notes due 2026, $250 million of 6% unsecured notes due
2052, $100 million of 7.75% unsecured notes due 2047 and $60
million of other debt. The company has access to a $500 million DIP
facility which will be used to support ongoing operations and the
completion of construction of its new wood pellet production plant
in Epes, Alabama in 2025.
Enviva has faced significant pressure on its liquidity given a
material decline in wood pellet spot prices since late 2022 and has
fully drawn down its $570 million revolving credit facility as of
Sept. 30, 2023. Enviva's liquidity is provided by a $570 million
revolving credit facility and a $105 million secured term loan due
June 2027 under its secured credit agreement.
Enviva had approximately $440 million of liquidity available as of
Sept. 30, 2023, including $315 million of unrestricted cash on
hand. Additionally, Enviva has $125 million of restricted cash to
fund the construction of new wood pellet plants.
ISSUER PROFILE
Enviva Inc. is the world's largest supplier of utility-grade wood
pellets to major power generators by production capacity. The
company procures wood fiber and processes it into utility-grade
wood pellets, which are then transported to their customers
overseas through vessels.
ESG CONSIDERATIONS
Enviva Inc. has an ESG Relevance Score of '5' for both Governance
and Management Strategy due to poor execution of corporate strategy
which has led to a change in management and resulted in a
significant and material decline in earnings and cash flows
relative to prior expectations, which has a negative impact on the
credit profile, and is highly relevant to the rating, resulting in
a series of ongoing rating downgrades. 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
----------- ------ -------- -----
Enviva Inc. LT IDR D Downgrade RD
senior unsecured LT C Affirmed RR6 C
EXELA TECHNOLOGIES: Receives Nasdaq Noncompliance Notice
--------------------------------------------------------
Exela Technologies, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that the Company
received a notice from the Nasdaq Listing Qualifications Staff of
The Nasdaq Stock Market LLC stating that the Company is in
noncompliance with Listing Rules 5620(a) and 5810(c)(2)(G) as a
result of its failure to hold an annual shareholder meeting within
12 months of the December 31, 2022 fiscal year end.
The Notice has no immediate effect on the Company's listing on the
Nasdaq Capital Market. The Company now has until April 29, 2024, to
submit a plan to regain compliance. If that plan is accepted by
Nasdaq, then the Company may be granted an exception of up to 180
calendar days from the date of its December 31, 2023 fiscal year
end, or until June 28, 2024, to regain compliance. If Nasdaq does
not accept the Company's plan, the Company will have the
opportunity to appeal that decision to a Hearings Panel.
As previously announced on January 26, 2024, the Company had
adjourned its 2023 annual meeting until June 13, 2024 due to lack
of required quorum. In response to the Notice, the Company intends
to either reconvene the 2023 annual meeting on June 13, 2024 as
previously announced or to combine the 2023 annual meeting with its
upcoming 2024 annual meeting with a new record date to be held on
or about the same date and to timely submit a plan designed to
regain compliance in accordance with the requirements of the Notice
and the Nasdaq listing standards.
There can be no assurance, however, that Nasdaq will accept the
Company's plan or that the Company will be able to regain
compliance with the annual meeting requirement or maintain or
regain compliance with other Nasdaq listing requirements.
About Exela Technologies
Headquartered in Irving, Texas, Exela Technologies, Inc. --
www.exelatech.com -- is a global provider of transaction processing
solutions, enterprise information management, document management
and digital business process services. The Company's
technology-enabled solutions allow global organizations to address
critical challenges resulting from the massive amounts of data
obtained and created through their daily operations. Its solutions
address the life cycle of transaction processing and enterprise
information management, from enabling payment gateways and data
exchanges across multiple systems, to matching inputs against
contracts and handling exceptions, to ultimately depositing
payments and distributing communications.
Exela reported a net loss of $415.58 million in 2022, a net loss of
$142.39 million in 2021, and a net loss of $178.53 million in 2020.
As of June 30, 2023, the Company had $675.34 million in total
assets, $1.49 billion in total liabilities, and a total
stockholders' deficit of $817.01 million.
Detroit, Michigan-based KPMG LLP, the Company's auditor since 2013,
issued a "going concern" qualification in its report dated April 3,
2023, citing that the Company has a history of net losses, net
operating cash outflows, working capital deficits, significant cash
payments for interest on long-term debt, and significant current
maturities of long-term debt that raise substantial doubt about its
ability to continue as a going concern.
* * *
As reported by the TCR on Aug. 24, 2023, S&P Global Ratings raised
its issuer credit rating on Exela Technologies Inc. to 'CCC' from
'SD' (selective default). S&P said, "Despite improving revenue
trends and cost savings, we forecast limited liquidity cushion in
January and July of 2024."
EXQUISITE QUARTERS: Hires Richard B. Rosenblatt as Legal Counsel
----------------------------------------------------------------
Exquisite Quarters, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Maryland to employ Law Offices of Richard
B. Rosenblatt as counsel.
The firm's services include:
a. giving the Debtor legal advice with respect to her powers
and duties as Debtor-in-Possession;
b. preparing, as necessary, applications, answers, orders,
reports and other legal papers filed by the Debtor;
c. preparing a Disclosure Statement and Plan of
Reorganization; and
d. performing all other legal services for the Debtor which
may be necessary herein.
The firm will be paid at these rates:
Richard B. Rosenblatt $400 per hour
Linda M. Dorney $400 per hour
Attorneys $350 per hour
Paralegal $200 per hour
The firm will be paid a retainer in the amount of $10,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Richard B. Rosenblatt, Esq., a partner at Law Offices of Richard B.
Rosenblatt, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Richard B. Rosenblatt, Esq.
Linda M. Dorney, Esq.
The Law Offices of Richard B. Rosenblatt, PC.
30 Courthouse Square, Suite 302
Rockville, MD 20850
Tel: (301) 838-0098
Email: rrosenblatt@rosenblattlaw.com
About Exquisite Quarters, LLC
Exquisite Quarters, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. D. Md. Case No. 24-11633) on Feb. 28, 2024, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by Richard B. Rosenblatt, Esq. at LAW OFFICES OF
RICHARD B. ROSENBLATT, PC.
FANATICS HOLDINGS:S&P Cuts Secured Credit Facility Rating to 'BB-'
------------------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on Fanatics
Holdings Inc. (FHI) subsidiary Fanatics Collectibles Intermediate
Holdco Inc.'s (Fanatics Collectibles') senior secured credit
facility to 'BB-' from 'BB'. The facility consists of of a $300
million revolver and $248 million first-lien term loan. S&P also
revised the recovery rating to '3' from '2'. The '3' recovery
rating indicates its expectation for meaningful recovery (50%-70%;
rounded estimate: 60%) in the event of a payment default.
Fanatics Collectibles increased its revolving credit facility to
$300 million from $100 million on March 15, 2024. Given the
revolver upsize, our projected level of revolver borrowings
outstanding in a hypothetical default scenario has increased,
reducing the recovery prospects for the senior secured lenders.
S&P notes Fanatics Commerce Intermediate Holdco LLC (Fanatics
Commerce) paid down $300 million of its $500 million senior secured
term loan. The '3' recovery rating is unchanged given that the
lower level of funded debt is offset by lower emergence EBITDA. The
lower emergence EBITDA reflects its view that the company would
default at lower level of EBITDA under its current capital
structure. The unchanged senior secured term loan recovery rating
also reflects the significant amount of priority claims associated
with the company's $700 million asset-based lending (ABL) facility.
Though, the rounded estimate increased to 60% from 55% due to the
partial paydown in our simulated default scenario.
All other ratings on FHI, Fanatics Collectibles, and Fanatics
Commerce, including the 'BB-' issuer credit ratings, remain
unchanged.
ISSUE RATINGS - RECOVERY ANALYSIS
S&P assesses recovery prospects for the debt at Fanatics Commerce
and Fanatics Collectibles as separate stand-alone entities based on
the ring-fencing of the debt facilities from FHI's other
subsidiaries.
Fanatics Collectibles
Key analytical factors
-- S&P's simulated default scenario contemplates a default
occurring in 2028 at Fanatics Collectibles because of a steep
decline in EBITDA, stemming from a loss of key licensing contracts
or partnerships, along with weak consumer discretionary spending
amid an economic contraction, limiting the company's ability to
meet its financial commitments.
-- S&P's recovery analysis assumes the company will emerge as a
going concern following a bankruptcy to maximize lenders' recovery
prospects.
-- S&P applies a 6x multiple to our projected emergence EBITDA to
estimate the company's enterprise value. This multiple is lower
than the 6.5x multiple we typically use for leisure and sports
issuers, reflecting our view that valuations could be limited in a
stressed environment with strained relationships with IP owners.
-- S&P assumes about $260 million of borrowings will be
outstanding under the $300 million revolving credit facility at
default, reflecting 85% utilization of the commitment.
Simulated default assumptions
-- Simulated year of default: 2028
-- EBITDA at emergence: $53 million
-- Implied enterprise value (EV) multiple: 6x
-- Estimated gross EV at emergence: $319 million
Simplified waterfall
-- Net EV after 5% administrative costs: $286 million
-- Valuation split (obligors/nonobligors): 55%/45%
-- Senior secured facility claims: $468 million*
--Recovery expectations: 50%-70%; rounded estimate: 60%
*Debt amounts include six months of prepetition interest.
Fanatics Commerce
Key analytical factors
-- S&P's simulated default scenario contemplates a default
occurring in 2028 at Fanatics Commerce.
-- S&P assumes the company will emerge as a going concern
following a bankruptcy to maximize lenders' recovery prospects.
-- S&P values Fanatics Commerce as a going concern by applying a
6x EBITDA multiple to our projected emergence EBITDA. This multiple
is higher than the 5x multiple it uses for most retail issuers,
which reflects its view that Fanatics Commerce would remain
attractive to buyers even at a distressed point given its large
operating platform with extensive customer reach and a valuable
customer database.
-- S&P assumes that about $420 million of borrowings would be
outstanding under the upsized $700 million asset-based lending
(ABL) credit facility by the time the company defaults, which
reflects 60% utilization of the commitment.
Simulated default assumptions
-- Simulated year of default: 2028
-- EBITDA at emergence: $93 million
-- Implied enterprise value (EV) multiple: 6x
-- Estimated gross EV at emergence: $557 million
Simplified waterfall
-- Net EV after 5% administrative costs: $529 million
-- Valuation split (obligors/nonobligors): 100%/0%
-- ABL credit facility claims: $421 million*
-- Senior secured facility claims: $175 million*
--Recovery expectations: 50%-70%; rounded estimate: 60%
*Debt amounts include six months of prepetition interest.
Ratings List
ISSUE-LEVEL RATINGS LOWERED; RECOVERY RATINGS REVISED
TO FROM
FANATICS COLLECTIBLES INTERMEDIATE HOLDCO INC.
Senior Secured
US$248 mil fltg rate
term bank ln due 04/11/2028 BB- BB
Recovery Rating 3(60%) 2(75%)
US$300 mil fltg rate revolver
bank ln due 04/11/2028 BB- BB
Recovery Rating 3(60%) 2(75%)
ISSUE-LEVEL RATINGS AFFIRMED; RECOVERY EXPECTATION REVISED
TO FROM
FANATICS COMMERCE INTERMEDIATE HOLDCO LLC
Senior Secured BB- BB-
Recovery Rating 3(60%) 3(55%)
FARM LLC: Hires BransonLaw PLLC as Bankruptcy Counsel
-----------------------------------------------------
The Farm, LLC d/b/a Curated American Getaways, LLC seeks approval
from the U.S. Bankruptcy Court for the Middle District of Florida
to employ BransonLaw, PLLC as counsel.
The firm will provide these services:
a. prosecute and defend any causes of action on behalf of the
Debtor; prepare, on behalf of the Debtor, all necessary
applications, motions, reports and other legal papers;
b. assist in the formulation of a plan of reorganization; and
c. provide all other services of a legal nature.
The firm will be paid at these rates:
Attorneys $450 per hour
Paralegals $200 per hour
The firm received retainer in the amount of $27,391.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Jacob D. Flentke, Esq., a partner at BransonLaw, PLLC, disclosed in
a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeffrey S. Ainsworth, Esq.
Jacob D. Flentke, Esq.
Flentke Legal Consulting, PLLC, Of Counsel
BransonLaw, PLLC
1501 E. Concord St.
Orlando, FL 32803
Telephone: (407) 894-6834
Facsimile: (407) 894-8559
Email: jeff@bransonlaw.com
jacob@bransonlaw.com
About The Farm, LLC d/b/a Curated
American Getaways, LLC
The Farm LLC offers luxury estate vacation.
The Farm LLC, doing business as Curated American Getaways LLC
sought relief under Subchapter V of Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00362) on January 26,
2024. In the petition filed by Katie Martin Loane, as CFO, the
Debtor reports total assets of $624,659 and total liabilities
amounting to $4,393,655.
The Honorable Bankruptcy Judge Lori V. Vaughan handles the case.
Jeffrey Ainsworth, Esq., BransonLaw PLLC BransonLaw PLLC,
represents the Debtor as legal counsel.
FB RIVERSIDE: Public Auction Sale Set for May 1
-----------------------------------------------
In accordance with Article 9 of the Uniform Commercial Code, UC
Stonebrook/Pinebrook Equity Member LLC ("secured party") will sell
at public auction all of the common membership interests held by FB
Riverside I LLC ("Debtor") in Pinebrook Stonebrook Member LLC
("pledged entity") and certain related rights, interests, and
properties. The collateral secures liabilities and obligations to
secured party that total not less than $4,558,658.15 plus certain
collection and enforcements costs.
The principal assets of the pledged entity consist of two wholly
property at 5864 Sinclair Avenue, Riverside, California 92505 and
other owning an unfinished multifamily property at 4661 Tyler
Street, Riverside, California 92503.
The public auction sale will be held in person at the offices of
Sklar Kirsh LLP, 1880 Century Park East, Suite 300, Los Angeles,
California 90067 and virtually via Zoom video or audio conference
on May 1, 2024, at 2:00 p.m. (Eastern Time). Zoom meeting
information will be provided to all confirmed participants that
have qualified to participate in the public sale under the
applicable terms of the sale. The public sale will be conducted by
Matthew D. Mannion of Mannion Auctions LLC.
All bids must be for cash and the successful bidder must be
prepared to deliver immediately available funds equal to 10% of the
successful bid amount within one day after the public sale, with
the balance of the successful bid amount to be delivered within 14
days after the public sale.
Parties interested in bidding on the collateral must contact Brock
Cannon and Stephen Schwalb of the Secured Party's broker, Newmark,
via mail at NewmarkUCCTeam@nmrk.com.
Additional information may be found at
https://rmarketlace.com/listing/60596/ucc-foreclosure-sale-pledge-of-equity-interests-indirect-interest-in-a-multifamily-portfolio-riverside-ca.
FINANCE OF AMERICA: Adds More Class A Shares Under Incentive Plan
-----------------------------------------------------------------
Finance of America Companies Inc. filed a Registration Statement on
Form S-8 with the U.S. Securities and Exchange Commission for the
purpose of registering additional shares of Class A common stock,
par value $0.0001 per share, of the Registrant, reserved for
issuance under the Finance of America Companies Inc. 2021 Omnibus
Incentive Plan. These shares of Class A Common Stock are additional
securities of the same class as other securities for which an
original registration statement on Form S-8 (File No. 333-257180)
was filed with the Securities and Exchange Commission on June 17,
2021, which registered 21,250,000 shares of Class A Common Stock
issuable under the Plan, and an additional registration statement
on Form S-8 (File No. 333-265690), which was filed with the
Commission on June 17, 2022 to register 21,106,586 additional
shares of Class A Common Stock issuable under the Plan.
The shares of Class A Common Stock registered by this Registration
Statement consist of: (i) 10,009,416 shares of Class A Common Stock
that have become reserved for issuance as a result of the operation
of the "evergreen" provision of the Plan as of January 1, 2023 and
January 1, 2024, which provides that the total number of shares
subject to the Plan will be increased on the first day of each
fiscal year pursuant to a specified formula; and (ii) 5,660,939
shares of Class A Common Stock that have become available for
issuance under the Plan as a result of cancellation, forfeiture,
termination, settlement in cash, or other settlement without
issuance of shares of Class A Common Stock in respect of awards
under the Plan. Other than the 10,009,416 shares of Class A Common
Stock that have become available for issuance pursuant to the
"evergreen" provision of the Plan, the shares registered by this
Registration Statement do not represent an increase in the number
of shares previously reserved for issuance under the Plan.
A full-text copy of the Registration Statement is available at
https://tinyurl.com/2un9vu7d
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.
FLANNERY LLC: Seeks to Hire Safe Way Tax Service as Accountant
--------------------------------------------------------------
Flannery LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Arkansas to employ Safe Way Tax Service LLC as
its accountant.
The firm will render these services:
(a) record cash receipts/income from daily cash reports and/or
bank deposits;
(b) record cash disbursements/expenses;
(c) record any adjusting entries needed;
(d) reconcile bank statements;
(e) prepare monthly financial statements;
(f) prepare tax returns (quarterly);
(g) prepare and report monthly sales/use tax;
(h) report and pay weekly payroll;
(i) file weekly/monthly payroll taxes;
(j) submit and distribute employee W2 and 1099s; and
(k) prepare corporate tax returns.
The normal fee charged by Safe Way Tax Service LLC is $375 monthly
but additional services may be rendered at the rate of $55/hour.
Safe Way Tax Service is a disinterested party and does not hold or
represent an interest adverse to the Debtor, its creditors or with
any other party in interest, according to court filings.
The firm can be reached through:
Tanzetta Lasker,
Safe Way Tax Service LLC
1912 Washington Ave
Conway AR 72032
Phone: (501) 269-0521
Email: safewaytaxservice@gmail.com
About Flannery LLC
Flannery, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. E.D. Ark. Case No. 24-10014) on January
3, 2024, with up to $50,000 in assets and $100,001 to $500,000 in
liabilities.
Judge Richard D. Taylor oversees the case.
Carl W. Hopkins, Esq., represents the Debtor as legal counsel.
FORZA PIPELINE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Forza Pipeline Services, Inc.
2205 East CR 155
Midland, TX 79706
Chapter 11 Petition Date: March 20, 2024
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 24-70030
Judge: Hon. Shad Robinson
Debtor's Counsel: Todd J. Johnston, Esq.
MCWHORTER, COBB & JOHNSON, LLP
P.O. Box 2547
Lubbock, TX 79408
Tel: 806/762-0214
Fax: 806/762-8014
Email: tjohnston@mcjllp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Doug Onstead as vice 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/5EPR75I/Forza_Pipeline_Services_Inc__txwbke-24-70030__0001.0.pdf?mcid=tGE4TAMA
FPG COLONNADE: Puts North Dallas Property for Sale on April 2
-------------------------------------------------------------
In accordance with applicable provisions of the Uniform Commercial
Code as enacted in New York, ACF L5-M LLC ("secured party") will
sell (i) 99.5% of the limited partnership interests held by FPG
Colonnade Mezz LLC ("Debtor") in and to FPG Colonnade LP ("LP
Borrower") and (ii) 100% of the limited liability company in held
by the Debtor in and to FPG Colonnade GP LLC ("GP Borrower") to the
highest bidder at public auction that will take place on April 2,
2024, at 10:00 a.m. Eastern Daylight Time, both in person and
remotely from the offices of Paul Hastings LLP, 200 Park Avenue,
New York, New York, with access afforded in person and remotely via
Zoom or other web-based video conferencing and telephonic
conferencing program selected by Secured Party. Remote log in
credentials will be provided to registered bidders.
Secured party's understanding is that principal assets of LP
Borrower is the parcel of real property commonly known as 15301,
15303 and 15305 North Dallas Parkway, Addison, Texas, currently
occupied by and operated as the Colonnade Office Park.
The collateral will be sold as a single lot, and will not be
divided or sold in any lesser amounts. The public sale of the
collateral will be subject to the further terms and conditions set
forth in the "terms of public sale" which are available online at
https://www.TheColonnadeDallsUCCSale.com and by contacting Jones
Lang LaSalle Americas Inc., 330 Madison Avenue, New York, New York
10017, Attn: Brett Rosenberg, Tel: 212-812-5926, Email
Brett.Rosenberg@jll.com.
FTX TRADING: Seeks to Extend Plan Exclusivity to May 13
-------------------------------------------------------
FTX Trading Ltd. and its affiliates asked the U.S. Bankruptcy Court
for the District of Delaware to extend their exclusive periods to
file a chapter 11 plan and solicit acceptances thereof to May 13
and July 11, 2024, respectively.
On December 16, 2023, following months of negotiations with the Ad
Hoc Committee, the Committee and other key stakeholders, the
Debtors filed the Initial Plan, the Initial Disclosure Statement
and the Solicitation Procedures Motion. However, the plan formation
process is not complete.
The Debtors explain they continue discussions with the U.S.
Department of Justice with respect to asset forfeitures and other
governmental agencies regarding voluntary subordination of
governmental claims behind the victims of the fraudulent activities
of prepetition insiders. Given improved projections as to
distributable value, the Debtors also remain in discussions with
the Committee, the Ad Hoc Committee and other key stakeholders
regarding the terms of a final Plan and key components of creditor
recoveries, including, but not limited to postpetition interest,
exit liquidity and the resolution of disputes about the legal
nature of digital asset entitlements.
The Debtors claim that they intend to file an amended plan and
disclosure statement incorporating changes and updates since the
filing of the Initial Plan, and to solicit votes on that amended
plan. Accordingly, the Debtors need additional time to finalize and
file the amended plan and disclosure statement.
The Debtors assert that they continue to collaborate with key
stakeholders, including the Committee, the Ad Hoc Committee, FTX DM
and the JOLs. The forthcoming amended plan will reflect hard fought
consensus with respect to a range of challenging and complex issues
with each of these parties and numerous other stakeholders.
Accordingly, the relief requested herein will further the Debtors'
efforts to progress these Chapter 11 Cases in collaboration with
their creditors and other parties-in-interest.
The Debtors further assert that the request to extend the Exclusive
Periods is not intended to exert pressure on creditors or any other
interested party in these Chapter 11 Cases. To the contrary, the
Debtors propose extending the Exclusive Periods to permit the
Debtors to capitalize on the momentum they have built and to file
an amended plan that is the result of constructive discussions and
negotiations with the key stakeholders in these Chapter 11 Cases.
FTX Trading Ltd. and its affiliates are represented by:
Adam G. Landis, Esq.
Kimberly A. Brown, Esq.
Matthew R. Pierce, Esq.
LANDIS RATH & COBB LLP
919 Market Street, Suite 1800
Wilmington, DE 19801
Tel: (302) 467-4400
Email: landis@lrclaw.com
brown@lrclaw.com
pierce@lrclaw.com
- and -
Andrew G. Dietderich, Esq.
James L. Bromley, Esq.
Brian D. Glueckstein, Esq.
Alexa J. Kranzley, Esq.
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, NY 10004
Tel: (212) 558-4000
Email: dietdericha@sullcrom.com
bromleyj@sullcrom.com
gluecksteinb@sullcrom.com
kranzleya@sullcrom.com
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
million 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.
GENESIS GLOBAL: McDermott Updates List of Genesis Crypto Creditors
------------------------------------------------------------------
The law firm McDermott Will & Emery LLP filed a fifth amended
verified statement pursuant to Rule 2019 of the Federal Rules of
Bankruptcy Procedure to disclose that in the Chapter 11 cases of
Genesis Global Holdco, LLC and its affiliated debtors, the firm
represents the Genesis Crypto Creditors Ad Hoc Group.
Since filing the Fourth Amended Verified Statement, the Genesis
Crypto Creditors Ad Hoc Group has had further changes to the
members of the group.
Additional creditors of the Debtors may become clients of McDermott
and members of the Genesis Crypto Creditors Ad Hoc Group and
certain members of the Genesis Crypto Creditors Ad Hoc Group may
cease to be members in the future.
The Members of Genesis Crypto Creditors Ad Hoc Group's nature and
amount of disclosable economic interests held in relation to the
Debtors are: Member 1; Member 2; Member 3; Member 4; Member 5;
Member 6; and Member 7.
Counsel to the Genesis Crypto Creditors Ad Hoc Group:
McDERMOTT WILL & EMERY LLP
Darren Azman, Esq.
Joseph B. Evans, Esq.
Lucas Barrett, Esq.
One Vanderbilt Avenue
New York, NY 10017-3852
Telephone: (212) 547-5400
Facsimile: (212) 547-5444
E-mail: dazman@mwe.com
E-mail: jbevans@mwe.com
E-mail: lbarrett@mwe.com
- and -
Gregg Steinman, Esq.
333 SE 2nd Avenue, Suite 4500
Miami, FL 33131-2184
Telephone: (305) 329-4473
Facsimile: (305) 503-8805
E-mail: gsteinman@mwe.com
About Genesis Global
Genesis Global Holdco, LLC, through its subsidiaries, and Global
Trading, Inc., provide lending and borrowing, spot trading,
derivatives and custody services for digital assets and fiat
currency.
Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE.
LTD. (GAP) provide lending and borrowing, spot trading, derivatives
and custody services for digital assets and fiat currency. Genesis
Global Holdco, LLC owns 100% of GGC and GAP.
Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are
pending before the Honorable Sean H. Lane.
At the time of the filing, Genesis Holdco reported $100 million to
$500 million in both assets and liabilities.
Genesis Holdco is a sister company of Genesis Global Trading, Inc.
("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG").
GGT, DCG and certain of the Holdco subsidiaries are not included in
the Chapter 11 filings. The non-debtor subsidiaries include
Genesis UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia
(Hong Kong) Limited, Genesis Bermuda Holdco Limited, Genesis
Custody Limited ("GCL"), GGC International Limited ("GGCI"), GGA
International Limited, Genesis Global Markets Limited, GSB 2022 II
LLC, GSB 2022 III LLC and GSB 2022 I LLC.
The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as
bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez
& Marsal Holdings, LLC as financial advisor; and Moelis & Company,
LLC as investment banker. Kroll Restructuring Administration, LLC,
is the Debtors' claims and noticing agent and administrative
advisor.
The ad hoc group of creditors is represented by Kirkland & Ellis,
LLP and Kirkland & Ellis International, LLP. The ad hoc group of
Genesis lenders is represented by Proskauer Rose, LLP. The U.S.
Trustee for Region 2 appointed an official committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped White & Case, LLP as bankruptcy counsel; Houlihan
Lokey Capital, Inc., as investment banker; Berkeley Research Group,
LLC as financial advisor; and Kroll as information agent.
GENIE INVESTMENTS: Hires Mickler & Mickler LLP as Counsel
---------------------------------------------------------
Genie Investments NV, Inc. seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to employ Mickler &
Mickler, LLP as counsel.
The hourly rates charged by the firm for legal services range from
$300 to $400. In addition, the firm will seek reimbursement for
out-of-pocket expenses incurred.
Bryan Mickler, Esq., at the Law Offices of Mickler & Mickler,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Bryan K. Mickler, Esq.
Law Offices of Mickler & Mickler, LLP
5452 Arlington Expy.
Jacksonville, FL 32211
Tel: (904) 725-0822
Fax: (904) 725-0855
Email: bkmickler@planlaw.com
About Genie Investments NV, Inc.
Genie Investments NV Inc., filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 24-00496) on Feb. 21, 2024, disclosing
under $1 million in both assets and liabilities. The Debtor hires
Law Offices of Mickler & Mickler, LLP as counsel.
GOGO INC: S&P Alters Outlook to Stable, Affirms 'B+' ICR
--------------------------------------------------------
S&P Global Ratings revised its outlook on Gogo Inc. to stable from
positive and affirmed all of its ratings, including the 'B+' issuer
credit rating.
The stable outlook reflects that the company is unlikely to achieve
the necessary credit metrics for a higher rating this year. That
said, S&P still recognize that Gogo will benefit from some ratings
upside over the longer term because it may reduce its leverage
below 4x in 2025.
S&P said, "We expect Gogo's leverage will increase to the high 4x
area in 2024 before declining below 4x in 2025. The company ended
2023 with S&P Global Ratings-adjusted leverage of 3.8x. This was
partially due to management's shifting of a portion of the
investment spending for its new 5G and Galileo products into 2024.
We forecast Gogo's EBITDA will decline by about 20% in 2024 as it
takes on an additional $40 million of operating expenses related to
its 5G and Galileo products. We do not expect this expenditure will
recur in 2025 or beyond.
"As this investment spending rolls off and the company begins to
benefit from its new products in 2025, we believe its S&P Global
Ratings-adjusted leverage will decline significantly. Similarly, we
expect Gogo's free cash flow will materially decline in 2024 due to
the additional operating expenditure as well as an about $25
million increase in its capital expenditure (capex; relative to
2023) for its new products.
"We forecast the company will materially expand its earnings and
cash flow in 2025 and thereafter. The increasing number of aircraft
using its network, coupled with rising data usage, will likely
support a robust improvement in Gogo's revenue for the next several
years. We expect the company will increase its revenue at a
compound annual rate in the low- to mid-teens percent area from
2023 to 2028 while it expands its management-adjusted EBITDA
margins to 40% over the same period (from the mid-30% area in
2024). We believe Gogo's short-term strategic initiatives and
elevated investments will reduce its free operating cash flow
(FOCF) generation to about $160 million in 2025.
"Gogo's competition will intensify, which poses risks to our
forecast. The global private business aviation industry comprises
about 39,000 aircraft, of which only about 24% have a broadband
solution. While the business aviation market is currently
underpenetrated, we expect increasing competition from newer
entrants. For example, SmartSky Networks (which also operates an
air-to-ground [ATG] network) has made inroads into the private jet
market and could become a more significant threat, notwithstanding
the challenges it has faced in executing its plan. In addition, low
earth orbit (LEO) providers such as Starlink are starting to gain
momentum. Although Starlink is currently more focused on larger
commercial aircraft, we expect it will develop the technology to
take market share in the small, private jet space as well. Though
Gogo is likely to maintain its dominant market share through 2023,
we believe the added competition could lead to some pricing
pressure in the coming years.
"The stable outlook reflects our belief that Gogo is unlikely to
achieve the necessary credit metrics for a higher rating this year.
That said, we still recognize it will benefit from some ratings
upside over the longer term because it may reduce its leverage
below 4x in 2025."
S&P could lower its rating on Gogo if S&P expects its leverage will
increase and remain above 5x on a sustained basis. This could occur
if:
-- The company undertakes additional investment spending beyond
its current expectations, leading to further delays in its leverage
reduction; or
-- Competition in the space intensifies, pressuring its revenue
and earnings growth.
S&P could raise its rating on Gogo if:
-- S&P expects its leverage to decline below 4x on a sustained
basis; and
-- The company successfully launches its 5G and Galileo programs,
which supports a material improvement in its EBITDA and FOCF
generation.
ESG factors have no material influence on S&P's credit rating
analysis of Gogo.
GRAFTECH INTERNATIONAL: S&P Lowers ICR to 'B-', Outlook Negative
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on GrafTech
International Ltd. to 'B-' from 'B+' and the issue level rating on
its senior secured notes to 'B' from 'BB-'. S&P's '2' recovery
rating (70%-90%; rounded estimate: 70%) on the secured notes is
unchanged.
The negative outlook reflects the uncertainty around the timing and
pace of GrafTech's earnings recovery. If the company's earnings do
not recover as S&P expects, this could lead to a liquidity deficit
and cause us to view its capital structure as unsustainable absent
an improvement in market conditions.
S&P said, "We anticipate another year of depressed earnings due to
the continued softness in GrafTech's steel end markets. We believe
the company's EBITDA could be as low as breakeven again this year,
which will require it to use a large portion of its available
liquidity to mitigate its cash burn as it navigates depressed
graphite electrode prices and demand uncertainty. We expect
GrafTech will generate negative free operating cash flow (FOCF) of
over $100 million in 2024. The company's current liquidity position
comprises $177 million of cash on hand and about $112 million of
revolver availability (reflecting the 35% cap on the $330 million
facility because its leverage exceeds 4x). Based on our cash flow
assumptions, we expect the company will have sufficient liquidity
to support its ongoing capital expenditure (capex), interest
expense, and potential working capital needs over the next 12
months as it increases production, even if the availability under
its RCF remains constrained.
"Given the long production lead time for graphite electrodes and
low customer inventory levels in Europe, we anticipate GrafTech
will start to invest in working capital later this year to meet its
demand once activity starts to pick up. In our view, the company's
potential levers to preserve cash include a further reduction in
its capex or curtailing additional capacity to reduce its fixed
costs, in addition to ongoing footprint optimization efforts. If
GrafTech's production and earnings do not recover as we anticipate
by the end of 2024, we anticipate it would face increasing
liquidity pressure.
"We anticipate GrafTech will start to see a recovery in its
earnings in 2025, supported by the ramp-up of its volumes and an
increase in its utilization rates toward 70%, which will lead to
improving fixed-cost absorption. We expect the company will expand
its volumes by 15% in 2024 reflecting a stabilization in demand and
utilization rates to about 60%, based on production capacity of
178,000 mt starting in 2024, following the idling of its St. Marys
facility in 2023. Amid the current challenging market conditions,
we assume GrafTech's realized prices will decline again in 2024
because it will sell about 85% of its production at spot prices
rather than under its pre-existing long-term contracts, which have
largely expired. The company's average realized electrode price
declined by 20% in 2023 to $6,451/ton. We anticipate its average
realized price will be between $4,500/ton and $5,500/ton in 2024.
In our view, an improvement in GrafTech's volumes will depend on
its ability to recover and maintain its market share amid
competitor production and pricing discipline and improving steel
market conditions.
"We do not anticipate the company will return to generating
positive earnings until 2025. By the end of 2025, we anticipate
GrafTech's EBITDA will recover to $125 million-$150 million, which
is based on our forecast that graphite electrode prices will
rebound closer to historical levels of about $5,700/ton as the
company's production increases to 120,000-130,000 metric tons (mt).
