/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/190906.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, September 6, 2019, Vol. 23, No. 248 Headlines 0-TO-60 LOGISTICS: $1.5K Sale of GMC Savana to Eagle Okayed 152 BROADWAY: BEH Objects to Disclosure Statement 2021 DEVELOPMENT: Case Summary & 2 Unsecured Creditors 2745 WEST 16TH STREET: To Sell Property for $2.3MM to Fund Plan 305 EAST 61ST STREET: Unsecureds to Get Paid From Sale Proceeds 53 STANHOPE: Brooklyn Lender Objects to Disclosure Statement A.J. MCDONALD: To Sell Vehicle to Fund Plan Payments AJUBEO LLC: U.S. Trustee Unable to Appoint Committee AMERANT BANCORP: Fitch Ups LT IDR to BB+ & Alters Outlook to Stable AQ CARVER: Moody's Assigns B3 CFR, Outlook Stable ASPEN CLUB: U.S. Trustee Unable to Appoint Committee B & J PROPERTY: Class Suit Plaintiffs Object to Plan Disclosures BADAX LLC: Seeks to Hire Khang & Khang as Legal Counsel BANESCO USA: Fitch Affirms BB- LT IDR & Alters Outlook to Positive BLACKHAWK MINING: Gets Approval to Hire AP Services, Appoint CRO BLACKHAWK MINING: Taps Centerview Partners as Financial Advisor BLACKHAWK MINING: Taps Kirkland & Ellis as Legal Counsel BLUE DOLPHIN: Settlement of GEL Arbitration Takes Effect BORGER ENERGY: Moody's Hikes Sr. Sec. Rating to Ba3, Outlook Stable CAMBER ENERGY: Nearing Completion of Waste Gas Gathering Line CARLOS MIGUEL'S: U.S. Trustee Unable to Appoint Committee CAROLINA CARBONIC: Bankr. Administrator Unable to Appoint UCC CASCADE FAMILY: Oct. 9 Plan Confirmation Hearing CASTILLO I PARTNERSHIP: Oct. 23 Plan Confirmation Hearing CENTER CITY HEALTHCARE: U.S. Govt. Objects to $55MM Residency Sale CNX RESOURCES: Fitch Assigns BB LongTerm IDR, Outlook Stable COASTAL HOME: U.S. Trustee Unable to Appoint Committee CONCRETE INVESTMENTS: Hires Zalkin Revell as Legal Counsel CONTINENTAL CAST: Lender OKs Interim Use of Cash Collateral DOMINION GROUP: Case Summary & 20 Largest Unsecured Creditors DR. RICHARD R. ROLLE: Court Consents to Cash Use Until Sept. 10 EAT HERE BRANDS: Committee Taps Scroggins & Williamson as Counsel FANNIE MAE & FREDDIE MAC: Treasury Publishes GSE Reform Plan FLOYD SQUIRES: Liquidating Agent's $240K Eureka Property Sale OK'd FLOYD SQUIRES: Liquidating Agent's $250K Eureka Property Sale OK'd FORT BRAGG: Oct. 10 Plan Confirmation Hearing GEORGIA DIRECT: Carpet Co. Seeks Cash for Operating Expenses HALCON RESOURCES: Court Asked to Appoint Creditors' Committee HALCON RESOURCES: Seeks to Hire Weil Gotshal as Legal Counsel HARB PROPERTIES: $15K Sale of Lorain Property to Buckeye Approved HMC/CAH CONSOLIDATED: J. Shaffer Suit vs HAC Not Subject to Stay HOUTEX BUILDERS: Oct. 28 Plan Confirmation Hearing IMPORT SPECIALTIES: Seeks to Use Cash Collateral of Charter Bank INT'L. RESTAURANT: $29K Sale of Equipment to Inaali Approved JOSEPH BRENNICK: $70K Sale of Wauchula Property to Avanti Approved KAISER GYPSUM: Court Allows IPA to File Third-Party Complaint KAR AUCTIONS: Moody's Affirms B1 CFR, Outlook Stable KFC HOLDING: Moody's Hikes Sr. Unsecured Notes Rating to Ba3 LAJ CONSTRUCTION: Case Summary & 6 Unsecured Creditors LEADVILLE CORP: U.S. Trustee Unable to Appoint Committee MHI HOLDINGS: Moody's Assigns B2 CFR, Outlook Stable MILLERBERND SYSTEMS: Sale Scrap Metal to K&K Metal Approved MILLWASP REALTY: Taps MYC & Associates as Real Estate Broker MOHAJER12 CORP: Gets OK to Pay Insurance of Principal and His Kin MOHIN ENTERPRISES: 7-Eleven Franchisee Seeks Access to Cash MURPHY OIL: Moody's Rates New $500MM Unsecured Notes 'Ba2' NAVAHO TOUR: Seeks Approval to Use Cash Collateral NEW VENTURE 777: Court Authorizes Cash Use Thru Sept. 30 NORPAC FOODS: PBGC, Int'l. Paper Appointed as Committee Members PALM BEACH GOLF: Seeks Court Approval to Use Cash Collateral PETROSHARE CORP: Case Summary & 30 Largest Unsecured Creditors PETROSHARE CORP: In Chapter 11 to Seek Recapitalization or Sale PHYLLIS HANEY: $25K Sale of Beaver Property Dismissed w/o Prejudice POWER M.E.P.: Seeks to Hire Eric A. Liepins as Legal Counsel PRAIRIE ECI: Fitch Puts BB- LongTerm IDR on Rating Watch Negative PRINCE ORGANIZATION: Taps Tabani Realty as Real Estate Broker PRIORITY PAYMENT: Moody's Lowers CFR to B3, Outlook Stable PWR INVEST: Court OKs Cash Motion, Sets Final Hearing on Sept. 12 QUANTUM CORP: Reports $21.6M Loss for Quarter Ended Sept. 30, 2018 RADFORD QUARRIES: Taps Moon Wright as Bankruptcy Counsel REGDALIN PROPERTIES: Trustee's $747K Studio City Property Sale OK'd REVOLAR TECHNOLOGY: U.S. Trustee Unable to Appoint Committee RIVERWOOD GAS: Court Grants BLM Bid to Junk SAC w/o Leave to Amend SAM MCFADIN: Auction Sale of Conway Assets Approved SAND CASTLE: Court OK’s Request to End Timeshare Plan on Condo SEARS HOLDINGS: Sears Cuts 250 Employees at Hoffman Estates HQ SENIOR CARE: PM Management's Transfer of Assets to Comal Approved SENIOR CARE: PM Management's Transfer of Assets to Park Valley OK'd SENIOR CARE: Sept. 6 Hearing on Amended Disclosure Statement SERVICE PAINTING: Hires Taps Getzler Henrich as Financial Advisor SEVEN STARS: Asks Court to Use Wells Fargo Cash Collateral SHRI VITTHAL: Franchisee Seeks to Use Cash, Sustain Operations SMOKY MOUNTAIN: Hires Hedrick Gardner as Special Appellate Counsel SPN INVESTMENTS: Oct. 17 Disclosure Statement Hearing SRISIRI PHARMA: Hires Gold Lange & Majoros as Counsel STERNSCHNUPPE LLC: Lease Agreement with 3 Kids Approved SUPER QUALITY: Oct. 4 Plan Confirmation Hearing THRUSH AIRCRAFT: Case Summary & 20 Largest Unsecured Creditors TIMBERLINE FOUR: Agent Says Receivables Not "Cash Collateral" TRESHA-MOB LLC: Voltaire's Limited Objection to Sale Hearing Junked UBIOME INC: Blames Founders for FBI Probe, Chapter 11 UBIOME INC: Case Summary & 30 Largest Unsecured Creditors UBIOME INC: New Management Seeks Quick Sale in Chapter 11 VARTEK LLC: Asks Court to Permit Use of Seacoast Cash Collateral VERITY HEALTH: Ct. OK's Stipulation to Junk California AG's Appeal VILLA BELLINI: U.S. Trustee Unable to Appoint Committee VILLAS OF WINDMILL: Trustee Taps Rappaport Osborne as Counsel VILLAS OF WINDMILL: Trustee Taps Yip Associates as Accountant VISUAL HEALTH: U.S. Trustee Unable to Appoint Committee WEATHERFORD INT'L: Seeks to Hire Deloitte FAS as Accountant [*] Morgan Lewis Hires 3 Bankruptcy Partners [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ********* 0-TO-60 LOGISTICS: $1.5K Sale of GMC Savana to Eagle Okayed ----------------------------------------------------------- Judge Brett H. Ludwig of the U.S. Bankruptcy Court for the Eastern District of Wisconsin authorized 0-to-60 Logistics, LLC's sale of its 2011 GMC Savana 4500, Vehicle No. 4001 as identified in the Debtor's Schedule A/B, VIN 1GD374CA3B1904552, with approximately 207,002 miles on it, to Eagle Chevrolet Buick GMC for $1,500 plus satisfaction of the outstanding mechanic's lien in the amount of $4,658. The sale is free and clear of all liens and encumbrances. All liens and encumbrances will attach to the net proceeds of sale. There are no costs of sale. 0-to-60 Logistics, LLC sought Chapter 11 protection (Bankr. E.D. Wis. Case No. 19-22818) on April 2, 2019. Counsel for the Debtor: John W. Menn, Esq. STEINHILBER SWANSON LLP 107 Church Avenue Oshkosh, WI 54901 Telephone: (920) 426-0456 Facsimile: (920) 426-5530 152 BROADWAY: BEH Objects to Disclosure Statement ------------------------------------------------- Broadway Equity Holdings LLC objects to the proposed Disclosure Statement filed by 152 Broadway Haverstraw NY LLC and Blue Beverage Group Inc. in support of their proposed plan of reorganization. BEH points out that the Debtor's Disclosure Statement does not accurately reflect either possibility. BEH asserts that the proposed private sale does not comply with section 1129(b)(2)(A) under clause (i), because BEH is not retaining its lien on the Property, or under clause (ii), because BEH does not retain Section 363(k) credit-bid rights, or under clause (iii), because BEH is not being offered the indubitable equivalent of its claim. BEH complains that the Disclosure Statement still cannot be approved because it lacks "adequate information" within the meaning of 11 U.S.C. Section 1125. According to BEH, the Disclosure Statement does not contain adequate information because it fails to address the Claims of the Debtors' insiders and whether those claims should be objected to or sought to be subordinated or disallowed. BEH points out that the Disclosure Statement fails to disclose whether or not Debtors intend to seek to object to these claims or investigate to determine if subordination or disallowance is appropriate. BEH further points out that the Disclosure Statement is inadequate because it fails to disclose the conflict of interest allegation set forth in the objections to the retention of Debtor's bankruptcy counsel. BEH asserts that the Disclosure Statement lacks any discussion of the efforts made to market the Property before entering into the proposed sale agreement with the Debtor's potential purchaser. BEH complains that the Disclosure Statement fails to set forth how the $1 million cash proceeds from sale of Property will pay all the expenses of the sale and other administrative expenses. According to BEH, the Disclosure Statement does not provide the sources of information for the claim amounts in the various classes and the Debtors' assumptions in connection with its liquidation analysis. Attorneys for BEH: Fred B. Ringel, Esq. Steven B. Eichel, Esq. ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C. 875 Third Avenue, 9th Floor New York, New York 10022 Tel: (212) 603-6300 About 152 Broadway Haverstraw NY 152 Broadway Haverstraw NY LLC is the fee simple owner of warehouse and office buildings at 152 Broadway, Haverstraw, N.Y. The properties have an appraised value of $11 million. 152 Broadway Haverstraw NY sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-22834) on April 19, 2019. At the time of the filing, the Debtor disclosed $11,000,269 in assets and $27,892,967 in liabilities. The case is assigned to Judge Robert D. Drain. Backenroth Frankel & Krinsky, LLP is the Debtor's legal counsel. 2021 DEVELOPMENT: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: 2021 Development Inc. 5752 Bancroft Dr. New Orleans, LA 70122 Case No.: 19-12390 Business Description: 2021 Development Inc. is a privately held company in New Orleans, Louisiana. Chapter 11 Petition Date: September 4, 2019 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Hon. Jerry A. Brown Debtor's Counsel: Edwin M. Shorty, Jr., Esq. EDWIN M. SHORTY, JR. & ASSOCIATES 650 Poydras Street, Suite 2515 New Orleans, LA 70130 Tel: (504) 207-1370 Fax: (504) 207-0850 E-mail: EShorty@eshortylawoffice.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Llewellyn Scott, president. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at: http://bankrupt.com/misc/laeb19-12390.pdf 2745 WEST 16TH STREET: To Sell Property for $2.3MM to Fund Plan --------------------------------------------------------------- MAFR Holdings LLC and 2745 West 16th Street LLC filed a Chapter 11 plan and accompanying disclosure statement. The Debtor has calculated that it needs approximately $2,500,000 to confirm the Plan. On the Effective Date, the Debtor shall sell the Property to the 2752 West 15th Street LLC for $2.3 million and enter into a lease for the Property which has an option to buy it back for $2.3 million. Although the proceeds of the sale of the Property will be $2.3 million, in order to enter into the lease transaction with the Buyer, the Debtor will have to pay certain fees and prepay certain expenses totaling $185,000. The sale proceeds will need to be supplemented by approximately $385,000 to confirm the Plan. MAFR Holdings LLC has provided a written commitment to provide additional advances up to $500,000 to fund the Plan. Class 5 General Unsecured Claims are unimpaired. Payment in full in Cash of Allowed Amount on the Distribution. Class 6 Interest Holder are impaired. The Debtor's operating agreement will be amended on the Effective Date to dilute Mr. Vitale's membership interest and voting rights in accordance with the terms of Schedule A annexed to the Plan. A full-text copy of the Disclosure Statement dated September 3, 2019, is available at https://tinyurl.com/y6tg7ltp from PacerMonitor.com at no charge. A full-text copy of the Amended Plan dated September 3, 2019, is available at https://tinyurl.com/yy7mtzm2 from PacerMonitor.com at no charge. A full-text copy of the Plan dated August 30, 2019, is available at https://tinyurl.com/y6zc28f8 from PacerMonitor.com at no charge. Attorneys for MAFR Holdings LLC: Isaac Nutovic, Esq. NUTOVIC & ASSOCIATES 261 Madison Avenue, 26th Floor New York, New York 10016 (212) 421-9100 Attorneys for Debtor: Joshua Bronstein, Esq. The Law Offices of Joshua Bronstein & Associates, PLLC 114 Soundview Drive Port Washington, N.Y. 110 About 2745 West 16th Street Based in Brooklyn, New York, 2745 West 16th Street LLC, a Single Asset Real Estate, filed a voluntary Chapter 11 Petition (Bankr. E.D.N.Y. Case No. 19-42321) on April 18, 2019, with estimated assets and liabilities at $1 million to $10 million respectively. Founded in 2010, the Company owns a property consisting of two residential units and three commercial units. It previously sought bankruptcy protection on Aug. 18, 2018 (Bankr. E.D.N.Y. Case No. 18-44708). 305 EAST 61ST STREET: Unsecureds to Get Paid From Sale Proceeds --------------------------------------------------------------- 305 East 61st Street Group, LLC, proposes a Chapter 11 plan of reorganization and accompanying disclosure statement. Class 4 General Unsecured Claims are impaired. Each holder of an Allowed Unsecured General Claim shall receive, in full and final satisfaction of such Claims, a pro rata share of the net excess Sale proceeds and recoveries from Causes of Action, if any, up to 100%, after the prior payment of Administrative Expense Claims, and allowed Class 1, Class 2, and Class 3 claims in full. All Cash necessary to make payments required pursuant to this Plan will be obtained from the refinance and construction loan, proceeds of the Sale of the Property, possible member contributions, and recoveries from Causes of Action. A full-text copy of the Disclosure Statement dated September 3, 2019, is available at https://tinyurl.com/y3nsc89z from PacerMonitor.com at no charge. About 305 East 61st Street Group Based in New York, 305 East 61st Street Group LLC, a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)), filed a voluntary Chapter 11 Petition (Bankr. S.D.N.Y. Case No. 19-11911) on June 10, 2019. The case is assigned to Hon. Sean H. Lane. The Debtor's counsel is Robert J. Spence, Esq., at Spence Law Office, P.C., in Roslyn, New York. The Debtor's accountant is Singer & Falk. At the time of filing, the Debtor had estimated assets and debts of $10 million to $50 million. 