6/28/2021                                                                                                                           [Edition 1, Volume 4]

In many distressed situations, there are opportunities for clients to acquire assets at discounted prices. Gensburg Calandriello & Kanter is providing this bi-monthly summary of recent Chapter 11 cases filed in Illinois, Indiana, Wisconsin, Michigan and Ohio, as well as hospitality cases filed nationally, in which debtors (not necessarily clients of GCK) own assets that may be of interest, thereby making GCK clients aware of potential opportunities and ventures in the distressed assets market.  Cases listed under “Assets for Sale” feature assets currently available.  In cases listed under “New Filings,” the debtors have not yet found it necessary or otherwise decided to liquidate their assets, but may nonetheless be receptive to inquiries or offers to acquire some or all of the assets that they own.

New Filings

The following is an updating list of cases which are currently in, or entering chapter 11 bankruptcy.  We hope that these summaries provide you with the ability to quickly determine the relevancy of any given case and gauge your level of interest in the assets contained within.  If you need further information on any of the opportunities listed, please contact us by clicking here.

Illinois

Single Asset Real Estate Business – Rolling Meadows, Illinois

In re 1600 Hicks Road, LLC (Bankr. N.D. Illinois); Case No. 21-07478

• 1600 Hicks Road, LLC filed for Chapter 11 bankruptcy on June 15, 2021, in the Northern District of Illinois. 1600 owns the commercial property commonly known as: 1600 Hicks Road, Rolling Meadows, Illinois 60008. Google Maps provides that Exotic Motors Inc., a pre-owned car dealership, is currently operating at this address. In its bankruptcy schedules, the Debtor values its real property at $620,000.00, with a total secured claim of $1,539,998.00. This is the sole asset and liability disclosed by Debtor.  Debtor’s first day filings disclose no business or non-business income. No reason for bankruptcy was disclosed by Debtor.

Consumer Electronics Brand – Chicago, Illinois

In re Aiwa Corporation (Bankr. N.D. Illinois); Case No. 21-07702

• Aiwa Corporation, a Delaware Corporation with its principal place of business being in Chicago, filed for Chapter 11 bankruptcy on June 22, 2021, in the Northern District of Illinois. Aiwa is a consumer electronics brand owned and used by various companies in different regions of the world. Aiwa’s products include speakers, headphones, and earbuds. Debtor estimates the total value of both its assets and liabilities to be $1,000,001- $10 million. Debtor disclosed personal property consisting of and valued at by debtor as follows: bank accounts valued at $71,655.51; accounts receivables booked at $281,209.13; and general “other current assets” valued at $280,863.46. Debtor also discloses ownership of trademarks and patents with an estimated value of $1,250,000.00. Additionally, Debtor discloses its twenty largest unsecured creditors who hold combined liabilities of $775,497.33. For 2019, Debtor reported total income of $878,511.00 and taxable income of ($1,021,386.00). No specific reason for bankruptcy was disclosed by Debtor.

Indiana

Real Estate – Indianapolis, Indiana

In re JS&H Properties, LLC (Bankr. S.D. Indiana); Case No. 21-02948

• JS&H Properties, LLC filed for Chapter 11 bankruptcy on June 25, 2021, in the Southern District of Indiana. No information pertaining to JS&H Properties, LLC was disclosed by Debtor or easily ascertainable from an internet search. Debtor estimates both its assets and liabilities to be between $1,000,001 – $10 million. Debtor does not specifically disclose any assets, but does disclose a $2,493,164.10 secured claim, consisting of a note, mortgage, and foreclosure judgment for the real property commonly known as 16 East Henry Street, Indianapolis, Indiana. Debtor also discloses unsecured claims with a combined total of $343,923.52. No information concerning income or the reason for bankruptcy was disclosed by Debtor.

