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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                     L A T I N   A M E R I C A

            Tuesday, August 21, 2018, Vol. 19, No. 165


                            Headlines



B R A Z I L

AZUL SA: S&P Affirms 'B+' Global Scale ICR, Outlook Stable
AZUL SA: Reports July Traffic


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Water Supply Dwindles as Drought Spreads
DOMINICAN REPUBLIC: Trade With UK Falls 2.22% in 1H to US$121MM


J A M A I C A

DIGICEL GROUP: Sues French Telecoms Giant


N I C A R A G U A

NICARAGUA: Protesters Take to the Streets After Long Struggle


P U E R T O    R I C O

KONA GRILL: Berke Bakay Transitions to New Role as Exec. Chairman
NATIONAL STORES: U.S. Trustee Forms Seven-Member Committee
PUERTO RICO: 1st Cir. Remands Bondholders' Case to District Court
ROTULOS VILLEGAS: Taps Justiniano Law Offices as Legal Counsel


V E N E Z U E L A

VENEZUELA: Debt Wreck Marks New Milestone as $6.1 Billion Unpaid


                            - - - - -


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B R A Z I L
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AZUL SA: S&P Affirms 'B+' Global Scale ICR, Outlook Stable
----------------------------------------------------------
S&P Global Ratings affirmed its 'B+' global scale issuer credit
and issue-level ratings on Azul S.A. At the same time, S&P
affirmed the 'brAA' Brazilian national scale issuer credit rating.

S&P said, "The 'B+' issue-level rating on Azul's senior unsecured
debt is the same as the issuer credit rating, reflecting our
recovery rating of '4', given our expectation of average recovery
prospects (30%-50%; rounded estimate 40%) for unsecured creditors.

"The affirmation reflects our expectation of Azul's gradual
improving credit metrics in the next few years, albeit somewhat
slower than our previous forecast, supported by its fairly
balanced capital structure with hedged debt principal, growth
strategy that will generate higher cash flows, good operating
efficiency, and ability to adjust average ticket prices during
volatile industry and macroeconomic conditions. Nevertheless, we
don't believe that Azul is shielded against exchange rate (FX)
volatility and rises in Brent prices, because almost half of the
company's cost structure is pegged to the U.S. dollar, as well as
all its operating and financial leases, while it generates less
than 15% of cash flows in hard currency. We now expect the company
to post gross debt to EBITDA below 4.5x in 2018 and below 4.0x in
2019, versus our previous expectation of 4.0x in 2018 and around
3.5x in 2019."

After Azul's IPO and bond issuance, it refinanced debt to reduce
the interest burden. Nevertheless, turbulent industry and economic
conditions during the second quarter of 2018 affected the
company's deleverage trend, despite the hedging strategy that
protects Azul's 2024 notes and part of its fuel needs. The
currency exposure corroborates our view of Azul's negative capital
structure, which limits the ratings. For instance, S&P notes that
adjusted debt, including operating lease adjustment, reached
almost R$11.3 billion in June 2018 (from roughly R$10 billion this
March). In S&P's view, Azul's good operating performance
ultimately reflects its competitive advantages in its unique route
network that benefits from little overlap with those of its main
competitors. The company is the only carrier for about 70% of its
routes, giving it meaningful pricing power so that it's usually
able to pass through cost increases and currency devaluation to
average fares. Coupled with that, Azul has implemented its growth
strategy by adding larger aircrafts to its fleet (A-320NEOs) and
replacing some of its smaller E-Jets on longer-haul flights. This
will not only increase Azul's cash generation because of these
aircrafts' higher available seat kilometers (ASK), but will also
help the company improve its operating efficiency by capturing
the benefits of lower cost per seat and fuel burn efficiency.

Under S&P' base-case scenario, it also includes the following
assumptions:

-- Brazil's GDP increasing by 1.6% in 2018 and 2.4% in 2019,
    supporting increased demand for air travel among corporate and
    leisure clients;

-- Average exchange rate of R$3.60 per $1 in 2018 and R$3.75 per
    $1 in 2019, affecting Azul's foreign-denominated expenses,
    including fuel, maintenance, and aircraft leasing;

-- Brazilian consumer price index (CPI) growing 3.7% in 2018,
    followed by 4.1% in 2019, affecting Azul's main costs and
    expenses denominated in local currency, including salaries,
    which also increase with the company's higher capacity. This
    is offset by the roughly 35%-40% gain in efficiency from the
    introduction of larger aircrafts;

-- Aircraft fuel prices increasing according to our forecasted
    Brent oil prices of $67 per barrel (bbl) in 2018 and $60/bbl
    in 2019, on average, affecting the company's unhedged fuel
    costs;

