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Your weekly dose of actionable deal flow intelligence by DailyDAC.
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By DailyDAC™ • Issue #33 • February 2, 2022
A curation of actionable deal flow intelligence using some very proprietary sources, some public (but dispersed) data and a lot of spit & vinegar.
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Chapter 11 - Pleadings To-Date Suggest Likely Sale |
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- East Flatbush real estate development project. Hello Living Developer Nostrand LLC filed for chapter 11 protection (case no. 21-22696-shl), pending in the Southern District of New York (White Plains). The Debtor (based in Monsey, NY) filed the day before Madison Realty Capital, which apparently claims to be owed $69 million, was set to hold a UCC auction. Chapter 11 - Pleadings To-Date Suggest Likely Sale. An examination of the court docket and an inquiry into surrounding facts suggest to DailyDAC that this Chapter 11 should be short-lived and that there is room for an outside party to buy the debt, buy the assets, or potentially serve as a white knight for the Debtor. The Debtor owns 1580 Nostrand Avenue in East Flatbush. The Debtor is owned or controlled by Eli Karp. Karp sought to construct luxury rentals in an area that had yet to be gentrified, south of Prospect Lefferts Gardens near Little Caribbean. He bought the site for $13 million in 2014. Of the 210 units planned at Nostrand Avenue, 95 are completed, according to a report in The Real Deal. The Debtor made numerous claims against Madison Realty, all of which a New York Supreme Court Judge in Rockland County ruled on in Madison Realty’s favor. Madison Realty is run by Josh Zegen, Brian Shatz, and Adam Tantleff. The Debtor is represented by Leo Fox @ (212) 867-9595 and leo@leofoxlaw.com. More info: Madison Realty @ (646) 472-1900 or ny@madisonrealtycapital.com, or Debtor’s counsel, depending on what hat you choose to wear. See Chapter 11 Petition; Chapter Retention; Chapter 11 Top 20. Deal ID: 32121.
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- $4 million performing mezzanine loan. Performing Loan Sale. Undisclosed Seller. The interest-only loan originated in October 2015, in the amount of $4m with a fixed interest rate of 10.50% for a ten-year initial term. The mezz loan is secured by the equity interests in the borrower, which controls the fee-simple interest in a 292,458-SF anchored retail center located in Birmingham, Alabama. The mezz loan originated alongside a $39m senior mortgage loan which is secured by a first-lien mortgage in the property. The mortgage loan is coterminous to the mezzanine loan and carries an interest rate of 4.77%. Payments are interest-only for the initial 5 years, amortizing on a 30-year schedule thereafter. As of August 2021, both the mezzanine loan and mortgage loan were performing as agreed. The mezzanine loan currently has a DSCR of 1.22x, DY of 8.26%, and LTV of 79.57%. The opportunity affords investors the opportunity to acquire a performing mezz loan with desirable loan metrics including an attractive coupon. The mezzanine loan carries a fixed-rate coupon of 10.50% with nearly 4 years of the remaining term. An early payoff of the Loan is subject to yield maintenance. The loan is current and in good standing, as proven by its payment history and loan metrics which include a DSCR of 1.22x, DY of 8.26%, and LTV of 79.57%. The loan continued to perform throughout the COVID-19 pandemic. National & regional tenants account for 90% of the in-place rent roll. The property is shadow-anchored by Walmart, a multinational retail chain, as well as Lowe's. Founded nearly 50 years ago, the sponsor specializes in retail shopping center development, management, and renovation. More info: Brett Rosenberg of JLL @ (212) 812-5926 or brett.rosenberg@am.jll.com. Deal ID: 32136.
