/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/190729.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 29, 2019, Vol. 23, No. 209 Headlines 73 EMPIRE DEVELOPMENT: Exclusive Filing Period Extended to Oct. 21 ADAIR MECHANICAL: Seeks to Hire Eric A. Liepins as Legal Counsel ALPHATEC HOLDINGS: Incurs $12.4 Million Net Loss in 2nd Quarter AMWINS GROUP: Moody's Maintains B2 CFR Amid Incremental Loan Plans AMYRIS INC: Signs Second Exchange Agreement with Investor ARCADIA GROUP: Clashes With Landlords Over U.S. Assets AVERY'S USED CARS: Hires K.C. Bouchillon as Special Counsel BED BATH: Egan-Jones Lowers Senior Unsecured Ratings to BB- BERNARD L. MADOFF: Kingate to Pay Back $860-Mil. BLACK MOUNTAIN: Seeks to Hire Carlyon Cica as Bankruptcy Counsel BLACKHAWK MINING: Hires Prime Clerk as Claims and Noticing Agent BLACKJEWEL LLC: Caldwell, Manier Represent Insurance Parties BLACKJEWEL LLC: Contura Makes $20.6MM Offer for Surface Mines BOEAU BELLE: Delays Plan to Recreate Stores Financial Records BRIAN CHRISTOPHER EWERT: Boat, Car and Jet Ski Up for Sale BROOKDALE SENIOR: Egan-Jones Lowers Senior Unsec. Ratings to CCC BRUIN E&P: S&P Lowers Issuer Credit Rating to 'B-'; Outlook Stable BUMBLE BEE: Hires AlixPartners as Turnaround Adviser CAMBRIAN HOLDING: Russell, Steptoe Represent Utility Companies CANBRIAM ENERGY: S&P Withdraws 'CCC-' LT Issuer Credit Rating CANCER GENETICS: Will Hold "Say-On-Pay" Votes Every Year CAT ISLAND INVESTORS: Hires Shapiro Bieging as Counsel CLEAR CHANNEL: S&P Places 'CCC+' ICR on CreditWatch Positive COMSTOCK RESOURCES: Fitch Raises IDR to B Amid Covey Park Deal CORECIVIC INC: Fitch Lowers LT IDR to BB; Alters Outlook to Neg. COSMOS HOLDINGS: Signs $750,000 Promissory Note Payable to Lender CRCI LONGHORN: S&P Alters Outlook to Negative, Affirms 'B' ICR CREDIT MANAGEMENT: Seeks to Hire Carlyon Cica as Bankruptcy Counsel CYCLE-TEX INC: Hires Coldwell Banker as Real Estate Broker CYTODYN INC: Board Ousts Chief Medical Officer for "Cause" CYTODYN INC: Extends Expiration of Exercise Offer Until July 31 DAVITA INC: Moody's Gives Ba1 Rating to New $5-Bil.+ Secured Loans DBUBS MORTGAGE 2011-LC1A: Fitch Affirms Bsf Rating on Cl. G Certs DEBORAH EARLE: $660K Sale of Lawndale Property to Smiths Approved DELTA MATERIALS: Seeks to Extend Exclusive Filing Period to Aug. 9 DESERT LAND: Trustee's Nellis Auction of Assets Approved DIEBOLD NIXDORF: Moody's Rates Proposed Secured Loans 'B3' DTZ US BORROWER: Moody's Upgrades LT CFR to B1, Outlook Stable DYNCORP INTERNATIONAL: S&P Affirms 'B+' ICR; Outlook Stable E&M CLEANING: Seeks to Hire Wetzel Gagliardi as Counsel ELK PETROLEUM: Hires Seaport Global as Investment Banker EXPRESSWAY DELIVERIES: RED Buying All Assets for $15K FISH 269: Seeks to Hire Morrison Tenenbaum as Counsel FIZZICS GROUP: Exclusivity Period Extended Until Oct. 8 FOOTHILLS EXPLORATION: Closes $178,000 in Loan Transactions FRANKIE V'S KITCHEN: $2.5M Sale of All Assets to Casa Approved FRONTIER COMMUNICATIONS: Fitch Lowers Issuer Default Rating to CCC GENOCEA BIOSCIENCES: Incurs $6.5 Million Net Loss in 2nd Quarter GIVE AND GO: S&P Alters Outlook to Negative, Affirms 'B-' ICR GLOBAL AIRCRAFT: Moody's Rates Five-Year Sr. Unsec. Notes 'Ba2' GLOBAL EAGLE: S&P Affirms 'CCC' ICR; Outlook Developing GLOBAL PARTNERS: Moody's Rates New $400MM Sr. Unsec. Notes 'B2' GREAT SMOKY: Seeks to Hire Bates Carter as Accountants GRS CORPORATION: Seeks to Hire Border Law as Counsel HARVEST PLASMA: Seeks to Hire Akerman LLP as Counsel HDR HOLDING: Committee Hires Pepper Hamilton LLP as Counsel HEATING & PLUMBING: Hires Kutner Brinen, P.C. as Attorney HOCHHEIM PRAIRIE: S&P Affirms 'B+' Long-Term ICR; Outlook Stable INNOVA GLOBAL: Receiver's Sale of All of Braden's Assets Approved INPIXON: Amends Prospectus on $18M Stock Offering Plus Warrants ISTAR INC: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable JBS USA: S&P Rates New $1BB Senior Unsecured Notes Due 2030 'BB-' JOHNSON PUBLISHING: Ebony and Jet Archives Acquired for $30M KAISER GYPSUM: Hires Moore & Jackson as Special Litigation Counsel KDC HOLDCO: S&P Downgrades First-Lien Term Loan Rating to 'B' KENDALL FROZEN: Trustee Taps Lindon Law as Labor Counsel LADDER CAPITAL: Fitch Affirms BB IDR & Alters Outlook to Positive LJ RUBY: S&P Assigns 'B' ICR on Proposed Sale to Littlejohn & Co. MABVAX THERAPEUTICS: Seeks to Extend Exclusivity Period to Nov. 18 MICHAEL HANCOCK: $75K Sale of Petal Property to Hancock Approved MICHAEL HANCOCK: $80K Sale of Petal Property to Childress Approved NESCO HOLDINGS: S&P Assigns 'B' ICR on Capitol Investment Merger NEW ENGLAND MOTOR: $282K Private Sale of 9 Vehicles to Shevell OK'd NEW ENGLAND MOTOR: $3.5M Private Sale of Miami Property Approved NEW START INCORPORATED: Hires Smyth and Hauck as Accountant NOMAD BUYER: Moody's Assigns B3 CFR, Outlook Positive NUSTAR ENERGY: S&P Affirms 'BB-' ICR; Outlook Stable OPEN ROAD: Sale of Untitled Holiday Project Rights to MGM Okayed PF HOLDINGS: S&P Lowers 2015A Housing Revenue Bonds Rating to BB+ PG&E CORP: U.S. Trustee Objects to Key Employee Incentive Plan PG&E CORP: Wins Two-Week Reprieve From Creditor Attacks PG&E CORPORATION: Akin Gump Updates List of Unsecured Noteholders PIER 3 BUILDERS: Hires Martin Wolons as Financial Consultant PIER 3: $392K Sale of Lunenburg Property Denied without Prejudice POPULUS FINANCIAL: S&P Affirms 'B' ICR; Outlook Stable PROMISE HEALTHCARE: Remaining Assets Sale to Strategic Consummated QI WU: $755K Sale of Chino Hills Property to Zhu Approved RAMBUS INC: Egan-Jones Lowers Senior Unsec. Ratings to B+ RIOT BLOCKCHAIN: Establishes an Advisory Board S2P ACQUISITION: S&P Assigns B- Corporate Credit Rating U.S. TELEPACIFIC: S&P Places 'B' ICR on CreditWatch Negative UGI ENERGY: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable UGI ENERGY: Moody's Assigns Ba3 CFR, Outlook Stable VT TOPCO: S&P Affirms 'B' ICR on Incremental Debt Raise WESTERN ENERGY: S&P Withdraws 'B' Long-Term Issuer Credit Rating WINDSTREAM HOLDINGS: Taps Altman Vilandrie as Telecom Consultant WINDSTREAM HOLDINGS: Taps SolomonEdwards as Accounting Consultant WP CITYMD: S&P Affirms 'B-' ICR on Summit Medical Merger WYOCOMPOSITES LLC: Seeks to Hire Knight Law as Counsel XENETIC BIOSCIENCES: Altium Growth Owns 9.8% Stake as of July 17 YRC WORLDWIDE: Moody's Raises CFR to B2, Outlook Stable ZEP INC: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR [^] BOND PRICING: For the Week from July 22 to 26, 2019 ********* 73 EMPIRE DEVELOPMENT: Exclusive Filing Period Extended to Oct. 21 ------------------------------------------------------------------ Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York has extended 73 Empire Development's exclusive period to file a chapter 11 plan through Oct. 21, and to solicit acceptances thereof through Dec. 20. Judge Drain has also extended through Sept. 19 the Debtor's time to assume or reject that certain non-residential real property lease (to the extent it is found to be a true lease), by and between the Debtor and MDL Equipment Corp. for property known as 73 Empire Boulevard, Brooklyn, New York 11225. The extension is conditioned on the receipt by MDL from the Debtor, on or before June 28, of a money-good check in the amount equal to all post-petition Basic Rent and Additional Rent due under the Ground Lease for the period commencing on February 21, 2019 and through June 28, 2019, including but not limited to real estate taxes, and upon Debtor's timely payment to MDL on a monthly basis, beginning on July 1, 2019 and thereafter on the first day of each subsequent month, of Basic Rent and Additional Rent due under the Ground Lease. About 73 Empire Development 73 Empire Development is a privately held company in Brooklyn, New York that is engaged in activities related to real estate. It has executed a ground lease on 73 Empire Blvd, Brooklyn, New York. The current value of the Debtor's interest in the Property is $6 million based on informal market valuation. 73 Empire Development filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-22285) on February 20, 2019. In the petition signed by David Goldwasser, authorized signatory of GC Realty Advisors, managing member, the Debtor estimated $6,100,000 in assets and $2,808,285 in liabilities. Mark A. Frankel, Esq. at Backenroth Frankel & Krinsky, LLP, represents the Debtor as counsel. The case has been assigned to Judge Robert D. Drain. ADAIR MECHANICAL: Seeks to Hire Eric A. Liepins as Legal Counsel ---------------------------------------------------------------- Adair Mechanical Services seeks authority from United States Bankruptcy Court for the Eastern District of Texas (Sherman) to employ Eric A. Liepins and the law firm of Eric A. Liepins, P.C., as counsel for the Debtor. The firm will advise the Debtor regarding its duties under the Bankruptcy Code and will provide other legal services related to its Chapter 11 case. Eric Liepins, Esq., the attorney who will be handling the case, charges $275 per hour. The hourly rates for paralegals and legal assistants range from $30 to $50. The firm received a retainer of $7,500, plus the filing fee. Mr. Liepins disclosed in a court filing that his firm does not represent any interest adverse to the Debtor's bankruptcy estate. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Phone: (972) 991-5591 Fax: (972) 991-5788 E-mail: eric@ealpc.com About Adair Mechanical Services Adair Mechanical Services, Inc. is a commercial and industrial HVAC, refrigeration, and plumbing contractor with 27 combined years of experience working with a variety of brands and systems in the DFW Metroplex. Based in Argyle, Texas, Adair Mechanical Services, Inc. filed its Voluntary Petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. E.D. Tex. Case no. 19-41928) on July 19, 2019. Eric A. Liepins, Esq. at the law firm of Eric A. Liepins, P.C. represents the Debtor as counsel. ALPHATEC HOLDINGS: Incurs $12.4 Million Net Loss in 2nd Quarter --------------------------------------------------------------- Alphatec Holdings, Inc. filed with the U.S. Securities and Exchange Commission on July 26, 2019, its quarterly report on Form 10-Q reporting a net loss of $12.43 million on $27.31 million of total revenues for the three months ended June 30, 2019, compared to a net loss of $7.07 million on $22.04 million of total revenues for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss of $25.40 million on $51.87 million of total revenues compared to a net loss of $8.99 million on $43.34 million of total revenues for the same period last year. As of June 30, 2019, the Company had $133.43 million in total assets, $31 million in total current liabilities, $49.36 million in total long-term debt, $1.46 million in operating lease liability, $13.82 million in other long-term liabilities, $23.60 million in redeemable preferred stock, and $14.16 million in total stockholders' equity. Liquidity The Company's annual operating plan projects that its existing working capital at June 30, 2019 of $44.9 million (including cash of $18.6 million) along with the use of the Expanded Credit Facility with Squadron Medical Finance Solutions LLC of the remaining $20.0 million that closed on March 27, 2019 allows the Company to fund its operations through at least one year subsequent to the date the financial statements are issued. "The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through revenues from the sale of its products, equity financings and debt financings. As the Company has historically incurred losses, successful transition to profitability is dependent upon achieving a level of revenues adequate to support the Company's cost structure. This may not occur and, unless and until it does, the Company will continue to need to raise additional capital. Operating losses and negative cash flows may continue for at least the next year as the Company continues to incur costs related to the execution of its operating plan and introduction of new products. The Company's inability to raise additional capital from outside sources will have a material adverse impact on its operations," said Alphatec in the filing. "The Company's debt agreements include traditional lending and reporting covenants, including a financial covenant that requires the Company to maintain a minimum fixed charge coverage ratio beginning in April 2020 and a minimum liquidity covenant of $5.0 million effective through March 2020. Should at any time the Company fail to maintain compliance with these covenants, the Company will need to seek waivers or amendments to the debt agreements. If the Company is unable to secure such waivers or amendments, it may be required to classify its obligations under the debt agreements in current liabilities on its consolidated balance sheet. The Company may also be required to repay all or a portion of outstanding indebtedness under the debt agreements, which would require the Company to obtain further financing. There is no assurance that the Company will be able to obtain further financing, or do so on reasonable terms," the Company added. A full-text copy of the Form 10-Q is available for free at: https://is.gd/KyMiOx About Alphatec Holdings Carlsbad, California-based Alphatec Holdings, Inc., through its wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a provider of innovative spine surgery solutions dedicated to revolutionizing the approach to spine surgery. ATEC designs, develops and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities and trauma. The Company markets its products in the U.S. via independent sales agents and a direct sales force. Alphatec reported a net loss attributable to common shareholders of $42.46 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common shareholders of $2.29 million for the year ended Dec. 31, 2017. As of March 31, 2019, Aphatec had $119.41 million in total assets, $27.62 million in total current liabilities, $42.55 million in long-term debt, $1.77 million in operating lease liability, $14.60 million in other long-term liabilities, $23.60 million in redeemable preferred stock, and total stockholders' equity of $9.25 million. AMWINS GROUP: Moody's Maintains B2 CFR Amid Incremental Loan Plans ------------------------------------------------------------------ Moody's Investors Service is maintaining the B2 corporate family rating and B2-PD probability of default rating of AmWINS Group, Inc. following the company's announcement that it plans to borrow an incremental $250 million under its senior secured term loan (rated B1), which will be fungible with the existing term loan. The company will use proceeds from the incremental borrowing to help fund acquisitions and pay related fees and expenses. The rating agency has assigned a B1 rating to AmWINS' $125 million revolving credit facility, which the company is extending by one year to January 2023. The outlook for AmWINS is positive. RATINGS RATIONALE The pending transaction increases AmWINS' pro forma debt-to-EBITDA ratio slightly to about 5.5x, with (EBITDA - capex) interest coverage remaining at around 2.5x, and the free-cash-flow-to-debt ratio remaining in the mid-single digits, based on Moody's estimates (which incorporate standard accounting adjustments). AmWINS' ratings reflect its market position as the largest US property & casualty wholesale broker; its diversification across clients, retail producers, insurance carriers and product lines; and its healthy EBITDA margins. The company has achieved solid organic growth and consistent profitability supported by effective technology investments, high employee retention and an opportunistic acquisition strategy. These strengths are offset by the company's significant debt burden, integration risk associated with acquisitions, and potential liabilities arising from errors and omissions, a risk inherent in professional services. Factors that could lead to an upgrade of AmWINS' ratings include: (i) debt-to-EBITDA ratio remaining below 6x, (ii) (EBITDA - capex) coverage of interest exceeding 2.5x, and (iii) free-cash-flow-to-debt ratio exceeding 5%. Factors that could lead to a stable outlook include: (i) debt-to-EBITDA ratio exceeding 6x, (ii) (EBITDA - capex) coverage of interest below 2.5x, or (iii) free-cash-flow-to-debt ratio below 5%. The following AmWINS ratings (and loss given default (LGD) assessments) remain unchanged: Corporate family rating at B2; Probability of default rating at B2-PD; Existing $125 million senior secured first-lien revolving credit facility maturing in January 2022 at B1 (LGD3); $1.6 billion (includes the incremental $250 million) senior secured first-lien term loan maturing in January 2024 at B1 (LGD3); $300 million senior unsecured notes maturing in July 2026 at Caa1 (LGD6). Moody's has assigned the following rating to AmWINS: Extended $125 million senior secured revolving credit facility maturing in January 2023 at B1 (LGD3). The outlook for AmWINS is positive. Upon closing of the transaction, Moody's expects to withdraw the B1 rating on AmWINS' existing senior secured revolving credit facility since this facility will be replaced by the extended facility. The principal methodology used in this rating was Insurance Brokers and Service Companies published in June 2018. Headquartered in Charlotte, North Carolina, AmWINS is a leading wholesale distributor of specialty insurance products and services. The company generated revenues of $1.1 billion for the 12 months through March 2019. AMYRIS INC: Signs Second Exchange Agreement with Investor --------------------------------------------------------- Amyris, Inc., previously issued and sold on Dec. 10, 2018, $60 million aggregate principal amount of senior convertible notes, convertible into shares of the Company's common stock, par value $0.0001 per share, to certain private investors pursuant to a Securities Purchase Agreement, dated Dec. 6, 2018, by and among the Company and Investors. In addition, as previously reported, on May 15, 2019, the Company entered into an exchange agreement with one of the Investors, pursuant to which the Company and the Exchanging Investor agreed to exchange the December 2018 Note held by the Exchanging Investor, in the principal amount of $53.3 million, for a new senior convertible note with an equal principal amount and a warrant to purchase 2 million shares of Common Stock at an exercise price of $5.12 per share, with an exercise term of two years from issuance. Pursuant to the Prior Exchange, during the period from July 22, 2019 to July 29, 2019, inclusive, the Exchanging Investor had the right to require the Company to redeem the Prior Exchange Note, in whole or in part, at a price equal to 125% of the principal amount of the Prior Exchange Note being redeemed. On July 24, 2019, Company entered into a Second Exchange Agreement with the Exchanging Investor, pursuant to which the Company and the Exchanging Investor agreed to exchange the Prior Exchange Note and Prior Exchange Warrant held by the Exchanging Investor for (i) a new senior convertible note with a principal amount of $68.3 million, which represents the amount that the Exchanging Holder would have been entitled to receive pursuant to the Put Right, as well as accrued and unpaid interest and late charges under the Prior Exchange Note, and (ii) a new warrant to purchase 2 million shares of Common Stock at an exercise price of $2.87 per share, with an exercise term of two years from the issuance of the Prior Exchange Warrant. The Second Exchange Agreement includes customary representations, warranties and covenants of the parties, and incorporates the covenants of the parties contained in the Purchase Agreement. The New Note would have substantially similar terms as the Prior Exchange Note, except that (i) the principal amount of the New Note would be $68.3 million, which principal amount reflects (i) accrued and unpaid interest and late charges under the Prior Exchange Note and (ii) a 25% premium accruing under the Prior Exchange Note as a result of the Company's failure to make an installment payment on the Prior Exchange Note due July 1, 2019 in the amount of $6.4 million, the Exchanging Investor would not be entitled to require the Company to redeem the New Note in cash at a price greater than the intrinsic value of the shares of Common Stock underlying the New Note, (ii) the New Note would bear interest at a rate of 18% per annum, representing the default interest rate accruing under the Prior Exchange Note as a result of the Payment Default, (iii) the Exchanging Investor would agree to extend its waiver of certain covenant breaches relating to the failure by the Company to timely file periodic reports with the SEC from July 22, 2019 to Sept. 16, 2019, (iv) the first Installment Date (as defined in the December 7 8-K) under the New Note would occur on Oct. 1, 2019, and (v) the Exchanging Investor would not be entitled to the Put Right, but the Company would be required to (A) make principal payments on the New Note in the amount of $3.2 million on each of Aug. 2, 2019 and Aug. 22, 2019, and (B) pay all remaining amounts then outstanding under the New Note on Sept. 16, 2019. If the Company fails to make any Required Prepayment on the applicable payment date, the conversion price of the New Note would be reset to the volume-weighted average price of the Common Stock on the trading day immediately following the Company's filing of a Current Report on Form 8-K with respect to its failure to make the Required Prepayment due on Sept. 16, 2019, if such volume-weighted average price is lower than the conversion price of the New Note then in effect, subject to a price floor. The New Warrant would have substantially identical terms as the Prior Exchange Warrant, except that the New Warrant would have an exercise price of $2.87 per share, as opposed to an exercise price of $5.12 per share under the Prior Exchange Warrant. The closing of the Second Exchange occurred on July 24, 2019. At the Closing, the Company issued the New Note and the New Warrant to the Exchanging Investor in exchange for the Prior Exchange Note and Prior Exchange Warrant, which were retired and cancelled. About Amyris Amyris, Inc., based in Emeryville, California, is an industrial biotechnology company that applies its technology platform to engineer, manufacture and sell natural, sustainably sourced products into the health & wellness, clean skincare, and flavors & fragrances markets. The Company's proven technology platform enables it to rapidly engineer microbes and use them as catalysts to metabolize renewable, plant-sourced sugars into large volume, high-value ingredients. The Company's biotechnology platform and industrial fermentation process replace existing complex and expensive manufacturing processes. The Company has successfully used its technology to develop and produce five distinct molecules at commercial volumes. The report from the Company's independent accounting firm KPMG LLP, the Company's auditor since 2017, on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and has current debt service requirements that raise substantial doubt about its ability to continue as a going concern. Amyris reported net losses attributable to the company of $72.32 million in 2017, $97.33 million in 2016, and $217.95 million in 2016. As of Sept. 30, 2018, Amyris had $122.7 million in total assets, $323.3 million in total liabilities, $5 million in contingently redeemable common stock, and a total stockholders' deficit of $205.6 million. ARCADIA GROUP: Clashes With Landlords Over U.S. Assets ------------------------------------------------------ Tom Corrigan, writing for The Wall Street Journal, reported that a group of disgruntled landlords told Judge James Garrity Jr. of the U.S. Bankruptcy Court for the Southern District of New York that they should have a "full accounting" of Arcadia Group Ltd.'s U.S. assets, which they say have been "bleeding in and out" of the London-based operator of Topshop and Topman stores. According to the Journal, in a court hearing, the landlords said Arcadia may have transferred assets to affiliates to keep them beyond the reach of U.S. creditors. Richard Chesley, Esq., a lawyer for Arcadia, told the judge that all of the money that has flowed out of the company has been to pay legitimate expenses like rent and payroll. "Vague accusations that we are seeking to take the money and run are unfounded," the Journal said, citing Mr. Chesley. Arcadia, which is in administration in the U.K., is also seeking to have its Chapter 15 case in the United States dismissed, but Judge Garrity denied the request, saying he has "serious questions as to whether it's appropriate to dismiss the proceeding." The judge said he wants to know more about how the landlords' claims are going to be treated in the U.K and asked for more information about the dispute over Arcadia's U.S. assets before he addresses other issues in the case, including a potential dismissal, the Journal related. About Arcadia Group (USA) Arcadia Group (USA) Limited is a London-based operator of a number of retail stores throughout the United States, selling clothing and accessories under the brand name Top Shop and Top Man. Visit https://www.arcadiagroup.co.uk for more information. Arcadia Group (USA) Limited sought Chapter 15 protection (Bankr. S.D.N.Y. Case No. 19-11650) on May 22, 2019, to seek U.S. recognition of its English law administration proceeding under the Insolvency Act 1986. Daniel Francis Butters and Ian C. Wormleighton, as foreign representatives, signed the petition. Judge James L. Garrity Jr. is assigned to the U.S. case. Jamila J. Willis, Esq., Richard A. Chesley, Esq., and Oksana Koltko Rosaluk, Esq., at DLA Piper LLP, serve as counsel in the U.S. case. AVERY'S USED CARS: Hires K.C. Bouchillon as Special Counsel ----------------------------------------------------------- Avery's Used Cars & Trucks Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire K.C. Bouchillon as special counsel. On March 7, 2019, Arthur B. Avery, Jr. removed an action pending in the Circuit Court in and for Polk County, Florida in which the Debtor was a party. That action is pending in this Court as Case No. 8:19-ap-00112-MGW. The proceeding is being presently scheduled for trial along Adversary Case No. 8:18-ap-00127 at the end of August, 2019. Bouchillon was the Debtor's counsel of record in the removed proceeding. The Debtor seeks to employ Bouchillon to assist the Debtor's counsel in the litigation of the Removed Proceedings as well as the Original Adversary Proceeding. Bouchillon intends to charge the Debtor $275 per hour for his services. Bouchillon does not have a material adverse interest to the Debtor's bankruptcy estate. The firm can be reached at: K.C. Bouchillon, Esq. Central Florida Mediation Group 454 West Pipkin Road Lakeland, FL 33813 Phone: 863-594-1113 About Avery's Used Cars & Trucks Inc. Avery's Used Cars & Trucks Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-10428) on Dec. 4, 2018. At the time of the filing, the Debtor estimated assets of less than $1 million and liabilities of less than $500,000. The case has been assigned to Judge Michael G. Williamson. BED BATH: Egan-Jones Lowers Senior Unsecured Ratings to BB- ----------------------------------------------------------- Egan-Jones Ratings Company, on July 15, 2019, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Bed Bath & Beyond Incorporated to BB- from BB+. Bed Bath & Beyond Inc. is a North American chain of domestic merchandise retail stores. Bed Bath & Beyond operates stores in the United States, Puerto Rico, Canada, and Mexico. Bed Bath & Beyond was founded in 1971. It is currently part of the S&P 500 and Global 1200 Indices. BERNARD L. MADOFF: Kingate to Pay Back $860-Mil. ------------------------------------------------ Andrew Scurria, writing for The Wall Street Journal, reported that two British Virgin Islands funds managed by Kingate Management Ltd. that channeled cash to Bernard Madoff will return $860 million in stolen money under a settlement with the liquidators cleaning up after his Ponzi scheme. According to the Journal, citing papers filed in bankruptcy court, the Kingate funds agreed to repay 93% of what they received from Mr. Madoff's phantom investment fund over their lifetimes. Kingate Global Fund Ltd. and Kingate Euro Fund Ltd. invested $1.73 billion in Mr. Madoff's firm starting in 1994 and lost everything when it was exposed as a fraud in 2008, the Journal related, citing court records. But they also collected cash along the way that came from other investors while the Ponzi scheme was in operation, the report said. Under their settlement with Irving Picard, the funds will receive an allowed claim of $1.66 billion in the liquidation of Bernard L. Madoff Investment Securities LLC, the report further related. The allowed claim will allow them to recover some of what they lost for distribution to their own investors, the report added. The settlement prohibits the Kingate funds, which are themselves in liquidation, from distributing any of that money to their founders Federico Ceretti and Carlo Grosso, the report noted. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has commenced distributions to victims. As of December 2018, more than $13.3 billion of those stolen funds have been recovered through the Madoff Recovery Initiative. Ten interim distributions to eligible BLMIS customers total more than $12 billion, which will equal 66.371 percent of each customer's allowed claim amount. BLACK MOUNTAIN: Seeks to Hire Carlyon Cica as Bankruptcy Counsel ---------------------------------------------------------------- Black Mountain Golf & Country Club seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Carlyon Cica, Chtd. as its bankruptcy counsel effective July 1, 2019. Effective July 1, 2019, lead counsel for the Debtor, Candace C. Carlyon, Esq. left the frim Clark Hill PLLC and formed the law firm Carlyon Cica, Chtd. with Dawn M. Cica, Esq. The Debtor wished to employ Carlyon Cica in the place of Clark Hill PLLC. Carlyon Cica is expected to provide general bankruptcy and restructuring services for the Debtor in this Chapter 11 Case. The hourly rates charged by the firm range from $250 to $620 for lawyers, and from $150-$250 per hour for paralegals, legal assistants, and law clerks. Candace Carlyon, Esq., lead attorney at Carlyon Cica, will charge $575 per hour. Ms. Carlyon disclosed in a court filing that her firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Candace C Carlyon, Esq. CARLYON CICA, CHTD. 4495 S. Pecos Road Las Vegas, Nevada 89121 Phone: 702-685-4444 About Black Mountain Golf & Country Club Based in Henderson, Nev., Black Mountain Golf & Country Club is a member-owned golf facility open to the public. The company is a non-profit corporation and a tax-exempt entity. Black Mountain Golf & Country Club sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 17-11540) on March 30, 2017. The petition was signed by Larry Tindall, president. At the time of the filing, the Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. The case is assigned to Judge Bruce T. Beesley. Morris Polich & Purdy LLP, now known as Clark Hill PLC, is the Debtor's legal counsel. The Debtor employed Coffey & Rader CPA as its accountant and Harper Appraisal, Inc., as appraiser. The Debtor hired Ray Fredericksen of Per4mance Engineering in connection with its efforts to rezone its property. No trustee, examiner or official committee has been appointed in the Debtor's bankruptcy case. On June 28, 2018, the Court confirmed the Debtor's First Amended Plan of Reorganization. BLACKHAWK MINING: Hires Prime Clerk as Claims and Noticing Agent ---------------------------------------------------------------- Blackhawk Mining LLC and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the District of Delaware (Delaware) to employ Prime Clerk LLC as claims and noticing agent in the Debtors' chapter 11 cases. (a) prepare and serve required notices and documents in these chapter 11 cases in accordance with the Bankruptcy Code and the Bankruptcy Rules in the form and manner directed by the Debtors and/or the Court, including (i) notice of the commencement of these chapter 11 cases and the initial meeting of creditors under Bankruptcy Code Sec. 341(a), (ii) notice of any claims bar date, (iii) notices of transfers of claims, (iv) notices of objections to claims and objections to transfers of claims, (v) notices of any hearings on a disclosure statement and confirmation of the Debtors' plan or plans of reorganization, including under Bankruptcy Rule 3017(d), (vi) notice of the effective date of any plan, and (vii) all other notices, orders, pleadings, publications and other documents as the Debtors or Court may deem necessary or appropriate for an orderly administration of these chapter 11 cases; (b) maintain an official copy of the Debtors' schedules of assets and liabilities and statements of financial affairs (collectively, the "Schedules"), listing the Debtors' known creditors and the amounts owed thereto; (c) maintain (i) a list of all potential creditors, equity holders, and other parties-in-interest and (ii) a "core" mailing list consisting of all parties described in Bankruptcy Rule 2002(i), (j), and (k) and those parties that have filed a notice of appearance pursuant to Bankruptcy Rule 9010; update and make said lists available upon request by a party-in-interest or the Clerk; (d) furnish a notice to all potential creditors of the last date for filing proofs of claim and a form for filing a proof of claim, after such notice and form are approved by the Court, and notify said potential creditors of the existence, amount, and classification of their respective claims as set forth in the Schedules, which may be effected by inclusion of such information (or the lack thereof, in cases where the Schedules indicate no debt due to the subject party) on a customized proof of claim form provided to potential creditors; (e) maintain a post office box or address for the purpose of receiving claims and returned mail, and process all mail received; (f) for all notices, motions, orders, or other pleadings or documents served, prepare and file, or cause to be filed with the Clerk, an affidavit or certificate of service within seven business days of service which includes (i) either a copy of the notice served or the docket number(s) and title(s) of the pleading(s) served, (ii) a list of persons to whom it was mailed (in alphabetical order) with their addresses, (iii) the manner of service, and (iv) the date served; (g) process all proofs of claim received, including those received by the Clerk, check said processing for accuracy, and maintain the original proofs of claim in a secure area; (h) maintain the official claims register for each Debtor (collectively, the "Claims Registers") on behalf of the Clerk; upon the Clerk's request, provide the Clerk with certified, duplicate unofficial Claims Registers; and specify in the Claims Registers the following information for each claim docketed: (i) the claim number assigned; (ii) the date received; (iii) the name and address of the claimant and agent, if applicable, who filed the claim; (iv) the amount asserted; (v) the asserted classification(s) of the claim (e.g., secured, unsecured, priority, etc.); (vi) the applicable Debtor; and (vii) any disposition of the claim; (i) provide public access to the Claims Registers, including complete proofs of claim with attachments, if any, without charge; (j) implement necessary security measures to ensure the completeness and integrity of the Claims Registers and the safekeeping of the original claims; (k) record all transfers of claims and provide any notices of such transfers as required by Bankruptcy Rule 3001(e); (l) relocate, by messenger or overnight delivery, all of the court-filed proofs of claim to the offices of Prime Clerk, not less than weekly; (m) upon completion of the docketing process for all claims received to date for each case, turn over to the Clerk copies of the Claims Registers for the Clerk's review (upon the Clerk's request); (n) monitor the Court's docket for all notices of appearance, address changes, and claims-related pleadings and orders filed and make necessary notations on and/or changes to the claims register and any service or mailing lists, including to identify and eliminate duplicative names and addresses from such lists; (o) identify and correct any incomplete or incorrect addresses in any mailing or service lists; (p) assist in the dissemination of information to the public and respond to requests for administrative information regarding these chapter 11 cases as directed by the Debtors or the Court, including through the use of a case website and/or call center; (q) monitor the Court's docket in these chapter 11 cases and, when filings are made in error or containing errors, alert the filing party of such error and work with them to correct any such error; (r) if these chapter 11 cases are converted to cases under chapter 7 of the Bankruptcy Code, contact the Clerk's office within three days of notice to Prime Clerk of entry of the order converting the cases; (s) thirty days prior to the close of these chapter 11 cases, to the extent practicable, request that the Debtors submit to the Court a proposed order dismissing Prime Clerk as Claims and Noticing Agent and terminating its services in such capacity upon completion of its duties and responsibilities and upon the closing of these chapter 11 cases; (t) within seven days of notice to Prime Clerk of entry of an order closing these chapter 11 cases, provide to the Court the final version of the Claims Registers as of the date immediately before the close of the chapter 11 cases; and (u) at the close of these chapter 11 cases, (i) box and transport all original documents, in proper format, as provided by the Clerk's office, to (A) the Philadelphia Federal Records Center, 14700 Townsend Road, Philadelphia, PA 19154-1096 or (B) any other location requested by the Clerk's office, and (ii) docket a completed SF-135 Form indicating the accession and location numbers of the archived claims. Prime Clerk will be paid at these hourly rates: Director of Solicitation $210 Solicitation Consultant $190 COO and Executive VP No charge Director $175-$195 Consultant/Senior Consultant $70-$165 Technology Consultant $35-$95 Analyst $30-$50 Prime Clerk will be paid a retainer in the amount of $50,000. Prime Clerk will also be reimbursed for reasonable out-of-pocket expenses incurred. Benjamin J. Steele, partner of Prime Clerk LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Prime Clerk can be reached at: Benjamin J. Steele PRIME CLERK LLC 830 3rd Avenue, 9th Floor New York, NY10022 Tel: (212) 257-5450 E-mail: bsteele@primeclerk.com About Blackhawk Mining LLC Blackhawk Mining LLC specializes in coal production. The Company acquires and operates idled coal reserves, mines, preparation plants, and loading facilities. Blackhawk Mining operates throughout the State of Kentucky. Blackhawk Mining LLC filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-11595) on July 19, 2019. L. Katherine Good at Potter Anderson & Corroon LLP represents the Debtor as counsel. BLACKJEWEL LLC: Caldwell, Manier Represent Insurance Parties ------------------------------------------------------------ In the Chapter 11 cases of Blackjewel, L.L.C., et al., the law firms Caldwell & Riffee, PLLC and Manier & Herod, P.C. submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure to disclose that it is representing XL Specialty Insurance Company, XL Reinsurance American, Inc. and First Surety Corporation. The address of each of the Parties is as follows: (1) XL Specialty Insurance Company 505 Eagleview Blvd Exton, PA (2) XL Reinsurance Company 505 Eagleview Blvd Exton, PA (3) First Surety Corporation 332 Wilson Street Clarksburg, WV 26301 Each of the Parties holds contractual indemnity, common law indemnity, and other claims against certain of the Debtors arising in connection with various surety bonds issued on behalf of and at the request of certain of the Debtors. The amounts of any such claims held by each of the Parties have not yet been determined. These are the only disclosable economic interests held by the Parties. Counsel for XL Specialty Insurance Company, XL Reinsurance Company, and First Surety Corporation can be reached at: CALDWELL & RIFFEE, PLLC Joseph W. Caldwell, Esq. 3818 MacCorkle Avenue, S.E. Post Office Box 4427 Charleston, WV 25364-4347 Telephone: (304) 925-2100 E-mail: joecaldwell@frontier.com - and - MANIER & HEROD, P.C. Michael E. Collins, Esq. Robert W. Miller, Esq. Scott C. Williams, Esq. 1201 Demonbreum St., Suite 900 Nashville, TN 37203 Telephone: (615) 742-9350 Facsimile: (615) 242-4203 E-mail: mcollins@manierherod.com A copy of the Rule 2019 filing is available at Pacermonitor.com at http://bankrupt.com/misc/Blackjewel_LLC__249_Rule2019.pdf About Blackjewel L.L.C. Blackjewel L.L.C.'s core business is mining and processing metallurgical, thermal and other specialty and industrial coals. Blackjewel operates 32 properties, including surface and underground coal mines, preparation or wash plants, and loadouts or tipples. Combined, Blackjewel and its affiliates hold more than 500 mining permits. Operations are located in the Central Appalachian Basin in Virginia, Kentucky and West Virginia and the Powder River Basin in Wyoming. Blackjewel L.L.C. and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel estimated $100 million to $500 million in asset and $500 million to $1 billion in liabilities as of the bankruptcy filing. The Hon. Frank W. Volk is the case judge. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI Consulting Inc. as financial advisor; Jefferies LLC as investment banker; and Prime Clerk LLC as the claims agent. BLACKJEWEL LLC: Contura Makes $20.6MM Offer for Surface Mines ------------------------------------------------------------- Tom Corrigan, writing for The Wall Street Journal, reported that Contura Energy Inc. has agreed to buy a group of Blackjewel LLC's surface mines out of bankruptcy for $20.6 million in cash, plus assumption of liabilities. The Debtors said in court papers that the agreement with Contura will "ensure that the Western Mines and the Pax Mines are restored to operating status and up to 700 Wyoming residents are able to continue earning regular wages in jobs associated with the mines for an estimated minimum of six to twelve years." Contura has agreed to purchase, and the Debtors have agreed to sell, substantially all assets associated with the Western Mines and the Pax Mines in exchange for (i) the assumption of hundreds of millions of dollars in liabilities associated with such assets, including payroll-related payments for employees returning to work in the Western Mines, and (ii) cash consideration in the amount of $20.6 million to be used to administer and keep alive the Debtors' estates and provide cash necessary to achieve other recoveries. The Debtors also proposed the following timeline for the sale process: Bid Deadline July 31 Auction August 1 Sale Objection Deadline August 2 Sale Hearing August 2 Closing Date August 5 Counsel for Contura: Elizabeth A. Amandus, Esq. Ellen Cappellanti, Esq. Jackson Kelly PLLC 500 Lee Street East, Suite 1600 Charleston, West Virginia 25301 Telephone: (304) 340-1000 Facsimile: (304) 340-1080 Email: eamandus@jacksonkelly.com Email: ecappellanti@jacksonkelly.com -- AND -- Damian Schaible, Esq. Angela M. Libby, Esq. Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 Facsimile: (212) 701-5800 Email: Damian.Schaible@DavisPolk.com Email: Angela.Libby@DavisPolk.com About Blackjewel L.L.C. Blackjewel L.L.C.'s core business is mining and processing metallurgical, thermal and other specialty and industrial coals. Blackjewel operates 32 properties, including surface and underground coal mines, preparation or wash plants, and loadouts or tipples. Combined, Blackjewel and its affiliates hold more than 500 mining permits. Operations are located in the Central Appalachian Basin in Virginia, Kentucky and West Virginia and the Powder River Basin in Wyoming. Blackjewel L.L.C. and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel estimated $100 million to $500 million in asset and $500 million to $1 billion in liabilities as of the bankruptcy filing. The Hon. Frank W. Volk is the case judge. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI Consulting Inc. as financial advisor; Jefferies LLC as investment banker; and Prime Clerk LLC as the claims agent. BOEAU BELLE: Delays Plan to Recreate Stores Financial Records ------------------------------------------------------------- Boeau Belle, Ltd., Inc. requests the U.S. Bankruptcy Court for the Eastern District of Texas to extend the exclusivity period within which to file a Chapter 11 Plan and solicit votes thereon through and including Oct. 14 and Dec. 13, respectively. The Debtor owns and operates twenty salon stores throughout Texas and Louisiana -- the management of which is akin to operating twenty separate businesses -- and as a result this case involves numerous creditors and parties in interest. The Debtor submits that cause exists to extend the Exclusivity Periods. In the short time since the Petition Date, the Debtor's staff and accountant have been faced with the arduous task of recreating the books and financial records for each of the Debtor's twenty individual stores. Most of the Debtor's staffs have been required to divert time and resources away from managing their individual stores and focusing on reorganization efforts in order to assist the Debtor's accountant with this undertaking. Without accurate and reliable financial data, the Debtor has been unable to prepare informed financial projections necessary for the preparation of a plan and disclosure statement. The Debtor has made significant progress towards the recreation of its books, and once the task is complete, the Debtor will be able to operate much more efficiently that it could prior to the Petition Date. Based on the currently available financial data, if the extension is granted by the Court, the Debtor will be able to confirm a feasible chapter 11 plan of reorganization within the extended Exclusivity Periods. About Boeau Belle, Ltd., Inc. Founded in 2012, Boeau Belle Ltd. Boeau Belle Salon & Spa offers a wide range of professional beauty services including haircuts & style, hair color, nails, waxing, threading, lash & brow tinting/extensions, and make up application, as well as facials and body polish services. http://www.boeaubelle.com/ Boeau Belle Ltd., Inc., based in Southlake, TX, filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 19-40708) on March 18, 2019. The Hon. Brenda T. Rhoades presides over the case. Christopher J. Moser, Esq., at Quilling Selander Lownds Winslett & Moser, PC, serves as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and liabilities. The petition was signed by Sid Biranth, president. Jeff Wright Consulting Services, LLC serves as accountant to the Debtor. BRIAN CHRISTOPHER EWERT: Boat, Car and Jet Ski Up for Sale ---------------------------------------------------------- Iron Horse Auction Co., Inc., will conduct an online auction of the assets of Brian Christopher Ewert, a debtor in a Chapter 7 bankruptcy case pending in U.S. Bankruptcy Court for the Middle District of North Carolina, Greensboro Division. Iron Horse will conduct an internet bidding beginning at 8:00 a.m. on July 30 through Aug. 6 at 2:00 p.m. The property to be sold includes: -- 2011 Chevrolet Suburban LT -- 2015 Chevrolet Suburban LTZ -- 2013 Lexus LX570 -- 2008 Mastercraft X15 -- 2012 Yamaha FX Wave Runner -- 2012 Triton Corporation Personal Watercraft Aluminum Trailer -- Sea Doo GSX PWC -- Steel Personal Watercraft Trailer The assets are located at 174 Airport Rd., Rockingham, NC. James B. Angell, the Chapter 7 Trustee in Ewert's case (Bankr. M.D.N.C. Case No. 18-10838), retained Iron Horse as auctioneer. BROOKDALE SENIOR: Egan-Jones Lowers Senior Unsec. Ratings to CCC ---------------------------------------------------------------- Egan-Jones Ratings Company, on July 16, 2019, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Brookdale Senior Living Incorporated to CCC from CCC+. Brookdale Senior Living Incorporated owns and operates over 1,000 senior living communities and retirement communities in the United States. Brookdale was established in 1978 and is based out of Brentwood, Tennessee. BRUIN E&P: S&P Lowers Issuer Credit Rating to 'B-'; Outlook Stable ------------------------------------------------------------------ S&P Global Ratings lowered the issuer credit rating to 'B-' from 'B' on U.S.-based oil and natural gas production company Bruin E&P Partners LLC. S&P also lowered the rating on the unsecured notes due 2023 to 'B' from 'B+' with a '2' recovery rating, reflecting its expectation of a substantial (70%-90%, rounded estimate: 85%) recovery in the event of a payment default. The downgrade on Bruin primarily reflects weaker-than-expected production along with higher operating costs and debt leverage. Liquidity is limited, and S&P is not expecting Bruin to generate substantial free cash flow until 2021. The stable outlook reflects S&P's view that the company will continue to develop the asset base with production and costs in line with the rating agency's revised projections. S&P forecasts the company will maintain at least adequate liquidity and FFO-to-debt above 20% over the next two years. "We could lower the ratings if liquidity deteriorates, the capital structure becomes unsustainable in our view, or if there is a heightened refinancing risk or likelihood of a distressed debt exchange. This would most likely come from weaker-than-expected oil prices or operational underperformance," S&P said. "We could raise our rating on Bruin if the company develops its asset base and increases its reserves, production, and drilling life to be commensurate with those of its higher-rated peers while reducing revolver borrowings and maintaining an FFO-to-debt ratio of at least 20%," S&P said, adding that this scenario could occur if commodity prices remain in line with the rating agency's expectations while the company increases its production, develops its acreage, and spends within cash flow. BUMBLE BEE: Hires AlixPartners as Turnaround Adviser ---------------------------------------------------- Alexander Gladstone and Soma Biswas, writing for The Wall Street Journal, reported that Bumble Bee Foods LLC has hired turnaround firm AlixPartners LLP as the seafood purveyor seeks to recover after pleading guilty to fixing prices on canned tuna, according to people familiar with the matter. According to the Journal, citing the people, Bumble Bee is in talks with lenders after defaulting on its loan. The lenders have agreed to a forbearance period as restructuring talks continue, the Journal said. In addition to hiring AlixPartners, Bumble Bee has been working with investment bank Houlihan Lokey Inc. and law firm Sullivan & Cromwell LLP, the Journal added. The company's lenders have hired investment bank Rothschild & Co. and law firm Weil Gotshal & Manges LLP, the Journal related, citing one of the people. In 2017, the San Diego-based Bumble Bee, which is owned by London-based private-equity firm Lion Capital, was fined $25 million by the U.S. government for price fixing, together with its two main competitors, Chicken of the Sea and StarKist Co. Those broader pressures plus the combination of the criminal fine and legal expenses resulted in Bumble Bee breaching a financial covenant in its $650 million term loan and its revolving credit facility, the Journal said, citing the people. The company has been in technical default since the end of March, the Journal added. CAMBRIAN HOLDING: Russell, Steptoe Represent Utility Companies -------------------------------------------------------------- In Cambrian Holding Company, Inc., et al. Chapter 11 case, Law firm of Russell R. Johnson III, PLC and Steptoe & Johnson PLLC submitted a verified statement to Federal Rule of Bankruptcy  Procedure 2019 regarding its representation of multiple utility companies that provided prepetition utility goods/services and continue to provide post-petition utility goods/services to the Debtors. As of July 18, 2019, the names and addresses of the Utilities represented by the Firms are: Appalachian Power Company d/b/a American Electric Power and Kentucky Power Company d/b/a American Electric Power Attn: Dwight C. Snowden American Electric Power 1 Riverside Plaza, 13th Floor Columbus, OH 43215 The nature and the amount of claims of the Utilities, and the times of acquisition thereof are as follows: * Kentucky Power Company d/b/a American Electric Power has an unsecured claim against some of the above-referenced Debtors arising from prepetition utility usage. * Both of the Utilities held prepetition deposits that they recouped against prepetition debt pursuant to Section 366(c)(4) of the Bankruptcy Code. * Both of the Utilities held surety bonds that they can make claims upon for payment of the prepetition debt that the Debtors owe to the Utilities. The Firms were retained to represent the foregoing Utilities in June 2019 and draft and file the Objection at Docket No. 168. The circumstances and terms and conditions of employment of the Firms by the Utilities is protected by the attorney-client privilege and attorney work product doctrine. The Firm can be reached at: LAW FIRM OF RUSSELL R. JOHNSON III, PLC Russell R. Johnson III, Esq. 2258 Wheatlands Drive Manakin-Sabot, VA 23103 Telephone: (804) 749-8861 Facsimile: (804) 749-8862 E-mail: russell@russelljohnsonlawfirm.com - and - STEPTOE & JOHNSON PLLC Nathaniel R. Kissel, Esq. 2525 Harrodsburg Road, Suite 300 Lexington, KY 40504 Telephone: (859) 219-8234 E-mail: Nate.Kissel@steptoe-johnson.com A copy of the Rule 2019 filing is available at PacerMonitor.com at http://bankrupt.com/misc/Cambrian_Holding_228_Rule2019.pdf About Cambrian Holding Co. Belcher, Kentucky-based Cambrian Holding Company, Inc., and its subsidiaries produce and process metallurgical coal and thermal coal for use by utility providers and industrial companies located primarily in the eastern United States and Canada. The company began operations in 1991 and, over time, acquired various mines and mining-related assets from major coal corporations. Cambrian Holding Company and 18 of its affiliates each filed a petition seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Lead Case No. 19-51200) on June 16, 2019. The Debtors tapped Frost Brown Todd LLC as counsel; Whiteford, Taylor & Preston, LLP, as litigation counsel; Jefferies LLC as investment banker; and FTI Consulting, Inc., as financial advisor. Epiq Corporate Restructuring, LLC, is the notice, claims and solicitation agent. CANBRIAM ENERGY: S&P Withdraws 'CCC-' LT Issuer Credit Rating ------------------------------------------------------------- S&P Global Ratings on July 25 withdrew its ratings, including its 'CCC-' long-term issuer credit rating, on Canbriam Energy Inc. at the company's request. At the time of withdrawal, the ratings were on CreditWatch, where they were placed with positive implications May 16, 2019. The CreditWatch placement followed the announcement that Pacific Oil & Gas Ltd. would acquire Canbriam. Subsequent to the acquisition closing, all rated debt was redeemed. CANCER GENETICS: Will Hold "Say-On-Pay" Votes Every Year -------------------------------------------------------- Cancer Genetics, Inc., filed an amended Current Report on July 25, 2019, to disclose the Company's decision as to how frequently it will hold an advisory vote on executive compensation. Cancer Genetics filed a Current Report on Form 8-K on June 3, 2019, to, among other things, report on the voting results of its annual meeting of stockholders held on May 31, 2019, including, among other matters, the results of the advisory vote of the stockholders on the frequency of future advisory votes on executive compensation. As reported in the Original Report, the stockholders of the Company approved by a plurality of the votes cast at the Annual Meeting a proposal to hold an advisory vote on executive compensation every year. In light of this result and after further discussion by the Board of Directors of the Company, the Board determined at its meeting on July 18, 2019, that, until the next required advisory vote on the frequency of future advisory votes on executive compensation, the Company will hold an advisory vote on executive compensation every year. About Cancer Genetics Headquartered in Rutherford, New Jersey, Cancer Genetics, Inc. -- http://www.cancergenetics.com/-- develops, commercializes and provides molecular- and biomarker-based tests and services, including proprietary preclinical oncology and immuno-oncology services, that enable biotech and pharmaceutical companies engaged in oncology and immuno-oncology trials to better select candidate populations and reduce adverse drug reactions by providing information regarding genomic and molecular factors influencing subject responses to therapeutics. CGI operates across a global footprint with locations in the US, Australia and China. Cancer Genetics reported a net loss of $20.37 million in 2018 following a net loss of $20.88 million in 2017. As of March 31, 2019, the Company had $38.49 million in total assets, $30.81 million in total liabilities, and $7.67 million in total stockholders' equity. RSM US LLP, in New York, the Company's auditor since 2010, issued a "going concern" opinion in its report on the Company's consolidated statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring losses, and has an accumulated deficit and negative cash flows from operations. The Company is also in violation of certain debt covenants. These conditions raise substantial doubt about the Company's ability to continue as a going concern. CAT ISLAND INVESTORS: Hires Shapiro Bieging as Counsel ------------------------------------------------------ Cat Island Investors Inc. seeks authority from the United States Bankruptcy Court for the Northern District of Texas (Ft. Worth) to hire Shapiro Bieging Barber Otteson LLP as counsel. Cat Island requires Shapiro are: a. provide legal advice with respect to its powers and duties as debtor-in-possession; b. prepare and pursue confirmation of a plan and approval of a disclosure statement; c. prepare on behalf of the Debtors necessary applications, motions, answers orders, reports and other legal papers; d. appear in Court and protecting the interests of the Debtors before the Court; and e. preform all other legal services for the Debtors which may be necessary and proper in these proceedings. Shapiro received a retainer fee $7,500.00 of which $3,434.00 was used to pay the filing fees in the above-captioned case, and $1,540.00 was used to pay for prefiling services. The Firm holds $2,526.00 as a retainer to secure payment of post-petition fees and expenses. Shapiro's hourly rates are: John C. Leininger $385.00 Members $325.00 - $385.00 Paralegals $185.00 John C. Leininger, partner with the law firm of Shapiro Bieging Barber Otteson LLP, attests that he and his firm are "disinterested persons" as that term is defined in Sec. 101(14) of the Bankruptcy Code. The firm can be reached at: John C. Leininger, Esq. SHAPIRO BIEGING BARBER OTTESON LLP 5430 LBJ Freeway, Suite 1540 Dallas, TX 75240 Tel: (214) 377-0146 E-mail: jcl@sbbolaw.com About Cat Island Investors Inc. Cat Island Investors Inc. is a privately held company whose principal assets are located at 8 Waveland Ave., Beaufort, SC 29907. Cat Island Investors Inc. filed their voluntary petitions under Chapter 11 of Title 11 of the United States Code (Bankr. N.D. Tex. Case No. 19-42647) on June 30, 2019.In the petition signed by Richard Woods, authorized representative, the Debtor estimated $1 million to $10 million in assets and $100,000 to $500,000 in liabilities. John C. Leininger, Esq. at Shapiro Bieging Barber Otteson LLP is the Debtor's counsel. CLEAR CHANNEL: S&P Places 'CCC+' ICR on CreditWatch Positive ------------------------------------------------------------ S&P Global Ratings placed all of its ratings on out-of-home advertising company Clear Channel Outdoor Holdings Inc. (CCOH), including its 'CCC+' issuer credit rating, on CreditWatch with positive implications. The CreditWatch positive placement follows the company's announcement that it plans to sell 100 million shares of common stock with an option for the underwriters to purchase an additional 15 million shares and use the proceeds to repay debt. S&P believes CCOH could raise $400 million to $500 million through the equity offering, and the company's FOCF could improve by about $43 million per year if the company is able to redeem $447 million of its 9.25% senior subordinated notes due 2024 and $20 million of its 8.75% senior notes due 2020. Under this scenario, S&P would likely be more confident that CCOH would generate positive FOCF in 2020. For the 12 months ended March 31, 2019, CCOH reported negative FOCF of $76 million. S&P expects to resolve the CreditWatch placement following the completion of the company's equity raise and debt repayment. At that time, the rating agency will reassess its expectations for Clear Channel's liquidity and cash flow generation. "We could raise our ratings on the company by one notch to 'B-' if it completes the equity offering as planned, repays its debt, and we believe that its FOCF will turn and remain positive in 2020. Our review will also incorporate our assessment of CCOH's revenue, EBITDA growth, and capital spending requirements over the next year," S&P said. "Conversely, we could affirm our 'CCC+' issuer credit rating on the company if it receives materially less proceeds from the equity offering than we expect such that we anticipate its negative FOCF will persist through 2020," S&P said. COMSTOCK RESOURCES: Fitch Raises IDR to B Amid Covey Park Deal -------------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating of Comstock Resources, Inc. to 'B' from 'B-' following the closing of the Covey Park Energy LLC acquisition in a cash and stock transaction valued at $2.2 billion. Fitch also upgraded Comstock's secured revolver to 'BB'/'RR1' from 'BB-'/'RR1' and the senior unsecured notes to 'B+'/'RR3' from 'B'/'RR3'. Fitch is also assigning a 'B+'/'RR3' rating to the Covey unsecured notes that were assumed by Comstock in the acquisition. The Positive Rating Watch has been removed and the Rating Outlook is Stable. On July 16, 2019, Comstock closed on the Covey Park acquisition in a cash and stock merger valued at $2.2 billion. Jerry Jones invested $475 million through a combination of common and preferred stock, and now owns approximately 75% of Comstock common shares. In addition, Covey Park's shareholders received $173 million of new common stock and $210 million of convertible preferred stock. Comstock assumed Covey's Park outstanding senior unsecured debt and retired Covey's Park existing preferred units. Covey Park is a privately held natural gas company with operations in the Haynesville shale basin. The acquisition more than doubles the size of Comstock, and increases production to 1.1Bcfe/d, net acres to 374,000, and proved reserves to 5.4 Tcfe. The transaction makes Comstock the largest operator in the Haynesville, increases drilling inventory, allows for estimated $25 million in corporate G&A savings, and provides for other operating and development savings due to its increased scale. Fitch believes the transaction strengthens CRK's credit profile through the increase in size and scale that should allow for cost and operating efficiencies, the substantial equity component, and the expectation of positive FCF to further reduce debt. Pro forma for the transaction, CRK is the largest producer of natural gas in the Haynesville Shale, which should allow for opportunities to substantially reduce operating and drilling costs. However, the transaction relies on a substantial drawdown on an increased, amended revolving credit facility that pressures liquidity. While Fitch believes near-term liquidity is more than adequate, execution and commodity risks could pressure liquidity over time. CRK's rating reflects the rapidly growing, full-cycle cost competitive Haynesville assets, low cost structure, sound hedging policy, no near-term debt maturities, and stated financial policy of achieving a low leverage profile. These considerations are offset by the execution risk of developing the Haynesville assets acquired in the Covey transaction, heavy exposure to natural gas, and the current scale and capital constraints that may have restricted CRK from maximizing operational efficiencies. KEY RATING DRIVERS Covey Acquisition: CRK acquired Covey Park Energy for $2.2 billion, including the assumption of Covey Park's outstanding debt and the retirement of Covey Park's existing preferred units. The transaction more than doubles the size of CRK in terms of production and reserves, while making it the largest producer in the Haynesville Shale. The increased size and scale should allow for substantial cost and operating efficiencies and substantially increase drilling inventory. Given the contiguous location of the Covey assets, CRK has now transformed approximately 100 locations to above 5,000 foot laterals, which should lead to better well economics. Credit Conscious Acquisition Financing: Fitch believes the $2.2 billion transaction is conservatively funded through the equity investment of Jerry Jones, CRK's principal shareholder, of $475 million in preferred and common stock, the substantial cumulative investment by Jones in CRK, which is estimated at $1.1 billion, and the improvement in leverage, which is estimated at 2.8x for pro forma 2019. However, this is somewhat offset by the substantial draw down on the new, amended credit facility, of which $1.25 billion is drawn down on a $1.5 billion facility. Although Fitch believes near-term liquidity is more than adequate, a prolonged depression of natural gas prices or the inability to execute on the transaction could reduce future liquidity. Fitch expects the company to increase liquidity over the near term through a combination of FCF applied to debt, bond and equity issuance, and the monetization of assets. Positively, there are no maturities until 2024, which provides CRK substantial time to address its debt service. Growing Haynesville Production: Prior to the acquisition, Comstock demonstrated its ability to successfully increase its reserve base through enhanced drilling and completion techniques, such as longer lateral lengths and substantially larger well stimulations. Comstock's close proximity to Henry Hub and competitive marketing arrangements allow for lower differentials than peers in other gas-oriented basins, further supporting the company's development program. Fitch expects Comstock to apply this drilling program to its entire Haynesville position of 374,000 net acres and 2,000 net drilling locations. Slightly FCF Negative: Fitch forecasts that Comstock will return to positive FCF in second-half 2019 assuming a $2.75/mcf 2019. This is due to a combination of the relatively low Haynesville basis differential and cost structure, measured capital deployment plan, limited reinvestment needs in the Bakken and prudent use of joint ventures to build out development in the Haynesville and Eagle Ford. Fitch assumes that any FCF deficit will likely be funded through the revolving credit facility. The Covey transaction is expected to increase FCF over time as synergies are achieved. Solid Hedging Program: Comstock aims to hedge approximately 50%-60% of its forward 12-month gas production, and is within this range pro forma for the Covey acquisition. The company has also hedged approximately 45% of its forward 12-month oil production. Preferred No Equity Credit: Fitch does not apply its Corporate Hybrids Treatment and Notching Criteria as the new preferred stock will be held by existing equity investors, or affiliates. Instead, Fitch utilizes its Corporate Rating Criteria on applying equity credit for shareholder and affiliated loans. The preferred stock contains a provision for a mandatory cash redemption upon a change of control and the Series A preferred holders have enforcement rights that requires a consent if after 12 months of the closing date that the Series A notes are not repaid in debt and debt/LTM EBITDAX is greater than 2.25x. As a result, Fitch is not allowing equity credit for the preferred stock. DERIVATION SUMMARY The Covey acquisition helps improves Comstock's credit position by adding scale in the Haynesville that should provide cost and operating efficiencies. Following the Covey acquisition, Comstock will have a 2019 pro forma production profile of about 200 mboe/d, which is well below Southwestern (SWN; BB) at 432 mboe/d, but higher than SM Energy (B+/Stable) at 120.2 mboe/d and Ultra Petroleum (UPL; CCC+) at 127 mboe/d. However, CRK has a lower netback owing to its concentration in natural gas. CRK's netback of $10/boe as of Q1 2019 compares with SM's of $20/boe and Extraction Oil & Gas's (XOG; B+/Stable) of $25/boe. CRK's management expects debt/ daily production to decline to $13,634 for pro forma 2019. This would put leverage well below SM at $22,000 and XOG at $21,000 for fiscal 2018. However, Fitch recognizes the operational risk of achieving these results. KEY ASSUMPTIONS Key Assumptions Within Fitch's Rating Case for the Issuer - Base case West Texas Intermediate (WTI) oil prices of $57.50 in 2019 and 2020 and long-term price of $55; - Base case Henry Hub natural gas price of $2.75 in 2019 and for the long term; - Production growth of 176% in 2019 and 71% in 2020 as a result of the Covey acquisition; - Capex of $536 million in 2019 and $805 million in 2020; - Full-year expenses of $0.77/mcf equivalent in 2019 and $0.66/mcf equivalent in 2020 reflecting production growth; - Other than Covey acquisition, no incremental acquisitions, divestitures or equity issuance. Any FCF is assumed to be used to reduce debt. Key Recovery Rating Assumptions for the Issuer Fitch's recovery analysis for Comstock Resources used both an asset value based approach on observed transactions of like assets and a going-concern (GC) approach, with the following assumptions: Transactional and asset based valuation such as recent transactions for the Haynesville, Eagle Ford, and Bakken basins on a $/acre as well as SEC PV-10 estimates were used to determine a reasonable sales price for the company's assets. Fitch also considers the recent acquisition of Covey Park for $2.2 billion. The pro forma SEC PV-10 estimate is approximately $4.2 billion, but is based on prices significantly higher than Fitch's stressed price deck assumptions. The company's main driver of value is their acreage in the Haynesville, which Fitch valued at $8,250/acre. Fitch expects the value of the Bakken asset to continue to drop due to the lack of new inventory, causing existing production to run off. The company also has about 9,500 net acres in the Eagle Ford that are completely undeveloped, which causes valuations to be lower. Assumptions for the going-concern approach include: -- Fitch assumed a bankruptcy scenario exit EBITDA of $694 million. The EBITDA estimate takes into account a prolonged commodity price downturn ($45-$47.50/WTI and $2.00-$2.25/mcf gas in 2019-2021) resulting in lower than expected production and potential liquidity constraints. The EBITDA estimate increased from $280 million to reflect the Covey acquisition and recent development offset by a lower price deck. -- GC enterprise value (EV) multiple of 4.0x versus a historical energy sector multiple of 6.7x. The multiple reflects the gas weighted production and the lack of growth opportunities at Fitch's stress case price deck. The recovery is based on the enterprise value of the company at $2.8 billion. After administrative claims of 10%, there is $2.5 billion available to creditors. The senior secured revolver is expected to be fully drawn given the current draw following the acquisition, and results in a recovery rate within the 'RR1' range. Under these assumptions, the senior unsecured notes would result in a recovery rate with the 'RR3' range to generate a one-notch uplift to the debt rating from the IDR. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Executable plan to enhance liquidity post acquisition through application of FCF, asset sales or equity to reduce the revolver; - Demonstrated execution of generating positive FCF; - Integration of Covey acquisition that results in improved unit economics and FFO increasing above $850 million; - Mid-cycle Gross Debt/EBITDA below 3.0x. Developments That May, Individually or Collectively, Lead to Negative Rating Action - A change in terms of financial policy that is debt holder unfriendly; - Inability to enhance liquidity over next 12-18 months; - Inefficiencies in execution of acquisition that causes gross debt/EBITDA above 4.0x. LIQUIDITY AND DEBT STRUCTURE As of March 31, 2019, Comstock had $29.3 million of cash on hand and $230 million of availability under its $700 million revolver. The company was in compliance with its credit facility covenants, which include a leverage ratio of less than 4x and a current ratio of at least 1.0:1.0. The credit facility matures on Aug. 14, 2023. After the acquisition, the credit facility commitments and borrowing base increased to $1.5 billion, and the maturity date was extended to 2024. Comstock drew $1.248 billion on its revolver, which leaves approximately $252 million of availability. Fitch expects the company will increase the liquidity through the application of FCF to reduce debt, potential senior note and/or equity issuances, and potential asset sales. The financial maintenance covenants will remain the same. CORECIVIC INC: Fitch Lowers LT IDR to BB; Alters Outlook to Neg. ---------------------------------------------------------------- Fitch Ratings has downgraded the ratings of CoreCivic, Inc., including the Long-Term Issuer Default Rating, to 'BB' from 'BB+'. Fitch has also revised CXW's Rating Outlook to Negative from Stable. The rating downgrade and Outlook revision reflect negative capital access trends for private prison operators, including CXW. The list of banks that have publicly announced plans to exit lending and providing financial services to private prison operators due to environmental, social and governance (ESG) concerns has recently grown beyond the largest U.S. money centers to include regional and European banks. Increased institutional lender and investor focus on ESG could reduce the company's access to attractively priced public equity and debt capital. Fitch will assess the company's ability to replace existing bank syndicate members and access new and existing capital sources during the one-to-two year Outlook horizon, including public and private bonds and equity. Prison real estate generally lacks secured property mortgage access, a key contingent liquidity source for equity REITs, making it more reliant on bank and debt capital markets access. KEY RATING DRIVERS Weaker Capital Access: Institutional capital providers are increasingly incorporating ESG issues into their investment strategies and decisions, resulting in weaker access to a variety of traditional capital sources for private prison operators. Indeed, recent announcements by major U.S. and foreign banks to cut financial services and lending to private prison operators have weakened CXW's through-the-cycle access to bank financing. Limited access to bank lending is uncharacteristic of REITs in the 'BB' rating category. During 2019, three of the lead lenders in CXW's $1.1 billion secured credit facility have announced they will stop lending and providing financial services to the private prison industry, including J.P. Morgan, Bank of America and SunTrust Bank. Other banks that have publicly announced plans to stop lending to private prison operators during 2019 include Wells Fargo and BNP Paribas in March and July, respectively. It is unclear if additional banks will sever ties with the sector, which is reflected in Fitch's Negative Outlook for the company. Fitch's CXW ratings assume the company replaces these syndicate members with alternative lending partners, primarily regional and foreign banks and non-bank financial institutions. Solid Competitive Position: CXW and its publicly traded REIT peer, The GEO Group, Inc., control more than 80% of all private prison bed capacity. Fitch expects the U.S. federal correctional system will continue to rely on private correctional facilities given the increased focus on illegal immigration, which has led to growth in detainees. Government agencies like ICE and the U.S. Marshals Service (USMS) operate few, or none of their own facilities. However, the private prison sector also faces negative headwinds from social pressures, and longer-term correctional trends are shifting away from imprisonment of non-violent offenders and toward rehabilitation and re-entry for minor drug offenses and other misdemeanors. Fitch views capital investment and government relationships as high entry barriers for potential private competitors. The bureaucratic and budgeting process at the state and federal levels are hurdles to new public supply that continue to benefit private operators, which own newer assets and have solid financial flexibility and capital access. New public bed capacity has been muted during the past five years, notwithstanding the aging U.S. prison stock and overcrowding, which have led to industry safety concerns. Higher Leverage, Lower Coverage: Fitch expects CXW's leverage to slowly decline to the high-3x range throughout its forecast horizon, in line with the company's blended leverage targets of 3.0x-4.0x. CXW has stated its intention to continue diversifying its portfolio through its Community and Properties segments to around 25% of NOI by YE 2020, which Fitch believes will require further capital outlays. CXW's leverage (net debt to recurring operating EBITDA) increased with the company's recent acquisitions of traditional, government-leased office buildings. Indeed, the company's leverage rose to 4.3x at for the TTM period ended March 31, 2019 from 3.6x at YE 2017 as the company financed its acquisitions in 2018 mostly through secured mortgages. However, CXW's leverage declines to 4.1x when including the full impact of EBITDA contributions from recently acquired properties. CXW maintained high fixed-charge coverage at 4.3x for the TTM period ended March 31, 2019, down from 6.0x at YE 2017, as the company has secured mortgages to pay for its 2018 office acquisitions and has assumed the full debt for its Lansing prison development in Kansas, which is slated for completion in 2020. Fitch projects that coverage will remain in the high-4x to low-5x range through the rating horizon. Occupancies, Margins Stabilize: Average compensated occupancy declined every year from 2007-2016 before recovering slightly to 79.6% in 2017, 80.7% in 2018, and to 82.7% in 1Q19. Occupancy has remained well below the company's target range even when factoring in CXW's desire to maintain a certain level of vacancy to meet future demand. CXW has lost several contracts in recent years, some by choice, and has been unable to recoup the occupancy losses even as an immigration crackdown has dramatically increased the level of detention by federal agencies under the Department of Homeland Security. Over the past four years, revenues have been consistently in the $1.7 billion-$1.9 billion range and EBITDA margins have been between 22%-24%; diluted adjusted funds from operations (AFFO) per share growth, a measure of a REIT's profitability, is down approximately 15% over the period. Fitch expects NOI margins to stabilize at current levels (in the high 20% range) as the company offsets its increased exposure to lower margin safety segment with exposure to government-lease administrative properties. Limited Contingent Liquidity: CXW's correctional real estate holdings provide negligible credit support. Prisons have limited to no alternative uses, and the properties are often in rural areas. The company has never obtained a mortgage on any of its owned prison properties, exhibiting a lack of contingent liquidity, and there is not a deep property transaction market for this asset class. Fitch would view increased institutional interest in secured lending for owned prisons throughout business cycles as a positive credit characteristic. High Tenant and Asset Concentration: Fitch considers CXW's government customer base a credit strength, although concentrated, as evidenced by the top 10 tenants accounting for 80% of 1Q19 revenue. Three of the company's top tenants are large federal correctional and detention authorities, which collectively made up 50% of revenue for the year. ICE accounted for an increasing share of CXW's revenues (27% 1Q19), due primarily to the South Texas Family Residential Center (STFRC) contract and elevated detention of immigrant populations. The USMS accounted for 17% of revenue, and the Bureau of Prisons accounted for 6% of revenue. Tennessee, Georgia and California are the three largest state customers and together accounted for 18% of 1Q19 revenue. Based on Fitch's analysis, the company has significant asset concentration that represents a credit concern. Secured Credit Facility Notching: Fitch rates the secured revolving and term loan 'BB+'/'RR1', one notch above the IDR, as they are effectively senior to the unsecured bonds. CXW's accounts receivable are pledged as collateral and were $273.6 million at 1Q19. Equity in the company's domestic operating subsidiaries and 65% of international subsidiaries are also pledged as collateral. The long-term fixed assets are not pledged. DERIVATION SUMMARY The lack of alternative uses and absence of secured debt financeability of CXW's corrections assets results in Fitch analyzing the company more like a traditional cash flow-generating corporate entity, as opposed to an asset-rich equity REIT, despite the tax election. CXW's leverage (approximately 4x) and fixed charge coverage (4x-5x) metrics are not sufficient for investment grade ratings despite being amongst the strongest credit metrics in Fitch's rated U.S. REIT universe. No country-ceiling, parent/subsidiary or operating environment aspects has an impact on the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer -- SSNOI growth of 0%-2% in 2019 thereafter, SSNOI growth mostly flat to slightly positive; -- Fitch assumes $50 million-$75 million in acquisitions annually 2019-2021 predominantly in the office properties segment and funded through mortgages; -- Development of its Otay Mesa Detention Center in California ($43 million total cost/$28.7 million cost to completion, completion 2019) and Lansing Correctional Facility in Kansas ($160 million total cost/$101.4 million to completion, completion 2020); -- Revolver used to repay 2020 and 2022 bond maturities and for financing needs on the margins; -- $250 million term loan B issuance in 2019; -- No equity issuance through the forecast period. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to a Positive Resolution of the Outlook Include: -- Improvements in capital lending from financial institutions, including the issuer's ability to replace syndicate members and access to alternative sources of capital (e.g. private placement debt, JVs, or mortgage lending activity in the private prison sector); -- Fitch's expectation of net debt to recurring operating EBITDA sustaining below 3.0x in combination with higher retained cash flow after dividends. Developments That May, Individually or Collectively, Lead to Negative Rating Action Include: -- Deterioration in the capital-raising environment indicating reduced financial flexibility and/or a weakened liquidity profile; -- Fitch's expectation of net debt to recurring operating EBITDA sustaining above 4.0x; -- Fitch's expectation of REIT fixed-charge coverage sustaining below 3.0x; -- Decreasing market share, increased pressure on per diem rates from customers and/or profitable contract losses; -- Material political decisions negatively affecting the long- term dynamics of the private correctional facilities industry. LIQUIDITY AND DEBT STRUCTURE Liquidity Sufficiently Covers Near-Term Maturities: Fitch estimates CXW's sources of liquidity (unrestricted cash, availability under its $800 million secured revolver, undrawn portion of its Kansas notes and estimated retained operating cash flows) cover its uses (debt maturities, estimated recurring maintenance capex, and development expenditures) by 1.6x at 1Q19 and 2.0x on a pro forma basis that includes the $250 million term loan issued in 2Q19 to repay the revolver balance. Fitch believes CXW has adequate liquidity under its $800 million revolver to address its debt maturities through 2022. However, the company will need to replace at least three lead lenders that have publicly announced plans to stop lending to private prison operators at, or before its revolver matures in April 2023. CXW has $350 million of unsecured bonds maturing on May 1, 2023. CXW has maintained an approximate 80% AFFO payout ratio since 2016, which is consistent with the broader REIT sector. Excess cash flow supports maintenance capex, prison construction, debt reduction and other general corporate activities. SUMMARY OF FINANCIAL ADJUSTMENTS -- Fitch adds back non-cash stock-based compensation to recurring operating EBITDA -- Fitch has adjusted the historical and projected net debt by assuming the issuer requires $15 million of cash for working capital purposes, which is otherwise unavailable to repay debt; -- Fitch treats the depreciation and interest expenses associated with the company's STFRC contract as operating expenses, which are deducted from EBITDA. COSMOS HOLDINGS: Signs $750,000 Promissory Note Payable to Lender ----------------------------------------------------------------- Cosmos Holdings Inc. executed on July 24, 2019, a senior promissory note in the principal amount of $750,000 payable to an unaffiliated third party lender who had previously loaned the Company $750,000. The funds represented by the Note were advanced between July 19 and 24, 2019. The Note bears interest at the rate of 15% percent per annum, paid quarterly in arrears. The Note matures on July 24, 2020 unless prepaid or in default. The Company may prepay the Note within the first six months by payment of unpaid interest for the first six months and, after six months, with a two percent ($15,000) premium. The Note is subject to acceleration in an event of default. Grigorios Siokas, the Company's CEO, personally guaranteed repayment of the Note. The guaranty is unconditional and irrevocable, and constitutes a guaranty of performance and of payment when due, and not just of collection. About Cosmos Holdings Cosmos Holdings Inc. is a multinational pharmaceutical wholesaler. The Company imports, exports and distributes pharmaceutical products of brand-name and generic pharmaceuticals, over-the-counter medicines, a variety of dietary and vitamin supplements. Currently, the Company distributes products mainly in the EU countries via its two wholly owned subsidiaries Skypharm SA and Decahedron Ltd. Cosmos Holdings reported a net loss of $9.06 million in 2018 following a net loss of $6.21 million in 2017. As of March 31, 2019, the Company had $21.7 million in total assets, $25.25 million in total liabilities, and a total stockholders' deficit of $3.54 million. Armanino LLP, in San Francisco, California, the Company's auditor since 2019, issued a "going concern" opinion in its report dated April 16, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. CRCI LONGHORN: S&P Alters Outlook to Negative, Affirms 'B' ICR -------------------------------------------------------------- S&P Global Ratings revised its outlook on CRCI Longhorn Holdings Inc. (d/b/a CLEAResult), an Austin, Texas-based provider of energy efficiency and demand management solutions to the utilities sector, to negative from stable and affirmed all of its ratings, including the 'B' issuer credit rating, the 'B' issue-level ratings on the first-lien credit facilities, and the 'CCC+' issue-level rating on the second-lien term loan. The outlook revision reflects CLEAResult's weak operating performance in 2018, with S&P-calculated leverage remaining at 8x versus the rating agency's expectation of leverage declining to the mid-6x area at year end 2019. Elevated leverage was a result of weaker than anticipated revenue growth and poor margin expansion. However, good gross margins, low capital intensity, and manageable debt service costs and maturity profile should allow CLEAResult to continue to generate adequate free operating cash flow (FOCF), with FOCF to debt in the mid-single-digit percentage area in 2019 and 2020. The negative outlook reflects elevated risks to S&P's base-case expectations of leverage declining to the low-7x area in 2019 and below 7x in 2020. Leverage reduction depends on CLEAResult improving margins from the mid- to high-teens percentages by focusing on more profitable programs, realization of its cost-saving initiatives such as headcount reductions, procurement savings, and lower expenses related to business optimization and improvement. "We could lower the ratings if the company's margin profile fails to improve in line with our expectations or if we forecast that leverage will remain above 7.5x by year-end 2019 or above 7x by year-end 2020," S&P said. "We could also lower the rating if the company fails to renew key programs or high competitive intensity in the increasingly saturated demand-side energy solutions industry lead us to believe organic revenue growth will remain in the low-single-digit percentages for a prolonged period," the rating agency said. S&P said it could revise the outlook to stable if CLEAResult meets the rating agency's 2019 base-case expectations and continues to build its new business pipeline in a manner that supports the rating agency's longer-term expectations of mid-single–digit percent organic revenue growth. CREDIT MANAGEMENT: Seeks to Hire Carlyon Cica as Bankruptcy Counsel ------------------------------------------------------------------- Credit Management Association Inc. seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Carlyon Cica, Chtd. as its bankruptcy counsel effective July 1, 2019. Effective July 1, 2019, lead counsel for the Debtor, Candace C. Carlyon, Esq. left the frim Clark Hill PLLC and formed the law firm Carlyon Cica, Chtd. with Dawn M. Cica, Esq. The Debtor wished to employ Carlyon Cica in the place of Clark Hill PLLC. Carlyon Cica is expected to provide general bankruptcy and restructuring services for the Debtor in this Chapter 11 Case. The hourly rates charged by the firm range from $250 to $620 for lawyers, and from $150-$250 per hour for paralegals, legal assistants, and law clerks. Candace Carlyon, Esq., lead attorney at Carlyon Cica, will charge $575 per hour. Ms. Carlyon disclosed in a court filing that her firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Candace C Carlyon, Esq. CARLYON CICA, CHTD. 4495 S. Pecos Road Las Vegas, Nevada 89121 Phone: 702-685-4444 About Credit Management Association Credit Management Association, Inc. -- http://creditmanagementassociation.org/-- is a non-profit association that has served business-to-business companies since 1883. CMA helps credit, collection, and financial decision-makers get the information and support they need to make fast, accurate credit decisions. In addition, CMA assists insolvent companies with workouts or liquidation through cost effective alternatives to bankruptcy. CMA has 800 members who pay a $495 annual fee for full membership or a $265 annual fee for an associate membership. It is headquartered in Las Vegas. CMA filed a Chapter 11 petition (Bankr. D. Nev. Case No. 18-16487) on Oct. 31, 2018. In the petition signed by Kimberly Lamberty, president and chief executive officer, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Mike K. Nakagawa oversees the case. The Debtor hired Clark Hill, PLLC as reorganization counsel, and Kurtzman Carson Consultants, LLC as the claims and noticing agent. CYCLE-TEX INC: Hires Coldwell Banker as Real Estate Broker ---------------------------------------------------------- Cycle-Tex, Inc., seeks authority from the U.S. Bankruptcy Court for the Northern District of Georgia to hire Coldwell Banker Commercial- Kinard Realty and Bradley Nelson as real estate broker. Cycle-Tex requires Coldwell Banker to market and sell the Debtor's real property located at 111 Lamar St. & 1216 Lamar St., Dalton, Georgia 30720. Coldwell Banker will be paid a commission of 6% closing fee upon the sale of the Lamar Street Properties. Bradley Nelson, agent with Coldwell Banker East West Realty, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Coldwell Banker can be reached at: Bradley Nelson COLDWELL BANKER EAST WEST REALTY 704 S. Thorntn Ave. Dalton, GA 30720 Phone: (706)463-8300 Fax: (706) 275-6220 Email: BNelsonRealtor@gmail.com About Cycle-Tex Inc. Cycle-Tex, Inc., is a privately-held company in Dalton, Georgia, that recycles thermoplastic post-industrial waste. It produces polypropylene, polyethylene and nylon 6 pellets in a wide range of melt-flow characteristics. Cycle-Tex also does toll conversion for companies such as grinding, precision-cutting, densifying and pelletizing. Cycle-Tex sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-42614) on Nov. 5, 2018. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Judge Paul W. Bonapfel oversees the case. The Debtor tapped Jones & Walden, LLC, as its legal counsel. CYTODYN INC: Board Ousts Chief Medical Officer for "Cause" ---------------------------------------------------------- The board of directors of CytoDyn Inc. terminated the employment of Dr. Richard G. Pestell, the Company's chief medical officer, for cause pursuant to the terms of his employment agreement with the Company and effective immediately, according to a Form 8K filed with the Securities and Exchange Commission. Pursuant to the terms of his employment agreement, upon such termination, Dr. Pestell resigned from his position as a director of the Company. Dr. Pestell was not a member of any board committees. About CytoDyn Inc. Headquartered in Vancouver, Washington, CytoDyn Inc. -- http://www.cytodyn.com/-- is a clinical-stage biotechnology company focused on the clinical development and potential commercialization of humanized monoclonal antibodies to treat HIV infection. Its lead product candidate, PRO 140, belongs to a class of HIV therapies known as entry inhibitors that block HIV from entering into and infecting certain cells. The Company believes that monoclonal antibodies are a new emerging class of therapeutics for the treatment of HIV to address unmet medical needs in the area of HIV and other immunologic indications, such as Graft versus Host Disease and certain types of cancer. The audit opinion included in the Company's Annual Report on Form 10-K for the year ended May 31, 2018, contains an explanatory paragraph regarding the Company's ability to continue as a going concern. Warren Averett, LLC, in Birmingham, Alabama, the Company's auditor since 2007, stated that the Company incurred a net loss of $50,149,681 for the year ended May 31, 2018 and has an accumulated deficit of $173,139,396 through May 31, 2018, which raise substantial doubt about its ability to continue as a going concern. As of Feb. 28, 2019, CytoDyn had $20.42 million in total assets, $26.67 million in total liabilities, and a total stockholders' deficit of $6.24 million. CYTODYN INC: Extends Expiration of Exercise Offer Until July 31 --------------------------------------------------------------- Cytodyn Inc. filed an Amendment No. 2 to its tender offer statement which amends and supplements the Exercise Offer Statement on Schedule TO originally filed with the Securities and Exchange Commission on June 24, 2019, as amended on July 19, 2019, relating to an offer by CytoDyn to amend and exercise outstanding warrants to purchase up to an aggregate of 141,066,818 shares of common stock upon the terms and subject to the conditions set forth in the Offer to Amend and Exercise Warrants to Purchase Common Stock, dated June 24, 2019, which together with the Election to Participate and Notice of Withdrawal constitute the "Offering Materials." The Amendment No. 2 extends the Expiration Date of the Offer to Amend and Exercise from July 24, 2019 at 5:00 p.m. (Eastern Time) to July 31, 2019 at 5:00 p.m. (Eastern Time), unless further extended or terminated by the Company. Throughout the Schedule TO, the Offer to Amend and Exercise and the other Offering Materials, all references to the Expiration Date of the Offer to Amend and Exercise are amended to refer instead to July 31, 2019 at 5:00 p.m. (Eastern Time). As of 5:00 p.m. (Eastern Time) on July 24, 2019, 7,608,967 Original Warrants exercisable for an aggregate of 7,608,967 shares of common stock and, pursuant to the terms of the Offer to Amend and Exercise, 3,804,461 Additional Shares (as defined in the Offering Materials) have been tendered and not withdrawn. About CytoDyn Inc. Headquartered in Vancouver, Washington, CytoDyn Inc. -- http://www.cytodyn.com/-- is a clinical-stage biotechnology company focused on the clinical development and potential commercialization of humanized monoclonal antibodies to treat HIV infection. Its lead product candidate, PRO 140, belongs to a class of HIV therapies known as entry inhibitors that block HIV from entering into and infecting certain cells. The Company believes that monoclonal antibodies are a new emerging class of therapeutics for the treatment of HIV to address unmet medical needs in the area of HIV and other immunologic indications, such as Graft versus Host Disease and certain types of cancer. The audit opinion included in the Company's Annual Report on Form 10-K for the year ended May 31, 2018, contains an explanatory paragraph regarding the Company's ability to continue as a going concern. Warren Averett, LLC, in Birmingham, Alabama, the Company's auditor since 2007, stated that the Company incurred a net loss of $50,149,681 for the year ended May 31, 2018 and has an accumulated deficit of $173,139,396 through May 31, 2018, which raise substantial doubt about its ability to continue as a going concern. As of Feb. 28, 2019, CytoDyn had $20.42 million in total assets, $26.67 million in total liabilities, and a total stockholders' deficit of $6.24 million. DAVITA INC: Moody's Gives Ba1 Rating to New $5-Bil.+ Secured Loans ------------------------------------------------------------------ Moody's Investors Service assigned Ba1 ratings to DaVita, Inc.'s new senior secured credit facilities. These include a $1 billion revolving credit facility, a $1.75 billion delayed draw term loan A, and a $2.5 billion term loan B. Moody's also affirmed the Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, SGL-1 Speculative Grade Liquidity Rating, and Ba3 ratings on the unsecured notes that will remain part of the post-transaction capital structure. The outlook is stable. Proceeds from the above-mentioned senior secured credit facilities will be used in combination with proceeds raised from the company's sale of DaVita Medical Group to repay existing debt and lengthen the company's debt maturity profile. "We view this transaction as a recalibration of financial leverage to accommodate the organization's moderately reduced scale and increased business focus," stated Moody's Vice President/Senior Credit Officer Jonathan Kanarek. Upon transaction close, Moody's expects to withdraw ratings on DaVita's senior secured term loan due 2021 and the unsecured bonds maturing in 2022. Assignments: Issuer: DaVita Inc. Senior Secured Term Loan B due 2026, Assigned Ba1 (LGD2) Senior Secured Delayed Draw Term Loan A due 2024, Assigned Ba1 (LGD2) Senior Secured Revolving Credit Facility due 2024, Assigned Ba1 (LGD2) Affirmations: Issuer: DaVita Inc. Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Speculative Grade Liquidity Rating, Affirmed SGL-1 Gtd Senior Unsecured SR Notes due 2025, Affirmed Ba3 (LGD5) Gtd Senior Unsecured SR Global Notes due 2024, Affirmed Ba3 (LGD5) Unchanged: Issuer: DaVita Inc. Senior Secured Term Loan B due 2021, Baa3 (LGD2) Senior Unsecured SR Global Notes due 2022, Ba3 (LGD5) Outlook Actions: Issuer: DaVita Inc. Outlook, Remains Stable RATINGS RATIONALE DaVita, Inc.'s Ba2 Corporate Family Rating reflects the company's considerable scale with over $11 billion in revenue and extensive network of dialysis outpatient clinics across 46 US states. It is also supported by the recurring revenue stream attributed to dialysis, as the treatment is critically important to patients who require it three times per week indefinitely. DaVita has strong free cash flow and very good liquidity. The Ba2 CFR is constrained by DaVita's moderately high financial leverage and its heavy reliance on its commercially insured dialysis patients for the vast majority of its profits and free cash flow. DaVita will continually be challenged to maintain a sufficiently large commercially insured end stage renal disease (ESRD) patient population to sustain its profitability. ESRD patients automatically convert to Medicare after a maximum of 33 months on dialysis. DaVita is reimbursed by Medicare at a fraction of what it earns from commercial payors, a disparity that results in increased social risk for the dialysis industry. The stable outlook reflects its view that DaVita's adjusted debt/EBITDA will decline to around 4.0 times or lower over the next 12-18 months. The outlook also reflects the underlying stability of DaVita's cash flows supported by continued growth in the population of people needing dialysis. The ratings could be downgraded if Moody's believes that DaVita's debt/EBITDA will be sustained above 4.25 times. A downgrade could also result from a material cut to reimbursement rates either by commercial insurers or Medicare, or a meaningful slowdown in the demand for dialysis treatment. The ratings could be upgraded if debt/EBITDA is sustained below 3.25 times. An upgrade could also occur if DaVita improves its business diversification while achieving improvements in operating performance. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. DaVita, Inc., headquartered in Denver, CO, is an independent provider of dialysis services primarily in the US for patients suffering from end-stage renal disease (chronic kidney failure). The company also provides home dialysis services, inpatient dialysis services through contractual arrangements with hospitals, laboratory services and other ancillary services. DaVita reported $11.4 billion of revenues from continuing operations for the year ended December 31, 2018. DBUBS MORTGAGE 2011-LC1A: Fitch Affirms Bsf Rating on Cl. G Certs ----------------------------------------------------------------- Fitch Ratings has affirmed eight classes of DBUBS Mortgage Trust commercial mortgage pass-through certificates series 2011-LC1. DBUBS 2011-LC1 Class A-2 233050AB9; LT PIFsf Paid In Full; previously at AAAsf Class A-3 233050AC7; LT AAAsf Affirmed; previously at AAAsf Class B 233050AF0; LT AAAsf Affirmed; previously at AAAsf Class C 233050AG8; LT AAAsf Affirmed; previously at AAAsf Class D 233050AH6; LT AAsf Affirmed; previously at AAsf Class E 233050AJ2; LT BBBsf Affirmed; previously at BBBsf Class F 233050AK9; LT BBsf Affirmed; previously at BBsf Class G 233050AL7; LT Bsf Affirmed; previously at Bsf Class X-A 233050AD5; LT AAAsf Affirmed; previously at AAAsf KEY RATING DRIVERS Increased Defeasance, Continued Amortization: Although there have been no payoffs since the last rating action, five loans were fully defeased, increasing the total balance of defeasance in the pool to $148.5 million from $7.4 million. One loan ($15.5 million, 1.8% of the pool) is scheduled to mature in 2019 and an additional seven non-defeased loans ($366.8 million, 41.4% of the pool) are scheduled to mature in 2020, including the largest loan in the pool. Class A-3 will be significantly paid down should these loans successfully refinance, which will further improve credit enhancement. Sensitivity to Large Loans: With 25 loans remaining and the top 15 loans representing 91.7% of the pool, the pool is considered concentrated. Fitch's analysis included additional stresses on three large loans in particular. The largest loan, Kenwood Towne Centre, represents 22.8% of the pool. It is secured by a regional mall in Cincinnati, OH. The collateral includes one anchor space and the inline space of the 1.2 million sf mall and is anchored by Dillard's (collateral), Macy's and Nordstrom. Despite strong inline sales and stable occupancy, there is general concern surrounding the lack of liquidity for regional malls, especially in secondary and tertiary markets. To reflect any upcoming rollover, Fitch's base case analysis included a 15% haircut to the servicer reported NOI. In addition, Fitch ran a sensitivity stress which assumed a 25% loss given the loan's upcoming maturity in December 2020. This approach is considered conservative based on the loan's low leverage point and stable performance, but was ultimately used to test the durability of the ratings. The third largest loan, 1200 K Street, is a Fitch Loan of Concern (FLOC) and represents 13.7% of the pool. It is secured by a Class A office building in the heart of Washington, DC's East End neighborhood. The government leases 97.8% of the NRA through the Pension Benefit Guaranty Corporation (PBGC), which has occupied the building since 1993. The federal government will be consolidating PBGC's headquarters from three buildings (including the subject) to The Portals in southwest Washington DC. The proposed space won't be delivered for another couple of years, according to the servicer commentary, and the tenant recently extended its lease at the subject. Per the servicer, the earliest PBGC can vacate is May 2021. This loan is scheduled to mature in February 2021, and the timing of the tenant's move could pose a significant refinance challenge. Fitch's base case treatment includes a 35% haircut to the servicer reported NOI, based on a dark-value analysis of the asset and resulted in a modeled loan-level loss of 27%. Fitch also ran a sensitivity stress which modeled total loss of 40% to reflect the loan's potential for maturity default. The sixth largest loan, Westgate I Corporate Center, is a FLOC and represents 4.3% of the pool. It is secured by a suburban New Jersey office property fully occupied by Everest Reinsurance. The tenant will be moving its headquarters from the subject to a nearby development in the next 18 months and it is not expected that they will renew their lease, which has an expiration date that coincides with the loan's scheduled maturity. This timing could pose a significant refinance challenge. Fitch's base case treatment includes a 50% haircut to the servicer reported NOI, based on a dark value analysis of the asset and resulted in a modeled loss of 19%. Fitch also ran a sensitivity stress which modeled a total loss of 30% to reflect the loan's potential for maturity default. Stable Performance and Loss Expectations: Despite some concerns with single-tenant exposure, overall the pool has exhibited stable performance. Loan level performance has remained in line with Fitch's expectations. There have been no defaults since the last rating action. DEBORAH EARLE: $660K Sale of Lawndale Property to Smiths Approved ----------------------------------------------------------------- Judge Ernest Robles of the U.S. Bankruptcy Court for the Central District of California authorized Deborah Earle's sale, outside the ordinary course of business, of the real property located at 4702 W. 165th St., Lawndale, California, legally described as Lot 36 of Tract No. 16658, in the County of Los Angeles, State of California, as per MAP recorded in Book 395, Page(s) 26 to 30, in the Office of the County Recorder of said County, to Oliver and Margaret Smith for $660,000, in accordance with the terms of their California Residential Purchase Agreement and the Southwest Escrow Corporation Settlement Statement. A hearing on the Motion was held on July 23, 2019 at 10:00 a.m. The PSA is approved. The sale of the Property will be "as-is" and "where-is" with all faults and without warranty, representation or recourse whatsoever. The loan secured by a first lien on the Property will be paid in full as of the date of the closing of the sale; and the sale will be conducted through an escrow and based on a non-expired contractual payoff statement received directly from Mr. Cooper (formerly Nationstar Mortgage, LLC). As of June 14, 2019, the Mr. Cooper payoff amount is currently $409,334. The Internal Revenue Service will be paid in full as of the date of the closing of the sale, and the sale will be conducted through and an escrow and based on a non-expired payoff statement received directly from the Internal Revenue Service. As of June 14, 2019, the Internal Revenue payoff amount is $1,986. The loan secured by a first lien on the Debtor' s property located at 5064 W. 59th Street, Los Angeles, CA 90056 will be paid as of the date of the closing of the sale; and the sale will be conducted through an escrow and based on a non-expired contractual payoff statement received directly from Mr. Cooper. As of June 14, 2019, the Mr. Cooper payoff amount is currently $46,332. The Franchise Tax Board will be paid in full as of the date of the closing of the sale. As of June 14, 2019, the Franchise Tax Board payoff amount is $3,200. The Los Angeles County Tax Collector ("LAC") claims for the tax years of 2018 and 2019 will be paid in fully as of the date of the closing of the sale, and the sale will be conducted through an escrow and based on a non-expired payoff statement received directly from the Los Angeles County Tax Collector. As of June 14, 2019, the LAC payoff amount is $19,408. The Administrative Claim of the Law Offices of Alik Segal will be paid in full as of the date of the closing of the sale, and the sale will be conducted through an escrow and based on a non-expired payoff statement received directly from the Law Offices of Alik Segal. As of June 14, 2019, the Alik Segal payoff amount is $95,000. The Escrow is authorized to pay Closing Costs including real estate broker's commissions, repair costs and other costs of sale. It is directed to distribute net proceeds currently estimated to be approximately $12,000 to A.O.E. Law & Associates’ Client Trust account to pay toward the unpaid balance of $12,000 for attorney's fees and costs owed to A.O.E. Law & Associates for its professional fees pursuant to Article 1.A of the Debtor's Plan. The fees will be held in A.O.E. Law & Associates' Client Trust account pending the Court's approval of a Final Fee Application for Compensation. The Escrow is further directed to distribute net proceeds currently estimated to be approximately $10,000 to A.O.E. Law & Associates Client Trust account to pay for professional fees in association with filing the Debtor's Motion for Reconversion to Chapter 11 and Debtor's Motion for Authority to Sell Estate Property. The fees will be held in A.O.E. Law & Associates' Client Trust pending the Court's approval of a Final Fee Application for Compensation. The Court's amended tentative ruling is adopted and incorporated into the Order. Deborah Earle sought Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-50423) on Dec. 9, 2012. DELTA MATERIALS: Seeks to Extend Exclusive Filing Period to Aug. 9 ------------------------------------------------------------------ Delta Materials, LLC and its affiliate Delta Aggregate, LLC request the U.S. Bankruptcy Court for the Southern District of Florida to extend the exclusive periods within which they can file and solicit acceptances to a chapter 11 plan through Aug. 9 and Oct. 8, respectively. The Debtors further request the Court to extend the plan and disclosure deadlines through Aug. 9. The Debtors have been actively soliciting for an investor and debtor in possession financing in order to operate the business as a going concern as well as searching for buyers in order to sell the property. Specifically, Debtors hired a broker, Southeast Land of North Florida Corporation, on March 20, 2019 to sell the property. Additionally, as the mining market is a niche industry, Southeast worked with the Debtors to target 12 specific potential buyers that held the most potential to purchase the property. As the brokerage contract with Southeast is set to expire in the next few months, the Debtors are currently seeking to hire another broker to solicit potential buyers. Additionally, the Debtors have been in informal negotiations with their secured creditor that have not yet been concluded. The Debtors are also actively soliciting for financing through several debtor-in-possession financiers as well as soliciting for customers in order to operate the business as a going concern. The Debtors assured the Court that if they can begin to operate the business as a going concern, it would significantly boost the value of the property and increase the likelihood of a sale. About Delta Materials and affiliate Delta Materials, LLC and its affiliate Delta Aggregate, LLC (Bankr. S.D. Fla. Lead Case No. 19-13191) filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code on March 12, 2019. Delta Aggregate owns a property located at 9025 Church Rd, Felda, Florida, having an appraised value of $22 million. The Debtors' counsel is Bradley S. Shraiberg, Esq., at Shraiberg Landau & Page, PA, in Boca Raton, Florida. At the time of filing, Delta Materials's total assets was $22,006,491 and total liabilities was $10,377,363. Delta Aggregate's total assets was $22,006,491 and total liabilities was $10,377,363. The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Delta Materials LLC, according to court docket. DESERT LAND: Trustee's Nellis Auction of Assets Approved -------------------------------------------------------- Judge Gary Spraker of the U.S. Bankruptcy Court for the District of Nevada authorized Kavita Gupta, the Trustee for Desert Land, LLC and its affiliates, to sell the assets listed on Schedule A, including the vehicle with VIN No. 1GKFK16397J198209, by auction free and clear of all liens. A hearing on the Motion was held on July 16, 2019, at 10:30 a.m. The Trustee is authorized to employ Nellis Auction as auctioneer under the terms and conditions set forth in the Motion and Exhibit 1 thereto. He is further authorized to pay a commission equal to 10% of the auction hammer price for the vehicle and 15% for the other assets with a 10% buyer's premium to be charged for live bidders and 15% for online bidders to Nellis Auction. The Court waived the 14-day stay imposed by Bankruptcy Rule 6004(h). A copy of Exhibit 1 attached to the Order is available for free at: http://bankrupt.com/misc/DESERT_LAND_801_Order.pdf About Desert Land On April 30, 2018, Tom Gonzales commenced an involuntary petition for relief under Chapter 7 of the Bankruptcy Code against Desert Land, LLC. The petitioning creditor was Bradley J. Busbin, as trustee of the Gonzales Charitable Remainder Unitrust One. Jamie P. Dreher -- jdreher@downeybrand.com -- of Downey Brand LLP represents the Trustee. The Debtor and its affiliates sought and obtained the conversion of the case to a case under Chapter 11 on June 28, 2018 (Bankr. D. Nevada, Lead Case No. 18-12454). The Debtor's affiliates are Desert Oasis Apartments LLC, Desert Oasis Investments, LLC, and Skyvue Las Vegas LLC. Schwartzer & McPherson Law Firm serves as the Debtors' counsel. DIEBOLD NIXDORF: Moody's Rates Proposed Secured Loans 'B3' ---------------------------------------------------------- Moody's Investors Service affirmed Diebold Nixdorf, Inc.'s B3 Corporate Family Rating, B3-PD Probability of Default Rating, SGL-3 Speculative Grade Liquidity rating, the B3 ratings on the company's existing first lien credit facilities as well as the Caa2 ratings on Diebold's senior unsecured notes. Concurrently, Moody's assigned a B3 rating to the company's proposed revolving credit facility and term loan A for which Diebold plans to extend maturities to April 2022 from December 2020 alongside a modest aggregate increase in total borrowings. The outlook was revised to stable from negative, principally reflecting the company's stronger liquidity prospects under a successful maturity extension as well as demonstrated improvements in operating profitability through the first six months of 2019. However, if Diebold is unsuccessful in completing the maturity extension, the outlook will be revised to negative. Assignments: Issuer: Diebold Nixdorf, Inc. Senior Secured 1st lien Term Loan A due 2022, Assigned B3 (LGD4) Senior Secured 1st lien Revolving Credit Facility due 2022, Assigned B3 (LGD4) Affirmations: Issuer: Diebold Nixdorf, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Senior Secured 1st lien Term Loan A due 2020, Affirmed B3 (LGD4) Senior Secured 1st lien Term Loan A1 due 2022, Affirmed B3 (LGD4) Gtd Senior Secured 1st lien Term Loan B due 2023, Affirmed B3 (LGD4) Senior Secured 1st lien Revolving Credit Facility due 2020, Affirmed B3 (LGD4) Gtd Senior Unsecured Global Notes due 2024, Affirmed Caa2 (LGD6) Outlook Actions: Issuer: Diebold Nixdorf, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE Diebold's B3 CFR is constrained by the company's elevated pro forma gross debt leverage of over 6x as of June 30, 2019, ongoing execution challenges relating to Diebold's restructuring program, and Moody's expectation of a challenging operating environment in the company's core automated teller machine ("ATM") market in the coming year. The rating is further constrained by Diebold's limited financial flexibility which continues to be negatively impacted by weak free cash flow generation as well as potential reputational risk in the event of a data security or customer privacy breach of the company's hardware products or software systems. These risks are somewhat mitigated by Diebold's expansive geographic footprint and leading market positions across its financial self service and retail point of sale business. Additionally, the company's credit profile should benefit from the ongoing shift in Diebold's sales mix towards higher margin software and services offerings which should mitigate challenges in the more mature hardware business and provide improved revenue visibility. Moody's believes Diebold's liquidity is presently adequate, as indicated by the SGL-3 rating. Liquidity is supported by pro forma cash and short-term investments on the company's balance sheet that are expected to approximate $300 million-$350 million following the completion of the proposed maturity extension. Liquidity is further supported by pro forma borrowing capacity of approximately $350 million under the company's revolver. As proposed, the revolver and term loan A will continue to be subject to maintenance covenant limitations including a maximum leverage ratio of 7.0x (with step downs beginning on June 30, 2020) and a minimum adjusted EBITDA to net interest expense coverage ratio of 1.38x (with step ups beginning on December 31, 2020). Based on current operating performance expectations, Moody's anticipates that the company will remain in compliance with these covenants over the next 12-18 months. The stable outlook reflects Moody's expectation that Diebold will experience a modest decline in sales in 2019, but expense reduction initiatives will fuel a healthy recovery in EBITDA. The outlook also reflects Moody's expectation that the company can successfully extend the majority of its debt maturing in 2020 to 2022. The ratings could be upgraded if Diebold generates sustained revenue growth and improves margins such that adjusted debt to EBITDA is sustained below 6.0x with improved liquidity and FCF/Debt is above 5% with adherence to disciplined financial policies. The ratings could be downgraded if Diebold experiences weak revenue and profitability trends, market share declines materially, or liquidity deteriorates. The principal methodology used in these ratings was Diversified Technology published in August 2018. Diebold has leading market positions in developing, manufacturing, and servicing ATMs, electronic cash registers, and other related physical security solutions for banks and retailers. Moody's expects the company to generate annual revenues of approximately $4.5 billion in 2019. DTZ US BORROWER: Moody's Upgrades LT CFR to B1, Outlook Stable -------------------------------------------------------------- Moody's Investors Service upgraded DTZ U.S. Borrower, LLC's senior secured first lien term loan and senior secured first lien revolving facility to Ba3 from B1, its corporate family rating to B1 from B2 and its probability of default rating to B1-PD from B2-PD. In the same rating action, Moody's affirmed DTZ's speculative grade liquidity rating of SGL-2. The outlook is stable. DTZ is an indirectly wholly-owned subsidiary of Cushman & Wakefield plc. The following ratings were upgraded: Issuer: DTZ U.S. Borrower, LLC LT Corporate Family Rating to B1 from B2 Senior Secured First Lien Term Loan to Ba3(LGD3) from B1(LGD3) Senior Secured First Lien Revolving Facility to Ba3(LGD3) from B1(LGD3) Probability of Default Rating to B1-PD from B2-PD The following rating was affirmed: Issuer: DTZ U.S. Borrower, LLC Speculative Grade Liquidity Rating at SGL-2 Outlook Action: Issuer: DTZ U.S. Borrower, LLC Outlook remains stable RATINGS RATIONALE The rating upgrade reflects Cushman & Wakefield's sustained improvement in its leverage metric, as measured by Debt/EBITDA (including Moody's standard adjustments for pensions and operating leases), benefiting primarily from its reduced debt balance. CWK used the net proceeds from its initial public offering to repay its senior secured second lien term loan in full and Moody's expects that CWK will sustain its leverage below 5.0x long-term. The company's Debt/EBITDA was 4.5x at Q1 2019, compared to 6.2x at Q1 2018. The rating upgrade also incorporates Cushman & Wakefield's strong market position as the third largest global commercial real estate services provider and its enhanced financial performance transparency and capital markets access as a public company. CWK derives a high proportion of earnings from contractual property, facility and project management businesses. Customer retention rates have traditionally been high, many through multi-year contracts with high switching costs, providing CWK with a strong base of recurring income. These credit strengths are mitigated by the fact that Cushman & Wakefield remains majority-owned by the private equity group after the IPO who has the right to designate five of the seats on the board of directors and the right to jointly designate for nomination one additional independent director so long as the private equity group collectively owns at least 50% of the total ordinary shares outstanding. The private equity group owned approximately 54% of Cushman & Wakefield's total ordinary shares outstanding at Q1, 2019. The stable outlook reflects Moody's expectation that Cushman & Wakefield will gradually improve its market share and margin across its businesses globally on a leverage neutral basis with Debt/EBITDA below 5.0x on a sustained basis. The SGL-2 speculative grade liquidity rating considers the company's good liquidity profile, which is supported by the senior secured first lien revolving facility of $810 million, which was fully available at March 31, 2019. The revolving facility will mature on August 21, 2023. Providing further support is the company's cash position of $411 million at March 31, 2019. DTZ has no debt maturities until 2023 when the senior secured revolving credit facility matures. The Ba3 ratings on the senior secured first lien term loan and revolving facility, which are one notch above the CFR reflect the first lien security on all assets and substantially all material tangible and intangible assets of DTZ and its guarantors including the parent company, DTZ UK Guarantor Ltd and its material direct and indirect wholly-owned subsidiaries organized in the United States and certain of its direct and indirect wholly-owned subsidiaries organized in England and Wales. The corporate family rating could be upgraded if the company were to permanently reduce leverage as defined by Debt/EBITDA (including Moody's standard adjustments for pensions and operating leases) to below 4.0x, improve interest coverage above 3.5x and achieve RCF/Net Debt above 15% on a consistent basis. Moody's does not expect these events to occur in the near- to medium term. A downgrade to the corporate family rating will result from a more aggressive financial policy, evidenced by Debt/EBITDA in excess of 5.0x, interest coverage below 2.0x on a sustained basis. Weakening operating performance, particularly stemming from significant broker defections or a large acquisition that presents integration challenges or increases leverage would also result in negative ratings pressure. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Based in Chicago, IL, Cushman & Wakefield is one of the leading, global providers of commercial real estate services. With approximately 51,000 employees, CWK operates in 70 countries and provides a full array of corporate real estate services (CRES) to occupiers, property owners, investors, and developers worldwide. DYNCORP INTERNATIONAL: S&P Affirms 'B+' ICR; Outlook Stable ----------------------------------------------------------- S&P Global Ratings affirmed its 'B+' issuer credit rating on DynCorp International Inc. (DynCorp). At the same time, S&P assigned its 'BB' issue-level and '1' recovery ratings to the company's proposed first-lien credit facility, comprising a $360 million term loan due 2025 and a $70 million revolver due 2024. The affirmation reflects that lower debt levels after the proposed refinancing will extend maturities and offset lower earnings over the next 12-24 months as DynCorp International Inc. replaces lost contracts with new business, which has not yet ramped up. DynCorp lost some major contracts in the past year, including the Logistics Civil Augmentation Program V (LOGCAP V; currently under protest) and INL Air Wing, which have now ended or are expected to end in the next six to 12 months. Although the company successfully won new business to replace the lost contracts, it will take some time to ramp up. S&P expects debt to EBITDA of 2.5x-3.0x in 2019 and 3.0x-3.5x in 2020 due to the contract transition. "Our stable outlook on DynCorp reflects our expectation that credit ratios will deteriorate modestly because the lower debt levels following the refinancing will not fully offset declining earnings as it transitions to new programs. As a result, we expect debt to EBITDA of 2.5x-3.0x in 2019 and to increase to 3.0x-3.5x in 2020 as the new contracts ramp up," S&P said. Upside scenario Although unlikely, S&P could raise the rating in the next 12 months if debt to EBITDA remains below 3x and the company's private equity sponsor commits to maintaining leverage below 4x, even with potential debt-financed acquisitions or dividends. This could occur if the company successfully replaces the earnings from recently lost contracts and doesn't undertake any debt-financed acquisitions or dividends, according to S&P. Downside scenario Although unlikely, S&P could lower the rating in the next 12 months if debt to EBITDA rises above 5x for a sustained period. This could occur if DynCorp fails to replace major unsuccessful contract recompetes, suffers further material lost contracts, or has problems on existing contracts, according to the rating agency. "Although less likely, this could occur if leverage increases to fund a debt-financed dividend or acquisition. The rating could also be lowered if the company cannot successfully complete the proposed refinancing, constraining liquidity," S&P said. E&M CLEANING: Seeks to Hire Wetzel Gagliardi as Counsel ------------------------------------------------------- E&M Cleaning, Inc. seeks authority from the United States Bankruptcy Court for the Eastern District of Pennsylvania (Philadelphia) to hire Wetzel Gagliardi Fetter & Lavin LLC as counsel. E&M requires Wetzel Gagliardi to represent the Debtor in this Chapter 11 proceedings and perform all other legal services which may be necessary in furthering the reorganization of the Debtor's financial affairs. Wetzel's normal hourly billing rates are: John A. Wetzel, Esq. $400 John A. Gagliardi, Esq. $300 Paralegals $175 John A. Gagliardi, Esq., member of Wetzel Gagliardi Fetter & Lavin LLC, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. The firm can be reached through: John A. Gagliardi, Esq. WETZEL GAGLIARDI FETTER & LAVIN LLC 101 E. Evans Street Walnut Building - Suite A West Chester, PA 19380 Tel: (484) 887-0779 Fax: (484) 887-8763 E-mail: jgagliardi@wgflaw.com About E&M Cleaning, Inc. E&M Cleaning, Inc. -- https://www.maids.com/224 -- provides house cleaning services in Lower Bucks County, Pennsylvania. The Company offers recurring cleaning services, one-time cleaning services, spring or fall cleaning services, same-day cleaning services, and moving services. E&M Cleaning, Inc. filed for relief under Chapter 11 of Title 11 of the United States Code (Bankr. E.D. Penn. Case No. 19-14348) on July 9, 2019. In the petition signed by Warren J. Uzialko, president, the Debtor estimated $50,000 to $100,000 in assets and $1 million to $10 million. John A. Gagliardi, Esq. at Wetzel Gagliardi Fetter & Lavin LLC is the Debtor's counsel. ELK PETROLEUM: Hires Seaport Global as Investment Banker -------------------------------------------------------- Elk Petroleum Inc. and its debtor-affiliates seek authority from the United States Bankruptcy Court for the District of Delaware to employ Seaport Global Securities LLC, as investment banker to the Debtors, nunc pro tunc to July 12, 2019. Elk Petroleum requires Seaport to: (a) review the business and operations of the Assets and their historical and projected financial condition; (b) analyze business plans, forecasts and related financial projections for the Assets; (c) assist with the preparation of requisite marketing documents for the Transaction; (d) maintain copies of confidentiality agreements in connection with the Transaction; (e) coordinate due diligence, including meetings and information requests, in connection with the Transaction; (f) assist the Debtors in formulating a marketing strategy for the Transaction and in developing procedures and a timetable for marketing the Transaction; (g) assist the Debtors in identifying and evaluating candidates for the Transaction, run a sales and marketing process designed to identify such candidates, and advise the Debtors in connection with negotiations with such candidates (including as to strategy and tactics) and participate in such negotiations; (h) advise and assist the Debtors as to the particular requisite schedules and exhibits which may be required in connection with the Bankruptcy Case; (i) at the direction of the Company, assist the Company and/or participate in disseminating information to, and negotiating with, entities or groups that may be affected by a Transaction and by the contemplated sales and marketing process in furtherance of such a Transaction, such as the Official Committee of Preferred Equity Security Holders (the "Equity Committee") and any other party as required by any bid procedures approved by the Bankruptcy Court; (j) if requested by bankruptcy counsel for the Company, participate in hearings before the Bankruptcy Court with respect to the matters upon which Seaport Global has provided advice or other services, including, as relevant, coordinating with such counsel with respect to testimony in connection therewith; and (k) provide such other investment banking and financial advisory services as are customary for these types of transactions. Seaport will be paid as follows: Fees: Seaport will be paid as follows: a. Within five (5) business days following the entry of the Retention Order, a cash advisory fee (the "Advisory Fee") in the amount of $100,000, which shall be fully earned and non-refundable as soon as it is paid, but which will be fully creditable against the amount of any Sales Fee otherwise payable to Seaport Global pursuant to Section 2.b. below; b. A cash sales fee (the "Sales Fee") equal to one percent (1.0%) of the "Aggregate Consideration" received or receivable in connection with the consummation of the Transaction, but subject to a minimum fee of $500,000 (the "Minimum Fee"), with such Minimum Fee to apply to any "market test" or "sales process" conducted by Seaport Global (at the request of the Company) for the sale of (i) the interests owned by EPI in Resolute, EOS or Aneth, or (ii) more than 50% of the assets or businesses of any or all of EPI, Aneth, Resolute or EOS, in any such case, including through a sale or exchange of capital stock, options or assets, a lease of assets with or without a purchase option, a merger, consolidation or other business combination, a tender offer, the formation of a joint venture, partnership or similar entity, or any similar transaction, where (a) the Company elects not to transact or accept any such offer, and/or (b) an existing creditor successfully "Credit Bids" on some or all of its outstanding claims to acquire some or all of such assets or businesses. For the avoidance of doubt, (w) confirmation of the Plan filed by the Company at D.I. 15 (as may be amended, modified or supplemented) will not trigger a 1.0% Sales Fee but will only entitle Seaport Global to payment of the Minimum Fee, (x) the Sales Fee shall cover any time