53 STANHOPE: Brooklyn Lender Objects to Disclosure Statement ------------------------------------------------------------ Brooklyn Lender LLC objects to the approval of the proposed Disclosure Statement explaining the Chapter 11 plan of 53 Stanhope LLC and its affiliates. Brooklyn Lender asserts that the Debtors have the burden to prove that the plan is feasible, such that "confirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any successor to the debtor under the plan, unless such liquidation or reorganization is proposed in the plan." Brooklyn Lender complains that the Disclosure Statement identifies no alternative or additional source of funding, and because LOI itself is insufficient to make all payments contemplated under the Plan, the Plan cannot be effectuated, under any set of circumstances. Brooklyn Lender points out that the Debtors' own projections show that the Debtors' properties simply cannot service this amount of debt (and there is little to no likelihood of increased cash flows in any of the Debtors' fully leased properties), rendering the debt unserviceable. According to Brooklyn Lender, the Disclosure Statement further fails to meet the requirements of section 1125(b) of the Bankruptcy Code, which prohibits the solicitation of votes in respect of a plan of reorganization "unless, at the time of or before such solicitation, there is transmitted . . . a written disclosure statement . . . containing adequate information." Brooklyn Lender asserts that a disclosure statement must contain all pertinent information bearing on the success or failure of the proposals in the plan of reorganization. Brooklyn Lender complains that the Debtors have failed to establish that cause exists to extend exclusivity. As set forth above, the central issue in these cases has been known from the start: litigating Brooklyn Lender's entitlement to interest at the Default Interest Rate. Counsel for Brooklyn Lender LLC: Daniel A. Fliman, Esq. Jennifer S. Recine, Esq. Tiffany L. Ho, Esq. Isaac S. Sasson, Esq. STROOCK & STROOCK & LAVAN LLP 180 Maiden Lane New York, New York 10038 Telephone: (212) 806-5400 Facsimile: (212) 806-6006 About 53 Stanhope LLC 53 Stanhope LLC and 17 affiliates are primarily engaged in renting and leasing real estate properties. Each of the Debtors is an affiliate of 73 Empire Developement LLC, which sought bankruptcy protection on Feb. 21, 2019 (Bankr. S.D.N.Y. Case No. 19-22285). 53 Stanhope LLC and its affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23013) on May 20, 2019. The petitions were signed by David Goldwasser, authorized signatory of GC Realty Advisors. Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, represents the Debtors as counsel. A.J. MCDONALD: To Sell Vehicle to Fund Plan Payments ---------------------------------------------------- A.J. McDonald Company, Inc., filed a small business Chapter 11 plan and accompanying disclosure statement. CLASS IV - UNSECURED CLAIMS are impaired. All claims listed on Debtor's Schedule F are impaired. Each claim will be allowed in the scheduled amount if no claim was timely filed. Claim Nos. 3, 4, 5, 6 & 7 will be allowed in the amount of each filed claim. CLASS I - UNSECURED PRIORITY CLAIMS are impaired. There are two claims in this class. The Internal Revenue Service filed Priority Claim No. 1-3 in the amount of $500.00. Anne Arundel County alleges that its Claim No. 8-1 in the amount of $1,718.80 is both secured by real estate and a priority claim. Claim No. 8-1 is actually unsecured because the Debtor owns no real estate. Claims 1-3 and 8-1 will be paid in full prior to any distribution to general unsecured creditors. CLASS II - SECURED CLAIMS are impaired. There are two claims in this class. U.S. Bank filed Claim No. 2-1 in the amount of $29,432.00 that is secured by a drain cleaning machine. Kubota Credit Corporation filed Claim No. 3-1 in the amount of $10,866.63 that is secured by a micro excavator. Debtor will surrender the equipment to the secured creditors on the Effective Date of the Plan. Secured creditors must file deficiency claims, if any, within 60 days of the Effective Date of the Plan. Timely filed deficiency claims will be treated as General Unsecured Claims and paid pro rata with such claims. Untimely filed deficiency claims will receive no distribution under the Debtor's Plan. CLASS III - SECURED CLAIM are impaired. Daimler Truck Financial holds a Secured Claim in the amount of $43,558.72 that is secured by a 2016 Western Star Vacuum Truck. The Debtor's shareholder believes this vehicle is worth approximately $80,000.00. The Debtor will sell this vehicle within six months of the Effective Date of the Plan and pay this claim in full from the proceeds of the sale. The net remaining proceeds of sale will be distributed to Class IV creditors on a pro rata basis. CLASS V - EQUITY CLAIMS are impaired. The 100% equity interest of James J McDonald. He will pay $1,000.00 for this interest. Plan payments will be derived from operating revenues and from the sale of the 2016 Western Star Vacuum Truck. A full-text copy of the Disclosure Statement dated September 3, 2019, is available at https://tinyurl.com/y479qjv5 from PacerMonitor.com at no charge. About A.J. McDonald Company A.J. McDonald Company, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 18-25670) on Nov. 29, 2018. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of less than $500,000. The case is assigned to Judge Robert A. Gordon. The Debtor tapped Jeffrey M. Sirody and Associates, P.A., as its legal counsel. AJUBEO LLC: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Ajubeo LLC as of Sept. 3, according to a court docket. About Ajubeo, LLC Ajubeo, LLC -- https://www.ajubeo.com/ -- is a privately held provider of internet infrastructure software and equipment. Founded in 2011 and headquartered in Greater Denver Area in Boulder, Colorado, Ajubeo serves clients all over the world with datacenter hubs in Denver, New Jersey, Frankfurt, and Dusseldorf Germany. Ajubeo, LLC, filed a Chapter 11 petition (Bankr. D. Col. Case No. 17-17924) on Aug. 25, 2017. In the petition signed by Jeff Kuo, chairman of the Board of Managers, the Debtor estimated $1 million to $10 million in assets and liabilities. Joshua M. Hantman, Esq., at Brownstein Hyatt Farber Schreck, LLP, serves as counsel to the Debtor. AMERANT BANCORP: Fitch Ups LT IDR to BB+ & Alters Outlook to Stable ------------------------------------------------------------------- Fitch Ratings has upgraded the Long-Term Issuer Default Rating and Viability Rating for Amerant Bancorp Inc. and its main bank subsidiary, Amerant Bank N.A (AB), to 'BB+' and 'bb+', from 'BB' and 'bb' respectively. The Rating Outlook is Stable. KEY RATING DRIVERS IDRs & VRs The rating action recognizes AMTB's complete separation from its former parent, Mercantil Servicios Financieros (MSF), having successfully executed a spin-off, IPO and subsequent share repurchase agreement that left MSF with no outstanding stake in AMTB. The company simultaneously completed a successful rebranding as Amerant Bancorp Inc., highlighting the separation and containing headline risk from shared branding with its former Venezuelan parent. Fitch views this successful separation as an important milestone and a rating positive. The separation should accelerate AMTB's transition to becoming a domestically oriented community bank and execution of its growth strategy. AMTB's ratings reflect its continued solid asset quality with net charge-offs (NCOs) that have remained low. Through YTD19, NCOs were 0.11%, in-line with similarly-sized bank peers. Partially offsetting this is the bank's high concentration in commercial real estate (CRE), which accounts for 351% of risk-based capital, although AMTB maintains geographic diversity in the portfolio. Nearly half of the CRE loans are outside of South Florida, largely in New York and Texas. Earnings and profitability are weaker than community bank peers and are AMTB's primary rating constraint. Although profitability measures have begun to improve, core profitability remains low due to the company's operating cost structure and a funding mix that results in a NIM below peers. Fitch also views AMTB's funding profile as a rating constraint and weaker than community bank peers with greater reliance on CDs and brokered deposits and a lower proportion of noninterest bearing deposits. Additionally, its loans-to-deposits ratio of 99% is above the median of 91% for Fitch rated community bank peers. Fitch's believes AMTB's capital position is adequate, supports the risks inherent in the bank's business mix, and is in line with its expectations for the current rating level. With CET1 of 12.1% and a TCE ratio 9.9%, AMTB's capital levels have risen to levels more typical of its community bank peers. While Fitch views this positively, capital levels are likely to fluctuate as AMTB deploys capital. LONG- AND SHORT-TERM DEPOSIT RATINGS AB's uninsured deposit ratings are rated one notch higher than its IDR and senior unsecured debt rating because U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. HOLDING COMPANY AMTB has a bank holding company (BHC) structure with the bank as the main subsidiary. The subsidiary is considered core to the parent holding company, supporting equalized ratings between the bank subsidiary and the BHC. IDRs and VRs are equalized with those of AMTB's operating company and bank reflecting its role as the BHC, which is mandated in the U.S. to act as a source of strength for its bank subsidiaries. SUPPORT RATING AND SUPPORT RATING FLOOR AMTB and Amerant Florida Bancorp Inc. (AFB) have a Support Rating of '5' and Support Rating Floor of 'NF'. In Fitch's view, AMTB and AFB are not systemically important and, therefore, the probability of support is unlikely. IDRs and Viability Ratings (VRs) do not incorporate any support. RATING SENSITIVITIES IDRS & VRs With the upgrade, Fitch believes AMTB's ratings currently are well situated. Any positive rating momentum over the long term would be predicated on improvement in earnings & profitability profile. While management is executing a strategy to increase profitability, Fitch will look to substantive improvements in the bank's profitability such that metrics like Operating Profit to Risk Weighted Assets, Return on Average Assets, Return on Equity, and Efficiency converge with higher rated community bank peers before considering further uplift to the rating. Upside would also be predicated on AMTB maintaining a similar risk appetite as well as funding profile that is more in-line with community bank peers. Fitch views increases in AMTB's capital levels as commensurate with its significant CRE concentration. Fitch would negatively view AMTB managing capital consistently below that of peers and could take negative rating action if that persisted. AMTB has extensive experience servicing international customers and has demonstrated the ability to manage AML/BSA risks adequately, but these risks have increased, particularly in relation to Venezuela, as U.S. sanctions continue to tighten. Should AMTB fail to adequately monitor or screen for these risks, evidenced by regulatory action(s), negative rating action would likely occur. With the successful separation from MSF, AMTB's Venezuelan deposits are expected to steadily decline over time. To date, the bank has been able to manage through the change in its international deposit mix by growing its domestic deposits, although this growth has largely been in higher cost time deposits. An inability to attract lower cost and more stable deposits over time could create negative rating pressure. Fitch views AMTB's good asset quality metrics as supportive of the rating. Fitch would view negatively material deterioration of the bank's credit quality. Lastly, AMTB's ratings could also be sensitive to environmental factors such as severe weather events that result in sustained asset quality deterioration and/or weaker economic growth trends. LONG- AND SHORT-TERM DEPOSIT RATINGS The long- and short-term deposits ratings for AB are primarily sensitive to any change in the company's IDRs. Should a Long-Term IDR be downgraded, deposit ratings could be similarly affected. SUPPORT RATING AND SUPPORT RATING FLOOR AMTB has a Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF'. In Fitch's view, AMTB is not systemically important, and it is unlikely these ratings will change in the foreseeable future. HOLDING COMPANY If AMTB or AFB became undercapitalized or increase their double leverage significantly, there is potential that Fitch could notch the holding company IDR and VR from the ratings of the operating companies. AQ CARVER: Moody's Assigns B3 CFR, Outlook Stable ------------------------------------------------- Moody's Investors Service assigned first time ratings to AQ Carver Buyer, Inc. with a Corporate Family Rating of B3 and a Probability of Default Rating of B3-PD. Concurrently, Moody's assigned a B2 rating to the issuer's proposed senior secured first lien credit facility, comprised of a $325 million term loan and an undrawn $45 million revolver, and a Caa2 rating to the proposed $130 million second lien term loan. The proceeds of the new debt financing will be used to partially fund the purchase of CoAdvantage by Aquiline Capital Partners. The ratings outlook is stable. Assignments: Issuer: AQ Carver Buyer, Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Gtd Senior Secured 1st lien Term Loan B, Assigned B2 (LGD3) Gtd Senior Secured 1st lien Revolving Credit Facility, Assigned B2 (LGD3) Gtd Senior Secured 2nd lien Term Loan, Assigned Caa2 (LGD5) Outlook Actions: Issuer: AQ Carver Buyer, Inc. Outlook, Assigned Stable RATINGS RATIONALE The B3 CFR reflects AQC's very elevated pro forma LTM debt/EBITDA of 7.5x (Moody's adjusted as of June 30, 2019) and small scale relative to Professional Employer Organization industry leaders such as Automatic Data Processing's TotalSource division, Paychex, Inc., and TriNet Group Inc. Moody's views the PEO industry as highly competitive with relatively low barriers to entry. The rating also considers the risks related to the AQC's substantial revenue concentration in the Southeast United States as well as the considerable turnover in the company's core small and medium-sized business customer base. Moreover, the potential for incremental debt financed acquisitions in the fragmented and consolidating PEO sector or dividend distributions to the company's private equity holders increases financial policy risk. However, the risks associated with the company's credit profile are partially offset by the business visibility provided by AQC's recurring revenue sales model and healthy net customer growth trends which have helped the company improve its market presence and should support low single digit net revenue growth (pro forma for the impact of the company's termination of a large client relationship in December 2018) over the intermediate term. Additionally, AQC's modest capital expenditure budget should allow the company to generate healthy free cash flow which should approach 5% of total debt (Moody's adjusted) over the next 12 months. The B2 ratings for AQC's proposed first lien bank debt reflect the borrower's B3-PD PDR and a Loss Given Default ("LGD") assessment of LGD3. The B2 first lien ratings are one notch higher than the CFR and take into account the first lien bank debt's priority in the collateral, size, and senior ranking in the capital structure relative to the company's proposed second lien debt (Caa2, LGD5). The Caa2 rating on the second lien term loan is two notches below the B3 CFR acknowledging its junior position in the capital structure which exposes it to the first loss. Despite a nominal pro forma cash balance, AQC's adequate liquidity position is supported by Moody's expectation that the issuer will generate free cash flow of approximately $20 million over the next 12 months. The company's liquidity is also bolstered by an undrawn $45 million revolving credit facility. While AQC's proposed term loans are not subject to financial covenants, the revolving credit facility has a springing covenant based on a maximum net first lien leverage ratio which the company should be comfortably in compliance with over the next 12-18 months. The stable outlook reflects Moody's expectation that AQC's net sales will decline moderately in 2019 due to the impact of the company's termination of a large client relationship in December 2018 and subsequently expand at a low single digit rate in 2020 fueled by net new client additions and expanding payrolls of existing clients. This enhanced scale should produce improving profit margins and free cash flow due to limited working capital and capital expenditure requirements while reducing debt to EBITDA (Moody's adjusted) to 6.5x by the end of 2020. The ratings could be upgraded if AQC expands revenues and EBITDA to sustain meaningful deleveraging below 6.5x and maintains free cash flow to debt above 5% while adhering to conservative financial strategies. The ratings could be downgraded if revenue or EBITDA contracts materially from current levels, the company begins to generate weak or negative free cash flow, or liquidity deteriorates. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Tampa, FL, AQC, which is in the process of being acquired by Aquiline, provides outsourced human resource functions, including payroll, benefits acquisition, and regulatory compliance management, primarily to small and mid-sized businesses. In 2019, Moody's expects the company's pro forma net revenues to approach $190 million. ASPEN CLUB: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of The Aspen Club & Spa, LLC as of Sept. 3, according to a court docket. About The Aspen Club & Spa The Aspen Club & Spa owns and operates a private membership club that offers high intensity interval training (HI2T), cardio, and yoga classes. Aspen Club & Spa sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-14158) on May 16, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100 million and $500 million. The case has been assigned to Judge Joseph G. Rosania Jr. The Debtor is represented by Markus Williams Young & Hunsicker LLC. B & J PROPERTY: Class Suit Plaintiffs Object to Plan Disclosures ---------------------------------------------------------------- An ad hoc group of class action plaintiffs object to the adequacy of the joint disclosure statement explaining B. & J. Property Investments, Inc.'s Chapter 11 plan. The Plaintiffs assert that the Debtors' Disclosure Statement fails to adequately describe the assets of the Debtors. The Plaintiffs point out that the Debtors should be required to adequately explain the inconsistent valuations of their dealings with William Lloyd Development, Inc and specifically state why $937,322 is doubtful or uncollectable. The Plaintiffs further point out that the Debtors should be required to disclose William Lloyd Development, Inc. details in the Disclosure Statement section III(B). The Plaintiffs complain that the Plan and Disclosure make no disclosure regarding the avoidable transfers to Mr. Berman’s grandchildren. According to the Plaintiffs, the Debtors' Plan and Disclosure not only fail to account for the absolute priority rule; it does not so much as disclose that the rule is applicable to allow creditors to consider the options available to them at confirmation. The Plaintiffs assert that the Plan and Disclosure unfairly discriminates against Plaintiffs. Attorney for Ad Hoc Group: Keith D. Karnes, Esq. Karnes Law Offices, PC 2701 12th St. NE Salem, OR 97302 Tel: 503-385-8888 Fax: (503) 385-8899 Email: keith@keithkarnes.com -- and -- Kevin J. Rank, Esq. Rank & Associates, PC 1265 Waller St SE Salem OR 97302 Tel: 503-362-6068 Fax: 503-362-7095 Email: kevinr@opusnet.com About B. & J. Property Investments B. & J. Property Investments, Inc. is a privately held company engaged in commercial and industrial machinery and equipment rental and leasing. B. & J. Property Investments filed a Chapter 11 petition (Bankr. D. Ore. Case No. 19-60138) on Jan. 17, 2019. In the petition signed by William Berman, president, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The case is assigned to Judge Peter C. McKittrick. The Debtor is represented by Tonkon Torp LLP. BADAX LLC: Seeks to Hire Khang & Khang as Legal Counsel ------------------------------------------------------- Badax LLC seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Khang & Khang LLP as its legal counsel. The Debtor requires Khang & Khang to: a. advise and counsel the Debtor regarding matters of bankruptcy law; b. represent the Debtor regarding its legal rights and responsibilities under the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules, the U.S. Trustee Notices and Guides, and to assist the Debtor in the administration of its bankruptcy estate; c. advise the Debtor with respect to the preparation, filing and confirming of a plan of reorganization; d. represent the Debtor in proceedings or hearings before the Bankruptcy Court in matters involving bankruptcy law or in litigation in the Bankruptcy Court in matters relating to bankruptcy law; e. assist the Debtor in the preparation of reports, accounts, applications and orders involving matters of bankruptcy law; and f. assist the Debtor in such other matters as may be necessary. Joon Khang, Esq., and Judy Khang, Esq., the firm's attorneys who will be handling the case, will be paid $450 per hour and $375 per hour, respectively. On July 16, 2019, the Debtor paid Khang & Khang the amount of $7,500 as retainer. Khang & Khang will also be reimbursed for work-related expenses incurred. Mr. Khang, Esq., a partner at Khang & Khang, 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 estate. Khang & Khang can be reached at: Joon M. Khang, Esq. KHANG & KHANG LLP 18101 Von Karman Avenue, 3rd Floor Irvine, CA 92612 Tel: (949) 419-3834 Fax: (949) 385-5868 About Badax LLC Badax LLC, a privately held company in Chatsworth, Calif., filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 19-11718) on July 11, 2019. In the petition signed by Barbara Anne Klein, managing member, Badax LLC estimated $1 million to $10 million in both assets and liabilities. The case is assigned to Judge Martin R. Barash. BANESCO USA: Fitch Affirms BB- LT IDR & Alters Outlook to Positive ------------------------------------------------------------------ Fitch Ratings has affirmed Banesco USA's Long-Term and Short-Term Issuer Default Rating at 'BB-'/'B' and its Viability Rating at 'bb-'. Fitch also revised the Rating Outlook to Positive from Stable. KEY RATING DRIVERS The affirmation reflects Fitch's view that BNSC continues to generate operating performance in-line with its current rating while maintaining capital levels commensurate with its risk profile. The affirmation also incorporates Fitch's view of the bank's limited company profile as well as its funding composition and structure. Fitch views BNSC's structure as an independent entity with no direct linkage to its sister entity in Venezuela, Banesco Holding S.A (BH) as a rating positive. While there is common ownership and branding with BH, more tangible risks to BNSC's capital and equity are mitigated by ring fencing by banking regulators in the U.S. Fitch views the BNSC's ability to attract new foreign correspondent banking relationships as evidence of a robust BSA/AML program. While this segment gives Banesco USA greater revenue diversity with a growing stream of fee income, Fitch also recognizes that there are risks inherent to this business that are outside of what is typical for a community bank. Fitch has historically viewed BNSC's high proportion of international deposits sourced largely from Venezuelan depositors as a ratings constraint. However, Fitch recognizes that these deposits, which tend to be price insensitive, have remained stable in the face of worsening economic conditions in Venezuela. Additionally, BNSC has seen robust deposit growth domestically, although a significant portion of this growth has been higher cost time deposits. Asset quality metrics remain strong with the ratio of nonperforming loans-to-total loans at only 0.15% as of 2Q19. However, Fitch recognizes that recent strong loan growth, much of it in CRE, remains unseasoned in the current overall benign credit environment. Additionally, the bank's total CRE concentration is high at 416% of risk-based capital, and while it is diversified by industry and property type, it is largely concentrated in South Florida, which tends to be more volatile when economic conditions weaken. The Positive Outlook reflects positive steps taken by management to pivot from being a bank largely focused on international customers, to further establishing itself as a South Florida community bank with a growing base of locally sourced deposits and loans. Incorporated into the Outlook revision is the expectation that management will continue to execute on strategic initiatives to grow spread income and diversify the bank's deposit base. Moreover, Fitch believes BNSC's current and expected earnings are satisfactory and in-line with the current rating but notes that the bank's limited scope and small size make its earnings potentially more volatile. However, Fitch believes core profitability could continue to trend upward as the bank continues to invest in technology, which should aid and improve efficiency. SUPPORT RATING AND SUPPORT RATING FLOOR BNSC has a Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF'. In Fitch's view, BNSC is not systemically important. Fitch's support rating and support floor assume neither institutional support from any of its sister entities, nor sovereign support from the U.S. The IDRs and VRs do not incorporate any support. Historically, BNSC's principal shareholders have demonstrated a willingness to provide capital. LONG- AND SHORT-TERM DEPOSIT RATINGS BNSC's uninsured deposit ratings are rated one notch higher than the company's IDR because U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. RATING SENSITIVITIES IDRs and VR As reflected by the Positive Outlook, Fitch believes there could be upside to the company's ratings in the context of potentially improved profitability and deposit funding profile. For instance, a larger proportion of fee income from core business lines and a domestic deposit mix that shows solid growth in core deposits could influence ratings positively. Moreover, Fitch views BNSC's acquisition of Miami-based Brickell Bank as a reasonable opportunity to expand its South Florida franchise and gain greater scale in segments in which it already operates. A successful integration of the acquisition, including the bank bringing capital back up to be more in-line with historical levels, would likely trigger positive rating action. Failure to bring capital back to these levels could result in the Outlook being revised to Stable. Fitch has incorporated the view that asset quality improvement will moderate going forward and could even reverse nominally as credit metrics are expected to normalize industry wide. However, if BNSC's credit trends reverse materially beyond peer levels, particularly if some of the bank's larger loans or asset classes that have grown notable become impaired, pressure could be placed on the Outlook. Banesco USA's traditional base of Venezuelan depositors view the bank as a safe haven and their deposits have remained notably stable despite economic turmoil there. However, the deepening crisis in Venezuela makes growth in these deposits less likely and some erosion is possible. Difficulty in replacing these funds with stable, domestically sourced deposits, particularly cheaper core deposits, would be a rating constraint. Fitch notes that BNSC has successfully attracted new correspondent relationships on the strength of its AML/BSA controls. However, Fitch recognizes the risks inherent to correspondent banking including exposure to AML. Should the bank face any deficiencies or breakdown of controls as a result of these activities, exhibited by regulatory action(s), negative rating action would likely occur. Fitch would view positively greater loan diversification that lowered BNSC's CRE concentration in line with community bank peers. Lastly, BNSC's ratings could also be sensitive to environmental factors such as severe weather events that result in sustained asset quality deterioration and/or weaker economic growth trends. SUPPORT RATING AND SUPPORT RATING FLOOR BNSC has a Support Rating (SR) of '5' and Support Rating Floor of 'NF'. In Fitch's view, BNSC is not systemically important and it is unlikely these ratings will change in the foreseeable future. LONG- AND SHORT-TERM DEPOSIT RATINGS The long- and short-term deposit ratings are sensitive to any change to Banesco USA's Long- and Short-Term IDRs. BLACKHAWK MINING: Gets Approval to Hire AP Services, Appoint CRO ---------------------------------------------------------------- Blackhawk Mining LLC received approval from the U.S. Bankruptcy Court for the District of Delaware to hire AP Services, LLC and appoint Kevin Nystrom as chief restructuring officer. Mr. Nystrom and his firm will provide these services in connection with the Chapter 11 cases filed by the company and its affiliates: a. attend meetings with the Debtors' creditors and their advisors; b. review and modify the 13-week cash flow forecasts, debtor-in-possession budgets and long-term forecasts; c. prepare restructuring documents including restructuring support agreements, plan of reorganization and disclosure statement; d. prepare a liquidation analysis to be used in a best-interests test in a plan of reorganization; e. analyze employee compensation plans; and f. other restructuring tasks which are customarily performed by a CRO. The firm's hourly rates are: Managing Director $990 – $1,165 Director $775 - $945 Senior Vice President $615 - $725 Vice President $440 - $600 Consultant $160 - $435 Paraprofessional $285 - $305 During the 90-day period prior to the Petition Date, the Debtors paid APS and its affiliates