-- S&P assumes Azul will increase ASK by about 15%-16% in 2018
    and by roughly 16%-17% in 2019, as it replaces smaller
    aircraft with larger ones and expands its route network;

-- Revenue passenger per kilometer (RPK) increasing by 14%-15% in
    2018 and 16%-17% in 2019 because of more resilient demand for
    Azul's main routes and the delivery of larger aircraft, as
    seen in the 15% rise in RPK during the first six months of
    this year;

-- These assumptions result in an expected load factor of about
    79.5%-80.5% in 2018 and 2019;

-- Yields improving by around 10% in 2018 and flat in 2019;

-- Landing fees increasing with expected growth rate for annual
    departures, which we assume at 3% in the next few years;

-- Capital expenditures (capex) of about R$640 million in 2018
    and R$1.0 billion in 2019, mainly related to new aircrafts,
    engines, and equipment. Until 2019, Azul will finance new
    aircraft by operating leases that are already contracted;

-- S&P's divestment assumption includes proceeds from the sale of
    aircraft for about R$400 million in 2018; and

-- No relevant dividend payout-S&P assumes Azul's dividend policy
    of 0.1% over the previous year's net income.

Because of these assumptions, S&P arrives at the following credit
metrics:

-- Revenue of R$9.0 billion-R$9.1 billion in 2018 and R$10.4
    billion--R$10.5 billion in 2019;

-- EBITDA of R$2.5 billion-R$2.6 billion in 2018 and R$3.2
    billion-R$3.3 billion in 2019;

-- FFO of R$1.8 billion-R$1.9 billion in 2018 and R$2.4 billion-
    R$2.5 billion in 2019;

-- Gross debt to EBITDA below 4.5x in 2018 and between 3.6x-3.8x
    in 2019;

-- FFO to gross debt of 16%-17% in 2018 and slightly above 20% in
    2019;

-- EBITDA interest coverage slightly above 3.0x in 2018 and above
    3.5x in 2019; and

-- Free operating cash flow (FOCF) to debt of 5%-6% in 2018 and
    8%-9% in 2019.

S&P ran a sensitivity scenario for Azul, assuming an average and
end of period exchange rate of R$3.8 per $1 in 2018 and R$4.0 per
$1 in 2019. Under this scenario, Azul's gross credit metrics would
be:

-- Gross debt to EBITDA between 4.6x-4.7x in 2018 and slightly
    above 4.0x in 2019;

-- FFO to gross debt around 15% in 2018 and 18% in 2019;

-- EBITDA interest coverage slightly above 3.0x in 2018 and 3.5x
    in 2019; and

-- FOCF to debt below 5% in 2018 and around 6%-7% in 2019.

S&P said, "We believe Azul compares favorably with its peers in
the 'B' rating category such as Avianca Holdings S.A. (B/Stable/--
). Although we analyze the company's metrics on a gross debt
basis, we acknowledge that thanks to the debt refinancing that
followed Azul's IPO and the notes placement, coupled with its
ongoing fleet restructuring, we expect Azul to deleverage in the
next few years. We also believe this will stem from Azul's
strategy of operating in markets with little or no competition,
which generate higher margins and good operating efficiency
compared to those of domestic players. We also consider that Azul
has contingent assets composed of a portion of Portugal-based
airline TAP's convertible bonds, which are denominated in Euros an
d are a source of foreign currency for the company given their
face value. We also consider that Azul wholly owns its millage
program, Tudo Azul."

Liquidity

S&P said, "We view Azul's liquidity as adequate, because we expect
the company's sources over uses of liquidity to be higher than
1.2x in the next 12 months and that sources will continue to
exceed uses even if EBITDA declines by 30%. Azul holds sizable
cash reserves and benefits from a smooth debt maturity profile.
The company's fleet expansion will involve significant capex in
the coming years, although it has already contracted funding for
airlines to be delivered until 2019. We expect meaningful working
capital requirements in the coming years to reflect the company's
growth trajectory, which is offset by Azul's increasing cash flow
generation and credit friendly dividend policy--consisting of 0.1%
of previous years' net income. We believe the company has the
ability to absorb high-impact, low probability events, and we
acknowledge its access to capital markets last year when it first
placed its international bonds after the IPO."

Principal liquidity sources:

-- Cash and cash equivalents of R$1.5 billion as of June 30,
    2018; and

-- FFO of about R$1.1 billion in the next 12 months;

Principal liquidity uses:

-- Short-term debt of R$542 million as of June 30, 2018;

-- Capex of about R$820 million in the next 12 months, related to
    new aircrafts, engines, spare parts, and equipment;

-- Working capital requirements of roughly R$570 million,
    including intra-year seasonal working capital; and

-- No relevant dividend payments.