incurred by Seaport Global attending depositions and/or giving expert or other testimony in connection with the sales process, (y) the Minimum Fee shall apply in any such circumstance as described above where a "sales process" or "market test" is undertaken, and (z) there shall be no Sales Fee payable with respect to the consummation of any transaction (A) for the sale of the membership interests owned by EPI in Elk Grieve Project, LLC, Grieve Pipeline, LLC, Singleton EOR Project, LLC, North Grieve, LLC, Elk Operating Company, LLC or Elk Petroleum Madden Gas & CO2, LLC (the "NonDebtor Subsidiaries"), or (B) for the sale of any of the assets or businesses owned by the Non-Debtor Subsidiaries, in either case, including through a sale or exchange of capital stock, options or assets, a lease of assets with or without a purchase option, a merger, consolidation or other business combination, a tender offer, the formation of a joint venture, partnership or similar entity, or any similar transaction. The terms and conditions of any investment banking services, including compensation and arrangements, for a sale of the Non-Debtor Subsidiaries or their assets will be set forth in a separate written agreement between Seaport Global and the Company; c. For purposes of calculating the Sales Fee, the term "Aggregate Consideration" shall mean the aggregate amount of cash and the fair market value of any securities, contract rights or other property received or receivable, directly or indirectly, by or on behalf of the Company, its shareholders, directors and/or executive officers, in connection with the consummation of the Transaction, including, without limitation: (i) all indebtedness for borrowed money and other similar liabilities and preferred stock directly or indirectly assumed, refinanced, retired or extinguished in connection with the Transaction (but excluding all payments made and expenses incurred in connection therewith, including, without limitation, prepayment premiums and defeasance costs) and excluding debt repaid by the Company with proceeds received from the Transaction; (ii) the amount of any consideration placed in escrow or otherwise held back to support the Company's (or its stockholders') indemnification or similar obligations under the definitive documents with respect to the Transaction; and (iii) the amount of any "contingent" consideration to be paid in the future in connection with the Transaction; provided, that the amounts represented by clauses (ii) and (iii) shall only become payable as a portion of the Sales Fee if, as and when such amounts are actually paid to the Company. For purposes of computing any fees payable to Seaport Global hereunder, non-cash consideration shall be valued as follows: (1) publicly traded securities shall be valued at the average of their closing prices (as reported in the Wall Street Journal) for the 20 trading days prior to the closing of the Transaction, and (2) any other non-cash consideration shall be valued at the fair market value thereof as determined in good faith by the Company and Seaport Global; and d. If the Transaction is not concluded during the Term, then the Company agrees that if, within twelve (12) months from the Termination Date, the Company concludes the Transaction and Seaport Global is not then otherwise engaged as the Company's investment banker in connection with the Transaction, then, at the time such Transaction is consummated, the Company shall pay to Seaport Global the fees set forth in this Section 2, which fees Seaport Global would have received had it been so engaged. Expenses. Without in any way reducing or affecting the provisions of Annex "A" hereto, the Company shall reimburse Seaport Global for its reasonable and documented out-of-pocket expenses incurred in connection with the performance of its engagement hereunder and the enforcement of this Agreement, including, without limitation, the reasonable and documented fees, disbursements and other charges of Seaport Global's outside counsel (but excluding any fees, disbursements and other charges of in-house or outside counsel incurred in connection with drafting, negotiating and/or entering into this Agreement). Such reimbursements shall be made promptly upon submission by Seaport Global of statements for such expenses, subject to the approval of the Bankruptcy Court. Payment of the reimbursable fees, expenses and disbursements hereunder is in no way contingent upon any outcome of the Transaction contemplated hereby. Michael D. Bodino, Managing Director and Co-Head of Energy Investment Banking at Seaport Global Securities LLC, attests that Seaport is a "disinterested person," as such term is defined in section 101(14) of the Bankruptcy Code, neither holds nor represents an interest materially adverse to Debtors' estates, their creditors, or their shareholders for the matters on which Seaport is to be employed. Seaport can be reached through: Michael D. Bodino SEAPORT GLOBAL SECURITIES LLC 400 Poydras Street, Suite 3100 New Orleans, LA 70130 Tel: (504) 410-8010 About Elk Petroleum Elk Petroleum Inc. -- https://www.elkpet.com/ -- is an oil and gas company specializing in enhanced oil recovery (EOR). Elk Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11157) on May 22, 2019. At the time of the filing, Elk Petroleum estimated assets of between $1 million and $10 million and liabilities of less than $50,000. The petition was signed by Scott M. Pinsonnault, chief restructuring officer. The Debtors tapped Norton Rose Fulbright US LLP and Womble Bond Dickinson (US) LLP as legal counsel; Ankura Consulting Group, LLC, as restructuring advisor; Opportune LLP as valuation analysis provider; and Bankruptcy Management Solutions, Inc., as claims and noticing agent. Andrew Vara, acting U.S. trustee for Region 3, on June 19 appointed three equity security holders to serve on the committee of preferred equity security holders in the Chapter 11 case of Elk Petroleum, Inc. The Office of the U.S. Trustee on May 31 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 cases of Elk Petroleum, Inc. and its affiliates. EXPRESSWAY DELIVERIES: RED Buying All Assets for $15K ----------------------------------------------------- Expressway Deliveries, Inc., asks the U.S. Bankruptcy Court for the Central District of California to authorize the sale of all assets to Rapid Expressway Deliveries, Inc. ("RED") for a cash component of $15,000, and the assumption of liabilities relating to existing financial and executory contract/lease obligations with a total value to the Estate of approximately $2,067,000, subject to overbid. From inception, the Debtor and its counsel had considered the filing of a motion for approval of a sale of the Debtor as a growing concern. However, in light of recent economic changes, the Debtor must now sell all or substantially all of its assets. Recently, the Debtor received a "stalking horse" offer for substantially all of the assets of its chapter 11 estate. The Motion asks approval of a sale of the Assets to the Stalking Horse bidder free and clear of liens and claims of right. The Debtor's Stalking Horse Bidder is RED, formed by Richard Molino, the owner of the Debtor and guarantor of all of the leases and secured debt owed by the Debtor in the Case. The offer contains a cash component of $15,000, and the assumption of liabilities relating to existing financial and executory contract/lease obligations with a total value to the Estate of approximately $2,067,000. Assuming RED becomes the successful bidder, the purchase will be funded from readily available capital funded from Richard Molino's personal assets. The Debtor has provided RED extensive due diligence information and have had several detailed conversations with Mr. Molino and counsel for the Debtor. Moreover, Richard Molino is undisputedly familiar with the business operations of the Debtor. The Offer is for all Assets and the assumption of liabilities, and it is contingent on an order under 11 U.S.C. Section 363, subsections (b) and (f). The Bid Procedures Order, which sets forth procedures that must be followed in the event there are any interested overbidders, was entered by the Court on June 14, 2019. The procedures are neither complex nor pervasive: 1. Any other interested buyer must prequalify by 5:00 p.m. (PST) on July 5, 2019, and must: a. Make a nonrefundable good faith deposit of $7,500 with the Debtor's counsel, to be refunded only if the Potential Purchaser is not the highest bidder. If the Potential Purchaser is the highest bidder and then fails to close, the Debtor may retain the funds. b. Execute and deliver to the Debtor's counsel the Asset Purchase Agreement, which has been executed by RED, adjusted only to account for the change in purchase price and identity of the Potential Purchaser. An accurate copy of the APA is appended to the Bid Procedures Order. c. Execute and deliver to the Debtor's counsel a written statement confirming that: (i) it consents to the overbid procedures, and (ii) the offer made by the Overbidder pursuant to the Adjusted APA is not subject to or conditioned upon, and does not contain, any contingencies for financing, due diligence, or inspection. d. Provide information acceptable to the Debtor demonstrating that it has: (i) sufficient cash on hand or a binding financial commitment from an established and financially sound financial institution to ensure such Potential Purchaser's ability to meet is commitments to pursuant to its bid and to close the transaction under its Adjusted APA within the time frame established by the adjusted APA; (ii) the financial ability to perform on all the real and personal property leases to be assigned under its Adjusted APA; (iii) the legal capacity to complete the purchase; (iv) authorized the person who will be bidding for the Potential Purchaser to bid on its behalf; and (v) authorized the person signing its adjusted APA to do so and to bind it. 2. The purchase price in the adjusted APA will be at least $17,500 ($2,500 more than purchase price under the APA) and additional overbid increments at the hearing must be at least $2,500 each. 3. At least one (1) court day before the hearing on the Motion, the Debtor will file with the Court a report that (a) identifies any and all Potential Purchasers who have qualified pursuant to the procedures set forth; and (b) has attached a copy of all of the documents submitted, with confidential information (such as complete bank account numbers) redacted as necessary. 4. If there is more than one Potential Purchaser, an auction will be conducted by the Court at the hearing on Motion. RED and all the Potential Purchasers will be required to have an authorized representative present in Court. 5. If there are no qualified overbidders, the Debtor will simply request entry of an order approving the sale to RED; and will ask that RED be identified as a "good faith" purchaser entitled to the protections afforded by 11 U.S.C. Section 363(m). The Debtor prays that the Court issues and enters an Order approving the sale to RED, subject to the Bid Procedures Order . A hearing on the Motion is set for July 11, 2019 at 10:00 a.m. About Expressway Deliveries Expressway Deliveries, Inc., is a privately held company in Carson, California, that operates in the couriers and express delivery services industry. Expressway Deliveries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-23791) on Nov. 26, 2018. At the time of the filing, the Debtor disclosed $325,345 in assets and $1,045,781 in liabilities. The case is assigned to Judge Julia W. Brand. The Debtor tapped Friedman Law Group, P.C., as its legal counsel. FISH 269: Seeks to Hire Morrison Tenenbaum as Counsel ----------------------------------------------------- Fish 269 LLC seeks authority from the U.S. Bankruptcy Court for the Eastern District of New York (Brooklyn) to employ Morrison Tenenbaum PLLC as counsel. Fish 269 requires Morrison Tenenbaum to: a. advise the Debtor with respect to its powers and duties as debtor-in-possession in the management of its estate; b. assist in any amendments of Schedules and other financial disclosures and in the reparation/review/amendment of a disclosure statement and plan of reorganization; c. negotiate with the Debtor's creditors and taking the necessary legal steps to confirm and consummate a plan of reorganization; d. prepare on behalf of the Debtor all necessary motions, applications, answers, proposed orders, reports and other papers to be filed by the Debtor in this case; e. appear before the Bankruptcy Court to represent and protect the interests of the Debtor and its estate; and f. perform all other legal services for the Debtor that may be necessary and proper for an effective reorganization. Morrison Tenenbaum will charge these hourly rates: Lawrence Morrison, Esq. $525 Brian J. Hufnagel $425 Associates $380 Paraprofessionals $175 Morrison Tenenbaum received $4,000 as an initial retainer fee from the Debtor. Morrison Tenenbaum will also be reimbursed for reasonable out-of-pocket expenses incurred. Lawrence F. Morrison, a partner at Morrison Tenenbaum, PLLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Morrison Tenenbaum can be reached at: Lawrence F. Morrison, Esq. Brian J. Hufnagel, Esq. MORRISON TENENBAUM PLLC 87 Walker Street, Floor 2 New York, NY 10013 Tel: (212) 620-0938 About Fish 269 LLC Based in New York City, New York, Fish 269 LLC, the Debtor filed its voluntary petition for relief under Chapter 11 of the Bankruptcy (Bankr. E.D.N.Y. Case No. 19-42416) on April 23, 2019, listing under $1 million in both assets and liabilities. Lawrence Morrison, Esq. at Morrison Tenenbaum PLLC represents the Debtor as counsel. FIZZICS GROUP: Exclusivity Period Extended Until Oct. 8 ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended the period during which Fizzics Group Inc. has the exclusive right to file a Chapter 11 plan through Oct. 8, and to solicit acceptances for the plan through Dec. 7. "The Debtor is in the process of formulating a plan of reorganization that will enable it to emerge from bankruptcy in the short term as a sustainable, operating company," said David Klauder, Esq., at Bielli & Klauder, LLC. Fizzics Group has also met its revenue and expense projections, and has recently increased its sales pipeline. It has developed an initial long-term business plan and believes that it will be profitable in the near future, according to the company's attorney. Mr. Klauder further said that the company continues to review potential investment and financing alternatives that can also be used to provide operating capital and potential plan payments. About Fizzics Group Inc. Fizzics Group, Inc. -- http://www.fizzics.com-- is a technology platform company that developed portable draft beer systems to improve the flavor and taste of can, bottle or growler of beer to brewery fresh. It utilizes patented sonic wave technology to deliver the fresh taste of draft from any can or bottle of beer. Fizzics Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-10545) on March 12, 2019. At the time of the filing, the Debtor had estimated assets of less than $500,000 and liabilities of $1 million to $10 million. David M. Klauder, Esq., at Bielli & Klauder, LLC, is the Debtor's legal counsel. FOOTHILLS EXPLORATION: Closes $178,000 in Loan Transactions ----------------------------------------------------------- Foothills Exploration, Inc., on July 22, 2019, closed on a convertible loan transaction with Power Up Lending Group Ltd. in the principal amount of $78,000, before giving effect to certain transactional costs including legal fees yielding a net of $78,000. The Holder is entitled, at its option, at any time after the 180th daily anniversary of the Note, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock at a price for each share of Common Stock equal to 61% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC Marketplace exchange which the Company's shares are traded or any exchange upon which the Common Stock may be traded in the future, for the 20 prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company or its transfer agent after 4 p.m. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price). Interest on any unpaid principal balance of this Note shall be paid at the rate of 12% per annum. Interest will be paid by the Company in Common Stock. The Holder may, at any time, after the 180th daily anniversary of the Note, send in a Notice of Conversion to the Company for Interest Shares based on the formula described above. The dollar amount converted into Interest Shares will be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of that notice. The maturity date for this Note is July 17, 2020, and is the date upon which the principal sum, as well as any accrued and unpaid interest, will be due and payable. This Note may be prepaid or assigned with the following penalties/premiums: (i) during the initial 90 calendar day period after the issuance of the Note, by making a payment to the Holder of an amount in cash equal to 125% multiplied by the principal, plus accrued interest; (ii) during the 91st through 150th calendar day period after the issuance of the Note, by making a payment to the Holder of an amount in cash equal to 140% multiplied by principal, plus accrued interest; (iii) during the 151st through 180th calendar day period after the issuance of the Note, by making a payment to the Holder of an amount in cash equal to 145% multiplied by principal, plus accrued interest. The Company may not prepay any amount outstanding under this Note after the 180th calendar day after the issuance of the Note. Any amount of principal or interest due pursuant to this Note, which is not paid by the Maturity Date, will bear interest at the rate of the lesser of (i) 22% per annum or (ii) the maximum amount permitted by law from the due date thereof until the same is paid. Interest will commence accruing on the date the Note is fully paid and will be computed on the basis of a 365-day year and the actual number of days elapsed. Net proceeds obtained in this transaction will be used for general corporate and working capital purposes. No broker-dealer or placement agent was retained or involved in this transaction. The transaction documents contain additional terms and provisions, representations and warranties, including further provisions covering conversions of debt, remedies on default, venue, and governing law. GS Capital Partners, LLC Placement On July 24, 2019, the Company closed on a convertible redeemable loan transaction with GS Capital Partners, LLC in the principal amount of $110,000 with an original issue discount of $10,000, before giving effect to certain transactional costs including legal fees yielding a net of $100,000. GS is entitled, at its option, at any time after the 180th daily anniversary of the Note, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock at a price for each share of Common Stock equal to 55% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC Marketplace exchange which the Company's shares are traded or any exchange upon which the Common Stock may be traded in the future, for the 25 prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company or its transfer agent after 4 p.m. Eastern Standard or Daylight Savings Time if GS wishes to include the same day closing price). Interest on any unpaid principal balance of this Note will be paid at the rate of 10% per annum. Interest will be paid by the Company in Common Stock. GS may, at any time, after the 180th daily anniversary of the Note, send in a Notice of Conversion to the Company for Interest Shares. The dollar amount converted into Interest Shares will be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of that notice. The maturity date for this Note is July 23, 2020, and is the date upon which the principal sum, as well as any accrued and unpaid interest, will be due and payable. This Note may be prepaid with the following premiums: (i) during the initial 60 calendar day period after the issuance of the Note, by making a payment to GS of an amount in cash equal to 125% multiplied by the principal, plus accrued interest; (ii) during the 61st through 120th calendar day period after the issuance of the Note, by making a payment to GS of an amount in cash equal to 135% multiplied by principal, plus accrued interest; (iii) during the 121st through 180th calendar day period after the issuance of the Note, by making a payment to GS of an amount in cash equal to 145% multiplied by principal, plus accrued interest. The Company may not prepay any amount outstanding under this Note after the 180th calendar day after the issuance of the Note. Any amount of principal or interest due pursuant to this Note, which is not paid by the Maturity Date, shall bear interest at the rate of the lesser of (i) 24% per annum or (ii) the maximum amount permitted by law from the due date thereof until the same is paid. Interest will commence accruing on the date the Note is fully paid and will be computed on the basis of a 365-day year and the actual number of days elapsed. The transaction documents contain additional terms and provisions, representations and warranties, including further provisions covering conversions of debt, remedies on default, venue, and governing law. Active Management of Convertible Debt On July 12, 2019, the Company retired in full the first tranche of the convertible promissory note with Crown Bridge Partners, LLC, dated Dec. 6, 2018, in the principal amount of $45,500. The Company made several payments totaling $350,000 towards the principal balance of the convertible promissory note with Labrys Fund, L.P. dated Nov. 1, 2018, in the principal amount of $380,000. The Company entered into an extension agreement with Labrys Fund, L.P. for the repayment of said note and has one final payment of $55,000 remaining. The Company also entered an extension agreement for the repayment of the Jefferson Street Capital Note dated Dec. 19, 2018, in the principal amount of $58,300. The Company has paid a total of $25,000 towards the principal balance of the Jefferson Street Capital note and anticipates repaying the note in full in accordance to the extension agreement reached with the lender. About Foothills Exploration Foothills Exploration, Inc. -- http://www.foothillspetro.com-- is a growth stage oil and gas exploration and production company with a focus in the acquisition and development of undervalued and underdeveloped properties. The Company's assets are located across well-established plays in the U.S. Rocky Mountain region. Foothills Exploration incurred a net loss of $6.58 million in 2018 following a net loss of $6.49 million in 2017. As of March 31, 2019, the Company had $14.15 million in total assets, $24.44 million in total liabilities, and a total stockholders' deficit of $10.28 million. RBSM LLP, in Henderson, Nevada, the Company's auditor since 2015, issued a "going concern" opinion in its report dated April 16, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has an accumulated deficit, recurring losses, and expects continuing future losses, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. FRANKIE V'S KITCHEN: $2.5M Sale of All Assets to Casa Approved -------------------------------------------------------------- Judge Stacey G.C. Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas authorized Frankie V's Kitchen, LLC's sale of substantially all assets to Casa Verde Foods, LLC for $2.5 million. The sale hearing was held on July 17, 2019. The APA is also approved in its entirety and remains subject to modifications made in accordance with the Order, and any further Orders of the Court. The Closing Date will occur as soon as reasonably possible, given time is of the essence to maximize recovery to the Debtor's estate. The Debtor and the Purchaser will use their best efforts to cause the Closing to occur by July 24, 2019. All liens, claims, and/or encumbrances asserted against the Assets will attach to the proceeds of the sale. The sale is free and clear of all liens, claims. Pursuant to Sections 105(a) and 365(a) of the Bankruptcy Code, the contracts, identified on the attached Exhibit A and not later excluded by the Purchaser as provided in the Order, will be assumed and assigned to the Purchaser effective as of the Closing. For cause shown, the Order is effective and enforceable immediately and its provisions are self-executing upon entry notwithstanding any provision in the Bankruptcy Code, the Bankruptcy Rules, including, without limitation, Bankruptcy Rules 6004(h), 6006(d), or any other applicable provision under the law. Notwithstanding any other provision of the Order or the APA, the Order will be applicable to the Industrial Building Lease with CI DAL III-V, LLC which is a Designated Contract in the APA. The Purchaser will assume all the obligations of the tenant under the Lease which have accrued but have not become due until after Closing which include the year-end adjustments for operating expenses applicable to the entire calendar year of 2019. The fixtures and leasehold improvements will be subject to the Lease including the obligations of tenant thereunder with respect to the restoration of the premises at the expiration of the term of the Lease. About Frankie V's Kitchen Frankie V's Kitchen, LLC -- http://www.frankievskitchen.com/-- produces and distributes hot sauces, salsas, dressings and condiments, gourmet soups, and spreads. Frankie V's Kitchen sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 19-31717) on May 20, 2019. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of between $10 million and $10 million. The case is assigned to Judge Stacey G. Jernigan. Foley & Lardner LLP is the Debtor's legal counsel. FRONTIER COMMUNICATIONS: Fitch Lowers Issuer Default Rating to CCC ------------------------------------------------------------------ Fitch Ratings has downgraded the Issuer Default Rating of Frontier Communications Corporation and its subsidiaries to 'CCC' from 'B-'. Fitch also downgraded the ratings of the company's debt issues. KEY RATING DRIVERS Untenable Capital Structure: The downgrade reflects Fitch's opinion that Frontier has limited options with respect to $2.7 billion in maturities in 2022 and nearly $900 million in 2023. Debt exchanges are among these options, and there is the risk the exchanges could meet the two necessary tests for a distressed debt exchange (DDE) under Fitch's criteria: a material reduction in terms versus the original terms and the exchange is done to avoid bankruptcy or a traditional payment default. Fitch expects FCF to exceed maturities through 2021, lowering the possibility of a payment default but leading to a very real possibility that a DDE will be attempted to address the 2022 maturities and lower debt overall. Event Risk: Fitch believes the recent addition of board members with backgrounds in restructuring pose increased event risk for Frontier's creditors. Pending Asset Sale: Frontier has a definitive agreement to sell its operations in Washington, Oregon, Idaho and Montana to WaveDivision Capital, LLC (WDC) for $1.352 billion in cash, subject to closing adjustments, and plans to use the proceeds, which is expected close in 1H20, to repay debt. Fitch estimates the transaction multiple is approximately 5.3x based on 2019 estimated EBITDA (Fitch-calculated EBITDA is before restructuring and other charges and a goodwill impairment) for the operations, which is 5% below 2018's EBITDA. The transaction is generally leverage-neutral given Frontier's LTM Fitch-calculated gross debt leverage of 5.0x at March 31, 2019. Challenging Operating Environment: Frontier's rating incorporates a challenging operating environment for wireline operators. Fitch expects the company to show improving, albeit still negative, revenue trends in 2019 and improving EBITDA margins, and has implemented a business transformation program. Fitch expects modest improvements in the rate of decline in revenue in 2020 and thereafter. Revenue pressures showed signs of abating in recent quarters as Frontier reduces churn. The company implemented targeted price increases, with some reflecting the higher costs of video content, and moved customers off promotional pricing. The effect on EBITDA from the lower pace of revenue decline is largely mitigated through cost controls. Fitch believes the company needs to continue making progress on improving its revenue trajectory and expects Frontier's revenue trends to slowly improve from a deficit in the mid-single digits in 2019 to the low-single digits by the end of the forecast horizon. Frontier's business transformation program targets EBITDA benefits of up to a $500 million run rate exiting 2020. The company expects benefits of $50 million-$100 million during 2019, with a $200 million run rate exiting the year. Additional EBITDA-enhancing initiatives have the potential to mitigate the secular pressures on the company's EBITDA and cash flows. Fitch believes there is a notable degree of execution risk in achieving its goals, as some of the benefits depend on better revenue performance. FCF and Debt: Frontier generated $513 million of FCF on a Fitch-calculated basis in 2018 or $620 million pro forma, which adds back $107 million in preferred dividends following the conversion of the mandatory convertible preferred to common in mid-2018. Pro forma for the sale of Northwest operations and related debt reduction, Fitch estimates FCF in 2018 would have been around $550 million annually. At this run rate, FCF would more than be sufficient to repay $585 million in maturing debt and the $375 million currently outstanding on the revolver in 2019-2021. Parent-Subsidiary Relationship: Fitch linked the IDRs of Frontier and its operating subsidiaries based on their strong operational ties. Recovery: The recovery analysis assumes Frontier would be considered a going concern in a bankruptcy and the company would be reorganized rather than liquidated. Fitch assumed a 10% administrative claim. Frontier's going concern EBITDA is based on LTM results ended March 31, 2019. The EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level. The going concern EBITDA incorporated in the analysis is well below LTM EBITDA to reflect the industry's intense competitive dynamics, resulting in customer losses and pricing pressures stressing profitability. The overall decline also reflects Frontier's cost-cutting efforts to partially offset the declines. In sum, the going concern EBITDA is approximately 25% lower than LTM actual results. An enterprise value (EV) multiple of 4.8x is used to calculate a post-reorganization valuation. There are two bankruptcy cases of similar businesses analyzed in Fitch's Telecom, Media & Technology bankruptcy case study report. Both FairPoint Communications, Inc. and Hawaiian Telcom filed bankruptcy in 2008 and emerged with multiplies of 4.6x and 3.7x, respectively. Both were also sold in recent acquisitions for 5.9x and 5.6x, respectively. Frontier's announced sale of its Northwest operations was in the low 5x range, taking into account the modest decline in EBITDA expected by the time the sale closes. The median multiple for the nine telecom companies in Fitch's report was 5.2x, and the slightly lower recovery multiple for Frontier takes into account its weaker competitive position in the industry and the company's exposure to legacy assets. The company benefits from a strong fiber-to-the-home network and the potential for broadband customer growth through the CAF II program. The RCF is assumed to be fully drawn upon default. The waterfall analysis results in an 'RR1' Recovery Rating for the secured debt, including the first-lien credit and RCFs, and the second-lien senior secured notes. The waterfall also indicates an 'RR4' recovery for senior unsecured notes. The 'RR2' assigned to the approximately $450 million of outstanding subsidiary unsecured debt, excluding Frontier Florida LLC, reflects its structural seniority to all of the parent debt. The 'RR5' assigned to Frontier Florida's unsecured debt reflects Frontier Florida as a guarantor of Frontier's secured credit facility. The guarantee results in a lower estimated recovery value, 'RR5' for Frontier Florida's unsecured debt, as it ranks pari passu with the secured credit facility. DERIVATION SUMMARY Frontier has a higher exposure to the more volatile residential market compared with CenturyLink, Inc. (BB/Stable), one of its wireline peers, and to some extent, Windstream Services, LLC (not rated by Fitch). Incumbent wireline operators within the residential market face wireless substitution and competition from cable operators with facilities-based triple-play offerings, including Comcast Corp. (A-/Stable) and Charter Communications Inc. (Fitch rates Charter's indirect subsidiary, CCO Holdings, LLC BB+/Stable.) Cheaper alternative offerings, such as voiceover internet protocol and over-the-top (OTT) video services provide additional challenges. Incumbent wireline operators had modest success with bundling broadband and satellite video service offerings in response to these threats. Frontier has a relatively weak competitive position based on the scale and size of its operations in the higher margin enterprise market. In this market, Frontier is smaller than AT&T Inc. (A-/Stable), Verizon Communications Inc. (A-/Stable) and CenturyLink. All three companies have an advantage with national or multinational companies given their extensive footprints in the U.S. and abroad. Frontier also has a slightly smaller enterprise business than its wireline peer Windstream. Compared with Frontier, AT&T and Verizon maintain lower financial leverage, generate higher EBITDA margins and FCF, and have wireless offerings that provide more service diversification KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Organic revenues are expected to decline in the low 4% range in 2019 to slightly less than 4% thereafter; -- The EBITDA margin is expected to improve about 60 bps to 70 bps annually relative to the Fitch-calculated EBITDA margin of 40.3% in 2018; -- Capital spending reflects company guidance of $1.15 billion in 2019. During the forecast period capital intensity is in the 13.8% to 13.9% range, with the absolute amount declining with the sale of the operations in the Northwest; -- Cash taxes are nominal in 2019-2022. Fitch assumes that the company is able to use NOLs to offset taxes that may be due on the asset sale. -- The sale of the operations in the Northwest closes on July 1, 2020. Proceeds are used to reduce debt by $1.3 billion in 2020. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Successful execution of its business transformation plan, such that the company demonstrates stabile revenue and EBITDA trends. -- FCF margins sustained in the mid to high single digits. -- An expectation that the company will be able to successfully refinance 2022 and 2023 senior unsecured note maturities. Developments That May, Individually or Collectively, Lead to Negative Rating Action A downgrade to 'CCC-' or below would reflect an expectation that the company will struggle to refinance upcoming senior unsecured note maturities, primarily the unsecured notes due in 2022, leading to a DDE or a more comprehensive restructuring. LIQUIDITY AND DEBT STRUCTURE Refinancing Plans and Activities: Frontier's liquidity position was adequate as of March 31, 2019, supported by $119 million of cash and $405 million of availability (net of LOCs) under its $850 million revolving credit facility (RCF). Fitch expects FCF will be positive, in the mid to high single-digit percentage of revenue in the forecast period. Fitch expects Frontier to repay upcoming senior unsecured note maturities in 2019-2021 through cash flow and, if needed, interim RCF borrowings. Frontier has $800 million of capacity to issue first-lien secured debt under its incurrence covenants and additional capacity to issue junior-lien secured debt through an amendment to its credit agreements from January 2018. Certain bond indentures may limit the company's ability to issue additional secured debt. In March 2019, Frontier issued $1.65 billion of 8.0% first-lien senior secured notes due 2027. Proceeds were used to entirely repay the $1.4 billion in outstanding borrowings on its term loan A facility (balance as of Dec. 31, 2018) and its $239 million CoBank ACB facility (balance as of Dec. 31), which both would have matured in 2021. The remaining proceeds were used to pay related fees and expenses. Frontier amended its credit agreement following the transaction's close to extend the maturity of the $850 million revolver to February 2024 from February 2022, subject to certain springing maturity dates to any tranche of existing debt in excess of $500 million. Pricing on the revolver also increased by 0.25%, and certain amendments were made to the debt and restricted payments covenants. The springing maturities on the revolver and term loan B occur if more than $500 million in principal remains outstanding on any series 91 days before the maturity of senior unsecured notes in 2020, 2023 and 2024, or if more than $500 million remains outstanding in aggregate 91 days before the maturity of notes maturing in 2021 or 2022 on the two series of notes maturing in those years. As of March 31, 2019, $227 million is outstanding on the two series of notes maturing in 2020 and $309 million on the two series of notes maturing in 2021. Based on the current principal amounts outstanding, the springing maturities would first come into play for $500 million of notes due in April 2022 and $2.2 billion of notes due in September 2022. There are also single series of notes exceeding $500 million in each of 2023 and 2024, in the amounts of $850 million and $750 million, respectively. Frontier borrowed an incremental $240 million on its senior secured term loan B facility in July 2018. Proceeds were used to repay all borrowings under its CoBank credit facility due in October 2019 and to pay down a small portion of the CoBank facility due in 2021. Frontier also obtained technical amendments to its credit agreements with JPMorgan Chase Bank and CoBank to replace certain operating subsidiary equity pledges (with negative pledges provided to the former pledge subsidiaries) with equity pledges of direct, intermediate holding company subsidiaries of Frontier not previously pledged. The change increases the percentage of revenue, EBITDA and assets in the security package for the facilities. Fitch expects financial flexibility to be relatively solid, with FCF in the mid to high single digits as a percentage of revenue. An excess cash flow (ECF) sweep is in effect on the term loan, requiring mandatory prepayments of 25% and 50% of ECF if year-end net debt/EBITDA is above 5.00x and 5.25x, respectively. No payment in 2019 under the ECF sweep is required based on year-end 2018 net debt/EBITDA. GENOCEA BIOSCIENCES: Incurs $6.5 Million Net Loss in 2nd Quarter ---------------------------------------------------------------- Genocea Biosciences, Inc. filed with the U.S. Securities and Exchange Commission on July 25, 2019, its quarterly report on Form 10-Q reporting a net loss of $6.49 million for the three months ended June 30, 2019, compared to a net loss of $4.43 million for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss of $22.06 million compared to a net loss of $20.32 million for the same period last year. Since inception, the Company has incurred significant operating losses. The Company's accumulated deficit was $314.1 million as of June 30, 2019. The Company expects to incur significant expenses and increasing operating losses for the foreseeable future. Its net losses may fluctuate significantly from quarter-to-quarter and year-to-year. The Company said it will need to generate significant revenue to achieve profitability, and it may never do so. As of June 30, 2019, the Company had $70.76 million in total assets, $32.32 million in total liabilities, and $38.43 million in total stockholders' equity. Research and development expenses were $6.8 million for the quarter ended June 30, 2019, compared to $5.3 million for the same period in 2018. General and administrative expenses were $3.2 million for the quarter ended June 30, 2019, compared to $4.5 million for the same period in 2018. At June 30, 2019, its cash and cash equivalents were $58.7 million. Genocea expects that its existing cash and cash equivalents are sufficient to support its operations into the first quarter of 2021. There have been no sales under its at-the-market equity offering program during fiscal year 2019. A full-text copy of the Form 10-Q is available for free at: https://is.gd/HhxQZ2 Plans to Present at ESMO 2019 Genocea Biosciences plans to present additional GEN-009 immunogenicity data at this year's meeting of the European Society for Medical Oncology (ESMO), taking place from September 27th through October 1st, 2019 in Barcelona, Spain. "Our presentation of GEN-009 immunogenicity data at ASCO 2019 marked a significant milestone for Genocea," said Chip Clark, Genocea president & CEO. "These best-in-class data showcased our unique ATLAS platform and its ability to identify each patient's neoantigens of pre-existing T cell responses, as well as the amplification of anti-tumor cytokine responses to these neoantigens with GEN-009. These data gave us confidence to initiate Part B of our Phase 1/2a clinical trial, which we designed to demonstrate that such broad and strong anti-tumor immune responses lead to tumor shrinkage in cancer patients treated with GEN-009 and a checkpoint inhibitor." About Genocea Biosciences Headquartered in Cambridge, Massachusetts, Genocea -- http://www.genocea.com/-- is a biopharmaceutical company developing personalized cancer immunotherapies. The Company uses its proprietary discovery platform, ATLAS, to profile CD4+ and CD8+T cell (or cellular) immune responses to tumor antigens. Genocea incurred a net loss of $27.81 million in 2018, following a net loss of $56.71 million in 2017. As of March 31, 2019, Genocea had $35.82 million in total assets, $29.58 million in total liabilities, and $6.23 million in total stockholders' equity. Ernst & Young LLP, in Boston, Massachusetts, the Company's auditor since 2009, issued a "going concern" qualification in its report dated Feb. 28, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring losses from operations, has a working capital deficiency, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. GIVE AND GO: S&P Alters Outlook to Negative, Affirms 'B-' ICR ------------------------------------------------------------- S&P Global Ratings revised its outlook on Toronto-based Give and Go Prepared Foods Corp. to negative from stable and revised its liquidity assessment to less than adequate from adequate. At the same time, S&P affirmed its 'B-' issuer credit rating on the company and its 'B-' issue-level rating on the term loan. The outlook revision reflects S&P's opinion that Give and Go's credit measures might remain elevated in the next 12 months. The negative outlook reflects S&P's view that adjusted debt-to-EBITDA could remain elevated in the 8.5x-9.0x area for fiscal 2020, compared with its previous expectation of 7.5x-8.0x. High seasonal working capital requirements and elevated capex to support the company's capacity expansion and automation projects led to consistent high borrowings on its revolver. That, combined with modest year-over-year EBITDA growth, has increased S&P Global Ratings' adjusted debt-to-EBITDA ratio to about 9x for the last 12 months period ended March 2019. To address its near-term financial needs, the company has issued an incremental term loan of US$20 million and may raise additional capital in the form of sale and lease-back/capital lease transactions totaling approximately US$20 million-US$25 million. The outlook revision reflects the risk that, given the company's existing heavy debt burden, Give and Go's capital structure could become unsustainable in the near term if EBITDA deteriorates due to operational missteps or debt levels increase to fund acquisitions. The outlook revision also incorporates S&P's view of higher tolerance for financial risk of the owners compared with the rating agency's prior view. The negative outlook reflects the risks that Give and Go's credit measures could remain elevated in the 8.5x-9.0x area, which S&P considers weak for the ratings, in the next 12 months. In addition, S&P expects that EBITDA interest coverage will be below 1.5x, which increases payment risks if the company faces unexpected challenges. The outlook also reflects S&P's view