a total of $1,838,412.68, which included a $300,000 retainer. Mr. Nystrom, a managing director of AlixPartners, and the authorized representative of APS, disclosed in court filings that his firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. APS can be reached through: Kevin Nystrom AlixPartners, LLP 909 Third Avenue, Floor 30 New York, NY 10022 Phone: +1 (212) 561-4025 Email: knystrom@alixpartners.com About Blackhawk Mining Founded in 2010, Blackhawk Mining LLC -- http://www.blackhawkmining.com/-- is a diversified coal mining company headquartered in Lexington, Kentucky. They are a privately-owned coal producer operating predominantly in the Central Appalachian Basin of the United States. They sell their coal production domestically and internationally to a diverse set of end markets, such as steel producers, regulated utilities, and commodity trading houses. On July 19, 2019, Blackhawk Mining and 21 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11595). The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as general bankruptcy counsel; Potter Anderson Corroon LLP as local counsel; and AlixPartners as restructuring advisor; and Centerview Partners LLC as investment banker. Prime Clerk LLC is the claims agent. BLACKHAWK MINING: Taps Centerview Partners as Financial Advisor --------------------------------------------------------------- Blackhawk Mining LLC received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Centerview Partners LLC as their financial advisor and investment banker. The firm will provide services in connection with the Chapter 11 cases filed by the company and its affiliates: a. General Financial Advisory and Investment Banking Services: i. familiarize itself with the business, operations, properties, financial condition and prospects of the Debtors; ii. review the Debtors' financial condition and outlook; iii. assist in the development of financial data and presentations to the Debtors' Board of Directors, various creditors and other parties; iv. evaluate the Debtors' debt capacity and capital structures alternatives; v. participate in negotiations among the Debtors, creditors, suppliers, lessors and other interested parties; and vi. provide other financial advisory services specifically agreed upon in writing by the Debtors and the firm. b. Restructuring Services: i. analyze various restructuring scenarios and the potential impact of these scenarios on the value of the Debtors and the recoveries of those stakeholders impacted by the restructuring; ii. provide financial and valuation advice and assistance to the Debtors in developing and seeking approval of a restructuring plan; iii. provide financial advice and assistance to the Debtors in structuring any new securities to be issued pursuant to the plan in connection with the restructuring; iv. participate or assist the Debtors in negotiations with entities or groups affected by the restructuring; and v. if requested by the Debtors, participate in hearings before the court. c. Financing Services: i. provide financial advice and assistance to the Debtors in structuring and effecting a financing, identifying potential investors, and, at the Debtors' request, contacting such investors; and ii. assist in the arranging of a financing, the due diligence process, and negotiating the terms of any proposed financing and, if requested by the Debtors, participate in hearings before the court. d. Sale Services: i. provide financial advice and assistance to the Debtors in connection with a sale, identifying potential acquirors and, at the Debtors' request, contacting such potential acquirors; and ii. participate or assist the Debtors in negotiations with potential acquirors. Centerview will be compensated pursuant to a fee and expense structure detailed in the restructuring engagement letter, which can be accessed for free at https://is.gd/GvWymu Marc Puntus, a partner at and co-head of Centerview's Debt Advisory and Restructuring Practice, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Centerview can be reached through: Marc D. Puntus Centerview Partners LLC 31 West 52nd Street, 22nd Floor New York, NY 10019 Tel: (212) 380-2650 Fax: (212) 380-2651 About Blackhawk Mining Founded in 2010, Blackhawk Mining LLC -- http://www.blackhawkmining.com/-- is a diversified coal mining company headquartered in Lexington, Kentucky. They are a privately-owned coal producer operating predominantly in the Central Appalachian Basin of the United States. They sell their coal production domestically and internationally to a diverse set of end markets, such as steel producers, regulated utilities, and commodity trading houses. On July 19, 2019, Blackhawk Mining and 21 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11595). The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as general bankruptcy counsel; Potter Anderson Corroon LLP as local counsel; and AlixPartners as restructuring advisor; and Centerview Partners LLC as investment banker. Prime Clerk LLC is the claims agent. BLACKHAWK MINING: Taps Kirkland & Ellis as Legal Counsel -------------------------------------------------------- Blackhawk Mining LLC received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Kirkland & Ellis LLP and Kirkland & Ellis International LLP as its legal counsel. The firms will provide thse services in connection with the Chapter 11 cases filed by the company and its affiliates: a. advise the Debtors of their powers and duties in the continued management and operation of their businesses and properties; b. advise on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; c. attend meetings and negotiate with representatives of creditors and other parties in interest; d. take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against them, and representing them in negotiations concerning litigation in which they are involved; e. prepare pleadings; f. represent the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; g. advise the Debtors in connection with any potential sale of assets; h. appear before the bankruptcy court and any appellate courts; i. advise the Debtors regarding tax matters; and j. negotiate, prepare and seek approval of the Debtors' disclosure statement and confirmation of a Chapter 11 plan. The hourly rates for the firms' services are: Partners $1,025 - $1,795 Of Counsel $595 - $1,705 Associates $595 - $1,125 Paraprofessionals $235 - $460 The firms received from the Debtors an advance payment retainer in the amount of $500,000 on March 22, and an additional retainer totaling $4,640,681.68. Stephen Hessler, Esq., a partner of Kirkland & Ellis and Kirkland & Ellis International, disclosed in court filings that the firms are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Hessler disclosed that the firms have not agreed to a variation of their standard billing arrangements for their employment with the Debtors, and that no professional at the firms has varied his rate based on the geographic location of the Debtors' bankruptcy cases. The attorney also disclosed that the firms represented the Debtors during the twelve-month period before the petition date using these hourly rates: Partners $1,025 - $1,795 Of Counsel $595 - $1,705 Associates $595 - $1,125 Paraprofessionals $235 - $460 Mr. Hessler also disclosed that the Debtors have already approved the firms' budget and staffing plan for the period July 19 to Sept. 15. Kirkland can be reached through: Stephen E. Hessler, P.C. Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington Avenue New York, NY 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 E-mail: stephen.hessler@kirkland.com - and - James H.M. Sprayregen, P.C. Ross M. Kwasteniet, P.C. Joseph M. Graham, Esq. Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Chicago, IL 60654 Tel: (312) 862-2000 Fax: (312) 862-2200 E-mail: james.sprayregen@kirkland.com ross.kwasteniet@kirkland.com joe.graham@kirkland.com About Blackhawk Mining Founded in 2010, Blackhawk Mining LLC -- http://www.blackhawkmining.com/-- is a diversified coal mining company headquartered in Lexington, Ky. They are a privately-owned coal producer operating predominantly in the Central Appalachian Basin of the United States. They sell their coal production domestically and internationally to a diverse set of end markets, such as steel producers, regulated utilities, and commodity trading houses. On July 19, 2019, Blackhawk Mining and 21 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11595). The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as general bankruptcy counsel; Potter Anderson Corroon LLP as local counsel; and AlixPartners as restructuring advisor; and Centerview Partners LLC as investment banker. Prime Clerk LLC is the claims agent. BLUE DOLPHIN: Settlement of GEL Arbitration Takes Effect -------------------------------------------------------- As previously disclosed, on July 20, 2018, Blue Dolphin Energy Company and its wholly-owned subsidiaries Lazarus Energy, LLC and Nixon Product Storage, LLC, together with Lazarus Energy Holdings, LLC, Carroll & Company Financial Holdings, L.P., and Jonathan Carroll, entered into a Settlement Agreement (as amended) with GEL Tex Marketing, LLC, an affiliate of Genesis Energy, LP, related to the previously disclosed arbitration proceedings involving LE and GEL. Under the Settlement Agreement, GEL and the Lazarus Parties agreed, upon the occurrence of the Settlement Payment Date and subject to the terms and conditions set forth in the Settlement Agreement, (1) to mutually release all claims against each other, (2) to take such actions as are necessary to dismiss the GEL Arbitration Proceedings with prejudice and (3) to file a stipulation of dismissal with prejudice of the related Texas state court action filed by GEL to confirm the final award in the GEL Arbitration Proceedings (the hearing on which has been continued pursuant to the term of the Settlement Agreement). The Settlement was conditioned upon the Lazarus Parties' paying to GEL a lump sum cash payment of $10.0 million and cash payments of $0.5 million at the end of each calendar month until the Settlement Payment Date. The Fifth Amendment to the Settlement Agreement, entered into on May 6, 2019, amended the Settlement Agreement to provide, among other matters, that: * the Lazarus Parties would pay the Settlement Payment to GEL in one or more installments in specified minimum amounts, each due on or before specified days during the period from May 7, 2019 to May 16, 2019; * the Interim Payment due April 30, 2019 would be paid by the Lazarus Parties to GEL on a deferred basis in minimum installments of $0.1 million, each due on or before the last business day of each month from June to October 2019; * the Lazarus Parties would not be required to make any Interim Payments that otherwise would be required for months after April 2019, provided that the Lazarus Parties have timely made all Settlement Installment Payments and Deferred Interim Installment Payments; and * the "Settlement Payment Date" would be the first date on which the Lazarus Parties have paid to GEL (1) the Settlement Installment Payments totaling $10.0 million, (2) the Deferred Interim Installment Payments totaling $0.5 million and (3) any additional Interim Payments that become due as a result of the Lazarus Parties' failing to timely make any Settlement Installment Payment or Deferred Interim Installment Payment (as described in the preceding bullet point). Effectiveness of Settlement During the period from May 7, 2019 to May 10, 2019, the Lazarus Parties made multiple payments in cash to GEL totaling $10.0 million in the aggregate, which payments together constituted all of the Settlement Installment Payments. Additionally, during the months of June, July and August 2019, the Lazarus Parties made multiple payments in cash to GEL totaling $0.5 million in the aggregate, which payments together constituted all of the Deferred Interim Installment Payments and the last of which was made on Aug. 23, 2019. As a result of these payments and the fact that no further Interim Payments are required because of the timely payment of all of the Settlement Installment Payments and Deferred Interim Installment Payments: * the Settlement Payment Date occurred on Aug. 23, 2019; * the Lazarus Parties have made all payments to GEL required for the Settlement of the GEL Arbitration Proceedings to be effective and final; * the Mutual Releases have become effective; and * LE and GEL are in the process of taking the actions required under the Settlement Agreement to effect the dismissal with prejudice of the GEL Arbitration Proceedings and the related Texas state court action filed by GEL to confirm the final award in the GEL Arbitration Proceedings. As a result of the effectiveness of the Settlement, Blue Dolphin expects to recognize a gain on its consolidated statements of operations during the third quarter of 2019 in the amount of approximately $9.0 million related to the gain on settlement of the accrued arbitration award payable. Until the Settlement occurred, the accrued arbitration award payable was reflected on Blue Dolphin's consolidated balance sheets. About Blue Dolphin Headquartered in Houston, Texas, Blue Dolphin Energy Company -- http://www.blue-dolphin-energy.com/-- is a publicly-traded Delaware corporation formed in 1986, that is primarily engaged in the refining and marketing of petroleum products. The Company also provides tolling and storage terminaling services. Its assets, which are in Nixon, Texas, primarily include a 15,000-bpd crude distillation tower and approximately 1.1 million bbls of petroleum storage tank capacity. Pipeline transportation and oil and gas operations are no longer active. Blue Dolphin incurred a net loss of $523,000 for the 12 months ended Dec. 31, 2018, following a net loss of $22.32 million for the 12 months ended Dec. 31, 2017. As of June 30, 2019, the Company had $71.14 million in total assets, $78.92 million in total liabilities, and a total stockholders' deficit of $7.77 million. UHY LLP, in Sterling Heights, Michigan, the Company's auditor since 2002, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company received an adverse outcome of arbitration proceedings for which a settlement has been reached, however the Company has yet to secure financing for payment of the settlement amount, is in default under secured loan agreements, has suffered recurring losses from operations and has a net working capital deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. BORGER ENERGY: Moody's Hikes Sr. Sec. Rating to Ba3, Outlook Stable ------------------------------------------------------------------- Moody's Investors Service upgraded the senior secured rating for Borger Energy Associates, L.P. to Ba3 from B1. The rating outlook is stable. This rating action concludes the review for possible upgrade that was initiated on July 1, 2019. RATINGS RATIONALE Borger's rating upgrade is driven by the renewal of its Steam