Michigan

Transportation Services – Utica, Michigan

In re Prime Logistics, Inc. (Bankr. E.D. Michigan); Case No. 21-45397

• Prime Logistics, Inc. filed for Chapter 11 bankruptcy on June 24, 2021, in the Eastern District of Michigan. Prime Logistics provides transportation services for Panther Premium Logistics. Debtor estimates both its assets and liabilities to be between $1,000,001 and $10 million. No additional information has yet been disclosed by Debtor.

Ohio

Transportation Services – Columbus, Ohio

In re 5AAB Transport, LLC; In re 5AAB Holding, LLC; In re SJS Transport, LLC; and Heavy Diesel Services, LLC (Bankr. S.D. Ohio); Case Nos. 21-bk-52150

• 5AAB Transport, LLC (“Transport”); 5AAB Holding, LLC (“Holding”); SJS Transport, LLC (“SJS”); and Heavy Diesel Service, LLC (“Diesel”) (collectively, the “Companies”) are related business entities, under the same management, which have all filed for relief under Chapter 11 of the Bankruptcy Code in June 2021. There is currently a pending request for joint administration of the cases. The Debtors have disclosed that together, the Companies provide ground transportation, freight forwarding, and logistics services, all on a national, regional and local basis. Each of the Companies manages a different segment of operations. The Debtors have noted that together, the Companies’ assets consist of hauling assets, intellectual/intangible property, receivables (Transport and SJS); maintenance assets (Diesel); and real estate (Holding). The breakdown of business operations and assets for each of the Companies is as follows:
  • The Debtors disclose that Transport, together with SJS, operates as a freight forwarding service. They note that Transport owns trucks and trailers as part of its freight forwarding business. SJS does not own any equipment. Debtor estimates the revenue derived from Transport and SJS to be $300,000.00 per month. Debtor discloses and estimates the value of Transport’s personal property as follows: 15 trucks and 18 trailers with a combined value of $575,000; and equipment used for loading the trailers with an undisclosed value. Debtor discloses that SJS’s assets are bank accounts and accounts receivables, but does not estimate the value of said assets.
  • The Debtors note that Holding is a real estate holding company that owns the primary real estate from which the Companies operate. Transport, SJS, and Diesel contribute funds to Holding as needed to own and maintain the property. Debtor discloses that Holding owns the real properties commonly known as 445 Commerce Square, Columbus, Ohio and 435 Commerce Square, Columbus, Ohio. Debtor also discloses that 445 has an office building, warehouse, and loading dock, while 435 is an equipment yard that has previously been rented to other trucking companies for vehicle storage. No value is provided for the properties.
  • Diesel provides truck and equipment repair services to Transport and other third-party companies, with a specialization in Volvo trucks. Debtor estimates the total value of Diesel’s assets to be $90,000, consisting of tools and equipment used for truck and trailer repair, maintenance inventory, and hardware for vehicle diagnostic services. Debtor estimates that Diesel generates approximately $30,000 per month.

According to Debtor, the liabilities of the Companies are both secured and unsecured and each encumber one or more of the Companies. A total estimated value of the Companies’ liabilities is not disclosed by Debtor. Debtor does disclose that the reason for bankruptcy stems from multiple factors, including the loss of a large customer, the Covid-19 pandemic, and a shortage of drives and trailers that has limited the Companies’ ability to meet demand.