that the company's liquidity position is sensitive and offers scant protection against unexpected events. "We could lower the ratings if the company's EBITDA interest coverage falls below 1.5x and adjusted debt-to-EBITDA weakens to more than 9.0x, reflecting higher risk of an unsustainable capital structure. We believe such a scenario could occur with just 100 basis points of deterioration in EBITDA margins from our base-case scenario, reflecting higher-than-expected start-up costs or operational underperformance," S&P said. The rating agency said it could also lower the ratings if Give and Go's liquidity position weakens and the company does not demonstrate financial capacity to sustain its growth and fund its fixed charges. "We could revise the outlook to stable within the next 12 months if Give and Go is able to successfully execute on its expansion initiatives leading to increasing EBITDA such that leverage declines to less than 8x," S&P said. GLOBAL AIRCRAFT: Moody's Rates Five-Year Sr. Unsec. Notes 'Ba2' --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the five-year senior unsecured notes issued by Global Aircraft Leasing Co., Ltd. GALC is a newly formed entity which holds Bohai Leasing Co., Ltd.'s 70% shareholder interest in commercial aircraft leasing concern Avolon Holdings Limited (Baa3 senior unsecured at subsidiary level). GALC's outlook is stable. Avolon's ratings and stable outlook are not affected by GALC's transaction. RATINGS RATIONALE Moody's assigned a Ba2 rating to GALC's senior notes based on the company's 70% ownership interest in competitively well-positioned and profitable aircraft leasing subsidiary Avolon. Avolon generates durable cash flows that, through payment of dividends, should provide GALC sufficient means to comfortably service the interest costs of its senior notes. GALC's rating also reflects governance risks related to its ultimate parent Bohai, whose consolidated credit profile, though improving, is weaker than Avolon's stand-alone profile. Bohai and its controlling shareholder HNA Group (NR) have taken steps to reduce leverage and short-term debt balances, which lessens their financial risks and leads to more stable governance. However, GALC has higher governance risks than Avolon, which contributes to GALC having a higher probability of default. Avolon's governance risks relating to Bohai and HNA became less prominent credit constraints after ORIX Corporation (A3 stable) acquired a 30% interest in Avolon in November 2018. GALC's debt rating also incorporates the structural subordination of GALC's creditors to Avolon's creditors. Structural subordination elevates the loss severity of GALC's senior creditors in the event of default compared to Avolon's senior creditors. GALC will use proceeds of the senior notes to repay existing holding company indebtedness. The notes include a PIK (payment in kind) toggle, which allows GALC to capitalize interest expense should cash on hand be insufficient to make coupon payments. The notes indenture will also include terms that limit GALC's ability to use its cash resources in ways that weaken creditor protections, including mandatory redemption, permitted investment, change of control and asset sales provisions. The proposed GALC transaction does not weaken Avolon's credit profile. The dividend payout required of Avolon for GALC to adequately service the senior notes is moderate and manageable based on Avolon's ample earnings and favorable operating prospects. As a result, Moody's expects that Avolon will be able to maintain its stand-alone capital and liquidity strength and flexibility. Although double leverage has declined as a result of holding company debt repayments, it nevertheless continues to reflect negatively on the quality of Avolon's capital and the demands on its internally generated liquidity; this is mitigated by strengthened governance following ORIX's acquisition of a minority interest in Avolon. Moody's could upgrade GALC's ratings if: 1) Avolon's ratings are upgraded due to an improvement in its intrinsic credit profile; 2) Bohai's credit profile improves further due to lower leverage and strengthened liquidity; and 3) GALC's governance risks decline. Moody's could downgrade GALC's ratings if: 1) Avolon is downgraded, 2) Bohai's leverage increases, its liquidity weakens, or its earnings materially diminish; or 3) GALC's cushion with respect to its bond covenants materially deteriorates. GLOBAL EAGLE: S&P Affirms 'CCC' ICR; Outlook Developing ------------------------------------------------------- S&P Global Ratings affirmed all ratings on Global Eagle Entertainment Inc., including its issuer credit rating of 'CCC', and revised the outlook to developing to reflect greater flexibility to allow management to execute on its growth initiatives. The outlook change reflects a significantly improved liquidity profile following the recent incremental term loan and credit agreement amendment, which buys the company more time to execute on its growth plan. S&P estimates that the company's total liquidity position is enhanced by about $55 million over the next year as a result of the transactions. This takes into account the $40 million of cash to the balance sheet as well as the elimination of about $20 million in required amortization, net of an increase in interest expense of about $4 million. Therefore, S&P now projects cash to remain around pro forma levels of about $60 million over the next year, factoring in a forecast for roughly break-even free operating cash flow (FOCF), with some variation possible quarter to quarter. This compares with a previous forecast of around $5 million to $10 million of cash at year-end 2019. S&P believes the proposed transaction not only provides more financial cushion against adverse events, but also allows more operational flexibility for management to focus on its various initiatives to stabilize its cost structure and grow revenue. Still, the rating agency recognizes there is meaningful uncertainty surrounding forecasted cash flow levels given operational challenges and a poor track record of achieving financial targets. The developing outlook reflects an improved liquidity position but also incorporates uncertainty around Global Eagle's ability to generate positive free operating cash flow on a sustained basis given integration challenges with past acquisitions, elevated costs related to internal control deficiencies, a competitive market environment, and execution risk associated with recently announced headcount reductions. "We could lower the rating if operational missteps resulted in a lack of significant cash flow improvement over the next year, such that we believe a default or restructuring is likely within 6 months. This could be caused by pricing pressure, customer losses, delays in product installations, a lack of new business wins, or cost overruns," S&P said. "We could upgrade the rating over the next year if the company demonstrates an ability to sustain positive FOCF through successful cost reduction initiatives, growth in market share, and connectivity service margins approaching 25% from about 13% currently," S&P said. GLOBAL PARTNERS: Moody's Rates New $400MM Sr. Unsec. Notes 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Global Partners LP proposed $400 million senior unsecured notes due 2027, co-issued by GLP Finance Corp. The proceeds from the proposed notes offering will be used to repurchase outstanding notes as outlined in a simultaneously announced tender offer for its $375 million senior unsecured notes due 2022. Remaining proceeds will be used to call the remaining notes not tendered and to pay down outstandings under the company's revolver. Global's other ratings are unchanged and the rating outlook remains stable. "The notes tender and issuance extends Global's maturity profile and alleviates a potential funding wall over the next couple of years," said John Thieroff, Moody's Vice President. The following rating was assigned: Issuer: Global Partners LP $400 million senior unsecured notes due 2027, assigned B2 (LGD5) RATINGS RATIONALE The existing and proposed senior unsecured notes are rated B2, one notch below Global's B1 CFR, reflecting the effective subordination of the notes to Global's $1.3 billion of revolving credit facilities, which are secured by substantially all the assets of the firm. Global's B1 Corporate Family Rating reflects the company's strong market presence in the northeastern US, relatively stable earnings and modest working capital needs associated with its retail gasoline supply and station operations businesses. The credit profile also reflects the company's relatively conservative management of distributions to limited partners in recent years, and the funding of its growth with a meaningful amount of retained cash flow and equity. The rating is are constrained by certain characteristics that are typical in the distribution business: low margins, exposure to volatile commodity prices and working capital intensity which results in elevated debt balances during periods of high commodity prices and can lead to margin compression when the commodity markets are in backwardation. The company faces an element of seasonality which adds to working capital volatility. Global also contends with material geographic concentration in the mature northeastern US and the risks associated with the company's Master Limited Partnership (MLP) corporate finance model. The stable rating outlook reflects Moody's view that management will prudently manage its liquidity profile and commodity price exposure and will fund material capital projects or acquisitions with either a meaningful amount of equity or retained cash flow. The ratings could be upgraded if debt/EBITDA is sustained below 4x while successfully executing on growth strategy and the company achieves meaningful growth in more durable, fee-based businesses. The ratings could be downgraded if margins compress for an extended period of time, distribution coverage falls below 1.2x or debt/EBITDA approaches 6x. GREAT SMOKY: Seeks to Hire Bates Carter as Accountants ------------------------------------------------------ Great Smoky Mountains Enterprises LLC seeks authority from the United States Bankruptcy Court for the Eastern District of Tennessee (Greeneville) to hire Bates Carter & Co, P.C. to provide accounting services, give tax advice and prepare required federal income tax returns. GSME desires to employ BatesCarter for the purpose of providing opinions on values of the interests GSME expects to sell and testimony in support of any motion to sell. GSME has agreed to compensate BatesCarter based on its customary hourly rates, which are: Martha Cartee, CPA, ABV $170.00 Melissa Molina, CPA $202.00 Partners $350.00 GSME has agreed to reimburse the firm for expenses. BatesCarter requested a $10,000.00 retainer. J. Ronald Bracewell, Jr., CPA, managing partner of Bates Carter & Co., P.C., attests that he and his firm are "disinterested" within the meaning of 11 U.S.C. Sec. 101(14). The firm can be reached at: J. Ronald Bracewell, Jr., CPA Bates Carter & Co., P.C. 525 Candler St #6 Gainesville, GA 30501 Phone: +1 770-532-9131 About Great Smoky Mountains Enterprises LLC Headquartered in Knoxville, Tennessee, Great Smoky Mountains Enterprises operates full-service restaurants. Great Smoky Mountains Enterprises LLC filed its Chapter 11 Voluntary Petition (Bankr. E.D. Tenn. Case No. 19-51193) on June 5, 2019. In the petition signed by Scott Burch, chief manager, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. Maurice K. Guinn, Esq. at Gentry, Tipton & McLemore, P.C. represents the Debtor as counsel. GRS CORPORATION: Seeks to Hire Border Law as Counsel ---------------------------------------------------- GRS Corporation seeks authority from the United States Bankruptcy Court for the Eastern District of Michigan to employ Border Law PLLC as counsel. GRS requires Border Law to: (a) provide legal advice with respect to the powers, rights, and duties of the Debtor in the continued management and operation of its business; (b) provide legal advice and consultation related to the legal and administrative requirements of operating this Chapter 11 bankruptcy case, including to assist your Applicant in complying with the procedural requirements of the Office of the United States Trustee; (c) take all necessary actions to protect and preserve the Debtor's Estate, including prosecuting actions on the Debtor's behalf, defending any action commenced against the Debtor, and representing the Debtor's interests in any negotiations or litigation in which the Debtor may be involved, including objections to the claims filed against the Debtor's Estate; (d) prepare on behalf of your Applicant any necessary pleadings including Applications, Motions, Answers, Orders, Complaints, Reports, or other documents necessary or otherwise beneficial to the administration of the Debtor's Estate; (e) represent the Debtor's interests at the Meeting of Creditors, pursuant to Sec. 341 of the Bankruptcy Code, and at any other hearing scheduled before this Court related to the Debtor; (f) assist and advise your Applicant in the formulation, negotiation, and implementation of a Chapter 11 Plan and all documents related thereto; (g) assist and advise the Debtor with respect to negotiation, documentation, implementation, consummation, and closing of corporate transactions, including sales of assets, in this Chapter 11 bankruptcy case; (h) assist and advise the Debtor with respect to the use of cash collateral and obtaining Debtor-in-Possession or exit financing and negotiating, drafting, and seeking approval of any documents related thereto; (i) review and analyze all claims filed against the Debtor's Bankruptcy Estate and to advise and represent the Debtor in connection with the possible prosecution of objections to claims; (j) assist and advise the Debtor concerning any executory contract and unexpired leases, including assumptions, assignments, rejections, and renegotiations; (k) coordinate with other professionals employed in the case to rehabilitate the Debtor's affairs; and (l) perform all other bankruptcy related legal services for the Debtor that may be or become necessary during the administration of this case. Border Law PLLC holds a retainer in the amount of $5,000.00. The hourly rates to be charged by Border Law PLLC in this matter are $285.00 for attorneys. Brett Border of Border Law PLLC attests that his firm is a "disinterested person" as that term is defined in 11 U.S.C. Section 101(14). The firm can be reached at: Brett Border, Esq. Border Law PLLC 24725 West 12 Mile Road suite 110 Southfield, MI 48034 Tel. 248-945-1111 Email: bablawpllc@outlook.com About GRS Corporation GRS Corporation filed a Voluntary Petition under the provisions of Chapter 11 of the United States Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-49597) on June 28, 2019, listing under $1 million in both assets and liabilities. Brett A. Border, Esq. at Border Law PLLC is the Debtor's counsel. HARVEST PLASMA: Seeks to Hire Akerman LLP as Counsel ---------------------------------------------------- Harvest Plasma Torch Corp. seeks authority from the United States Bankruptcy Court for the Western District of Pennsylvania (Pittsburgh) to hire Akerman LLP as counsel for the Debtor. Harvest requires Akerman to: a. advise the Debtor with respect to its powers and duties as a debtor-in-possession in the continued operation of its business; b. advise the Debtor with respect to all general bankruptcy matters; c. prepare, on behalf of the Debtor, all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of its estate; d. represent the Debtor at all critical hearings on matters relating to its affairs and interests as debtor-in-possession before this Court, any appellate courts, and the United States Supreme Court, and protecting the interests of the Debtor; e. prosecute and defend litigated matters that may arise during this case, including such matters as may be necessary for the protection of the rights, the preservation of the estate’s assets, or the Debtor’s successful reorganization; f. negotiate appropriate transactions and prepare any necessary documentation related thereto; g. represent the Debtor on matters relating to the assumption or rejection of executory contracts and unexpired leases; h. advise the Debtor with respect to general corporate securities, real estate, litigation, environmental, labor, regulatory, tax, healthcare, and other legal matters which may arise during the pendency of this Chapter 11 Case; and i. perform all other legal services that are necessary for the efficient and economic administration of these cases. Akreman's hourly rates are: David W. Parham $650.00 Partner Amy M. Leitch $360.00 Partner Jennifer Meehan $250.00 Paralegal Amy M. Leitch, partner with the law firm of Akerman LLP, attests that she and her are "disinterested persons" pursuant to 11 U.S.C. Sec. 101(14). The can be reached through: David W. Parham, Esq. AKERMAN LLP 2001 Ross Avenue, Suite 3600 Dallas, TX 75201 Telephone: (214) 720-4300 Facsimile: (214) 981-9339 Email: david.parham@akerman.com and Amy M. Leitch, Esq. AKERMAN LLP 50 North Laura Street, Suite 3100 Jacksonville, FL 32202 Telephone: (904) 798-3700 Facsimile: (904) 798-3730 Email: amy.leitch@akerman.com About Harvest Plasma Torch Corp. Harvest Plasma Torch is an industrial torch company that manufactures high temperature torches to convert solid waste into synthetic gas, which can be used to generate electricity. On May 10, 2019, creditors Ronald Klatt, William Grichin and Denton Hough filed an involuntary Chapter 11 petition against the company (Bankr. W.D. Pa. Case No. 19-21929). The petitioners are represented by William C. Price, Esq., at Clark Hill PLC. The case is assigned to Judge Jeffery A. Deller. Bernstein-Burkley, P.C. is the Debtor's bankruptcy counsel. HDR HOLDING: Committee Hires Pepper Hamilton LLP as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors of HDR Holding, Inc. and Schramm, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Delaware to retain Pepper Hamilton LLP as counsel to the Committee nunc pro tunc to July 9, 2019. The Committee requires Pepper Hamilton to: a. advise the Committee with respect to its rights, duties and powers in these cases; b. assist and advise the Committee in its consultations with the Debtors relating to the administration of these cases; c. assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure and in negotiating with the holders of claims and, if appropriate, equity interests; d. assist the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and other parties involved with the Debtors, and the operation of the Debtors' businesses; e. assist the Committee in its analysis of, and negotiations with the Debtors or any other third parties concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing transactions and the terms of a plan of reorganization or liquidation for the Debtors; f. assist and advise the Committee as to its communications, if any, to the general creditor body regarding significant matters in this case; g. represent the Committee at all hearings and other proceedings; h. review, analyze, and advise the Committee with respect to applications, orders, statements of operations and schedules filed with the Court; i. assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and j. perform such other services as may be required and which are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. Pepper Hamilton's current standard hourly rates are: Francis J. Lawall Partner $860.00 Donald J. Detweiler Partner $795.00 John H. Schanne, II Associate $505.00 Kenneth A. Listwak Associate $405.00 Susan M. Henry Paralegal $295.00 Monica a. Molitor Paralegal $295.00 Donald J. Detweiler, partner of the law firm of Pepper Hamilton LLP, attests that Pepper Hamilton, its partners, counsel and associates are "disinterested persons" within the meaning of section 101(14). In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, Mr. Detweiler disclosed that: -- it has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; -- none of the professionals included in the engagement vary their rate based on the geographic location of the bankruptcy case; -- the firm has not represented the Committee in the 12 months prepetition; and -- Pepper Hamilton will work with the Committee to develop and approve a prospective budget and staffing plan for Pepper Hamilton's engagement for the postpetition period as appropriate. The firm can be reached at: Donald J. Detweiler, Esq. Pepper Hamilton LLP Hercules Plaza, Suite 5100, 1313 N. Market Street Wilmington, DE 19801 About HDR Holding and Schramm HDR Holding, Inc. and Schramm, Inc. -- http://www.schramminc.com/ -- are manufacturers and suppliers of branded land-based hydraulic drills and equipment to the mining, oil and gas, water and other end-markets. The company's products are sold on every continent, and the Company and its products maintain major market positions in China, Australia, Russia, Latin America, and Africa. HDR is a holding company and the direct parent of Schramm, owning 100% of the equity in Schramm. HDR Holding and Schramm, Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11396) on June 24, 2019. HDR Holding estimated assets of $50 million to $100 million and liabilities of the same range as of the bankruptcy filing. The Hon. Mary F. Walrath is the case judge. The Debtors tapped Young Conaway Stargatt & Taylor, LLP as counsel; FocalPoint Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. HEATING & PLUMBING: Hires Kutner Brinen, P.C. as Attorney --------------------------------------------------------- Heating & Plumbing Engineers, Inc. seeks authority from the United States Bankruptcy Court for the District of Colorado (Denver) to employ Kutner Brinen, P.C. as attorneys. The professional services that Counsel is to render are: a. provide the Debtor with legal advice with respect to its powers and duties; b. aid the Debtor in the development of a plan of reorganization under Chapter 11; c. file the necessary petitions, pleadings, reports, and actions that may be required in the continued administration of the Debtor's property under Chapter 11; d. take necessary actions to enjoin and stay until a final decree the continuation of pending proceedings and to enjoin and stay until a final decree herein the commencement of lien foreclosure proceedings and all matters as may be provided under 11 U.S.C. Sec. 362; and e. perform all other legal services for the Debtor that may be necessary. Counsel's hourly rates are: Lee M. Kutner $550 Jeffrey S. Brinen $475 Jenny M. Fujii $380 Keri L. Riley $320 Maureen M. Gerardo $200 Paralegal $75 Counsel holds a pre-petition retainer for payment of post-petition fees and costs in the amount of $52,087.52. Lee M. Kutner, Esq., shareholder of Kutner Brinen, P.C., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Lee M. Kutner, Esq. KUTNER BRINEN, P.C. 1660 Lincoln St., Ste. 1850 Denver, CO 80264 Tel: 303-832-2400 E-mail: lmk@kutnerlaw.com About Heating & Plumbing Engineers, Inc. Founded in 1947, Heating & Plumbing Engineers, Inc., a mechanical contractor, provides HVAC sheet metal, plumbing, and piping systems services in Colorado. Heating & Plumbing Engineers, Inc. filed its Voluntary Petition pursuant to Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-16183) on July 19, 2019. In the petition signed by William T. Eustace, chief executive officer, the Debtor estimated $13,845,361 in assets and $14,934,602 in liabilities. Lee M. Kutner, Esq. at Kutner Brinen, P.C. represents the Debtor as counsel. HOCHHEIM PRAIRIE: S&P Affirms 'B+' Long-Term ICR; Outlook Stable ---------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' long-term issuer credit and insurer financial strength ratings on Texas-domiciled Hochheim Prairie Farm Mutual Insurance Assn. and Hochheim Prairie Casualty Insurance Co. The outlook is stable. This rating action follows a review of Hochheim under S&P's revised criteria insurance ratings methodology listed below. Hochheim knows the Texas market well and has managed successfully through difficult weather years while maintaining its market presence. Effective use of reinsurance, deductible profile changes, reduced writing in urban areas, and multiple rate increases have improved the underwriting quality of the portfolio. However, single-state concentration with pockets of aggregation will continue to expose the company to more-volatile underwriting results than peers experience. Additionally, marginal capital adequacy and a significant reliance on the reinsurance market to protect the balance sheet weaken S&P's assessment of the company. Management has knowledge of the markets in which it competes, which has allowed the company to manage risks appropriately while maintaining prudent underwriting leverage so as not to over expose itself in any given accident year. The stable outlook is based on S&P's expectation that Hochheim will maintain capital at the marginal level and regulatory risk-based capital comfortably above regulatory intervention level, strong levels of reinsurance protection for both frequent and severe weather losses, and underwriting near break-even. S&P could lower the ratings in the next 12 months if Hochheim's: -- Competitive position deteriorates, either through reduction in market presence from competitor growth or outsize growth with inadequate pricing; -- Combined (loss and expense) ratios stay above 100% on a multiyear basis, signaling inability to maintain its recently improved underwriting performance; or -- Capital adequacy weakens to below S&P's current marginal assessment, due to either a substantial reduction in reinsurance protection or outsize losses on a multiyear basis. -- Greater risk of regulatory involvement from weaker risk-based capital metrics could lead to multiple notch downgrade. "We view an upgrade as unlikely over the next year. However, if Hochheim can demonstrate a commitment and ability to hold a higher level of capital adequacy, according to our model, combined with more-stable earnings, we could raise our ratings," S&P said. INNOVA GLOBAL: Receiver's Sale of All of Braden's Assets Approved ----------------------------------------------------------------- Judge Dana L. Rasure of the U.S. Bankruptcy Court for the Northern District of Oklahoma authorized PricewaterhouseCoopers Inc., LIT, the court-appointed receiver of Innova Global Ltd. and affiliates, to sell all the assets of Braden Manufacturing, LLC outside the ordinary course of business to NXTNano, LLC. The sale is free and clear of any and all liens or other interests, except any liens or interests of the Landlord, in accordance with the terms of the High Bid APA, with such liens and interests attaching to the proceeds of the sale. In the event of failure to close the High Bid APA transaction, the Receiver and the Alternate Buyer, MI3, Inc., are each authorized and, subject to the conditions in the Alternate Bid APA, the Receiver is directed, to take any and all actions specified in the Alternate Bid APA or that are necessary or appropriate to consummate the sale of the Assets to the Buyer and the Closing pursuant to the Alternate Bid APA, and to execute any and all additional instruments and documents that may be reasonably necessary or desirable to implement the Alternate Bid APA without further order of the Court. In the event that the Buyer fails to close under the terms of the High Bid APA, under the terms of the Sales Process the Receiver is authorized to proceed to Closing and to sell the Assets to the next highest bidder, to retain deposits as liquidated damages as authorized by the Sale Process and the respective asset purchase agreements and to otherwise take all actions authorized by or appropriate under the applicable asset purchase agreement, including but not limited to actions necessary to conclude a sale of the Assets, if possible, or return deposits as contemplated by the respective asset purchase agreements pursuant to the Sales Process. About Innova Global Ltd. Innova Global Ltd. is a full service engineering, fabrication, procurement and construction company specializing in air and noise emissions control, acoustic consulting, gas turbine systems, heat recovery, modular gas compression facilities, and turnkey building solutions primarily for oil & gas, power generation, and industrial customers. Innova Global and its affiliates are a group of Canadian-based companies -- http://www.pwc.com/car/innova-- that have been placed into a receivership proceeding under the Bankruptcy and Insolvency Act in Canada, which is a foreign proceeding within the meaning of 11 U.S.C. Section 101(23). The proceedings are pending before the Queen's Bench of Alberta in the Judicial Centre of Calgary, Canada. The Debtors' U.S. operations are based in Tulsa, Oklahoma. On April 1, 2019, the Canadian Court appointed Paul J. Darby at PricewaterhouseCoopers Inc. LIT, as the Receiver. On April 4, 2019, Innova Global Ltd., and affiliates (i) Innova Global Operating Ltd; (ii) Innova Global Limited Partnership; (iii) 1938247 Alberta Ltd.; (iv) Innova Global Holdings Limited Partnership; (v) Innova Global, Inc.; (vi) Innova Global, LLC (Bankr. N.D. Okla. Case No. 19-10659); and (vii) Braden Manufacturing, L.L.C., through the Receiver, each filed a Chapter 15 petition (Bankr. N.D. Okla. Lead Case No. 19-10653). Judge Dana L. Rasure is assigned to the cases. John E. Howland, Esq., at Rosenstein, Fist & Ringold; and Steve A. Peirce, Esq., at Norton Rose Fulbright US LLP, are counsel in the U.S. cases. The Receiver's U.S. counsel can be reached at: John E. Howland ROSENSTEIN, FIST & RINGOLD 525 South Main, Suite 700 Tulsa, Oklahoma 74103 Telephone: (918) 585-9211 Facsimile: (918) 583-5617 E-mail: johnh@rfrlaw.com - and - Steve A. Peirce, NORTON ROSE FULBRIGHT US LLP 300 Convent Street, Suite 2100 San Antonio, Texas 78205-3792 Telephone: (210) 224-5575 Facsimile: (210) 270-7205 E-mail: steve.peirce@nortonrosefulbright.com INPIXON: Amends Prospectus on $18M Stock Offering Plus Warrants --------------------------------------------------------------- Inpixon has filed with the U.S. Securities and Exchange Commission an amendment no.1 to its Form S-1 registration statement relating to the offering $18.0 million of shares of the Company's common stock, Series A warrants and Series B warrants. Each share of the Company's common stock is being sold together with a Series A warrant to purchase one share of common stock and a Series B warrant to purchase 0.50 of a share of common stock. Each warrant will have an exercise price per share of not less than 100% but not more than 120% of the combined public offering price per share and related warrants, will be immediately exercisable and will expire on the fifth anniversary of the original issuance date. In addition, the Series A warrants also provide that, beginning 30 days after the issuance date, such warrants may be exercised at the option of the holder on a cashless basis, in whole or in part for a whole number of shares, for 0.70 of the shares that would be received upon cash exercise, if on the date of exercise, the volume weighted average price of the Company's common stock is lower than the then applicable exercise price per share. The shares of the Company's common stock and warrants are immediately separable and will be issued separately, but will be purchased together in this offering. The Company is also offering to those purchasers, if any, whose purchase of its common stock in this offering would otherwise result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the Company's outstanding common stock immediately following the consummation of this offering, the opportunity, in lieu of purchasing common stock, to purchase shares of the Company's newly designated Series 6 Convertible Preferred Stock, or Series 6 Preferred, convertible into a number of shares of common stock equal to $1,000 divided by the combined public offering price per share of common stock and related warrants. Each share of Series 6 Preferred is being sold together with the equivalent number of Series A warrants and Series B warrants as would have been issued to such purchaser of Series 6 Preferred if they had purchased shares of common stock based on the combined public offering price per share and related warrants. Pursuant to this prospectus, the Company is also offering the shares of common stock issuable upon the exercise of the warrants and the conversion of the Series 6 Preferred. Each share of Series 6 Preferred is convertible at any time at the option of the holder, provided that the holder will be prohibited from converting the Series 6 Preferred for shares of the Company's common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of the Company's common stock then issued and outstanding. However, any holder may increase such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage will not be effective until 61 days after such notice to the Company. The Company's common stock is listed on The Nasdaq Capital Market under the symbol "INPX." On July 23, 2019, the last reported sale price of the Company's common stock on The Nasdaq Capital Market was $0.43 per share. There is no established trading market for the warrants or the Series 6 Preferred and the Company does not expect a market to develop. In addition, the Company does not intend to apply for the listing of the warrants or the Series 6 Preferred on any national securities exchange or other trading market. Without an active trading market, the liquidity of the warrants and the Series 6 Preferred will be limited. A full-text copy of the Form S-1/A is available for free at: https://is.gd/bTc8AA About Inpixon Headquartered in Palo Alto, California, Inpixon is a technology company that helps to secure, digitize and optimize any premises with Indoor Positioning Analytics (IPA) for businesses and governments in the connected world. Inpixon Indoor Positioning Analytics is based on new sensor technology that finds all accessible cellular, Wi-Fi, Bluetooth and RFID signals anonymously. Paired with a high-performance, data analytics platform, this technology delivers visibility, security and business intelligence on any commercial or government premises worldwide. Inpixon's products, infrastructure solutions and professional services group help customers take advantage of mobile, big data, analytics and the Internet of Things (IoT). Inpixon reported a net loss of $24.56 million for the year ended Dec. 31, 2018, compared to a net loss of $35.03 million for the year ended Dec. 31, 2017. As of March 31, 2019, Inpixon had $20.12 million in total assets, $7.21 million in total liabilities, and $12.90 million in total stockholders' equity. Marcum LLP, in New York, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 28, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. ISTAR INC: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed iStar Inc.'s Long-Term Issuer Default Rating at 'BB-'. Fitch has also affirmed iStar's senior secured debt rating at 'BB+', unsecured debt rating at 'BB' and preferred stock rating at 'B-'. The Rating Outlook is Stable. iStar Inc. LT Issuer Default Rating BB- Affirmed; previously at BB- senior unsecured, LT BB Affirmed; previously at BB preferred, LT B- Affirmed; previously at B- senior secured, LT BB+ Affirmed; previously at BB+ KEY RATING DRIVERS The rating affirmations reflect iStar's unique platform and strategy relative to other commercial real estate finance and investment companies, improvement in asset quality resulting from lower exposure to legacy land assets and non-performing loans, declining leverage, meaningful proportion of unsecured debt funding relative to similarly rated finance and leasing companies, and solid liquidity profile. Rating constraints include the material shift in the firm's strategy and execution risk associated with the continued monetization of legacy assets in the near term, which have negatively affected iStar's earnings; increased performance pressures on certain CRE sub-sectors; continued exposure to certain longer-term legacy land assets; variable earnings resulting from a reliance on gain on sale income; and a reliance on wholesale funding. Additionally, Fitch believes that key person risk associated with CEO Jay Sugarman has increased following turnover among executive officers in recent years. In February 2019, iStar announced a redefined strategic focus, which includes growing its ground lease business through its 65.8% ownership in Safehold Inc. (SAFE) and refocusing its lending business to provide one-stop capital solutions, combining the ground lease product of SAFE with a first mortgage leasehold loan from iStar. Fitch believes there is limited performance data on the ground lease business given SAFE's short operating history, which has been untested through a market cycle, although this is somewhat mitigated by the seniority of ground lease investments. On May 2, 2019, iStar announced that in light of its strategic shift, Andrew Richardson has decided to step down as CFO and president of the land portfolio. Richardson was hired in 2018 to focus on the monetization and management of legacy assets. Richardson has agreed to stay on for a period to help with the search and to transition responsibilities to other members of the senior management team, who will fulfill his duties on an interim basis until a new CFO is named. Additionally, in March 2019, iStar announced the retirement of Vice Chairman Nina Matis, who had served as Chief Investment Officer from April 2007 to February 2018. Fitch believes the recent management changes and uncertainty around the CFO position have increased key person risk associated with CEO Jay Sugarman, but recognizes the company's other executive officers have sufficient industry experience. iStar has been focused on opportunistically selling legacy assets, reducing the book by 46% from Dec. 31, 2017 through March 31, 2019. However, as part of the strategic shift, iStar has elected not to move forward with the development of certain legacy assets in order to free up resources to focus on the new strategy. Of the $938 million of remaining legacy assets at the end of first-quarter 2019 (1Q19), approximately $545 million (14% of the total portfolio) was comprised of three legacy assets that iStar intends to develop or hold over a longer period of time. iStar intends to monetize the remaining $393 million of legacy assets, which includes around 30 to 40 assets, in the near term, thereby reducing legacy assets to approximately 10%-15% of its total portfolio. Fitch believes that the land portfolio has adversely influenced iStar's overall asset quality given the illiquidity of these assets and the inconsistent cash flow generation, and would therefore view the continued reduction in exposure favorably. In 2018, iStar recorded impairments of $147.1 million on land and development and real estate assets, which were primarily the result of the decision to accelerate the monetization of certain assets following the strategic shift. As a result of the shorter forecast hold periods, 10 assets were written down totalling $142 million of impairment charges in 4Q18. While the impairments negatively affected iStar's profitability and leverage in 2018, Fitch views the strategy as appropriate given the improvement in portfolio risk that will result as well as the shift to more consistent earnings sources as proceeds are redeployed into net lease and real estate finance investments. As of March 31, 2019, iStar's $3.9 billion portfolio (excluding cash) consisted of real estate finance (23% of gross carrying value), net lease properties (53%, of which 10% is the firm's equity method investment in SAFE), land and development properties (17%), operating properties (7%), and other assets (0.2%). Operating properties and land and development should continue to decline as a proportion of the portfolio as part of the firm's strategic focus, which Fitch believes will improve the risk profile of the portfolio. iStar will focus on growing its lending business, which will primarily co-originate leasehold loans alongside SAFE ground leases, and its net lease business. iStar's loan portfolio has generally performed well since the crisis with no losses incurred on loans originated since 2008. Approximately $778 million of loans (92.1% of gross loans) at March 31, 2019 were performing and generated a 9.1% yield, down from 9.4% a year ago due to the payoff of higher yielding loans in 2018. The company's loan portfolio quality improved following the resolution of the non-performing Hammons loan in 2Q18, which had a carrying value of $145.8 million. iStar received a $45.8 million cash payment and a preferred equity investment with a face value of $100 million that is mandatorily redeemable in five years. iStar recorded the preferred equity at a discounted value of $77 million and is accruing interest over the expected duration of the investment. As a result, iStar recorded a $21.4 million loan loss provision and simultaneously charged-off of the remaining unpaid balance. The company expects to recover the full $100 million face value over the next four years. The gross carrying value of NPLs represented 7.9% of total gross loans in this segment at 1Q19, down significantly from 15.7% at 1Q18. Fitch views the net lease real estate portfolio as a benefit to overall asset quality since it provides cash flow stability. iStar's net lease portfolio includes its equity investment in SAFE, a publicly traded real estate investment trust (REIT) focused exclusively on the ground lease asset class, which completed its public offering in June 2017. Ground leases generally represent ownership of the land underlying CRE projects that is triple net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon. iStar will continue to participate in the ground lease business through its ownership of SAFE and will also offer leasehold loans and leasehold equity to SAFE's tenants. Fitch views the increased exposure to SAFE ground lease assets as an improvement in portfolio risk, relative to legacy assets, given the senior position of ground leases in the capital structure. Still, the performance of iStar's investment in SAFE will be driven by SAFE's ability to grow and generate consistent earnings over time. At March 31, 2019, iStar had a 65.8% economic interest in SAFE, comprised of 42.4% of SAFE common stock and the remainder in the form of non-voting limited partnership units, which the firm exchanged into shares of common stock in May 2019 on a one-for-one basis. iStar's investment in SAFE increased from approximately 41.8% at YE 2018 following an additional $250 million investment in 1Q19. On Jan. 2, 2019, in connection with iStar's increased investment in SAFE, the management agreement was amended to increase the fee rates and extend the term (previously one year) through June 30, 2022, which is non-terminable except for cause. iStar is entitled to a management fee of 1.0% of total SAFE equity up to $1.5 billion, 1.25% for incremental equity of up to $3.0 billion, 1.375% for incremental equity of up to $5.0 billion, and 1.5% for incremental equity over $5.0 billion. Fees will be paid in cash or in shares of SAFE common stock, at the discretion of SAFE's independent directors. iStar's management fee from SAFE amounted to $1.5 million in 1Q19. iStar had waived management fees prior to 3Q18. iStar's pre-tax return on average assets was negative in 2018 and in 1Q19, partially driven by the impairment of assets during 4Q18 and earnings pressure resulting from continued exposure to legacy assets that are not generating revenues. Profitability is expected to improve as impairments decline and the portfolio continues to rotate into more consistent earning investments. On July 1, 2019, iStar announced that it had closed on the previously announced sale of its portfolio of seven cold storage properties leased to Preferred Freezer Services, LLC (Preferred Freezer) to a third party for a price of $442.5 million, including the assumption of $228.0 million of debt by the purchaser, which is expected to result in an approximate $220.0 million gain for iStar in 2Q19. Additionally, in May 2019, iStar announced a $112 million transaction with Bowlero Corporation, an operator of bowling entertainment venues, which will consist of the purchase of nine bowling centers for $57 million and a commitment to purchase up to $55 million of additional bowling centers over the next several years. The new centers