GrafTech's costs are easing as it takes steps to optimize its
footprint and variable input costs, including petroleum-based input
prices continue to ease year over year. However, it could take
longer than we initially anticipated for the company to return its
production levels and utilization rates to their historical average
levels of approximately 154,000 mt and 86% (reflecting the new
capacity of 178,000 mt), respectively, which could cause it to
sustain leverage of more than 6x beyond 2025. GrafTech's production
declined by 44% in 2023 and its utilization rate dipped to about
44%.
"Despite our expectations for a recovery in steel demand and
production this year, imports and competitive pressures are
weighing on graphite electrode prices. Despite growing steel
production in China and India and declines in European and North
American steel output, global graphite electrode exports have been
relatively resilient, which is depressing the pricing for
electrodes in GrafTech's end markets. Steel production and
utilization rates are down globally and mills are being cautious
around buying electrodes amid the uncertainty surrounding a
recovery in their demand. This is particularly true in Europe,
where industrial demand has been sluggish and long lead times are
depressing buying activity. Eurozone steel demand declined by an
estimated 5% and the region's steel output declined by about 7% in
2023.
"While we expect European steel demand will recover by about 5% in
2024, we anticipate persistent weak industrial production and
economic conditions. European steel producers continue to deal with
inflationary cost pressures, which have tightened their steel
margins over the last several quarters as steel prices declined to
$710/ton in 2023 from $903/ton in 2022. The U.S. steel market has
been more resilient, utilization rates dipped slightly in 2023 but
output remained flat. Increased steel supply discipline has
supported prices and inflationary pressures have been less severe.
"While we see the potential for softer steel demand from certain
markets, such as commercial construction, this could be offset by
increased demand from federal stimulus related to infrastructure
projects and ongoing manufacturing investments."
GrafTech's return to spot sales is leading to elevated earnings
volatility. The company has transitioned to spot sales and
shorter-duration contracts at lower prices, and away from the
long-term agreements it signed in 2018 under near-record prices,
due to market conditions. The large swing in GrafTech's earnings in
2023 was similar to its historical volatility prior to 2018. During
2011-2017, the company's EBITDA peaked at $285 million and reached
a trough of negative $5 million. S&P said, "We assume GrafTech's
volumes under these long-term agreements decline to about 15% of
its total volumes sold in 2024 under our base-case forecast. As
these agreements expire, it will reduce the company's realized
prices over the next 12-24 months because they will move closer
toward market prices."
The negative outlook reflects the risk that GrafTech's EBITDA could
be as low as breakeven this year and the uncertainty around the
timing and pace of its recovery under current market conditions.
The company currently has a sufficient cash cushion under our base
case for the next 12 months; however, S&P believes it could face a
liquidity deficit that leads it to view its capital structure as
unsustainable if its volumes and earnings do not recover.
S&P could lower its ratings on GrafTech if its liquidity position
becomes more constrained over the next 12 months or we believe its
capital structure has become unsustainable. This could occur if:
-- Its volumes do not recover in 2025, indicating a sustained loss
of market share; or
-- Market prices continue to deteriorate and remain below
historical levels for an extended period, which would lead to
sustained margin pressure.
S&P could revise its outlook on GrafTech to stable if it sees signs
of a recovery in its earnings and EBITDA over the next 12 months
that S&P believes will support sustainable volume growth, a path
toward deleveraging to about 6x, and cash flow generation to
support its liquidity cushion as it ramps up its business to meet a
rebound in steel production.
GRANDEUR TRINITY: Alexandra Garrett Named Subchapter V Trustee
--------------------------------------------------------------
Mark Zimlich, the U.S. Bankruptcy Administrator for the Southern
District of Alabama, appointed Alexandra K. Garrett as Subchapter V
trustee for Grandeur Trinity, LLC.
About Grandeur Trinity
Grandeur Trinity, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Ala. Case No. 24-10587) on March
7, 2024, with $10 million to $50 million in assets and $1 million
to $10 million in liabilities. Julius Marion Uter, managing member,
signed the petition.
Judge Jerry C. Oldshue presides over the case.
Edward J. Peterson, Esq., at Johnson Pope Bokor Ruppel & Burns, LLP
represents the Debtor as legal counsel.
GREATER WESTCHESTER: Hires Howard Hanna as Real Estate Broker
-------------------------------------------------------------
Greater Westchester Property Group LLC, seeks approval from the
U.S. Bankruptcy Court for the Southern District of New York to
employ Howard Hanna Rand Realty as real estate broker.
The firm will market the Debtor's real property located at 13
Eldridge Street, Port Chester, New York 10573-5191.
The firm will be paid a commission of 6 percent of the sales
price.
David Gaudio, a partner at Howard Hanna Rand Realty, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
David Gaudio
Carol A. Mascolino
Howard Hanna Rand Realty
95 S. Middletown Rd.
Nanuet, NY 10954
Tel:(914) 723-8700
About Greater Westchester Property Group
Greater Westchester Property Group, LLC filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D.N.Y.
Case No. 24-22129) on Feb. 19, 2024. In the petition signed by
Joseph Cannavo, authorized representative, the Debtor disclosed up
to $1 million in both assets and liabilities.
Judge Sean H. Lane oversees the case.
Jeffrey A. Reich, Esq., at Reich Reich & Reich, PC serves as the
Debtor's legal counsel.
HAGA-MOF LLC: Hires Desai Law Firm LLC as its Counsel
-----------------------------------------------------
HAGA-MOF LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Missouri to employ The Desai Law Firm, LLC as
its counsel.
The firm's services include:
a. advising the Debtor with respect to its rights, power and
duties in this Chapter 11 case;
b. assisting and advising the Debtor in its consultations with
the Subchapter V trustee;
c. assisting the Debtor in analyzing the claims of creditors
and negotiating with such creditors;
d. assisting in the investigation of the assets, liabilities
and financial condition of the Debtor and reorganizing the Debtor's
business;
e. advising the Debtor in connection with the sale of its
assets or business;
f. assisting the Debtor in its analysis of and negotiation
with any third-party concerning matters related to, among other
things, the terms of a plan of reorganization;
g. assisting and advising the Debtor with respect to any
communications with the general creditor body regarding significant
matters in this case;
h. commencing and prosecuting necessary and appropriate
actions and proceedings on behalf of the Debtor;
i. reviewing, analyzing or preparing legal documents;
j. representing the Debtor at all hearings and other
proceedings;
k. conferring with other professional advisors in providing
advice to the Debtor;
l. performing all other necessary legal services in this case
as may be requested by the Debtor; and
m. assisting and advising the Debtor regarding pending
litigation matters in which it may be involved.
The firm will be paid at these rates:
Partners $385 per hour
Associates $250 per hour
Paralegals $125 per hour
The firm received advance payment of $25,000.
Spencer Desai, Esq., a partner at Desai Law Firm, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Spencer P. Desai, Esq.
The Desai Law Firm, LLC
13321 North Outer Forty Road, Suite 300
St. Louis, MO 63017
Tel: (314) 666-9781
Fax: (314) 448-4320
Email: spd@desailawfirmllc.com
About HAGA-MOF LLC
HAGA-MOF LLC, sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mo. Case No. 24-10077) on February 27,
2024, with up to $50,000 in assets and up to $10 million in
liabilities.
Judge Brian C. Walsh presides over the case.
Spencer P. Desai, Esq., at The Desai Law Firm, LLC represents the
Debtor as bankruptcy counsel.
HAMMER FIBER: Incurs $90K Net Loss in First Quarter
---------------------------------------------------
Hammer Fiber Optics Holdings Corp. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net loss of $89,858 on $909,952 of revenues for the quarter ended
Oct. 31, 2023, compared to a net loss of $84,672 on $799,460 of
revenues for the quarter ended Oct. 31, 2022.
As of Oct. 31, 2023, the Company had $7.85 million in total assets,
$3.68 million in total liabilities, and $4.17 million in total
stockholders' equity.
"The Company has consistently sustained losses since its inception.
These factors, among others, raise substantial doubt about the
ability of the Company to continue as a going concern for a period
of one year from the issuance of these financial statements. The
Company's continuation as a going concern is dependent upon, among
other things, its ability to increase revenues, adequately control
operating expenses and receive debt and/or equity capital from
third parties. No assurance can be given that the Company will be
successful in these efforts," Hammer Fiber said in the Report.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1539680/000106299324006734/form10q.htm
About Hammer Fiber Optics
Sarasota, FL-based Hammer Fiber Optics Holding Corp is a company
focused on sustainable shareholder value investing in both
financial services technology and wireless telecommunications
infrastructure. Hammer's financial technologies business is
focused on providing digital stored value technology via its
HammerPay mobile payments platform to enable digital commerce
between consumers and branded merchants across the developing
world, ensuring Swift, Safe and Secure encrypted remittances and
banking transactions.
HENDRIX FARMING: Seeks to Hire Riles Auctions as Auctioneer
-----------------------------------------------------------
Hendrix Farming, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Mississippi to employ Riles Auctions,
LLC to auction for sale its equipment.
The auctioneer's fee is equal to 5 percent $2000 sales and a
buyer's premium equal to 1 percent onsite and 4 percent online.
Riles Auctions is a "disinterested person" within the meaning of 11
U.S.C. 101(14), according to court filings.
The firm can be reached through:
Garrett Riles
Riles Auctions, LLC
5713 Highway 178 E
Potts Camp, MS 38659
Phone: (662) 274-4708
Email: RilesAuctions@gmail.com
About Hendrix Farming, LLC
Hendrix Farming, LLC, a company in Holy Springs, Miss., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. N.D. Miss. Case No. 23-13663) on Nov. 30, 2023, with $1
million to $10 million in both assets and liabilities. Robert Byrd,
Esq., at Byrd & Wiser, serves as Subchapter V trustee.
Judge Jason D. Woodard oversees the case.
Craig M. Geno, Esq., at the Law Offices of Craig M. Geno, PLLC
represents the Debtor as bankruptcy counsel.
HERBALIFE NUTRITION: S&P Lowers ICR to 'B', On Watch Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
Herbalife Nutrition Ltd. to 'B' from 'B+' and placed it on
CreditWatch with negative implications. S&P concurrently lowered
its issue-level rating on its senior secured debt to 'BB-' from
'BB' and our issue-level rating on its senior unsecured notes to
'B' from 'B+'. The issue-level ratings are also on CreditWatch with
negative implications. S&P's '1' recovery rating on the senior
secured debt (90%-100%; rounded estimate: 90%) and '4' recovery
rating on the senior unsecured debt (30%-50%; rounded estimate:
35%) are unchanged.
The CreditWatch negative placement reflects the looming maturities
totaling $1.5 billion through Sept. 1, 2025. S&P said, "We could
lower the rating by up to two notches over the next few months if
Herbalife cannot raise sufficient debt capital to address its
maturities through 2025. We could affirm the 'B' rating if the
company refinances its debt maturities on satisfactory terms
consistent with the rating."
The downgrade reflects Herbalife's challenged operating performance
and heightened refinancing risk affecting $1.5 billion of its
capital structure.
Herbalife's debt maturities over the next 18 months include a term
loan A ($236.1 million outstanding as of Dec. 31, 2023) due March
19, 2025; term loan B ($650.6 million outstanding as of Dec. 31)
due Aug. 18, 2025; and $600 million senior unsecured notes maturing
on Sept. 1, 2025. The company fully repaid the $197 million of
convertible notes that were due March 15, 2024, using a mix of cash
and revolver borrowings.
S&P said, "We understand that Herbalife is in discussions with its
lenders to refinance its maturities. Our base case assumes it will
refinance its maturities, however terms could include higher
pricing, additional covenants, and enhanced repayment acceleration
that could materially alter our view.
"We expect S&P Global Ratings-adjusted leverage will remain below
5x despite our forecast for weaker profitability and free operating
cash flow (FOCF) in 2024."
Herbalife continues to report declining membership and volumes in
all of its regions in 2023 except Asia-Pacific due to tough
macroeconomic conditions and recruitment difficulties.
Additionally, continued elevated input costs and one-time expenses
related to recent restructuring initiatives, including its
transformation program and investments in Herbalife One, have
weighed down profitability. As a result, S&P Global
Ratings-adjusted EBITDA declined about 25% in 2023 compared to
2022. S&P assumes these restructuring costs will continue into 2024
as the company reorganizes the business.
S&P said, "Consequently, our base case assumes adjusted EBITDA will
decline about 5% in 2024 and thereafter improve about 10% in 2025
as one-time costs run off and Herbalife starts to benefit from
cost-saving actions. At the same time, we note that the successful
completion of the turnaround initiatives is still uncertain and may
not materialize as we expect, which could slow the company's
deleveraging profile.
"Our business risk assessment of weak reflects Herbalife's
participation in the highly competitive weight management and
nutritional products industry and risks associated with operating a
multilevel direct sales business model.
The industry is characterized by low barriers to entry and numerous
competitive formats, including similar weight loss products sold in
brick-and-mortar stores by large consumer products companies, other
direct sellers, increased e-commerce activity, diet pills, low-carb
diets, self-help weight management services, mobile applications,
subscription services through social media, weight-loss drugs, and
services administered by doctors, nutritionists, and dieticians.
Further, wider adoption of GLP-1 drugs that promote weight loss
could substantially disrupt the nutritional supplement industry.
Nevertheless, high obesity rates globally and the desire for
healthier lifestyles create favorable industry dynamics for
Herbalife. These factors are somewhat offset by Herbalife's solid
geographic diversity.
The CreditWatch negative placement reflects the looming maturities
totaling $1.5 billion due through 2025. S&P said, "We could lower
the rating by up to two notches over the next few months if
Herbalife cannot raise sufficient debt capital to address its
maturities through 2025. We could affirm the 'B' rating if the
company refinances its debt maturities on satisfactory terms
consistent with the rating; this could happen shortly after a
successful refinancing, should it occur."
IIG GLOBAL: San Agustin Contract Enforceable, SDNY Judge Says
-------------------------------------------------------------
Judge Edgardo Ramos of the United States District Court for the
Southern District of New York affirmed an April 27, 2023, order
entered by United States Bankruptcy Judge Michael E. Wiles granting
summary judgment in favor of IIG Global Trade Finance Fund Ltd. and
IIG Structured Trade Finance Fund Ltd., and denying summary
judgment in favor of San Agustin Energy Corp. in an adversary
proceeding between the parties.
The district court case is styled, In re: IIG GLOBAL TRADE FINANCE
FUND, LTD. et al., SAN AGUSTIN ENERGY CORP., Appellant, Appellant,
v. IIG GLOBAL TRADE FINANCE FUND LTD. and IIG STRUCTURED TRADE
FINANCE FUND LTD., Appellees, Nos. 23-cv-4350, 23-cv-6611
(S.D.N.Y.)
The sole issue on appeal is whether the Bankruptcy Court erred in
finding that the parties entered into an enforceable agreement
pursuant to which San Agustin assumed all obligations for the
borrowers of certain outstanding loans.
San Agustin is a Panamanian corporation. Global Trade and
Structured Trade are limited liability companies incorporated in
the Cayman Islands. Global Trade and Structured Trade are in
official liquidation before the Grand Court of the Cayman Islands.
On appeal, the parties do not dispute that Global Trade and
Structured Trade are the assignees of an entity called Trade
Financial Trust.
To finance its acquisition of certain oil fields in Colombia from
non-party Pacific Stratus, on March 10, 2014, Valle Energy Inc. and
one of its subsidiaries, Lakeview Green Corp., entered into a loan
agreement with IIG Capital, LLC, which acted as an agent for a
lender. While the March 2014 Loan Agreement did not name the
lender for whom IIG Capital was acting as an agent, the parties do
not dispute that the lender was Trade Finance Funding I, Ltd.
On November 20, 2015, Valle acquired all of the shares of San
Agustin's immediate parent company, making San Agustin an indirect
wholly owned subsidiary of Valle. Accordingly, on November 20,
2015, the conditions as to the effective date of San Agustin's
conditional guarantee were satisfied, making San Agustin a
guarantor of Valle and Lakeview's loan.
Separate from the March 2014 Loan Agreement, on December 3, 2015,
Valle entered into a loan agreement with another entity associated
with IIG Capital, IIG TOF B.V. Unlike in the March 2014 Loan
Agreement, IIG TOF served as the direct lender rather than through
an agent, and under the express contract terms was allowed to
assign its rights at any time and/or to sell participation
interests in any outstanding loans.
Instead of pursuing default remedies after the loans were not
repaid, in October 2016, the parties began discussing possible
amendments to both loan agreements.
During the month of September 2019, San Agustin and TFT discussed a
possible fifth amendment to consolidate the March 2014 and December
2015 Loan Agreements.
On October 15, 2019, a representative of TFT emailed a
representative of San Agustin a copy of the Fifth Amendment
executed on the same date by TFT.
On November 1, 2019, a representative of San Agustin emailed a
representative of TFT a copy of the Fifth Amendment, which San
Agustin had revised in certain respects, executed by San Agustin on
October 28, 2019. San Agustin forwarded its copy of the Fifth
Amendment along with a cover email.
On November 20, 2019, San Agustin's counsel sent a signed, proposed
modified amendment to TFT, along with the signed pledge agreement,
executed promissory note, and the officers' certificates. In the
Proposed Modified Fifth Amendment, San Agustin, among other, minor,
revisions, purported to extend the maturity date by six months.
On October 8, 2020, the Bankruptcy Court approved the assignment by
TFT to Global Trade and Structured Trade, of TFT's "right, title
[and] interest in" a series of loans, including the $15,450,000
principal amount to "Valle Energy Inc." that remained outstanding
pursuant to the Fifth Amendment.
On March 12, 2021, Global Trade and Structured Trade brought an
adversary proceeding against San Agustin in bankruptcy court to
recover the unpaid loan obligations, alleging, among other causes
of action, that San Agustin breached its payment obligations
pursuant to the Fifth Amendment.
Global Trade and Structured Trade filed an amended complaint on
July 8, 2021, which became the operative complaint in the
underlying action.
On August 13, 2021, San Agustin filed a motion to dismiss, which
the Bankruptcy Court denied on September 28, 2021. San Agustin
answered the amended complaint on October 7, 2021.
On June 30, 2022, San Agustin moved for summary judgment. Global
Trade and Structured Trade cross-moved for summary judgment that
same day. The Bankruptcy Court held oral argument on October 4,
2022. During oral argument, Global Trade and Structured Trade
agreed that the effective date of the Fifth Amendment could be
determined to be whatever most benefitted San Agustin, and
subsequently incorporated that concession into their damage
calculations.
On April 27, 2023, the Bankruptcy Court issued its decision
granting summary judgment to Global Trade and Structured Trade. The
court found "the relevant facts are not in dispute, and that the
Fifth Amendment was validly executed by the parties and is
enforceable."
San Agustin filed its Notice of Appeal on May 11, 2023. On July 21,
2023, San Agustin filed a Notice of Appeal of an amended judgment
entered by the Bankruptcy Court in the underlying matter, which was
docketed as a separate appeal.
On August 1, 2023, the Court accepted the case as related to No.
23-cv-4350. With the consent of Global Trade and Structured Trade,
San Agustin moved to consolidate the two cases, a request which the
Court granted on August 16, 2023.
San Agustin argues that the Fifth Amendment is not valid because
the parties executed materially different versions, and therefore
did not mutually assent to be bound by the agreement. Global Trade
and Structured Trade respond that the Bankruptcy Court correctly
determined that the Fifth Amendment is valid because any minor
textual differences between October 15, 2019 and the October 28,
2019 versions are immaterial.
According to Judge Ramos, there is no dispute that the parties
signed the Fifth Amendment on different days and that there are
differences between the October 15, 2019 and October 28, 2019
versions. However, the Court states these differences only matter
if they are material, or in other words, affect the parties' rights
and obligations pursuant to the contract.
San Agustin first alleges that the different "as of" dates in the
versions executed by the parties results in different effective
dates of the agreement, which constitutes a material difference
because it affects the calculation of interest due on the
outstanding loans. San Agustin also argues the different "as of"
dates render the Fifth Amendment ambiguous as to its start date.
The District Court finds these arguments are without merit, because
each version of the Fifth Amendment expressly identifies the
effective date as the "date of its signature." Accordingly, the
effective date of the Agreement is October 28, 2019, the date by
which it was fully executed by both parties.
Indeed, New York state courts have found that immaterial
differences like changed dates that do not affect the parties'
liabilities do not impact the validity of a contract.
Second, San Agustin argues that the Bankruptcy Court's decision
changed the contractual meaning of effective date from "as the date
of its signature" to "as the last date it was signed by the
parties. This argument implies that the parties intended for the
Fifth Amendment to be signed on the same day, but the Fifth
Amendment contains no such requirement. Additionally, the Court
notes San Agustin never explains why such a change would constitute
a material difference.
Third, even assuming the differences between the two versions of
the Fifth Amendment are immaterial, San Agustin contends that
because the Fifth Amendment only contemplated counterparts to be
signed if they were exactly identical, even minor differences
between the versions are sufficient to prevent the agreement from
being enforced.
To support its argument, San Agustin cites to Black's Law
Dictionary and a source from the Cornell Law School Legal
Information Institute that define a counterpart as a duplicate or
copy. However, the District Court finds the mere definition of a
counterpart does not support San Agustin's claim that in order to
be valid, counterparts must be identical. This is especially true
when San Agustin offers no caselaw to support its theory.
The District Court agrees with the Bankruptcy Court that the
immaterial changes made by San Agustin to the Fifth Amendment still
resulted in a binding contract.
The Court upholds the Bankruptcy Court's judgment that there were
no material differences between the October 15, 2019, and the
October 28, 2019 versions of the Fifth Amendment.
San Agustin next argues that the Fifth Amendment never became
effective because San Agustin failed to deliver the signed pledge
agreement, executed promissory note, and the officers' certificates
described in the Fifth Amendment, and only turned those documents
over to TFT in relation to the Modified Proposed Fifth Amendment.
In contrast, Global Trade and Structured Trade represent that the
Fifth Amendment had no conditions precedent to its becoming
effective other than the parties' signature.
The District Court notes both versions of the Fifth Amendment
provide that San Agustin "will deliver" an executed note, "shall
deliver" officer certificates, and "shall execute and deliver" a
pledge of stock. The language of the Amendment does not include
unmistakable words indicating that a condition precedent to
contract formation exists. Accordingly, the Court agrees with the
Bankruptcy Court that the delivery of certain additional documents
was not required before the Fifth Amendment became effective.
San Agustin separately contends that, on the basis of extrinsic
evidence including the Proposed Modified Fifth Amendment and
November 1, 2019 cover email, the parties did not intend for the
Fifth Amendment to be binding. Global Trade and Structured Trade
argue that considering extrinsic evidence is not warranted because
the Fifth Amendment is unambiguous, and even if considered, that
any extrinsic evidence does not show a lack of intent to be bound.
San Agustin argues that the Fifth Amendment is ambiguous as to its
effective date and whether the delivery of certain ancillary
documents was a condition precedent to its becoming effective. The
District Court finds San Agustin's arguments unavailing. The plain
language of the Fifth Amendment resolves these issues, and the
Court considers extrinsic evidence of the parties' intent only
where that plain language yields ambiguity.
San Agustin also contends that extrinsic evidence is necessary to
show that the parties lacked intent to be bound by the agreement.
Global Trade and Structured Trade argue that considering extrinsic
evidence is not warranted because the Fifth Amendment is
unambiguous, and even if considered, that any extrinsic evidence
does not show a lack of intent to be bound.
Finally, San Agustin argues that there is an exception to the parol
evidence rule that a party can always allege that an agreement did
not go into effect. Under New York law, the parol evidence rule
"bars the consideration of extrinsic evidence of the meaning of a
complete written agreement if the terms of the agreement,
considered in isolation, are clear and unambiguous."
The District Court notes San Agustin did not make arguments
regarding an exception to the parol evidence rule in the underlying
bankruptcy proceedings. Generally, a district court will not
address arguments that were not presented to the bankruptcy court.
A copy of the Court's decision dated March 12, 2024, is available
at https://tinyurl.com/yze77uby
Hedge fund IIG Global Trade Finance Fund Ltd. commenced Chapter 15
bankruptcy proceedings (Bankr. S.D.N.Y. Case No. 20-10132) on
January 17, 2020, to seek recognition of its proceedings in the
Cayman Islands. The petition was filed by Christopher Kennedy and
Alexander Lawson of Alvarez and Marsal Cayman Islands Ltd. John A.
Pintarelli, Esq., at Morrison & Foerster LLP, represents the
Chapter 15 petitioners.
INNOVATIVE NURSING: Unsecureds to Get $1k per Month for 36 Months
-----------------------------------------------------------------
Innovative Nursing Solutions and Hospice Care LLC filed with the
U.S. Bankruptcy Court for the Northern District of Georgia a Plan
of Reorganization dated March 12, 2024.
The Debtor is a Georgia Limited Liability Company, 100% of the
equity interest of which is owned by Phyllis Burr Dove-Edwin. The
Debtor is the operator of a hospice nursing service (the
"Business").
Ms. Dove-Edwin is a long-time Registered Nurse ("RN"), and she has
successfully worked as an RN at various medical facilities around
the state of Georgia, as well as a traveling nurse to other states.
Debtor maintains its headquarters and administrative offices at
leased premises located at 1818 Lakefield Court SE, Suite B,
Conyers, Georgia 30013 (the "Office").
The combination of Medicare recoupment and delinquent invoices,
coupled with overrunning costs associated with the IPU, resulted in
significant cash flow issues for Debtor. To resolve these issues,
reorganize its affairs, and to ensure the continuity of quality
care to its patients, on December 19, 2023, Debtor filed a
voluntary petition for relief under Chapter 11 (Subchapter V) of
the Bankruptcy Code.
This Plan deals with all property of Debtor and provides for
treatment of all Claims against Debtor and its property.
Class 6 shall consist of Unsecured Claims of Debtor that have been
timely filed in this Case, including any potential Deficiency
Claims. Under the Plan, Debtor shall pay to Holders of Class 6
General Unsecured Claims holding Allowed Claims, in full
satisfaction of their respective Allowed Unsecured Claims, a pro
rate share of $1000.00 per month, beginning on 28th day of the
first month after the Effective Date continuing each month
thereafter for a total period of 36 consecutive months, in full
satisfaction of the Allowed Class 6 General Unsecured Claims.
Each Class 6 creditor shall refrain from enforcing any personal
guarantee of payment and performance that such creditor may hold
against any individual, provided that Debtor is not in default of
its Plan obligations to the Class 6 creditor as to its Allowed
General Unsecured Claims; however, if Debtor is in default and said
default goes uncured as provided in the Plan, then the Class 6
creditor in question may enforce said personal guarantee.
Notwithstanding anything else in this document to the contrary, any
Class 6 General Unsecured Claim shall be reduced by any payment
received by the creditor holding such claim from any third party or
other obligor, and Debtor's obligations hereunder shall be reduced
accordingly.
The Debtor discloses but does not warrant that its Scheduled
General Unsecured Claims that have filed proofs of claim asserting
Unsecured Claims are as follows: American Express National Bank
($93,590.24); American Express National Bank ($13,811.25); Internal
Revenue Service ($52,735.39); and Phylliss Grier ($26,000.00).
Class 6 is Impaired by the Plan.
Class 7 consists of the Membership Interest Claims. The Holders of
pre-petition membership interests in Debtor shall retain their
interest in Debtor under the Plan.
The source of funds for payments pursuant to the Plan is Debtor's
continued Business operations.
A full-text copy of the Plan of Reorganization dated March 12, 2024
is available at https://urlcurt.com/u?l=c2cSuA from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Angelyn M. Wright, Esq.
The Wright Law Alliance, P.C.
1244 Clairmont Road, Suite 222
Decatur, GA 30031-2890
Tel: (404) 373-9933
Fax: (888) 900-0610
Email: twlope@earthlink.net
About Innovative Nursing Solutions
and Hospice Care LLC
Innovative Nursing Solutions and Hospice Care LLC is the operator
of a hospice nursing service in Conyers, GA.
The Debtor filed its voluntary petition for Chapter 11 protection
(Bankr. N.D. Ga. Case No. 23-62548) on Dec. 19, 2023, listing
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities. Phyllis Dove-Edwin, president/member-manager, signed
the petition.
THE WRIGHT LAW ALLIANCE, P.C., serves as the Debtor's legal
counsel.
JAZI KAT: Seeks Approval to Hire Degnan Law as Special Counsel
--------------------------------------------------------------
Jazi Kat, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Arizona to hire Degnan Law, PLLC, as its special
counsel.
The firm will represent the Debtor in the ongoing District Court
litigation styled as Jazi Kat, LLC and Jazi Kat, LLC, v. Travelers
Casualty Insurance Company of America, Case No.
CV-23-00716-PHX-DLR.
The firm will charge these hourly rates:
Managing Partner $500
Partner $400
Senior Associates $325
Associates $285
Law Clerks $250
Paralegals $195 to $225
Legal Assistants $75
The firm received an advance payment of $5,000.
Degnan Law does not represent or hold any interest adverse to the
Debtor or the Estate with respect to the District Court Litigation,
according to court filings.
The firm can be reached through:
David Dengan, Esq.
Degnan Law, PLLC
4105 N 20th Street, Suite 220
Phoenix, AZ 85016
Telephone: (602) 266-0531
Facsimile: (480) 718-8534
About Jazi Kat, LLC
Jazi Kat, LLC filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 24-01626) on
March 5, 2024, listing $1 million to $10 million in both assets and
liabilities. The petition was signed by Bridget O'Brien as managing
member.
Judge Madeleine C. Wanslee presides over the case.
Krystal M. Ahart, Esq. at Kahn & Ahart, PLLC represents the Debtor
as counsel.
JJ ARCH LLC: Eric Huebscher Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Region 2 appointed Eric Huebscher of Huebscher
& Co. as Subchapter V trustee for JJ Arch, LLC.
Mr. Huebscher will be paid an hourly fee of $425 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Huebscher declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Eric Huebscher
Huebscher & Co.
301 E 87th St. - 20E
New York, NY 10128
Phone: 917-763-3891
Email: ehuebscher@huebscherconsulting.com
About JJ Arch
JJ Arch, LLC is a vertically integrated real estate owner, operator
and developer with an active investment portfolio with more than
5.7 million square feet across the United States.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-10381) on March 7,
2024, with $1 million to $10 million in assets and $100,000 to
$500,000 in liabilities. Jeffrey Simpson, managing member, signed
the petition.
Judge John P. Mastando III oversees the case.
Scott A. Griffin, Esq., at Griffin, LLP represents the Debtor as
legal counsel.
JL TEXAS PALLETS: Hires Lane Law Firm PLLC as Counsel
-----------------------------------------------------
JL Texas Pallets & Logistics LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ Lane
Law Firm PLLC as counsel.
The firm will provide these services:
a. assist, advise and represent the Debtor relative to the
administration of the chapter 11 case;
b. assist, advise and represent the Debtor in analyzing the
Debtor's assets and liabilities, investigating the extent and
validity of lien and claims, and participating in and reviewing any
proposed asset sales or dispositions;
c. attend meetings and negotiate with the representatives of
the secured creditors;
d. assist the Debtor in the preparation, analysis, and
negotiation of any plan of reorganization and disclosure statement
accompanying any plan of reorganization;
e. take all necessary action to protect and preserve the
interests of the Debtor;
f. appear, as appropriate, before this Court, the Appellate
Courts, and other Courts in which matters may be heard and to
protect the interests of the Debtor before said Courts and the
United States Trustee; and
g. perform all other necessary legal services in these cases
The firm will be paid at these rates:
Robert C. Lane $595 per hour
Joshua Gordon $550 per hour
Associate Attorneys $500 per hour
Paraprofessionals $150 to $250 per hour
The firm received from the Debtor a retainer in the amount of
$30,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert C. Lane, a partner at Lane Law Firm PLLC, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Robert C. Lane, Esq.
The Lane Law Firm, PLLC
6200 Savoy, Suite 1150
Houston, TX 77036
Tel: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
About JL Texas Pallets & Logistics LLC
JL Texas Pallets & Logistics, LLC is a new pallet manufacturer in
Houston, Texas.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Case No. 24-30802) on February
28, 2024, with $275,185 in total assets and $1,425,750 in total
debts. Jerry Marshal, JSM member, signed the petition.
Judge Jeffrey P. Norman oversees the case.
Robert C. Lane, Esq., at Tbe Lane Law Firm, represents the Debtor
as bankruptcy counsel.
JOANN INC: Gibson Dunn & Morris Nichols Advise Term Loan Group
--------------------------------------------------------------
In the Chapter 11 cases of JOANN Inc. and affiliates, the Ad Hoc
Term Loan Group filed a verified statement pursuant to Rule 2019 of
the Federal Rules of Bankruptcy Procedure.
In August 2023, the Ad Hoc Term Loan Group (as comprised from time
to time) formed and retained Gibson, Dunn & Crutcher LLP to
represent it as legal counsel in connection with a potential
restructuring of the outstanding debt obligations of the Debtors
and certain of their subsidiaries and affiliates.
Subsequently, in February 2024, Gibson Dunn contacted Morris,
Nichols, Arsht & Tunnell LLP to serve as Delaware co-counsel to the
Ad Hoc Term Loan Group.
Gibson Dunn and Morris Nichols represent (as that term is defined
in Bankruptcy Rule 2019(a)(2)) the Ad Hoc Term Loan Group,
comprised of the beneficial holders or the investment advisors or
managers for certain beneficial holders in their capacities as
lenders under that certain Credit Agreement, dated as of October
21, 2016 (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement" and the Loans (as defined
in the Credit Agreement) made thereunder, the "Term Loans"), by and
among Jo-Ann Stores, LLC, as borrower, Needle Holdings LLC, as
holdings, the lenders party thereto from time to time, and Bank of
America, N.A., as administrative agent.
Gibson Dunn and Morris Nichols do not represent or purport to
represent any other entities in connection with the Debtors'
chapter 11 cases. Gibson Dunn and Morris Nichols do not represent
the Ad Hoc Term Loan Group as a "committee" (as such term is used
in the Bankruptcy Code and Bankruptcy Rules) and do not undertake
to represent the interests of, and are not fiduciaries for, any
creditor, party in interest, or other entity that has not signed a
retention agreement with Gibson Dunn or Morris Nichols.