- $23 million defaulted loan. Non-Performing Loan Sale. $23 million defaulted senior loan. The Lender originated the Loan in June 2019 with an initial balance of $23 million to acquire a developable site in the Wynwood district of Miami, FL (“Property”). The situation provides an opportunity for an investor to acquire the recently defaulted loan on a land site that has already been submitted to the local Design Review Committee. The opportunity would allow an investor optionality in either pursuing the Collateral or with a Loan workout. The loan is an interest-only loan, which carries a LIBOR + 7.75% rate subject to a 2.50% LIBOR floor, for a 10.25% all-in rate compounding on an actual over 360-day basis. The default rate is 8.00% above ordinary interest. The Loan had an initial maturity date of June 18, 2020, and permitted three six-month extensions. The Loan performed until July 1, 2021, when Borrower failed to extend. The Loan is currently in default with an unpaid principal balance of $23 million. It is secured by both a first-priority mortgage on the fee simple interest in the Property and a pledge of 100% equity interest in the Borrower; the property is comprised of a five parcel developable site totaling 41,550 SF of area. The current site plan includes building 108 residential units, 35 lodging units, and 9,508 SF of commercial retail space. The sponsor’s pledge of equity will potentially give an investor an accelerated timeline into fee simple ownership by utilizing the UCC foreclosure process instead of a more traditional real estate foreclosure, saving time and money. More info here or Bob Knakal of JLL @ (212) 812-5973 or bob.knakal@am.jll.com. Deal ID: 32123.
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- Residential Home at 99 Rockledge Road, Bronxville, NY 10708. Chapter 11 Bankruptcy 363 Sale in the case of Anthony J. Montaruli, Case No. 21-22443-shl, pending in the Southern District of New York. Home is 3,300 SF, five bed / four bath on Âľ acre lot. The hearing on the Motion is February 12, 2022, at 10 am. The proposed buyers are Ibrahim Rabadi and Suheir Rabadi and the proposed purchase price is $880,000. Originally listed for $1.2 million. The proposed sale is, by its terms, subject to higher and better offers. More info: Trulia listing and Anne Penachio of Penachio Malara LLP, counsel for the Debtor @ 245 Main Street - Suite 450 in White Plains, New York 10601 or at (914) 946-2889. Deal ID: 32146.
- Trucks, semi-tractors, semi-trailers, and trailers. Chapter 11 Bankruptcy 363 Sale. 13 vehicles previously used by Pipeline Foods (Case No. 21-11002 (KBO) pending in Delaware) at its former facility in Hope, Minnesota are for sale. The vehicles were previously marketed and the only firm offer received was from Nations Capital, which initially offered to purchase the Vehicles for $135,000–$155,000, and which ultimately agreed to pay $160,000. The motion seeking to approve the sale, if approved, would result in no auction and, instead, a private sale to Nations Capital. Pursuant to the Notice of Motion, objections are due February 9, 2022 at 4 pm ET. See also Proposed Purchase Agreement. More info: Mark Minuti (mark.minuti@saul.com), Monique B. DiSabatino (monique.disabatino@saul.com), or Matthew P. Milana (matthew.milana@saul.com); or any of them @ (302) 421-6800. Deal ID: 32148.
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Chapter 12 Bankruptcy 363 Sales |
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- 132 acres of farmland in Havre, Hill County, Montana, Chapter 12 Bankruptcy 363 Sale. The address is 7515 Laredo Road, Havre, Hill County, Montana. Objections to the motion are due on or about February 9, 2022. Sale is set for closing on March 1, 2022. Comps suggest that the proposed sale price of $652,600 is below market. See this listing and this listing of nearby property for comparison. Further, the current Buy-Sell Agreement has contingencies. More info: Gary S. Deschenes of Deschenes & Associates Law Offices, counsel for the Debtor @ gsd@dalawmt.com or (406) 761-6112 or Jenny M. Jourdonnais, counsel for Independence Bank or Assistant U.S. Attorney, Victoria L. Francis, attorney for Farm Service Agency, or Robert G. Drummond, Chapter 12 Trustee. Other relevant pleadings are here (#4-20). Deal ID: 32153.