Azul is subject to payment acceleration financial covenants under
its debt contracts, which require adjusted net debt to EBITDAR of
less than 5.5x and interest coverage greater than 1.2x. S&P
expects the company to meet the interest coverage ratio with a
meaningful cushion, above 30% headroom, although it expects a
limited cushion of about 20% for debt to EBITDAR.

Outlook

S&P said, "The stable outlook reflects our view that Azul will
gradually improve its financial metrics in the coming years by
generating increasing cash flow as it grows. The outlook also
incorporates our expectations of a stronger operating performance
thanks to the company's competitive advantages and improving
operating efficiency, mainly due to its fleet strategy and market
leadership in key routes it operates. As a result, we expect
Azul's gross leverage to be below 4.5x by the end of 2018 and
below 4.0x in 2019, while FFO to debt will improve to 14%-15% and
16%-17%, respectively, in the same period."

Downside scenario

S&P said, "We could downgrade Azul because of weaker-than-expected
operating performance, potentially due to further worsening of
Brazil's economy and political uncertainty in the country that
could affect demand and exacerbate FX volatility, raising the
company's leverage and costs. These factors would result in debt
to EBITDA closer to 5.0x and FFO to debt of about 12% on a
consistent basis. A negative rating action is also possible if
volatility in the company's cash generation results in operational
cash burn, weakening Azul's liquidity."

Upside scenario

S&P said, "We could raise the ratings if Azul deleverages and
increases cash flow generation by repaying more expensive debt and
improving its overall debt cost and maturity profile, which could
result in gross debt to EBITDA trending to 3.0x, FFO to gross debt
of about 30%, and FOCF to gross debt above 15% consistently. An
upgrade is also possible if the company lowers its exposure to
foreign currency volatility."

Ratings Score Snapshot

Corporate Credit Rating: B+/Stable/--
                          brAA/Stable/--

Business risk: Weak
-- Country risk: Moderately high
-- Industry risk: High risk
-- Competitive position: Fair

Financial risk: Aggressive
-- Cash flow/Leverage: Aggressive

Anchor: b+
Modifiers:
-- Diversification/Portfolio effect: Neutral (no impact)
-- Capital structure: Negative (-1 notch)
-- Liquidity: Adequate (no impact)
-- Financial policy: Neutral (no impact)
-- Management and governance: Fair (no impact)
-- Comparable rating analysis: Positive (+1 notch)

Issue Ratings--Recovery Analysis

Key analytical factors

The 'B+' rating on Azul's senior unsecured notes due 2024 is at
the same level as the issuer credit rating, reflecting a recovery
rating of '4' with an average recovery expectation of 40%
(rounded) for unsecured creditors.

Although most of Azul's fleet is under operating and financial
leases, the issue-level rating reflects the company's non-aircraft
related debts, which are mostly unsecured. In addition, the
company holds unencumbered aircraft that it could sell to reduce
debt in a stress scenario. S&P said, "We analyze Azul's recovery
under a going concern basis, given its relevance to the markets it
serves, with little or no competition, which leads us to believe
that the company would likely be restructured in a distress
scenario."

S&P said, "We valuate Azul using a discrete asset value approach,
focusing on the most valuable and liquid assets available. We
apply an overall haircut of about 60% to Azul's asset base,
including about a 75% haircut to its cash position, because the
company would likely use part of its cash to fund working capital
needs and repay more expensive loans as its operations and access
to markets starts to weaken.

"Under this scenario, we believe Azul's available assets would be
enough to meet its secured loans and about 40% of its unsecured
loans, including the notes due 2024."

Simulated default assumptions

-- Simulated year of default: 2022.

-- S&P includes only about 23% of Azul's cash and cash reserves,
    because it believes the company would use those resources to
    continue operating and meeting working capital needs.

-- Accounts receivables to decline by 32%, reflecting issues of
    collecting from clients and a decline in demand closer to
    default.

-- A 20% haircut to spare parts and engines.


-- A 40% haircut to the value of some domestic slots.

-- An 80% haircut to aircraft equipment and engines.

-- S&P applies a 5% cut for administrative expenses.

-- Therefore, S&P arrives at a gross enterprise value of about
    R$1.6 billion.