The names, addresses, and disclosable economic interests of all the
members of the Ad Hoc Term Loan Group are as follows:
1. ArrowMark Colorado Holdings LLC
100 Fillmore Street, Suite 325
Denver, CO 80206
* $35,102,443.57
2. BC Partners
650 Madison Avenue
New York, NY 10022
* $3,900,000.00
3. DoubleLine Capital LP
2002 N. Tampa Street, Suite 200
Tampa, FL 33602
* $3,071,250.00
4. Fidelity Management & Research Company, LLC
88 Black Falcon Avenue, V13H
Boston, MA 02110
* $38,088,664.00
5. HPS Investment Partners, LLC
40 W 57th Street, 33rd Floor
New York, NY 10019
* $7,020,216.69
6. Investcorp Credit Management US LLC
280 Park Avenue, 36th Floor
New York, NY 10017
* $6,470,986.24
7. Johkim Capital Partners Management LLC
8235 Douglas Avenue, Suite 1050
Dallas, TX 75225
* $23,076,904.00
8. LCM Asset Management LLC
399 Park Avenue, 22nd Floor
New York, NY 10022
* $45,916,417.00
9. Maple Rock Capital Partners Inc
21 St. Clair Ave E, Suite 1100
Toronto, ON M4T 1L9
* $39,677,216.00
10. MJX Asset Management LLC
12 E 49th Street, 38th Floor
New York, NY 10017
* $34,188,823.71
11. Nassau Corporate Credit LLC
17 Old Kings Highway South
Darien, CT 06820
* $8,764,324.88
12. Nuveen Asset Management, LLC
8500 Andrew Carnegie Blvd.
Charlotte, NC 28262
* $56,002,941.10
13. Octagon Credit Investors, LLC
250 Park Avenue, 15th Floor
New York, NY 10177
* $66,014,464.29
14. Ontario Teachers' Pension Plan Board
5650 Yonge Street
Toronto, Ontario, M2M 45H Canada
* $51,803,217.50
15. Philosophy Capital Management LLC
3201 Danville Boulevard, Suite 100
Alamo, CA 94607
* $38,094,347.69
16. Seix Investment Advisors LLC
1 Maynard Drive, Suite 3200
Park Ridge NJ, 07656
* $14,826,127.90
17. Shenkman Capital Management, Inc.
151 West 42nd Street, 29th Floor
New York, NY 10036
* $9,896,364.85
18. Sound Point Capital Management, LP
375 Park Avenue, 33rd Floor
New York, NY 10152
* $15,458,661.20
19. The Guardian Life Insurance Company of America (Park
Avenue Institutional Advisers, LLC
10 Hudson Yards, 20th Floor
New York, NY 10001
* $31,537,030.54
Attorneys for the Ad Hoc Term Loan Group:
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
Robert J. Dehney, Esq.
Matthew B. Harvey, Esq.
Brenna A. Dolphin, Esq.
1201 North Market Street
16th Floor
Wilmington, Delaware 19801
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
E-mail: rdehney@morrisnichols.com
mharvey@morrisnichols.com
bdolphin@morrisnichols.com
- and –
GIBSON, DUNN & CRUTCHER LLP
Scott J. Greenberg, Esq.
Joshua Brody, Esq.
Kevin Liang, Esq.
200 Park Avenue
New York, New York 10166
Telephone: (212) 351-4000
Facsimile: (212) 351-4035
Email: SGreenberg@gibsondunn.com
JBrody@gibsondunn.com
KLiang@gibsondunncom
About JOANN
JOANN operates in the fabric and sewing industry with one of the
largest assortments of arts and crafts products. JOANN has
transformed itself into a fully-integrated, digitally-connected
omni-channel retailer.
JOANN reported a net loss of $200.6 million for the year ended Jan.
28, 2023.
* * *
As reported by the TCR on July 14, 2023, S&P Global Ratings lowered
its ratings on U.S.-based creative products retailer Joann Inc. to
'CCC' from 'CCC+'. The outlook is negative, reflecting the risk S&P
could lower its rating on Joann if liquidity deteriorates or the
company pursues a debt transaction that S&P views as tantamount to
default. S&P said weak operating performance and higher borrowing
costs are straining cash flow and liquidity.
JUDSON COLLEGE: Gets OK to Sell Marion Property for $92,000
-----------------------------------------------------------
Judson College got the green light from the U.S. Bankruptcy Court
for the Southern District of Alabama to sell its real property in
Marion, Ala.
The bankruptcy court, at a hearing on March 19, approved the sale
of the property to Alexis Barnes who offered $92,000.
The property is a single-family residence located at 401 Bibb
Street, Marion, Ala. It is currently vacant and does not generate
income.
After payment of the sale costs, the net proceeds will be
distributed to pay Chapter 11 quarterly fees; to creditors holding
secured claims on the property; and to Judson to be distributed
pursuant to a confirmed Chapter 11 plan or as otherwise ordered by
the court.
About Judson College
Judson College was founded as a liberal arts college for women in
1838 by members of the Siloam Baptist Church. It historically
operated on an 80-acre campus located in the town of Marion in
southwest Alabama. Since 1843, Judson College has been one of those
entities whose ministries are fostered by the Alabama Baptist State
Convention, whose work is financially supported by the Convention,
and whose ministries received the Convention's encouragement and
nurture. After several years of declining enrollment, Judson
College's Board of Trustees voted to suspend academic operations on
May 6, 2021.
Judson College sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ala. Case No. 20004) on January 8,
2024, with $1 million to $10 million in assets and $10 million to
$50 million in liabilities. Daphne R. Robinson, president, signed
the petition.
Judge Henry A. Callaway oversees the case.
The Debtor tapped Alexandra K. Garrett, Esq., at Silver Voit
Garrett & Watkins as bankruptcy counsel; and Christian & Small, LLP
and Gilmore, Rowley, Crissey & Wilson, Attorneys at Law, LLC as
special counsels.
KBS REAL: Incurs $157.5 Million Net Loss in 2023
------------------------------------------------
KBS Real Estate Investment Trust III, Inc. filed with the
Securities and Exchange Commission its Annual Report on Form 10-K
reporting a net loss of $157.53 million on $300.68 million of total
revenues for the year ended Dec. 31, 2023, compared to a net loss
of $62.46 million on $308.02 million of total revenues for the year
ended Dec. 31, 2022.
As of Dec. 31, 2023, the Company had $2.14 billion in total assets,
$1.87 billion in total liabilities, and 267.41 million in total
stockholders' equity.
Irvine, California-based Ernst & Young LLP, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 18, 2024, citing that the Company has $1.2 billion of
loan principal maturing within one year from the date of issuance
of the consolidated financial statements, and has stated that
substantial doubt exists about the Company's ability to continue as
a going concern.
KBS Real stated, "The ongoing challenges affecting the U.S.
commercial real estate industry, especially as it pertains to
commercial office buildings, continues to be one of the most
significant risks and uncertainties we face. The combination of
the continued economic slowdown, high interest rates and persistent
inflation (or the perception that any of these events may
continue), as well as a lack of lending activity in the debt
markets, have contributed to considerable weakness in the
commercial real estate markets. The usage and leasing activity of
our assets in several markets remains lower than pre-pandemic
levels in those markets. Upcoming and recent tenant lease
expirations and leasing challenges in certain markets amidst the
aforementioned headwinds coupled with slower than expected
return-to-office, most notably in the greater San Francisco Bay
Area where we own several assets, have had direct and material
impacts to property appraisal values used by our lenders and have
impacted our ability to access certain credit facilities and on our
ongoing cash flow.
"As of March 18, 2024, we have $1.2 billion of loan maturities in
the next 12 months. Considering the current commercial real estate
lending environment, this raises substantial doubt as to our
ability to continue as a going concern for at least a year from the
date of the issuance of our financial statements. In order to
refinance, restructure or extend our maturing debt obligations, we
have been required to reduce the loan commitments and/or make
paydowns on certain loans, and we anticipate we may be required to
make additional reductions to loan commitments and paydowns on the
loans maturing during the next 12 months in order to refinance,
restructure or extend those loans. As a result of reductions in
loan commitments and paydowns and the ongoing liquidity needs in
our real estate portfolio, in addition to raising capital through
new equity or debt, we may consider selling assets into a
challenged real estate market in an effort to manage our liquidity
needs. Selling real estate assets in the current market would
likely impact the ultimate sale price. We also may defer
noncontractual expenditures. Moreover, our loan agreements contain
cross default provisions, including that the failure of one or more
of our subsidiaries to pay debt as it matures under one debt
facility may trigger the acceleration of our indebtedness under
other debt facilities. If we are unable to successfully refinance
or restructure certain of our debt instruments, we may seek the
protection of the bankruptcy court to implement a restructuring
plan, which would constitute an event of default under other
indebtedness of our subsidiaries. As a result of our upcoming loan
maturities, reductions in loan commitments and loan paydowns, the
challenging commercial real estate lending environment, the current
interest rate environment, leasing challenges in certain markets
where we own properties, reduction in our cash flows and the lack
of transaction volume in the U.S. office market as well as general
market instability, management's plans cannot be considered
probable and thus do not alleviate substantial doubt about our
ability to continue as a going concern. Continued disruptions in
the financial markets and economic uncertainty could further impact
our ability to implement our business strategy and continue as a
going concern. Overall, there remains significant uncertainty
regarding the timing and duration of the economic recovery, which
precludes any prediction as to the ultimate adverse impact the
current disruptions in the markets may have on our business.
Potential long-term changes in customer behavior, such as continued
work-from-home arrangements, could materially and negatively impact
the future demand for office space, further adversely impacting our
operations. These risks are not priced into the December 12, 2023
estimated value per share. As such, the estimated value per share
does not take into account developments in our portfolio since
December 12, 2023."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1482430/000148243024000025/kbsriii-20231231.htm
About KBS Real Estate
KBS Real Estate Investment Trust III, Inc. is a Maryland
corporation that has elected to be taxed as a real estate
investment trust and it intends to continue to operate in such a
manner. The Company has invested in a diverse portfolio of real
estate investments. As of Dec. 31, 2023, the Company owned 16
office properties (of which one property was held for non-sale
disposition), one mixed-use office/retail property and an
investment in the equity securities of a Singapore real estate
investment trust (the "SREIT").
LA SALLE UNIVERSITY: Fitch Rates $44MM Series 2024 Bonds 'BB'
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to up to $44 million of
Philadelphia Industrial Development Authority for series 2024 bonds
to be issued on behalf of La Salle University, PA (La Salle).
The series 2024 bonds are expected to be sold via negotiation on or
about the week of March 25, and the final size may decrease based
on market conditions. Proceeds will be used to partially refund
certain series 2012 and 2017 bonds with no extension of final
maturities, effectuate a tender of certain series 2017 bonds, and
finance capital projects, capitalized interest, funded interest,
and costs of issuance. Following the series 2024 transaction as
proposed, La Salle will have interest-only payments due on bonded
debt through fiscal year 2028, with a significant step-up in
aggregate debt service in fiscal 2030 after principal starts to
amortize in fiscal 2029.
Additionally, Fitch has downgraded La Salle's Issuer Default Rating
(IDR) and the following bonds issued on behalf of La Salle to 'BB'
from 'BB+':
- $40,050,000 Philadelphia Industrial Development Authority, La
Salle University revenue bonds series 2017;
- $94,975,000 Pennsylvania Higher Educational Facilities Authority,
La Salle University revenue bonds series 2012.
The Rating Outlook is Negative.
Entity/Debt Rating Prior
----------- ------ -----
La Salle
University (PA) LT IDR BB Downgrade BB+
La Salle
University (PA)
/General Revenues/1 LT LT BB Downgrade BB+
La Salle's 'BB' IDR and bond ratings reflect the university's
financial asset base relative to its significant debt that, while
still adequate, has declined notably in recent years to a pro forma
43% Fitch-calculated available funds-to-adjusted debt at FYE 2023
from the prior five years' average of 63%. The weaker balance sheet
is largely the result of expense cuts that did not match the
magnitude of multi-year revenue declines from a shrinking student
base (total headcount of 3,556 in fall 2023, down 32% from 5,193 in
fall 2018) in the highly competitive and demographically
unfavorable Pennsylvania market.
The ratings also consider Fitch's opinion that prior vacancies,
interim appointments, and turnover in several key management roles
contributed to La Salle's recent hardships, but that all key
positions except director of financial aid are now staffed with
permanent incumbents. Further, the relatively new management team
has leveraged external consultants and appears both committed and
aligned with the current Board of Trustees to execute on revenue
enhancement, asset monetization, and financial right-sizing plans
that include the issuance of the series 2024 bonds for near-term
debt service savings.
Despite early progress in La Salle's turnaround plan, Fitch's
expectations for the university's leverage ratios have deteriorated
somewhat since Fitch's last review, driving the downgrade to 'BB'
from 'BB+'. Fitch's revised expectations are mostly from timing
adjustments to the university's planned asset monetization
strategies, the addition of incremental new money borrowing on top
of already sizable debt, and a weaker fall 2023 enrollment (fiscal
2024) than previously anticipated by Fitch.
The Negative Outlook is supported by outcomes of Fitch-modeled,
forward-looking scenarios that incorporate a potential financial
market downturn and Fitch's current expectations for La Salle's
revenues, expenses, capital expenditures, and no additional debt.
The Outlook reflects the significant degree of execution risk
through that forward-looking scenario, particularly on the revenue
side, where La Salle is relying on fundraising, and modest
enrollment and student revenue increases even after experiencing a
record low incoming freshman class in fall 2023. LaSalle will need
to quickly pivot in order to reverse the trajectory of its
recurring operating performance, to successfully execute on its
strategic plan, and to thereby avoid further downgrades.
In the longer term, the extent and timing of asset monetization
strategies may also support more favorable rating implications.
Significant deviations from La Salle's realignment plans, either on
the downside from stubborn expenses or continued revenue declines,
or on the upside from asset monetization of its large portfolio of
noncore assets, will additionally influence future rating actions.
SECURITY
The series 2012, 2017 and 2024 bonds are parity debt and secured by
a pledge of unrestricted gross revenues of the university. Upon an
event of default, an intercreditor agreement provides for the
unrestricted gross revenues to be delivered to the parity debt
trustees and the collateral agent.
The series 2024 bonds are also secured by campus properties
appraised in March 2024 for over $133 million among La Salle's
total appraised property value of $302 million. Through an
intercreditor agreement, the series 2012 and 2017 bondholders also
share a pari-passu claim to the series 2024 mortgages.
KEY RATING DRIVERS
Revenue Defensibility - 'bb'
Fundraising, Endowment and Asset Monetization Capacity Partially
Counters Significant Drops in Student Revenue
La Salle's 'bb' revenue defensibility assessment reflects the
university's historically two-thirds' to three-quarters' dependence
on student-generated revenues and enrollment pressure over several
years with weak student demand metrics. Net student-generated
revenue has fallen 31% from fiscal year 2018 to fiscal year 2023,
roughly corresponding to the 32% drop in FTEs during that period of
4,430 in fall 2017 to 3,029 in fall 2022. Fall 2023 FTEs declined
another 13% to 2,647 with the smallest entering freshman class in
recent history, a modest 82% freshman acceptance rate and weak 10%
matriculation.
In Fitch's opinion, these figures reflect the fiercely competitive
and demographically unfavorable Pennsylvania region in which La
Salle operates, coupled with operational mishaps attributed to
staff turnover or vacancies in key enrollment and financial aid
roles over the past several years.
La Salle reports preliminary fall 2024 enrollment data to be
favorable to fall 2023 with higher interest in on-campus housing,
nursing and business programs. The university is also implementing
strategies recommended by an external enrollment consultant,
achieved a meaningful 5% improvement in the freshman-to-sophomore
retention rate to 71%, and has secured an experienced enrollment
management executive who joined in October 2023.
La Salle additionally plans tuition increases in part to correct
for a tuition price reset that was executed in fiscal 2017. Current
tuition sticker price is just under $35,000 and well below that of
several regional private peers. Nevertheless, with a very
price-sensitive student body (a high 49% of La Salle's beginning
undergraduate students in the 2021-2022 academic year were Pell
Grant recipients, according to federal data), federal delays in
providing student financial aid eligibility calculations to
colleges nationwide, and one remaining key vacancy in the director
of financial aid position, Fitch is cautious about projecting
stable enrollment in fall 2024.
La Salle has been able to counter some of the volatility from its
student revenues with meaningful contributions from endowment
income, fundraising, use of reserves, and asset monetization.
Recent endowment draws of over 7% and use of strategic reserves are
unsustainable, in Fitch's opinion, but are being curtailed starting
in fiscal 2024. La Salle filled its VP of Advancement position in
fall 2023 and has retained a fundraising consultant. It is also
considering the launch of a sizeable fundraising campaign. Fitch
believes that La Salle has significant capacity and willingness to
monetize noncore assets such as excess real estate and a steam
plant.
Operating Risk - 'bbb'
Extraordinary Income and Expense Measures Supplement Variable Cash
Flows
Inclusive of its use of reserves, non-recurring revenues, and
supplemental endowment draws, La Salle generated Fitch-calculated
operating cash flow margins between 10% and 14% based on audited
results from fiscal years 2018 to 2022, but less than 2% in fiscal
2023. Management has implemented noteworthy expense cuts for fiscal
2024, but will still realize negligible cash flow for the year due
to revenue tracking lower as well.
Fitch expects cash flow margins to revert at least to the 5%-10%
range starting in fiscal 2025 as La Salle continues to rationalize
expenses and looks to incrementally grow student revenues and
increase operating gifts. Asset monetization efforts will also aid
in operational improvement by reducing ongoing plant maintenance
costs and bolstering the investment pool, which will generate
incremental additional investment income.
Fitch's operating risk assessment is tempered by La Salle's
refinancing of near-term principal via the series 2024 transaction,
and an elevated debt burden. Preliminary expectations based on
maximum issuance size include average annual debt service of about
$12.3 million, representing about 13% of fiscal 2023 operating
income. Restoration of healthy and consistent cash flow margins
over the course of the next five years is essential to La Salle's
capacity to comfortably cover debt service payments when
significant principal payments start to amortize in fiscal 2030.
La Salle's internally-funded capital plans for the coming years are
limited to repair and replacement costs as the university
prioritizes cash preservation, but its average age of plant of over
20 years may reflect growing capital needs. Roughly $18 million in
new money proceeds from the series 2024 bonds will finance the
athletics arena renovation, roof replacements, acquisition of
information technology, and other miscellaneous projects. Capital
gifts from a planned fundraising campaign, and some state capital
funds for private universities will supplement internal-funding for
capex needs.
Financial Profile - 'bb'
Sufficient Available Funds Provide Flexibility; Trajectory is
Dependent on Plan Execution
La Salle's 'bb' financial profile assessment reflects strain on La
Salle's leverage profile but with flexibility to meet financial
commitments. Fitch-calculated Available Funds (AF: cash and
investments less permanently restricted net assets) as of FYE 2023
was about $58 million, significantly lower than prior years.
Following the series 2024 bond issue, which presumes a maximum of
about $18 million in net new debt, La Salle's outstanding par
amount of debt (100% fixed rate) will increase from about $116
million to about $134 million. La Salle has no debt-equivalent
leases. The resulting approximately 43% available funds (AF) at FYE
2023 against pro forma adjusted debt is lower than historical
ratios, and will weaken further by FYE 2024 due the deficit
expected during the fiscal year to be funded by reserves.
La Salle is bound by a debt service coverage ratio covenant in the
series 2012, 2017 and 2024 bonds of 1.0x annually with two
consecutive violations requiring the use of a consultant. The
calculation of funds available for debt service under bond
documents include unrestricted revenues less expenses plus
depreciation, amortization and interest, plus cash and investment
assets of the university. As of FYE May 31, 2023, La Salle was
comfortably in compliance with the covenant, and expects to be
compliant at FYE 2024 as well.
Beyond this fiscal year that ends on May 31, 2024, the sufficiency
of La Salle's leverage profile and ratings are dependent on its
successful execution of their asset monetization, revenue
enhancement and expense management plans. Fitch has incorporated
expectations of rapid reduction of unsustainable draws on resources
in forward-looking scenarios that form the basis for the ratings
and Outlook. Absent improvements in recurring operating performance
and a fully successful execution of La Salle's plans, La Salle
remains susceptible to further deterioration in available funds
over the intermediate term, consistent with a lower rating.
Conversely, execution of these plans together with asset
monetization strategies may warrant a positive rating action.
Asymmetric Additional Risk Considerations
Fitch's assessment includes no asymmetric additional risk
considerations.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Continued enrollment declines in fall 2024 and beyond that
pressure net tuition and student fee revenue;
- Operating performance that does not steadily improve after fiscal
2024 towards levels that would support increased debt service
requirements starting in fiscal 2030;
- Unfavorable shift in financial flexibility either from additional
debt, erosion in AF or reduction of operating liquidity;
- Instability in retaining key management positions;
- Inability to meet annual targets and make steady progress towards
the university's financial right-sizing, revenue building, and
asset monetization plans including the refinancing of near-term
debt maturities via the series 2024 bond transaction.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Signs of stabilization or recovery in enrollment, retention,
and/or residential housing levels in fall 2024, correlating with
the same for student fee revenues;
- Execution of La Salle's asset monetization, revenue enhancement,
and expense reductions at better than Fitch's current expectations,
resulting in significant and sustained improvement in
Fitch-calculated operating cash flow margins and leverage ratios
(AF-to-adjusted debt);
- A return to a normalized level of endowment support that persists
over several years, as supported by sustainable operating
performance and solid Fitch-calculated debt service coverage on a
recurring basis.
PROFILE
La Salle University, founded in 1863 by the Institute of the
Brothers of the Christian Schools (Christian Brothers), is a
private, co-educational university located on a 133-acre campus in
the Germantown area of Philadelphia, 10 miles from Center City. La
Salle is one of six Lasallian colleges in the U.S. and numerous
colleges and educational institutions in the Lasallian network
worldwide. La Salle was granted university status in 1984. The
Christian Brothers' residence is co-located on the campus of the
university.
Total headcount enrollment in fall 2023 was 3,556, and was 2,647 on
an FTE basis. La Salle offers undergraduate and graduate degrees at
its three schools: Arts and Sciences, Business, and Nursing and
Health Sciences. La Salle's most popular majors according to
federal data on degrees conferred in 2022 are business and nursing
for undergraduate programs, and business, education and health
sciences for graduate programs. Roughly 68% of students are
undergraduates and 80% are Pennsylvania residents. With several
NCAA Division I men's and women's athletics programs and several
hundred student-athletes, athletics is an important component of La
Salle's operations.
A new President of the university was inaugurated in April 2022. In
Spring 2023, a new Vice President for Finance and Administration
replaced the predecessor who joined about a year prior. Other new
management staff who have joined the university over the past two
years include Chief of Staff, Vice President of Enrollment
Management, Vice President of Advancement, Provost, and Vice
President of Athletics and Recreation.
La Salle's accreditation from the Middle States Commission on
Higher Education was last affirmed in 2016. The university is
currently in the process of its self-review scheduled for 2024-25.
La Salle's most recently calculated financial responsibility score
for the U.S. Department of Education (DOE) was 1.9, which is
considered financially responsible by DOE.
Sources of Information
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
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.
LECLAIRRYAN PLLC: Segregated Funds Claims Deadline Set for April 12
-------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia set
April 12, 2024, as last date for any person asserting any interest
in any prepetition segregated funds claims against LeClairRyan
PLLC. All claims must be submitted by overnight delivery to:
Paula S. Beran, Esq.
Tavenner & Beran PLC
20 N. 8th Street
Richmond, VA 23219
If any claimants believes it has timely tendered a claim in
prepetition segregated fund but the same is not on the list of
claims in prepetition segregated funds, claimants must notify Paula
S. Beran, Esq. at PBeran@TB-LawFirm.com.
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind-down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm
claims assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth represented LeClairRyan in the case. Protiviti was the
Debtor's financial adviser for the liquidation.
The bankruptcy case was converted to a Chapter 7 liquidation on
Oct. 24, 20219. Lynn L. Tavenner was named a Chapter 7 trustee,
and then Benjamin C. Ackerly, a successor trustee.
Benjamin C. Ackerly retained Tyler P. Brown, Hunton Andrews Kurth
LLP, as counsel for Chapter 7 trustee.
LEXARIA BIOSCIENCE: CFO Holds 200,000 Stock Options
---------------------------------------------------
Nelson Cabatuan, chief financial officer of Lexaria Bioscience
Corp., filed a Form 3 Report with the U.S. Securities and Exchange
Commission, disclosing ownership of stock options to purchase
200,000 shares of the company's common stock as of March 14, 2024.
The options are exercisable at a price of $2.93 per share and have
an expiration date of March 15, 2029.
Fifty thousand (50,000) options are exercisable on March 15, 2024,
an additional 50,000 options are exercisable on March 15, 2025,
thereafter an additional 4,166 options are exercisable monthly
until Feb. 15, 2027 with the balance of 4,182 options being
exercisable on March 15, 2027.
About Lexaria
Lexaria Bioscience Corp. -- http://www.lexariabioscience.com-- is
a biotechnology company developing the enhancement of the
bioavailability of a broad range of fat-soluble active molecules
and active pharmaceutical ingredients using its patented
DehydraTECH drug delivery tecnnology. DehydraTECH combines
lipophilic molecules or APIs with specific long-chain fatty acids
and carrier compounds that improve the way they enter the
bloodstream, increasing their effectiveness and allowing for lower
overall dosing while promoting healthier oral ingestion methods.
Lexaria Bioscience incurred a net loss of $6.71 million for the
year ended Aug. 31, 2023, a net loss of $7.38 million for the year
ended Aug. 31, 2022, a net loss and comprehensive loss of $4.19
million for the year ended Aug. 31, 2021, a net loss and
comprehensive loss of $4.08 million for the year ended Aug. 31,
2020, and a net loss and comprehensive loss of $4.16 million for
the year ended Aug. 31, 2019. As of Nov. 30, 2023, the Company had
$3.63 million in total assets, $254,040 in total liabilities, and
$3.37 million in total stockholders' equity.
Since inception, the Company has incurred significant operating and
net losses. Net losses attributable to shareholders were $1.2
million and $1.8 million for the quarters ended November 30, 2023
and 2022, respectively. As of November 30, 2023, the Company had an
accumulated deficit of $46.9 million. The Company expects to
continue to incur significant operational expenses and net losses
in the upcoming 12 months. The Company's net losses may fluctuate
significantly from quarter to quarter and year to year, depending
on the stage and complexity of its R&D studies and corporate
expenditures, additional revenues received from the licensing of
its technology, if any, and the receipt of payments under any
current or future collaborations it may enter into. The recurring
losses and negative cash flows from operations raise substantial
doubt as to the Company's ability to continue as a going concern,
the Company said in its Quarterly Report for the period ended Sept.
30, 2023.
MAXLINEAR INC: S&P Alters Outlook to Negative, Affirms 'BB-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its rating outlook on MaxLinear Inc. to
negative from stable and affirmed its 'BB-' rating.
S&P said, "The negative outlook reflects our expectation that the
cyclical downturn will weaken financial metrics during fiscal 2024
with S&P Global Ratings-adjusted leverage above 3x and minimal free
cash flow generation during 2024. Although we expect a strong
rebound in 2025, the outlook captures the risk that MaxLinear will
sustain metrics above our downside triggers or costs from the
arbitration process with Silicon Motion are larger than our base
case.
"We revised MaxLinear's revenue and earnings expectations
significantly down from our previous assumptions for 2024, mainly
due to a prolonged inventory digestion cycle. With significantly
slower capital spending by telecom operators and the extended
period of excess customer and channel inventory built up, we expect
total revenue in 2024 to fall to about $465 million, 60% lower than
the peak reached in 2022. This represents significantly greater
level of volatility than the 24.5% peak-to-trough revenue decline
during the last downcycle over 2017-2019. Compared with its larger
analog and communications semiconductor peers like Broadcom Inc.,
we believe this volatility reflects MaxLinear's relatively small
scale and greater end-market and product concentration. While we
forecast the company will start returning to growth in fiscal 2025,
we note there is a considerable lack of visibility in the current
environment and the downturn may be more prolonged.
"We expect Infrastructure will remain the most robust segment,
supported by demand for 5G wireless backhaul products, storage
accelerators, and high throughput (400 and 800 gigabit) optical
data center products. We also believe Maxlinear will benefit longer
term, when the industry cycle improves, from design win activity
for new products related to Wi-Fi 7 and high speed ethernet
connectivity.
"MaxLinear's lower revenue levels will likely keep EBITDA margins
and FOCF depressed over the next 12 months. We expect S&P Global
Ratings-adjusted EBITDA margins to decrease below the 10% area in
2024 from the high of 32.5% in 2022, before potentially returning
to the high teens in 2025. MaxLinear has taken actions to reduce
costs, but given the weak demand environment, we expect revenue
declines will significantly impair profitability. At the same time,
even with modest debt levels, we expect S&P adjusted gross leverage
will increase to 4x in 2024 (or higher, depending on the Silicon
Motion litigation outcome) from about 0.5x at the end of 2022. We
also expect materially weak FOCF in 2024.
"We also note that Silicon Motion is seeking to receive the full
$160 million merger termination fee and further compensation for
damages and costs from the arbitration, which began in October 2023
and is expected to last for 12-18 months. We expect the company to
have sufficient liquidity to cover any ongoing litigation and
settlement costs, backed by $187 million cash and short-term
investments as of Dec. 31, 2023 as well as an undrawn $100 million
revolver revolver maturing in June 2026.
"The negative outlook reflects our expectation that the cyclical
downturn will weaken financial metrics during fiscal 2024 with S&P
Global Ratings-adjusted leverage above 3x and minimal free cash
flow generation during 2024. Although we expect a strong rebound in
2025, the outlook captures the risk that MaxLinear will sustain
metrics above our downside triggers or costs from the arbitration
process with Silicon Motion are larger than our base case."
S&P could lower its ratings on MaxLinear if:
-- The ongoing weak demand environment leads to worse revenue and
EBITDA declines in 2024 than in S&P's base-case forecast;
-- S&P expects leverage sustained above 3x or FOCF to debt under
10% during fiscal 2025 due to a weaker-than-expected rebound; or
-- The ongoing litigation with Silicon Motion drags on and S&P's
project that company would have to increase borrowings to fund a
significant cash settlement or penalties from the arbitration.
S&P could revise the outlook to stable if MaxLinear:
-- Were to increase revenues to normalized levels and improve
profitability such that it sustains S&P Global Ratings-adjusted
leverage under 3x and free cash flow to debt above 15%;
-- Realizes a relatively favorable outcome from the arbitration
with Silicon Motion; and
-- Employs a financial policy that deemphasizes acquisitions and
shareholder distributions.
MEDICAL HEALING: Hires Sanders Holloway & Ryan as Accountant
------------------------------------------------------------
Medical Healing Center, LLC, seeks approval from the U.S.
Bankruptcy Court for the Northern District of Florida to employ
Sanders, Holloway & Ryan as accountant.
The firm will prepare the Debtor's tax returns and provide other
accounting/bookkeeping advice and services.
The firm will be paid at these rates of $65 and $250 per hour
depending on the work performed. The firm will also be reimbursed
for reasonable out-of-pocket expenses incurred.
Dan Holloway, a partner at Sanders, Holloway & Ryan, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Dan Holloway
Sanders Holloway & Ryan
2878 Mahan Dr.
Tallahassee, FL 32308
Tel: (850) 222-1608
About Medical Healing Center
Medical Healing Center, LLC, a company in Tallahassee, Fla.,
provides adult primary care with emphasis on holistic medicine. It
conducts business under the name The Medical Healing Center.
Medical Healing Center filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Fla. Case No.
23-40478) on Dec. 12, 2023, with $100,000 to $500,000 in assets and
$1 million to $10 million in liabilities. Angela D. Myers, managing
member, signed the petition.
Byron W. Wright III, Esq., at Bruner Wright, P.A. represents the
Debtor as legal counsel.
MERCY HOSPITAL: Seeks to Extend Plan Exclusivity to June 3
----------------------------------------------------------
Mercy Hospital, Iowa City, Iowa and certain of its affiliates asked
the U.S. Bankruptcy Court for the Northern District of Iowa to
extend their exclusivity periods to file a plan of reorganization
and obtain acceptance thereof to June 3 and August 5, 2024,
respectively.
The Debtors explain that while they closed on the sale of
substantially all of their assets to the State University of Iowa
at the end of January, there are still numerous issues related to
the disposition of assets that the Debtors and their stakeholders
must continue to work through, including treatment of the Debtors'
pension plan and its participants, analysis and treatment of
administrative claims, winddown of the Debtors' self-insured
insured trusts, and, ultimately, the economic issues underlying
distributions under a chapter 11 plan of liquidation.
Since the Petition Date, the Debtors have made significant and
material progress toward advancing the Chapter 11 Cases, including,
most significantly, consummating the transaction with the
University in a manner that provided continuity of care for the
Debtors' patients and job opportunities for the Debtors' former
workforce as well as filing the Combined Plan and Disclosure
Statement. The continued good faith efforts and progress exhibited
by the Debtors in the Chapter 11 Cases thus far support a further
extension of the Exclusive Periods.
As noted, the Debtors and the Secured Bondholder Representatives
understand that continuing negotiations must occur in the coming
weeks even though the Combined Plan and Disclosure Statement have
been filed. Granting the requested extensions will give the Debtors
a full and fair opportunity to engage in meaningful discussions and
negotiations with the Pension Committee and Committee without the
distraction, cost, and delay of a competing plan process.
The Debtors claim that the extension of the Exclusivity Periods
will allow them and the Secured Bondholder Representatives to
continue the good faith negotiations with the Debtors' creditor
constituencies that have been ongoing during the preceding months.