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Chapter 7 - Promising Cases Commenced |
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- Modbook, Inc., Case 1:22-bk-10093-VK. Chapter 7 Promising Case Commenced. The case was filed on January 23, 2022. According to the company, Modbooks, Inc. “produced the “Modbook Pro,” an enclosure conversion kit that transforms an original Apple non-Retina 13.3-inch MacBook Pro notebook into a slate-style, pen-enabled macOS tablet computer. With its dual-core Intel i5/i7 processor options it represents the only slate-style tablet Mac solution on the market [and] Our upcoming Modbook Pro X is an enclosure conversion kit that transforms a top-of-the-line Apple Retina 15.4-inch MacBook Pro into a 2-in-1 convertible, pen-enabled macOS tablet/laptop. This combination of power and versatility makes the Pro X not only our high-end offering but in effect also the “best” configuration of an Apple Retina MacBook Pro.” The company was founded by Andreas Haas (who is also its CEO and Lead Engineer), in 2012 and is headquartered in either Van Nuys, or Reseda, CA 91406 (the chapter 7 petition states that its principal place of business is 18341 Sherman Way, Suite 100, Reseda, CA 91335 and that its mailing address is 7345 Whitaker Avenue, Van Nuys, CA 91406. The company’s shareholders are Mr. Haas and Kumiko Haas. Mr. Haas, who holds a B.S. in Management Information Systems from the Ludwig Maximilians University of Munich in Bavaria, previously co-founded Axiotron Corp. in 2005, which appears to have been the predecessor of Modbook and previously went through its own restructuring in 2010 [More info about this here and here.] The Chapter 7 Petition states that there are less than $500,000 in assets and less than $1 million in liabilities. More info: Debtor’s attorney, Henry Haddad of the Law Offices of Henry Haddad, 3600 Wilshire Blvd., Suite 332, Los Angeles, CA 90010, or (213) 387-0099 or Henry@haddadlawoffices.com. Deal ID: 32160.
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See this week’s In-Depth Look at the very end of this issue.
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- HPI Products. Contract chemical formulator. Receivership - Commenced. The United States District Court for the District of Missouri has appointed a receiver to manage HPI Products, as the St. Joseph company has continually failed to comply with a consent decree to ensure the proper use of chemicals. According to a declaration from Kevin Snowden, an environmental scientist for the United States Environmental Protection Agency, “a potentially explosive pink powder released onto the floor” and the improper storage of uncharacterized liquids that contained high levels of arsenic and lead were found at the facility. The court then appointed Greenfield Environmental Trust Group, Inc. to serve as the receiver for the defendants, and all assets were frozen (including bank accounts, brokerage firms, and mutual funds). More info: Greenfield Environmental Trust Group, Inc. @ (617) 715-6915. Deal ID: 32114.
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Multiple real estate development sites in California. Receivership - Sale. A court-appointed receiver is moving to sell the Bay Area real estate empire of a developer who is the central figure in a fraud case whose alleged victims number in the hundreds. Of 13 properties listed in a recent federal court filing, only five have been sold. The developer was Sanjeev Acharya and his company, San Jose, California-based Silicon Sage Builders. The SEC has accused both Acharya and Silicon Sage of an array of fraudulent actions that the federal regulators claim swindled hundreds of investors. A federal judge has placed Silicon Sage’s properties into receivership. The court-appointed receiver has begun a lengthy process of attempting to salvage value from the collapsed and bankrupt real estate empire by finding buyers for the properties. The following remaining properties are still-unsold:
3780 Peralta Blvd., Fremont. Fully entitled as a mixed-use project, the site has attracted a buyer that’s willing to pay $23 million for the site. Net proceeds could total $2 million.
1313 Franklin St., Santa Clara. The site is a mixed-use development with ground-floor retail units and residential units upstairs. Potential buyers have made offers to buy the retail, but the lender on the site must agree to concessions for the site.
1665 Alum Rock Ave., San Jose. A parcel needed for the development of a mixed-use residential and retail development has attracted interest from a buyer. The lender must make concessions before the sale can occur.
560 S. Mathilda Ave., Sunnyvale. An offer has emerged for the first floor retail and office space. The price is less than the loan amount on the commercial space, which means the lender must agree to concessions.
2101-2149 Alum Rock Ave., San Jose. These parcels represent a section of a large property that would be needed for the development of a project consisting of 796 residential units, along with shops and restaurants.
42111 Osgood Road, Fremont. A partially built residential complex called Savant at Irvington that totals 93 units is located at this site. The court has been asked to resolve multiple disputes over control of this project’s future.
1821 Almaden Road, San Jose. A partly constructed residential project called The Almaden that totals 91 units is being built at this site. The court is being asked to resolve multiple disputes over control of this project’s future.
17374 Walnut Grove, Morgan Hill. Uncertainty has arisen as to the ownership of this property, which is undeveloped land.
More info here or Michael Sew Hoy of the SEC @ (323) 965-3949 or sewhoym@sec.gov. Deal ID: 32115.