Sales Agreement on favorable terms with its steam offtaker, WRB Refining LP. WRB is a joint partnership between Phillips 66 (A3 stable) and Cenovus Energy Inc. (Ba1 stable). The SSA, which was set to expire this year, has been extended for five years to June 2024. Its terms provide for a 6% increase in steam revenue via a higher steam factor plus an incremental tiered payment tied to operational performance. The SSA renewal improves cash flow visibility over the remaining term of the debt. Both the SSA and Borger's power purchase agreement with Southwestern Public Service Company (Baa2 stable) now expire in June 2024, which is 18 months after the debt maturity in December 2022. The increased visibility for contracted cash flows beyond the life of the debt is credit positive. Borger's contract structure closely links the project's financial performance to the price of natural gas. Falling natural gas prices compress margins and debt service coverage ratios (DSCRs); rising prices have the opposite effect. At Henry Hub natural gas prices of $2.25 per mmbtu, Moody's calculates that Borger can produce annual DSCRs (after the payment of scheduled major maintenance) above 1.0x and an average DSCR above 1.1x for the remaining term of the debt. Recent plant investments are driving better operational performance, which also supports stronger credit metrics. The plant has averaged a minimum 94% availability factor in recent years after experiencing operational problems until 2014. Borger's sponsors have made the necessary capital investments to sustain high plant availability going forward, including key improvements to rotors and control systems. Rating Outlook The stable outlook reflects its view that Borger can maintain high plant availability and produce average DSCR metrics above 1.1 times after accounting for major maintenance contributions. Factors that could lead to a downgrade The project could be downgraded if chronic depressed natural gas prices cause the project's average DSCR to fall below 1.1x on a sustained basis. The rating could also come under pressure if the project incurs major operational issues or if sponsor support for the project wanes. Factors that could lead to an upgrade The rating could be upgraded if Borger is able to sustain DSCRs comfortably above 1.2x while satisfying anticipated capital spending requirements. Profile Borger Energy Associates, L.P. is a limited partnership that owns and operates a 230-MW, gas-fired cogeneration facility located near Borger, Texas. The plant consists of two Siemens 501D5A combustion turbines and two heat recovery steam generators that began commercial operations in 1999. Borger is indirectly owned by WG Partners Acquisition, LLC, (B1 negative) a joint venture among funds managed by Harbert Management Group (51%), UBS Infrastructure (32%) and Northwestern Mutual (17%). CAMBER ENERGY: Nearing Completion of Waste Gas Gathering Line ------------------------------------------------------------- Camber Energy, Inc.'s subsidiary Lineal Industries, Inc., is nearing completion of a natural gas line that transports treated waste methane from a solid waste landfill into a consumer gas distribution system. Tim Connolly, CEO of Lineal Star Holdings, LLC, Camber's recently acquired parent of Lineal, commented, "We are proud of our role in safely and efficiently completing this unique project, directing waste gas to green gas and other productive consumer uses. When our industry needs a specialty construction team with the depth of experience to plan unusual work and reliably execute that plan, they think of Lineal. After all, we have a 64-year history of safely meeting our client's unique objectives and completing challenging projects on budget and on time." About Camber Energy Based in San Antonio, Texas, Camber Energy, Inc. (NYSE American: CEI) -- http://www.camber.energy/-- is an independent oil and gas company engaged in the development of crude oil, natural gas and natural gas liquids in the Hunton formation in Central Oklahoma in addition to anticipated project development in the Texas Panhandle. The Company also provides midstream and downstream pipeline specialty construction, maintenance and field services via its recently announced acquisition agreement with Lineal Star Holdings LLC. Camber Energy reported net income of $16.64 million for the year ended March 31, 2019, following a net loss of $24.77 million for the year ended March 31, 2018. As of June 30, 2019, the Company had $7.16 million in total assets, $1.97 million in total liabilities, and $5.19 million in total stockholders' equity. Camber Energy received on July 2, 2019, a deficiency letter from NYSE American LLC stating that the Company is not in compliance with the continued listing standards as set forth in Section 103(f)(v) of the NYSE American Company Guide. The Deficiency Letter indicated that the Company's securities have been selling for a low price per share for a substantial period of time. CARLOS MIGUEL'S: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Carlos Miguel's of Castle Rock, LLC, as of Sept. 3, according to a court docket. About Carlos Miguel's Carlos Miguel's -- http://www.carlosmiguels.com/-- is a restaurant chain in Littleton, Colo., that offers authentic Mexican cuisine like quesadillas, enchilladas, and more. Carlos Miguel's has branches in Castle Rock, Colorado Springs, Highlands Ranch, Littleton, Briargate, Monument and Frisco. On Sept. 28, 2018, Carlos Miguel's of Castle Rock, LLC; Carlos Miguel's of Country Club Corners, LLC; Carlos Miguel's of Frisco, LLC; and Carlos Miguel's of Littleton, LLC, filed voluntary Chapter 11 petitions (Bankr. D. Colo. Case Nos. 18-18485 to 18-18488). The petitions were signed by Luis Miguel Martin, managing member. At the time of filing, Carlos Miguel's of Castle Rock disclosed $33,357 in assets and $184,571 liabilities; Carlos Miguel's of Country Club disclosed $26,396 in assets and $280,865 in liabilities; while Carlos Miguel's of Frisco, LLC, disclosed $26,756 in assets and $304,193 liabilities. The Hon. Elizabeth E. Brown oversees the cases. Aaron A. Garber, Esq., at Buechler & Garber, LLC, serves as the Debtors' counsel. CAROLINA CARBONIC: Bankr. Administrator Unable to Appoint UCC ------------------------------------------------------------- The U.S. bankruptcy administrator on Sept. 4 disclosed in a filing with the U.S. Bankruptcy Court for the Middle District of North Carolina that no unsecured creditors' committee has been appointed in the Chapter 11 case of Carolina Carbonic and Hydrotesting, Inc.. About Carolina Carbonic and Hydrotesting Carolina Carbonic and Hydrotesting, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. N.C. Case No. 19-10899) on Aug. 20, 2019. At the time of the filing, the Debtor had estimated assets of less than $1 million and liabilities of less than $100,000. The Debtor is represented by the Law Firm of Ivey, McClellan, Gatton & Siegmund. CASCADE FAMILY: Oct. 9 Plan Confirmation Hearing ------------------------------------------------ The Bankruptcy Court issued an order conditionally approving the amended disclosure statement explaining the amended Chapter 11 plan of Cascade Family Skating, LLC. October 9, 2019, at 10:15 a.m. is fixed for the hearing on final approval of the Disclosure Statement, if a written objection has been timely filed, and for the hearing on confirmation of the Amended Plan. October 2, 2019, is fixed as the last day for filing and serving written objections to the Disclosure Statement and confirmation of the Amended Plan. October 3, 2019, is fixed as the last day for submitting written acceptances or rejections of the Amended Plan. October 4, 2019, is fixed as last day for the Debtor's counsel to file a Report of Balloting and Proof of Service pursuant to Bankruptcy Local Rule 3018-1(c). Class 7 (Unsecured Claims) are impaired. The Class 7 Claim of each Holder of an Allowed General Unsecured Claim will be paid in full, from the earnings of the Debtor's Business, no later than 180 days after the Effective Date. Class 2 (Fulton County Tax Commissioner) are impaired. The Allowed Class 2 Claim of the Fulton County Tax Commissioner will be paid, from the earnings of the Debtor's Business, $65,916.19 plus 4% annual interest, payable in equal monthly installments of $1,031.00 per month for 72 months. Class 3 (KeyBank) are impaired. The Allowed Class 3 Claim of KeyBank will be paid, from the earnings of the Debtor's Business, the full Allowed amount of its Claim, plus 6.5% annual interest, amortized over 10 years, with a monthly payment of $4,485.15 per month for 60 months, and a balloon payment of the remaining loan balance due at the end of the 60-month period. Class 4 (SBA) are impaired. The Allowed Class 4 Claim of the SBA will be paid, from the earnings of the Debtor's Business, $322,910.45 plus 1.85% annual interest payable in equal monthly installments of $4,000.00 for 84 months. Class 5 (Georgia Department of Revenue) are impaired. The Allowed Class 5 Claim of the Georgia Department of Revenue will be paid, from the earnings of the Debtor's Business, $600,000.00 plus interest as follows: (i) $200,000.00 of the Claim amount will accrue no interest and will be paid in equal monthly installments of $2,380.00 for 84 months; (ii) $400,000.00 of the Claim amount will accrue interest at the rate of 6% annually and will be paid in equal monthly installments of $5,843.00 for 84 months. Class 6 (Internal Revenue Service) are impaired. The Allowed Class 6 Claim of the IRS will be paid, from the earnings of the Debtor's Business, $40,000.00 plus 6% annual interest, payable in equal monthly installments for 36 months, which may be prepaid without penalty. Class 8 (ADA Claim) are impaired. The Plan provides that the Debtor may satisfy the ADA Claim in full by maintaining policies and procedures for enabling access for people with mobility disabilities, hiring an architect to conduct a compliance survey, and remedying any defects identified by such architect. If the Reorganized Debtor fails to do so, the United States may seek monetary damages or equitable relief against the Reorganized Debtor. Class 9 (Golden Glide, Inc.) are impaired. The Allowed Class 8 Claim of Golden Glide, Inc. will be subordinated to all other Claims and will receive no distributions until all other distributions on account of all Allowed Claims are made as provided in the Plan. The Plan proposes to pay general unsecured creditors in full. A forced liquidation of the Debtor's assets would bring significantly less value than that which can be achieved by the reorganization proposed in the Plan, which will result in higher payments to creditors than that which would come from a liquidation under chapter 7 of the Bankruptcy Code. The Debtor had only $44,300.00 in personal property assets (not including fee simple interest in certain real property with a book value of $1.8 million and an unknown current value) compared to $1,939,808.48 in liabilities. A full-text copy of the Amended Disclosure Statement dated September 2, 2019, is available at https://tinyurl.com/y3d2ftgn from PacerMonitor.com at no charge. Attorneys for the Debtor: William A. Rountree, Esq. Benjamin R. Keck, Esq. ROUNTREE LEITMAN & KLEIN, LLC Century Plaza I 2987 Clairmont Road, Suite 175 Atlanta, Georgia 30329 Tel: (404) 584-1244 Email: wrountree@rlklawfirm.com bkeck@rlklawfirm.com About Cascade Family Skating Cascade Family Skating, LLC -- https://atlantafamilyfuncenters.com/ -- owns a family entertainment center that operates a roller skating rink in Atlanta, Georgia. Cascade Family Skating sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-57159) on April 27, 2018. In the petition signed by Gregory Alexander, president, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. The Debtor tapped Rountree & Leitman, LLC as its legal counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. CASTILLO I PARTNERSHIP: Oct. 23 Plan Confirmation Hearing --------------------------------------------------------- A hearing to determine whether Castillo I Partnership's Corrected Third Amended Chapter 11 Plan of Reorganization will be confirmed pursuant to 11 U.S.C. Section 1129 will be held on October 23, 2019, at 10:00 a.m. September 25, 2019 is fixed as the last day to file with the court and serve on the Debtor's counsel and other parties in interest any objection or opposition to confirmation of the Plan. Class 11 - General unsecured claims are impaired. Unsecured claims will be paid, within 5 years of the Effective Date their pro rata share of the net assets of the Debtor as of the Effective Date. Net estate assets are estimated to be approximately $147,675 computed as follows: Real estate ($1,130,000) + $28,000 in General DIP Account - administrative expenses to be paid at Effective Date ($10,325) - secured claims of $1,000,000 ($750,000 for Castillo Property and $250,000 for Valleyheart Property) = $147,675. Class 1 - BANK OF NEW YORK MELLON are impaired. Secured Creditor shall have a secured claim in the amount of $396,701.05, pursuant to the Stipulation filed on July 2, 2019 as No. 216 on the Docket, which is incorporated herein as if set forth in full. The Secured Claim shall be amortized over 30 years at a fixed rate of interest of 5.75% per annum. Class 2 - MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. are impaired. The SBA and/or MERS are believed to have been paid in full and/or to have waived, abandoned and/or written off any loan or other obligation, and/or any such obligation is otherwise unenforceable, as inter alia, no payment by Debtor has been made, and no request or demand for any payment from Debtor has been made for more than 13 years. Class 3 - SBA, its purported assignee, Bayview Financial Trading Group and/or the current holder of this third deed of trust against the Castillo Property are impaired. Bayview is believed to have been paid in full and/or to have waived, abandoned and/or written off any loan or other obligation, and/or any such obligation is otherwise unenforceable, as inter alia, no payment by Debtor has been made, and no request or demand for any payment from Debtor has been made for more than 13 years. Class 4 - E.N. Financial Services & Development are impaired. Any secured portion of this claim shall bear interest at 4.75% per annum and shall be payable and re-amortized over a 30-year period. Any unsecured portion shall be treated as an unsecured claim, receiving, within 5 years of the Effective Date its pro rata share of Debtor’s net assets as of the Effective Date, but not less than 5% of the amount of the unsecured claim. Class 5 - 17 Oakdale, LLC are impaired. Any secured portion of this claim shall bear interest at 4.75% per annum and shall be payable and re-amortized over a 30-year period. Any unsecured portion shall be treated as an unsecured claim, receiving, within 5 years of the Effective Date its pro rata share of Debtor’s net assets as of the Effective