The Debtors have no ulterior motive in seeking an extension of the
Exclusive Periods.
The Debtors assert that termination of the Exclusive Periods may
result in creditors filing competing plans during the time that the
Debtors are soliciting the Combined Plan and Disclosure Statement,
creating unnecessary duplicative costs for the estate and confusion
among the wider creditor base. Such termination may also
disincentivize creditors from negotiating with the Debtors.
Counsel for the Debtors:
Roy Leaf, Esq.
NYEMASTER GOODE, P.C.
625 1st Street SE, Suite 400
Cedar Rapids, IA 52401-2030
Telephone: (319) 286-7002
Facsimile: (319) 286-7050
Email: rleaf@nyemaster.com
- and -
Felicia Gerber Perlman, Esq.
Daniel M. Simon, Esq.
Emily C. Keil, Esq.
MCDERMOTT WILL & EMERY LLP
444 West Lake Street, Suite 4000
Chicago, IL 60606
Telephone: (312) 372-2000
Facsimile: (312) 984-7700
Email: fperlman@mwe.com
dsimon@mwe.com
ekeil@mwe.com
About Mercy Hospital, Iowa City
Mercy Hospital, Iowa City, Iowa is a Catholic-based Iowa nonprofit
corporation that operates an acute care community hospital and
clinics in Iowa City, Iowa, and surrounding communities.
Mercy Hospital and affiliates, Mercy Iowa City ACO, LLC and Mercy
Services Iowa City, Inc., filed Chapter 11 petitions (Bankr. N.D.
Iowa Lead Case No. 23-00623) on Aug. 7, 2023. In the petition
signed by its chief restructuring officer Mark E. Toney, Mercy
Hospital disclosed $100 million to $500 million in both assets and
liabilities.
Judge Thad J. Collins oversees the cases.
The Debtors tapped Nyemaster Goode, P.C and McDermott Will & Emery
LLP as bankruptcy counsels; H2C Securities Inc. as investment
banker; and Epiq Corporate Restructuring, LLC as notice and claims
agent. Toneykorf Partners, LLC provides interim management services
to the Debtors.
Mary Jensen, Acting U.S. Trustee for Region 12, appointed an
official committee of unsecured creditors on Aug. 15, 2023. The
committee tapped Sills Cummis & Gross P.C. and Cutler Law Firm,
P.C. as legal counsels; and FTI Consulting, Inc. as financial
advisor.
Susan N. Goodman is the patient care ombudsman appointed in the
Debtors' cases.
MIWD HOLDCO II: Fitch Rates New Sr. Secured Term Loan 'BB+'
-----------------------------------------------------------
Fitch Ratings has assigned 'BB+'/'RR2' ratings to MIWD Holdco II
LLC's proposed issuances of senior secured term loan B and senior
secured notes. Proceeds from these issuances will be used to fund a
portion of the acquisition price for PGT Innovations, Inc. (NYSE:
PGTI; PGT).
Fitch has also affirmed the Issuer Default Ratings (IDRs) of MIWD
Holdco II LLC and MIWD Holding Company LLC (dba MITER brands;
MITER) at 'BB-' and the 'BB+'/'RR2' rating on the company's
existing senior secured term loan B and 'BB-'/'RR4' rating on its
senior unsecured notes. The Rating Outlook is Stable.
MITER's pro forma EBITDA leverage of 4.0x remains within Fitch's
sensitivities for the 'BB-' IDR. The company's improved scale and
diversification as a result of the PGT acquisition is a credit
positive.
KEY RATING DRIVERS
Acquisition of PGT: Fitch views the acquisition as aligned with
MITER's growth strategy, and believes the combination benefits its
business profile as increased scale and product, customer and
geographic diversification mitigate risk. However, acquisitions of
this size also carry integration risk, which, along with higher
leverage and diminished FCF generation, could pressure the 'BB-'
IDRs, particularly in a weaker demand environment.
PGT is a manufacturer and supplier of premium windows, doors and
garage doors, including an array of impact-resistant offerings. In
2023, PGT generated revenue of $1.5 billion and adjusted EBITDA of
$268 million (17.8% margin). The $3.1 billion purchase price
($42/share) equates to an 11.5x EBITDA multiple, excluding any
synergies. The transaction will be financed with $1.8 billion of
incremental senior secured debt, $979 million of equity that will
be contributed as common equity to the borrower by an affiliate of
Koch Equity Development (KED) and balance sheet cash. Fitch does
not consider the newly issued preferred equity to be debt, similar
to the preferred equity currently held by KED.
Temporarily Elevated Leverage: Fitch estimates MITER's pro forma
EBITDA leverage will be around 4.0x upon transaction close, which
assumes $40 million of run-rate cost synergies and does not
consider preferred equity as debt. Fitch projects EBITDA leverage
to increase to about 4.4x at YE 2024, reflecting an expectation of
modest margin compression due to lower volumes, PGT's lower margin
business and still-elevated input costs combined with some downward
pressure on prices. Fitch expects MITER to focus on deleveraging in
the next 12 months-18 months, and projects EBITDA leverage to
decline to around 3.7x in 2025 from EBITDA growth and term loan
prepayments.
Management aims to maintain net leverage, excluding preferred
equity, below 3.0x on a long-term basis. Similar to the Milgard
acquisition in 2019, Fitch expects MITER to reduce leverage back to
its target within 18 months-24 months following the transaction.
Improved Scale and Diversification: Pro forma for the combination,
revenue and EBITDA are expected to exceed $3.0 billion and $600
million, respectively. Fitch expects the greater scale should
benefit MITER's bargaining power with trade partners. The addition
of PGT also enhances the company's geographic, product and customer
mix, which mitigates risk. Fitch assumes MITER benefits from the
increased operating leverage from the acquisition, resulting in
about $40 million of synergies. The company may also be able to
realize some cross-selling opportunities across each brands'
distribution channels and geographies, but Fitch does not expect
this to provide a meaningful benefit.
Fitch is loosening its primary leverage sensitivities as a result
of the improved scale and diversification. Fitch is comfortable
with EBITDA leverage situating between 3.5x-4.5x at the 'BB-' IDR.
However, should the acquisition not be consummated, Fitch would
revert to the EBITDA leverage sensitivities of 3.0x-4.0x.
Strong Profitability Supports Deleveraging: Fitch's rating case
assumes the company achieves modest improvement in legacy PGT
EBITDA margins given the company's track record of margin expansion
in recent years, which have far outpaced peers. MITER's strong
profitability coupled with the limited working and fixed capital
intensity of the business should result in FCF generation, which
Fitch expects the company will allocate to debt reduction.
Weak Demand Environment: Fitch expects MITER's organic revenue to
decline 4%-5% organically in 2024 as modest growth in single-family
home construction is offset by persistent weakness in repair and
remodel (R&R) and multi-family home construction, in addition to
lower selling prices. However, MITER's volumes could exceed Fitch's
expectations if R&R demand improves meaningfully, particularly
considering the company's recent capacity expansions. Fitch
projects the company's organic revenue to grow 3%-4% in 2025 as R&R
activity rebounds and selling prices improve.
Fitch expects EBITDA margin to contract about 175bps-225bps in 2024
to about 20.0%-20.5% from the contribution of PGT's lower margin
results and modest margin contraction at legacy MITER, offset by
some realization of cost synergies. Fitch sees EBITDA margins
situating at 21%-22% in the longer term, supporting strong FCF
generation.
Growth Strategy: MITER has demonstrated its willingness to increase
leverage to pursue transformational acquisitions, as evidenced by
this transaction as well as its acquisition of Milgard in 2019.
However, the company also undertakes organic growth initiatives,
including capacity expansion by opening new plants and adding lines
at existing ones. Fitch views the company's balanced growth
strategy positively from a business profile standpoint.
Nevertheless, sizable acquisitions carry integration risk, which,
along with higher leverage and weaker FCF generation, could
jeopardize the company's financial profile.
Ownership and Distributions: MITER is a majority-family owned and
operated business with KED participating as a significant minority
shareholder and holder of preferred equity. Fitch expects the
company to make distributions to its owners, funded with FCF or
debt proceeds, to enable redemption of their preferred equity
investment, to the extent allowable under the secured debt's
restricted payment covenants.
DERIVATION SUMMARY
MITER's IDRs reflect its top-four position in the highly fragmented
U.S. windows and doors market, strong profitability metrics and
strong, consistent FCF generation. The IDRs also reflect a high
exposure to the residential new construction market, a concentrated
product portfolio within a fragmented and competitive subsector,
and somewhat limited geographic diversification.
MITER is strongly positioned relative to 'B' category Fitch-rated
building products and distributor peers, such as New AMI I, LLC
(dba Associated Materials) (B/Negative), Doman Building Materials
Group Ltd. (B+/Stable), Chariot Buyer LLC (dba Chamberlain)
(B-/Stable) and LBM Acquisition, LLC (LBM; B/Stable).
MITER has stronger credit metrics, profitability metrics and lower
sales exposure to commodified product offerings than Doman and LBM.
MITER's leverage levels and financial policy are more conservative
than those of Associated Materials and Chamberlain. Compared with
higher-rated investment-grade peers, MITER has significantly
smaller scale, above-average exposure to new residential
construction, a higher leverage tolerance and a more concentrated
product portfolio, which are factors that weigh on the credit
profile. However, the company's profitability metrics are
commensurate with, or stronger than, these peers.
Fitch applies its "Parent and Subsidiary Linkage Rating Criteria"
to arrive at ratings for each entity in the group, using the
stronger subsidiary (MIWD Holdco II LLC), weaker parent (MIWD
Holding Company LLC) path. Fitch considers Holdco II to have a
stronger credit profile than Holding Company due to the former's
unrestricted access to group cash flows. Holding Company is the
issuer of the financial statements and has no operations and does
not issue Fitch-defined debt.
Fitch categorizes 'legal ring-fencing' as 'porous' under the
criteria due to Holdco II's limitations on upstreaming dividends
based on short-dated term loan documentation. Fitch considers
'access and control' as 'open' primarily due to Holding Company's
direct ownership over Holdco II. Fitch has assessed the Standalone
Credit Profile of Holdco II and the consolidated group credit
profile as 'BB-'. Therefore, no up notching of Holdco II applies
and the Holding Company and Holdco II are rated 'BB-'.
KEY ASSUMPTIONS
- Organic revenue declines 4%-5% in 2024 and grows 3%-4% in 2025;
- Reported EBITDA margin contracts about 175bps-225bps in 2024 to
20.0%-20.5% from the contribution of PGT's lower margin business
and modest margin contraction at legacy MITER, offset by
realization of cost synergies;
- EBITDA margin improves 75bps-100bps in 2025 from additional cost
synergy realization and a growing top line;
- Capex as a percentage of revenues in the 3%-4% range;
- FCF margin of 2%-3% in 2024 and 5%-6% in 2025;
- FCF applied to mandatory term loan prepayments in 2025 and 2026
as well as some voluntary prepayments;
- Average SOFR of 5.125% in 2024 and 4.05% in 2025;
- Pro forma EBITDA leverage of 4.4x at YE 2024 and 3.7x at YE
2025.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch's expectation EBITDA leverage will be sustained below
3.5x;
- The company improves the diversity of its business by
meaningfully reducing exposure to residential new construction
activity, broadening product offerings or significantly increasing
scale.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Expectation EBITDA leverage will be sustained above 4.5x;
- Sustained deterioration in operating performance resulting in
EBITDA margins contracting to the low-double digit percentages,
resulting in low-single digit FCF margins.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects MITER to have ample liquidity
upon close of the transaction with balance sheet cash of around
$120 million and full availability under its asset-backed loan
(ABL) revolving credit facility. The company recently upsized its
ABL to $325 million from $175 million, and extended the maturity to
March 2029. The company's nearest material maturity is in December
2027, when its term loan comes due. MITER's liquidity position is
also supported by Fitch's expectation that the company will
continue to generate consistently positive FCF despite higher
interest payments.
ISSUER PROFILE
MITER Brands is one of the largest manufacturers of vinyl,
aluminum, and fiberglass windows and patio doors in the U.S.,
selling its products into the new construction and R&R residential
markets through third-party distribution.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch considers outstanding preferred equity as non-debt of the
rated entity, per Section 7 of Appendix 1: Main Analytical
Adjustments under its Corporate Rating Criteria. Fitch considers
the existing preferred shares and the newly issued preferred shares
shareholder loans, as they are held by KED and issued outside of
the restricted group. Fitch determined that the presence of these
preferred equity instruments does not increase the probability of
default under rated-entity debt, resulting in the non-debt
classification.
Fitch adjusts historical reported EBITDA by adding back non-cash
stock-based compensation expense, non-cash inventory step-up
charges and one-time transaction fees to adjusted EBITDA.
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
----------- ------ -------- -----
MIWD Holdco II LLC LT IDR BB- Affirmed BB-
senior secured LT BB+ New Rating RR2
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR2 BB+
MIWD Holding
Company LLC LT IDR BB- Affirmed BB-
MOVING & STORAGE: Hires Neeleman Law Group as Legal Counsel
-----------------------------------------------------------
Moving & Storage Solutions, Inc., seekss approval from the U.S.
Bankruptcy Court for the Western District of Washington to employ
Neeleman Law Group as legal counsel.
The firm's services include:
a. assisting the Debtor in the investigation of the financial
affairs of the estate;
b. providing legal advice and assistance to the Debtor with
respect to matters relating to this case and creditor
distribution;
c. preparing all pleadings necessary for proceedings arising
under this case; and
d. performing all necessary legal services for the estate in
relation to this case
The firm will be paid at these rates:
Principal $550 per hour
Associates $450 per hour
Paralegal $200 per hour
The firm will be paid a retainer in the amount of $6,738.00
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Jennifer L. Neeleman, Esq., a partner at Neeleman Law Group,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Jennifer L. Neeleman, Esq.
Neeleman Law Group, P.C.
1403 8th Street
Marysville, WA 98270
Tel: (425) 212-4800
Fax: (425) 212-4802
About Moving & Storage Solutions, Inc.,
Moving & Storage Solutions Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No.
24-10039-CMA) on January 9, 2024. In the petition signed by David
Powell, president, the Debtor disclosed up to $5000,000 in assets
and up to $1 million in liabilities.
Judge Christopher M. Alston oversees the case.
Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C., represents
the Debtor as legal counsel.
MVK FARMCO: $27MM DIP Loan from Wilmington Wins Interim OK
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
MVK FarmCo LLC and affiliates to use cash collateral and obtain
postpetition financing, on an interim basis.
The Debtors obtained a senior secured, superpriority, priming
debtor-in-possession financing in an aggregate principal amount of
up to $27 million -- inclusive of the $22 million advanced prior to
the entry of the Fourth Interim DIP Order -- from a consortium of
lenders, agented by Wilmington Trust, National Association.
The DIP facility is due and payable on the earliest of (a) March
31, 2024, the Scheduled Termination Date, (b) the consummation of
any chapter 11 plan of any of the Debtors other than the Plan
approved by the Required DIP Lenders, and (c) the acceleration of
the loans and the termination of the commitment with respect to the
DIP Facility in accordance with the DIP Credit Agreement and other
documents governing the DIP Facility.
The Debtors are required to comply with these milestones:
1. Entry of the Third Interim DIP Order by the Bankruptcy
Court no later than March 1, 2024;
2. Filing by the Obligors and their Affiliates that aredebtors
in the Bankruptcy Cases of a revised Approved Budget in form and
substance satisfactory to the Required Lenders no later than
February 29, 2024; provided that a Lender's respective New Term
Loan Commitment will not be increased without such Lender's prior
written consent;
3. Filing by the Debtors of the plan supplement with respect
to the First Amended Joint Chapter 11 Plan of Liquidation of MVK
FarmCo LLC and its Debtor Affiliates [Docket No.696] in form and
substance satisfactory to the DIP Lenders no later than March 14,
2024.
4. Entry of the Final Order by the Bankruptcy Court no later
than March __, 2024;
5. The occurrence of the Plan confirmation hearing no later
than March 28, 2024; and
6. The entry of an order by the Bankruptcy Court confirming
the Plan no later than March 29, 2024.
An immediate need exists for the Debtors to obtain and use funds
and encumber property of the estates to enhance liquidity to, as
the case may be, enable the orderly continuation of their
operations and preserve the value of their business and estates, to
pay the costs and expenses of administering the Cases, and to fund
and consummate a plan process.
On April 3, 2023, the Debtors and the Prepetition Bridge Secured
Parties implemented a bridge financing of up to $93.5 million in
term loans to extend the Debtors' liquidity runway so that the
Debtors and their advisors could evaluate potential paths forward,
including both in- and out-of-court solutions.
As adequate protection, the Prepetition PropCo Agent and the other
Prepetition PropCo Secured Parties are granted replacement security
interests in and liens upon all Adequate Protection Collateral.
The Prepetition OpCo Agent and the other Prepetition OpCo Secured
Parties are granted on an interim basis, replacement security
interests in and liens upon all Adequate Protection Collateral.
The Prepetition Bridge Agents and the Prepetition Bridge Lenders
are on an interim basis, replacement security interests in and
liens upon on all Adequate Protection Collateral.
The Prepetition Bridge Secured Parties are granted on an interim
basis, on account of the Prepetition New Money Bridge Loans,
allowed superpriority administrative expense claims as provided for
in 11 U.S.C. section 507(b).
The Prepetition Bridge Administrative Agent (on behalf of the
Prepetition Bridge Lenders) will receive from the Debtors cash
payments in an amount equal to all prepetition and postpetition
accrued and unpaid interest on account of the Prepetition New Money
Bridge Loans at the rate provided for in the Prepetition Bridge
Credit Agreement as and when due under the Prepetition Bridge
Credit Agreement.
A copy of the order is available at https://urlcurt.com/u?l=fBIzID
from Stretto, the claims agent.
About MVK FarmCo
MVK FarmCo, LLC and its affiliates -- https://prima.com/ -- are
providers of stone fruit, operating an integrated network of farms,
ranches and packaging facilities. Founded in 1999 and
headquartered in Fresno, Calif., the Debtors cultivate
approximately 18,000 acres of land nestled throughout the San
Joaquin Valley.
The Debtors filed Chapter 11 petitions (Bankr. D. Del. Lead Case
No. 23-11721) on Oct. 13, 2023. John Boken, chief executive
officer, signed the petitions.
At the time of the filing, the Debtors reported consolidated assets
of $500 million to $1 billion and consolidated liabilities of $1
billion to $10 billion.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankruptcy counsel; Young Conaway Stargatt &
Taylor, LLP as local counsel; Houlihan Lokey as investment banker;
and Stretto, Inc., as claims and noticing agent. AP Services, LLC,
provides interim management and restructuring support services to
the Debtors.
MYRTLE HOMOSASSA: Case Summary & One Unsecured Creditor
-------------------------------------------------------
Debtor: Myrtle Homosassa LLC
957 Lorraine Drive
Franklin Square, NY 11010
Business Description: Myrtle Homosassa is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)). The Debtor is a 1/3
owner of a commercial property located at
3959 S Suncoast Blvd. having an assessed
value of $1 million.
Chapter 11 Petition Date: March 20, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-41187
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: H Bruce Bronson, Esq.
BRONSON LAW OFFICES PC
480 Mamaroneck Ave
Harrison, NY 10528-1621
Tel: (914) 269-2530
Fax: (888) 908-6906
Email: hbbronson@bronsonlaw.net
Total Assets: $1,047,522
Total Liabilities: $2,550,000
The petition was signed by Paul Amato as managing member.
The Debtor listed Janice A. Warren, CFC Citrus County Tax
Collector, 210 N. Apopka Ave., Suite 100 Inverness, FL 34450 as its
sole unsecured creditor holding a claim of $50,000 for ad valorem
taxes.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/SQZIMKQ/Myrtle_Homosassa_LLC__nyebke-24-41187__0001.0.pdf?mcid=tGE4TAMA
NICNAT LLC: Unsecured Creditors to Get 0% in Liquidating Plan
-------------------------------------------------------------
Nicnat LLC filed with the U.S. Bankruptcy Court for the Northern
District of Illinois a Disclosure Statement relating to Plan of
Liquidation dated March 14, 2024.
The Debtor is a limited liability company organized and existing
under the laws of the State of Illinois. Debtor owns commercial
real estate located at 901 North Raddant Road, Batavia, Illinois.
The Debtor leases the premises to two related entities that in turn
operate an automotive repair and body shop. The related entities,
Spike Body Werks and Geneva Body Shop are also debtors in their own
Chapter 11 cases. Debtor receives rent payments of $13,500 a month
from the related entities. This Plan of Liquidation is a result of
negotiations with Spike, Geneva and Byline Bank.
As of the Petition Date, the Debtor's principal asset consisted of
the Real Property and improvements located on the Real Property.
Prior to filing the bankruptcy case, Debtor identified a well
qualified real estate broker experienced in the sale of similar
commercial properties in order to market and sell the Real
Property. Debtor filed this case on November 15, 2023, in order to
consummate an orderly sale of the Real Property in order to
maximize the recovery available to creditors.
Pursuant to the Plan, Debtor will have 6 months from the Effective
Date to complete the sale or the title to the Real Property will
transfer to Byline Bank.
The Plan calls for liquidation of all Property of the Estate and
distribution of the proceeds first to pay any Allowed
Administrative Claims in full and then distribute any remaining
proceeds to Holders of Allowed Class 1 claims (Claims Secured by
Real Property) on a pro rata basis. In the event that all Allowed
Class 1 claims are paid in full, the Plan calls for the
distribution of any remaining Property of Estate to be distributed
to Holders of Class 2 claims (General Unsecured Claims).
Class 2 claims consist of all remaining general unsecured claims.
Holders of Class 2 claims shall receive a pro-rata share of each
distribution of the Property of the Estate remaining after
Administrative Claims and Class 1 Claims are paid in full up to
100% of the amount their Allowed Claim. Class 2 Claims are not
expected to receive a distribution. The allowed unsecured claims
total $165,000. This Class will receive a distribution of 0% of
their allowed claims.
Class 3 interests consist of the equity interests in the Debtor.
Holders of Class 3 interests shall receive the remainder of the
Property of the Estate after (i) all Disputed Claims filed against
the Debt have become Allowed Claims or have been disallowed, and
(2) the Holders of Allowed Class 2 Claims have been paid in full.
Class 3 is not expected to receive a distribution.
The Plan will be funded by the Debtor using net receipts from the
sale of the Real Property as well as cash on hand that constitute
Property of the Estate. Debtor receives $13,500 a month in rental
income that will be used to fund the Adequate Protection payments
to Byline Bank.
A full-text copy of the Disclosure Statement dated March 14, 2024
is available at https://urlcurt.com/u?l=SWzvkZ from
PacerMonitor.com at no charge.
Counsel to the Debtor:
John F. Hiltz, Esq.
Alex J. Whitt, Esq.
Hiltz Zanzig & Heiligman, LLC
53 West Jackson Blvd., Suite 1301
Chicago, IL 60604
Tel: (312) 566-9008
Email: jhiltz@hzhlaw.com
About Nicnat LLC
Nicnat is primarily engaged in renting and leasing real estate
properties.
Nicnat LLC filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-15379) on
November 15, 2023. The petition was signed by Pasquale Roppo as
member. At the time of filing, the Debtor estimated $1 million to
$10 million in both assets and liabilities.
Judge Deborah L Thorne presides over the case.
John F Hiltz, Esq. at Hiltz Zanzig & Heiligman LLC represents the
Debtor as counsel.
NP WILDCAT: Property Sale Proceeds to Fund Plan
-----------------------------------------------
NP Wildcat TIC 1, LLC, filed with the U.S. Bankruptcy Court for the
Central District of California a Disclosure Statement in support of
Plan of Liquidation dated March 14, 2024.
The Debtor, a Delaware limited liability company, is a tenant-in
common owner of certain real estate located at 1050 East 8th
Street, Tucson, Arizona 85719 (the "Property"), which is an
improved property near the University of Arizona being operated as
a student apartment complex called the Wildcat Canyon Village
Apartments.
The Property was acquired by the Debtor and its co-owners
(collectively, the "Borrowers") in June 2019. The Property has 76
apartment units; of these units, 24 are one bedroom/one bath, 30
are two bedroom/two bath, and 23 are three bedroom/three bath. The
Property is nearly fully leased up and has historically generated
positive cash flow and has been able to service its indebtedness.
The Debtor commenced this chapter 11 case predominantly in light of
unlawful actions taken by the second deed of trust holder on the
property, Wildcat Lender, LLC.
The Debtor believes that the value of the Property is sufficient to
satisfy in full the Allowed Claims of all administrative, priority,
secured, and unsecured creditors; which would obviate the need to
pursue avoidance action claims against insider and non-insider
creditors as identified in the SOFA.
Class 3 consists of General Unsecured Claims. Allowed Class 3
Claims shall be paid in Cash, on a pro rata basis, to the extent of
available proceeds from the Sale after payment in full of all
Unclassified Claims, Class 1 Claims, Class 2a Claims, and Class 2b
Claims, on the later of the (i) Effective Date of the Plan or (ii)
the date on which the Claim becomes an Allowed Claim. The allowed
unsecured claims total $274,815.46. This Class is impaired.
Allowed Class 4 Interests shall be paid in Cash, on a pro rata
basis, to the extent of available proceeds from the Sale after
payment in full of all Unclassified Claims, Class 1 Claims, Class
2a Claims, Class 2b Claims, and Class 3 on the Effective Date of
the Plan.
The Plan proposes that the Debtor will distribute proceeds
generated through the Debtor's Sale of the Property to holders of
Allowed Claims and Interests in accordance with the Plan. The
Debtor expects that net Sale proceeds will be sufficient to pay, in
full, all Allowed Administrative Claims, Priority Tax Claims, and
Unsecured Priority Claims. The balance of any proceeds will be used
to pay, pro rata, the Allowed Claims of its unsecured creditors.
All remaining proceeds will be paid to the Debtor's equity holders,
and the Debtor will be liquidated.
A full-text copy of the Disclosure Statement dated March 14, 2024
is available at https://urlcurt.com/u?l=4591LP from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Thomas R. Fawkes, Esq.
TUCKER ELLIS LLP
233 South Wacker Drive, Suite 6950
Chicago, IL 60606
Tel: (312) 256-9425
Fax: (312) 324-6309
Email: Thomas.fawkes@tuckerellis.com
Matthew I. Kaplan, Esq.
TUCKER ELLIS LLP
515 South Flower Street
Forty-Second Floor
Los Angeles, CA 90071
Telephone: (213) 430-3400
Facsimile: (213) 430-3409
About NP Wildcat TIC 1, LLC
NP Wildcat is primarily engaged in renting and leasing real estate
properties.
NP Wildcat TIC 1, LLC in San Clemente, CA, filed its voluntary
petition for Chapter 11 protection (Bankr. C.D. Cal. Case No.
23-12657) on December 15, 2023, listing as much as $10 million to
$50 million in both assets and liabilities. Patrick S. Nelson as
manager, signed the petition.
Judge Scott C Clarkson oversees the case.
TUCKER ELLIS LLP serve as the Debtor's legal counsel.
PERFECT NICHE: Hires Tarpy Cox Fleishman as Legal Counsel
---------------------------------------------------------
A Perfect Niche, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Tennessee to employ Tarpy, Cox,
Fleishman & Leveille, PLLC to handle its Chapter 11 case.
The firm will be paid at these rates:
Thomas Leveille $375 per hour
Ed Shultz $350 per hour
Taylor Drinnen $250 per hour
Paralegals $75 to $95 hour
The firm received an initial retainer in the amount of $6,000, plus
filing fee of $1,738.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Lyn Tarpy, a partner at Tarpy, Cox, Fleishman & Leveille, PLLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Lyn Tarpy, Esq.
Tarpy, Cox, Fleishman & Leveille, PLLC
1111 N. Northshore
Suite N-290
Knoxville, TN 37919
Telephone: (865) 588-1096
About A Perfect Niche, LLC
A Perfect Niche, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Tenn. Case No. 24-30311) on Feb. 27, 2024, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by TARPY, COX, FLEISHMAN & LEVEILLE, PLLC.
PM MANAGEMENT: Seeks to Hire Gutnicki LLP as Counsel
----------------------------------------------------
PM Management - Killeen I NC LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ
Gutnicki LLP as counsel.
The firm's services include:
a. taking all necessary action to protect and preserve the
estates of the Debtors, including the prosecution of actions on the
Debtors' behalf, the defense of any actions commenced against the
Debtors, the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed against
the Debtors' estates;
b. providing legal advice with respect to the Debtors' powers
and duties as debtors in possession in the continued operation of
their business;
c. preparing on behalf of the Debtors, as debtors in
possession, necessary motions, applications, answers, orders,
reports, and other legal papers in connection with the
administration of the Debtors' estates;
d. appearing in court and protecting the interests of the
Debtors before this Court;
e. assisting with any disposition of the Debtors' assets, by
sale or otherwise;
f. take all necessary or appropriate actions in connection
with any plan of reorganization and related disclosure statement
and all related documents, and such further actions as may be
required in connection with the administration of the Debtors'
estates;
g. reviewing all pleadings filed in the Cases; and
h. performing all other legal services in connection with the
Cases as may reasonably be required.
The firm will be paid at these rates:
Partners and counsel $600 to $875 per hour
Associates $450 to $500 per hour
Paraprofessionals $225 to $285 per hour
The firm received a retainer in the amount of $250,000, paid by
non-Debtor Marvin Rubin.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Liz Boydston, Esq., a partner at Gutnicki LLP, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Liz Boydston, Esq.
Alexandria Rahn, Esq.
Gutnicki LLP
10440 N. Central Expressway, Suite 800
Dallas, TX 75231
Tel: (465) 895-4413
Fax: (465) 895-4413
Email: lboydston@gutnicki.com
arahn@gutnicki.com
About PM Management
PM Management - Killeen I NC, LLC, a company in Dallas, Texas, and
its affiliates own and operate nursing care facilities.
PM Management and affiliates filed petitions under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Texas Lead Case
No. 24-30240) on January 29, 2024, with $1 million to $10 million
in both assets and liabilities. Kevin O'Halloran, chief
restructuring officer, signed the petitions.
The Debtors tapped Gutnicki, LLP as bankruptcy counsel.
PROOFPOINT INC: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Proofpoint, Inc.'s Long-Term Issuer
Default Rating (IDR) at 'B'. The Rating Outlook is Stable. Fitch
has downgraded the $300 million secured revolving credit facility
(RCF) and upsized $3.4 billion first-lien secured term loan to
'B+'/'RR3' from 'BB-'/'RR2'. This action follows Proofpoint's
planned $800 million upsizing of the first-lien facility, with the
proceeds to be used to repay the existing $800 million second lien
term loan.
Proofpoint's ratings are supported by highly recurring revenues
that translate into resilient cash flow generation. As a private
equity owned company, Fitch expects financial leverage to remain
elevated, as equity owners optimize ROE over debt reduction. Fitch
estimates gross leverage will be below 6.0x in 2024, driven by
EBITDA growth due to continuing revenue growth and implementation
of operational optimization. The operating profile and financial
metrics are consistent with a 'B' IDR.
KEY RATING DRIVERS
Leader in Niche Cybersecurity Industry: In the highly fragmented
enterprise cybersecurity industry, Proofpoint has been a leader in
enterprise email security and compliance. Its products protect
against threats across email, web, networks, cloud applications,
data governance and data retention enforcement.
Secular Tailwind Supporting Growth: Proofpoint benefits from the
growing cybersecurity industry, which Fitch forecasts would have
CAGR in the teens in a normal economic environment. The importance
of cybersecurity has risen in recent years with increasingly
complex IT networks and continued digitalization of information.
High profile cybersecurity breaches have also heightened awareness
of the need for more comprehensive cybersecurity solutions. Fitch
believes this will benefit subsegment leaders such as Proofpoint
that will be part of the overall solution to these issues.
Highly Recurring Revenue with High Retention: Over 95% of
Proofpoint's revenue is recurring in nature, with high 90%s gross
retention rates. The strong revenue retention implies sticky
products supported by the company's platform of cybersecurity
products, which solidify its market position. The high revenue
retention and recurring revenue enhances the predictability of
Proofpoint's financial performance and maximizes the lifetime value
of customers.
Diversified Customer Base: Proofpoint serves approximately 14,000
customers across diverse industry verticals including financial
services, healthcare, TMT, industrial, and manufacturing. The broad
exposure effectively reduces customer concentration risks and
revenue volatility through economic cycles, which, in turn, reduces
industry-specific risks.
Operational Improvements: Since the acquisition by Thoma Bravo in
2021, Proofpoint has undergone significant operational optimization
to enhance its operational efficiency to levels comparable to
industry peers. Through 2023, the company has successfully executed
on a significant portion of the plan and is tracking inline against
expectations. This has substantially reduced risks as it continues
to execute on the remaining plan. Fitch expects improvements in
operational performance should lead to FCF margin expansion
approaching industry peers.
Elevated Leverage Profile with Deleveraging Capacity: Fitch
forecasts gross leverage to decline to below 6.0x in 2024 as the
company benefits from continuing revenue growth and operating
leverage. Despite the further deleveraging capacity projected
beyond 2024 supported by the company's FCF generation, Fitch
expects limited deleveraging as Proofpoint's private equity
ownership would likely prioritize ROE maximization over debt
prepayment. These could include acquisitions to broaden
Proofpoint's market position and increase dividend payments.
DERIVATION SUMMARY
Proofpoint operates in the sub-segment of the fragmented
cybersecurity industry. The broader enterprise security market has
been growing supported by greater awareness around security
breaches and the increasing complexity of IT networks and
applications. While the company had been growing at rates
significantly higher than industry average as a public company, its
profitability as measured by EBITDA and FCF margins had been below
those of industry peers. As part of the plan to be acquired by
Thoma Bravo in 2021, the company devised a plan to execute on
operational efficiency improvements to close the profitability gap
with industry peers.