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Article 9 / Secured Party Sales |
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- 78-80 Saint Marks Place. Mixed-use/historic theater - 4,875 SF Secured Party Sale. Cushman & Wakefield has been exclusively engaged by the Secured Party to offer for sale the Collateral to the highest qualified bidder at a public auction. The Borrower owns the real property known as 78-80 Saint Marks Place, New York, NY. Located on Saint Marks Place between 1st and 2nd Avenues, this singular tax lot consists of two separate, five-story, 25-foot-wide buildings. These tax class 2B buildings combine for a total of 9 units over approximately 14,275 above grade SF. The Real Property is currently configured as four residential apartments, one owner-occupied duplex, one office space, a second-floor museum, and a ground-floor theater. The Real Property is the home to the historic Theater 80 St. Marks which occupies the entire 4,875 square feet of ground-floor retail. This 160-seat theater is an East Village icon and destination for a variety of music and theater. Within the theater are the William Barnacle Tavern and FoxFace Sandwiches which serve patrons of the theater (which occupies approximately 200 SF of the ground floor and includes a full vented kitchen). Located on the second floor of 78 Saint Marks is the two-room Museum of the American Gangster. More info here or Ian Brooks of Cushman & Wakefield @ (212) 589-5107. Deal ID: 32080.
- 162-164 East 82nd Street. Two contiguous luxury apartment buildings. Secured Party Sale. 162-164 East 82nd Street are two contiguous apartment buildings located between 3rd and Lexington Avenues in the prime Yorkville neighborhood of the Upper East Side. Totaling 19,670 SF, the apartment buildings consist of 37 residential units, 32 of which have been renovated. The buildings are surrounded by restaurants, boutiques, art, and shopping and are located in close proximity to Central Park, the MET Museum, Serafina, Fairway Market, and the Q, 4, 5, & 6 subway stations. More info: Greg Corbin of Rosewood Realty Group @ (212) 359-9900 or Greg@rosewoodrg.com. Deal ID: 32081.
- 45 East 66h Street Owners Corp. Luxury Penthouse - 4,020 S.F. Secured Party Sale. 1835 shares of capital stock of 45 East 66th Owners Corp. and appurtenant to 45 East 66th Street, PHAB, New York, New York will be auctioned on March 2, 2022. Bids are due by March 1, 2022. Described as a luxury penthouse, the property is an open-concept duplex residence offering approximately 4,020 S.F. of living space surrounded by 3,455 S.F. of set-back terraces. It features 4-5 well-proportioned bedrooms, 4.5 luxurious bathrooms, a corner living room with a large skylight, an enormous dining area, a chef’s dream kitchen with a separate breakfast area, all surrounded by a wall of glass, filling the space with natural light. There is also a laundry room, a media room or den, and a workstation. Features include multi-zone central air conditioning, soundproof architectural floors, private water pumps, and upgraded electric power. There is a private elevator landing leading to a windowed entry foyer, a grand corner living room with large skylight and glass walls with access to a terrace, an enormous dining area, a powder room, and a kitchen, with a separate breakfast area. There are three bedrooms, a media room, four bathrooms, and a utility/laundry room. The property also includes a workstation lounge under the cantilevered stairway that leads to the upper level, which is a master bedroom suite. More info: Marie P. Hofsdal, Esq. of Pryor Cashman LLP @ mhofsdal@pryorcashman.com or (212) 326-0494. Deal ID: 32082.
- River Houze, LLC. 30-story riverfront apartment complex with an address of 9000 East Jefferson Avenue, Detroit, Michigan 48214. Tax Item No. 19000016.001. Secured Party Sale. The following mortgage will be foreclosed on by a sale of the mortgaged premises, or some part of them, at a public auction sale to the highest bidder for cash or cashier's check at the place of holding the circuit court in Wayne County, starting promptly at 11:00 a.m., on February 17, 2022. Default has been made in the conditions of a certain Multifamily Mortgage made by River Houze, LLC, a Michigan limited liability company (“Borrower”), dated March 11, 2020, to Berkadia Commercial Mortgage LLC, a Delaware limited liability company (the “Original Lender”), recorded May 15, 2020, as Instrument No. 2020164429, in Liber 55787, Page 151, in the Register of Deeds, Wayne County, Michigan (the “Records”), and assigned by Original Lender to Fannie Mae, pursuant to that certain Assignment of Security Instrument, effective as of March 11, 2020, and recorded May 15, 2020, as Instrument No. 2020164430, in Liber 55787, Page 171 of the Records, on which mortgage there is claimed to be due at the date hereof $42,404,930.71 on the Multifamily Note. More info: Foley & Lardner LLP @ (313) 234-7100, Attorneys for Fannie Mae Attn: Andrew McClain, 500 Woodward Avenue, Ste. 2700 Detroit, MI 48226-3489. Deal ID: 32100.
