Bankruptcy News

PFO Global Conversion Sought

PFO Global filed with the U.S. Bankruptcy Court an emergency motion to convert its Chapter 11 reorganization cases to liquidation under Chapter 7. The motion explains, "The Debtors believe conversion and continuation of the Bankruptcy Cases under Chapter 7 are in their best interests and the best interests of their creditors. In light of the lack of any progress in the raising of the necessary funds for a reorganization (or debtor in possession financing) by the UCC, the Unsecured Creditors and the Debtors and the mounting expenses accrued by the Debtors, their creditors, and other parties in interest, the Debtors believe an orderly liquidation proceeding carried out according to the provisions of Chapter 7 of the Bankruptcy Code will minimize future expenses and provide for maximum distribution to creditors. Concurrently herewith, in the effort to minimize further administrative expense, the Debtors have filed their Motion for Authority to Reject Non-Residential Lease Agreement relating to their leased premises. The Debtors invoke their right under Bankruptcy Code Section 1112(a) to convert the Bankruptcy Cases to cases under Chapter 7 of the Bankruptcy Code."

NephroGenex Plan Effective

NephroGenex's Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The U.S. Bankruptcy Court confirmed the Plan on May 10, 2017. BankruptcyData's Plan Summary notes, "The Plan contemplates that the Debtor's unsecured creditors would receive distributions equal to 26.8% to 37.1% of the allowed amounts of their claims. Medpace has agreed to waive its Cash Distribution under the Plan and exchange its General Unsecured Claim against the Debtor in the amount of $4,312,698 for 100% of the New Common Stock in the Reorganized Debtor. Under the Plan, General Unsecured Claims will receive its pro rata share of the Liquidating Trust Interests, for a 46.4% - 50.4% rate of recovery." This drug development company filed for Chapter 11 protection on April 30, 2016, listing $24 million in pre-petition assets.

Optima Specialty Steel Disclosure Statement Approved

The U.S. Bankruptcy Court issued an order approving Optima Specialty Steel's Disclosure Statement and scheduled a June 29, 2017 hearing to consider the First Amended Joint Chapter 11 Plan, with objections due by June 22, 2017. As previously reported, "Specifically, Optima Acquisitions LLC, a Delaware limited liability company ('OA' or the 'Plan Sponsor'), which is the sole 100% common stock shareholder of Debtor Optima and is the Plan Sponsor, will fund the Plan with the Plan Sponsor Contribution, a $200 million cash equity contribution to Reorganized Optima as a contribution in respect of the Plan Sponsor's outstanding and Unimpaired Existing Optima Common Stock. Under the Plan, the Debtors will raise an additional approximately $105 million exit financing term loan and an exit financing revolver of approximately $35 million, commitments for which will be obtained from one or more third parties. The $200 million Plan Sponsor Contribution and the approximately $140 million of exit financing will fund the implementation of the Plan's provisions providing for unimpaired treatment to all creditors and leave OA (as sole shareholder) unimpaired. In return for the $200 million Plan Sponsor Contribution, OA will retain its existing 100% equity interest in Optima."

21st Century Oncology Holdings Chapter 11 Petition Filed

21st Century Oncology Holdings (f/k/a Radiation Therapy Services Holdings) and more than 50 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, lead case number 17-22770. The Company, which operates cancer treatment centers, is represented by Christopher Marcus of Kirkland & Ellis. The Company also announced that it has reached an agreement in principle with its senior lenders and bondholders on the terms of a comprehensive debt restructuring that is expected to reduce the Company's long-term net debt by more than $500 million, including a new cash equity infusion of $75 million from a group of investors. Once implemented, the debt restructuring will improve the Company's financial flexibility and enhance its ability to work with its physician and hospital partners. Paul Rundell, 21st Century Oncology Holdings' Interim C.E.O., comments, "We are a fundamentally strong and profitable business; however, we simply have too much debt given the size of the business and the way industry dynamics, particularly the challenging reimbursement environment, have affected our ability to maximize revenue in the aftermath of these unprecedented, ongoing changes. As a result, in recent months we have been engaged in discussions with our key creditors to reduce our overall debt level. We are encouraged by the progress we've made in these advanced discussions and are optimistic that we can finalize the restructuring agreement in short order. We expect it to form the basis of a consensual Plan of Reorganization that gives us the necessary flexibility to make investments that will allow us to remain at the forefront of patient care, which is always our top priority." In conjunction with the Chapter 11 filing, certain of 21st Century Oncology Holdings' senior lenders have committed to provide up to $75 million in working capital through debtor-in-possession financing. Upon Court approval, the D.I.P. facility, together with the Company's available cash reserves and cash provided by operations, is expected to provide sufficient liquidity for the Company to continue operating its business without interruption and to meet its obligations. Upon emergence from the Chapter 11 process and subject to certain conditions, certain of 21st Century Oncology Holdings' creditors will contribute $75 million of cash equity in the reorganized company. As of October 25, 2013, OnCure Holdings, Inc. operates as a subsidiary of 21st Century Oncology, Inc. OnCure Holdings emerged from a previous Chapter 11 filing in October 2013 and was acquired by Radiation Therapy Services Holdings. Radiation Therapy Services Holdings changed its name to 21st Century Oncology Holdings in December 2013.

Constellation Enterprises M.O.R. Filed

Constellation Enterprises filed with the U.S. Bankruptcy Court a monthly operating report for the period of April 3, 2017 to April 30, 2017. For the period, the consolidated Debtors reported a net loss of $149.5 million on $49.7 million in net revenues and paid $11.3 million in total operating expenses before depreciation. Cash at the beginning of the period was $4.6 million and $4.6 million at period end, with a negative net cash flow of $2,803.

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