Simplified waterfall

-- Net enterprise value (after 5% administrative expenses): R$1.5
    billion

-- Secured debt: R$370 million

-- Total value available to unsecured claims: R$1.2 billion

-- Total senior unsecured debt: R$2.3 billion

-- Expected recovery of senior unsecured debt: 30%-50% (rounded
    estimate: 40%)

Ratings Affirmed

  Azul S.A.
   Issuer Credit Rating
    Global Scale                            B+/Stable/--
    Brazil National Scale                   brAA/Stable/--

                                             To         From
  Azul Investments LLP

   Senior Unsecured
    Local Currency                           B+         B+
    Recovery Rating                          4(40%)     4(45%)


AZUL SA: Reports July Traffic
-----------------------------
Azul S.A., "Azul", the largest airline in Brazil by number of
cities served, announced on August 8, 2018, its preliminary
traffic results for July 2018.
Consolidated passenger traffic (RPKs) increased 22.6% compared to
July 2017 on a capacity increase (ASKs) of 21.2%.  As a result,
load factor was 85.4%, 1.0 percentage points higher than July
2017. Domestic load factor was 83.5% and international was 91.0%.

"July was a strong traffic month for Azul, demonstrating a healthy
demand environment and the continuing success of our fleet
transformation strategy," says John Rodgerson, Azul's CEO.

Year to date, we continue to be the number one on-time airline in
Brazil, with an on-time arrival rate of 86.39%, according to
FlightStats.



===================================
D O M I N I C A N   R E P U B L I C
===================================


DOMINICAN REPUBLIC: Water Supply Dwindles as Drought Spreads
------------------------------------------------------------
Dominican Today reports that the drinking water supply due to
dwindled reservoirs has forced thousands of families in the North
region to buy it from tanker trucks.

In some villages, residents must pay as much as 50 pesos for a 55
gallon tank, according to Dominican Today.

The sale of water by trucks has spread throughout the area as the
drought heightens, the report notes.

The report relays that reservoir Tavera-Bao stood at 316.65 meters
above sea level, below the average 340 meters.

"This causes the flow deficit to be maintained due to the low
level of the dam and the problems at the Lopez Angostura pumping
station," said the Water Utility of Moca (Coraamoca), the report
says.

It adds that the inflow of raw water is 1,000 liters per second,
which must supply 85 percent of the 230,000 users of northern
Espaillat province, adds the report.

As reported in the Troubled Company Reporter-Latin America on
July 19, 2018, Fitch Ratings assigned a 'BB-' rating to
Dominican Republic's USD1.3 billion bonds, maturing July 2028. The
notes have a coupon of 6%.  Proceeds from the issuance will be
used for general purposes of the government, including the partial
financing of the 2018 budget.


DOMINICAN REPUBLIC: Trade With UK Falls 2.22% in 1H to US$121MM
---------------------------------------------------------------
Dominican Today reports that Dominican Republic-United Kingdom
trade topped US$121.0 million in the first half, a 2.22% decline
compared to the same period last year.

From January to June 2017, trade had reached US$122.7 million,
according to the third Microeconomic Vision Bilateral Trade
Bulletin Dominican Republic-United Kingdom, corresponding to
January-June 2018, according to Dominican Today.

This publication on Dominican Republic-United Kingdom trade is the
result of an agreement between the Universidad Pontificia (PUCMM)
and the British Dominican Republic Chamber of Commerce (Britcham),
through the Center for Economic and Social Studies (CEPA), the
report notes.

Of the trade in 2018, exports accounted for 44.8% and imports
55.2%, or US$54.2 million and US$66.9 million respectively, the
report relays.

Meanwhile, exports of Dominican products to the British market
climbed 0.53%, whereas imports fell 75%, the report says.

According to the study, the products with the greatest export
potential from the Dominican Republic to the United Kingdom are
bananas and plantains, the report notes.

The products with the greatest export potential from the United
Kingdom to the Dominican Republic are: whiskey, motor vehicles and
medicines, the report adds.

As reported in the Troubled Company Reporter-Latin America on
July 19, 2018, Fitch Ratings assigned a 'BB-' rating to
Dominican Republic's USD1.3 billion bonds, maturing July 2028. The
notes have a coupon of 6%.  Proceeds from the issuance will be
used for general purposes of the government, including the partial
financing of the 2018 budget.


=============
J A M A I C A
=============


DIGICEL GROUP: Sues French Telecoms Giant
-----------------------------------------
RJR News reports that the Irish Times newspaper is reporting that
Digicel has taken legal action seeking an additional EUR80 million
from French telecoms giant Orange in relation to a long-running
anti-competitive practices dispute in the Caribbean.

The Paris Commercial Court ruled last December that Orange pay
Digicel EUR179.6 million in damages, plus costs and interest
dating back to March 2009, according to RJR News.

It came as the French group was found to have abused its dominant
position in the French West Indies, the report notes.