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- Hawthorne Gardening Company. Cannabis producer. Mass Layoffs. Hawthorne Gardening Company, an affiliate of Scotts Company LLC, has eliminated 150 positions in Vancouver, Washington. Deal ID: 32101.
- Acutus Medical, Inc. Arrhythmia management company. Mass Layoffs. Acutus Medical, Inc. will eliminate 55 positions in Carlsbad, California. Deal ID: 32105.
- Country Cupboard Restaurant and Shop Country Cupboard Inc. Restaurant & retail shop. Mass Layoffs. Country Cupboard Restaurant and Shop will eliminate 140 positions in Lewisburg, Pennsylvania. Deal ID: 32106.
- Special Metals Corporation. Nickel alloy producer. Mass Layoffs. Special Metals Corporation will eliminate 75 positions in Huntington, West Virginia. Deal ID: 32107.
- Sony DADC US Inc. Supply chain services provider. Mass Layoffs. Sony DADC US Inc. will eliminate 100 positions in Terre Haute, Indiana. Deal ID: 32118.
- Nash and Sons Trucking Inc. Trucking & logistics company. Mass Layoffs. Nash and Sons Trucking Inc. will eliminate 75 positions throughout the State of Indiana. Deal ID: 32119.
- ABM Industry Group LLC. Building maintenance and facility services company. Mass Layoffs. ABM will eliminate 400+ positions because ABM lost a large contract with a national health care firm, Kaiser Permanente. Employees in Maryland, Virginia, and the District of Columbia are impacted. Deal ID: 32128.
- Glossier. Skincare and beauty products company. Mass Layoffs. Glossier has eliminated 80 technology positions (about one-third of the corporate staff). In August of 2020, the company laid off retail workers and closed stores in New York, Los Angeles, and London due to its digital focus. Deal ID: 32130.
- First Coast Security. Security company. Mass Layoffs. First coast security has eliminated 300 employees in Florida. These cuts followed the loss of a contract with Trulieve, the Tallahassee-based medical cannabis company. Deal ID: 32135.
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- Mars Wrigley. Manufacturer of branded chocolate & confections. Plant/Facility closing. Mars Wrigley will be closing the original Mars factory in Chicago, Illinois which still makes M&Ms, Twix, Snickers, Milky Way, and Skittles, the company confirmed. The closure will happen during the next two years. Deal ID: 32102.
- ADT/Cybersecurity/SDI. Cybersecurity business. Plant/Facility Closing. The ADT Cybersecurity/SDI business in Greensboro, North Carolina will cease operations at the end of 2022. Deal ID: 32104.
- Penske Logistics LLC. Supply chain management company. Plant/Facility Closing. Penske Logistics LLC is closing its terminal facility in Flint, Michigan. Deal ID: 32112.
- Stearns Lending. Wholesale mortgage lender. Plant/Facility Closing. Stearns Lending will eliminate 348 positions, following the decision by Guaranteed Rate earlier this month to discontinue operations of its third-party wholesale channel in Lewisville, Texas. Deal ID: 32113.
- Central Lake Armor Express, Inc. Safety equipment supplier. Plant//Facility Closing. Central Lake Armor Express, Inc. has closed its facility in Central Lake, Michigan. Deal ID: 32120.
- J.H. Baxter. Wood treatment facility. Plant//Facility Closing. J.H. Baxter’s wood treatment facility is permanently closing as of January 31st, 2022 in Eugene, Oregon. The plant has been cited and fined for environmental violations, with additional complaints of strong chemical odors. Recently, levels of dioxins in nearby residences were high enough to facilitate soil removal. Deal ID: 32140
- Earth Fare. Grocery store chain. Plant//Facility Closing. Earth Fare will be permanently closing its location in St. Johns, Florida five months after reopening. Earth Fare will close two other locations in Oldsmar, Florida, and Cleveland, Florida. Deal ID: 32145
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Rating Agency Alerts/Other Signs of Distress |
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- Sierra Oncology, Inc. Hematology & oncology company. Rating Agency Alerts/Other Signs of Distress. A going concern opinion was issued for Sierra Oncology, Inc., a hematology & oncology company based in San Mateo, California. It is a clinical-stage hematology and oncology company with a limited operating history. Since its inception, it has incurred significant operating losses. Net losses were $69.2 million and $80.9 million for the nine months ending on September 30, 2021. It had an accumulated deficit of $915.8 million. In connection with the preparation of the Quarterly Report on Form 10-Q for the nine months ended September 30, 2021, it projected insufficient liquidity to fund its operations for the following 12 months beyond the date of the issuance of the condensed consolidated financial statements included in such Quarterly Report on Form 10-Q, which raises substantial doubt about its ability to continue as a going concern. Deal ID: 32088.