Date, but not less than 5% of the amount of the unsecured claim. Class 6 - Phillips Lerner Lauzon & Jamra LLP are impaired. Accordingly, this claim shall not be a lien against the Castillo Property, Debtor has no liability to this creditor, secured or unsecured, and this creditor will receive no distribution under the Plan. Class 7 - Unifund CCR, LLC are impaired. Accordingly, this claim shall not be a lien against the Castillo Property, Debtor has no liability to this creditor, secured or unsecured, and this creditor will receive no distribution under the Plan. Class 8 - CITIMORTGAGE, INC. are impaired. The Secured Claim shall be amortized over 30 years at a fixed market rate of interest, which shall be deemed to be 4.75% per annum, unless determined otherwise by stipulation or the court, but any remaining unpaid balance shall be paid by the original due date of the loan, on or about January 1, 2036. Class 12 - Interest holders, Ahron Zilberstein and Vardit Zilberstein, Debtor's partners. Interest holders will retain their interests. The plan will be funded by the following: Rental income and/or contributions from Debtor's partners. The Debtor's partners will contribute any necessary funds to Debtor so that Debtor will have at least $15,000 and adequate cash and cash flow on hand at all times on and after the confirmation hearing to pay Debtor's debts as they become due, together with a reasonable reserve. A full-text copy of the Disclosure Statement dated September 3, 2019, is available at https://tinyurl.com/yxww7yr2 from PacerMonitor.com at no charge. The Amended Disclosure Statement filed on August 30 corrected the title page, page 32 and the proof of service from the Disclosure Statement Describing Third Amended Plan filed on July 7, 2019 as Doc 217. A full-text copy of the August 30 Amended Disclosure Statement is available at https://tinyurl.com/y56g3l4e from PacerMonitor.com at no charge. Attorney for Debtor: Mark E. Goodfriend, Esq. LAW OFFICES OF MARK E. GOODFRIEND 16055 Ventura Blvd, Suite 800 Encino, CA 91436 Telephone: (818) 783-8866 Facsimile: (818) 783-5445 Email: markgoodfriend@yahoo.com About Castillo I Partnership Castillo I Partnership is a privately held partnership in Van Nuys, California. A sister company, M.N.E. Funding, Inc., sought bankruptcy protection on Sept. 10, 2017 (Bankr. C.D. Cal. Case No. 17-12420). Castillo I Partnership, based in Van Nuys, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 17-13341) on Dec. 18, 2017. In its petition signed by Ahron Zilberstein, general partner, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Martin R. Barash presides over the case. Mark E. Goodfriend, Esq., at the Law Offices of Mark E. Goodfriend, serves as bankruptcy counsel to the Debtor. CENTER CITY HEALTHCARE: U.S. Govt. Objects to $55MM Residency Sale ------------------------------------------------------------------ WHYY reports that federal agency Centers for Medicare and Medicaid Services filed an objection to Hahnemann University Hospital's proposal to sell its medical residency programs to a consortium of six local health systems led by Thomas Jefferson University Hospitals for $55 million. According to WHYY, at a hearing Sept. 4, U.S. Justice Department attorney Marc Sacks argued that Congress laid out in the Affordable Care Act the process for redistributing medical residency slots when a hospital closes. It provides for a system of awarding residency slots to hospitals, free of charge, through a public bidding process. Hahnemann's lawyers, however, argued that the hospital is not considered closed as it is still doing business. Hahnemann CRO Allen Wilen testified that the hospital still employs about 80 people on payroll and is helping patients who called looking for medical services find new ones and transferring medical records. Mr. Sacks countered that even if Judge Gross deemed the hospital still open, CMS regulation states that a Medicare provider number can be transferred only with a change of ownership. He argued that because only the residency programs were being transferred and not all of Hahnemann's operations, that did not constitute a change in ownership. Judge Gross was inclined to vote in favor of Hahnemann's owner and move forward with the sale of the residency slots, but he urged parties to negotiate a deal. He deferred ruling on the sale at the Sept. 4, 2019 hearing. WHYY relates that many worry approval of the $55 million sale could open the door to hospital systems bundling and selling off residency programs as a commodity. "We think this sets a dangerous precedent allowing hospitals to be sold for [their] parts, when the parts are maybe more valuable than the whole," said attorney Mitchell Malzberg, representing the Pennsylvania Association of Staff Nurses and Allied Professionals, the union that represented about 800 nurses at Hahnemann. According to WHYY, two groups expressed interest in purchasing the hospital as a going concern, and positioned themselves as possible backup plans if the judge ruled against the residency sale. About Center City Healthcare d/b/a Hahnemann University Hospital Center City Healthcare, LLC, is a Delaware limited liability company that operates Hahnemann University Hospital. Its parent company is Philadelphia Academic Health System, LLC, which is also the parent company of St. Christopher's Healthcare, LLC and its affiliated physician groups. Center City Healthcare and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11466) on June 30, 2019. At the time of the filing, the Debtors estimated assets of between $100 million and $500 million and liabilities of the same range. The cases are assigned to Judge Kevin Gross. The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel; EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as investment banker; and Omni Management Group, Inc., as claims and noticing agent. CNX RESOURCES: Fitch Assigns BB LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has assigned a 'BB' Long-Term Issuer Default Rating to CNX Resources Corporation. Fitch has also assigned a 'BBB-'/'RR1' rating to the revolving credit facility and a 'BB'/'RR4' to the senior unsecured notes. The Rating Outlook is Stable. CNX's rating reflects its status as a top 10 producer of natural gas, strong cash netbacks, adequate liquidity position, extensive hedging program, operational and financial flexibility benefits from ownership of CNX Midstream Partners LP (CNXM), and Fitch's forecasted base case leverage profile in the 2.5x-3x range. Fitch expects CNX to generate a FCF deficit in 2019 as it steps up its development in Southwest Pennsylvania and completes several infrastructure projects. However, FCF should turn positive in 2020 as these infrastructure projects are completed. Rating concerns include recent weakness in natural gas prices, which could delay FCF generation and slow the development of Southwest Pennsylvania, as Fitch expects the company would reduce capex to keep outspend measured in a lower commodity price environment. In addition, CNX has a $750 million share repurchase program. Fitch will consider the allocation of future FCF proceeds among share repurchases and debt reduction, particularly in light of the uncertain capital market access for high yield E&P issuers. KEY RATING DRIVERS Substantial Natural Gas Base: The rating is supported by CNX's extensive acreage and drilling inventory in the core of the Marcellus and Utica shales. The company has approximately 539,000 net Marcellus acres and 627,000 net Utica acres. CNX's acreage is largely stacked-pay inventory and highly contiguous with a proved reserves life ratio of 15.5 years based on 2018 production. The acreage is also supported with extensive midstream and water infrastructure, with the former through its controlling position in CNXM. CNX current development is focused on the Southwest Pennsylvania (SWPA) Marcellus where the company has substantial core inventory. In addition, the company is blending damp gas from the Marcellus with dry Utica gas to sell as dry gas. This is providing a 30% uplift in NPV by avoiding processing fees, allowing for a higher well count and concentrated volume, providing for faster cycle times, and taking advantage of capex already spent. Single Basin Risk: CNX operations are primarily in Appalachia, which exposes the company to significant basis risk due to takeaway constraints. Nevertheless, differentials have improved as new pipeline capacity has been installed. CNX resisted signing into long-term takeaway contracts to avoid entering into firm transportation commitments that could have resulted in expensive long-term obligations. Instead, the company used hedges to mitigate pricing risk. As a result, CNX was able to move its production without entering into contracts that would make it inflexible to adjust production during periods of low natural gas prices because it had to meet takeaway commitments. Despite CNX's success in managing its commitments, the strategy could be risky if Appalachia takeaway capacity ever becomes constrained. Low Cost Operator: CNX is one of the lowest cost operators in the Appalachia, which allows for one of the highest netbacks in that region. Lower costs are driven by the lack of unutilized firm transportation charges, midstream ownership, and investment in water infrastructure. Management estimates that approximately 70% of CNX water is transferred through pipeline infrastructure resulting in an 80% cost savings compared with trucking. As production increases, costs are likely to decrease per unit due to the increase in scale. Thoughtful Hedging Program: CNX has one of the most robust hedging positions in the industry, with approximately 81% of its expected 2019 gas production hedged at an average of $3.01 per MCf and 86% of its expected 2020 gas production hedged at an average of $2.94 per Mcf. Furthermore, CNX hedges a majority of its production against basis risk. The company hedges a material portion of its proved developed production a portion of its proved undeveloped production until 2023. Fitch believes that CNX has a thoughtful hedging program that locks in expected returns and reduces volatility in cash flows, while its extensive basis hedges protects from potential disruptions in the Appalachia basin. CNX's hedge program combined with its low cost structure allows for capital allocation flexibility for its future development program. CNXM Enhances Value: CNXM provides significant value to CNX in several forms: First, it provides a source of funding through drop downs of midstream assets at CNX to CNXM. Management estimates that there is potential for further drop downs. Second, because CNXM can self-fund growth projects, this reduces further buildout costs for CNX. Lastly, through its ownership of 21.7 million CNXM units, CNX receives substantial distributions from CNXM, which Fitch expects to grow at approximately a 25% CAGR over the forecasted period from $55 million in 2019. CNXM is expected to turn FCF positive in Q3 19, and as capex spend is reduced, the entity could generate up to $100 million in FCF in 2020. FCF Expected to Turn Positive: Fitch expects CNX to run a FCF deficit in 2019 as the company develops its SWPA Marcellus acreage and builds out its midstream and water infrastructure. However, capex spending is expected to decline significantly in 2020 and should allow for positive FCF in 2020 and beyond. Management expects to allocate FCF to a combination of incremental 2020 development, debt reduction, and/or share repurchases. A prolonged period of low commodity prices could delay the timing of turning FCF positive and reduce the potential for material deleveraging. The company has a $750 million share repurchase program in effect, and repurchased approximately $108 million in 2019. Conservative Financial Policy: CNX has a long-term target of sustained net leverage for the standalone E&P of less than 2.5x. The company's active hedging program, lack of "out-of-money" firm transportation commitments, and midstream operations all combine to de-risk the balance sheet. The expectation of FCF deficits in 2019 is somewhat concerning given the current commodity price environment and existing lack of capital market access for high yield E&P companies. Nevertheless, Fitch expects the company to turn FCF positive in 2020 and use the proceeds to address its revolver borrowings and near-term debt maturities. DERIVATION SUMMARY In terms of production, CNX is a mid-sized producer at 232 boe/d and is smaller than Southwestern Energy (SWN: BB/Stable) at 432 mboe/d, Antero Resources (AR: BB+/Stable) at 451mboe/d and EQT (BBB-/Stable) at 679 mboe/d but slightly larger than Comstock Resources (CRK: B/Stable) of 200 mboe/d, pro forma for its acquisition of Covey Park. CNX also has a lower liquids mix of production at 8% compared with SWN at 15% and AR at 28%. However, CNX has one of the highest netbacks as calculated by Fitch at $2.04/mcfe, which is above AR at $1.38/mcfe, EQT at $1.66/mcfe, and SWN at $1.53/mcfe. Despite the lower mix of liquids, CNX has one of the best netbacks among its peers. Fitch believes that CNX's cost structure can continue to improve as higher production provides more scale and the company benefits from recent infrastructure spend. CNX's debt/flowing barrel at $8,320/bbl is in line with EQT ($8,160/bbl) and AR ($8,542/bbl) but higher than SWN ($5,422/bbl). CNX's standalone Debt/EBITDA at 2.3x is slightly better than AR, EQT and Southwestern. Fitch anticipates that CNX's leverage metrics will improve over time from growing production and its move to positive FCF generation. Two areas that stand out for CNX compared to its peers is the lack of off balance sheet obligations created through firm transportation commitments and the strong hedge program. CNX's firm transportation commitments are significantly lower than SWN, AR, and EQT. FT commitments can establish financial and operational obligations that cause companies to spend capex and create FCF deficits in order to meet these commitments. In addition, CNX has hedged approximately 86% of its 2020 gas production, more than any other peer except for AR. Therefore, CNX has been able to lock in returns within a current period when natural gas prices are well below historical levels. KEY ASSUMPTIONS - Base case Henry Hub natural gas price of $2.75 throughout the forecasted period; - Base case WTI oil prices of $57.50 in 2019 and 2020 and a long-term price of $55; - Production growth of 3% in 2019 and 12% in 2020 based on 2019 capex spend; - Capex of $1.235 billion in 2019 and $670mm in 2020 based on the midpoint of management guidance; - Other than share repurchases made in 1H 19, no incremental share repurchases, equity issuance, acquisitions, or divestitures. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Operational execution of development plan that balances growth initiatives with funding from internally generated FCF; - Mid-cycle debt/EBITDA below 2.5x or FFO-Adjusted Leverage below 2.75x on a sustained basis; - Demonstrated commitment to stated financial policy, including hedging program. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Mid-cycle debt/EBITDA above 3.5x or FFO-Adjusted Leverage below 3.75x on a sustained basis; - Inability to generate FCF over the cycle or material allocation of FCF proceeds to share repurchases; - Weakening of unit cost profile or capital returns. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity Position: As of June 30, 2019, CNX has $33 million of consolidated cash on hand and $1,271 million of borrowing capacity on its revolver. The revolving commitments were $2.1 billion and there was $630 million of borrowings outstanding and $199 million of letters of credit outstanding. CNX amended its revolving credit facility in April 2019 and the borrowing base was reaffirmed at $2.1 billion and the maturity was extended to April 2024. If the principal amount of the 5.875% senior notes due in April 2022 is greater than $500 million 91 days prior to that notes' maturity, then the revolving credit facility will become due at that time. In addition, there is a maximum net leverage ratio of no greater than 4.0:1, which is based on net debt. CNX must also maintain a minimum current ratio of no less that 1.0:1.0. CNX Midstream also has its own revolving credit facility that is not guaranteed by CNX. The facility has $600 million in commitments and had $208 million of borrowings outstanding, leaving availability at $392 million. Fitch considers CNX's maturity schedule to be manageable with the next major maturity in April 2022, although the revolver maturity will spring forward to 91 days prior to that maturity as discussed previously. Asset coverage on the debt is strong, with PDP PV-10/consolidated net debt at 1.5x consolidated and 1.9x for the E&P business only for year-end 2018. COASTAL HOME: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Coastal Home Care, Inc., according to court dockets. About Coastal Home Care Coastal Home Care, Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 19-07259) on July 31, 2019, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Jake C. Blanchard, Esq., at Blanchard Law, P.A. CONCRETE INVESTMENTS: Hires Zalkin Revell as Legal Counsel ---------------------------------------------------------- Concrete Investments, Inc. seeks authority from the U.S. Bankruptcy Court for the Northern District of Florida to hire Zalkin Revell, PLLC as its legal counsel. The Debtor requires Zalkin Revell to: a) prepare schedules and statements, as well as various pleadings, applications, motions, responses, objections, and notices related to administration of this case and conducting examinations incidental to the administration of this case and any proceedings therein; b) protect the interests of the Debtor in all matters pending before the Court; c) analyze and develop the relationship of the Debtor to the claims of creditors and other parties in interest in this case; d) advise the Debtor of its rights, duties and obligations as Debtor-in-Possession operating under Chapter 11 of the Bankruptcy Code; e) take any and all other necessary action incidental to the proper preservation and administration of this Chapter 11 case; f) appear at various hearings on administrative and contested matters and in any adversary proceedings filed; and g) advise and assist the Debtor in the formation and drafting of a disclosure statement and plan of reorganization and negotiating with its creditors in connection with a plan and any and all matters related thereto. The firm's hourly rates are: Natasha Revell, Esq. $300 Kenneth Revell, Esq. $300 Teresa Dorr, Esq. $285 Legal Assistants $95. Zalkin Revell has been paid a retainer of $15,000 for legal fees and $1,717 for costs and expenses. The firm will also be reimbursed for work-related expenses incurred. Natasha Revell, Esq., a member of Zalkin Revell, 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. Zalkin Revell can be reached at: Natasha Revell, Esq. ZALKIN REVELL, PLLC 2410 Westgate Dr., Suite 100 Albany, GA 31707 Tel: (229) 435-1611 Fax: (866) 560-7111 E-mail: nrevell@zalkinrevell.com About Concrete Investments, Inc. Based in Panama City Beach, Florida, Concrete Investments, Inc. filed a petition for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Secs. 101 (Bankr. N.D. Fla. Case No. 19-50096) on August 2, 2019, listing under $1 million in both assets and liabilities. Teresa M. Dorr at Zalkin Revell, PLLC is the Debtor's counsel. CONTINENTAL CAST: Lender OKs Interim Use of Cash Collateral ----------------------------------------------------------- Judge Robert D. Berger of the U.S. Bankruptcy Court for the District of Kansas approved on an interim basis the motion to use cash collateral filed by Continental Cast Stone, LLC, pursuant to the terms reached by the Debtor and Central Bank of the Midwest. The Debtor and Central Bank have agreed that: (1) The Debtor will not seek a hearing for approval of a DIP Facility until final hearing on the Cash Collateral Motion; (2) As adequate protection, the Debtor will pay Central Bank an amount calculated at a per diem rate of $679.72 per day from the Petition Date until the date of the final hearing; The Debtor has agreed not seek to extend this Stipulated Interim Order nor seek to continue the final hearing on its request. About Continental Cast Stone Continental Cast Stone, LLC -- http://www.continentalcaststone.com/ -- doing business as CCSM Acquisition LLC was established in 1986. It is a manufacturer of cast stone and has offices in Kansas, South Carolina, Chicago, and California. Continental Cast filed a Chapter 11 bankruptcy petition (Bankr. D. Kan. Case No. 19-21752) on Aug. 20, 2019. In the petition signed by Bryan Hinkle, member, the Debtor estimated assets and liabilities at $1 million to $10 million. MANN CONROY, LLC, is the Debtor's counsel. DOMINION GROUP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Dominion Group, LLC 635 Highlandia Avenue, Suite A Baton Rouge, LA 70810 Business Description: Dominion -- https://www.dominiongp.com -- is a turn-key bulk materials producer and provider, which operates marine terminals and provides transportation and logistics support serving businesses on the Mississippi River and Gulf Coast. Cape Quarry, a wholly-owned subsidiary of Dominion, owns and operates a limestome quarry in Cape Girardeau County, Missouri. Chapter 11 Petition Date: September 3, 2019 Two affiliates that simultaneously filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Dominion Group, LLC 19-12366 Cape Quarry, LLC 19-12367 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Hon. Jerry A. Brown Debtors' Counsel: Robin B. Cheatham, Esq. ADAMS & REESE LLP One Shell Square 701 Poydras Street, Suite 4500 New Orleans, LA 70139 Tel: (504) 581-3234 Fax: (504) 566-0210 Email: cheathamrb@arlaw.com robin.cheatham@arlaw.com Debtors' Financial Advisor: CHIRON ADVISORY SERVICES LLC Debtors' Exclusive Investment Banker: CHIRON FINANCIAL LLC Dominion Group's Estimated Assets: $1 million to $10 million Dominion Group's Estimated Liabilities: $1 million to $10 million Cape Quarry's Estimated Assets: $10 million to $50 million Cape Quarry's Estimated Liabilities: $1 million to $10 million The petitions were signed by Joe William Cline, III, manager of Dominion Group LLC. Full-text copies of the petitions are available for free at: http://bankrupt.com/misc/laeb19-12366.pdf http://bankrupt.com/misc/laeb19-12367.pdf A. List of Dominion Group's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. American Commercial Barge Line $89,663 Attention: Sam Williams P.O. Box 610 Jeffersonville, IN 47130 2. Bottom Line Equipment LLC $35,689 P. O. Box 81217 Lafayette, LA 70598 3. Breazeale, Sachse & Wilson, LLC $119,124 Twenty-Third Floor One American Place P.O. Box 3197 Baton Rouge, LA 70821 4. CAT Commercial Account $16,778 P. O. Box 978595 Dallas, TX 75397 5. CEMUS $177,500 1210 Airline Hwy Baton Rouge, LA 70805 6. CGB-Waterfront Marine Services $38,640 23476 Network Place Chicago, IL 60673 7. Construction $15,564 Aggregate Supply Luhr Bros, Inc. P.O. Box 50 Columbia, IL 62236 8. Cooper Consolidated, LLC $91,568 28586 Network Place Chicago, IL 60673 9. Donahue Patrick & Scott, PLLC $166,653 450 Laurel Street, Suite 1600 Baton Rouge, LA 70801 10. FMT $90,684 P.O. Box 203351 Dallas, TX 75320 11. Gavillon Agriculture, LLC $37,500 1331 Capitol Avenue Omaha, NE 68102 12. Harry Robert Insurance $37,208 725 E. Cornerview St. Gonzales, LA 70737 13. John Credit Inc. $36,797 John Deere Financial P.O. Box 650215 Dallas, TX 75265 14. Lord & Winter $17,496 David Winter 1720 Nottingham Place Nashville, TN 37221 15. Louisiana Department of Revenue $32,000 617 North Third Street Baton Rouge, LA 70802 16. Louisiana Marine $347,278 Operators, LLC 2302 E. Main St. Broussard, LA 70518 17. Louisiana Workforce Commission $14,323 1001 N 23rd Street Baton Rouge, LA 70802 18. Postlethawaite & $42,675 Netterville, APAC 8550 United Plaza Baton Rouge, LA 70809 19. Siboney $303,804 1450 Centrepark Blvd, Suite 100 West Palm Beach, FL 33401 20. Tricon Steamship Agency, Inc. $40,040 226 Eastbank Dr., Suite A Gonzales, LA 70737-4840 B. List of Cape Quarry's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Agg Pro LLC $13,859 818 Hickory St Calvert City, KY 42029 2. Base Rock $43,115 6801 Vo-Tech Rd Bonne Terre, MO 63628 3. Breazeale, Sachse & $28,687 Wilson, LLC Twenty-Third Floor One American Place P. O. Box 3197 Baton Rouge, LA 70821 4. Buckley Powder Co $78,950 42 Inverness Dr. E Englewood, CO 80112 5. Citizens Electric Corporation $24,000 P.O. Box 368 Perryville, MO 63775 6. Collector of Revenue $33,426 1 Barton Square Jackson, MO 63755 7. Don Heil Oil Co. $18,006 P.O. Box 127 Sainte Genevieve, MO 63670 8. Dryer Electric $13,723 16 Saxon Memorial Drive Frohna, MO 63748 9. Electrical Contractors, Inc. $22,903 2620 E. Outer Rd Rutherford, NJ 07070 10. Horton Supply Co $57,068 518 N. Jefferson Springfield, MO 65806 11. Magotteaux, Inc. $13,624 725 Cool Springs, Blvd. #200 Franklin, TN 37067 12. Metal Cutters LLC $9,745 803 Enterprise Cape Girardeau, MO 63703 13. MSC Industrial Supply Co. $14,315 P.O. Box 953635 Saint Louis, MO 63195-3635 14. Richardson Tire, Co. $5,804 4901 Nash Rd. Cape Girardeau, MO 63703 15. Roland Machinery Co. $6,245 816 N. Dirksen Parkway Springfield, IL 62702 16. Ryan Samuel Istre $275,000 1231 South Columbine Baton Rouge, LA 70808 17. Santie Oil $41,605 126 Larcel Drive P.O. Box 1108 Sikeston, MO 63801 18. Shaw Heavy $13,928 Equipment Repair 404 East Fourth Street Sparta, IL 62286 19. Sinfabco $6,650 #4 Heil Drive Marissa, IL 62257 20. Travelers Insurance $47,092 P.O. Box 2927 Hartford, CT 06104 DR. RICHARD R. ROLLE: Court Consents to Cash Use Until Sept. 10 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina approves the motion filed by Dr. Richard R. Rolle, Jr., PLLC to use cash collateral to pay its operating expenses pursuant to the Budget. The Debtor's creditors are granted replacement security interest to the extent of cash collateral used by the Debtor. The budget for the week-ending Sept. 4, 2019 provides for total expenses of $10,701 -- $3,500 of which is for health insurance; $1,500 for materials; and $1,250 for general operating expenses. A copy of the Order and the Budget can be accessed for free at: http://bankrupt.com/misc/Rirchard_R_30_Cash_Ord.pdf A final hearing on the motion will be held on Sept. 10, 2019 at 9:30 a.m. About Richard R. Rolle Dr. Richard R. Rolle Jr., PLLC -- http://rolleoralfacialsurgery.com/-- owns and operates a surgery center in Cornelius, North Carolina, specializing in oral and maxillofacial surgery and general dentistry. Dr. Richard R. Rolle Jr., PLLC, filed for Chapter 11 protection (Bankr. W.D.N.C. Case No. Case No. 19-31124) on Aug. 15, 2019 in Charlotte, North Carolina. In the petition signed by Richard R. Rolle, Jr., member manager, the Debtor estimated assets at $100,000 to $500,000 and liabilities at $1 million to $10 million as of the Petition Date. Judge Craig J. Whitley oversees the case. ESSEX RICHARDS, P.A., is the Debtor's attorney. EAT HERE BRANDS: Committee Taps Scroggins & Williamson as Counsel ----------------------------------------------------------------- The official committee of unsecured creditors of Eat Here Brands, LLC and its debtor-affiliates seeks authority from the United States Bankruptcy Court for the Northern District of Georgia to retain Scroggins & Williamson, P.C. as its legal counsel. The committee requires Scroggins to: a. consult with, advise, and represent the committee concerning the administration of the Debtors' Chapter 11 cases and any matter relevant thereto; b. advise the committee of its powers and duties in the Debtors' cases; c. consult with, advise and represent the committee with respect to formulation of a Chapter 11 plan; d. prepare pleadings and applications; e. conduct examinations of the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtors' business and the desirability and feasibility of continuation of such business; and f. take any and all other action incident to the proper preservation and administration of the committee's interests in the Debtors' Chapter 11 case. The firm's hourly rates range from $415 to $495 for attorneys and from $125 to $150 for legal assistants and paralegals. J. Hayden Kepner Jr., Esq., a member of Scroggins & Williamson, disclosed in a court filing that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: J. Robert Williamson, Esq. Matthew W. Levin, Esq. Scroggins & Williamson, P.C. 4401 Northside Parkway, Suite 450 Atlanta, GA 30327 Tel: (404) 893-3880 Fax: (404) 893-3886 Email: rwilliamson@swlawfirm.com Email: mlevin@swlawfirm.com About Eat Here Brands Eat Here Brands, LLC, a Delaware limited liability company that was formed on or about May 23, 2012, owns the trademarks and other intellectual property rights of the Babalu restaurant concept. The Babalu concept was named after the signature song of the television character Ricky Ricardo, who was played by Desi Arnaz in the television comedy series I Love Lucy. The Babalu concept features upscale Latin-inspired cuisine born out of the love and respect for food and for music genres such as the guaracha, cha-cha, and Latin jazz, which is a major component of the Babalu concept (the restaurants commonly plays Cuban, Spanish, and Latin music of all genres). Eat Here Brands owns 100 percent of the membership interests of its affiliated debtors and certain non-debtor entities. Eat Here Brands and its affiliated debtors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Lead Case No. 19-61688) on July 30, 2019. At the time of the filing, Eat Here Brands disclosed assets of between $1 million and $10 million and liabilities of the same range. The cases have been assigned to Judge Wendy L. Hagenau. The Debtors tapped Arnall Golden Gregory LLP as bankruptcy counsel; GGG Partners, LLC as financial advisor; and