The report relays that Orange said in its latest financial report
for the first half of 2017 that it had set aside EUR346 million in
an escrow account to cover the cost.

However, the Denis O'brien led Digicel claims the award should be
EUR426 million -- EUR80 million higher -- as the interest should
be calculated on a compound basis rather than the simple interest
formula used by Orange, the report relays.

Legal correspondence, seen by The Irish Times, shows that the
Digicel case will come before the Paris Court of Appeal on
September 4, the report notes.

Separately, Orange appealed the December ruling in April with the
same court, and its chief financial officer, Ramon Fernandez, told
analysts late last month on a conference call that the company was
confident that the court should reduce the amount at stake, the
report says.

The report discloses that Digicel is also said to be confident
that its position will be upheld by the appeal court.

A spokeswoman for Orange declined to comment, while a spokesman
for Digicel said the company was unable to comment on ongoing
litigation, the report relays.

The ultimate amount of damages, stemming from allegations made
against Orange of anti-competitive practices between 2000 and 2005
across seven islands that make up the French West Indies, would
help Digicel as it comes under pressure from bond investors to
lower its EUR5.8 billion debt, the report notes.

However, it is understood that Mr. O'Brien will have to share some
of the money with French phone group Buoygues Telecom, which sold
its French West Indies business to Digicel in 2006, the report
relays.

Meanwhile, Digicel is planning to raise J$500 million from asset
sales and increase earnings by 10 per cent to US$1.1 billion
dollars in the current financial year, the report says.

This is in order to meet a key pledge to bondholders that it will
reduce its net debt in the space of 12 months, the report notes.

The deleveraging plan is seen as crucial as Digicel eyes a
refinancing of $2 billion of bonds that are due to be redeemed in
September 2020, the report discloses.

This has been driven as investors fret over the group's ability to
refinance the debt well ahead of schedule and amid a broader
sell-off of emerging market debt, which has been exacerbated
recently by Turkey's ongoing financial crisis and a rise in the
value of  the US dollar, the report adds.

As reported in the Troubled Company Reporter-Latin America on
July 5, 2018, Moody's Investors Service has changed to negative
from stable the outlook on the ratings of Digicel Group Limited
("Digicel", "DGL" or the "company") and Digicel Limited ("DL") and
assigned a negative outlook to Digicel International Finance
Limited ("DIFL"). At the same time, Moody's has affirmed DGL's B2
corporate family rating (CFR) and B2-PD probability of default
rating (PDR), as well as the B1 rating on the unsecured notes of
DL and the Ba2 rating on the secured bank credit facilities of
DIFL.


=================
N I C A R A G U A
=================


NICARAGUA: Protesters Take to the Streets After Long Struggle
-------------------------------------------------------------
Alianza News reports that protest marches were held in the streets
of Managua, four months after the protests against the ruling
Sandinista government began, which started in Nicaragua on Apr.18.

"Not a step back" was the slogan repeated during the
demonstrations, which were held under the theme "Nothing is
normal," according to Alianza News.

"We started strong but we had comrades who were killed, or others
who disappeared and of whom we still have no news months later,
hundreds wounded, physically and psychologically, repression,
threats. Then, there were moments of fear and doubt, but it is
clear we have to continue," a young protester, Luis Carlos
Chamorro told EFE, the report relays.

The protester, who acknowledged the uncertainty that plagued him
"and many other comrades at certain times," said, "Now is the time
for the people, the time for Nicaragua, to get back what belongs
to us, to be free, to have justice and peace, and we will only
achieve that by being united in the streets," the report notes.

The report says that the he demonstrators were "more convinced
than ever" of the need to fight "united," to do whatever it takes
and to "seek justice for more than 400 brothers and sisters who
gave their lives for a better country for all."

"They don't deserve that we stay at home watching abuses continue
by a government that believes it is the master of the world,
master of the destiny of millions of Nicaraguans.  For them and
for us, we are going to continue even if it costs us our lives,"
Mr. Chamorro concluded, the report adds.

As reported in the Troubled Company Reporter-Latin America on
June 29, 2018, Fitch Ratings has downgraded Nicaragua's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'B' from 'B+'. The
Outlook is Negative.


======================
P U E R T O    R I C O
======================


KONA GRILL: Berke Bakay Transitions to New Role as Exec. Chairman
-----------------------------------------------------------------
Berke Bakay, age 40, Kona Grill, Inc.'s president and chief
executive officer transitioned his role from president and chief
executive officer to executive chairman of the Board of Directors.