- The Graystone Company, Inc. Bitcoin mining company. Rating Agency Alerts/Other Signs of Distress. A going concern opinion was issued for The Graystone Company, Inc., a bitcoin mining company based in Fort Lauderdale, Florida. There are no assurances that the Company will be able to either achieve a level of revenues adequate to generate sufficient cash flow from operations; or obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings, and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations. Due to uncertainties related to these matters, substantial doubt about the ability of the Company to continue as a going concern is raised. Deal ID: 32089.
- Verde Bio Holdings, Inc. Mineral & royalty acquisition company. Rating Agency Alerts/Other Signs of Distress. A going concern opinion was issued for Frisco, Texas-based Verde Bio Holdings, Inc. The Company has a history of net losses from continuing operations and net cash used in operating activities. The company will need to raise additional working capital to continue its normal and planned operations. The Company will also need to generate and sustain significant revenue levels in future periods in order to become profitable. Even if the Company does this, it may not be able to maintain or increase its level of profitability. Accordingly, substantial doubt exists about our ability to continue as a going concern. Deal ID: 32096.
- Bantec, Inc. Distributor of military products. Rating Agency Alerts/Other Signs of Distress. A going concern opinion was issued for Bantec, Inc., a Little Falls, New Jersey-based distributor of military products. The Company's cash and cash equivalents were $985,953 on September 30, 2021. For the year ended September 30, 2021, the Company incurred a net loss of $1,882,071 and used cash in operations of $1,576,648. The working capital deficit, stockholders’ deficit and accumulated deficit was $14,709,592, $14,796,078 and $32,956,840, respectively, at September 30, 2021. Furthermore, on September 6, 2019, the Company received a default notice on it's payment obligations under the senior secured credit facility agreement with TCA and has defaulted on notes payable and other promissory notes. These matters raise substantial doubt about our ability to continue as a going concern. Deal ID: 32097.
- TPT Global Tech, Inc. Telecommunications Media Content Hub. Rating Agency Alerts/Other Signs of Distress. A going concern opinion was issued for TPT Global Tech, Inc., a telecommunications media content hub based in San Diego, California. The Company has suffered recurring losses from operations and has insufficient cash flows from operations to support working capital requirements. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Deal ID: 32098.
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- Village Optometry, Inc. Optometry practice. Bulk Sale. The name and business address of the Seller is: Village Optometry, Inc. and Douglas M Osborne, O.D., 711 Grand Avenue, Suite 2, Carlsbad, California 92008. The name and business address of the Buyer is Adam Rosa, O.D., 3915 Mission Ave #2, Oceanside, California 92057. The bulk sale will be held on February 10, 2022. More info: The Heritage Escrow Company @ (619) 234-2010. Deal ID: 32071.
- Gish Flowers Inc. (d/b/a Crozier's Flowers). Flower retailer. Bulk Sale. The name and business address of the seller is Gish Flowers Inc. 139 Main Street, Vista, California 92084. The name and business address of the buyer is Remy Florals Inc. 139 Main Street, Vista, California 92084. The anticipated date of the bulk sale is February 9, 2022. More info: Warranty Escrow Service Corp. @ (760) 434-1800. Deal ID: 32072.
- Palm Springs Aircraft Maintenance Service. Aircraft repair business. Bulk Sale. The name and business address of the Seller is Palm Springs Aircraft Maintenance Service, 145 N. Gene Autry Trail #16, Palm Springs, California 92262. The name and business address of the Buyer is CAS Aero Solutions, LLC, 1150 S. Vineyard Ave., Ontario, California 91761. The bulk sale will be held on February 15, 2022. More info: The Escrow Connection @ (760) 327-8566. Deal ID: 32073.