Within the broader enterprise security market, peers include Gen
Digital Inc. (BB+/Negative). Proofpoint has smaller scale and lower
EBITDA margins than Gen Digital Inc. Proofpoint also has higher
financial leverage.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Organic revenue growth in the mid-teens and decelerates to the
low-teens;
- EBITDA margins expanding to near comparable industry peers by
2024;
- Deferred RSU payments spread out between 2024-2027; with de
minimis post 2025;
- Capex intensity of approximately 4% per year;
- Aggregate acquisitions totaling $600 million through 2027.
RECOVERY ANALYSIS
- The recovery analysis assumes that Proofpoint would be
reorganized as a going-concern (GC) in bankruptcy rather than
liquidated.
- Fitch has assumed a 10% administrative claim with a GC approach.
- The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level that should be approaching
industry norm while incorporating the risks associated with
necessary operational improvements, upon which Fitch bases the
enterprise valuation.
- An enterprise value (EV) multiple of 7x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization EV. The choice of this
multiple considered the following factors:
- The median reorganization enterprise value/EBITDA multiple for
the 71 TMT bankruptcy cases that had sufficient information for an
exit multiple estimate to be calculated was 5.9x. 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 Proofpoint's revenue and mission
critical nature of the product support the high-end of the range.
- After applying the 10% administrative claim, adjusted EV of
$2.356 billion is available for claims by creditors resulting in a
'B+'/'RR3' Recovery Rating for the secured first lien debt and
revolving credit facility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Success to fully execute on planned operational improvements;
- Fitch's expectation of EBITDA leverage remaining below 5.5x;
- (CFO-capex)/debt above 8%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Failure to fully execute on planned operational improvements;
- Fitch's expectation of EBITDA leverage remaining above 7x;
- (CFO-capex)/debt below 3% on a sustained basis;
- Negative revenue growth reflecting erosion in market position for
core products;
- EBITDA interest coverage sustained below 1.5x.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The company's liquidity is projected to be
adequately supported by approximately $650million cash on balance
sheet at the end of 3Q23, $300 million undrawn RCF, and projected
FCF generation after 2024 as operational improvement plans are
executed.
Debt Structure: Proofpoint has $3.4 billion of secured first lien
debt due 2028, pro forma for the recently announced issuance of
incremental 1st lien term loan. Fitch expects Proofpoint to
generate ample FCF to make its required debt payment
ISSUER PROFILE
Proofpoint is a leading cybersecurity and compliance company
serving large and mid-sized organizations with a focus around
protecting employees from IT security threats and compliance risks.
The company's products include security and compliance programs
that are primarily cloud-delivered.
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
----------- ------ -------- -----
Proofpoint, Inc. LT IDR B Affirmed B
senior secured LT B+ Downgrade RR3 BB-
QSAM BIOSCIENCES: Assurance Dimensions Raise Going Concern Doubt
----------------------------------------------------------------
QSAM Biosciences, Inc. disclosed in a Form 10-K Report filed with
the U.S. Securities and Exchange Commission for the fiscal year
ended December 31, 2023, that Assurance Dimensions, the Company's
auditor since 2023, expressed that there is substantial doubt about
the Company's ability to continue as a going concern.
In the Report of Independent Registered Public Accounting Firm
dated March 20, 2024, Margate, Florida-based Assurance Dimensions
said, "The Company had a net loss and net cash used in operating
activities of $4,393,126 and $2,848,136, respectively, for the year
ended December 31, 2023, and an accumulated deficit of
approximately $40,158,601, respectively, as of December 31, 2023.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern."
As of December 31, 2023, the Company had negative working capital
of $672,348 and cash of $1,386,387.
The Company has supported operations through the issuance of common
stock, preferred stock and debt over the last 12 months. This
includes a common stock and warrant offering which closed March 31,
2023, of which a total of $2.85 million was raised, inclusive of
$342,667 in subscriptions receivables existing at the end of the
quarter which were received in April 2023. The Company issued
additional common stock in the third quarter of 2023 in connection
with a private placement of $600,000. The Company issued additional
common stock in the fourth quarter of 2023 in connection with a
private placement of $250,000, inclusive of $250,000 in
subscription receivables existing at the end of the fiscal year
which was received in January 2024.
On November 14, 2023, the Company signed a non-binding term sheet
with Telix Pharmaceuticals Limited, a public limited company
registered under the laws of the Commonwealth of Australia, with
respect to the Merger. Upon execution of that term sheet, Telix
paid the Company $2 million as an Option and Pre-Closing
Collaboration Fee, and to assure 60 days of exclusivity as they
completed their due diligence and the parties negotiated the
definitive Merger Agreement (the "Telix Option Fee"). If the Merger
does not close, the Telix Option Fee will be automatically
converted to QSAM common stock at a price of $6.70 per share. The
Company is accounting for this as additional paid in capital akin
to a prepaid warrant.
Management expects expenses to increase through the end of 2024 as
the Company's drug technology continues through clinical trials,
and as a result, if the Merger does not close in the first half of
2024, the Company will need to raise additional capital to support
these operations. If the Company is not successful in raising
additional capital, it may need to delay clinical trials, reduce
overhead, or in the most extreme scenario, shut down operations.
There is no guarantee that the Merger will close, or whether the
Company will be able to generate revenue and/or raise capital
sufficient to support its continuing operations. The ability of the
Company to continue as a going concern is dependent on management's
plans which include implementation of its business model to develop
and commercialize its drug candidate, seek strategic partnerships
to advance clinical trials and other research endeavors which could
provide additional capital to the Company, and continue to raise
funds for the Company through equity or debt offerings. There is no
assurance, however, that the Company will be successful in raising
the needed capital and, if funding is available, that it will be
available on terms acceptable to the Company.
The Company reported $1,705,247 in total assets, $1,032,900 in
total liabilities, $509,198 in liquidation preference of Series A
Redeemable convertible preferred stock, and $163,150 in total
stockholders' equity as of December 31, 2023.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/mssss27u
About QSAM Biosciences, Inc.
Austin, TX-based QSAM Biosciences, Inc. is developing
next-generation nuclear medicines for the treatment of cancer and
other diseases. QSAM's initial technology, 153Sm-DOTMP, is a
clinical-stage bone-targeting radiopharmaceutical originally
developed by IsoTherapeutics Group LLC and now owned by IGL Pharma
Inc.
R & D TIMBER: Hires Walker Accounting as Accountant
---------------------------------------------------
R & D Timber Co., Inc. seeks approval from the U.S. Bankruptcy
Court for the District of South Carolina to employ Walker
Accounting and Tax Service as accountant.
The firm will provide these services:
a. provide monthly bank reconciliation and financial statements
at the rate of $300 per month;
b. provide bi-weekly payroll for up to 12 employees at the rate
of $200 per month;
c. render yearly tax return at the rate of $1,200 per hour.
For additional services, the firm's hourly rates for Paul Walker
$200; Barry Moore $125; Joy Craven or Jessica Seward $100; and for
office support staff $50.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Paul Walker, a partner at Walker Accounting and Tax Service,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Paul Walker
Walker Accounting and Tax Service
1476 Jeffries Hwy.
Walterboro, SC 29488
Tel: (843) 549-6000
About R & D Timber Co., Inc.
R & D Timber Co., Inc. offers land clearing, excavation, and
forestry mulching services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. S.C. Case No. 24-00577) on February 16,
2024. In the petition signed by Danny L. Bishop, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Elisabetta Gm Gasparini oversees the case.
Kevin Campbell, Esq., at Campbell Law Firm, PA, represents the
Debtor as legal counsel.
REPMGMT INC: Hires Hirschler Fleischer as Special Counsel
---------------------------------------------------------
Repmgmt Inc. Chartered, d/b/a Fireside Campaigns seeks approval
from the U.S. Bankruptcy Court for the District of Columbia to
employ Hirschler Fleischer as special counsel.
The firm's services include:
a. reviewing all prepetition transactions in which the
Debtor's counsel, Lannan Legal PLLC, represented the Debtor, and
consulting with the Subchapter V Trustee following such review, to
determine whether it is in the best interest of the estate to
pursue actions for avoidance and recovery against any non-debtor
parties arising out of such transactions, and reporting to the
Court whether Hirschler believes it is in the best interest of the
estate to pursue any such action (as defined in the Engagement
Agreement, the "Initial Stage"); and
b. on behalf of the estate, pursuing one or more avoidance and
recovery actions against non-debtor parties arising out of the
aforementioned transactions (as defined in the Engagement
Agreement, the "Litigation Stage").
The firm will be paid as follows:
a. For the Initial Stage, the Debtor shall pay Hirschler a flat
fee of $9,000.
b. For the Litigation Stage, (1) if Hirschler elects for the
Debtor to pursue an action against Bradley Bauman and August
Campbell to avoid the Debtor’s transfer of a security interest to
them under the secured credit facility for which Lannan Legal
represented the Debtor, and that avoidance action results in entry
of a judgment avoiding that transfer, then Hirschler shall be
entitled to a flat fee of $9,000 (in addition to the $9,000 flat
fee for its services during the Initial Stage); (2) if Hirschler
elects for the Debtor to pursue any avoidance and recovery action
arising out of any other prepetition transaction in which Lannan
Legal represented the Debtor, then Hirschler shall be entitled to a
contingent fee equal to (A) 33 percent of any recovery made in an
action for which the Court has entered a judgment in favor of the
Debtor or for which a trial has begun, and (B) 25 percent of any
recovery made pursuant to a settlement made before trial has begun
(but without a judgment in favor of the Debtor); and (3) Hirschler
shall be entitled to reimbursement of no more than $500 in actual
expenses for each adversary proceeding it elects to pursue.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
David Swan, Esq., a partner at Hirschler Fleischer, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
David Swan, Esq.
Hirschler Fleischer, PC
The Edgeworth Building
2100 East Cary Street
Richmond, VA 23218
Tel: (804) 771-9500
Fax: (804) 644-0957
About RepMGMT Inc.
RepMGMT Inc. Chartered filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D.D.C. Case No.
23-00375) on Dec. 12, 2023, with $50,000 to $100,000 in assets and
$1 million to $10 million in liabilities. Bradley Bauman,
president, signed the petition.
Judge Elizabeth L. Gunn oversees the case.
Robert Lannan, Esq., at Lannan Legal, PLLC represents the Debtor as
bankruptcy counsel.
REVELARE LLC: Stephen Coffin Named Subchapter V Trustee
-------------------------------------------------------
The Acting U.S. Trustee for Region 13 appointed Stephen Coffin,
Esq., attorney at The Small Business Law Center, as Subchapter V
trustee for Revelare LLC.
Mr. Coffin will be paid an hourly fee of $285 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Coffin declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Stephen D. Coffin, Esq.
Attorney at Law, MBA
The Small Business Law Center
2705 St. Peters-Howell Rd, Suite A
St. Peters, MO 63376
Phone: (636) 244-5252
Fax: (636) 486-1788
Email: scoffin@tsblc.com
About Revelare LLC
Revelare LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mo. Case No. 24-40768) on March 6,
2024, with $100,001 to $500,000 in both assets and liabilities.
Frank R. Ledbetter, Esq., at Ledbetter Law Firm, LLC represents the
Debtor as bankruptcy counsel.
ROBERTSHAW US: Hires Guggenheim as Investment Banker
----------------------------------------------------
Robertshaw US Holding Corp. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Guggenheim Securities, LLC as investment banker.
The firm will provide these services:
a. review and analysis of the business, financial condition and
prospects of the Debtors;
b. evaluation of the liabilities of the Debtors, its debt
capacity and its strategic and financial alternatives;
c. In connection with any Transaction:
i. evaluation from a financial and capital markets point of
view of alternative structures and strategies for implementing the
Transaction;
ii. preparation of offering, marketing or other transaction
materials concerning the Company and the Transaction for
distribution and presentation to the relevant Transaction
Counterparties;
iii. development and implementation of a marketing plan with
respect to such Transaction;
iv. identification and solicitation of, and the review of
proposals received from, the Investors and other prospective
Transaction Counterparties; and
v. negotiation of the Transaction;
d. in connection with any Transaction pursued or effected in
connection with a Bankruptcy Case, evaluation, from a financial
point of view, of alternative strategies for implementing any such
Transaction, including pursuant to a Plan, which may be a plan
under Chapter 11 of the Bankruptcy Code confirmed in connection
with any Bankruptcy Case in Bankruptcy Court; and
e. such other matters as may be agreed upon by Guggenheim
Securities and the Company in writing, including without limitation
via email, during the term of Guggenheim Securities' engagement.
The firm will be paid as follows:
a. Monthly Fees.
i. The Debtors will pay Guggenheim Securities a non-refundable
cash fee of $150,000 per month (each, a "Monthly Fee"), which fee,
commencing as of November 1, 2023, will be due and paid by the
Debtors in advance promptly on the first day of each calendar month
during the period of Guggenheim Securities' engagement under the
Engagement Letter, in each case, whether or not any Transaction is
consummated.
ii. An amount equal to 50% of the Monthly Fees actually paid
to Guggenheim Securities shall be credited against any Transaction
Fee that thereafter becomes payable pursuant to Sections 4(c), 4(d)
or 4(e) of the Engagement Letter (it being understood that, once
credited against any one of the foregoing fees, any such amount of
the Monthly Fee so credited cannot be credited again against any
other fee payable under the Engagement Letter).
b. Restructuring Transaction Fee.
i. If any Restructuring Transaction is consummated during the
period of Guggenheim Securities' engagement then, in each case, the
Debtors will pay Guggenheim Securities a cash fee (a "Restructuring
Transaction Fee") in an amount equal to $6,500,000.
ii. Any such Restructuring Transaction Fee will be payable
promptly upon the consummation of any Restructuring Transaction;
provided, however, that the Restructuring Transaction Fee in
connection with any Restructuring Transaction that is contemplated
to be effectuated pursuant to Section 3(a)(9) of the Securities Act
of 1933, as amended (the "Securities Act"), will be fully earned
and payable on the date that definitive offer documents for the
related exchange offer under Section 3(a)(9) of the Securities Act
are first distributed to creditors whose claims would be affected
thereby, without regard to the results of such exchange offer or
any other contingency. For the avoidance of doubt, with respect to
(and solely with respect to) any Restructuring Transaction
effectuated pursuant to Section 3(a)(9) of the Securities Act, the
only Restructuring Transaction Fee payable under the Engagement
Letter on account of each such Restructuring Transaction shall be
the fee payable pursuant to the proviso clause in the immediately
preceding sentence.
c. Financing Fee(s).
i. If any Financing Transaction is consummated during the
period of Guggenheim Securities' engagement under the Engagement
Letter (or following any expiration or termination of such
engagement, subject in each such case to Section 7(c) of the
Engagement Letter), then, in each case, the Debtors will pay
Guggenheim Securities one or more cash fees (each, a "Financing
Fee") in an amount equal to:
(A) with respect to any Financing Transaction consummated in
connection with, including, without limitation, as of and/or at any
time following the commencement of, a Bankruptcy Case, the sum of:
I. 150 basis points (1.50%) of the aggregate face amount of
any debt obligations to be issued or raised by the Debtors
(including the face amount of any related commitments) in any Debt
Financing that is secured by first priority liens over the Debtors'
assets, plus
II. 250 basis points (2.50%) of the aggregate face amount
of any debt obligations to be issued or raised by the Debtors
(including the face amount of any related commitments) in any Debt
Financing that is not covered by the immediately preceding
sub-clause (I), plus
III. 400 basis points (4.00%) of the aggregate amount of
gross proceeds raised by the Debtors in any Equity Financing
(including the face amount of any related commitments).
ii. Financing Fees for any Financing Transaction will be
payable upon the consummation of the related Financing
Transaction.
d. Sale Transaction Fees(s).
i. If any Sale Transaction is consummated during the period of
Guggenheim Securities' engagement under the Engagement Letter (or
following any expiration or termination of such engagement, subject
in each such case to Section 7(c) of the Engagement Letter), then,
in each case, the Debtors will pay Guggenheim Securities a cash fee
(each, a "Sale Transaction Fee") on account of each Sale
Transaction in an amount equal to:
(A) with respect to any Sale of Control Transaction,
$6,500,000 (a "Sale of Control Fee"); and
(B) with respect to any Sale Transaction not constituting a
Sale of Control Transaction, an amount equal to 1.50% of the
Aggregate Sale Consideration (as defined below) relating to such
Sale Transaction (a "Discrete Sale Fee");
ii. Any such Sale Transaction Fee will be payable promptly
upon the consummation of any Sale Transaction.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Brendon Philipps, a senior managing director at Guggenheim
Securities, LLC, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Brendon Philipps
Guggenheim Securities LLC
330 Madison Avenue
New York, NY 10017
Tel: (212) 518-9200
Email: GSinfo@GuggenheimPartners.com
About Robertshaw US Holding Corp.
Robertshaw US Holding Corp., along with its affiliates, is a global
leader in designing and manufacturing innovative control systems
and components for the appliance and HVAC industries.
Robertshaw US Holding and its affiliates filed Chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90052) on February 15, 2024,
with $500 million to $1 billion in assets and liabilities. John
Hewitt, chief executive officer, signed the petitions.
The Debtors tapped Hunton Andrews Kurth LLP & Latham & Watkins, LLP
as bankruptcy counsel; Guggenheim Securities, LLC as investment
banker and financial advisor; and KPMG, LLP as accountant, tax
advisor and auditor. Kroll Restructuring Administration, LLC is the
claims, noticing, solicitation and balloting agent.
ROBERTSHAW US: Hires Hunton Andrews as Bankruptcy Co-Counsel
------------------------------------------------------------
Robertshaw US Holding Corp. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Hunton Andrews Kurth LLP as bankruptcy co-counsel.
The firm will provide these services:
a) advise the Debtors with respect to their powers and duties as
debtors in possession in the continued management and operation of
their business;
b) advise and consult on the conduct of these chapter 11 cases,
including all of the legal and administrative requirements of
operating in chapter 11;
c) attend meetings and negotiate with representatives of
creditors and other parties in interest;
d) take all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any actions commenced against the Debtors and
representing the Debtors in negotiations concerning litigation in
which the Debtors are involved, including prosecuting objections to
claims filed against the Debtors' estates;
e) prepare pleadings in connection with these chapter 11 cases,
including motions, applications, answers, draft orders, reports and
other documents necessary or otherwise beneficial to the
administration of the Debtors' estates;
f) represent the Debtors in connection with obtaining authority
to use cash collateral and obtain postpetition financing;
g) appear before the Court and any appellate courts to represent
the interests of the Debtors' estates;
h) take any necessary actions on behalf of the Debtors to
negotiate, prepare and obtain approval of a disclosure statement
and confirmation of a chapter 11 plan of reorganization and all
documents related thereto;
i) advise the Debtors in connection with any sale of assets;
j) provide non-bankruptcy services to the Debtors to the extent
requested by the Debtors; and
k) perform all other necessary legal services for the Debtors in
connection with these chapter 11 cases, which may include (i) the
analysis of the Debtors' leases and executory contracts and the
assumption, rejection or assignment thereof, (ii) the analysis of
the validity of liens against the Debtors, and (iii) advice on
corporate and litigation matters, including both pending and
threatened litigation and the administration and resolution of
claims.
The firm will be paid at these rates:
Timothy A. Davidson II, Partner $1,250 per hour
Joseph W. Buoni, Partner $1,130 per hour
Ashley L. Harper, Partner $950 per hour
Philip M. Guffy, Associate $910 per hour
Catherine Rankin, Associate $800 per hour
Brandon Bell, Associate $700 per hour
Kaleb Bailey, Associate $595 per hour
The firm received an advance retainer of $250,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Question: Did Hunton Andrews Kurth agree to any variations from,
or alternatives to, Hunton Andrews Kurth's standard or customary
billing arrangements for this engagement?
Response: No.
Question: Do any of the Hunton Andrews Kurth professionals
included in this engagement vary their rate based on the geographic
location of the bankruptcy case?
Response: No.
Question: If you represented the Debtors in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If Hunton Andrews Kurth's billing
rates and material financial terms have changed postpetition,
explain the difference and the reasons for the difference?
Response: Hunton Andrews Kurth's billing rates and material
financial terms for its prepetition engagement of the Debtors are
set forth in the Engagement Letter. Hunton Andrews Kurth's billing
rates and material financial terms for Hunton Andrews Kurth's
representation of the Debtors have not changed postpetition.
Question: Have the Debtors approved Hunton Andrews Kurth's
prospective budget and staffing plan, and, if so for what budget
period?
Response: Hunton Andrews Kurth has not prepared a budget and
staffing plan.
Timothy A. Davidson II, Esq., a partner at Hunton Andrews Kurth,
disclosed in court filings that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Timothy A. Davidson II, Esq.
Hunton Andrews Kurth, LLP
600 Travis, Suite 4200
Houston, TX 77002
Telephone: (713) 220-4200
Facsimile: (713) 220-4285
Email: taddavidson@HuntonAK.com
About Robertshaw US Holding Corp.
Robertshaw US Holding Corp., along with its affiliates, is a global
leader in designing and manufacturing innovative control systems
and components for the appliance and HVAC industries.
Robertshaw US Holding and its affiliates filed Chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90052) on February 15, 2024,
with $500 million to $1 billion in assets and liabilities. John
Hewitt, chief executive officer, signed the petitions.
The Debtors tapped Hunton Andrews Kurth LLP & Latham & Watkins, LLP
as bankruptcy counsel; Guggenheim Securities, LLC as investment
banker and financial advisor; and KPMG, LLP as accountant, tax
advisor and auditor. Kroll Restructuring Administration, LLC is the
claims, noticing, solicitation and balloting agent.
ROBERTSHAW US: Hires Latham & Watkins as Counsel
------------------------------------------------
Robertshaw US Holding Corp. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Latham & Watkins LLP as bankruptcy counsel.
The firm will provide these services:
a. advise the Debtors in connection with their restructuring
activities regarding negotiations, litigation, and settlement with
creditors and other interested parties to the restructuring;
b. advise the Debtors with respect to finance and corporate
transactions, including one or more potential asset sales;
c. review of documents;
d. preparation of agreements;
e. review and prepare pleadings;
f. court appearances; and
g. all other necessary legal services for the Debtors in
connection with the chapter 11 cases.
The firm will be paid at these rates:
Partners $1,495 to $2,455 per hour
Counsel $1,430 to $1,860 per hour
Associates $760 to $1,505 per hour
Professional Staff $230 to $1,130 per hour
Paralegals $325 to $715 per hour
The firm received from the Debtor a retainer of $1,500,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the
following is provided in response to the request for additional
information:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: The firm's current hourly rates for services rendered
on behalf of the Debtors. These rates have been used since January
2024. The firm used the rates for services rendered in 2023:
$1,495-$2,240 for partners; $1,690-$1,735 for counsel; $760-$1,345
for associates; $355-$560 for paraprofessionals.
George Klidonas, Esq., a partner at Latham & Watkins, disclosed in
a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
George Klidonas, Esq.
Latham & Watkins, LLP
1271 Avenue of the Americas
New York, NY 10020
Telephone: (212) 906-1200
Facsimile: (212) 751-4864
Email: george.klidonas@lw.com
About Robertshaw US Holding Corp.
Robertshaw US Holding Corp., along with its affiliates, is a global
leader in designing and manufacturing innovative control systems
and components for the appliance and HVAC industries.
Robertshaw US Holding and its affiliates filed Chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90052) on February 15, 2024,
with $500 million to $1 billion in assets and liabilities. John
Hewitt, chief executive officer, signed the petitions.
The Debtors tapped Hunton Andrews Kurth LLP & Latham & Watkins, LLP
as bankruptcy counsel; Guggenheim Securities, LLC as investment
banker and financial advisor; and KPMG, LLP as accountant, tax
advisor and auditor. Kroll Restructuring Administration, LLC is the
claims, noticing, solicitation and balloting agent.
ROBERTSHAW US: Seeks to Hire AlixPartners as Financial Advisor
--------------------------------------------------------------
Robertshaw US Holding Corp. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ AlixPartners, LLP as financial advisor.
The firm will provide these services:
-- assist the Debtors with their treasury activities, including
developing short-term cash flow forecasting, and assist with
planning for alternatives as requested by the Debtors;
-- provide assistance with implementing vendor management
programs to maintain vendor support;
-- provide assistance to the Debtors with the development of
materials for stakeholder diligence, coordination of due diligence
and the maintenance of a data room, as needed;
-- provide assistance to management in connection with the
Debtors' development of their business plans, and such other
related forecasts, as may be required;
-- advise senior management in the negotiation and
implementation of restructuring initiatives and evaluation of
strategic alternatives;
-- assist management and its other professionals in sourcing,
negotiating and implementing any financing, including DIP and exit
financing facilities, in conjunction with the overall
restructuring;
-- assist the Debtors in the preparation of financial related
disclosures and reporting as may be required by the Court,
including monthly operating reports;
-- assist the Debtors in the identification of executory
contracts and unexpired leases and the performing of cost/benefit
evaluations with respect to the assumption or rejection of each, as
necessary;
-- provide assistance with implementation of Court orders;
-- assist the Debtors and provide overall coordination of claims
processing, analysis, and reporting, including plan classification
modeling and claim estimation;
-- participate in meetings, develop informational materials, and
otherwise provide support to the Debtors and their other
professional advisors in negotiations with potential investors,
banks and other secured lenders, bondholders, any statutory
creditors' committee appointed in these chapter 11 cases (if any),
the U.S. Trustee, other parties-in-interest, and professionals
hired by the same, as requested;
-- assist in addressing accounting matters pertaining to chapter
11 related matters as well as operating procedures to segregate
prepetition and postpetition business transactions;
-- assist in the evaluation and analysis of avoidance actions,
including fraudulent conveyances and preferential transfers;
-- assist with performing any investigations as may deemed
necessary by the Debtors or the Restructuring Committee of the
Board of Directors;
-- assist the Debtors with plan distribution activities;
-- assist with the preparation of information and analysis
necessary for the confirmation of a plan of reorganization or
similar plan in these chapter 11 cases, including information
contained in the disclosure statement;
-- provide expert witness testimony before the Court on matters
that are within AlixPartners' areas of expertise; and
-- assist with such other matters as may be requested that fall
within AlixPartners' expertise and that are mutually agreed.
The firm will be paid at these rates:
Partner & Managing Director $1,225 to $1,495 per hour
Partner $1,200 per hour
Director $960 to $1,125 per hour
Senior Vice President $800 to $910 per hour
Vice President $640 to $790 per hour
Consultant $230 to $625 per hour
The firm is holding a retainer in the amount of $569,814.52 from
the Debtors.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Randall Eisenberg, a managing director at AlixPartners, disclosed
in court filings that his firm is a "disinterested person" as that
term is defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Randall S. Eisenberg
AlixPartners, LLP
909 Third Avenue
New York, NY 10022
Tel: (212) 490-2500
Fax: (212) 490-1344
Email: reisenberg@alixpartners.com
About Robertshaw US Holding Corp.
Robertshaw US Holding Corp., along with its affiliates, is a global
leader in designing and manufacturing innovative control systems
and components for the appliance and HVAC industries.
Robertshaw US Holding and its affiliates filed Chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90052) on February 15, 2024,
with $500 million to $1 billion in assets and liabilities. John
Hewitt, chief executive officer, signed the petitions.
The Debtors tapped Hunton Andrews Kurth LLP & Latham & Watkins, LLP
as bankruptcy counsel; Guggenheim Securities, LLC as investment
banker and financial advisor; and KPMG, LLP as accountant, tax
advisor and auditor. Kroll Restructuring Administration, LLC is the
claims, noticing, solicitation and balloting agent.
SALISH COAST: Gets OK to Hire Williams & Nulle as Accountant
------------------------------------------------------------
Salish Coast Enterprises, Inc., doing business as Skagit Valley
Malting, received approval from the U.S. Bankruptcy Court for the
Western District of Washington to employ Williams & Nulle, PLLC as
accountant to the Debtor.
Hansell/Mitzell requires Williams & Nulle to assist in the
preparation and filing of the Debtor's federal tax return.
Williams & Nulle will be paid at these hourly rates:
Duane M. Gilliland $200
Bookkeepers $85-$95
Williams & Nulle will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Steven L. Tobiason, member of Williams & Nulle, PLLC, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Williams & Nulle can be reached at:
Steven L. Tobiason
WILLIAMS & NULLE, PLLC
1101 8th St. D
Anacortes, WA 98221
Tel: (360) 293-6913
About Salish Coast Enterprises
Salish Coast Enterprises, Inc. is a craft malthouse in Burlington,
Wash.
Salish Coast Enterprises filed Chapter 11 petition (Bankr. W.D.
Wash. Case No. 23-12026) on Oct. 20, 2023, with $1 million to $10
million in both assets and liabilities. David Green, chief
executive officer, signed the petition.
Judge Timothy W. Dore oversees the case.
The Debtor tapped Meyers Law Group, PC as bankruptcy counsel and
Cairncross & Hempelmann, PS as local counsel.
SALTWIRE NETWORK: Inability to Pay Debt Prompts CCAA Proceedings
----------------------------------------------------------------
The Supreme Court of Nova Scotia entered an order ("Initial Order")
granting Saltwire Network Inc., The Halifax Herald Limited,
Headline Promotional Products Limited, Titan Security &
Investigation Inc., Brace Capital Limited and Brace Holdings
Limited ("Companies") protection pursuant to the Companies’
Creditors Arrangement Act ("CCAA"). Pursuant to the Initial Order,
KSV Restructuring Inc. was appointed as monitor ("Monitor") and
David Boyd of Resolve Advisory Services Ltd. was appointed as Chief
Restructuring Officer ("CRO").
Pursuant to the Initial Order, there is a stay of proceedings until
March 22, 2024, which may be extended by the Court from
time-to-time. A motion is scheduled to be heard on March 22, 2024
to, among other things, extend the stay of proceedings.
According to Court Documents, SaltWire is insolvent and unable to
meet their obligations as they come due. The total claims against
SaltWire (including all the affiliated companies) exceed $5
million. Breaking down the debts as between the separate corporate
entities which comprise the SaltWire affiliated entities:
a) As of December 31, 2023, the amount owing by The Halifax Herald
Limited to Fiera is $8,239,634.92, plus accrued interest and costs.
It acknowledges breaching (and being in default of) the loan
agreement with Fiera in respect of this debt;
b) As of December 31, 2023, the amount owing by SaltWire Network
Inc. to Fiera was $24,507,715.32, plus accrued interest and costs.
It acknowledges breaching (and being in default of) the loan
agreements in respect of this debt;
c) As of February 23, 2024, SaltWire Network Inc. owed CRA
$2,589,018.28;
d) As of February 23, 2024, The Halifax Herald Limited owed CRA
$4,993,145.09;
e) The Halifax Herald Retirement Plan has 404 members as of
December 31, 2022. Over the course of 2018 and 2019, The Halifax
Herald Limited was required to make certain payments totaling
$2,656,656.00 into this pension plan. It did not do so. The
monies were diverted to operations. The Halifax Herald Limited
justified this decision on the basis of new solvency valuation
which would have reduced their obligations to make payments into
the Plan. However, these new solvency valuations did not actually
come into law until April 1, 2020 - about two years after The
Halifax Herald Limited had already begun withholding payments. The
Halifax Herald Limited now owes these monies ($2,656, 656) to the
Pension Plan as confirmed by Norton, J. in the decision bearing
citation 2024 NSSC 19.
f) The remaining affiliated SaltWire entities become entangled in
this proceeding through an interconnected ownership structure and
the various forms of security held by Fiera in support of the
underlying debts.
The CCAA Proceedings allow the Companies to address their current
financial challenges and provide the best opportunity to
restructure their businesses so that they can be viable in the long
term.
A copy of the materials filed in the restructuring proceedings are
available on the Monitor's website at
https://www.ksvadvisory.com/experience/case/herald-saltwire.
SaltWire Network Inc. -- https://www.saltwire.com/ -- is a Canadian
newspaper publishing company owned by the Dennis-Lever family of
Halifax, Nova Scotia, owners of The Chronicle Herald.
SAND LANE: Hires Cicero LoVerde & Pacifico as Accountant
--------------------------------------------------------
Sand Lane Development Corp. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Cicero,
LoVerde & Pacifico CPAs PC as accountant.
The firm will provide these services:
a. prepare the monthly Chapter 11 operating reports;
b. prepare and file yearly Federal and New York State tax
returns.
c. prepare yearly balance sheets and cash flow statements.
d. prepare and file NYC RPIE forms.
The firm will be paid at these rates:
Partner $350 per hour
Manager $275 per hour
Senior Accountant $200 per hour
Staff Accountant $150 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Gerard Loverde, a partner at Cicero, LoVerde & Pacifico CPAs PC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Gerard Loverde
Cicero, LoVerde & Pacifico CPAs PC
1336 Forest Avenue
Staten Island, NY 10302
Tel: (718) 273-3362
About Sand Lane Development Corp
Sand Lane Development Corp is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)). The Debtor is the owner of
real property located at 900 Hylan Blvd, Staten Island, NY 10305,
valued at $3.2 million.
Sand Lane Development Corp sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No.
24-40092) on Jan. 9, 2024. In the petition filed by Domenic
Tomasselo, secretary, the Debtor disclosed $3,204,520 in total
assets and $2,690,452 in total liabilities.
Judge Nancy Hershey Lord oversees the case.
The Debtor tapped Gregory A. Flood, Esq., as bankruptcy counsel and
Menicucci Villa Panzella Climi PLLC as its environmental and
landlord tenant attorneys.
SAND LANE: Hires Law Office of Gregory A. Flood as Counsel
----------------------------------------------------------
Sand Lane Development Corp. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Law Office of
Gregory A. Flood as counsel.