In connection with Mr. Bakay's appointment as the Company's
executive chairman of the Board of Directors, he will receive an
initial base salary of $350,000 per year.  There are no other
changes to his compensation at this time.

The Company appointed Jim Kuhn, age 57, to serve as president and
chief executive officer of the Company, effective Aug. 7, 2018.
Mr. Kuhn previously held the position of chief operating officer
with the Company.

Mr. Kuhn will receive an initial base salary of $350,000 per year.
There are no other changes to his compensation at this time.

                    Departure of Directors

Effective Aug. 7, 2018, James R. Jundt, age 76, retired from the
Company's Board of Directors.  Mr. Jundt served eight years as the
Company's Chairman of the Board of Directors.

                        About Kona Grill

Kona Grill, Inc., headquartered in Scottsdale, Arizona, Kona
Grill, Inc. -- http://www.konagrill.com/-- currently owns and
operates 45 restaurants in 22 states and Puerto Rico.
Additionally, Kona Grill has two restaurants that operate under a
franchise agreement in Dubai, United Arab Emirates, and Vaughan,
Canada.

Kona Grill incurred a net loss of $23.43 million in 2017 and a net
loss of $21.62 million in 2016.  As of June 30, 2018, Kona Grill
had $85.02 million in total assets, $77.17 million in total
liabilities and $7.85 million in ttoal stockholders' equity.

The Company has incurred losses resulting in an accumulated
deficit of $79.7 million, has a net working capital deficit of
$7.6 million and outstanding debt of $37.8 million as of Dec. 31,
2017.  The Company said in its 2017 Annual Report that these
conditions together with recent debt covenant violations and
subsequent debt covenant waivers and debt amendments, raise
substantial doubt about its ability to continue as a going
concern.


NATIONAL STORES: U.S. Trustee Forms Seven-Member Committee
----------------------------------------------------------
Andrew R. Vara, Acting U.S. Trustee for Region 3, on Aug. 16
appointed seven creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases of J & M Sales, Inc,
National Stores, Inc., and its affiliates.

The committee members are:

     (1) Regency Centers, LP
         Attn: Ernst A. Bell, Esq.
         One Independent Drive, Suite 114
         Jacksonville, FL 53562
         Tel: (904) 598-7685

     (2) Armouth Intl., Inc.
         Attn: Charles Armouth Levy
         18 W. 33rd Street, Floor No. 5
         New York, NY 10001
         Tel: (212) 695-7700

     (3) One Step Up, Ltd.
         1412 Broadway, 3rd Floor
         New York, NY 10018
         Tel: (212) 398-1110

     (4) Mulitex, Ltd.
         Attn: Sivaprakasham R. Rajakkal
         Room 905-907, (th Floor, Tower 1
         Cheung Sha Wan Plaza, 833 Cheung Sha Wan Road
         Lai Chi Kok, Hong Kong
         Tel: (852) 225-11333

     (5) Idea Nuova
         Attn: Isaac Ades
         302 5th Avenue, 5th Floor
         New York, NY 10001
         Tel: (212) 643-0680

     (6) Royal Deluxe Accessories
         2565 Brunswick Avenue, Building 02
         Linden, NJ 07036
         Tel: (908) 523-0550

     (7) Jasmine McGerr
         c/o Capstone Law APC
         1875 Century Park East, Suite 1000
         Los Angeles, CA 90067
         Tel: (310) 556-4811

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense.  They may investigate the debtor's business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.

                      About National Stores

National Stores is a 344-store chain in 22 U.S. states and Puerto
Rico.  National Stores currently does business as Fallas, Fallas
Paredes, Fallas Discount Stores, Factory 2-U, Anna's Linen's by
Fallas, and Falas (spelled with single "l" in Puerto Rico).

Fallas, which emplolys 9,800 people, is a discount retailer
offering value-priced merchandise, including apparel, bedding and
household supplies.  The brands of National Stores are located in
retail plazas, specialty centers, and downtown areas to serve the
communities its customers and staff members call home.

National Stores, Inc., and its affiliates sought Chapter 11
protection and Aug. 6, 2018, and announced that Hilco Merchant
Resources, LLC, is conducting going-out-of-business sales for 74
stores.  The lead case is In re J & M Sales Inc. (Bankr. D. Del.
Lead Case No. 18-11801).

J & M Sales estimated assets and debt of $100 million to $500
million as of the bankruptcy filing.

The Hon. Laurie Selber Silverstein is the case judge.

The Debtors tapped Katten Muchin Rosenman LLP as general
bankruptcy counsel, Pachulski Stang Ziel & Jones LLP as bankruptcy
co-counsel, Retail Consulting Services, Inc., as real estate
advisor, Imperial Capital, LLC, as investment banker, and Prime
Clerk LLC as the claims and noticing agent.  SierraConstellation
Partners, LLC, is providing personnel to serve as chief
restructuring officer and support staff.