will be added to two of iStar's existing master net leases with Bowlero. In connection with the transaction, the maturities of these leases were extended by 15 years to 2047. As a result, iStar will revalue the properties originally subject to the leases at fair market value for financial reporting purposes, resulting in an expected gain in 2Q19 in the range of $145 million to $165 million. While opportunistic asset sales have provided significant gains for iStar in recent years, the reliance on income from sales has resulted in earnings volatility. Fitch believes that earnings could continue to benefit from opportunistic transactions in the near term as iStar continues to recognize value from its existing portfolio, but expects the firm to reduce its reliance on variable gain income over time as the portfolio shifts into asset classes that provide more stable cash flows. iStar's earnings will be largely dependent on the pace of business expansion and the performance of SAFE longer term. iStar counts for its investment in SAFE under the equity method of accounting, and will therefore record a higher portion of SAFE's net income as earnings to iStar following the increased investment in SAFE. Additionally, the amendment to the management fee agreement as well as the end of the fee waiver in 2Q18 should provide earnings benefits. Management expects to be able to realize material upside to the underlying value of the SAFE portfolio in the marketplace. However, Fitch believes that this could take some time to materialize given the relatively short operating history of SAFE. Fitch's benchmark leverage ratio for iStar is debt-to-tangible equity, treating the preferred securities as 50% equity. On this basis, leverage was 6.1x at March 31, 2019; within Fitch's 'bb' quantitative benchmark range for balance sheet-intensive finance and leasing companies (5.0x-7.0x). Leverage ticked up in 4Q18, partially due to the decline in equity resulting from the aforementioned asset impairments. Pro forma for the reduction in debt resulting from the Preferred Freezer sale and the expected gains from the Preferred Freezer sale and Bowlero transaction, Fitch estimates that leverage would decline to below 4x, which compares favorably with historical leverage levels. Fitch expects iStar's leverage to remain around current (pro forma) levels, and believes leverage could decline further if iStar is able to execute on additional asset sales or other opportunistic transactions. Fitch notes that iStar's leverage metrics may be slightly overstated as a result of the consolidation of iStar Net Lease I LLC (Net Lease Venture I) onto iStar's balance sheet in 2Q18. As of March 31, 2019, 58.1% of iStar's debt (including 50.0% of the preferred securities) was unsecured, down from 83.1% a year ago but above levels of many other diversified REITs and similarly rated balance sheet-intensive finance and leasing companies. If the consolidated Net Lease Venture I secured debt was excluded, Fitch estimates that this ratio would have been higher, at 67% at 1Q19. In June 2018, iStar completed an upsizing, repricing and extension of its senior secured term loan. As part of the transaction, iStar increased the size of the term loan to $650 million from $400 million, extended the maturity to June 2023 from October 2021 and reduced its coupon to LIBOR plus 2.75% from LIBOR plus 3.00%. Proceeds were used to repay outstanding borrowings under the previous term loan facility and to redeem a portion of senior unsecured notes scheduled to mature in July 2019. The remaining portion of the 2019 unsecured notes was subsequently repaid using cash and other available liquidity. Pro forma for the Preferred Freezer sale and excluding the consolidated Net Lease Venture I debt, Fitch estimates that unsecured debt would increase to approximately 72% of total debt outstanding. Fitch believes that unsecured debt enhances the company's operational and financial flexibility and expects unsecured debt to remain around current levels (pro forma for the Preferred Freezer sale) over the Outlook horizon. Fitch views iStar's liquidity as adequate for the rating category. At March 31, 2019, iStar had $315.4 million of cash and cash equivalents and approximately $325.0 million available under its revolving credit facilities. The company does not have any debt maturities until September 2020, when $400 million of senior unsecured notes come due. REITs must generally distribute at least 90% of their net taxable income, excluding capital gains, to shareholders each year. However, iStar's liquidity position is further enhanced by its ability to retain earnings, as it holds net operating loss (NOL) carryforwards that can generally be used to offset ordinary taxable income in future years. These NOLs begin to expire in 2029 and will fully expire in 2036 if unused. iStar initiated a quarterly common dividend, beginning 3Q18, of $0.09 per share, which will increase to $0.10 per share beginning 2Q19. Fitch expects the company's liquidity position to continue to benefit from the NOL carryfowards prior to expiration. The Stable Rating Outlook reflects Fitch's expectations for continued improvements in iStar's earnings, leverage and asset quality over the outlook horizon. However, continued exposure to certain legacy assets and opportunistic transactions could continue to cause earnings volatility in the near term until the portfolio is rotated into more consistent earning investments. The Stable Outlook also reflects expectations for the maintenance of sufficient liquidity and a heavily unsecured funding profile. The secured debt rating is two notches above iStar's Long-Term IDR and reflects the collateral backing these obligations, indicating superior recovery prospects for secured debtholders under a stressed scenario. The unsecured debt rating is one notch above iStar's Long-Term IDR and reflects the availability of sufficient unencumbered assets, which provide support to unsecured creditors, and relatively low levels of secured debt in the firm's funding profile. This profile indicates good recovery prospects for unsecured debtholders under a stressed scenario. In addition, the company adheres to a 1.2x unencumbered assets-to-unsecured debt covenant, which provides protection to bondholders during periods of market stress. Unencumbered asset coverage of unsecured notes was approximately 1.6x at March 31, 2019, but coverage would be lower on a stressed basis, which would contemplate declines in the value of the company's unencumbered portfolio. The preferred stock rating is three notches below iStar's Long-Term IDR, reflecting that these securities are deeply subordinated and have loss absorption elements that would likely result in poor recovery prospects. JBS USA: S&P Rates New $1BB Senior Unsecured Notes Due 2030 'BB-' ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level rating and '3' recovery rating to the proposed $1 billion senior unsecured notes due 2030, to be issued by JBS USA Lux S.A., JBS USA Food Company, and JBS USA Finance Inc. The '3' recovery rating indicates an average recovery expectation of 50%-70% (rounded estimate 65%) for senior unsecured creditors in an event of default. JBS USA's parent company, JBS S.A. (JBS; BB-/Positive/--), will fully and unconditionally guarantee the notes. Therefore, recovery expectations for these notes are in line with all of JBS USA's other senior unsecured guaranteed notes. JBS will use the proceeds for liability management purposes, to fund the tender offer of JBS Investments GmbH's outstanding 2023 and 2024 notes. The company could use any remaining amount to repay other debt. This remains in line with the group's strategy of extending debt tenor and reducing debt costs, which is in line with S&P's expectations that the group will maintain a comfortable liquidity cushion. Recovery Analysis S&P has assigned a recovery rating of '3' to the proposed senior unsecured notes, with an average recovery of 65% (rounded estimate). Key analytical factors: -- S&P's hypothetical default scenario would occur in 2023 amid a combination of high grain prices, shortages of livestock, high cattle prices, a weak demand scenario for meat in general, and a tighter access to credit markets. -- S&P has valued JBS USA using a 6x multiple applied to its projected emergence-level EBITDA of $1.3 billion, arriving at a stressed enterprise value (EV) of $8 billion. Simulated default assumptions -- Simulated year of default: 2023 -- EBITDA at emergence: $1.3 billion -- EBITDA multiple: 6.0x -- Estimated gross EV: $8 billion Simplified waterfall -- Net EV, after 5% of administrative costs: $7.6 billion -- Collateral net value available from restricted subsidiaries: $5 billion -- Senior secured debt: $2.6 billion (includes the company's term loan and revolving credit facilities) -- Senior unsecured debt: $5.4 billion (including all of the company's senior notes) -- Recovery expectations for secured debt: 95% -- Recovery expectations for unsecured debt guaranteed by JBS S.A.: 65% Note: All debt amounts include six months of prepetition interest. Ratings List New Rating JBS USA Lux S.A. JBS USA Food Company JBS USA Finance Inc. Senior Unsecured BB- Recovery Rating 3(65%) JOHNSON PUBLISHING: Ebony and Jet Archives Acquired for $30M ------------------------------------------------------------ Jonathan Randles, writing for The Wall Street Journal, reported that a consortium of foundations is set to acquire the archives of Ebony and Jet magazines for $30 million and intend to make the extensive collection of photographs chronicling African-American life and culture during the 20th century available for the public to view. According to the Journal, the buyers include the Ford Foundation, The J. Paul Getty Trust, the John D. and Catherine T. MacArthur Foundation and the Andrew W. Mellon Foundation, which prevailed in a bankruptcy auction to acquire the archives of the magazines' former publisher, Johnson Publishing Co. The Journal related that the consortium said they would donate the archives to the Smithsonian National Museum of African American History and Culture, the Getty Research Institute and other cultural institutions "to ensure the broadest access for the general public and use by scholars, researchers, journalists, and other interested parties." The Troubled Company Reporter previously reported that the photographs and related materials found in the Archive are the singular collection chronicling the African American experience in the latter half of the 20th century. They represent more than 4 million images and thousands of hours of video and music footage, dating back to 1948. The Archive was appraised at $46 million in 2015. According to the report, the collection includes 1 million photographs and more than 3 million negatives and slides, as well as audio and video recordings. Featured in the archives are countless images of notable black individuals, including Angela Davis, Rosa Parks, Malcolm X, Martin Luther King Jr., Jackie Robinson, Quincy Jones and Nina Simone, the report added. About Johnson Publishing Company Johnson Publishing Company LLC filed for Chapter 7 bankruptcy (Bankr. N.D. Ill. Case No. 19-10236) on April 9, 2019. Jack B. Schmetterer oversees the Debtor's case. The Debtor's attorneys are Howard L. Adelman, Esq., and Steven B Chaiken, Esq., at Adelman & Gettleman Ltd., in Chicago, Illinois. Miriam R. Stein was appointed as Chapter 7 trustee. The Trustee's attorneys are N. Neville Reid, Esq., Ryan T Schultz, Esq., and Brian Wilson, Esq., at Fox, Swibel, Levin Carrill, LLP, in Chicago, Illinois. KAISER GYPSUM: Hires Moore & Jackson as Special Litigation Counsel ------------------------------------------------------------------ Kaiser Gypsum Company, Inc., and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the Western District of North Carolina to employ Moore & Jackson, LLC as special litigation counsel effective as of June 20, 2019. The Debtors employed Moore & Jackson on or about June 20, 2019 to assist the Debtors and the Debtors’ national coordinating litigation counsel, Williams Kastner, in responding to a third-party subpoena issued to the Debtors in litigation pending in the United States District Court for the District of Maryland captioned Keyes Law Firm, LLC v. Napoli Bern Ripka Shkolnik, LLP, et al., 17-CV-02972-RDB. The Debtors believe Moore & Jackson is well-qualified and able to represent the Debtors as special litigation counsel in the Maryland Proceeding. The Moore & Jackson attorneys primarily working on this matter bill at $190 per hour. Joel Newport, member or Moore & Jackson, LLC, assures the Court that his firm does not hold any interest materially adverse to the Debtors' estates with respect to the matters on which it will be employed. The firm can be reached at: Joel Newport,Esq. Moore & Jackson, LLC 305 Washington Ave #401 Towson, MD 21204 Phone: +1 410-583-5241 About Kaiser Gypsum Kaiser Gypsum Company, Inc., and affiliate Hanson Permanente Cement, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case Nos. 16-31602 and 16-10414) on Sept. 30, 2016. The petitions were signed by Charles E. McChesney, II, vice-president and secretary. The companies are represented by Rayburn Cooper & Durham P.A. and Jones Day. Cook Law Firm, P.C. and K&L Gates LLP serve as special insurance counsel; NERA Economic Consulting as consultant; Miller Nash Graham & Dunn LLP as special environmental and insurance counsel; and PricewaterhouseCoopers LLP as financial advisors. At the time of the bankruptcy filing, Kaiser and Hanson estimated their assets and liabilities at $100 million to $500 million. Kaiser's principal business consisted of manufacturing and marketing gypsum plaster, gypsum lath and gypsum wallboard. The company has no current business operations other than managing its legacy asbestos-related and environmental liabilities. The company has no material tangible assets. HPCI's primary business was the manufacture and sale of Portland cement products. It is a wholly-owned, indirect subsidiary of non-debtor Lehigh Hanson, Inc. HPCI is the direct parent of Kaiser Gypsum as well as non-debtor Hanson Micronesia Cement, Inc. and non-debtor Hanson Permanente Cement of Guam, Inc., the operating subsidiaries. Non-debtor Permanente Cement Company, which has no assets or operations, is also a wholly-owned subsidiary of HPCI. The Office of the U.S. Trustee appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Kaiser Gypsum Company, Inc. The Creditors Committee hired Blank Rome LLP as counsel, and Moon Wright & Houston, PLLC. An Official Committee of Asbestos Personal Injury Claimants retained Caplin & Drysdale, Chartered, as its counsel. Lawrence Fitzpatrick, the Future Claimants' Representative, tapped Ankura Consulting Group, LLC as his claims evaluation consultant; Young Conaway Stargatt & Taylor, LLP as attorney; and Hull & Chandler, P.A. as local counsel. KDC HOLDCO: S&P Downgrades First-Lien Term Loan Rating to 'B' ------------------------------------------------------------- S&P Global Ratings said it lowered its issue-level ratings on KDC HoldCo Inc.'s first-lien term loan to 'B' from 'B+' and revised its recovery rating on the debt to '3' from '2'. The issuer credit rating (B/Stable/--) is unchanged. KDC is proposing to issue a US$85 million add-on to its US$525 million first-lien term loan. Without a meaningful change to the enterprise value at default and the term loan increasing, S&P expects the term loan holders to receive lower recovery. As a result, S&P revised the recovery rating on the debt to '3', which indicates meaningful (50%-70%; rounded estimate: 65%) recovery from '2', which indicates substantial (70%-90%); rounded estimate: 70%) recovery in default. S&P expects the company to use the proceeds from the incremental term loan to fund the acquisition of U.K.-based Swallowfield, repay the existing revolver, and add cash to the balance sheet. The Swallowfield acquisition complements KDC's existing business and further expands the company's already diverse product profile into cosmetic pencils, specialty aerosols and prestige bar soaps. In addition, the acquisition diversifies KDC's geographic presence in Europe. The additional debt issuance increases S&P Global Ratings' adjusted debt-to-EBITDA ratio for fiscal 2020 by about 1.0x to 5.6x-5.8x. Although S&P expects Swallowfield to add modest EBITDA, the rating agency expects cost synergies to allow KDC to generate modest S&P Global Ratings' adjusted EBITDA margins of 11%-12%. S&P has updated its recovery analysis to reflect the additional US$85 million add-on term loan. Issue Rating - Recovery Analysis Key analytical factors -- Knowlton Development Corp. Inc. and KDC US Holdings Inc. are jointly the co-borrowers of the US$75 million revolver and US$610 million term loan. -- S&P's simulated default scenario incorporates the assumption of a default in 2022, following a prolonged period of weak macroeconomic conditions, increased competition, loss of key customers, or significant decline in demand. -- S&P assumes the company would reorganize or be sold as a going concern as opposed to being liquidated. -- S&P values KDC on a going-concern basis using a 6x multiple of its projected emergence EBITDA, which corresponds to the company's fixed charges estimated in 2022. -- S&P applies 25% operational adjustment to better align EBITDA decline with that of other 'B' rated peers. Simulated default assumptions -- Simulated year of default: 2022 -- EBITDA at emergence: US$80 million -- EBITDA multiple: 6x Simplified waterfall -- Gross recovery value: US$478.6 million -- Net recovery value for waterfall after administrative expenses (5%): US$455 million -- Obligor/non-obligor valuation split: 100%/0% -- Estimated priority claims: US$0 -- Remaining recovery value: US$455 million -- Estimated first-lien claim: US$678 million -- Value available for first-lien claim: US$455 million -- Recovery range: 50%-70% (rounded estimate: 65%) KENDALL FROZEN: Trustee Taps Lindon Law as Labor Counsel -------------------------------------------------------- Howard Grobstein, the Chapter 11 trustee for Kendall Frozen Fruits, Inc., seeks authority from the U.S. Bankruptcy Court for the Central District of California to retain Lindon Law Corporation as the Trustee's special, corporate, labor, and employment counsel. The Firm will undertake, or cause to be undertaken, all legal work necessary to address the corporate, labor, and employment law issues facing the Trustee, including, negotiating employment and termination packages for the Debtor; and assisting the Trustee in all corporate, labor, and employment matters. The Firm's regular hourly rates are: Mark L. Lindon $ 550 Lisa H, Juelle $ 450 The Firm is holding $3,642 as unearned retainer, for the services to be performed in this case. Mark L. Lindon, principal of Lindon Law Corporation, attests that his Firm is a "disinterested person" within the meaning of Bankruptcy Code Section 101(14). The firm can be reached through: Mark L. Lindon, Esq. Lindon Law Corporation 4010 Prado Del Trigo Calabasas, CA 91302 Phone: (818) 225-9155 Email: mlindon@lindonlaw.net About Kendall Frozen Fruits Newport Beach, California-based Kendall Frozen Fruits, Inc. -- https://www.kendallfruit.com/ -- is an industrial food supplier specializing in the sale and marketing of fruit and vegetable products since 1939. It offers frozen fruits, dried fruits, juice concentrates, purees, freeze dried fruit, fruit powders, vegetable products, chocolate covered dried fruit, and yogurt covered dried fruit. Kendall Frozen Fruits sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-14052) on Nov. 5, 2018. At the time of the filing, the Debtor estimated assets of $1 million to $10 million and liabilities of the same range. Judge Scott C. Clarkson oversees the case. SulmeyerKupetz, A Professional Corporation, is the Debtor's counsel. Howard Grobstein was appointed as the Debtor's Chapter 11 trustee on Feb. 14, 2019. The trustee hired Marshack Hays LLP as his legal counsel. LADDER CAPITAL: Fitch Affirms BB IDR & Alters Outlook to Positive ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings and senior unsecured debt ratings of Ladder Capital Finance Holdings LLLP and Ladder Capital Finance Corporation, subsidiaries of Ladder Capital Corp, at 'BB'. The Rating Outlook has been revised to Positive from Stable. KEY RATING DRIVERS The Positive Outlook reflects Fitch's expectation that Ladder will demonstrate additional access to the unsecured debt markets over the Outlook horizon, thereby enhancing its funding flexibility, in advance of the expected loss of Federal Home Loan Bank (FHLB) membership by Ladder's captive insurance subsidiary, effective February 2021. The Rating Outlook also reflects continuation of a strong credit track record and consistent investment strategy throughout periods of market volatility as a result of its ability to shift between the securities, lending and real estate businesses, which tend to be countercyclical. The rating affirmations reflect Ladder's established platform as a commercial real estate (CRE) lender and investor; conservative underwriting culture; granular portfolio; continued adherence to leverage targets commensurate with the risk profile of its assets; internal management structure; and expanding access to capital. Additionally, Fitch believes that there is a strong alignment of interests between management and shareholders, as evidenced by management and directors owning $220 million of equity in the company (11.3%) as of March 31, 2019. Rating constraints include Ladder's focus on the CRE market, which exhibits volatility through the credit cycle; reliance on wholesale funding; and the absence of a track record as a standalone entity through a full credit cycle. Ladder has made progress diversifying its funding sources in recent years through collateralized loan obligation (CLO) issuances and additional unsecured note offerings. At March 31, 2019, Ladder's debt consisted of six committed loan repurchase facilities, one committed and multiple uncommitted securities repurchase facilities, a corporate credit facility from numerous lending institutions, mortgage loan borrowings, borrowings from the FHLB, three unsecured note issuances and the aforementioned CLO debt. Fitch believes that Ladder will continue to diversify its funding profile over time, including opportunistically issuing additional unsecured debt, which would reduce liquidity risk, improve financial flexibility and extend funding duration. Unsecured debt represented 24.6% of Ladder's total debt outstanding at March 31, 2019, which is within Fitch's 'bb' benchmark range for balance sheet heavy finance and leasing companies. Fitch notes the expected loss of FHLB membership by Ladder's captive insurance subsidiary, effective February 2021, as an on-going funding consideration. Ladder can currently draw $654.3 million of its total FHLB capacity of $1.9 billion, but any new advances will have maturity dates prior to the 2021 expiration date. Ladder has multiple options at its disposal to either repay FHLB borrowings via securities sales or new debt arrangements. Fitch believes that replacement funding will consist largely of longer-term unsecured debt funding, although Ladder could also look to utilize additional shorter-term secured repurchase facilities and/or non-recourse CLO debt. An increased reliance on short-term repurchase facilities could introduce incremental funding and liquidity risks, but Fitch believes these risks would be somewhat mitigated by the relatively short duration of Ladder's assets and the investment-grade nature of the securities portfolio, which helps ensure liquidity for these positions. The issuance of new unsecured debt would incrementally hurt earnings, given the higher cost relative to FHLB borrowings, although Fitch does not expect there to be a material impact on the firm's profitability. Ladder's ability to economically access long-term unsecured debt funding, such that unsecured debt approaches 35% of total debt, would be viewed favorably by Fitch. Ladder's top property exposures in its loan portfolio at March 31, 2019 were multifamily (25%), office (23%) and hotels (22%). Fitch expects continued healthy U.S. property fundamentals across most asset classes in 2019, although certain property types will continue to face headwinds. The multifamily sector should see some growth, but with certain markets working through excess supply. The same holds true for office, where market performance is bifurcated by exposure to tech employment and the densification trend, which remains a steady form of effective new supply. Fitch expects U.S. lodging revenue per available room to grow by 2%-3% during 2019 as low unemployment and rising wages are supporting good leisure demand trends. That said; Fitch believes that recent dynamics in hotel CRE investing indicate that this sector is near a cyclical peak. At March 31, 2019, the company's loan portfolio totaled $3.5 billion with an average loan balance of $18 million, limiting individual loss exposures. From inception in October 2008 through March 31, 2019, Ladder originated over $36.5 billion of CRE investments and incurred a principal loss on only one loan, demonstrating strong execution to date. While Ladder has not yet managed through a full credit cycle, it has operated during multiple periods of market volatility. Ladder's average loan-to-value ratio has remained relatively stable over time and amounted to 69% at March 31, 2019. The principal balance of three loans on non-accrual status, which Ladder concluded were individually impaired at first-quarter 2019 (1Q19), totaled $36.9 million, representing just 1.0% of the loan portfolio (based on outstanding face amount). Fitch does not view the modest increase in impaired loans during 2018 (from zero at year-end 2017) as a material weakening in asset quality. While Fitch believes that asset quality metrics could deteriorate in a downturn, credit performance is expected to remain solid given the track record of senior management at other firms in the prior recessions and Ladder's consistent underwriting standards. Additionally, any future losses resulting from idiosyncratic issues should be manageable given the company's focus on limiting portfolio concentrations by underwriting relatively small loan sizes. Core earnings to average assets and core earnings to average equity were 3.7% and 14.7%, respectively, in 2018, up from 3.1% and 11.9%, respectively in 2017. Ladder's net interest income after provisions increased 16.2%, year over year, due to rising interest rates and a larger average loan portfolio during the year, which generates a higher yield than the securities portfolio (smaller average securities portfolio in 2018). This was partially offset by an increase in interest expense and $13.9 million in provision for loan losses, compared with no provision for loan losses in 2017. Ladder's earnings continue to benefit from gains resulting from sales of real estate, loans and securities, but interest income and operating lease income have grown in recent years, which Fitch considers to be more stable and predictable income streams. Ladder's core earnings totaled $46.9 million in 1Q19, which was down 26.5% from 1Q18 largely due to lower realized gains from real estate sales and an unfavorable impact from declining interest rates on the value of hedges. Fitch expects core earnings to remain solid in 2019, although returns may be lower due to increased purchases of lower-yielding securities in recent quarters. Ladder's earnings had benefited from the rising interest rate environment in recent years given the floating-rate nature of the loan portfolio (72% of loans at 1Q19) while the company's funding includes a meaningful fixed rate component. If interest rates were to decline, Ladder's net interest income would be negatively affected but the impact would be capped since all floating-rate loans have interest rate floors. Additionally, the value of Ladder's securities portfolio is expected to increase if rates decline. At March 31, 2019, Ladder's leverage, defined by Fitch as total debt-to-tangible equity, was 3.1x. At March 31, 2019, Ladder's total debt obligations included $497.3 million of non-recourse CLO debt. Ladder varies its leverage depending on the risk profile of its portfolio and seeks to manage its adjusted leverage ratio, as measured by debt-to-equity excluding the non-recourse borrowings under CLOs, within a target range of 2.0x to 3.0x. On this basis, Ladder's leverage was 2.6x at March 31, 2019. While the CLO debt is non-recourse to Ladder, Fitch views it as a funding source for one of Ladder's core businesses and, therefore, primarily evaluates leverage on a consolidated basis. In November 2018, Ladder issued equity for the first time since its initial public offering in 2014, raising $99 million. Fitch views Ladder's ability to access the public equity market favorably. Fitch believes Ladder has an adequate liquidity position. At March 31, 2019, the company had $2.4 billion of committed, undrawn funding capacity available, consisting of $266.4 million of availability under its corporate revolving credit facility, $654.3 million of undrawn committed FHLB financing and $1.4 billion of other undrawn committed financings. Additionally, Ladder's unencumbered pool of assets, which is over $600 million in excess of the amount required by its bond covenant, could be pledged or sold (subject to applicable haircuts) to provide additional liquidity, if necessary. At March 31, 2019, unencumbered assets included $45.2 million of unrestricted cash, $1.2 billion of loans, $211 million of securities, $80.3 million of real estate and $461 million of other assets. Still, Ladder's liquidity position remains constrained by its real estate investment trust (REIT) tax election as REITs must generally distribute at least 90% of their net taxable income, excluding capital gains, to shareholders each year. Ladder adheres to a 1.2x unencumbered assets to unsecured debt covenant, which should provide protection to bondholders during periods of market stress. Unencumbered asset coverage of unsecured notes was approximately 1.7x at March 31, 2019, but coverage would be lower on a stressed basis, which would contemplate declines in the value of the company's unencumbered portfolio. The equalization of the senior unsecured debt rating with Ladder's IDR reflects the availability of unencumbered assets, suggesting average recovery prospects for debtholders under a stressed scenario. RATING SENSITIVITIES Ladder's ratings could be upgraded over the Outlook horizon if the company demonstrates additional access to long-term unsecured debt funding in advance of the expiration of FHLB membership, resulting in unsecured debt to total debt approaching 35%. An upgrade would also be contingent upon the continued management of leverage in a manner consistent with the risk profile of its portfolio; the maintenance of sufficient liquidity; a sustained low reliance on gain on sale income; and strong asset quality performance in the face of CRE sub-sector pressures. An inability to access the unsecured debt markets over the Outlook horizon, such that FHLB financing is replaced with secured debt issuances, could lead to an Outlook revision to Stable. Conversely, negative rating pressure on the IDR could result from a significant reduction in long-term economic sources of funding; a material weakening of asset quality; a sustained increase in adjusted leverage (excluding CLO borrowings) beyond the company's articulated target of 2.0x-3.0x; and/or a material reduction in liquidity. The unsecured debt ratings are sensitive to changes to Ladder's IDR and the level of unencumbered balance sheet assets relative to outstanding debt. The unsecured debt ratings could be notched above the IDR over time should unencumbered asset coverage improve. Conversely, the unsecured debt ratings could be notched down from the IDR should secured debt increase and/or the level of unencumbered assets decrease to such an extent that expected recoveries on the senior unsecured debt were adversely affected. Criteria Variation In the Non-Bank Financial Institutions Rating Criteria, the core earnings and profitability benchmark ratio for balance sheet intensive finance and leasing companies is pre-tax income/average assets. Fitch believes that core earnings, as defined by Ladder, is a more useful measure of earnings performance than reported pre-tax income because core earnings excludes certain non-cash expenses and unrecognized results and eliminates timing differences related to securitization gains and changes in the values of assets and derivatives. Therefore, the primary earnings and profitability benchmark used in this analysis is core earnings/average assets. LJ RUBY: S&P Assigns 'B' ICR on Proposed Sale to Littlejohn & Co. ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to LJ Ruby Holdings LLC, the parent of the U.S. industrial distributor operating as Kaman Distribution. The outlook is stable. The rating action follows disclosure that LJ Ruby Holdings will be sold by aerospace manufacturer Kaman Corp. to financial sponsor Littlejohn & Co., LLC and will operate as an independent business. Meanwhile, S&P assigned its 'B' issue-level rating and '3' recovery rating to the company's proposed $320 million first lien term loan due in 2026 and its CCC+ issue-level rating and '6' recovery rating to the company's proposed $115 million second-lien term loan due in 2027. S&P's 'B' issuer credit rating reflects its expectation that Kaman Distribution will reduce its S&P Global Ratings-adjusted debt to EBITDA to between 5.0x-5.5x and generate $20 million to $30 million of free cash flow over the 12 months following the acquisition. Kaman Distribution has a weaker market position than higher rated industrial distributors, such as WESCO and Grainger, within the fragmented and highly competitive industrial distribution industry. The company's 10 largest suppliers hold considerable market power as they account for a significant portion of its purchases. This is partially offset by the long-standing relationships Kaman Distribution has built with these companies. Furthermore, many of the company's products are highly engineered and serve mission-critical applications for its customers, reducing their incentive to make decisions solely on price. As a result, the company maintains good positions in its product niches, including a top-three position in its three key product lines. While the company has migrated to greater level of maintenance, repair, and operations (MRO) demand, S&P believes the company's thin margins could come under pressure if a U.S. industrial downturn occurs. The stable outlook on Kaman Distribution reflects S&P's expectation that leverage will improve to 5.0x to 5.5x by the end of 2020. The rating agency's base-case forecast assumes incremental margin growth from ongoing strategic pricing initiatives and cost savings achieved through operational improvements, which will also allow the company to reduce leverage. "We could lower our rating over the next 12 months if we expect the company's adjusted debt to EBITDA to be above 6x over a sustained period. This could occur if the company fails to execute on its cost savings and pricing initiatives or if end-market demand were to significantly deteriorate," S&P said, adding that it could also lower its rating if the company pursues debt-financed acquisitions or shareholder returns that stretch credit measures beyond levels contemplated in the rating agency's base case. "Although unlikely in our view during the next 12 months, given our forecast over this period, we could raise our rating if we expect the company's adjusted debt to EBITDA will remain less than 4x on a sustained basis. We would also need to believe the sponsor is committed to maintaining financial policies that will support this improved level of leverage, according to S&P. MABVAX THERAPEUTICS: Seeks to Extend Exclusivity Period to Nov. 18 ------------------------------------------------------------------ MabVax Therapeutics Holdings, Inc. and affiliates asked the U.S. Bankruptcy Court for the District of Delaware to extend the period during which they have the exclusive right to file a Chapter 11 plan through Nov. 18, and solicit votes on the plan through Jan. 17, 2020. This is the companies' first request for an extension of the exclusivity period since they filed for bankruptcy protection on March 21. Since their bankruptcy filing, the companies have spent most of their time negotiating and consummating a sale of substantially all of their assets to BioNTech AG, which closed on May 7. Recently, the court authorized the sale of the companies' remaining assets. Following the sale of their assets, the companies shifted their focus to developing an exit strategy for their bankruptcy cases including establishing bar dates, evaluating executory contracts excluded from the sale, and preparing a plan of liquidation, according to court filings. About MabVax Therapeutics MabVax -- https://www.mabvax.com/ -- is a clinical-stage biotechnology company with a fully human antibody discovery platform focused on the rapid translation into clinical development of products to address unmet medical needs in the treatment of cancer. Its lead clinical development candidate, HuMab-5B1, is a fully human IgG1 monoclonal antibody (mAb) that targets sialyl Lewis A (sLea), an epitope on CA19-9. CA19-9 is expressed in over 90% of pancreatic cancer (PDAC) and in other diseases including small cell lung, colon and other GI cancers. MabVax Therapeutics Holdings, Inc., and MabVax Therapeutics, Inc., each filed a voluntary Chapter 11 petition (Bankr. D. Del. Case No. 19-10603 and 19-10604, respectively) on March 21, 2019. At the time of filing, MabVax Therapeutics Holdings estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. MabVax Therapeutics, Inc., estimated up to $50,000 in assets and liabilities. Jason A. Gibson, Esq., at the Rosner Law Group LLC, represents the Debtors as bankruptcy counsel. MICHAEL HANCOCK: $75K Sale of Petal Property to Hancock Approved ---------------------------------------------------------------- Judge Katharine M. Samson of the U.S. Bankruptcy Court for the Southern District of Mississippi authorized Michael Sean Hancock's sale of the real property located at 109 Longleaf Dr., Petal, Mississippi to Trystan Hancock for $75,000. The sale is free and clear of all interests. The liens of First Southern Bank are attached to the net sales proceeds of the sale and the claim of First Southern Bank will be paid in full. The Debtor will file a Report of Sale with the Court. Any proceeds from the sale of the Property above the amounts of the liens of First Southern Bank will be placed in a United States Trustee authorized DIP bank account, and such proceeds will not be disbursed until further order of the Court. Within seven days after the sale of the Property closes, pursuant to Fed R. Bankr. P. 6004(f)(1), the Debtor will file on the Court docket a Report of Sale with a copy of the settlement statement, bill of sale, and/or auctioneer's report. Good cause exists to authorize the sale without subjecting the order to a stay of execution, as permitted under Rules 7062 and 6004(h) of the Federal Rules of Bankruptcy Procedure. Michael Sean Hancock sought Chapter 11 protection (Bankr. S.D. Miss. Case No. 18-51989) on Oct. 11, 2018. The Debtor tapped Jarrett Little, Esq., at Lentz & Little, PA, as counsel. MICHAEL HANCOCK: $80K Sale of Petal Property to Childress Approved ------------------------------------------------------------------ Judge Katharine M. Samson of the U.S. Bankruptcy Court for the Southern District of Mississippi authorized Michael Sean Hancock's sale of the real property located at 48 Miller Rd., Petal, Mississippi to Brad Childress for $80,000. The sale is free and clear of all interests. The liens of First Southern Bank are attached to the net sales proceeds of the sale and the claim of First Southern Bank will be paid in full. The Debtor will file a Report of Sale with the Court. Any proceeds from the sale of the Property above the amounts of the liens of First Southern Bank will be placed in a United States Trustee authorized DIP bank account, and such proceeds will not be disbursed until further order of the Court. Within seven days after the sale of the Property closes, pursuant to Fed R. Bankr. P. 6004(f)(1), the Debtor will file on the Court docket a Report of Sale with a copy of the settlement statement, bill of sale, and/or auctioneer's report. Good cause exists to authorize the sale without subjecting the order to a stay of execution, as permitted under Rules 7062 and 6004(h) of the Federal Rules of Bankruptcy Procedure. Michael Sean Hancock sought Chapter 11 protection (Bankr. S.D. Miss. Case No. 18-51989) on Oct. 11, 2018. The Debtor tapped Jarrett Little, Esq., at Lentz & Little, PA, as counsel. NESCO HOLDINGS: S&P Assigns 'B' ICR on Capitol Investment Merger ---------------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to NESCO Holdings Inc. (NESCO) and its subsidiary, Capitol Investment Merger Sub 2, LLC. The rating action follows NESCO's announcement that it has entered into a definitive agreement to merge with Capitol Investment Corp. IV (Capitol) and become a publicly listed company. Capitol and Energy Capital Partners will invest $200 million of cash in NESCO, which it will use to partially pay down existing debt. The company will also refinance its existing capital structure with $475 million of new senior secured second-lien notes and a $350 million asset-based lending (ABL) revolving credit facility. Meanwhile, S&P assigned its 'B' issue-level rating and '4' recovery rating to the proposed $475 million senior secured second-lien notes due 2024, issued by Capitol Investment Merger Sub 2, LLC. The company's scale is relatively small in S&P's view, and its scope of operations are narrow compared to its larger and more diversified peers. The company's 2019 estimated revenues of about $270 million are much smaller than Ahern Rentals Inc. and Custom Truck One Source L.P. But NESCO maintains a broad geographic footprint across the U.S., Canada, and Mexico. In addition, its healthy utilization rates of around 80% and the vertical integration of its parts, tools, and accessory business support above-average EBITDA margins. NESCO also has a relatively young fleet of rental units (with an average rental age of less than four years compared to 15 years to 25 years of useful life of the equipment) that requires minimum maintenance capital expenditures. The stable outlook on NESCO reflects S&P's expectation for relatively favorable end-market conditions, driven by weaker but still stable economic expansion, and continued investments in infrastructure spending in the U.S. These factors should allow the company to improve profitability and reduce leverage to the high 4x area over the next 12 months. "We would lower the ratings if NESCO's leverage were to approach 6x. This would most likely arise from pressure on revenue growth and margins due to competitive pressures or weak demand in the transmission and distribution markets that result in a drop in utilization rates," S&P said. "Although unlikely in the near term, we could raise the rating if the company executes on its organic growth plans and leverage is sustained well below 4x," S&P said. In this scenario, the company would continue to benefit from healthy end-market demand and expansion of its rental fleet, expanding its market share and scale to match larger rental peers. A further decrease in financial sponsor ownership would also demonstrate the sustainability of an improved financial risk profile, according to S&P. NEW ENGLAND MOTOR: $282K Private Sale of 9 Vehicles to Shevell OK'd ------------------------------------------------------------------- Judge John K. Sherwood of the U.S. Bankruptcy Court for the District of New Jersey authorized the private sale by New England Motor Freight, Inc. and its affiliated debtors of the following nine vehicles to Myron P. Shevell: (i) Unit No. 11231, VIN SCBBP9ZA7CC077684, 2012 Bentley for $60,000; (ii) Unit No. 10728, VIN WDDNG76XS37AI12137, 2007 Mercedes S600 for $12,000; (iii) Unit No. 11016, VIN WDDUX7GBSGA119041, 2016 MAYBACH 57S for $85,000; (iv) Unit No. 11501, VIN WDDUGRFB7FA106703, 2015 Mercedes S550V4 for $45,000; (v) Unit No. 11115, VIN WEDNGBGBXBA391099, 2011 Mercedes S550 4MATIC for $17,000; (vi) Unit No. 11614, VIN 1FAHP2E8168121622, 