The firm will provide these services:
a. give advice to the Debtor with respect to its powers and
duties as Debtor-in-Possession and the continued management of its
property and affairs;
b. negotiate with creditors of the Debtor and work out a plan
of reorganization and take the necessary legal steps in order to
effectuate such a plan including, if needed, negotiations with
creditors and other parties in interest;
c. prepare on behalf of the Debtor all necessary schedules,
application, motions, answers, orders, reports, and other legal
papers required for the Debtor that seek protection from its
creditors under Chapter 11 of the Bankruptcy Code;
d. appear before the Bankruptcy Court to protect the interest
of the Debtor and to represent the Debtor in all matters pending
before the Court;
e. represent the Debtor in connection with obtaining
post-petition financing;
f. take any necessary action to obtain approval of a
disclosure statement and confirmation of a plan of reorganization;
and
g. perform all other legal services of the Debtor which may be
necessary for the preservation of the Debtors estate and to promote
the best interest of the Debtor, its creditors and its estate.
The firm will be paid at the rate of $400 per hour, and a retainer
in the amount of $5,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Gregory A Flood, Esq., a partner at Law Offices of Gregory A Flood,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Gregory A Flood, Esq.
Law Offices of Gregory A. Flood
900 South Avenue, Ste 300,
Staten Island, NY 10314-3428
Tel: (718) 568-3678
Email: floodlaw@gmail.com
About Sand Lane Development Corp.
Sand Lane Development Corp is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)). The Debtor is the owner of
real property located at 900 Hylan Blvd, Staten Island, NY 10305,
valued at $3.2 million.
Sand Lane Development Corp sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No.
24-40092) on Jan. 9, 2024. In the petition filed by Domenic
Tomasselo, secretary, the Debtor disclosed $3,204,520 in total
assets and $2,690,452 in total liabilities.
Judge Nancy Hershey Lord oversees the case.
The Debtor tapped Gregory A. Flood, Esq., as bankruptcy counsel and
Menicucci Villa Panzella Climi PLLC as its environmental and
landlord tenant attorneys.
SAS AB: US Bankruptcy Court Approves Chapter 11 Plan
----------------------------------------------------
SAS AB on March 19, 2024, disclosed that the U.S. Bankruptcy Court
for the Southern District of New York (the "Court") has approved
SAS' Plan of Reorganization ("Chapter 11 Plan").
The effectiveness of the Chapter 11 Plan remains subject to various
conditions precedent, including approvals from various regulatory
authorities and the completion of a Swedish company reorganization
at the SAS AB level.
SAS currently expects to emerge from the chapter 11 process around
the end of the first half of 2024, and reiterates its expectation
that there will be no recovery for subordinated creditors and no
value for SAS AB's existing shareholders.
All of SAS AB's common shares and listed commercial hybrid bonds
are expected to be cancelled, redeemed and delisted in connection
with emergence from the restructuring proceedings. SAS' operations
and flight schedule remain unaffected by the restructuring
proceedings and SAS will continue to serve its customers in the
ordinary course throughout this process.
SAS initiated voluntary chapter 11 proceedings in the U.S. in order
to accelerate the implementation of its comprehensive business
transformation plan, SAS FORWARD. The aim of the chapter 11
process was to reach agreements with key stakeholders, restructure
the company's debt obligations, reconfigure its aircraft fleet, and
emerge with a significant capital injection.
Over the course of the chapter 11 process, SAS has successfully
reconfigured its aircraft fleet and reached amended lease
agreements with 15 lessors, representing 59 aircraft. Through the
amended lease agreements, SAS expects to achieve the targeted
annual cost savings of at least SEK 1.0 billion in reduced aircraft
lease expenses and annual cash flow items relating to aircraft
financing.
SAS has also successfully concluded a competitive exit financing
solicitation process, selecting Castlelake, L.P., on behalf of
certain funds or affiliates ("Castlelake"), Air France-KLM S.A.
("Air France-KLM") and Lind Invest ApS ("Lind Invest"), together
with the Danish state, as the winning bidder consortium. The agreed
transaction structure includes a total investment in reorganized
SAS corresponding to USD1,200 million, which includes USD475
million in new unlisted equity and USD 725 million in secured
convertible debt.
The Chapter 11 Plan, which was approved by the Court on March 19,
is supported by more than 99 percent of the creditors that voted on
the Chapter 11 Plan.
Anko van der Werff, President & Chief Executive Officer of SAS,
comments: "This is a major milestone for SAS in our transformation
plan, SAS FORWARD. The approved Chapter 11 Plan is supported by
more than 99 percent of our creditors that voted, and it sets a
clear path to exiting the restructuring proceedings. We look
forward to emerging as a competitive and financially stronger
airline with a stable equity structure. I would like to thank our
investors and our other stakeholders who have worked
constructively
with us in reaching this milestone, and our creditors for their
confidence in our plan. I would also like to thank our employees
for their dedication and determination throughout this process. We
still have work to do but this marks a powerful step towards
realizing SAS' potential to remain at the forefront of the airline
industry for years to come."
The effectiveness of the Chapter 11 Plan remains subject to various
conditions precedent, including approvals from various regulatory
authorities and the completion of a Swedish company reorganization
at the SAS AB level. SAS reiterates its expectation that there will
be no recovery for subordinated creditors and no value for SAS
AB's
existing shareholders. All of SAS AB's common shares and listed
commercial hybrid bonds are expected to be cancelled, redeemed and
delisted in connection with emergence from the restructuring
proceedings.
Information regarding chapter 11 cases
Additional information regarding SAS' voluntary chapter 11 cases is
available on SAS' dedicated restructuring website. U.S. court
filings and other documents related to the chapter 11 cases in the
U.S. are available on a separate website administered by SAS'
claims agent, Kroll Restructuring Administration LLC.
Advisors
Weil, Gotshal & Manges LLP is serving as global legal counsel and
Mannheimer Swartling Advokatbyra AB is serving as Swedish legal
counsel to SAS. Seabury Securities LLC and Skandinaviska Enskilda
Banken AB are serving as investment bankers, and Seabury Securities
LLC is also serving as restructuring advisor to SAS. Skadden, Arps,
Slate, Meagher & Flom LLP is serving as legal counsel, Rothschild
&
Co is serving as investment banker, and SkyWorks Holdings LLC is
serving as aviation consultant to Castlelake. White & Case LLP,
Euclid Law and Sheppard, Mullin, Richter & Hampton LLP are serving
as co-legal counsel to Air France-KLM. Bech-Bruun Law Firm P/S is
serving as legal counsel and Latham & Watkins LLP is serving as US
legal counsel to Lind Invest. Wilkie Farr & Gallagher LLP is
serving as legal counsel, Jefferies LLC is serving as investment
banker, AlixPartners, LLP is serving as financial advisor, Alton
Aviation Consultancy LLC is serving as industry advisor, and DLA
Piper LLP is serving as Scandinavian counsel to the Official
Committee of Unsecured Creditors.
About Scandinavian Airlines
SAS SAB -- https://www.sasgroup.net/ -- Scandinavia's leading
airline, with main hubs in Copenhagen, Oslo and Stockholm, is
flying to destinations in Europe, USA and Asia. In addition to
flight operations, SAS offers ground handling services, technical
maintenance, and air cargo services. SAS is a founder member of the
Star Alliance, and together with its partner airlines offers a wide
network worlxdwide.
SAS AB and its subsidiaries, including Scandinavian Airlines
Systems Denmark-Norway-Sweden and Scandinavian Airlines of North
America Inc., sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10925) on July 5,
2022. In the petition filed by Erno Hilden, authorized
representative, SAS AB estimated assets between $10 billion and $50
billion and liabilities between $1 billion and $10 billion.
Judge Michael E. Wiles oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as global legal
counsel; Mannheimer Swartling Advokatbyra AB as special counsel;
FTI Consulting, Inc. as financial advisor; Ernst & Young AB as tax
advisor; and Seabury Securities, LLC and Skandinaviska Enskilda
Banken AB as investment bankers. Seabury is also serving as
restructuring advisor. Kroll Restructuring Administration, LLC is
the claims 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 Willkie Farr & Gallagher, LLP.
SC HEALTHCARE: Case Summary & 40 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: SC Healthcare Holding, LLC
830 West Trailcreek Dr.
Preoria IL 61614
Business Description: The Debtors comprise one of the largest
nursing home operators in the United States
and work in partnership with physicians,
skilled nurses, and other health care
providers in order to provide various
healthcare and rehabilitation services for
elderly citizens in Illinois, Missouri, and
Iowa. Among other services, the Debtors
provide assisted and supportive living,
skilled nursing care, respite care, memory
care, hospice, local medical transportation,
radiology, and pharmacy services.
Chapter 11 Petition Date: March 20, 2024
Court: United States Bankruptcy Court
District of Delaware
One hundred forty-one affiliates that concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
SC Healthcare Holding, LLC (Lead Case) 24-10443
SC Healthcare Holding, LLC 24-10443
War Drive, LLC 24-10444
Aledo HCO, LLC 24-10445
Lebanon RE, LLC 24-10446
Aledo RE, LLC 24-10447
McLeansboro RE, LLC 24-10448
Arcola HCO, LLC 24-10449
Legacy - PHC Inc. 24-10450
Arcola RE, LLC 24-10451
Midwest Health Operations, LLC 24-10452
Aspen HCO, LLC 24-10453
Legacy Estates AL, LLC 24-10454
Midwest Health Properties, LLC 24-10455
Aspen RE, LLC 24-10456
Monmouth AL, LLC 24-10457
Bement HCO, LLC 24-10458
Legacy HCO, LLC 24-10459
North Aurora HCO, LLC 24-10460
Bement RE, LLC 24-10461
South Elgin, LLC 24-10462
North Aurora, LLC 24-10463
Macomb, LLC 24-10464
Betty's Garden HCO, LLC 24-10465
Petersen 23, LLC 24-10466
Betty's Garden RE, LLC 24-10467
Sullivan AL RE, LLC 24-10468
Petersen 25, LLC 24-10470
Marigold - PHC Inc. 24-10471
Bradford AL RE, LLC 24-10472
Petersen 26, LLC 24-10473
Marigold HCC, LLC 24-10474
Sullivan HCO, LLC 24-10475
Bushnell AL RE, LLC 24-10476
Petersen 27, LLC 24-10477
Sullivan RE, LLC 24-10478
Marigold HCO, LLC 24-10479
Casey HCO, LLC 24-10480
Petersen 29, LLC 24-10481
Collinsville HCO, LLC 24-10482
MBP Partner, LLC 24-10483
Swansea HCO, LLC 24-10484
Petersen 30, LLC 24-10485
Collinsville RE, LLC 24-10486
CYE Bradford HCO, LLC 24-10487
Petersen Farmer City, LLC 24-10488
CYE Bushnell HCO, LLC 24-10489
Petersen Health & Wellness, LLC 24-10490
Piper RE, LLC 24-10491
Petersen Health Business, LLC 24-10492
CYE Kewanee - PHC, Inc. 24-10493
Petersen Health Care - Farmer City, LLC 24-10494
Pleasant View HCO, LLC 24-10495
CYE Kewanee HCO, LLC 24-10496
Petersen Health Care - Illini, LLC 24-10497
CYE Knoxville - PHC, Inc. 24-10498
Pleasant View RE, LLC 24-10499
Petersen Health Care - Roseville, LLC 24-10500
CYE Knoxville HCO, LLC 24-10501
Petersen Health Care II, Inc. 24-10502
Polo - PHC, Inc. 24-10503
Petersen Health Care III, LLC 24-10504
Polo HCO, LLC 24-10505
CYE Monmouth - PHC, Inc. 24-10506
Petersen Health Care V, LLC 24-10507
Polo, LLC 24-10508
Petersen Health Care VII, LLC 24-10509
CYE Monmouth HCO, LLC 24-10510
Prairie City HCO, LLC 24-10511
Petersen Health Care VIII, LLC 24-10512
Prairie City RE, LLC 24-10513
CYE Sullivan HCO, LLC 24-10514
Petersen Health Care X, LLC 24-10515
Swansea RE, LLC 24-10516
Robings HCO, LLC 24-10517
CYE Walcott HCO, LLC 24-10518
Petersen Health Care XI, LLC 24-10519
Tarkio HCO, LLC 24-10520
Robings, LLC 24-10521
CYV Kewanee AL RE, LLC 24-10522
Tarkio RE, LLC 24-10523
Petersen Health Care XIII, LLC 24-10524
Decatur HCO, LLC 24-10525
Rosiclare HCO, LLC 24-10526
Tuscola HCO, LLC 24-10527
Petersen Health Care, Inc. 24-10528
Tuscola RE, LLC 24-10529
Rosiclare RE, LLC 24-10530
Petersen Health Enterprises, LLC 24-10531
Twin HCO, LLC 24-10532
Decatur RE, LLC 24-10533
Petersen Health Group, LLC 24-10534
Twin RE, LLC 24-10535
Royal HCO, LLC 24-10536
Petersen Health Network, LLC 24-10537
Vandalia HCO, LLC 24-10538
Eastview HCO, LLC 24-10539
Eastview RE, LLC 24-10540
Petersen Health Properties, LLC 24-10541
Vandalia RE, LLC 24-10542
Effingham HCO, LLC 24-10543
Village Kewanee HCO, LLC 24-10544
Petersen Health Quality, LLC 24-10545
Effingham RE, LLC 24-10546
Walcott AL RE, LLC 24-10547
Royal RE, LLC 24-10548
El Paso - PHC, Inc. 24-10549
Watseka HCO, LLC 24-10550
Shangri La HCO, LLC 24-10551
Watseka RE, LLC 24-10552
El Paso HCC, LLC 24-10553
Shangri La RE, LLC 24-10554
Westside HCO, LLC 24-10555
El Paso HCO, LLC 24-10556
Westside RE, LLC 24-10557
Shelbyville HCO, LLC 24-10558
Flanagan - PHC, Inc. 24-10559
XCH, LLC 24-10560
Shelbyville RE, LLC 24-10561
Flanagan HCC, LLC 24-10562
Petersen Health Systems, Inc. 24-10563
SJL Health Systems, Inc. 24-10564
Flanagan HCO, LLC 24-10565
Petersen MT, LLC 24-10566
Petersen MT3, LLC 24-10567
Havana HCO, LLC 24-10568
Petersen MT4, LLC 24-10569
Petersen Roseville, LLC 24-10570
Petersen Health Care Management, LLC 24-10571
Havana RE, LLC 24-10572
Piper HCO, LLC 24-10573
Lebanon HCO, LLC 24-10574
Jonesboro, LLC 24-10575
Kewanee AL, LLC 24-10576
Knoxville & Pennsylvania, LLC 24-10577
Kewanee HCO, LLC 24-10578
Knoxville AL, LLC 24-10579
Kewanee, LLC 24-10580
CYE Girard HCO, LLC 24-10581
McLeansboro HCO, LLC 24-10582
Petersen Management Company, LLC 24-10583
SABL, LLC 24-10584
Judge: Hon. Thomas M Horan
Debtors' Counsel: Andrew L. Magaziner, Esq.
Shella Borovinskaya, Esq.
Carol E. Cox, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: amagaziner@ycst.com
sborovinskaya@ycst.com
ccox@ycst.com
- and -
Daniel J. McGuire, Esq.
Gregory M. Gartland, Esq.
WINSTON & STRAWN LLP
35 W. Wacker Drive
Chicago, IL 60601
Tel: (713) 651-2600
Fax: (312) 558-5700
Tel: (312) 558-5600
Email: dmcguire@winston.com
Email: ggartland@winston.com
- and -
Carrie V. Hardman, Esq.
200 Park Avenue
New York, New York 10166
Tel: (212) 294-6700
Fax: (212) 294-4700
Email: chardman@winston.com
Estimated Assets
(on a consolidated basis): $100 million to $500 million
Estimated Liabilities
(on a consolidated basis): $100 million to $500 million
The petitions were signed by David R. Campbell as authorized
signatory.
Full-text copies of two of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/FTYWA2Y/Petersen_26_LLC__debke-24-10473__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/HYGW35Y/SC_Healthcare_Holding_LLC__debke-24-10443__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. RehabCare (acquired by Trade $11,878,868
Select Rehabilitation LLC)
2600 Compass Road
Glenview, IL 60026
Anna Gardina Wolfe
Tel: 847-441-5593
Email: awolfe@selectrehab.com
2. Martin Bros Trade $8,217,994
406 Viking Road
Cedar Falls, IA 50613
Kristina M. Stanger
Nyemaster Goode P.C.
Phone: 515-283-8009
Email: kmstanger@nyemaster.com
3. Select Rehabilitation LLC Trade $6,414,411
2600 Compass Road
Glenview, IL 60026
Anna Gardina Wolfe
Phone: 847-441-5593
Email: awolfe@selectrehab.com
4. Omnicare Trade $2,342,986
Department 781668
PO Box 78000
Detroit, MI 48278-1668
Geoffrey S. Goodman
Foley & Lardner LLP
Phone: 312-832-4514
Email: ggoodman@foley.com
5. McKesson Medical-Surgical Trade $1,782,282
9954 Mayland Drive Suite 4000
Richmond, VA 23233
Anna Watkins
Phone: 800-453-5180 ext. 56817
Email: Anna.Watkins@McKesson.com
6. Constellation NewEnergy Utility $1,766,355
Gas Division LLC
PO Box 5473
Carol Stream, IL 60197-5473
Karen Green
Phone: 667-313-5472
Email: Karen.Green@constellation.com
7. Onestaff Medical LLC Trade $1,141,002
10802 Farnam Drive
Omaha, NE 68154
Ben Nelson
Phone: 531-484-2920
Email: bnelson@onestaffmedical.com
8. Lawrence Recruiting Trade $951,877
Specialists Inc.
1120 N. 103rd Plaza, Suite 300
Omaha, NE 68114
Paige Wischmann
Phone: 402-807-5926
Email: pwischmann@lrshealthcare.com
9. PEL/VIP Trade $607,870
9840 Southwest Highway
Oak Lawn, IL 60453
Raymond Kalinsky
Phone: 800-779-4231
Email: rayjjr@pelvip.com
10. Ginoli & Company LTD Trade $547,000
7625 North University, Suite A
Peoria, IL 61614-8303
Michael Remmele, CPA
Phone: 309-671-2350
Email: mremmele@ginolicpa.com
11. SNF Receivable Solutions LLC Trade $522,536
PO Box 216
Thonotosassa, FL 33592
Ann Trimble
Phone: 513-274-9612
Email: atrimble@snfreceivablesolutions.com
12. Medical Solutions LLC Trade $498,863
PO Box 850737
Minneapolis, MN 55485-0737
Chris Wells
Phone: 402-524-4114
Email: Chris.Wells@medicalsolutions.com
13. Favorite Healthcare Staffing Trade $465,489
PO Box 26225
Overland Park, KS 6622
Miranda Dingman
Phone: 913-363-5966
Email: mhoeckelmann@favoritestaffing.com
14. CliftonLarsonAllen LLP Trade $363,791
PO Box 775967
Chicago, IL 60677-5967
Melissa A. Yoder, CPA
Phone: 309-495-8894
Email: Melissa.Yoder@claconnect.com
15. RecoverCare LLC Trade $305,870
dba Joerns LLC
PO Box 936446
Atlanta, GA 31193-6446
Melia Crousore
Phone: 800-826-0270
Email: melia.crousore@joerns.com
16. Nurses PRN Trade $254,626
1101 East South River Street
Appleton, WI 54915
Tim Hansen
Phone: 920-734-7643
17. Newman Manor Inc/ Trade $225,133
C/O Newman Bank
2481 US-36
Newman, IL 61942
Harold N. Adams
Meyer Capel
Phone: 217-352-1800 ext. 112
Email: hadams@meyercapel.com
18. PointClickCare Trade $235,013
Technologies Inc.
PO Box 674802
Detroit, MI 48267-4802
Mary Ann Mirto
Phone: 877-501-1310 Ext. 5516
Email: maryann.mirto@smartlinx.com
19. Datamax Trade $187,774
dba Sumner One
PO Box 5180
St. Louis, MO 63139-0180
Edmund Sumner
Phone: 314-616-4295
Email: edmunds@sumnerone.com
20. Health Advocates Network Trade $155,132
Inc.
dba Horizons Healthcare
1875 NW Corporate
Boulevard, Suite 120
Boca Raton, FL 33431
Monica Liebal
Phone: 309-469-2172
Email: Monica.Liebal@hanstaff.com
21. PIPCO Companies LTD Trade $144,429
1409 West Altorfer Drive
Peoria, IL 61615
Steve Cicciarelli
Phone: 309-692-4060
Email: SteveC@pipco-co.com
22. Sage Intacct Inc. Trade $131,551
Dept 3237
PO Box 123237
Dallas, TX 75312-3237
Irene Aves
Phone: 408-709-4849
Email: irene.aves@sage.com
23. Shiftkey LLC Trade $126,120
PO Box 735913
Dallas, TX 75373
Ryon Stewart
Phone: 469-947-9982
Email: ryon.stewart@shiftkey.com
24. Rentokil Pest Control Trade $119,093
PO Box 14095
Reading, PA 19612
Tyler Shoemaker
Phone: 217-454-2140
Email: tyler.shoemaker@prestox.com
25. Baker Tilly US LLP Professional $106,563
205 N Michigan Ave., 28th Floor
Chicago, IL 60601-5927
Colin J. Walsh
Phone: 312-729-8043
Email: Colin.Walsh@bakertilly.com
26. Alvord, Wynona (Deborah L. Litigation Unknown
Royse as Attorney-In-Fact
for Wynona Alvord)
Taxman, Pollock, Murray,
and Bekkerman
225 W. Wacker Dr., Ste. 1650
Chicago, IL 60606
Colleen Mixan Mikaitis
Phone: 312-321-8414
27. Bill, Judith Litigation Unknown
Parker & Parker
300 NE Perry Ave.
Peoria, IL 61603
Robert Parker
Phone: 309-237-0440
Email: rob@parkerandparkerattorneys.com
28. Borries, James (Jane A Litigation Unknown
Spiker & Jeffrey L. Borries,
Independent Co-Executors
of the Estate of James L.
Borries, Sr., deceased)
Sutterfield Law Offices
208 S. Second St.
Effingham, IL 62401
David Sutterfield
Phone: 217-342-3100
29. Butler, Margaret (Daniel Hall Litigation Unknown
Butler and Kevin Randall
Butler, as Independent Co-
Executors of the Estate of
Ola Margaret Butler,
deceased)
Hopkins & Huebner, PC
Northwest Bank Tower
100 E. Kimberly Road, Suite 400
Davenport, IA 52806-5943
Glenn Ruud
Phone: 563-445-2254
Email: gruudhhlawpc.com
30. Chamberland, Jeanette Litigation Unknown
(Mary Williams, as
Independent Executrix of
the Estate of Jeanette
Chamberland)
Konicek & Dillon, PC
70 W. Madison St., #2600
Chicago, IL 60602
Thomas Dillon
Phone: 630-313-207
31. Denson, Kenneth (Kenneth Litigation Unknown
C. Denson, II, as
Independent Administrator
of the Estate of Kenneth
Clarence Denson, Sr.,
deceased)
Kralovec, Jambois &
Schwartz
60 W Randolph St., 4th
Floor
Chicago, IL 60601
Eva Golabek
Phone: 312-782-2525
Email: egolabek@sj-lawgroup.com
32. Downs, Mildred (Janet Van Litigation Unknown
Gundy, as Independent
Administrator of the Estate
of Mildred M. Downs, deceased)
The Law Offices of Steven J. Malman
505 West University
Avenue, Suite 119
Champaign, IL 6182
Patricia Gifford
Phone: 888-407-2393
Email: pgifford@malmanlaw.com
33. Hartsock, Edith (Kim U. Litigation Unknown
Hartsock, as Independent
Executor of the Estate of
Edith S. Hartsock,
deceased)
The Law Offices of Steven
J. Malman
505 West University
Avenue, Suite 119
Champaign, IL 61820
Patricia Gifford
Phone: 888-407-2393
Email: pgifford@malmanlaw.com
34. Owens, Jimmie (Angela Litigation Unknown
Rich, as Independent
Administrator of the Estate
of Jimmie L. Owens,
Deceased)
Levin & Perconti
325 North LaSalle Street,
Suite 450
Chicago, IL 60654
Susan Novosad
Phone: 773-923-3083
Email: sln@levinperconti.com
35. Qureshi, Mary Ellen (Mary Litigation Unknown
Qureshi as Independent
Administrator for the Estate
of Mary Ellen Qureshi,
deceased)
Kralovec, Jambois &
Schwartz
60 W Randolph St., 4th Floor
Chicago, IL 60601
Jeffrey Li
Phone: 872-250-1069
Email: jli@sj-lawgroup.com
36. Smith, Russel Litigation Unknown
Holder Law Group, LLP
505 W University Ave., #218
Champaign, IL 61820
Elizabeth Holder
Phone: 217-840-2652
Email: betsy@holderlawpllp.com
37. Tipton, Rosie L. (Paul Litigation Unknown
Harrington, as Independent
Administrator of the Estate
of Rosie L. Tipton,
deceased)
Katz Nowinski, PC
1000 36th Ave.
Moline, IL 6126
Aaron Curry
Phone: 309-797-3000
Email: acurry@katzlawfirm.com
38. Wellenreiter, Phyllis Litigation Unknown
(Rhonda Umstattd, as
Independent Adminstrator
for the Estate of Phyllis
Wellenreiter, deceased)
Levin & Perconti
325 North LaSalle Street,
Suite 450
Chicago, IL 60654
Kara Rockey
Phone: 312-376-2014
Email: kmr@levinperconti.com
39. Williams, Ola (Rosie Litigation Unknown
Hendricks, as Independent
Administrator of the Estate
of Ola Williams, Deceased)
Levin & Perconti
325 North LaSalle Street,
Suite 450
Chicago, IL 60654
Lauren Park
Phone: 312-376-2014
Email: lep@levinperconti.com
40. Winters, Joe (John Winters, Litigation Unknown
as Independent
Representative of the Estate
of Joe F. Winters)
Taylor Law Offices, PC
122 E. Washington Ave.
Effingham, IL 62401
Aaron Jones
Phone: 217-342-3925
Email: ajones@taylorlaw.net
SHARKFIN REAL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Sharkfin Real Estate Holdings, LLC
c/o Terri Widdick, Owner
7643 Gate Parkway
Jacksonville, FL 32216
Business Description: Sharkfin Real Estate Holdings, LLC
owns 28 residential properties in Florida
having a total current value of $4.83
million.
Chapter 11 Petition Date: March 21, 2024
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 24-00814
Judge: Hon. Jacob A. Brown
Debtor's Counsel: Bryan K. Mickler, Esq.
LAW OFFICES OF MICKLER & MICKLER, LLP
5452 Arlington Expy.
Jacksonville FL 32211
Phone: (904) 725-0822
E-mail: bkmickler@planlaw.com
Total Assets: $4,858,044
Total Liabilities: $9,340,025
The petition was signed by Terri E. Widdick as manager.
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/HDRIQ4I/Sharkfin_Real_Estate_Holdings__flmbke-24-00814__0001.0.pdf?mcid=tGE4TAMA
SHERLOCK STORAGE: Gets OK to Sell Missoula Property for $2.6MM
--------------------------------------------------------------
Sherlock Storage, LLC got the green light from a U.S. bankruptcy
judge to sell its real property located at 2603 Industry Road,
Missoula, Mont.
Judge Benjamin Hursh of the U.S. Bankruptcy Court for the District
of Montana on March 20 approved the sale of the property to BCF
Investments, LLC for $2.6 million.
The property is being sold "free and clear" of liens and interests,
according to court filings.
After payment of the sale costs, Sherlock will use the net proceeds
from the sale to pay Missoula County Treasurer for property taxes,
K & J Investments, LLC for tax lien, and the Mark Mohorcich
Irrevocable Trust. The balance of the net proceeds will be used to
pay claims pursuant to the company's Chapter 11 plan.
About Sherlock Storage
Sherlock Storage, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Mont. Case No. 22-90150) on Oct.
4, 2022, with $1 million to $10 million in both assets and
liabilities.
Judge Benjamin P. Hursh oversees the case.
Gary S. Deschenes, Esq., at Deschenes & Associates Law Offices and
Cappis Consulting & Tax, LLC serve as the Debtor's legal counsel
and accountant, respectively.
SIMPLIFIED SOFTWARE: Hires Shan Shikarpuri as Accountant
--------------------------------------------------------
Simplified Software Development, L.L.C seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ Shan
Shikarpuri & Associates as accountant.
The firm will assist the Debtor in the preparation of its federal
and state tax returns.
The firm will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Michael Hicks, a member of Shan Shikarpuri & Associates, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael D. Hicks, CPA
Shan Shikarpuri & Associates, PA
2656 West Lake Road
Palm Harbor, FL 34684
Telephone: (727) 786-1800
Facsimile: (727) 786-7030
Email: info@bconsultants.net
About Simplified Software Development, L.L.C
Simplified Software Development, LLC, a company that offers online
dietary management solution in Dunedin, Fla., filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 24-00560) on Feb. 1, 2024, with up to $500,000 in
assets and up to $10 million in liabilities. Stephen Bennett,
managing member, signed the petition.
Judge Catherine Peek McEwen oversees the case.
The Debtor tapped David W. Steen, Esq., at David W. Steen, PA, as
legal counsel and Richard T. Heiden, Esq., as special counsel.
SKYLINK EXPRESS: Liquidity Challenges Cue CCAA Filing
-----------------------------------------------------
The Ontario Superior Court of Justice (Commercial List) entered an
initial order granting Skylink Express Inc. protection under the
Companies' Creditors Arrangement Act ("CCAA"). Pursuant to the
Initial Order, KSV Restructuring Inc. was appointed as monitor
("Monitor").
Pursuant to the Initial Order, there is a stay of proceedings until
March 21, 2024, which may be extended by the Court from
time-to-time. A motion is scheduled to be heard on March 21, 2024
to extend the stay of proceedings to April 26, 2024 ("Comeback
Motion"). A copy of this order, if issued, will be available on
the Monitor's website at
https://www.ksvadvisory.com/experience/case/skylink. The Monitor
also intends to post a notice on its website regarding the
extension immediately following the Comeback Motion.
The Company's Board of Directors determined that filing for CCAA
protection would provide the Company the best opportunity to
address its liquidity challenges and various inefficiencies,
including the opportunity to address certain key contracts to which
the Company is a party. The Company's management believes that the
protection afforded by the CCAA will provide the Companies with the
stability they require to complete their restructuring and return
to long-term profitability.
The Monitor can be reached at:
KSV Restructuring Inc.
220 Bay Street, Suite 1300
Toronto Ontario M5J 2W3
Bobby Kofman
Tel: 416-932-6228
Email: bkofman@ksvadvisory.com
Jordan Wong
Email: jwong@ksvadvisory.com
Counsel for the Monitor:
Cassels Brock & Blackwell LLP
Suite 3200, Bay Adelaide Centre
North Tower
40 Temperance Street
Toronto, ON M5H 0B4
Jane Dietrich
Tel: 416-860-5223
Email: jdietrich@cassels.com
Monique Sassi
Tel: 416-860-6886
Email: msassi@cassels.com
Stephanie Fernandes
Tel: 416-860-6481
Email: sfernandes@cassels.com
Counsel for the Companies:
Norton Rose Fulbright Canada LLP
222 Bay Street, Suite 3000, P.O. Box 53
Toronto, ON M5K 1E7
Jennifer Stam
Tel: 416-202-6707
Email:Jennifer.stam@nortonrosefulbright.com
Eric Reither
Tel: 416-216-4858
Email: eric.reither@nortonrosefulbright.com
Katie Parent
Tel: 416-216-4838
Email: katie.parent@nortonrosefulbright.com
Skylink has operated for over 25 years providing regional air cargo
services throughout North America and, today, is one of Canada's
largest operators, specializing in regional courier feeder
operations and time-sensitive, cost effective, air cargo charters
throughout North America.
SNC LAVALIN: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on SNC-Lavalin Group Inc.
(dba AtkinsRealis) to positive from negative and affirmed its 'BB+'
issuer credit rating and its 'BB+' issue-level rating on its
unsecured notes. The '3' recovery rating is unchanged.
The positive outlook reflects S&P's expectation for AtkinsRealis'
to generate positive organic revenue growth, relatively stable
EBITDA margins, and a significant increase in FOCF generation over
the next couple of years could result in an upgrade.
The positive outlook reflects S&P's expectation for adjusted debt
to EBITDA to gradually decline to about 2x or lower with adjusted
FOCF to debt approaching 20% over the next couple of years.
S&P said, "The outlook revision reflects AtkinsRealis'
stronger-than-anticipated financial performance in 2023 and our
expectation for further organic EBITDA growth and higher FOCF
generation, which will support further deleveraging. The company's
reported financial results as of the end of fiscal year 2023
exceeded our expectations, including its S&P Global
Ratings-adjusted debt to EBITDA of 2.3x, which is about a turn
lower than we had expected at this time last year. This
outperformance was due, in large part, to a lower-than-forecast
level of cash outflows associated with AtkinsRealis' remaining LSTK
projects and a strong 18.3% organic expansion in its services
revenue supported by strong demand in its engineering services and
nuclear segments. AtkinsRealis Services also ended the year with a
record-high backlog of $13.7 billion (up 16.1% from the previous
year), which we believe will support a continued increase in the
company's organic revenue and earnings and further deleveraging. We
now expect AtkinsRealis will generate S&P Global Ratings-adjusted
debt to EBITDA of about 2x over the next couple of years as its S&P
Global Ratings-adjusted FOCF to debt approaches 20%. These stronger
prospective credit measures--supported by the good organic growth
in its services business (particularly in nuclear) and relatively
more-stable earnings and cash flow generation from its LSTK
projects nearing completion--have increased the likelihood that we
will upgrade the company in the next 24 months.
"We anticipate the company will generate stronger FOCF as its
legacy lump sum turnkey (LSTK) projects near an end. In our view,
the few remaining LSTK projects AtkinsRealis is responsible for
(including the Eglington and Trillium projects in Ontario and
Reseau Express Metropolitan in Quebec) are nearing completion. We
also believe the work that remains carries little cash flow risk
and no longer consider these legacy projects to be a material
source of credit risk. As such, we assume the company will generate
positive annual FOCF of just over $200 million in 2024, which we
believe will likely rise to more than $500 million in 2026
supported by a low- to mid-single digit percent increase in its
organic revenue while maintaining relatively stable S&P Global
Ratings-adjusted EBITDA margins of about 10%.