PUERTO RICO: 1st Cir. Remands Bondholders' Case to District Court
-----------------------------------------------------------------
The U.S. Court of Appeals for the First Circuit considers again
the application of PROMESA, a statute Congress enacted to address
Puerto Rico's financial crisis. In this instance, holders of
revenue bonds issued by the Puerto Rico Electric Power Authority,
known as PREPA, sought relief from a stay of actions against PREPA
to petition another court to place PREPA in receivership. The
district court concluded that PROMESA sections 305 and 306, 48
U.S.C. sections 2165, 2166, precluded it from granting such
relief.

Upon review, the First Circuit concludes otherwise. Whether the
district court should in its discretion grant the requested
relief, and on what terms and conditions, is a matter the Court
leaves to the able district court to decide on remand based on
circumstances as they then exist.

Appellants, or "the bondholders," are holders and insurers of debt
issued by PREPA and governed by a 1974 Trust Agreement. Under that
Trust Agreement, PREPA pledged to the bondholders its revenues to
repay over time the money PREPA acquired by issuing the bonds,
plus interest. On July 3, 2017, PREPA defaulted on its payments.
The bondholders accuse PREPA of breaching a promise to seek a rate
increase sufficient to cover debt payments, of failing to collect
on customer accounts, and of mismanaging operations. For these
reasons, the bondholders asked the district court overseeing the
Title III bankruptcy for relief from the automatic stay so that
they could file suit to vindicate their right under territorial
law to have a receiver appointed to manage PREPA and seek a rate
increase sufficient to cover debt servicing.

The Title III court denied the bondholders' request for relief
from the automatic stay. It reasoned, first, that PROMESA section
305 prohibited the Title III court "from transferring control of
PREPA's management and property to a receiver without the
Oversight Board's consent." Second, it concluded that PROMESA
section 306 which gives the Title III court exclusive jurisdiction
over the debtor's property, also prevented it from "ced[ing]
jurisdiction of PREPA's property in the form of operating assets
and revenues to another court." Third, and in the alternative, the
Title III court concluded that "cause" did not exist under 11
U.S.C. section 362(d)(1) to lift the stay because the balance of
harms cut against the relief requested.

The First Circuit agrees with the bondholders that Section 305
does not tie the Title III court's hands quite so much as that
court found it did. The First Circuit's reasoning begins with
the statutory text. The text of Section 305 trains on the powers
of "the court," plainly the Title III court. It states
specifically what that court may not do: "interfere with" certain
powers and assets of the debtor "by any stay, order, or decree."
The bondholders' principal request for relief does not ask the
Title III court to issue any such stay, order, or decree that
itself interferes with the debtor's powers or assets. Rather, the
bondholders ask the Title III court to stand aside -- by lifting
the stay -- to allow another court under Commonwealth law to
decide whether to do what the Title III court is assumed not to be
able to do. Nothing in that text plainly calls for the First
Circuit to read a prohibition on interference by the Title III
court so broadly as to encompass an action that might allow
another court to decide whether to interfere with the powers or
properties of the debtors.

The First Circuit, thus, holds that Section 305 does not prohibit
as a matter of course the Title III court from lifting the stay
when the facts establish a creditor's entitlement to the
appointment of a receiver in a different court in order to protect
a creditor's collateral should that protection otherwise be
necessary and appropriate.

Regarding Section 306, it is better understood as a housekeeping
provision keeping the bankruptcy process ultimately under the
prerogative of the Title III court. Even when the Title III court
lifts the stay, that prerogative remains. Thus, the First Circuit
concludes that Section 306(b) does not prevent a Title III court
from, after a determination of "cause," lifting the stay to allow
a
creditor to seek the appointment of a receiver in another court.

The Title III court also included a brief section in its order
stating, in the alternative, that it would deny the requested
relief from the automatic stay even if it had the power to do
otherwise. In so stating, it identified the impediments that a
receiver appointed outside the adjustment proceeding would pose to
the successful conclusion of that proceeding. The Title III court,
however, undertook no assessment of the extent to which any
collateral of the bondholders might be irreversibly harmed in the
interim, or whether PREPA could demonstrate that it was adequately
protecting that interest, factors a court would ordinarily examine
and weigh.

For these reasons the First Circuit vacates the order denying the
bondholders' request for relief from the automatic stay and
remands
for further proceedings.