- Kenny, Inc. (d/b/a Reynolds Sandwich Shop). Restaurant. Bulk Sale. The name and business address of the Seller is Kenny, Inc. (d/b/a Reynolds Sandwich Shop) N-1340 Reynolds Avenue, #106, Irvine, California 92614. The name and business address of the Buyer is Junsu Kim 1340 Reynolds Avenue, #106, Irvine, California 92614. The bulk sale will be held on February 9, 2022. More info: Detail Escrow, Inc. @ (562) 865-2324. Deal ID: 32074.
- Calimesa Veterinary Clinic, Inc. Veterinary services business. Bulk Sale. The name and business address of the Seller is Calimesa Veterinary Clinic, Inc. 980 Calimesa Blvd, Calimesa, California 92320. The name and business address of the Buyer is Pet Cure Inc. 980 Calimesa Blvd., Calimesa, California 92320. The anticipated date of the bulk sale is February 8, 2022. More info: Design Escrow, Inc. @ (626) 445-6137. Deal ID: 32076.
- Fairfax Com, LLC (d/b/a Mas Masa Restaurant). Fast casual restaurant. Bulk Sale. The name and business address of the Seller is Fairfax Corn, LLC (d/b/a Mas Masa Restaurant) 31 Bolinas Rd, Suite B, Fairfax, California 94930. The name and address of the Buyer is LICOS, 13 Corte Encanto, Greenbrae, California 94904. The Bulk Sale is scheduled for May 14, 2022. More info: Debbie Kneeshaw Howe of The Heritage Escrow Company @ (619) 234-2010. Deal ID: 32077.
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Significant Litigation Development |
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- Ossining Land LLC. 5.9 acre industrial property. Significant Litigation Development. Ossining Land LLC, run by Jonathan Kloos of Manhattan-based Metropolis Realty Advisors, is suing the Village of Ossining, alleging the locality’s decision to invalidate a building permit was unlawful. The suit aims to compel an inspector to renew the permit. At stake is the 5.9-acre Hudson Steppe project at 34 State Street. The site once housed a wallpaper factory and offices, as well as the Smith-Robinson House, a mansion listed on the village’s register of historic places. Kloos wants to develop three buildings which would include 189 apartments. He also wants to renovate the mansion into office space. The developer is affiliated with North Hill Capital Management. Deal ID: 32124.
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- AMC Entertainment. Movie theater chain. Seeking: Debt Financing. AMC Entertainment is reportedly advancing on its plans to refinance some of its high-interest debt — even as its stock and bond prices dip. The company is in advanced talks with several interested parties about lowering its interest burden and stretching out bond payment due dates by several years. Efforts to reach a debt deal come as AMC has been limited in its ability to pay off debt while the environment for refinancing is getting tougher. More info here. Deal ID: 32125.
- 5 Times Square. Office tower. Seeking: Debt Financing. Days after signing Roku to a massive long-term lease, Scott Rechler is in the market for a ten-figure loan to refinance his Times Square office tower. Rechler’s RXR Realty aims to refinance its 1.1 million-square-foot, 39-story tower at 5 Times Square to the tune of $1.5 billion. RXR is seeking the new debt after signing the streaming service Roku to 240,000 square feet across the building’s top eight floors. More info here. Deal ID: 32126.
- Bausch Health Companies Inc. Specialty pharmaceutical company. Seeking: Debt Financing. Bausch Health Companies Inc. announced that it is seeking to refinance its existing credit agreement. The refinanced Credit Agreement is expected to consist of approximately $2.5 billion of term B loans and a $975 million revolving credit facility. The Credit Agreement Refinancing is expected to occur only upon completion of the initial public offering (IPO) of Bausch + Lomb Corporation and a related debt financing by Bausch + Lomb. At the time of the Bausch + Lomb IPO, Bausch + Lomb will initially remain a 'restricted' subsidiary subject to the terms of the Credit Agreement covenants, but the Credit Agreement Refinancing is expected to permit Bausch Health to designate Bausch + Lomb as an 'unrestricted' subsidiary outside the terms of the Credit Agreement covenants upon achievement of a 7.6x pro forma 'Total Leverage Ratio.' The Credit Agreement Refinancing is designed to facilitate the separation and distribution of Bausch + Lomb. The Company also intends, subject to market conditions, to issue approximately $1.0 billion of secured debt securities. The proceeds of the New Term B Loans and the offering of the New Debt Securities, along with proceeds from the Bausch + Lomb IPO and from the repayment of an intercompany note owed by Bausch, are expected to be used to fund the redemption in full of our outstanding 6.125% Senior Notes due 2025, refinance all of the existing Term B Loans, fund a partial redemption of our outstanding 9.000% Senior Notes due 2025 and to pay related fees, premiums, and expenses. More info here. Deal ID: 32134.