"The rating reflects our expectation for positive organic revenue
growth with relatively stable profitability over the next few
years. In our view, the company's services business is well
positioned to benefit from planned increases in public (government)
infrastructure spending and rising demand for nuclear power. We
believe the transportation (including rail, mass transit, roads,
and airports) and civil infrastructure sectors, which we view as
important targets for public spending, will likely support the
company's long-term growth. We also believe the company's nuclear
business is well positioned to expand while generating
above-average margins, particularly given the company's position in
Canada Deuterium Uranium (CANDU) technology, which has a
significant installed base in Canada, and its expertise with
decommissioning and waste management.
"Furthermore, we believe AtkinsRealis is well positioned to
continue to benefit from the expanding demand for its engineering
and nuclear services across its key regions, including the U.K,
Canada, and U.S. We assume the company increases the organic
revenue from its services business by the mid- to high-single digit
percent area over the next couple of years, which will slow to the
low-single digit percent area thereafter. A significant portion of
the contracted revenue from AtkinsRealis' engineering services
segment is reimbursable, which is a departure from the contracted
revenue related to its legacy LSTK contracts and has previously led
to significant cost overruns. We expect a heightened degree of
stability in AtkinsRealis' profitability based on our view that its
LSTK projects pose less of a risk to its earnings.
"We continue to view AtkinsRealis' 407 ETR investment as a source
of credit protection, though not to the extent that we think it
will lead to a lower level of sustained leverage than we currently
forecast if sold. The company holds a 6.76% stake in the 407 ETR
tolled highway in Ontario, which we view as a non-strategic
financial investment that it could sell to generate significant
proceeds. For instance, in 2019 the company sold 10.01% of this
investment for C$3 billion, with up to an additional $250 million
contingently payable over the subsequent decade. While we do not
assume AtkinsRealis will divest its remaining stake under our
base-case scenario, we believe it provides it with the optionality
to use the proceeds from a potential sale to fund an acquisition
that could strengthen its competitive position or reduce its debt.
That said, based on our estimate that the company's S&P Global
Ratings-adjusted debt to EBITDA will be about 2x over the next
couple of years, we believe it is less likely that management will
use the sale proceeds for material deleveraging.
"The positive outlook primarily reflects our expectation for
AtkinsRealis to generate positive organic revenue growth,
relatively stable EBITDA margins, and a significant increase in
FOCF generation over the next couple of years that could result in
an upgrade. Over the next couple of years, we forecast adjusted
debt to EBITDA to gradually decline to about 2x or lower with
adjusted FOCF to debt approaching 20%, while the company maintains
financial flexibility through its ownership stake in the 407 ETR.
"We could revise our outlook back to stable on AtkinsRealis within
the next 24 months if adjusted debt to EBITDA increases well above
2x or we expect adjusted FOCF to Debt to remain well below 20%.
This could occur if the company's earnings decline, potentially
owing to weaker demand for its services, competitive pressures, or
higher operating costs. We could also revise the outlook to stable
if AtkinsRealis' weighted average debt maturity profile is less
than two years absent a credible near-term plan to extend it or
sufficient liquidity to repay upcoming maturities while maintaining
adequate liquidity.
"We could upgrade AtkinsRealis over the next 24 months if we expect
that over the next few years, the company will maintain adjusted
debt to EBITDA at or below 2x and adjusted FOCF to debt approaching
20%, supported by organic growth at relatively stable EBITDA
margins. In this scenario we would also expect the company to
appropriately manage its debt maturity risk consistent with a
higher rating and to retain its investment in 407ETR. In our view,
the investment provides some credit risk protection, absent which,
an upgrade may require stronger sustained credit measures."
SPI ENERGY: Agrees to Repay $10.5 Million to Streeterville
----------------------------------------------------------
SPI Energy Co., Ltd. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on March 6, 2024, the
Company and Streeterville Capital, LLC (the "Petitioner") entered
into that certain Deed of Settlement, pursuant to which the Company
would repay the total of $10,500,000 to the Petitioner no later
than Dec. 31, 2024 by way of a number of staged payments.
Pursuant to the Settlement Agreement, (i) the Petitioner is
obligated to withdraw a winding up petition; (ii) the parties will
completely release and discharge one another from any and all
further claims; (iii) the Company will take steps to withdraw a
complaint filed in California by the Company and its subsidiaries
against the Petitioner; and (iv) certain related parties to the
Company will agree to and execute full guarantees guaranteeing the
payments. The Settlement Agreement superseded, replaced and
extinguished the Prior Settlement Agreement in its entirety.
On Jan. 17, 2024, the Company received the Petition with a Notice
of Hearing filed by the Petitioner in the Grand Court of the Cayman
Islands. Among other things, the Petition seeks an order for the
winding up of the Company pursuant to Section 92(d) of the Cayman
Islands Companies Act (as revised) on the basis that the Company is
unable to pay its debts. The Petition is also seeking appointment
by the Cayman Court of Graham Robinson and James Parkinson of Crown
Cayman Ltd as joint official liquidators. The Petitioner alleged
that the Petitioner is a creditor of the Company in the total sum
of US$14,979,960.41 and the Company failed to repay four
Convertible Promissory Notes dated April 8, 2022, June 9, 2021,
Sept. 30, 2021 and Nov. 12, 2021, by which the Petitioner loaned
the Company the principal sums of US$2,110,000, US$4,210,000,
US$4,210,000 and US$4,210,0000, respectively, with interest, fees,
charges and late fees payable thereon. The Petition will be
opposed by the Company's management and will be subject to the
Cayman Court's decision which may grant, decline or modify the
Petition as it sees fit. According to the Notice of Hearing, the
hearing of the Petition was scheduled to take place at the Cayman
Court on Feb. 23, 2024. Pursuant to the terms of the Settlement
Agreement, Streeterville shall seek a court order at the hearing of
the Petition in the form agreed to by the parties.
On Feb. 23, 2024, the parties reached a settlement agreement (the
"Prior Settlement Agreement") pursuant to which the Company would
repay the total of $10,100,000 to the Petitioner no later than
April 8, 2024 by way of a number of staged payments. The Prior
Settlement Agreement was superseded, replaced and extinguished in
its entirety by the Settlement Agreement.
"The ultimate resolution of the proceedings may have a material
adverse impact on the Company's business, financial condition,
results of operations or cash flows. Failure to settle the
proceedings or other unfavorable outcomes in the proceedings -
including but not limited to the winding up of the Company or the
appointment of joint official liquidators - could result in
significant damages, additional penalties or other remedies imposed
against the Company. Litigation of this kind could result in
substantial costs and a diversion of the Company management's
attention and resources. It could also result in the Company's
reputation being harmed and the Company's stock price could decline
as a result of allegations made in the course of the proceedings,
regardless of the truthfulness of the allegations," said SPI Energy
in the Report.
About SPI Energy Co.
SPI Energy Co., Ltd. is a global provider of photovoltaic (PV)
solutions for business, residential, government and utility
customers and investors. The Company develops solar PV projects
which are either sold to third party operators or owned and
operated by the Company for selling of electricity to the grid in
multiple countries in Asia, North America and Europe.
SPI Energy reported a net loss of $33.72 million for the year ended
Dec. 31, 2022, compared to a net loss of $44.83 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$231.09 million in total assets, $213.22 million in total
liabilities, and $17.87 million in total equity.
New York, New York-based Marcum Asia CPAs LLP, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 14, 2023, citing that the Company has a
significant working capital deficit, has incurred significant
losses and needs to raise additional funds to sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
The Company suffered a net loss of $5.6 million during the nine
months ended September 30, 2023 from continuing operations. As of
September 30, 2023, there was net working capital deficit of $114.7
million and accumulated deficit of $684.7 million. These factors
raise substantial doubt as to its ability to continue as a going
concern, according to the Company's Quarterly Report for the period
ended Sept. 30, 2023.
STERLING CONSULTING: Seeks to Hire Martillaro Raub as Accountant
----------------------------------------------------------------
Sterling Consulting Corporation, seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Martillaro Raub and Associates, Inc. as Accountant.
The firm will provide these services:
a. prepare tax returns;
b. compile monthly balance sheets and income statements;
c. prepare monthly Debtor in possession reports required by
the U.S. Trustee's Office, including detailed trial balance sheets,
bank account reconciliations, sorted and coded check registers, and
monthly transaction registers;
d. assist in connection with the Chapter 11 Reorganization;
and
e. provide other accounting and tax services as required.
The firm will be paid at these rates:
Tax Partner, Judith A. Martillaro, CPA $375 per hour
Senior Associate, Lauren Rhea, CPA $190 per hour
Associate, Lizette Torrez $145 per hour
Administrative Manager, Tami Allen $150 per hour
Administrative Staff, Lisa Sage $120 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Judith A. Martillaro, a partner at Martillaro Raub and Associates,
Inc., disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Judith A. Martillaro, CPA
Martillaro Raub and Associates, Inc.
4865 Ward Rd Ste 100
Wheat Ridge, CO 800033
Tel: (303) 421-4775
About Sterling Consulting Corporation
Sterling Consulting Corporation filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-20196) on Dec. 11, 2023, with $50,001 to $100,000 in assets and
$100,001 to $500,000 in liabilities.
Craig I. Kelley, Esq., at Kelley Kaplan & Eller, PLLC represents
the Debtor as legal counsel.
STOP SMACKN: Angela Shortall of 3Cubed Named Subchapter V Trustee
-----------------------------------------------------------------
The Acting U.S. Trustee for Region 4 appointed Angela Shortall of
3Cubed Advisory Services, LLC as Subchapter V trustee for Stop
Smackn, LLC.
Ms. Shortall will be paid an hourly fee of $500 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Shortall declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Angela L. Shortall
3Cubed Advisory Services, LLC
111 S. Calvert St., Suite 1400
Baltimore, MD 21202
Phone: 410-783-6385
About Stop Smackn
Stop Smackn, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D.C. Case No. 24-00072) on March 8,
2024, with $0 to $50,000 in assets and $500,001 to $1 million in
liabilities.
Richard G. Hall, Esq., represents the Debtor as legal counsel.
SUNLAND MEDICAL: Unsecureds to Recover 5% to 17% in Plan
--------------------------------------------------------
Sunland Medical Foundation and 4750 GHW Bush Land Holdings LLC
submitted a Disclosure Statement for Second Amended Chapter 11 Plan
of Liquidation dated March 14, 2024.
The Plan is a plan of liquidation. In general, a chapter 11 plan of
liquidation (i) divides claims and equity interests into separate
classes, (ii) specifies the property that each class is to receive
under the Plan, and (iii) contains other provisions necessary to
implement the Plan.
Generally, the Plan establishes a mechanism by which assets of the
Estates will be distributed to Holders of Claims and Interests, in
the order set forth in the Plan.
Class 11 consists of General Unsecured Claims. The allowed
unsecured claims total $2,800,000 to $4,000,000. This Class will
receive a distribution of 5% to 17% of their allowed claims. This
Class is impaired. In full and final satisfaction, settlement, and
release of any and all General Unsecured Claims:
* Each Holder of an Allowed General Unsecured Claim in Class
11 who (i) votes to accept this Plan, or (ii) does not vote, shall
receive (1) its Pro Rata share of the GUC Liquidating Trust
Interests representing the right of each Holder of an Allowed GUC
Settlement Claim to receive Distributions from the GUC Liquidating
Trust in accordance with the Plan and the GUC Liquidating Trust
Agreement, and (2) its Pro Rata share of Liquidating Trust
Interests representing the right of each Holder of an Allowed
General Unsecured Claim to receive Distributions from the
Liquidating Trust in accordance with the Plan and pursuant to the
DIP Lenders Settlement.
* Each Holder of an Allowed General Unsecured Claim in Class
11 who votes to reject the Plan will receive its Pro Rata share of
the Liquidating Trust Interests representing the right of each
Holder of an Allowed General Unsecured Claim to receive
Distributions from the Liquidating Trust in accordance with the
Plan and pursuant to the DIP Lenders Settlement. However, no Holder
of an Allowed General Unsecured Claim shall receive a Distribution
from the Liquidating Trust unless and until all Class 3 DIP
Financing Claims, Class 8 Bondholder Claims, and Class 12 Batsu
Claims are paid in full or satisfied.
The Plan shall be funded from the Effective Date Cash and any other
Assets of the Estates, except as otherwise expressly set forth in
the Plan.
On the Effective Date, the Liquidating Trust shall be formed,
established, and become effective pursuant to the Plan and in
accordance with the Liquidating Trust Agreement, to receive the
Liquidating Trust Assets, to liquidate the Liquidating Trust
Assets, including the Litigation Claims, and to enable the
Liquidating Trustee to distribute same to the Liquidating Trust
Beneficiaries in accordance with the terms of the Plan and the
Liquidating Trust Agreement.
The GUC Liquidating Trust will be funded from the General Unsecured
Claim Settlement Payment, which shall be (a) a one-time, lump-sum
payment of $250,000 that will be paid on the Effective Date and
will be carved out from the DIP Lenders' Collateral, and (b) up to
$300,000 of the Indemnification Funds if and when they are returned
to the Debtors' Estates. The amount available for Distributions
under the Plan are those amounts in the GUC Trust after the fees
and expenses of the GUC Liquidating Trust are paid, with such
payment being made from funds held by the GUC Liquidating Trust.
The Bankruptcy Court has scheduled a hearing to consider
Confirmation of the Plan for April 23, 2024, at 2:00 p.m. (the
"Confirmation Hearing"). All Ballots with respect to the Plan must
be completed in full and signed to be counted in the tabulation of
the votes on April 16, 2024.
A full-text copy of the Disclosure Statement dated March 14, 2024
is available at https://urlcurt.com/u?l=SI86FA from
PacerMonitor.com at no charge.
Counsel to the Debtors:
Marcus A. Helt, Esq.
Jack G. Haake, Esq.
Grayson Williams, Esq.
MCDERMOTT WILL & EMERY LLP
2501 North Harwood Street, Suite 1900
Dallas, TX 75201-1664
Tel: (214) 295-8000
Fax: (972) 232-3098
Email: mhelt@mwe.com
jhaake@mwe.com
gwilliams@mwe.com
Natalie Rowles, Esq.
MCDERMOTT WILL & EMERY LLP
One Vanderbilt Avenue
New York, New York 10017-3852
Tel: (212) 547-5400
Fax: (212) 547-5444
Email: nrowles@mwe.com
About Sunland Medical Foundation
Sunland Medical Foundation and 4750 GHW Bush Land Holdings, LLC are
owners of Trinity Regional Hospital Sachse, a full-service hospital
and emergency room near Dallas, Texas. Trinity is a not-for profit,
32-bed, community-focused acute care hospital providing care to the
residents of Sachse, Murphy, Wylie, Rowlett, Garland, Plano,
Richardson, and surrounding communities.
The Debtors sought Chapter 11 protection (Bankr. N.D. Texas Lead
Case No. 23-80000) on Aug. 29, 2023. Both estimated $50 million to
$100 million in assets and $100 million to $500 million in
liabilities as of the bankruptcy filing.
The Hon. Michelle V. Larson is the case judge.
The Debtors tapped McDermott Will & Emery, LLP as legal counsel;
Meadowlark Advisors, LLC as financial advisor; and Eide Bailly LLP
as tax advisor. Stretto Inc. is the claims agent.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Dickinson Wright, PLLC as legal counsel and
Caliber Advisors, LLC as financial advisor.
Susan Goodman is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
SUPPLYONE HOLDINGS: S&P Assigns 'B' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
SupplyOne Holdings Co. Inc. At the same time, S&P assigned its 'B'
issue-level and '3' recovery ratings to SupplyOne Inc.'s term loan
B.
S&P said, "The stable rating outlook reflects our expectation that
SupplyOne will generate low- to mid-single-digit percentage organic
revenue growth in 2024, with modest volume growth as the company
moves past inventory destocking that has affected the broader
packaging industry. The outlook also reflects our view of the
company's ongoing operational initiatives and relative price
stability, supporting EBITDA margins sustained in the low-teens
percentage area. In addition, we expect the company to maintain
leverage below 6.5x on a sustained basis.
"Our rating on SupplyOne reflects the company's limited scale
within the highly fragmented packaging distribution market."
With roughly $1.25 billion in 2023 revenue, Supply One primarily
serves U.S. based small to midsize businesses (SMBs) with custom
corrugated converting capabilities as well as short run,
value-added distribution services across several end markets
including food and beverage, consumer products, industrial, and
medical and pharmaceutical. SupplyOne provides a wide range of
services to a large and diverse number of customers, and their
ability to provide customizable, short-run, and quick turnarounds
on purchase orders to companies that typically lack the scale or
scope to deal directly with manufacturers or large stock
distributors creates a competitive advantage within the SMB
converting and distribution subsegment. The company operates under
a hub-and-spoke model, with distributors based around corrugated
converting facilities, with custom corrugated representing more
than half of its product type sold within its portfolio, creating
higher substrate concentration as compared with other, larger
packaging companies. The markets the company operates in remains
highly fragmented and we expect bolt-on acquisitions to be a key
focus for SupplyOne.
S&P expects customer destocking will reverse and volume improvement
will support mid-to-single-digit percentage organic revenue growth
in 2024.
SupplyOne started to see destocking ease in the second half of
2023, with fourth-quarter 2023 revenue flat from the previous year.
The company expects to see positive volume momentum into 2024,
which should support top-line revenue growth in the year. Further
supporting revenue in 2024 will be two acquisitions it made in the
first quarter. S&P said, "We forecast 2024 S&P Global
Ratings-adjusted EBITDA above $170 million. The company's custom
corrugated and value-added programs have historically supported
EBITDA margins in the low-teens percentage area, which tends to be
higher than that of other larger, stock distributors. We forecast
S&P Global Ratings-adjusted leverage under the new capital
structure of about 5.3x in 2024, falling below 5.0x in 2025. We
expect the company will maintain leverage below 6.5x, and
management indicates it will focus excess cash flow on potential
mergers and acquisitions, though we have not included any in our
base case scenario."
SupplyOne's capital-lite business model and modest debt load should
support positive free operating cash flow (FOCF).
Capital spending has historically been about 1% of revenues, which
S&P expects will continue. SupplyOne has used recent growth capital
spending, including an elevated $24 million in 2023, on cost-saving
initiatives, including facility consolidations, as well as new
converting equipment, which should further support EBITDA margins
in the low-teens percentage area. S&P forecasts positive S&P Global
Ratings-adjusted FOCF of $70 million-$75 million over the next two
years.
S&P said, "The stable outlook reflects our expectation that
SupplyOne will maintain healthy demand for its products in its
custom corrugated and value-added services programs, while
continuing to spur margin growth through operational improvements
and successfully integrating ongoing acquisitions. In addition, we
expect the company will sustain leverage below 6.5x, and generate
FOCF to debt in the low- to mid-single digits.
"We could lower the rating on SupplyOne if a prolonged
deterioration in operating performance results in a constrained
liquidity position; an inability to sustain positive FOCF; and/or
the company pursues aggressive financial policies, prioritizing
debt-funded acquisitions or sponsor dividends, resulting in
sustained leverage over 6.5x."
While unlikely, S&P could raise the rating if:
-- SupplyOne is able to increase its scale and product offerings
such that the business profile is commensurate with S^P's
expectations at a higher rating level; and
-- The company and financial sponsor demonstrate a commitment to
maintaining a conservative financial policy such that leverage is
sustained below 5x for consecutive years, inclusive of acquisitions
and shareholder rewards.
TARGET GROUP: Fruci & Associates II Raises Going Concern Doubt
--------------------------------------------------------------
Target Group Inc. disclosed in a Form 10-K Report filed with the
U.S. Securities and Exchange Commission for the fiscal year ended
December 31, 2023, that Fruci & Associates II, PLLC, the Company's
auditor since 2017, expressed that there is substantial doubt about
the Company's ability to continue as a going concern.
In the Report of Independent Registered Public Accounting Firm
dated March 20, 2024, Spokane, Washington-based Fruci & Associates
II, PLLC said, "The Company has an accumulated deficit, net losses,
and a working capital deficit. These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern."
The Company has earned minimal revenue since inception and has
sustained operating losses during the year ended December 31, 2023.
The Company had a working capital deficit of $11,495,043 and an
accumulated deficit of $31,107,348 as of December 31, 2023. For the
year ended December 31, 2023, the company reported a net loss of
$323,670, compared to a net loss of $4,520,064 for the year ended
December 31, 2022.
As of December 31, 2023, the Company had $8,840,902 in total
assets, $15,813,599 in total liabilities, and $6,972,697 in total
stockholders' deficiency.
The Company's continuation as a going concern is dependent on its
ability to generate sufficient cash flows from operations to meet
its obligations and/or obtaining additional financing from its
members or other sources, as may be required.
In order to maintain its current level of operations, the Company
will require additional working capital from either cash flow from
operations, sale of its equity or issuance of debt. However, the
Company currently has no commitments from any third parties for the
purchase of its equity. If the Company is unable to acquire
additional working capital, it will be required to significantly
reduce its current level of operations.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/5hcbts5n
About Target Group Inc.
Ontario, Canada-based Target Group Inc. is a diversified,
vertically integrated, progressive company with a focus nationally
and internationally. The Company is engaged in the cultivation,
processing and distribution of curated cannabis products for the
medical and adult-use recreational cannabis market in Canada and,
where legalized by state legislation, in the United States.
TERRESTRIAL BREWING: Taps George Roman Auctioneers as Auctioneers
-----------------------------------------------------------------
Terrestrial Brewing Company, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Ohio to employ George
Roman Auctioneers, Ltd. as auctioneers.
The firm will conduct an online only auction of the Debtor's
business and assets.
The firm will be paid at a 3 percent commission and will retain a
buyer's premium of 10 percent.
As disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Ronald L. Roman
George Roman Auctioneers, Ltd.
22 West Main Street
Canfield, OH 44406
Tel: (330) 533-4071
Email: ronaldlroman@gmail.com
About Terrestrial Brewing Company
Terrestrial Brewing Company, LLC owns and operates a brewery, bra
and restaurant in the Battery Park neighborhood of Cleveland,
Ohio.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-14226) on Dec. 1,
2023, with up to $50,000 in assets and $1 million to $10 million in
liabilities. Frederic Schwieg, Esq., at Schwieg Law, serves as
Subchapter V trustee.
Judge Suzana Krstevski Koch oversees the case.
Jonathan P. Blakely, Esq., represents the Debtor as legal counsel.
THORNBEAR HOLDINGS: Hires Weiss Law Group as Bankruptcy Counsel
---------------------------------------------------------------
Thornbear Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Maryland to hire The Weiss Law Group, LLC
as its counsel.
The firm's services include:
a. providing legal advice with respect to the powers, rights,
and duties of the Debtor and Debtor-in-Possession;
b. providing legal advice and consultation related to the
legal and administrative requirements of this case, including
assisting Applicant in complying with the procedural requirements
of the Office of the United States Trustee;
c. taking appropriate actions to protect and preserve the
Estate, including prosecuting actions on the Debtor's behalf,
defending actions commenced against the Debtor, and representing
the Debtor's interests in any negotiations or litigation in which
the Debtor may be involved, including objections to the claims
filed against the Estate, and preparing witnesses and reviewing
documents in this regard;
d. preparing appropriate documents and pleadings, including
but not limited to Schedules, Applications, Motions, Answers,
Orders, Complaints, Reports, or other documents appropriate to the
administration of the Estate;
e. representing the Debtor's interests at the Initial Debtor
Interview, the Meeting of Creditors, any Status Conferences, any
Disclosure Statement Hearing, the Confirmation Hearing, and other
hearings before this Court related to the Debtor;
f. assisting and advising the Debtor in the formulation,
negotiation, and implementation of a Disclosure Statement and/or
Chapter 11 Plan and all documents related thereto;
g. assisting and advising the Debtor with respect to
negotiation, documentation, implementation, consummation, and
closing of transactions, including the sale of assets or the
incurring of debt;
h. assisting and advising the Debtor with respect to the use
of cash collateral, obtaining financing, and negotiating, drafting,
and seeking approval of any documents related thereto;
i. reviewing and analyzing claims filed in this case, and
advising and representing the Debtor in connection with objections
to such claims;
j. assisting and advising the Debtor with respect to executory
contracts and unexpired leases, including assumptions, assignments,
rejections, and renegotiations;
k. coordinating with other professionals employed in the
case;
l. reviewing and analyzing applications, orders, motions, and
other pleadings and documents filed with the Bankruptcy Court and
advising the Debtor thereon; and
m. assisting the Debtor in performing such other services as
may be in the interest of the Debtor and the Estate and performing
all other legal services required by the Debtor.
The firm will be paid $595 per hour for partners, $295 per hour for
associates, and $195 per hour for paralegals.
The firm will be paid a retainer in the amount of $10,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Brett Weiss, a partner at Weiss Law Group, LLC, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Brett Weiss, Esq.
WEISS LAW GROUP, LLC
8843 Greenbelt Road, Suite 299,
Greenbelt, Maryland 20770
Tel: (301) 924-4400
Fax: (240) 627-4186
Email: brett@BankruptcyLawMaryland.com
About Thornbear Holdings, LLC
Thornbear Holdings, LLC is a real estate holding agency.
Thornbear Holdings, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No.
24-12007) on March 8, 2024, listing $2,533,900 in assets. The
petition was signed by Mary Daniels as managing member.
Judge Lori S Simpson represents the Debtor as counsel.
Brett Weiss, Esq. at THE WEISS LAW GROUP represents the Debtor as
counsel.
TOPPOS LLC: Court OKs Sale of Property to Red Fox for $2.4MM
------------------------------------------------------------
A U.S. bankruptcy judge has given the go-signal for Toppos, LLC to
sell its property to Red Fox Funding 2, LLC.
Judge Pamela McAfee of the U.S. Bankruptcy Court for the Eastern
District of North Carolina approved the sale transaction between
Toppos and the buyer, which made a $2.4 million offer for the
property.
The property consists of manufactured homes located in Cape Fear
Village, Green Pines, Pinewood and White Sands in North Carolina.
The property is being sold "free and clear" of liens, encumbrances,
rights and interests, with interests attaching to the sale
proceeds.
Toppos will use the proceeds from the sale to, among other things,
pay Northpoint Commercial Finance, LLC, a lienholder. Northpoint
will receive the sum of $2.037 million at closing.
About Toppos LLC
Toppos, LLC is primarily engaged in acting as lessors of buildings
used as residences or dwellings. The company is based in Lumberton,
N.C.
Toppos filed Chapter 11 petition (Bankr. E.D.N.C. Case No.
23-02889) on Oct. 5, 2023, with $10 million to $50 million in
assets and $50 million to $100 million in liabilities. Neil
Carmichael Bender, II, member-manager, signed the petition.
Judge Pamela W. Mcafee oversees the case.
Blake Y. Boyette, Esq., at Buckmiller, Boyette & Frost, PLLC is the
Debtor's legal counsel.
John C. Bircher, III was appointed as the Chapter 11 trustee in the
Debtor's case. The trustee tapped Davis Hartman Wright, LLP as
legal counsel and Williams Overman Pierce, LLP as accountant.
TRP BRANDS: Hires Kreshmore Group as Real Estate Professional
-------------------------------------------------------------
TRP Brands LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Illinois to employ Kreshmore Group as real
estate professional.
The firm's services include:
a. reviewing and providing advice with respect to the
Debtors' unexpired leases of real property, real estate market
trends and conditions, and ascertaining the values of Debtors'
leasehold interests;
b. negotiating of post-petition lease terms, including rent,
and other issues in connection with the Debtors' ongoing business
operations; and
c. performing all other services for, and providing all other
necessary advice to, the Debtors which may be necessary and proper
in these cases.
The firm will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
David Wabick, a partner at Kreshmore Group, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
David Wabick, Esq.
Kreshmore Group
14216 McCarthy Rd.
Lemont, IL 60439
Tel: (708) 719-4118
About TRP Brands LLC
TRP Brands, LLC and The RoomPlace Furniture & Mattress, LLC filed
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 24-01529) on
Feb. 2, 2024. Valerie Berman-Knight, president, signed the
petitions.
At the time of the filing, TRP Brands reported up to $50,000 in
assets and $50 million to $100 million in liabilities while
RoomPlace reported up to $50,000 in assets and $100 million to $500
million in liabilities.
Judge Deborah L. Thorne oversees the cases.
E. Philip Groben, Esq., at Gensburg Calandriello & Kanter, P.C. is
the Debtors' legal counsel.
The U.S. Trustee for Region 11 appointed an official committee of
unsecured creditors in these Chapter 11 cases. The committee tapped
FisherBroyles, LLP as its legal counsel.
TRUCK & TRAILER: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Truck & Trailer Leasing Avenue LLC
16830 Chicago Ave.
Lansing, IL 60438
Business Description: The Debtor provides trucking and storage
services.
Chapter 11 Petition Date: March 21, 2024
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 24-04137
Judge: Hon. Donald R. Cassling
Debtor's Counsel: Saulius Modestas, Esq.
MODESTAS LAW OFFICES, P.C.
401 S. Frontage Rd., Suite C
Burr Ridge, IL 60527-7115
Tel: 312-251-4460
Fax: 312-277-2586
Email: smodestas@modestaslaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Sergiu Tintiuc as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XNV7MRY/Truck__Trailer_Leasing_Avenue__ilnbke-24-04137__0001.0.pdf?mcid=tGE4TAMA
TRUIST INSURANCE: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned Truist Insurance Holdings, LLC (TIH),
McGriff Insurance Services, LLC (McGriff) and Panther Platform
Midco, L.P. first-time 'B' Long-Term Issuer Default Ratings (IDRs).
The Rating Outlook is Stable. Fitch has also assigned an instrument
rating of 'B+'/ 'RR3' on the first-lien secured debt and
'CCC+'/'RR6' on the second-lien secured debt co-issued by TIH and
McGriff.
TIH's ratings reflect the company's solid market position in
insurance brokerage, stable and recurring business model, solid
EBITDA margins, and exposure to a recession resilient end market.
However, weak balance sheet metrics including high EBITDA leverage
(debt/EBITDA) and low interest coverage, weigh against the ratings.
Fitch rates TIH relative to other insurance brokers and business
services issuers and believes the company is well positioned at the
'B' IDR category.
KEY RATING DRIVERS
Solid Competitive Position: Fitch views TIH's position as the fifth
largest U.S. insurance broker as a credit positive. This positions
it well in a fragmented industry landscape, with meaningful scale
versus many brokers in the U.S., although it is materially smaller
than other global industry leaders. Fitch estimates 2023 revenue of
more than $3.4 billion and EBITDA of nearly $1.0 billion.
The business includes the largest U.S. insurance wholesaler (and
third largest P&C wholesale brokerage ranked by premium volume
(CRC)), one of the market leading MGA / delegated authority
underwriting platforms (AmRisc & Starwind), a top retail insurance
broker (McGriff), a leading life insurance wholesaler (Crump), a
leading independent commercial title agent in the U.S. (Kensington
Vanguard), and a benefits wholesaler (BenefitMall).
Organic Growth: Fitch views TIH's historic growth profile as a
positive, and expects the company will continue to benefit from
solid pricing and overall economic trends in the near term. Organic
revenue growth historically averaged 8% and 5% over the past five
and 10 years, respectively. TIH's business is characterized by high
client retention and organic growth that has proven resilient
historically. TIH continues to expand its presence in many end
markets and regions through producer recruitment.
Diversified Revenue Profile: TIH's ratings benefit from some
diversification across its business, although the company is
heavily concentrated in P&C brokerage, which comprises 80% of
revenue. TIH provides a full range of brokerage, consulting and
advisory services, including benefits, property and casualty, life
and title insurance and has organized its business into three
reportable segments: Wholesale (45% of FY 2023 revenues), Retail
(35%) and Specialty (15%). Nearly all of its business is derived in
the U.S. but it has diversified its regional exposure via M&A and
producer recruitment over the past few years, with some
concentration in the southeastern U.S. TIH has limited
concentration in terms of carriers and clients.
High Leverage; Weak Coverage: Fitch views the company's leverage
and coverage metrics as limiting factors regarding the IDR. TIH is
being spun off from a U.S. bank (Truist Financial Corp., NYSE: TFC,
A/Stable) and will be acquired by private equity firms Stone Point
Capital and CD&R, among others. Following this transaction. TIH's
EBITDA leverage is expected to remain elevated over the next few
years. Fitch calculates pro forma 2024 EBITDA leverage, or
debt/EBITDA, will be in the mid-high-7.0x range. Fitch forecasts
this will decline to the high-6.0x over the ratings horizon. This
leverage is high for the 'B' IDR and Fitch would look for
improvement in this metric over time.
Fitch also considers interest coverage as a key metric in the
ratings evaluation. The agency forecasts TIH to be in the mid- to
high-1.0x range with this metric in the next few years, sufficient
for the IDR. However, this is low in the near-term and close to
Fitch's negative sensitivity threshold for the 'B' IDR. Fitch would
look for improvement in interest coverage over time.
Stable Industry: Fitch believes the company operates a fairly
predictable business model in an industry that performed well
historically across the economic cycle. The insurance brokerage
industry was stable historically even during periods of economic
shock, such as the global financial crisis in 2008-2009 and the
pandemic in 2020.
Some of the largest insurance brokers experienced only low- to
mid-single-digit organic declines in the 2008-2010 timeframe. Fitch
believes the industry stability stems from insurance and benefits
services being fairly essential across the cycle. In addition, the
brokerage business model inherently has an adjustable cost
structure.
Healthy Cash Flows: Fitch expects the company to generate free cash
flow margins as a percentage of revenue in the mid-single digit
range in the coming years. Fitch views TIH's underlying cash
generation profile as reasonably healthy. Fitch is unclear on
management's financial policy, but believes M&A could be a primary
use of cash flow over the ratings horizon. However, management will
likely focus investments internally in 2024 as it becomes a
stand-alone company.