2016 Ford Taurus for $13,000; (vii) Unit No. 11532, Plate No. SSSGYT, 2015 Chevy Silverado Extended Cab 2500HD $20,000; (viii) Unit No. 11416, VIN 3GCUKRECGEGZI 1029, 2014 Chevy Silverado Crew Cab 1500 for $22,000; and (ix) Unit No. 11315, VIN 3FA6POH73DR381331, 2013 Ford Taurus for $8,000. The sale is on an "as is, where is" basis, free and clear of any and all liens, claims, encumbrances, and other interests. Any liens, claims or encumbrances on the Property will attach to the proceeds of the Sale. The Asset Purchase and Sale Agreement, dated as of May 8, 2019 (as may be amended, supplemented, or otherwise modified from time to time) is approved. With respect to the Leased Propertys, the Debtors are authorized to assume and-, assign the Audi Freehold lease and related Leased Property effective as of the date hereof. To the extent required, the Debtors have provided adequate assurance of future performance with respect to such Audi Freehold lease and no further showing of adequate assurance of future performance is necessary. With respect to the 2017 Mercedes-Benz GLC43W4, such lease will only be assumed and assigned upon the consent of Daimler Trust, which consent will not be unreasonably withheld. To the extent Daimler Trust does not consent to the assumption and assignment, the Debtors and Daimler Trust will promptly schedule such matter for hearing and the parties are authorized to file supplemental briefs in support of their respective positions. Pursuant to Bankruptcy Rule 6004(h), the Sale Order will not be stayed after its entry, but will be effective and enforceable immediately upon entry. Accordingly, the Debtors are authorized and empowered to close the Sale and other transactions immediately upon entry of the Sale Order. Aside from Section 5.1(a)(2) which is stricken from the Purchase Agreement, nothing in the Sale Order will modify or waive any closing conditions or termination rights in the Purchase Agreement, and all such conditions and rights will remain in full force and effect in accordance with their terms. A copy of the Agreement attached to the Order is available for free at: http://bankrupt.com/misc/New_England_Motor_762_Order.pdf About New England Motor Freight New England Motor Freight, Inc. -- http://www.nemf.com/-- provides less-than-truckload (LTL) carrier services in the United States and Canada. Founded in 1977, the company is based in Elizabeth, New Jersey, and has terminals in the Northeast and Mid-Atlantic. New England Motor Freight and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 19-12809) on Feb. 11, 2019. At the time of the filing, New England Motor estimated assets of $100 million to $500 million and liabilities of $50 million to $100 million. The cases are assigned to Judge John K. Sherwood. The Debtors tapped Gibbons P.C. as legal counsel; Whiteford, Taylor & Preston, LLP as special counsel; Phoenix Executive Services, LLC, as restructuring advisor; and Donlin Recano as claims agent. NEW ENGLAND MOTOR: $3.5M Private Sale of Miami Property Approved ---------------------------------------------------------------- Judge John K. Sherwood of the U.S. Bankruptcy Court for the District of New Jersey authorized the private sale by New England Motor Freight, Inc. and its affiliated debtors of the commercial/industrial real property located at 11700 NW 36th Avenue, Miami, Florida, along with certain improvements and fixtures, to 11700 Holdings, LLC by way of an assignment from ATI Container Services, LLC, for $3.515 million. The sale is on an "as is, where is" basis, free and clear of any and all liens, claims, encumbrances, and other interests. Any liens, claims or encumbrances on the Property will attach to the proceeds of the Sale. The Purchase and Sale Agreement, dated as of June 12, 2019 (as may be amended, supplemented, or otherwise modified from time to time) is approved. Pursuant to Bankruptcy Rule 6004(h), the Sale Order will not be stayed after its entry, but will be effective and enforceable immediately upon entry. Accordingly, the Debtors are authorized and empowered to close the Sale and other transactions immediately upon entry of the Sale Order. A copy of the Agreement attached to the Order is available for free at: http://bankrupt.com/misc/New_England_Motor_761_Order.pdf About New England Motor Freight New England Motor Freight, Inc. -- http://www.nemf.com/-- provides less-than-truckload (LTL) carrier services in the United States and Canada. Founded in 1977, the company is based in Elizabeth, New Jersey, and has terminals in the Northeast and Mid-Atlantic. New England Motor Freight and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 19-12809) on Feb. 11, 2019. At the time of the filing, New England Motor estimated assets of $100 million to $500 million and liabilities of $50 million to $100 million. The cases are assigned to Judge John K. Sherwood. The Debtors tapped Gibbons P.C. as legal counsel; Whiteford, Taylor & Preston, LLP as special counsel; Phoenix Executive Services, LLC, as restructuring advisor; and Donlin Recano as claims agent. NEW START INCORPORATED: Hires Smyth and Hauck as Accountant ----------------------------------------------------------- A New Start Incorporated, seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Smyth and Hauck, PA a division of MKA, LLC, as accountant. Smyth and Hauck will prepare the annual Federal and State of Florida Income Tax Returns of the Debtor for the year 2018. The firm will also prepare the County Personal Property Tax, where applicable. Smyth and Hauck will be based upon the amount of time required at standard billing rates of $200 to $235 per hour for CPAs and $75 to $125 per hour for accounting department. Kristine C. Polo, CPA of Smyth & Hauck, P.A. attests that her firm doed not represent any interest adverse to the Debtor, or the estate, and is a disinterested person as required by 11 U.S.C. Sec. 327(a). The firm can be reached at: Kristine C. Polo, CPA Smyth & Hauck, P.A. 631 US Highway One, Suite 405 North Palm Beach, FL 33408 Phone: 561-848-9300 About A New Start Incorporated A New Start Incorporated -- https://anewstartincfl.com/ -- is a treatment center in Palm Beach County, Florida, providing outpatient treatment for substance abuse and chemical dependency disorders in adult clients. An outpatient program allows clients to continue working or attending school while receiving treatment and support from the company's program and team of specialists. A New Start Incorporated filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 19-13294) on March 14, 2019. In the petition signed by Eugene Sullivan, CEO, the Debtor estimated $1 million to $10 million in assets and $100,000 to $500,000 in liabilities. The case is assigned to Judge Erik P. Kimball. Angelo A. Gasparri, Esq., at Law Office Angelo A. Gasparri, is the Debtor's counsel. NOMAD BUYER: Moody's Assigns B3 CFR, Outlook Positive ----------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and B3-PD Probability of Default to Nomad Buyer, Inc. At the same time, Moody's assigned B3 ratings to the company's $525 million first lien senior secured credit facilities, including a $100 million revolving credit facility and a $425 million term loan. The outlook is positive. Ratings Assigned: Nomad Buyer, Inc. Corporate Family Rating, at B3 Probability of Default Rating, at B3-PD $100 million senior secured 1st lien revolver expiring 2023 at B3 (LGD3) $425 million senior secured 1st lien term loan due 2025 at B3 (LGD3) The outlook is positive RATINGS RATIONALE The B3 CFR reflects NaviHealth's high financial leverage, moderate but growing scale, and limited operating track record as a stand-alone company. Based on the trailing twelve-month financials, the company's adjusted debt/EBITDA is 7.2x. However, Moody's expects meaningful earnings growth over the next 12-18 months due to contract expansions with its customers. As a result, Moody's forecasts leverage to decline towards 6.0 times by the end of 2019, with further deleveraging in 2020. The company generates most of its revenue from contracts with health insurers or participants of the bundled payments for care improvement (BPCI) program. There are risks associated with the company's rapid expansion. Further, the company takes on the risk of medical care costs within its contracts. The rating is supported by relatively high barriers to entry in the healthcare cost containment space due to the company's proprietary technology and data capabilities. The ratings also benefit from Moody's view that demand for NaviHealth's cost containment services will grow, given growing Medicare Advantage and BPCI enrollment and growth in home health services. The ratings further benefit from the company's business diversification from its software as a service (SAAS) segment, which is offered to customers such as health care providers. The outlook is positive. The positive outlook reflects Moody's expectation that, although currently very high, financial leverage should improve over the next 12-18 months reflecting earnings growth as the company expands the scope of its business with current payors and wins new business. Ratings could be downgraded if the company's liquidity and/or operating performance weakens, or if the company fails to effectively manage its rapid growth. The ratings could also be downgraded if the company's financial policies become more aggressive. Ratings could be upgraded if NaviHealth reduces its adjusted debt/EBITDA to below 6.0 times and generates sustained free cash flow. An upgrade would also be supported by increased scale, demonstration of stable organic growth and effective execution on its expansion strategy. Headquartered in Brentwood, Tennessee, NaviHealth is a provider of home health benefits management services to the managed care industry. The company manages service offerings in post -acute management and care transitions and offers these services to both health plans and BPCI program participants. NaviHealth also offers software services to health plan and provider customers. The company's revenues are approximately $789 million. NaviHealth is privately owned by Clayton, Dubilier, & Rice with a minority ownership stake from Cardinal Health. NUSTAR ENERGY: S&P Affirms 'BB-' ICR; Outlook Stable ---------------------------------------------------- S&P Global Ratings affirmed its 'BB-' issuer credit rating on NuStar Energy L.P. and its 'BB' issue-level ratings on the partnership's senior unsecured debt and 'B' issue-level rating on its subordinated notes. The '3' recovery rating on the senior unsecured debt and '6' recovery rating on the subordinated notes are unchanged. The affirmation reflects S&P's expectation of leverage at or above 5.5x despite improvement in credit metrics under the updated hybrid criteria. Previously, S&P assigned zero equity credit to NuStar's $1.725 billion of hybrid securities because the partnership had breached the 15% capitalization threshold. As a result of clarification in the Hybrid Capital criteria, the rating agency is reinstating intermediate (50%) equity credit to $900 million of NuStar's hybrids, representing 15% of the S&P Global Ratings' adjusted capitalization. The remaining $825 million of hybrid securities above 15% will continue to receive no equity credit and be treated as 100% debt. As a result, the S&P Global Ratings' adjusted leverage is expected to be 5.9x in 2019 and between 5.3x and 5.6x in 2020 compared with the rating agency's previous expectations of 6.9x in 2019 and between 6.25x and 6.50x in 2020. While leverage metrics are a turn lower than previously forecast, the rating agency's view of NuStar's financial risk is unchanged because leverage remains high. "The stable outlook reflects our view that NuStar will execute growth projects and increase volumes especially in its Permian system. As a result, we expect S&P Global Ratings' adjusted leverage of 5.9x in 2019, dropping to 5.5x in 2020. We expect the partnership to maintain our view of adequate liquidity," the rating agency said. "We could consider negative rating action if NuStar's leverage rose above 6.5x on an S&P Global Ratings' adjusted basis, or if liquidity deteriorated. This could occur due to under performance in one of its business segments or leverage-funded growth projects or acquisitions," S&P said. S&P said it could revise its outlook to positive if NuStar was able to maintain debt to EBITDA below 5.5x and follow with an upgrade as leverage approached 5x. "This could occur due to NuStar realizing higher volumes than we forecast, resulting in stronger cash flows. In order to raise the rating, we would expect a cushion in NuStar's leverage metrics to account for swings in cash flows through the commodity cycle so that we wouldn't expect leverage to rise above 5.5x on a sustained basis during times of stress," S&P said. OPEN ROAD: Sale of Untitled Holiday Project Rights to MGM Okayed ---------------------------------------------------------------- Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware authorized the private sale by Open Road Films, LLC, and affiliates of their rights, title, and interest in and to the Untitled Holiday Project to Metro-Goldwyn-Mayer Pictures, Inc., for $182,164, plus the assumption of the Assumed Liabilities. The sale, pursuant to their Asset Purchase Agreement, dated July 8, 2019, is free and clear of all liens, claims, interests, and encumbrances. Pursuant to Section 365 of the Bankruptcy Code, the Debtors are authorized to assume the Contracts set forth on the Exhibit 1 hereto and assign and sell the Contracts to MGM, and, upon the closing of the Sale, such Contracts will be assumed by the Debtors and assigned and sold to MGM. The terms and conditions of the Order will be immediately effective and enforceable upon its entry notwithstanding any applicability of Bankruptcy Rules 6004(h) or 6006(d). A copy of the Agreement attached to the Order is available for free at: http://bankrupt.com/misc/Open_Road_783_Order.pdf About Open Road Open Road Films, LLC, together with its affiliated debtors, is an independent distributor of motion pictures in the United States and licenses motion pictures in ancillary markets, principally to home entertainment, pay television, subscription and transactional video-on-demand, free television, and other non-theatrical entertainment distribution markets. Open Road Films, LLC, and its affiliates sought Chapter 11 protection (Bankr. D.Del. Lead Case No. 18-12012) on Sept. 6, 2018. Open Road estimated assets and debt of $100 million to $500 million. The Hon. Laurie Selber Silverstein is the case judge. Young Conaway Stargatt & Taylor, LLP, led by Robert F. Poppiti, Jr., Esq., Michael R. Nestor, Esq., Sean M. Beach, Esq., Ian J. Bambrick, Esq. serves as counsel to the Debtors. Klee, Tuchin, Bogdanoff & Stern LLP, led by Michael L. Tuchin, Esq., Jonathan M. Weiss, Esq., Sasha M. Gurvitz, Esq. also serves as counsel to the Debtors. FTI Consulting, Inc., acts as restructuring advisors and Donlin Recano & Company is claims and noticing agent to the Debtors. PF HOLDINGS: S&P Lowers 2015A Housing Revenue Bonds Rating to BB+ ----------------------------------------------------------------- S&P Global Ratings lowered and placed on CreditWatch with negative implications its long-term ratings on the following issues: -- Pennsylvania Housing Finance Agency's series 2015A multifamily housing revenue bonds (Brinton Manor and Brinton Towers Apartment project), issued for Brinton Apartments Penn LLC, to 'BB+' from 'BBB-'; -- Philadelphia Authority for Industrial Development's series 2016A and subordinate 2016B senior housing revenue bonds (The Pavilion), to 'BBB-' and 'BB+' from 'A' and 'BBB', respectively; and -- Public Finance Authority, Wis.' multifamily housing revenue bonds (Estates at Crystal Bay Apartments and Woodhaven Park Apartments Project) series 2016A and series 2016B, to 'BB(sf)' and 'BB- (sf)' from 'A- (sf)' and 'BBB (sf)', respectively. The downgrades reflect S&P's revised assessments of these transactions based on their management, and specifically management's strategy, financial policies and practices, and performance. Its rating actions are based on the most current audited information available from fiscal 2017. S&P reviewed data posted to EMMA (Electronic Municipal Market Access) in June 2019, which indicates occupancy rates at the Brinton Manor and Towers and Pavilion projects remain in line with the rating agency's prior year reviews, but have fallen by more than 8% at Crystal Bay and Woodhaven. "The CreditWatch placements follow our inability, after repeated inquiries of management, to obtain timely information of satisfactory quality in accordance with our applicable criteria and policies. As of July 22, 2019, PF Holdings LLC has not provided audited financial information for the fiscal year ended Dec. 31, 2018. Without this financial information, we are unable to verify the current net cash flow of the projects, which we use to calculate debt service coverage on rated bonds as part of our criteria," S&P said. "If we are unable to obtain the requested information within 30 days, we will likely suspend the affected ratings, preceded, in accordance with our policies, by any change to the ratings that we consider appropriate given available information. However, if we receive information that we consider sufficient and of satisfactory quality within the 30-day CreditWatch timeframe, we will conduct a review and take appropriate rating action," S&P said. PG&E CORP: U.S. Trustee Objects to Key Employee Incentive Plan -------------------------------------------------------------- Soma Biswas, writing for The Wall Street Journal, reported that a federal bankruptcy watchdog is objecting to California utility PG&E Corp.'s request for approval of a $3 million payment to new Chief Executive William Johnson, according to a court document. Andrew R. Vara, Acting United States Trustee for Region 3, objected to the PG&E and its debtor affiliates' request for approval of an incentive program for 12 senior executive officers, excluding the Chief Executive Officer. The aggregate value of the KEIP Awards at grant range from $5,465,500 at threshold performance, $10,931,000 at target performance, and $16,396,500 at maximum performance. According to the U.S. Trustee, the Motion seeks authority to pay the Debtors' senior executives KEIP Awards that would exceed $5.4 million at the "threshold" performance (or more than 92% of the executives' aggregate base salaries); $10.9 million at the "target" performance (or more than 185% of the executives' aggregate base salaries); and $16.3 million at the "maximum" performance (or more than 275% of the executives' aggregate base salaries). The Court, the U.S. Trustee said in court papers, should deny the Motion as lacking sufficient information for the Court and parties in interest to assess whether the KEIP is a true incentive plan -- particularly at the "threshold" level. The Debtors provide no information about the performance levels for the "Financial Performance" metric, and the relevant contracts are not on file with the Court, the U.S. Trustee complained. The Journal pointed out that the U.S. trustee is also balking at a provision for $2.5 million in severance payable to William Johnson if the CEO is terminated without cause. Mr. Johnson's employment contract also calls for an annual base salary of $2.5 million, the Journal noted. The CEO's base salary is significantly higher than the base salaries for CEOs at such comparable energy companies as Edison International and Sempra Energy, the Journal cited Mr. Vara as saying. About PG&E Corp PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Feb. 12, 2019. The creditors' committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PG&E CORP: Wins Two-Week Reprieve From Creditor Attacks ------------------------------------------------------- Andrew Scurria, writing for The Wall Street Journal, reported that U.S. Bankruptcy Judge Dennis Montali gave PG&E Corp. and its debtor affiliates an additional two weeks to devise a protocol for evaluating alternative Chapter 11 proposals, refusing the request by an ad hoc group of noteholders to terminate exclusivity. According to the Journal, Judge Montali declined to end the utility's exclusive control over the proceedings, instead granting California Gov. Gavin Newsom’s administration time to try to avoid a free-for-all among competing restructuring strategies. The Journal, citing Alan Kornberg, an attorney for the California Public Utilities Commission, said that multiple, competing proposals could complicate PG&E's bankruptcy, dragging out the proceedings and threatening its ability to meet a June 2020 deadline imposed by state lawmakers. If PG&E doesn't wrap up its bankruptcy by then, it won't be able to access a multibillion-dollar fund to cover liabilities stemming from a series of devastating wildfires linked to its utility equipment, the Journal pointed out. The Journal related that PG&E is scheduled to appear on Aug. 9 before Judge Montali, who would need to approve any protocol. If he doesn't, creditors could pick up their efforts to strip PG&E of its exclusivity rights, the report said. About PG&E Corp PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Feb. 12, 2019. The creditors' committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PG&E CORPORATION: Akin Gump Updates List of Unsecured Noteholders ----------------------------------------------------------------- In the Chapter 11 cases of PG&E Corporation and Pacific Gas and Electric Company, the law firm Akin Gump Strauss Hauer & Feld LLP filed an amended verified statement pursuant to F.R.B.P Rule 2019 to provide an updated list of members of the Ad Hoc Committee of Senior Unsecured Noteholders. Akin Gump represents only the Ad Hoc Committee. Akin Gump does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Akin Gump does not represent the Ad Hoc Committee as a "committee" and does not undertake to represent the interests of, and are not fiduciaries for, any creditor, party in interest, or other entity that has not signed a retention agreement with Akin Gump. In addition, the Ad Hoc Committee does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. As of July 18, 2019, the members of the Ad Hoc Committee and their disclosable economic interests are: (1) Angelo, Gordon & Co., L.P. 245 Park Avenue New York, NY 10167 * Senior Utility Notes: $54,004,000 * PG&E Stock: 600,000 shares (2) Apollo Global Management LLC 9 West 57th Street 43rd Floor New York, NY 10019 * Senior Utility Notes: $356,026,000 * Utility L/C Reimbursement: $110,000,000 * DIP Term Loans: $93,000,000 * Delayed DIP Term Loans: $31,000,000 (3) Aurelius Capital Management, LP 535 Madison Avenue 31st Floor New York, NY 10022 * Senior Utility Notes: $99,500,000 * PG&E Stock: 624,933 shares (4) Canyon Capital Advisors LLC 2000 Avenue of the Stars 11th Floor Los Angeles, CA 90067 * Senior Utility Notes: $158,260,000 * Utility Revolver Loans: $161,983,142.89 * Utility L/C Reimbursement: $88,113,595 * HoldCo Revolver Loans: $15,000,000 * HoldCo Term Loans: $60,000,000 (5) Capital Group 333 South Hope Street 55th Floor Los Angeles, CA 90071 * Senior Utility Notes: $398,000,000 (6) CarVal Investors 461 Fifth Avenue New York, NY 10017 * Senior Utility Notes: $164,734,000 (7) Castle Hook Partners LP 250 West 55th Street New York, NY 10019 * Senior Utility Notes: $102,750,000 * PG&E Stock: 473,709 shares (8) Citadel Advisors LLC 520 Madison Avenue New York, NY 10022 * Senior Utility Notes: $553,500,000 * PG&E Stock: 3,540,569 shares * Short Positions in Call Options of 102,400 shares of PG&E Stock * Put Options in 794,000 shares of PG&E Stock (9) Citigroup Global Markets 390 Greenwich Street, 4th Floor New York, NY 10013 * Senior Utility Notes: $43,967,000 * Utility Revolver Loans: $6,000,000 * HoldCo Revolver Loans: $13,240,723 * Trade Claims: $27,801,750 (10) Cyrus Capital Partners, L.P. 65 East 55th Street 6th Floor New York, NY 10022 * Senior Utility Notes: $86,454,000 (11) Davidson Kempner Capital Management LP 520 Madison Avenue 30th Floor New York, NY 10022 * Senior Utility Notes: $821,700,000 * Revolver Loans: $55,000,000 * PG&E Stock: 6,022,000 shares (12) Deutsche Bank Securities Inc. 60 Wall Street 4th Floor New York, NY 10005 * Senior Utility Notes: $216,764,000 * Utility Revolver Loans: $11,920,017 * Utility L/C Reimbursement: $87,788,253 * Put Options in 1,825,000 shares of PG&E Stock $100,000,000 in Wildfire Subrogation Claims (13) Diameter Capital Partners LP 24 West 40th Street 5th Floor New York, NY 10018 * Senior Utility Notes: $151,748,000 * Utility Revolver Loans: $39,901,244 * PG&E Stock: 965,000 shares * Bilateral Utility Loan: $17,000,000 * Trade Claims: $10,972,746 (14) Elliott Management Corporation 40 West 57th Street New York, NY 10019 * Senior Utility Notes: $1,425,803,000 (15) Farallon Capital Management, L.L.C. One Maritime Plaza Suite 2100 San Francisco, CA 94111 * Senior Utility Notes: $353,120,000 * Utility Revolver Loans: $53,580,000 (16) Fir Tree Partners 55 West 46th Street 29th Floor New York, NY 10036 * Senior Utility Notes: $79,430,000 (17) Oaktree Capital Management, L.P. 333 South Grand Avenue 28th Floor Los Angeles, CA 90071 * Senior Utility Notes: $158,747,000 * PG&E Stock: 1,215,000 shares * DIP Term Loans: $3,750,000 * Utility Revolver Loans: $24,900,869 * Utility Term Loans: $10,000,000 (18) Och-Ziff Capital Management Group LLC 9 West 57th Street 39th Floor New York, NY 10019 * Senior Utility Notes: $407,799,000 * DIP Term Loans: $11,250,000 * Delayed DIP Term Loans: $3,750,000 * PG&E Stock: 1,714,023 shares * Call Options of 1,121 shares of PG&E Stock (19) Pacific Investment Management Company LLC 650 Newport Center Drive Newport Beach, CA 92660 * Senior Utility Notes: $2,051,882,000 * Utility Term Loans: $220,000,000 * DIP Term Loans: $634,500,000 * Delayed DIP Term Loans: $211,500,000 (20) Pacific Life Insurance Company 700 Newport Center Drive Newport Beach, CA 92660 * Senior Utility Notes: $86,287,000 (21) P. Schoenfeld Asset Management LP 1350 Avenue of the Americas 21st Floor New York, NY 10019 * Senior Utility Notes: $95,949,000 * PG&E Stock: 621,815 shares * Short Positions in Call Options of 325,000 shares of PG&E Stock (22) Senator Investment Group LP 510 Madison Avenue Suite 28 New York, NY 10022 * Senior Utility Notes: $214,796,000 (23) Taconic Capital Advisors LP 280 Park Avenue 5th Floor New York, NY 10017 * Senior Utility Notes: $135,873,000 * Utility Revolver Loans: $10,000,000 * Utility L/C Reimbursement: $25,000,000 * PG&E Stock: 300,000 shares (24) Third Point LLC 390 Park Avenue New York, NY 10022 * Senior Utility Notes: $543,671,000 (25) Värde Partners, Inc. 901 Marquette Avenue South Minneapolis, MN 55402 * Senior Utility Notes: $879,828,000 * Utility Revolver Loans: $21,486,655 * Utility L/C Reimbursement: $12,500,000 * 1,171,403 Short Positions in PG&E Shares Counsel to the Ad Hoc Committee of Senior Unsecured Noteholders of Pacific Gas and Electric Company can be reached at: AKIN GUMP STRAUSS HAUER & FELD LLP Michael S. Stamer, Esq. Ira S. Dizengoff, Esq. David H. Botter, Esq. Abid Qureshi, Esq. One Bryant Park New York, NY 10036 Telephone: (212) 872-1000 Facsimile: (212) 872-1002 Email: mstamer@akingump.com idizengoff@akingump.com dbotter@akingump.com aqureshi@akingump.com - and - Ashley Vinson Crawford, Esq. California Street Suite 1500 San Francisco, CA 94104 Telephone: (415) 765-9500 Facsimile: (415) 765-9501 Email: avcrawford@akingump.com A copy of the Rule 2019 filing from PacerMonitor.com is available at http://bankrupt.com/misc/PG&E_Corporation__3083_Rule2019.pdf About PG&E Corp PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Feb. 12, 2019. The creditors' committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PIER 3 BUILDERS: Hires Martin Wolons as Financial Consultant ------------------------------------------------------------ Pier 3 Builders, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire Martin Wolons as financial consultant/bookkeeper. Martin Wolons will maintain the Debtor's books of account, prepare the necessary monthly operating reports, assist the preparation of financial projections, and provide financial guidance to the Debtor. Mr. Wolons will be paid $750 per week. Mr. Wolons assures the Court that he represents no interest adverse to the interest of the estate and is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. Mr. Wolons can be reached at: Martin Wolons About Pier 3 Builders Pier 3 Builders, LLC, is a privately held company in the residential building construction business. The Company offers construction and remodeling services such as custom home building, additions, basement remodeling, and more. Pier 3 Builders sought Chapter 11 protection (Bankr. D. Mass Case No. 19-41022) on June 24, 2019. In the petition signed by Brian Campanale, manager, the Debtor estimated assets and liabilities in the range of $1 million to $10 million. Judge Elizabeth D. Katz is assigned to the case. The Debtor tapped David M. Nickless, Esq., at Nickless, Phillips and O'Connor, as counsel. PIER 3: $392K Sale of Lunenburg Property Denied without Prejudice ----------------------------------------------------------------- Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the District of Massachusetts denied without prejudice Pier 3 Builders, LLC's amended Motion to Assume Contract and to Sell Property in connection with the private sale of the real property known and numbered as 141 Beal Street, Lunenburg, Massachusetts, by private sale, to William J. and Donna M. Groark for $391,900, free and clear. A hearing on the Motion was held on July 23, 2019. About Pier 3 Builders Pier 3 Builders, LLC is a privately held company in the residential building construction business. The Company offers construction and remodeling services such as custom home building, additions, basement remodeling, and more. Pier 3 Builders, LLC, sought Chapter 11 protection (Bankr. D. Mass Case No. 19-41022) on June 24, 2019. Judge Elizabeth D. Katz is assigned to the case. In the petition signed by Brian Campanale, manager, the Debtor estimated assets and liabilities in the range of $1 million to $10 million. The Debtor tapped David M. Nickless, Esq., at Nickless, Phillips and O'Connor, as counsel. POPULUS FINANCIAL: S&P Affirms 'B' ICR; Outlook Stable ------------------------------------------------------ S&P Global Ratings said it affirmed its 'B' issuer credit rating on Populus Financial Group Inc. (Populus, f/k/a ACE Cash). The outlook remains stable. S&P also affirmed its 'B' issue rating on Populus's senior secured notes due 2022. The recovery rating on the notes remains '3', indicating the rating agency's expectation for a meaningful recovery (55%) in the event of a default. Populus announced a tender offer for its $315 million 12% senior secured notes due 2022. If the company redeems at least 50% of its notes, all restrictive covenants would be released. Moreover, if the company redeems 66 2/3% of its notes, then all of the collateral securing the existing senior notes would be released, such that any remaining 2022 notes would effectively become unsecured. The stable outlook on Populus reflects S&P's expectation that the company will integrate its Amscot acquisition and continue to transition its loan products toward more installment lending, without significant adverse effects on its operating profitability. S&P expects that leverage will remain under 3.0x and EBITDA interest coverage above 3.0x over the next 12 months. The rating agency's outlook also incorporates a delayed implementation of the Consumer Financial Protection Bureau payday lending rules and the withdrawal of the ability-to-pay underwriting requirements included in the original rule. "We could lower the rating over the next 12 months if operational issues cause an unexpected decline in profitability, and if we expect debt to adjusted EBTIDA will remain above 3.5x or interest coverage below 2.5x. In addition, we could lower the rating if JLL Partners, the company's financial sponsor, employs a more aggressive financial strategy," S&P said, adding that it could also lower the ratings if new, unanticipated regulations pose challenges to Populus's business model within its markets of operation. An upgrade is unlikely over the next 12 months, according to the rating agency. PROMISE HEALTHCARE: Remaining Assets Sale to Strategic Consummated ------------------------------------------------------------------ Promise Healthcare Group, LLC, and affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a notice of their consummation of the sale of remaining assets to Strategic Global Management, Inc. or its designated affiliates. On Jan. 1, 2019, Promise Healthcare Group, LLC and its affiliated debtors and DIP filed the Debtors' Motion for Orders (I)(A) Approving Bidding Procedures and Bid Protections Respecting the Remaining Assets, (B) Permitting Debtors to Designate Stalking Horse Purchaser(s) and Grant Bid Protections, (C) Scheduling a Hearing to Consider Approval of the Sale of Assets, (D) Approving Form and Manner of Notice of Sale, and (E) Granting Related Relief; and (II)(A) Authorizing and Approving the Sale of Substantially All Assets of Certain of the Debtors Free and Clear of Liens, Claims, Interests, and Encumbrances, (B) Authorizing the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, and (C) Granting Related Relief. On Jan. 2, 2019, the Debtors filed the Notice of Filing of Exhibits to the Debtors' Remaining Asset Sale Motion. The Court granted the Debtors' Remaining Asset Sale Motion on Feb. 1, 2019. On March 1, 2019, the Court entered the Sale Order, authorizing and approving, among other things, the sale of the Remaining Assets to the Purchasers. The Amendment 1 to the Asset Purchase Agreement is attached to the Notice as Exhibit 1. Effective as of 12:01 a.m. on June 15, 2019, the Debtors and the Purchasers consummated the closing of the Sale in accordance with the terms of the Asset Purchase Agreement, as amended. The copies of the documents filed in these Chapter 11 Cases, including all public documents related to the Sale, may be obtained free of charge at https://cases.primeclerk.com/promisehealthcaregroup.com. A copy of the Exhibit 1 attached to the Notice is available for free at: http://bankrupt.com/misc/Promise_Healthcare_1195_Sales.pdf About Promise Healthcare Established in 2003, Promise Healthcare is a specialty post-acute care health company headquartered in Boca Raton, Florida. Promise Healthcare Group, LLC and its affiliates sought bankruptcy protection on Nov. 4, 2018 (Bankr. D. Del. Lead Case No. 18-12491). In the petition signed by Andrew Hinkelman, chief restructuring officer, the Debtors estimated assets of $0 to $50,000 and liabilities of $50 million to $100 million. The Debtors tapped DLA Piper LLP and Waller Lansden Dortch & Davis, LLP, as general counsel; FTI Consulting, as financial and restructuring advisor; Houlihan Lokey and MTS Health Partners, L.P., as investment bankers; and Prime Clerk LLC as claims agent. QI WU: $755K Sale of Chino Hills Property to Zhu Approved --------------------------------------------------------- Judge Scott H. Yun of the U.S. Bankruptcy Court for the Central District of California authorized Qi Wu's sale of the 100% fee simple interest in the real property located at 14854 Avenida Anita, Chino Hills, California to Jing Zhu for $755,000. A hearing on the Motion was held on July 18, 2019 at 1:30 p.m. The sale of the Subject Property is made "as-is where-is." without warranties of any kind, express or implied. Through escrow on the sale of the Subject Property, the Debtor is authorized to pay from the sales proceeds the following: (a) all real property taxes due and owing to the County of San Bernardino regarding the Subject Property, (b) the lien of East West Bank in full satisfaction of its first Trust Deed, (c) compensation for real estate services to the Estate's real estate broker and the Buyer's real estate broker in the amount of $37,750, which will be split between the Estate's broker (Tittle Realty) and the Buyer's real estate broker (Remax 2000 Realty), (d) all title and escrow fees and costs, (e) the allowed administrative claim for attorneys' fees and costs to the law firm of LO & LO LLP, (f) the priority unsecured claim of the IRS in the amount of $669, and (g) an agreed reduced homestead exemption to the Debtor in the amount of $80,000. After these payments, the balance of the net sales proceeds will be released by escrow to the LO & LO LLP Trust Account for the payment of any remaining outstanding quarterly fees owed to the Office of the U.S. Trustee, any additional administrative claims allowed by the court, and then the balance disbursed pro rata to general unsecured claimants. The sale of the Subject Property will be free and clear of all liens and encumbrances. The Debtor will file a full accounting with the court detailing the status, receipt, and disbursement of all proceeds from the sale no later than 45 days from the date of the close of escrow. The 14-day stay under Federal Rule of Bankruptcy Procedure 6004(h) is waived. Qi Wu sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 18-100069) on Jan. 5, 2018. The Debtor tapped Michael Y. Lo, Esq., at Lo & Lo LLP as counsel. RAMBUS INC: Egan-Jones Lowers Senior Unsec. Ratings to B+ --------------------------------------------------------- Egan-Jones Ratings Company, on July 15, 2019, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Rambus Incorporated to B+ from BB-. Rambus Incorporated, founded in 1990, is an American technology company that designs, develops and licenses chip interface technologies and architectures that are used in digital electronics products. RIOT BLOCKCHAIN: Establishes an Advisory Board ---------------------------------------------- Riot Blockchain, Inc., has formed an advisory board comprised of well-respected thought leaders in the bitcoin and blockchain space. The Advisory Board will provide advisory services to the Company as it continues to operate and expand in the bitcoin and blockchain space. The Riot Advisory Board is comprised of well-recognized creative leaders with a wealth of operational and strategic experience from across the blockchain space including: bitcoin software development, node projects, bitcoin education, start-up advisory, and venture capital/angel investing. The Advisory Board has been established to assist the Company in its strategic mission and enhance shareholder value through the advisors' industry-leading insights and vast network of innovators and pacesetters. Profiles of the Advisory Board's members include: Pierre Rochard Pierre has been involved with bitcoin as a researcher, investor, and software developer since February 2013. He co-founded the Satoshi Nakamoto Institute to curate the best primary source literature on bitcoin and cryptography. In addition to developing bitcoin software, Pierre is an outspoken advocate for bitcoin's decentralized governance. In 2017 he began co-hosting the Noded Bitcoin Podcast. His successful open source software projects include BitcoinACKs.com and the Node Launcher. In 2019 he founded Lightning Power Users, which operates one of the largest Lightning Network routing nodes. Yan Pritzker Yan is the former co-founding CTO of Reverb.com, a music instrument marketplace that he helped grow to half a billion dollars in annual sales volume. He currently focuses on bitcoin education and software development and has authored the book "Inventing Bitcoin". Yan is a software entrepreneur with 20 years of experience and is the founder of OnChain Ventures, specializing in bitcoin advisory and consulting CTO services. Cory Klippsten Cory provides investment and advising to top VC-backed tech companies. Currently he is an advisor to Blis, Inklocker, SportsMe, Tesloop, Heartbeat, and Adaptive Capital, and is the founder of GiveBitcoin.io. As an advisor he has supported more than $250M of fundraising since 2016, and as an angel has funded 20+ early stage start-ups. Previously, Klippsten worked for Google, McKinsey, Microsoft, and Morgan Stanley, and earned an MBA in Finance and Entrepreneurship from the University of Chicago. The Board of Directors and Management of Riot said they are very pleased that these well recognized individuals have agreed to serve on Riot's Advisory Board as the Company advances in its strategic and operational activities. Additional information on the Advisory Board can be found on Riot's web site on the Advisors page at https://www.riotblockchain.com/about/advisory-board. About Riot Blockchain Headquartered in , Castle Rock, Colorado, Riot Blockchain -- http://www.RiotBlockchain.com/-- is focused on building, operating, and supporting blockchain technologies. Its primary operations consist of cryptocurrency mining, targeted development of a cryptocurrency exchange, and the identification and support of innovations within the sector. Riot Blockchain reported a net loss of $60.21 million in 2018 following a net loss of $19.97 million in 2017. As of March 31, 2019, Riot Blockchain had $15.44 million in total assets, $24.21 million in total liabilities, and a total stockholders' deficit of $8.76 million. Marcum LLP, in New York, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 2, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has a significant working capital deficiency, has incurred significant losses, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. S2P ACQUISITION: S&P Assigns B- Corporate Credit Rating ------------------------------------------------------- S&P Global Ratings assigned a 'B-' corporate credit rating to S2P Acquisition Borrower Inc. (dba Jaggaer), a cloud-based business automation software provider for spend management and procurement. The outlook is stable. Cinven plans to acquire Jaggaer from Accel-KKR in a transaction partially funded by $590 million in first-lien credit facilities, consisting of an $80 million revolving credit facility, $510 million first-lien term loan, and $205 million in EUR-denominated second-lien notes. Meanwhile, S&P assigned a 'B-' issue-level rating and '3' recovery rating to the proposed first-lien credit facilities. At the same time, the rating agency lowered the corporate credit rating on SciQuest Inc., the current borrower, to 'B-' from 'B'. The outlook is stable. S&P expects that the current debt of $385 million will be repaid at the transaction close. The rating on Jaggaer reflects the company's small scale and high leverage of about 10x at transaction close. Partially offsetting these factors are supportive industry fundamentals, a good market position within spend management software, the recent integration of BravoSolution, high recurring revenue stream, and low customer concentration. S&P expects leverage will remain above 8x for the next 12 to 18 months. The stable outlook on Jaggaer reflects S&P's expectation that favorable industry conditions coupled with the company's new integrated product suite will enable revenue growth at the mid-single-digit percentage level while the company improves profitability through operating scale. Even though leverage will be high at transaction close, S&P expects that the company, following the complete integration of BravoSolution, will be able to gradually reduce debt leverage through revenue growth and margin improvements. "We could lower the rating if declines in IT software spending or operational disruptions cause the company's revenue or EBITDA to be materially lower, resulting in breakeven or negative FOCF and a weak liquidity position such that it limits the company's ability to service debt," S&P said. "Although unlikely in the next 12 months, we would consider an upgrade if the company can reduce leverage to 7x or lower on a sustained basis, which will likely be achieved through material growth coupled with improved profitability," S&P said. U.S. TELEPACIFIC: S&P Places 'B' ICR on CreditWatch Negative ------------------------------------------------------------ S&P Global Ratings revised its CreditWatch placement for the ratings on Los Angeles-based competitive telecommunications provider U.S. TelePacific Holdings Corp., including the 'B' issuer credit rating, to CreditWatch negative from CreditWatch positive. The CreditWatch negative placement came after the company's proposed transaction to be acquired by special-purpose acquisition company Pensare Acquisition Corp. did not proceed as planned. "The revised CreditWatch placement reflects the potential for a one-notch downgrade given the uncertainty