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Other Interesting Opportunistic Data |
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(Noteworthy non-distressed auctions, opportunistic private business sales, overstocks/obsolete inventory, and other interesting sales without a legal process)
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- 159 Broadway, Brooklyn, New York. 130,154 S. F. development site. Other Interesting Opportunistic Data. Rosewood Realty Group has been exclusively engaged to market 159 Broadway, Brooklyn NY, as a Joint Venture, Recapitalization, or Sale. Features of the sale include Prime Williamsburg; 130,154 Buildable SF shovel ready site; 25-year ICAP tax abatement; Located in a qualified Opportunity Zone; Approved plans for a 26-story, 277’ tall mixed-use building; Foundation poured and underpinned to adjacent sites. Roof deck pool and bar; Ground floor restaurant and bar with below-grade ballroom; No special permit required (grandfathered). Currently, the site is in the early stages of excavation and construction can be resumed immediately. More info here or Greg Corbin of Rosewood Realty Group @ (212) 359-9904 or Greg@rosewoodrg.com. Deal ID: 32137.
- Industrial building - 21,229 S.F. Other Interesting Opportunistic Data. The site is located in the desirable Mott Haven neighborhood of the Bronx, New York. It has 175 feet of frontage along Rider Avenue and 118 feet of frontage on East 139th Street. It is currently improved with a single-story 21,229 SF industrial building. The plans call for an 8- and 9-story multi-family residential building consisting of a total of 135 apartments; a mix of studios, one bedroom, and two-bedroom units, with 57 parking spaces and 25 storage bins in the cellar level and ground floor. A developer is expected to apply for a 421-A exemption and will need to allocate 20% of the units to tenants with 80% of the area median income, and 10% of the units to tenants with 130% AMI. More info: Chaya Milworm of Rosewood Realty Group @ (212) 359-9936 or Chaya@rosewoodrg.com. Deal ID: 32138.
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This Week’s In-Depth Look |
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547,000 SF office building located in Little Rock, Arkansas. Chapter 7 Bankruptcy Sale. The Debtors are NNN 400 Capitol Center 16, LLC, et al., Case No. 16-12728 (JTD), which in turn own Regions Center, an approximately 547,000 square foot office building located in Little Rock, Arkansas.
A motion has been filed to approve a private sale pursuant to a credit bid for $31 million, subject to higher and better. The objection deadline is February 8, 2022 at 10 am ET.
The Debtors originally filed Chapter 11 in late 2016 and early 2017. Each of the Debtors is a limited liability company and each is owned by an individual or entity that made an independent investment in Regions Center (i.e., each acquired an undivided tenant-in-common (“TIC”) interest) in connection with an Internal Revenue Code Section 1031 tax-deferred exchange offering (a “1031 Exchange”).
A section 1031 exchange is a transaction authorized by Section 1031 of the Internal Revenue Code that permits deferral of gains from the sale of certain real property when the proceeds are reinvested in other real property in a manner that complies with Section 1031.
The secured creditor bought the loan from Wells Fargo in 2017 (for $32,841,378.76) and has a first priority lien on all the Debtor’s assets. As of October, the Regions Center, which had a 57% occupancy level with tenants paying a collective $5 million in rent per month at that time, was appraised by the County assessor at $30 million.
This deal opportunity is interesting regardless of whether one has an interest in bidding in at least two respects. First, it underscores the practical problem a TIC property can face in restructuring and, thus, the opportunity to look for distressed 1031 Exchange-traded properties. Second, it is an example of a rapidly increasing trend in bankruptcy of debtors and trustees seeking to sell “privately” under Bankruptcy Code §363 as opposed to under approved sale procedures.
More info: counsel for Chapter 7 Trustee, Ricardo Palacio (rpalacio@ashbygeddes.com) or Stacy L. Newman (snewman@ashbygeddes.com) of Ashby & Geddes, or via phone @ (302) 654-1888. Deal ID: 32162.
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