DERIVATION SUMMARY
TIH competes in a fragmented landscape of insurance brokerage and
benefits services providers that includes other local/regional
companies, national agents and large multi-national brokers. Fitch
rates numerous companies in the insurance brokerage and business
services industries that are comparable in terms of scale,
operating profile and business model.
TIH maintains its position as the 5th largest U.S. insurance
broker. However, it remains relatively small and has meaningfully
higher EBITDA leverage versus larger global brokers such as Marsh &
McLennan Companies, Inc. (A-/Stable), Aon plc (BBB+/Negative),
Willis Towers Watson plc (BBB/Positive), and Arthur J. Gallagher &
Co. (BBB+/Stable), among others. Fitch also rates Navacord Corp.
(B/Stable) and NFP Holdings (B/Positive Watch), which are smaller
in size but similar to TIH as they are highly levered.
The 'B' rating reflects TIH 's strong historic growth profile,
solid profitability, and diversification among its customers and
business segments. This is offset by a high EBITDA leverage, and
relatively weak interest coverage.
KEY ASSUMPTIONS
- Organic revenue growth of 6%-6.5% a year over the ratings horizon
plus incremental revenue from new M&A. Fitch calculated EBITDA
margins estimated in the 28%-30% range.
- Cash taxes and working capital remain a modest use of cash flow
in the next few years.
- TIH may continue to execute on its growth-driven M&A strategy in
the brokerage space from 2025 onwards, with cash outflows related
to purchase and integration costs from M&A.
- SOFR to decline to the high-4% range over the ratings horizon.
RECOVERY ANALYSIS
Key Recovery Rating Assumptions
- For entities rated 'B+' and below, where default is closer and
recovery prospects are more meaningful to investors, Fitch
undertakes a tailored, or bespoke, analysis of recovery upon
default for each issuance. The resulting debt instrument rating
includes a Recovery Rating or published 'RR' (graded from RR1 to
RR6), and is notched from the IDR accordingly. In this analysis,
there are three steps: (i) estimating the distressed enterprise
value (EV); (ii) estimating creditor claims; and (iii) distribution
of value.
Fitch assumes TIH would emerge from a default scenario under the
going concern approach liquidation. Key assumptions used in the
recovery analysis are as follows:
(i) Going concern EBITDA
- Fitch estimates a going concern EBITDA of approximately $800
million, or below the company's current run-rate EBITDA. This lower
level of EBITDA considers competitive and/or company-specific
pressures that hurt earnings in the future while also considering
that its M&A strategy could lead to a much higher EBITDA base
before any risk of bankruptcy.
(ii) EV Multiple
- Fitch assumes a 6.5x multiple, which is validated by historic
public company trading multiples, industry M&A and past
reorganization multiples Fitch has seen across various industries.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- EBITDA leverage, defined as debt/EBITDA, is sustained below
6.5x;
- (CFO-Capex)/Debt sustained above 5%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Interest coverage, defined as EBITDA/interest paid, sustained
below 1.5x;
- (CFO-Capex)/Debt sustained near 1% or below;
- Deterioration in operating fundamentals that lead to weaker
revenue trends, margin underperformance, and compression of cash
flows.
LIQUIDITY AND DEBT STRUCTURE
TIH's liquidity is adequate and should enable it to invest for
growth while providing sufficient downside protection for the
rating category. Proforma for the pending transaction, its cash
balance is expected to be near $150 million. Liquidity will be also
supported by stable and positive cash generation in the business
and an unutilized $1.175 billion first lien senior secured
revolver. Fitch projects FCF to remain positive over the forecast,
although one-time expenses in 2024 and higher interest expense will
constrain cash flow generation.
TIH's capital structure is expected to consist of first lien,
senior secured and second lien term loans. Its first lien senior
secured debt includes: (i) a $1.175 billion revolver; (ii) a $4
billion term loan maturing in 2031; and (iii) $2.1 billion of
senior secured notes. Additionally, the company will have $1.9
billion of second lien term loans. The first lien term loan is
expected to amortize at 1% per annum.
ISSUER PROFILE
TIH is the 5th largest insurance broker in the United States
operating across P&C (80% of 2023 revenues), Benefits (12%), Life
(5%) and Title (3%) insurance segments.
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
----------- ------ --------
Panther Platform
Midco, L.P. LT IDR B New Rating
Truist Insurance
Holdings, LLC LT IDR B New Rating
senior secured LT B+ New Rating RR3
Senior Secured
2nd Lien LT CCC+ New Rating RR6
McGriff Insurance
Services, LLC LT IDR B New Rating
senior secured LT B+ New Rating RR3
Senior Secured
2nd Lien LT CCC+ New Rating RR6
TWINLAB CONSOLIDATED: Tanner LLC Raises Going Concern Doubt
-----------------------------------------------------------
Twinlab Consolidated Holdings, Inc. disclosed in a Form 10-K Report
filed with the U.S. Securities and Exchange Commission for the
fiscal year ended December 31, 2023, that Tanner LLC, the Company's
auditor since 2014, expressed that there is substantial doubt about
the Company's ability to continue as a going concern.
In the Report of Independent Registered Public Accounting Firm
dated March 19, 2024, Salt Lake City, Utah-based Tanner LLC said,
"The Company has negative working capital, has incurred operating
losses, and has a large accumulated deficit. These conditions,
among others, raise substantial doubt about the Company's ability
to continue as a going concern."
In most periods since its formation, the Company has generated
losses from operations. At December 31, 2023, the Company had an
accumulated deficit of $370.1 million. Historical losses are
primarily attributable to lower than planned sales resulting from
low fill rates on demand due to limitations of the Company's
working capital, delayed product introductions and postponed
marketing activities, merger-related and other restructuring costs,
interest and refinancing charges associated with its debt
refinancing, and impairment of goodwill and intangible assets.
Losses have been funded primarily through issuance of common stock
and third-party or related party debt.
Because of its history of operating losses and significant interest
expense on its debt, the Company has a working capital deficiency
of $140.1 million at December 31, 2023. The Company also has $93.6
million of debt, presented in current liabilities.
For the year ended December 31, 2023, the Company reported a net
loss of $13.7 million, compared to a net loss of $8.2 million for
the year ended December 31, 2022.
As of December 31, 2023, the Company had $9 million in total
assets, $148.02 million in total liabilities, and $139.03 million
in total stockholders' deficit.
"These continuing conditions, among others, raise substantial doubt
about our ability to continue as a going concern," Twinlab said.
Management has addressed operating issues through the following
actions: focusing on growing the core business and brands;
continuing emphasis on major customers and key products; reducing
manufacturing and operating costs and continuing to negotiate lower
prices from major suppliers. The Company believes that it will need
additional capital to execute our business plan. There can be no
assurance that sources of funding will be available when needed on
acceptable terms or at all.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/4jkfb9kh
About Twinlab Consolidated Holdings
Boca Raton, FL-based Twinlab Consolidated Holdings, Inc. is an
integrated formulator, marketer, distributor and retailer of
branded nutritional supplements and other natural products sold to
and through domestic health and natural food stores, mass market
retailers, specialty retailers, on-line retailers and websites.
Internationally, the Company markets and distributes branded
nutritional supplements and other natural products to and through
health and natural product distributors and retailers.
VERMILLION ENERGY: Fitch Affirms BB- LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Vermilion Energy Inc.'s Long-Term Issuer
Default Rating (IDR) at 'BB-' and senior unsecured notes at
'BB-'/'RR4'. The Rating Outlook is Stable. Vermilion Energy Inc.'s
ratings reflect its diversified asset base and exposure to
higher-priced European oil and gas indices compared with North
American peers. These factors result in strong netbacks and EBITDA
leverage below 1.0x.
The ratings are balanced by the company's smaller production size
within its rating category, limited scale in fields outside of
North America, and uncertainties associated with the European
regulatory environment.
KEY RATING DRIVERS
Strong Netbacks Relative to Peers: Vermilion benefits from price
exposures outside North America, with guidance indicating that 38%
of its total 2024 production will come from European gas and
Brent-linked oil. The advantage of this price exposure is reflected
in its projected funds from operations (FFO), with 58% sourced
internationally, despite 62% of production being located in the
U.S. and Canada.
In 2023, Vermilion's unhedged half-cycle cash netbacks were
estimated at USD 25.70. While increasingly, gas-weighted production
has led to a moderate decline in this advantage relative to peers,
the company's exposure to price-advantaged oil and gas continues to
support robust cash netbacks compared to issuers with a higher
liquids weighting through the cycle.
Fitch anticipates that Vermilion's strong FCF relative to its
production size should enable the company to maintain its net debt
target below CAD 1 billion. Fitch projects Vermilion's EBITDA
leverage to be approximately 0.8x at midcycle prices.
Diversified Asset Base: Vermilion's asset base is notable among
peers given its high level of geographic diversification relative
to its size. Its asset base is focused on North America, Europe and
Australia, with production at YE23 split among Canada (~60%),
France (~9%), Germany (~6%), the Netherlands (~6%), the U.S. (~7%),
Australia (~2%), Ireland (~10%) and less than 1% from Central and
Eastern Europe.
Vermilion's geographically diverse investments are driven by its
approach to selecting the highest return projects, regardless of
location, which often leads to investments in shallow, lower-cost
conventional resource plays or lower-cost fracking plays.
Challenges to Scaling Up: The broad diversity of Vermilion's
portfolio limits its ability to organically grow in most
international plays. The growth outlook for its international
portfolio varies widely, with some regions in decline and others
offering promising geology but facing regulatory hurdles.
Vermilion's production level of approximately 84,000 boepd is at
the lower end of the general 'BB' rating category, where production
usually ranges from 75,000 boepd to 175,000 boepd.
Regulatory, Windfall Tax Uncertainties: The temporary European
Union windfall tax targeting oil and gas companies—a reflection
of a less supportive environment for Vermilion's operations in
Europe compared to North America and elsewhere—adds uncertainty
to the company's credit profile. The company observed windfall tax
expense of $223 million ($7.18/boe) and ~$78 million ($2.60/boe
and) in 2022 and 2023, respectively. Fitch does not foresee
material windfall taxes affecting the company during the forecast
period, though changes in hydrocarbon prices could change this
forecast.
DERIVATION SUMMARY
Vermilion's credit profile is mixed compared to counterparts in the
high-yield North American oil and gas sector. The company's
production scale is notably smaller than similar 'BB-' rated
entities like SM Energy Company (BB-/Stable) and MEG Energy Corp.
(BB-/Stable), as well as 'B+' rated Baytex Energy Corp.
(B+/Positive) and Strathcona Resources Ltd (B+/Stable).
Nevertheless, Vermilion counterbalances this by leveraging its
considerable geographical diversification and by benefiting from
internationally favorable pricing compared to its North
American-focused peers.
The diversification strategy, while sometimes advantageous, can
present challenges, such as navigating stricter regulatory
environments in Europe and the complexities associated with scaling
operations. Vermilion's historical cash netbacks have been
comparatively strong against its North American peer group, even
outperforming issuers that benefit from scaling efficiencies.
A greater focus on gas in 2023 and subdued natural gas prices have
somewhat diminished Vermilion's competitive edge. However, exposure
to Brent and TTF pricing continues to position Vermilion's average
production-weighted netbacks at the forefront of its peer group
through-the-cycle.
Vermilion's anticipated EBITDA and FCF are projected to surpass
those of North American peers when adjusted for the company's size,
sustained through the cycle. Fitch forecasted 2025 EBITDA leverage
at 0.5x and an FCF margin of 13.1% are expected to lead the peer
group averages, ranging from 0.9x to 1.3x for leverage, and 2.2% to
10.9% for FCF margins.
KEY ASSUMPTIONS
- West Texas Intermediate oil price of USD75 per barrel in 2024,
USD65 in 2025 and USD60 in 2026 and 2027 and USD57 in the long
term;
- Brent oil price of USD80 per barrel in 2024, USD70 in 2025 and
USD65 in 2026 and 2027 and USD60 in the long term;
- Henry Hub natural gas USD2.50 per thousand cubic feet (mcf) in
2024, USD3.00 in 2025, USD3.00 in 2026, USD2.75 in 2027 and the
long term;
- Title Transfer Facility natural gas USD10.00 per thousand cubic
feet (mcf) in 2024, USD10.00 in 2025, USD8.00 in 2026, USD7.00 in
2027 and USD5.00 in the long term;
- Interest rate assumptions aligned with Chatham Financial Fed
median through the forecast;
- No windfall tax impact through forecast;
- No additional hedges other than those listed as of January 2024
report.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Production approaching 150,000 boepd;
- Increased scale in existing positions, with greater drilling
inventory, a higher reserve life and the ability to develop new
inventory while maintaining high margins;
- Mid-cycle EBITDA Leverage below 2.0x;
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Loss of operational momentum, with organic production trending
below 70,000 boepd or materially increasing production costs;
- Impaired financial flexibility;
- Mid-cycle EBITDA Leverage above 3.0x;
- Deviation from a financial policy that emphasizes debt reduction
before Vermilion's stated targets are met.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity: At YE23, Vermilion's $1.6 billion revolver is
undrawn and the company holds cash on hand of ~$141 million. Fitch
anticipates Vermilion to generate positive FCF through the forecast
period. The company maintains a net debt target of $1 billion which
it currently meets.
Maturity Schedule: Vermilion's USD300 million unsecured notes
mature in 2025. Management has indicated comfortability with the
notes becoming current in March 2024. Fitch believes Vermilion will
generate adequate FCF and/or have the capital market access needed
to address the maturity in a timely fashion. The company's revolver
matures in 2026 and its USD400 million unsecured notes mature in
2030.
ISSUER PROFILE
Vermilion Energy Inc. is a small-to-medium sized diversified
international E&P company with producing properties primarily in
North America, Europe, and Australia.
ESG CONSIDERATIONS
Vermilion has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to its small to medium-sized production profile,
offshore production and operations with a more stringent
climate-related regulatory framework and increased social
resistance, including the approval of a temporary windfall tax
measure aimed at EU companies with activities in the hydrocarbon
sector. This has a negative impact on the credit profile and is
relevant to the ratings in conjunction with other factors
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Vermilion Energy Inc. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
WAVEDANCER INC: CohnReznick Raises Going Concern Doubt
------------------------------------------------------
WaveDancer, Inc. disclosed in a Form 10-K Report filed with the
U.S. Securities and Exchange Commission for the fiscal year ended
December 31, 2023, that CohnReznick LLP, the Company's auditor
since 2012, expressed that there is substantial doubt about the
Company's ability to continue as a going concern.
In the Report of Independent Registered Public Accounting Firm
dated March 20, 2024, Tysons, Virginia-based CohnReznick LLP said,
"The entity has suffered recurring losses from operations that
raise substantial doubt about its ability to continue as a going
concern."
For the year ended December 31, 2023, the Company reported a net
loss of $2,034,435, compared to a net loss of $17,753,838 for the
year ended December 31, 2022.
During the year ended December 31, 2023, the Company used cash from
operations, excluding discontinued operations, of $2,121,462 and as
of December 31, 2023, had a net working capital deficit of $31,098,
including cash and cash equivalents of $681,995. As of December 31,
2023, the Company had no borrowing availability under its bank line
of credit. On November 15, 2023, the Company and its wholly owned
subsidiary, FFN, Inc., entered into an Agreement and Plan of Merger
with Firefly Neuroscience, Inc. FFN was incorporated solely for the
purpose of entering into the Merger Agreement. In accordance with
the Merger Agreement, FFN will merge into Firefly which will become
a wholly owned subsidiary of WaveDancer, WaveDancer will change its
name to Firefly Neuroscience, Inc., and the Firefly shares will be
converted into WaveDancer shares. The board of directors of Firefly
after the Merger will consist of five members, one of whom will be
designated by WaveDancer. As a condition of the Merger Agreement,
on November 15, 2023, the Company also entered into a Stock
Purchase Agreement with Wavetop Solutions, Inc., a company owned
and controlled by WaveDancer's chairman and chief executive
officer, to sell all of the outstanding shares of Tellenger, Inc.
to Wavetop for $1.5 million of cash. Tellenger is the entity
through which the Company operates its day-to-day business. On
March 14, 2024, the Company convened a special meeting of its
shareholders and received the shareholder approvals required to
close the Merger. Firefly has obtained the necessary consent from
its shareholders for the Merger.
The Merger Agreement requires that WaveDancer has sufficient cash
on hand on the closing date to pay all its outstanding liabilities
on that date including transactions fees and expenses as well as
severance costs for employees that will be terminated as a result
of the merger. The Company will have to raise approximately $0.8 to
$1.1 million to satisfy its obligations on the closing date. In
addition, Firefly has conditions it must satisfy in order for the
Merger to close, including approval by Nasdaq Capital Markets LLC
of its initial listing application. In order to have its listing
application approved by Nasdaq, Firefly will need to raise
approximately $6 million of equity as of the closing of the Merger.
There is no assurance that the Company will successfully raise the
capital it needs to close the Merger with Firefly, nor that all the
other conditions precedent to the Merger closing will be satisfied,
which creates substantial doubt about the Company's ability to
continue as a going concern for at least one year from the date
that the accompanying consolidated financial statements are issued.
If the Merger does not close, the Company will need to raise
additional capital and reduce its operating expenses to meet its
ongoing cash flow requirements and there is no assurance that such
efforts would be successful.
As of December 31, 2023, the Company had $4,519,835 in total
assets, $2,251,145 in total liabilities, and $2,268,690 in total
stockholders' equity.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/32czz7s6
About WaveDancer
WaveDancer, based in Fairfax, VA, has been servicing federal and
commercial customers since 1979. WaveDancer is in the business of
developing and maintaining information technology systems,
modernizing client information systems, and performing other
IT-related professional services to government and commercial
organization.
WOODLAND PLACE: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Woodland Place Apartments, LLC, according to court
dockets.
About Woodland Place Apartments
Woodland Place Apartments, LLC is a single asset real estate debtor
(as defined in 11 U.S.C. Section 101(51B)). The company is based in
Pensacola, Fla.
Woodland Place Apartments filed Chapter 11 petition (Bankr. N.D.
Fla. Case No. 24-30073) on February 1, 2024, with $1 million to $10
million in both assets and liabilities. Judge Jerry C. Oldshue, Jr.
oversees the case.
Edward J. Peterson, III, Esq. at Johnson Pope Bokor Ruppel & Burns,
LLP represents the Debtor as legal counsel.
YERUSHA LLC: Hires Bach Law Offices Inc. as Legal Counsel
---------------------------------------------------------
Yerusha LLC seeks approval from the U.S. Bankruptcy Court for the
Northern District of Illinois to employ Bach Law Offices, Inc. as
counsel.
The firm will represent the Debtor in matters concerning
negotiation with creditors, prepare plan and disclosures statement,
examine and resolve claims filed against the estate, prepare and
prosecute of adversary matters, and otherwise to represent the
Debtor in matters before the Bankruptcy Court.
The firm will be paid at these rates:
Paul M. Bach $425 per hour
Penelope N. Bach $425 per hour
The Debtor paid the firm an initial retainer of $5,000, plus filing
fee.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Paul M. Bach, Esq., a partner at Bach Law Offices, Inc., disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Paul Matthew Bach, Esq.
Bach Law Offices
555 Skokie Blvd Suite 250
Northbrook, IL, 60062
Tel: (847) 564-0808
About Yerusha LLC
Yerusha, LLC filed Chapter 11 petition (Bankr. N.D. Ill. Case No.
24-01640) on February 6, 2024, with $500,001 to $1 million in both
assets and liabilities.
Judge Deborah L. Thorne oversees the case.
Paul M. Bach, Esq., at Bach Law Offices represents the Debtor as
bankruptcy counsel.
ZION OIL: RBSM LLP Raises Going Concern Doubt
---------------------------------------------
Zion Oil & Gas, Inc. disclosed in a Form 10-K Report filed with the
U.S. Securities and Exchange Commission for the fiscal year ended
December 31, 2023, that RBSM LLP, the Company's auditor since 2018,
expressed that there is substantial doubt about the Company's
ability to continue as a going concern.
In the Report of Independent Registered Public Accounting Firm
dated March 20, 2024, Las Vegas, NV-based RBSM LLP said, "The
Company has suffered recurring losses from operations and had an
accumulated deficit that raises substantial doubt about its ability
to continue as a going concern."
The Company incurs cash outflows from operations, and all
exploration activities and overhead expenses to date have been
financed by way of equity or debt financing. The recoverability of
the costs incurred to date is uncertain and dependent upon
achieving significant commercial production of hydrocarbons.
The Company's ability to continue as a going concern is dependent
upon obtaining the necessary financing to undertake further
exploration and development activities and ultimately generating
profitable operations from its oil and natural gas interests in the
future. The Company's current operations are dependent upon the
adequacy of its current assets to meet its current expenditure
requirements and the accuracy of management's estimates of those
requirements. Should those estimates be materially incorrect, the
Company's ability to continue as a going concern may be in doubt.
During the year ended December 31, 2023, the Company incurred a net
loss of approximately $8 million and had an accumulated deficit of
approximately $286.6 million. These factors raise substantial doubt
about the Company's ability to continue as a going concern within
the next 12 months.
To carry out planned operations, the Company must raise additional
funds through additional equity and/or debt issuances or through
profitable operations. There can be no assurance that this capital
or positive operational income will be available to the Company,
and if it is not, the Company may be forced to curtail or cease
exploration and development activities.
As of December 31, 2023, the Company had $25.2 million in total
assets, $3.2 million in total liabilities, $22 million in total
stockholders' equity.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/4ef55auj
About Zion Oil & Gas
Dallas, TX-based Zion Oil & Gas, a US public company traded on the
OTC Market, explores for oil and gas onshore in Israel.
[*] James H. M. Sprayregen to Join Hilco Global as Vice Chairman
----------------------------------------------------------------
James H. M. Sprayregen, one of the most well-known and highly
regarded dealmakers and thought leaders in the restructuring,
corporate reorganization, and the M&A community, will join Hilco
Global as a Vice Chairman of the privately held global financial
services holding company.
As Vice Chairman, Mr. Sprayregen will serve as a partner and key
strategic advisor to Hilco Global CEO and founder, Jeffrey
Hecktman, working alongside another recent hire, David Kurtz –
Vice Chairman and Chief Strategic Officer who joined the firm from
Lazard in the fall of 2023. Both leaders, along with John Chen –
Vice Chairman and COO, will have oversight for the firm's rapidly
expanding financial services platform within the Office of the
Chairman, a new and collaborative executive leadership team at the
Hilco Global holding company and reporting to Jeffrey B. Hecktman
– Executive Chairman, CEO and Founder.
Jeffrey B. Hecktman, CEO of Hilco Global explained Sprayregen' s
role at the company, "Jamie joins our global executive team as a
key advisor and strategic partner alongside David Kurtz and John
Chen, to further align our organization to meet the aggressive
commercial growth plans we have established for our company." Mr.
Hecktman continued, " Not only does Jamie bring to Hilco Global his
considerable credentials and outstanding reputation for decades as
one of the top restructuring attorneys and dealmakers in the United
States, but he also fits in well with Hilco's indefatigable deal
culture and passion to deliver innovative transaction solutions to
all our clients."
Mr. Sprayregen will have responsibility for continuing to help fuel
the impressive growth of the firm's broad solutions platform by
leveraging his deep restructuring and advisory experience in
combination with Hilco Global' s expanded merchant banking
capabilities including its broad range of advisory services coupled
with innovative capital solutions for private credit, special
situations, and principal investing.
Mr. Sprayregen said, "Having known Hilco Global my entire
professional life, I've always been impressed by the breadth and
depth of their solutions focused platform and their deep
relationships with the top executives at third party advisors
(including lawyers, lenders, private credit, investment banks,
commercial banks, and investors. These relationships provide an
incredible foundation for me to contribute and to play a key role
in taking Hilco to the next level of growth and expansion."
Mr. Sprayregen continued, "Jeff Hecktman and his partners at Hilco
Global have created a modern, solutions focused firm that offers
the most comprehensive range of financial services to deliver
restructuring solutions and first-class advisory expertise in
combination with capital solutions and principal investing. This is
a powerful combination that results in a modern merchant banking
approach that provides customized solutions to resolve complex and
stressed situations and enhance long-term enterprise business
value."
Mr. Sprayregen joins Hilco Global from Kirkland & Ellis, where he
was the founder of the Kirkland Restructuring Group. He built the
group from its inception in 1990 to become the premier
restructuring practice in the world. He served on Kirkland's
worldwide management committee from 2003–2006 and 2009–2019. He
was co-head of the Restructuring Group at Goldman Sachs from
2006–2008 and returned to Kirkland at the end of 2008. Some of
his clients include Energy Future Holdings, Caesars, Avaya, Toys
"R" Us, iHeartMedia, Seadrill, General Growth, Japan Airlines,
United Airlines and Reader's Digest.
Jon Ballis, Chairman of Kirkland's Executive Committee said, "Jamie
has been an exceptional lawyer and a tremendous partner and friend,
and we're grateful for his countless contributions to Kirkland –
most importantly, his founding of our market-leading restructuring
practice. We wish him great success with this exciting new
opportunity at Hilco Global and we look forward to continuing our
relationship with him, and Hilco, in the future."
Mr. Sprayregen added, "My 32 years at Kirkland have been rewarding
in so many ways. As I start a new chapter, it's especially
gratifying to see Kirkland's restructuring practice stronger than
ever, leading on all levels with an unmatched depth of talent and
positioned to keep building on their incredible success."
Often described as "a legend in the restructuring space" and "one
of the most sought-after transaction attorneys in the US", in 2010,
Mr. Sprayregen was selected by The National Law Journal as one of
"The Decade's Most Influential Lawyers", was named "Global
Insolvency & Restructuring Lawyer of the Year" in 2013 by Who's Who
Legal Awards, receiving more votes from clients and peers than any
other individual worldwide. In 2013, he was inducted into the
Turnaround Management Association's "Turnaround and Restructuring
Investing Industry Hall of Fame." From 2013 to 2015, Jamie served a
two-year term as the president of INSOL International, the world's
leading international insolvency association. He is a Fellow of the
American College of Bankruptcy, a member of the International
Insolvency Institute and the National Bankruptcy Conference. On
March 21st, 2024, Mr. Mr. Sprayregen will receive the
"Distinguished Service Award" from the American College of
Bankruptcy Fellows.
Mr. Sprayregen also serves as an adjunct full professor of finance
at The Wharton School of the University of Pennsylvania teaching a
joint course on corporate restructuring with the University of
Pennsylvania Law School. He is a member of the National Board of
the American Israel Public Affairs Committee and the American
Jewish Committee Board of Governors. He also serves on the Board of
the Chicago Council on Global Affairs and World Business Chicago
Mr. Sprayregen graduated from The University of Illinois College of
Law, J.D., 1985 and the University of Michigan, B.A., 1982.
About Hilco Global
Hilco Global -- http://www.hilcoglobal.com/-- is a privately held
diversified financial services company and the world's preeminent
authority on maximizing the value of assets for both healthy and
distressed companies. Hilco Global financial services leverage a
unique blend of deep restructuring, and principal investing. Hilco
Global delivers customized solutions to undervalued, high potential
companies to resolve complex and stressed situations and enhance
long-term enterprise value.
Hilco Global operates as a holding company comprised of over twenty
specialized business units that work to help companies understand
the value of their assets and as needed monetize the value. Hilco
Global has almost 4 decades of a successful track record of acting
as an advisor, agent, investor and/or principal in any transaction.
Currently, the company has $3 Billion in assets under management.
Hilco Global works to deliver the best possible result by aligning
interests with clients and providing them strategic insight,
advice, and, in many instances, the capital required to complete
the deal. Hilco Global is based in Northbrook, Illinois and has
more than 800 professionals operating on five continents with US
offices located in Boston, Detroit, Chicago, New York,
Philadelphia, and internationally in Australia, Canada, UK,
Germany, Netherlands, Mexico and throughout Asia.
[*] Teresa C. Kohl Bags M&A Advisor's 2024 Leadership Award
-----------------------------------------------------------
Managing Director Teresa C. Kohl was presented with the M&A
Advisor's Leadership Award during the 18th Annual Turnaround Awards
Gala in West Palm Beach, Florida on March 19. This prestigious
award recognizes Teresa's accomplishments throughout her career and
the lasting benefits she has brought to the M&A and corporate
restructuring profession. SSG partners J. Scott Victor and Robert
Smith gave remarks and presented Ms. Kohl with the Award.
"We are honored to present Teresa Kohl with the 2024 M&A Advisor
Leadership Award," said Roger Aguinaldo, Founder and CEO of The M&A
Advisor. This year's Leadership Award honors Ms. Kohl's significant
contributions to her organization, her profession, and the
restructuring and distressed investment industry as a whole.
As Managing Director of SSG, Ms. Kohl is responsible for
originating and leading investment banking transactions. She has
completed over two hundred restructuring matters, including
refinancing and sale transactions for middle-market companies in
bankruptcy proceedings and out-of-court workouts. Prior to her
transition to investment banking, she led financial and operational
restructuring engagements for boutique advisory firms.
She is a Fellow of the American College of Bankruptcy. She has
served on the Board of Directors of the American Bankruptcy
Institute and has served on the Executive Board and in leadership
positions of the Turnaround Management Association (TMA Global),
where she was the first woman to lead TMA's largest global chapter
(New York City) as President and co-founded TMA Global's Network of
Women. She is the immediate past Board Chair of Living Beyond
Breast Cancer, a national non-profit organization that connects
people with trusted breast cancer information and a community of
support. She is a member of the Association of Insolvency and
Restructuring Advisors, INSOL International, the International
Women's Insolvency and Restructuring Confederation, and The Forum
of Executive Women. She serves on the Steering Committee of the
Eastern District of Pennsylvania Bankruptcy Conference and as a
mentor for the American Bankruptcy Institute's (ABI's) Diversity
and Inclusion Working Group Mentoring Program.
Ms. Kohl will be inducted into the M&A Advisor's Hall of Fame in
November 2024. She previously received the M&A Advisor's Distressed
M&A Dealmaker of the Year Award in 2019 and 2021.
About SSG Capital Advisors, LLC
SSG Capital Advisors is an independent boutique investment bank
that assists middle-market companies and their stakeholders in
completing special situation transactions. We provide our clients
with comprehensive investment banking services in the areas of
mergers and acquisitions, private placements, financial
restructurings, valuations, litigation, and strategic advisory. SSG
has a proven track record of closing over 400 transactions in North
America and Europe and is a leader in the industry.
Securities are offered through SSG Capital Advisors, LLC (Member
SIPC, Member FINRA). All other transactions are effectuated through
SSG Advisors, LLC, both of which are wholly owned by SSG Holdings,
LLC. SSG is a registered trademark for SSG Capital Advisors, LLC
and SSG Advisors, LLC.
[^] BOOK REVIEW: The Turnaround Manager's Handbook
--------------------------------------------------
Author: Richard S. Sloma
Publisher: Beard Books
Soft cover: 226 pages
List Price: $34.95
Review by Gail Owens Hoelscher
In the introduction to this book, the author suggests that an
accurate subtitle could be "How to Become a Successful Company
Doctor." Using everyday medical analogies throughout, he targets
"corporate general practitioners" charged with the fiscal health of
their companies.
As with many human diseases, early detection of turnaround
situations is critical. The author describes turnaround situations
as a continuum differentiated by length of time to disaster: "Cash
Crunch," "Cash Shortfall," "Quantity of Profit," and "Quality of
Profit."
The book centers on 13 steps to a successful turnaround. The steps
are presented in a flowchart form that relates one to another.
Extensive data collection and analysis are required, including the
quantification of 28 symptoms, the use of 48 diagnostic and
analytical tools, and up to 31 remedial actions. (In case the
reader balks at the effort called for, the author points out that
companies that collect and analyze such data on a regular basis
generally don't find themselves in a turnaround situation to begin
with!)
The first step is to determine which of 28 symptoms are plaguing
the company. The symptoms generally pertain to manufacturing firms,
but can be applied to service or retail companies as well. Most of
the symptoms should be familiar to the reader, but the author lays
them out systematically, and relates them to the analytical tools
and remedial actions found in subsequent chapters. The first seven
involve the inability to make various payments, from debt service
to purchase commitments. Others include excessive debt/equity
ratio; eroding gross margin; increasing unit overhead expenses;
decreasing product line profitability; decreasing unit sales; and
decreasing customer profitability.
Step 2 employs 48 diagnostic and analytical tools to derive
inferences from the symptom data and to judge the effectiveness of
any proposed remedy. The author begins by saying ". . . if the
only tool you have is a hammer, you will view every problem only as
a nail!" He then proceeds to lay out all 48 tools in his medical
bag, which he sorts into two kinds, macro- and micro- tools.
Macro-tools require data from several symptoms or assess and
evaluate more than a single symptom, whereas micro-tools more
general-purpose in function. The 12 macro-tools run from "The Art
of Approximation" to "Forward-Aged Margin Dollar Content in Order
Backlog." The 36 micro-tools include "Product Line Gross Margin
Percent Profitability," Finance/Administration People-Related
Expenses As Percent Of Sales," and "Cumulative Gross $ by Region."
Next, managers are directed to 31 possible remedial actions,
categorized by the four stage turnaround continuum described above.
The first six actions are to be considered at the Cash Crunch
stage, and range from a fire-sale of inventory to factoring
accounts receivable. The next six deal with reducing
people-related expenses, followed by 13 actions aimed at reducing
product- and plant-related expenses. The subsequent five actions
include eliminating unprofitable products, customers, channels,
regions, and reps. Finally, managers are advised on increasing
sales and improving gross margin by cost reduction in various
ways.
The remaining steps involve devising the actual turnaround plan,
ensuring management and employee ownership of the plan, and
implementing and monitoring the plan. The advice is comprehensive,
sensible and encouraging, but doesn't stoop to clich, or empty
motivational babble. The author has clearly operated on patients
before and his therapeutics have no doubt restored many a firm's
financial health.
*********
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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are not intended to reflect actual trades. Prices for actual
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then-ending.
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Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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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.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***