regarding the sale of U.S. TelePacific Holdings Corp. (TelePacific) to another buyer as we believe that its existing private equity sponsors Clarity Partners and Investcorp are looking to exit the company. As a result, we believe that the company's credit measures could weaken under new ownership," S&P said. "TelePacific's adjusted debt to EBITDA is elevated in the high-6x area, which includes our 100% debt-like treatment of its $297 million of preferred stock. While the timing and realization of any transaction is still uncertain, we believe that leverage could rise above 7x, our current threshold for the rating, if the company is acquired by another financial sponsor," the rating agency said. The CreditWatch placement reflects the potential for a one-notch downgrade, depending on the likely buyer of the company and financial policy under new ownership if a transaction occurs. As part of S&P's review, it will also determine if the current rating thresholds are appropriate depending on its view of the company's business prospects over the next couple of years. UGI ENERGY: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has assigned a first-time long-term Issuer Default Rating of 'BB' to UGI Energy Services, LLC. Fitch has also assigned a 'BB+'/'RR1' rating to ES's proposed senior secured Term Loan B. The Term Loan B's 'RR1' and ES business characteristics drive a one-notch uplift to the debt rating from the IDR. The use of proceeds of the Term Loan B is the acquisition by ES of Columbia Midstream Group, LLC from TC Energy Corporation (TRP; A-/Stable). Fitch has reviewed preliminary documentation for the loan offering; the assigned ratings assume there will be no material variation from the draft previously provided. The Rating Outlook is Stable. Long-term counterparty risk chiefly supports the 'BB' IDR. ES benefits from long-term take-or-pay contracts with affiliate UGI Utilities, Inc. (UGIU; A-/Stable). The overall characterization of counter-party credit risk takes into account a portfolio of exposures to a variety of Appalachia basin-focused producers (and one electric power plant customer). These exposures cover triple-B, double-B, single-B, and non-rated-credit quality exposure (and the exposure under these contracts is generally of the Minimum Volume Commitment-type of contract). Other strengths of the credit are low leverage (expected to be slightly over 3.0x), and an integrated model for using company long-lived assets to support an energy marketing business. Concerns include integration risk related to the CMG assets, and asset positions that are exposed to the vagaries of the market (gas storage, electric power plants, and contract rights on third-party pipelines). Overarching all the strengths and concerns is the company's size. Fitch regards the size of a midstream company's EBITDA as an important credit indicator. KEY RATING DRIVERS Acquisition Adds Scale: The acquisition by ES from TRP of CMG will add scale. Fitch regards scale as an important factor in terms of credit quality. In addition to adding scale, the purchase adds tangible fixed assets that are useful to integrate into an energy marketing platform. Accessing Production from the Utica Shale: When the transaction closes, the CMG acquisition will provide ES with meaningful current natural gas production from the Utica shale. ES heretofore has worked with producing companies that were mainly accessing the Marcellus shale. Both formations are regarded as some of the continent's best. From August 2016 to March 2019, Utica shale production grew by approximately 75%. For the national perspective, U.S. production grew by approximately 25% over the same period. Strong Affiliate UGIU Provides Highly Assured Revenue: UGIU is expected to provide approximately 20%-25% of the ES gross margin in 2020, based on Fitch's forecasts of UGIU and total gross margin. Most of the services provided by ES to UGIU, which are subject to regulatory review and approval, measured in dollars, are services that have been rendered for many years, including renewals at expirations. Almost all the gross margin expected from UGIU is under take-or-pay contract that expires at or after fiscal 2023. Given the past renewals (which have been subject to review by UGIU's regulator), Fitch expects these take-or-pay contracts will be renewed as they expire (though the price may rise or fall). In Fitch's view, the take-or-pay payments from UGIU create a strong foundation of cash flows for ES to, among other things, capture opportunities, or withstand sector pressures. Certain Units Depend on Execution and Market Confidence: Though Fitch views ES as having a strong foundation, a group of marketing businesses are of a type that have been known, over history, to occasionally cause severe shocks for other companies. ES retails natural gas and electricity to approximately 13,000 customers at 40,000 locations. The customers are commercial and industrial customers, which generally have more predictable load profiles than retail customers, a credit positive. To serve these customers, ES procures the two energy types, as well as contracts for delivery services. The energy purchases and sales are well-matched as to payment type (variable or fixed price, e.g.) and contract duration. The delivery service contracts are often longer than the retail contracts the delivery contracts are meant to partly serve. In addition to retail, the company wholesales a portion of those delivery service contracts. In addition to buying energy types, and delivery services, the company also obtains gross margin from ancillary services regarding storage and field services. The suite of businesses requires tight execution and monitoring by supervising risk management personnel. In the event that execution falls short of past standards, these business franchises can be vulnerable to a loss of market confidence, such as loss of customers, or collateral calls. In the absence of problems, the suite of businesses is complementary, and provides ES with a competitive advantage. UGI Corporation Facilitating Low Leverage: ES's inaugural Term Loan B will benefit from relatively low leverage, in the context of regional midstream companies. ES's parent UGI Corporation (NR) will provide a significant amount of the purchase price of CMG. Leverage in fiscal year ended Sept. 30, 2020, is expected by Fitch to be slightly over 3.0x. Under Fitch's Parent Subsidiary Linkage, UGI Corporation and ES are judged to be in a "Strong Parent/Weak Subsidiary" relationship. Due to the absence of comprehensively strong linkages on the relevant criteria parameters, ES is rated on a standalone rating approach. DERIVATION SUMMARY A company's scale is an important indicator of credit quality. For Fitch in the Midstream section, $500 million of EBITDA is a frequently-used boundary line between IDRs of 'BBB-' and 'BB+'. In certain cases, a midstream company will achieve 'BBB-' or better with less than $500 million EBITDA. Such cases feature regulated or contractual cash flows, which both on a historical basis and long-term future basis give Fitch an assurance of low variability of EBITDA. Colonial Pipeline Company (NR) is an example of a company with a durable utility-type franchise. IFM Colonial Pipeline 2 LLC (BB+/Stable) owns 15.8% of Colonial Pipeline Company. IFM Colonial is smaller than ES, but the stability of its source of cash flow garners it a higher rating. NGL Energy Partners LP (B/Stable) is a diversified company, and some of the units engage in marketing and logistics activities. The company is not as integrated as ES between the pipelines, on the one side, and the marketing and logistics activities on the other side. Fitch expects NGL Energy Partners LP to post EBITDA leverage in the year ending March 31, 2020 to be in the mid-to-high 5x range. Fitch expects UGI to post year ending Sept. 30, 2020 leverage slightly over 3.0x. NGL Energy Partners LP does not have any sizeable supportive customer relationship that compares to ES's relationship with UGIU. This relationship provides a strong foundation, including support for prospects for high liquidity. By contrast, NGL Energy Partners LP has occasionally managed its liquidity aggressively. Due to significantly lower leverage and a highly supportive customer relationship, ES is rated three notches higher than NGL Energy Partners LP. Blue Racer Midstream (BB-/Stable) is comparable to ES on the basis of a similar geographical position in the Appalachia basin, as well as having gathering and processing assets. However, ES possesses greater business line diversity than Blue Racer in the form of ES having marketing, storage, and power generation assets. Closing leverage upon completion of ES's transaction will also be approximately 1.5 turns lower than Blue Racer's expected 2019 EBITDA leverage, which accounts partially for Fitch's higher IDR for ES in comparison to Blue Racer. Finally, Blue Racer's weaker counterparty exposures and construction risk are further differences that inform ES's stronger credit profile. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Fitch price deck for natural gas (e.g., CY21 natural gas prices at Henry Hub of $2.75/MMBtu). -- Contract counter-parties with minimum volume commitments or take-or-pay commitments perform under their obligations. -- ES's rights under interstate pipeline transportation and storage contracts (Capacity Management) do not rebound in value to the level achieved in fiscal 2017-2018. RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action -- Posting EBITDA above $400 million per annum, as well as the sanctioning of growth plans that Fitch expects will lead to above $500 million per annum. Developments that May, Individually or Collectively, Lead to Negative Rating Action -- A decline in the credit quality of UGI Utilities, Inc.; or a move downward in credit quality that is sector-wide for an array of non-affiliated shippers that provide long-term minimum volume commitments (or take-or-pay commitments). -- Total debt to adjusted EBITDA expected to be sustained above 4.5x. -- The energy marketing portion of ES experiences a loss of profitability stemming from failure to adhere to risk management policies. -- Growth in gathering and processing that increases business risk, for example the company begins taking title to commodities (see as percentage of proceeds natural gas processing); or there is a significant increase in the amount of contracts that do not have some type of revenue assurance feature (e.g., contracts that lack acreage dedication and/or minimum volume commitments). LIQUIDITY Liquidity Adequate: ES is considered to have adequate liquidity. As of March 31, 2019, the company had approximately $55 million in cash on hand and nothing outstanding (nor any letters of credit issued) on its $240 million revolving credit facility (RCF), which matures in March 2021. In addition to their RCF, the company also has an Accounts Receivable (A/R) securitization facility under which there was nothing outstanding as of March 31, 2019. Pro forma for the transaction, the company has publicly stated that it intends to lower the RCF from $240 million to $200 million, while maintaining the size of the $150 million A/R securitization facility. At closing of the Term Loan B, the RCF will be pari passu to the Term Loan B. FULL LIST OF RATING ACTIONS Fitch has assigned the following ratings: UGI Energy Services, LLC -- Long-term Issuer Default Rating (IDR) 'BB'; -- Senior secured Term Loan B rating 'BB+'/'RR1'. The Rating Outlook is Stable. UGI ENERGY: Moody's Assigns Ba3 CFR, Outlook Stable --------------------------------------------------- Moody's Investors Service assigned first time ratings to UGI Energy Services, LLC, including a Ba3 Corporate Family Rating, a Ba3-PD Probability of Default Rating and a Ba3 rating to the company's proposed senior secured term loan B due 2026. The rating outlook is stable. Proceeds from the proposed term loan will be used to partially fund UGIES' $1.275 billion acquisition of Columbia Midstream Group, LLC from TC Energy Corporation (Baa2 stable). Assignments: Issuer: UGI Energy Services, LLC Corporate Family Rating, Assigned Ba3 Probability of Default Rating, Assigned Ba3-PD Senior Secured Term Loan B, Assigned Ba3 (LGD3) Outlook is stable RATINGS RATIONALE UGIES' Ba3 CFR reflects the consistent cash flow generation derived from long-term contracts with take-or-pay or minimum volume commitments related to its Appalachian natural gas gathering, processing and transportation business, moderate debt leverage and the support of its parent, UGI Corporation (UGI, unrated). UGI will contribute about $600 million to UGIES to help fund the CMG purchase and UGI Utilities, Inc. (A2 stable) is a long-term contractual offtaker of several UGIES' assets, particularly the LNG/peak shaving business. UGI's equity contribution to UGIES will be funded by borrowing at UGI; while Moody's don't directly attribute this borrowing to UGIES, service of this debt could cause UGIES' distribution policy to become more aggressive over time. The acquisition of CMG expands UGIES' operational footprint, adds significant throughput capacity and provides additional operational scale. UGIES also has considerable diversification for a company its size, although correlation among assets is loose. The rating is constrained by the execution risk and spending tied to projects UGIES will undertake over the next several years that, in aggregate, are substantially larger than those it has tackled previously. The cash flow volatility associated with UGIES' capacity management business and, to a lesser extent, power generation is an additional constraint. The rating is also limited by UGIES' size and scale, which Moody's views as being in the single-B category. The proposed term loan is rated Ba3, the same as UGIES' Ba3 CFR. The term loan and the company's $200 million revolving credit facility share a collateral pool and are secured by substantially all assets, except accounts receivable backing the receivables facility. The term loan and the revolver rank pari passu in the capital structure. The term loan receives no rating uplift from the CFR because UGIES has no unsecured debt. Moody's expects UGIES to have adequate liquidity through September 30, 2020 -- the company's fiscal year end. UGIES is expected to be able to fund maintenance and significant growth capital spending, distributions and the modest amount of required term loan amortization with cash flow from operations through the period. Distribution coverage will be strong through FY 2020, and distributions are expected to moderate during periods of high capital spending. The company has a $240 million secured revolving credit facility that it is seeking an amendment that, among other things, will reduce the facility size to $200 million. UGIES also has an accounts receivable facility with seasonally varying availability between $75 million and $150 million. Both facilities were undrawn at March 31, 2019. The revolving credit agreement has two financial covenants -- a minimum interest coverage ratio of 3.5x and a maximum total leverage ratio of 3.5x. The proposed amendment also includes a temporary expansion of the leverage covenant to 4.0x immediately following acquisitions in which the amount of acquired assets is greater than $250 million. Moody's expects UGIES to remain in compliance with both covenants. The accounts receivable facility and the revolver expire in October 2019 and March 2021, respectively. The near term maturity of the revolver tempers the assessment of the company's liquidity. The company has limited alternate liquidity given almost all of its assets are encumbered. UGIES' stable outlook reflects the consistent cash flow its contracted pipeline and gathering operations are expected to generate as spending ramps up for a series of ambitious expansion projects. A ratings upgrade will likely depend on substantial completion of the PennEast pipeline, the Pennant Hickory Bend extension and the Big Pine Western expansion. Moody's could consider an upgrade if the company can achieve annual EBITDA of about $400 million while maintaining a debt to EBITDA ratio below 3.5x and a distribution coverage ratio (FFO -- Maintenance capex / Distributions) above 1.1x. The CFR could be downgraded if leverage approaches 4.5x or the distribution coverage falls below 1x. King of Prussia, PA-based UGI Energy Services, LLC is a midstream natural gas company and wholly-owned subsidiary of UGI Corporation. Pro forma its acquisition of Columbia Midstream Group, LLC, UGIES has gas gathering, processing, transportation and storage assets in the Marcellus and Utica shales of Pennsylvania, West Virginia and Ohio. UGIES' legacy operations also include a portfolio of 300 MW of power generation assets in western and northeastern Pennsylvania, commodity marketing, and peak shaving services, primarily LNG and propane-air mixtures to gas utilities. VT TOPCO: S&P Affirms 'B' ICR on Incremental Debt Raise ------------------------------------------------------- S&P Global Ratings affirmed all its ratings on Livingston, NJ - litigation support solutions provider, VT TopCo Inc. (Veritext), including its 'B' issuer and first-lien issue-level rating. Veritext intends to increase its senior secured revolving credit facility commitments by $15 million to $55 million, and borrow $50 million of incremental secured debt which is fungible with its existing first-lien term loan due 2025. The proceeds will be used to repay $33 million outstanding on its revolver and for general corporate purposes. The affirmation reflects S&P's expectation that higher earnings supported by its debt financed acquisition growth strategy will offset modestly higher debt balances. Veritext plans to use the proceeds from the proposed incremental debt financing to pay down the $33 million outstanding on the revolver, which was used to complete a series of acquisitions in second-quarter 2019. In March 2019, Veritext used proceeds from an incremental $50 million raise to finance acquisitions. S&P expects adjusted debt to EBITDA to decline to the low-7x area at year-end 2019 compared to 7.3x as of Dec. 31, 2018, and the company to generate about $8-$12 million of free operating cash flow (FOCF) in 2019. The stable outlook reflects S&P's expectation that Veritext will successfully integrate several recent acquisitions and maintain EBITDA margins in the high-teens to low-20% area. The rating agency forecasts that revenue growth and good operating level will support leverage reduction to the mid- to low-6x area by year-end of 2020. "We could lower the rating over the next 12 months if the company pursues a more aggressive debt-financed acquisition growth strategy or debt-financed dividend that results in pro-forma leverage remaining above 7x. Alternatively, we could lower the rating if unforeseen operational difficulties hurt credit measures or free operating cash flow (FOCF) to debt is sustained in the low-single digit area. We estimate this could occur if there is a decline in the service quality affecting the brand, an inability to retain court reporters or the advancement in technological solutions that results in margin compression or customer attrition. "Although unlikely over the next 12 months, we could consider raising the rating if Veritext sustains adjusted leverage below 5x and FOCF to debt in the high-single-digit to low double-digit area, coupled with a commitment from the financial sponsors to maintain leverage below that threshold. In this scenario, we would expect Veritext to demonstrate good operating performance, grow and diversify its revenue mix, or increase its profit margins." WESTERN ENERGY: S&P Withdraws 'B' Long-Term Issuer Credit Rating ---------------------------------------------------------------- S&P Global Ratings on July 23 withdrew its 'B' long-term issuer credit rating (ICR) on Western Energy Services Corp. at the issuer's request. At the time of the withdrawal, the outlook was negative. WINDSTREAM HOLDINGS: Taps Altman Vilandrie as Telecom Consultant ---------------------------------------------------------------- Windstream Holdings, Inc. and its debtor affiliates, seek approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Altman Vilandrie & Company as telecom services consultants. Windstream requires AV&Co to: a. prioritize areas for network investment across the entire footprint at the census block level based on financial return targets; b. create a dynamic financial forecast and planning model that will calculate the financial impact of staged network upgrades; c. synthesize findings and implications into a comprehensive network upgrade strategy. AV&Co. will receive a fee of $83,000 per week for a team of three dedicated consultants, oversight from three senior consultants, and intermittent specialist time. It is estimated that the engagement will take 8 to 9 weeks. In addition, the Debtors are obligated to pay an additional charge of $108,000 for the AV&Co.'s proprietary Automated Route Optimizer technology. Rory Altman, Director of the firm of Altman Vilandrie & Company, attests that AV&Co. is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. The firm can be reached at: Rory Altman Altman Vilandrie & Company 101 Federal Street, 28th Floor Boston, MA 02110 Phone: 617-753-7200 About Windstream Holdings Windstream Holdings, Inc. and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP as its financial advisor, and Perella Weinberg Partners LP as investment banker. WINDSTREAM HOLDINGS: Taps SolomonEdwards as Accounting Consultant ----------------------------------------------------------------- Windstream Holdings, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire SolomonEdwardsGroup, LLC as bankruptcy accounting consultant effective nunc pro tunc to June 1, 2019. Windstream requires SolomonEdwards to: a. eliminate backlog in pre/post-petition payables cutoff review; b. set up process for claims reconciliation and estimation; c. provide ongoing management of updates to claims population; d. assist with identification and estimation of Liabilities Subject to Compromise; e. prepare payables process review and suggestions based on knowledge and experience; f. provide claim reconciliation processes and resources in support of reconciliation to Debtors' books and records; g. provide ad-hoc assistance on bankruptcy accounting matters at the request of the Debtors; and h. provide bankruptcy accounting and emergence support at the request of the Debtors. SolomonEdwards hourly rates are: Partner $300 - $350 Principal $225 - $300 Director $200 - $250 Senior Manager $175 - $225 Manager $150 - $185 Senior Consultant $125 - $150 Consultant $75 - $125 Analyst $50 - $75 Clerical Staff $30 - $50 SolomonEdwards received $15,000 as retainer. Margaret Stribling, partner of the firm of SolomonEdwardsGroup, LLC, attests that SolomonEdwards is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. The firm can be reached through: Margaret Stribling, Esq. SolomonEdwardsGroup, LLC 1255 Drummers Lane, Suite 200 Wayne, PA 19087 Phone: 610-902-440 About Windstream Holdings Windstream Holdings, Inc. and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP as its financial advisor, and Perella Weinberg Partners LP as investment banker. WP CITYMD: S&P Affirms 'B-' ICR on Summit Medical Merger -------------------------------------------------------- S&P Global Ratings affirmed the 'B-' issuer credit rating on the combined entity WP CityMD Bidco LLC and revised the outlook to positive from stable. At the same time, S&P assigned its 'B-' issue-level rating and '3' recovery rating (50%-70%; rounded estimate: 55%) to the company's senior secured revolving credit facility (RCF) and first-lien term loan. On July 23, 2019, New York-based WP CityMD Bidco LLC announced plans to merge with New Jersey-based Summit Medical Group (SMG). The deal will be financed with a combination of secured first-lien debt of $900 million, about $1.6 billion of rollover of physicians and management equity from CityMD, SMG, and financial sponsors, and $262 million of new sponsor equity. Once the transaction is completed, the combined entity will operate in the New Jersey and New York area as a multispecialty and urgent care provider with a revenue base of about $1.2 billion and more than 1,300 providers. Although scale provides modest insulation against contrary factors including adverse reimbursement changes, the risks of operating in this narrow business is characterized by significant competition, low barriers of entry, and limited pricing flexibility. S&P expects that once the entities are integrated, the company will seek growth opportunities within its existing markets as well as expansion into contiguous new markets. SMG's EBITDA margins are lower than CityMD's on a stand-alone basis due to high provider compensation expense, which is about 35% of SMG sales and about 30% for the combined group. S&P estimates adjusted EBITDA margin will remain in the 12% area, near that of industry peers such as DMG Practice Management Solutions LLC. WP CityMD operates in New York as an urgent care provider while SMG provides primary care, multispecialty, and ancillary services (primary care, medicine, infusion, oncology, surgery, radiology, labs, and others) in the New Jersey portion of the New York metropolitan area. S&P said, "We believe there is limited market overlap but there is an opportunity for greater business synergies. The combined entity will focus on expansion in its existing markets. Although synergies will be limited, we believe the combination will modestly benefit from new referral relationships. Moreover, we expect the financial sponsors to prioritize growth and shareholder returns such that the company will remain highly leveraged for the next several years." S&P said, "With 2020 as the first full year following merger completion, we expect adjusted leverage of about 7.5x, remaining above 6.5x for at least two years. We expect WP CityMD to focus on expansion through physician additions and opening of new centers. We project a funds from operations (FFO)-to-debt ratio of less than 8% while free cash flow in 2020 and 2021 will be slim at $10 million-$20 million, with free operating cash flow (FOCF) to debt below 3%. The company will invest heavily in capital expenditures (capex) and to fund working capital needs during expansion. "The positive outlook on the combined entity reflects our uncertainty that despite our better view of post-merger business risk, it will generate free cash flow commensurate with a 'B' rating. "We could revise our outlook on WP CityMD to stable if it does not exceed our base-case scenario for about 2% FOCF to debt. Factors that may prevent better cash flow include higher-than-expected growth spending or higher working capital requirements to support aggressive growth initiatives. Under this scenario, we expect leverage to remain above 7x. "We could raise the rating if WP CityMD approaches FOCF to debt of about 3%. To do so, the company would have to exceed our base-case margin assumption of 12% by an estimated 150-200 basis points (bps) or through some combination of lower capex or working capital needs. Under the first scenario of higher margins, we project that leverage would fall below 7x." WYOCOMPOSITES LLC: Seeks to Hire Knight Law as Counsel ------------------------------------------------------ WyoComposites, LLC seeks authority from the U.S. Bankruptcy Court for the District of Wyoming (Cheyenne) to hire Paul K. Knight to serve as counsel for the estate. Mr. Knight will assist the Debtor in in filing the case and obtain confirmation of a Chapter 11 plan. Mr. Knight will charge $250 per hour for his services. Mr. Knight has received a retainer fee of $6717.00. Mr. Knight has no connection with the debtor, the creditors, or any other party in interest, their respective attorneys, accountants, the United States Trustee, or any person employed by the United States Trustee, as stated in the court filing. Mr. Knight can be reached at: Paul K. Knight Knight Law Offices LLC P.O. Box 12138 Jackson, WY 83002 Phone: 307-256-8678 Fax : 307-733-1058 Email: paulknightattorney@gmail.com About WyoComposites, LLC Based in Cheyenne, Wyoming, WyoComposites, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No. 19-20446) on July 12, 2019, listing under $1 million in both assets and liabilities. Paul K. Knight at Knight Law Offices LLC represents the Debtor as counsel. XENETIC BIOSCIENCES: Altium Growth Owns 9.8% Stake as of July 17 ---------------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Altium Capital Management, LP, Altium Growth Fund, LP, and Altium Growth GP, LLC disclosed that as of July 17, 2019, they beneficially own 260,000 shares of common stock and 260,000 shares of common stock issuable upon exercise of warrants of Xenetic Biosciences, Inc., which represents 9.8 percent of the shares outstanding. The percentage is based on 2,652,227 shares of Common Stock issued and outstanding as of July 17, 2019, as represented in the Company's Current Form 424B5 filed with the SEC on July 19, 2019, and does not assume the exercise of the Company's reported warrants and, subject to blockers. Pursuant to the terms of the Reported Warrants, the Reporting Persons cannot exercise the Reported Warrants to the extent the Reporting Persons would beneficially own, after any such exercise, more than 4.99% of the outstanding shares of Common Stock. Altium Growth Fund, LP is the record and direct beneficial owner of the securities covered by this statement. Altium Capital Management, LP is the investment adviser of, and may be deemed to beneficially own securities, owned by, Altium Growth Fund, LP. Altium Growth GP, LLC is the general partner of, and may be deemed to beneficially own securities owned by, Altium Growth Fund, LP. A full-text copy of the regulatory filing is available for free at: https://is.gd/31DUHR About Xenetic Biosciences Lexington, Massachusetts-based Xenetic Biosciences, Inc., is a clinical-stage biopharmaceutical company focused on the discovery, research and development of next-generation biologic drugs and novel orphan oncology therapeutics. The Company recently announced its acquisition of the XCART platform, a novel CAR T technology engineered to target personalized, patient-specific tumor neoantigens. The Company plans to initially apply the XCART technology to develop cell-based therapeutics for the treatment of B-cell lymphomas. Xenetic Biosciences reported a net loss of $7.30 million for the year ended Dec. 31, 2018, compared to a net loss of $3.59 million for the year ended Dec. 31, 2017. As of March 31, 2019, Xenetic Biosciences had $16.45 million in total assets, $4.93 million in total liabilities, and $11.51 million in total stockholders' equity. Marcum LLP, in Boston, Massachusetts, the Company's auditor since 2015, issued a "going concern" qualification in its report dated March 29, 2019 on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has had recurring net losses and continues to experience negative cash flows from operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. YRC WORLDWIDE: Moody's Raises CFR to B2, Outlook Stable ------------------------------------------------------- Moody's Investors Service upgraded the ratings of truck carrier YRC Worldwide Inc., including the Corporate Family Rating to B2 from B3, the Probability of Default Rating to B2-PD from B3-PD and the Senior Secured rating to Ba2 from Ba3. The Speculative Grade Liquidity rating is affirmed at SGL-3. The outlook is stable. RATINGS RATIONALE The ratings reflect the prospects for meaningful cost savings because of greater operational flexibility under YRC's new five-year labor agreement with the International Brotherhood of Teamsters. Moody's anticipates that YRC will achieve additional cost savings from a network optimization strategy that aims to increase density in its terminal network through cohabitation or consolidation of facilities. Combined with YRC's ongoing focus on pricing and the benefits from last year's step up in fleet investments, Moody's expects that YRC will sustainably improve its financial performance by 2020, with (adjusted) operating margins of at least 4.5%, debt/EBITDA declining towards 5 times and cash flows from operations that are sufficient to fund capital expenditures of nearly 6% of revenues, calculated on an adjusted basis. Nonetheless, the cost of higher wages and other benefits in the labor agreement are considerable and will weigh on the company's earnings and cash flows in 2019, before YRC is able to fully realize the benefits of greater operational flexibility. YRC intends to offset the incremental labor costs through freight rate increases. However, the execution of its pricing strategy could become more challenging as economic growth slows down and more trucking capacity becomes available in the market. Liquidity is adequate (SGL-3). YRC maintains a moderate amount of cash that at times has been as low as about $90 million. Furthermore, availability under the $450 million ABL revolving credit facility is less than $50 million because the facility is substantially used for approximately $340 million of letters of credit that support YRC's self-insurance programs. Still, cash flows from operations will be around $175 million in 2020, in Moody's estimates, allowing the company to reinvest meaningfully in its operations. The Ba2 senior secured rating reflects the relative priority of the secured debt claim and the high proportion of unsecured liabilities in YRC's debt structure, which includes a large estimated liability for multi-employer pension plans, using Moody's methodology for calculating such liability. The ratings could be upgraded if YRC is able to improve its operating margins to levels that enable the company to generate consistently positive free cash flow, while undertaking a capital spending program that will meaningfully reduce YRC's fleet age. Debt/EBITDA at the low 4 times level and considerably greater availability of committed credit facilities would also be important considerations for a higher rating. The ratings could be downgraded if Moody's expects that YRC is unable to sustain operating margins of at least 4.5%, that YRC is unable to sustain leverage below 5.5 times or if (adjusted) capital expenditures do not remain in excess of 4% of revenues. The ratings could also be downgraded if there is a deterioration in liquidity, including because of recurring negative free cash flow and diminishing headroom under financial covenants. Upgrades: Issuer: YRC Worldwide Inc. Corporate Family Rating, Upgraded to B2 from B3 Probability of Default Rating, Upgraded to B2-PD from B3-PD Senior Secured Bank Credit Facility, Upgraded to Ba2 (LGD2) from Ba3 (LGD2) Affirmations: Issuer: YRC Worldwide Inc. Speculative Grade Liquidity Rating, Affirmed SGL-3 Outlook Actions: Issuer: YRC Worldwide Inc. Outlook, Changed To Stable From Positive The principal methodology used in these ratings was Surface Transportation and Logistics published in May 2019. YRC Worldwide Inc. is a provider of over-the-road transportation services and has one of the largest less-than-truckload ("LTL") transportation networks in North America. The company operates through two business segments: YRC Freight, which focuses on longer-haul LTL shipments with a fleet comprising approximately 7,600 owned and leased tractors, and YRC Regional, which focuses on more regional, next-day and time-sensitive services, with a fleet of approximately 6,500 owned and leased tractors. Revenues in the last 12 months ended March 31, 2019 were $5.1 billion. ZEP INC: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR ----------------------------------------------------------- S&P Global Ratings affirmed the 'CCC+' issuer credit rating and revised the outlook to negative on Atlanta, Ga.-based Zep Inc. Zep's credit metrics weakened from S&P's previous expectations and are dependent on a favorable business environment to improve. The company's EBITDA margins have weakened over the past several quarters, mainly due to changes in customer mix and commodity cost inflation, which the company has only been able to partially offset with price increases. S&P believes there is now less cushion for any large shocks. Despite these challenges in fiscal 2019 (year ending Aug. 31), its base case envisages positive free cash flow in fiscal 2020, as the company should benefit from its cost saving initiatives. The negative outlook reflects the challenge that management faces in achieving stated initiatives to grow revenue and EBITDA, generate positive free cash flow on a sustained basis, and meet future obligations. S&P expects the company to continue to hire additional sales headcount in an effort to grow revenue and improve profits, though there is execution risk in achieving these goals in a timely manner. The rating on Zep takes into account the company's persistently high leverage and strained cash flow generation. "We could lower the rating if free operating cash flow becomes materially negative on an annual basis or if credit quality of liquidity weakens over the next 12 months. This could happen if sources over uses no longer exceeded 1.2x or if EBITDA interest coverage fell below 1x," S&P said. A constrained liquidity position would likely be caused by lower than expected demand for Zep's products, an inability to replenish its salesforce following a period of attrition, or continued commodity cost inflation, according to the rating agency. S&P said it could also lower the rating if it believed the company would pursue a transaction that the rating agency considered distressed. "We could raise the rating over the next 12 months if improved business or economic conditions lead to the company reducing leverage to a more sustainable level, such that debt to EBITDA remains below 8x. For such a scenario to occur, we would expect EBITDA margins to expand by at least 200 basis points (bps) and for revenue growth to also grow 2% beyond our base case, without any additional debt," S&P said. [^] BOND PRICING: For the Week from July 22 to 26, 2019 ------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- Acosta Inc ACOSTA 7.75 15.824 10/1/2022 Acosta Inc ACOSTA 7.75 15.948 10/1/2022 Approach Resources Inc AREX 7 16.961 6/15/2021 BNC Bancorp BNCN 5.5 91.978 10/1/2024 BPZ Resources Inc BPZR 6.5 3.017 3/1/2049 BPZ Resources Inc BPZR 6.5 3.017 3/1/2015 Bemis Co Inc AMCR 6.8 99.512 8/1/2019 Bon-Ton Department Stores Inc/The BONT 8 10.5 6/15/2021 Bristow Group Inc BRS 6.25 20.875 10/15/2022 Bristow Group Inc BRS 4.5 23 6/1/2023 Cenveo Corp CVO 8.5 1.346 9/15/2022 Cenveo Corp CVO 8.5 1.346 9/15/2022 Cenveo Corp CVO 6 0.894 5/15/2024 Chukchansi Economic Development Authority CHUKCH 9.75 60 5/30/2020 Chukchansi Economic Development Authority CHUKCH 10.25 60 5/30/2020 Cloud Peak Energy Resources LLC / Cloud Peak Energy Finance Corp CLD 12 15.25 11/1/2021 DFC Finance Corp DLLR 10.5 67.125 6/15/2020 DFC Finance Corp DLLR 10.5 67.125 6/15/2020 Devon Energy Corp DVN 4 103.51 7/15/2021 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 6.375 3.276 6/15/2023 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.75 1.283 9/1/2022 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 9.375 20.741 5/1/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8 20.27 2/15/2025 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 9.375 20.745 5/1/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.75 1.27 9/1/2022 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8 20.27 2/15/2025 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.75 1.27 9/1/2022 Energy Conversion Devices Inc ENER 3 7.875 6/15/2013 Energy Future Intermediate Holding Co LLC / EFIH Finance Inc TXU 9.75 38.125 10/15/2019 Federal Farm Credit Banks FFCB 1.18 99.728 8/1/2019 Federal Home Loan Banks FHLB 3.02 99.669 6/14/2027 Federal Home Loan Banks FHLB 1.39 99.889 7/30/2019 Ferrellgas Partners LP / Ferrellgas Partners Finance Corp FGP 8.625 74.415 6/15/2020 Ferrellgas Partners LP / Ferrellgas Partners Finance Corp FGP 8.625 74.619 6/15/2020 Fleetwood Enterprises Inc FLTW 14 3.557 12/15/2011 Foresight Energy LLC / Foresight Energy Finance Corp FELP 11.5 30.413 4/1/2023 Foresight Energy LLC / Foresight Energy Finance Corp FELP 11.5 29.07 4/1/2023 Frontier Communications Corp FTR 8.875 69.575 9/15/2020 Frontier Communications Corp FTR 8.5 78.25 4/15/2020 Grizzly Energy LLC VNR 9 6 2/15/2024 Grizzly Energy LLC VNR 9 6 2/15/2024 Halcon Resources Corp HKUS 6.75 20.509 2/15/2025 Halcon Resources Corp HKUS 6.75 11.5 2/15/2025 Halcon Resources Corp HKUS 6.75 20.694 2/15/2025 Halcon Resources Corp HKUS 6.75 20.75 2/15/2025 Halcon Resources Corp HKUS 6.75 20.75 2/15/2025 High Ridge Brands Co HIRIDG 8.875 10 3/15/2025 High Ridge Brands Co HIRIDG 8.875 10.25 3/15/2025 Homer City Generation LP HOMCTY 8.137 38.75 10/1/2019 Hornbeck Offshore Services Inc HOS 5.875 62.878 4/1/2020 Hornbeck Offshore Services Inc HOS 5 51.885 3/1/2021 Hornbeck Offshore Services Inc HOS 1.5 95.5 9/1/2019 Iconix Brand Group Inc ICON 5.75 31.25 8/15/2023 Legacy Reserves LP / Legacy Reserves Finance Corp LGCY 8 3.69 12/1/2020 Legacy Reserves LP / Legacy Reserves Finance Corp LGCY 6.625 6 12/1/2021 Legacy Reserves LP / Legacy Reserves Finance Corp LGCY 8 3.5 9/20/2023 Lehman Brothers Inc LEH 7.5 1.847 8/1/2026 MF Global Holdings Ltd MF 9 14.75 6/20/2038 MF Global Holdings Ltd MF 6.75 14.75 8/8/2016 MModal Inc MODL 10.75 6.125 8/15/2020 Mashantucket Western Pequot Tribe MASHTU 7.35 17.313 7/1/2026 Murray Energy Corp MURREN 11.25 32.274 4/15/2021 Murray Energy Corp MURREN 11.25 32.863 4/15/2021 Murray Energy Corp MURREN 9.5 27 12/5/2020 Murray Energy Corp MURREN 9.5 27 12/5/2020 New Gulf Resources LLC/ NGR Finance Corp NGREFN 12.25 3.963 5/15/2019 New WEI Inc WLTG 8.5 0.834 4/15/2021 Pernix Therapeutics Holdings Inc PTX 4.25 2.25 4/1/2021 Pernix Therapeutics Holdings Inc PTX 4.25 2.25 4/1/2021 Pioneer Energy Services Corp PES 6.125 41.304 3/15/2022 Powerwave Technologies Inc PWAV 3.875 0.152 10/1/2027 Powerwave Technologies Inc PWAV 3.875 0.152 10/1/2027 Powerwave Technologies Inc PWAV 1.875 0.152 11/15/2024 Powerwave Technologies Inc PWAV 1.875 0.152 11/15/2024 Renco Metals Inc RENCO 11.5 24.875 7/1/2003 Rolta LLC RLTAIN 10.75 8.349 5/16/2018 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.125 17.25 11/1/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 8 66 6/15/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.375 24 11/1/2021 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 8 67.706 6/15/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.125 10.336 11/1/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.375 9.74 11/1/2021 Sanchez Energy Corp SNEC 7.75 6.09 6/15/2021 Sanchez Energy Corp SNEC 6.125 6.484 1/15/2023 Sears Roebuck Acceptance Corp SHLD 7.5 3.068 10/15/2027 Sears Roebuck Acceptance Corp SHLD 7 3.067 6/1/2032 Sears Roebuck Acceptance Corp SHLD 6.5 3.038 12/1/2028 Sears Roebuck Acceptance Corp SHLD 6.75 3.035 1/15/2028 Sempra Texas Holdings Corp TXU 5.55 13.5 11/15/2014 Stearns Holdings LLC STELND 9.375 50 8/15/2020 Stearns Holdings LLC STELND 9.375 50 8/15/2020 TerraVia Holdings Inc TVIA 6 4.644 2/1/2018 Transworld Systems Inc TSIACQ 9.5 26 8/15/2021 Transworld Systems Inc TSIACQ 9.5 26 8/15/2021 UCI International LLC UCII 8.625 4.78 2/15/2019 US Bank NA/Cincinnati OH USB 2.20063 99.999 9/11/2048 Ultra Resources Inc UPL 7.125 9 4/15/2025 Ultra Resources Inc UPL 6.875 8.5 4/15/2022 Ultra Resources Inc UPL 6.875 9.975 4/15/2022 Ultra Resources Inc UPL 7.125 8.086 4/15/2025 Windstream Services LLC / Windstream Finance Corp WIN 7.5 29.5 6/1/2022 Windstream Services LLC / Windstream Finance Corp WIN 6.375 28.563 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 8.75 31.25 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 6.375 31.5 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 8.75 29.5 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 7.75 26.894 10/15/2020 Windstream Services LLC / Windstream Finance Corp WIN 7.75 26.449 10/1/2021 rue21 inc RUE 9 1.428 10/15/2021 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table 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 constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. 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. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN: 1520-9474. 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 subscription rate is $975 for 6 months 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 $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***