A full-text copy of the Court's August 8, 2018 Decision is
available at:

     http://bankrupt.com/misc/prb17-04780-935.pdf

                        About Puerto Rico

Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.

The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.

The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').

The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017.  On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").

U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases.  The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.

Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.

The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.

Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.

McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.

Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at

      https://cases.primeclerk.com/puertorico

Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.

O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.

The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.

                    Bondholders' Attorneys

Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet,
Rivera & Sifre, P.S.C. and serve as counsel to the Mutual Fund
Group, comprised of mutual funds managed by Oppenheimer Funds,
Inc., and the First Puerto Rico Family of Funds, which
collectively hold over $4.4 billion of GO Bonds, COFINA Bonds, and
other bonds issued by Puerto Rico and other instrumentalities.

White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.

Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy Capital (Jersey) LP, FCO Advisors LP, and Monarch
Alternative Capital LP.

Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.

Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management II LP (the QTCB Noteholder Group).

                          Committees

The U.S. Trustee formed an official committee of retirees and an
official committee of unsecured creditors of the Commonwealth.
The Retiree Committee tapped Jenner & Block LLP and Bennazar,
Garcia & Milian, C.S.P., as its attorneys.  The Creditors
Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as
counsel.


ROTULOS VILLEGAS: Taps Justiniano Law Offices as Legal Counsel
--------------------------------------------------------------
Rotulos Villegas Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Puerto Rico to hire Justiniano Law
Offices as its legal counsel.

The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; assist in the liquidation of its assets; examine
claims of creditors; prepare a bankruptcy plan; and provide other
legal services related to its Chapter 11 case.

The firm will charge these hourly rates:

     Gloria Justiniano Irizarry     $250
     Associates                     $125
     Paralegals                      $50

Justiniano Law Offices received a retainer in the sum of $3,000.

Gloria Justiniano Irizarry, Esq., at Justiniano Law Offices,
disclosed in a court filing that she and other members of the firm
are "disinterested" as defined in section 101(14) of the
Bankruptcy
Code.

The firm can be reached through:

     Gloria Justiniano Irizarry, Esq.
     Justiniano Law Offices
     Ensache Martinez
     Calle A Ramirez Silva 8
     Mayaguez, PR 00680
     Phone: (787) 222-9272
     Email: justinianolaw@gmail.com

                   About Rotulos Villegas Inc.

Rotulos Villegas Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 18-04498) on August 8,
2018.  At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $1 million.  Judge
Brian K. Tester presides over the case.


=================
V E N E Z U E L A
=================


VENEZUELA: Debt Wreck Marks New Milestone as $6.1 Billion Unpaid
----------------------------------------------------------------
Patricia Laya at Bloomberg News reports that Venezuela's debt
crisis passed a new milestone as the government missed a principal
payment on one of its bonds for the first time last week, boosting
arrears on international securities to $6.1 billion.

It was hardly a surprise for investors, who have watched the value
of their securities plummet since President Nicolas Maduro
disclosed in November that he would seek to restructure the
country's debt in the midst of an economic crisis, according to
Bloomberg News.  But it reinforced the difficult position
creditors find themselves in as the overdue payments pile up with
no resolution in sight and no easy recourse for getting their
money back, notes the report.

President Maduro's recent measures to reduce long-standing
gasoline subsidies and redenominate the currency by lopping off
five zeroes, both set to take effect this month, are steps in the
right direction but ultimately unlikely to help the country pay
back bondholders, said Siobhan Morden, who heads Nomura Securities
International's Latin America fixed-income strategy, Bloomberg
News says.

"It still looks like a countdown with economic crisis morphing
into political crisis for the Maduro administration," Mr. Morden
said in an Aug 15 note, Bloomberg News adds.

The latest breakdown of the securities in flux (*Within grace
period) is available at:

                https://bloom.bg/2nJDU7d

As reported in the Troubled Company Reporter-Latin America on
June 1, 2018, S&P Global Ratings, on May 29, 2018, removed its
long- and short-term local currency sovereign credit ratings on
Venezuela from CreditWatch with negative implications and affirmed
them at 'CCC- /C'. The outlook on the long-term local currency
rating is negative. At the same time, S&P affirmed its 'SD/D'
long- and short-term foreign currency sovereign credit ratings on
Venezuela. S&P's transfer and convertibility assessment remains at
'CC'.



                            ***********


Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA 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 is compiled on the Friday prior to publication.
Prices reported are not intended to reflect actual trades.  Prices
for actual trades are probably different.  Our objective is to
share information, not make markets in publicly traded securities.
Nothing in the TCR-LA constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.

Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication.  At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

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                            ***********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.

Copyright 2018.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Peter A. Chapman at 215-945-7000.
.


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