Hospitality

Hotels – Page, Arizona and Rohnert Park, California

In re Redwood Empire Lodging, LP (Bankr.D.Ariz.); Case No. 21-04678

• On June 16, 2021, Redwood Empire Lodging, LP filed a petition under Chapter 11 of the Bankruptcy Code. The Debtor owns and operates two hotels – the 102 room Best Western Plus located at 208 N Lake Powell Boulevard, Page, Arizona 86040 and the 142 room Best Western Sonoma Winegrower’s Inn, located at 6500 Redwood Drive Rohnert Park, California 94928. In addition to offering hotel rooms to the public, the Debtors state that each of the Hotels has a cleaning department, a hot tub and swimming pool, a fitness center, and high-speed internet.  Although both Hotels typically provide guests with complimentary hot breakfast, the Debtor states that it has not been providing this service due to the COVID pandemic and related restrictions.  The Debtor states that it acquired the Page Hotel in November 2019 for approximately $21 million.  The Debtor states that it acquired the Rohnert Park Hotel in August 2019 for approximately $20 million.  The Debtor asserts that the COVID-19 pandemic  resulted in a nearly complete shutdown of the travel and hospitality industry in Arizona and California.  As a result, its hotels’ annual revenue dropped to an aggregate of approximately $3.1 million in 2020.  The Debtor states that it ended 2020 with a negative net income of approximately $1.6 million.

Hotel – Philadelphia, Pennsylvania

In re Roosevelt Inn, LLC and In re Roosevelt Motor Inn, LLC (Bankr.E.D.Pa.); Case Nos. 21-11697 & 21-11698

• On June 16, 2021, the Roosevelt Inn, LLC and the Roosevelt Motor Inn, LLC filed petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Pennsylvania. The Debtors operate the 107 room Roosevelt Inn hotel located at 7600 Roosevelt Boulevard, Philadelphia, Pennsylvania. The Debtors state that they have no secured debt, but file for bankruptcy due, in part, to various civil suits pending in the Philadelphia County Court of Common Pleas.

Hotel – Las Vegas, Nevada

In re Boutique NV, LLC (Bankr.D.Nev.); Case No. 21-13050

• On June 16, 2021, Boutique NV, LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Nevada. The Debtor states that it owns and operates The Retreat on Charleston Peak, which it describes as a sixty-two (62) room hotel located at 2755 Kyle Canyon Road, Las Vegas, Nevada 89124, APN 128-28-304-001. The Debtor further describes the hotel as a rustic lodge elevated 6,700 ft. above sea level in the Kyle Canyon area situated on 5.76 acres of land near Mount Charleston and is 45 minutes away from the Las Vegas Strip.  It states that the hotel offers various amenities, including the Canyon Restaurant & Tavern Bar, described as a full-service restaurant and bar with restricted gaming, and a 5,100 square foot event space and outdoor deck for wedding or commitment ceremonies, conferences, and other events.  The Debtor states that the hotel also has a spa, which has been closed during the COVID-19 pandemic, but which the Debtor believes will be re-opened soon.  The Debtor states that the hotel experienced a sharp downturn in revenue given its inability to host events and large gatherings during the COVID-19 pandemic and state-mandated closures, and thus fell behind on its debt service leading to a noticed foreclosure sale for the property, and this bankruptcy was filed to stay that foreclosure and allow for a restructuring of its secured debt.

NOTICE AND DISCLAIMER

The information contained in this article represents redactions from pleadings filed in the relevant bankruptcy case, supplemented, from time-to-time with data from the internet. Gensburg Calandriello & Kanter, P.C. has not independently investigated, nor verified the accuracy of this information and, therefore, does not make any representation or warranty whatsoever, express or implied, as to the content, accuracy or completeness of any of information contained herein, including, but not limited to (i) the value of any assets referenced herein, (ii) whether such assets are free from liens and encumbrances, or (iii) the environmental condition of any real estate.  Therefore, while the information contained in this article is believed to be accurate, it should not be relied upon, and does not constitute legal or financial advice. Thus, parties reviewing or acting on this material must make an independent determination as to whether or not a particular course of action is generally appropriate.

Gensburg Calandriello & Kanter, P.C.

Lane Gensburg                                          E. Philip Groben

Anthony Calandriello                                   Alexis Clinebell

Gary Kanter                                               Michael Gutting

Matthew Gensburg                                     Anne Kim

Norman Berger                                           Sandra Mertens

Giselle Piraro                                             Kathryn Rinkus

This information is based upon publicly available information and is intended to provide a brief overview of each opportunity.

Gensburg Calandriello & Kanter, P.C. | Attorneys at Law | WWW.GCKLEGAL.COM