Omni Management Group, Inc. as claims and noticing agent. The U.S. Trustee for Region 21 appointed a committee of unsecured creditors on Aug. 21, 2019. FANNIE MAE & FREDDIE MAC: Treasury Publishes GSE Reform Plan ------------------------------------------------------------ The U.S. Department of the Treasury released its plan to reform the housing finance system on Thurs., Sept. 5, 2019. The Treasury Housing Reform Plan consists of a series of recommended legislative and administrative reforms that are designed to protect American taxpayers against future bailouts, preserve the 30-year fixed-rate mortgage, and help hardworking Americans fulfill their goal of buying a home. "The Trump Administration is committed to promoting much needed reforms to the housing finance system that will protect taxpayers and help Americans who want to buy a home," said U.S. Treasury Secretary Steven T. Mnuchin. "An effective and efficient Federal housing finance system will also meaningfully contribute to the continued economic growth under this Administration." During the financial crisis of 2008, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) -- together known as the Government-sponsored enterprises (GSEs) -- posted significant losses and subsequently received more than $190 billion from the Treasury Department. The government's narrative is that the GSEs suffered from structural flaws and lack of sufficient regulatory oversight. GSE shareholders say the losses were manufactured using classic cookie jar accounting techniques in an illegal taking of private property for public use. On March 27, 2019, President Donald J. Trump issued a Presidential Memorandum directing the Secretary of the Treasury to develop a plan for administrative and legislative reforms to address this last unfinished business of the financial crisis. The Plan -- available at https://bit.ly/2lFeMR8 -- includes nearly 50 recommended legislative and administrative reforms to define a limited role for the Federal Government in the housing finance system, enhance taxpayer protections against future bailouts, and promote competition in the housing finance system. During the development of the Plan, the Treasury Department met with a wide range of stakeholders including affordable housing advocates; broker-dealers; investors; mortgage lenders, servicers, and insurers; think tanks; trade associations; and other interested parties. Treasury also consulted with the Federal Housing Finance Agency, the Department of Housing and Urban Development, and other government agencies. The Plan was submitted to the President for approval through the Assistant to the President for Economic Policy. "Our view is that the government footprint has become too big," Treasury Secretary Steven Mnuchin said in an interview ahead of Thursday's report. "There are people in Washington who are happy to leave this the way it is for another 10 or 20 years, and that’s not us. We feel an obligation to try to fix this," Andrew Ackerman and Kate Davidson at The Wall Street Journal report. Aaron Back, writing for the Journal's "Heard on the Street Column" isn't as optimistic. Mr. Back notes the plan uses the phrase "Congress should" 40 times and questions if the Administration will have time to do what it wants using the administrative tools available to it during the current presidential term. The United States Senate Committee on Banking, Housing and Urban Affairs will convene a hearing at 10:00 a.m. on Tues., Sept. 10, 2019, to conduct a hearing entitled "Housing Finance Reform: Next Steps." The witnesses will be (x) The Honorable Steven T. Mnuchin, Secretary of the Treasury; The (y) Honorable Benjamin S. Carson , M.D. Secretary, U.S. Department of Housing and Urban Development; and (z) The Honorable Mark A. Calabria, Ph.D. Director, Federal Housing Agency. See https://www.banking.senate.gov/hearings/housing-finance-reform-next-steps for further information about that Senate Committee hearing. FLOYD SQUIRES: Liquidating Agent's $240K Eureka Property Sale OK'd ------------------------------------------------------------------ Judge William J. Lafferty, III of the U.S. Bankruptcy Court for the Northern District of California authorized Janina M. Hoskins, the Liquidating Agent of the estate of the Floyd E. Squires III and Betty J. Squires, to sell the real property located at 1623-1625 G Street, Eureka, California, an improved parcel, APN 005-053-006-000, to Klokehus, LLC or its designee for $240,000, cash at close of escrow. A hearing on the Motion was held on July 31, 2019 at 10:30 a.m. The sale is free and clear of the liens, claims, encumbrances and interests, with those liens, claims, encumbrances and interests to re-attach to the proceeds of sale. The Liquidating Agent is authorized (i) to pay a real estate broker's commission not to exceed 6% of the total sale price, which will be split with the buyer's broker; and (ii) to pay standard closing costs, including but not limited to unpaid real property taxes, escrow fees, if any, recording costs and the like. The order is effective upon entry, and the stay otherwise imposed by Rule 62(a) of the Federal Rules of Civil Procedure and/or Bankruptcy Rule 6004(h) will not apply. Nothing in the Order will prevent the City of Eureka from enforcing any rights or remedies against the Property based upon any condition or violation that arises or continues from and after the closing. Nothing in the order will affect any rights that lienholders may have against third parties, including but not limited to title companies. About the Squires Floyd E. Squires, III, and Betty J. Squires filed for chapter 11 protection (Bankr. N.D. Cal. Case No. 16-10828) on Nov. 8, 2017, and are represented by David N. Chandler, Esq. of the Law Offices of David N. Chandler. Janina M. Hoskins was appointed as examiner of the Debtors on April 23, 2018. DENTONS US LLP, led by Michael A. Isaacs, is the examiner's counsel. FLOYD SQUIRES: Liquidating Agent's $250K Eureka Property Sale OK'd ------------------------------------------------------------------ Judge William J. Lafferty, III of the U.S. Bankruptcy Court for the Northern District of California authorized Janina M. Hoskins, the Liquidating Agent of the estate of the Floyd E. Squires III and Betty J. Squires, to sell the real property located at 216-220 3rd Street, Eureka, California, two improved parcels, APN: 001-066-002-000, 001-066-003-000, to John AA Hancock or his designee for $250,000, cash at close of escrow. A hearing on the Motion was held on July 31, 2019 at 10:30 a.m. The sale is free and clear of the liens, claims, encumbrances and interests, with those liens, claims, encumbrances and interests to re-attach to the proceeds of sale. The Liquidating Agent is authorized (i) to pay a real estate broker's commission not to exceed 6% of the total sale price, which will be split with the buyer's broker; and (ii) to pay standard closing costs, including but not limited to unpaid real property taxes, escrow fees, if any, recording costs and the like. The order is effective upon entry, and the stay otherwise imposed by Rule 62(a) of the Federal Rules of Civil Procedure and/or Bankruptcy Rule 6004(h) will not apply. Nothing in the Order will prevent the City of Eureka from enforcing any rights or remedies against the Property based upon any condition or violation that arises or continues from and after the closing. Nothing in the order will affect any rights that lienholders may have against third parties, including but not limited to title companies. About the Squires Floyd E. Squires, III, and Betty J. Squires filed for chapter 11 protection (Bankr. N.D. Cal. Case No. 16-10828) on Nov. 8, 2017, and are represented by David N. Chandler, Esq. of the Law Offices of David N. Chandler. Janina M. Hoskins was appointed as examiner of the Debtors on April 23, 2018. DENTONS US LLP, led by Michael A. Isaacs, is the examiner's counsel. FORT BRAGG: Oct. 10 Plan Confirmation Hearing --------------------------------------------- The Bankruptcy Court has issued an order conditionally approving the second amended disclosure statement explaining the small business Chapter 11 plan of Fort Bragg Carolina Trust. A hearing to consider confirmation of the Plan is scheduled for October 10, 2019 at 02:30 PM. Last day to object to confirmation is October 3, 2019. Class 3 - General allowable unsecured claims are impaired. General unsecured claims will be paid in full within twelve (12) months of an order confirming the Plan. Class 1 - Christopher Goines (disputed) $197,408, Fort Bragg Estates and Class 2 - William Lee (disputed) $375,000, Rosewood Mobile Home Park. If the value of the collateral or setoffs securing the creditor's claim is less than the amount of the creditor's allowed claim, the deficiency will be classified as a general unsecured claim. Class 4 - Equity Security Holders of the Debtor are impaired. The Debtor will retain his equity in the property of the bankruptcy estate post-confirmation. Payments and distributions under the Plan will be funded by the income received through the continued business operations of the Debtor or Reorganized Debtor. The Debtor disclosed in the Second Amended Disclosure Statement that it intends to add 50 units to the park within 60 days of Plan confirmation. The City continues to interfere with utilities and the Debtor is considering employing special counsel to resolve what appear to be eminent domain issues. The Debtor also adds that has been providing adequate assurance through its affiliate entity, Parks Management LLC. Although the Debtor's rental income stream has been interrupted due to City utility issues, this is temporary and will be corrected. It is the Debtor's intention to continue to use funds from its affiliate until the Debtor's income stream renders it solvent. A full-text copy of the Second Amended Disclosure Statement dated September 3, 2019, is available at https://tinyurl.com/y6yycmm5 from PacerMonitor.com at no charge. A full-text copy of the First Amended Disclosure Statement dated August 20, 2019, is available at https://tinyurl.com/y4pf7sk2 from PacerMonitor.com at no charge. About Fort Bragg Carolina Trust Fort Bragg Carolina Trust filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03388) on April 15, 2019, listing under $1 million in both assests and liabilities. The case is assigned to Judge Caryl E. Delano. Samantha L. Dammer, Esq., at Tampa Law Advocates, P.A., is serving as the Debtor's counsel. The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Fort Bragg Carolina Trust, according to court dockets. GEORGIA DIRECT: Carpet Co. Seeks Cash for Operating Expenses ------------------------------------------------------------ Georgia Direct Carpet, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Indiana to use cash collateral to pay operating expenses in the ordinary course of business, and to pay for the maintenance and upkeep of all its assets, nunc pro tunc to the Petition Date. As adequate protection, the Debtor proposes to grant its secured creditors postpetition replacement liens of at least $1,300,000 in the cash and receivables, to the same extent and priority as their properly perfected prepetition security interests, subject to determination of the creditors' rights. In the budget submitted to the Court, the Debtor projects total expenses at $77,563 for September 2019, $28,433 of which is for payroll. A copy of the budget is available free of charge at http://bankrupt.com/misc/Georgia_D_5_Cash_Budget.pdf As of the Petition Date, the Debtor's secured creditors and their respective claims are: (i) West End Bank, S.B., for $4,900,000; (ii) EIN Cap., for $100,000; and (iii) Premium Merchant Funding for $200,000. About Georgia Direct Carpet Georgia Direct Carpet, Inc., also known as Georgia Carpet Direct, owns and operates a carpet & flooring store in Richmond, Indiana, offering carpets, hardwoods, laminate flooring, and ceramic tile floor products. Georgia Direct Carpet sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 19-06316) on Aug. 26, 2019. In the petition signed by Anthony Bledsoe, president, the Debtor estimated assets and liabilities at $1 million to $10 million. The Hon. Robyn L. Moberly is the case judge. MATTINGLY BURKE COHEN & BIEDERMAN LLP represents the Debtor. HALCON RESOURCES: Court Asked to Appoint Creditors' Committee ------------------------------------------------------------- A creditor of Halcon Resources Corporation has filed a motion with the U.S. Bankruptcy Court for the Southern District of Texas seeking the appointment of a committee to represent unsecured creditors in the company's Chapter 11 case. In his motion, Michael Sammons, who is owed as much as $865,000 by the company, said the law "does not require a minimum of three willing members" to form a committee. "Section 1102(a)(1) for Chapter 11 cases does not specify any required minimum or maximum number of members but rather simply mandates that the U.S. trustee shall appoint a committee," Mr. Sammons said. "A [committee] of only two members would certainly be preferable to no [committee] at all," Mr. Sammons argued. The request came after the U.S. trustee did not appoint a committee in Halcon Resources' bankruptcy case since there are only two unsecured creditors willing to serve on the committee, according to court filings. Mr. Sammons further said a committee must be appointed due to "glaring red flags" that need to be investigated. "A cursory review of the liquidation statement in the disclosure statement reveals several glaring red flags, materially understated assets values and materially overstated costs and claims, warranting investigation by professionals to be selected by the [committee]," Mr. Sammons said. About Halcon Resources Halcon Resources Corporation (OTC PINK: HKRS)is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. During 2017, the Halcon acquired certain property in the Delaware Basin and divested their assets located in the Williston Basin in North Dakota and in the El Halon area of East Texas. As a result, the properties and drilling activities are currently focused in the Delaware Basin. Halcon Resources and its affiliates previously sought bankruptcy protection (Bankr. D. Del. Lead Case No. 16-11724) on July 27, 2016, and emerged from bankruptcy in September 2016 after Eliminating $1.8 billion in long-term debt. Halcon Resources Corporation, along with its subsidiaries, again sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-34446) on Aug. 7, 2019, this time to seek confirmation of a prepackaged plan that would cut debt by $750 million. The Debtors disclosed $1,798,838,000 in total assets and $945,175,000 in total liabilities as of March 31, 2019. Perella Weinburg Partners and Tudor Pickering Holt & Co. are acting as financial advisors, Weil, Gotshal & Manges LLP is acting as legal counsel and FTI Consulting, Inc. is acting as restructuring advisor to the Company in connection with the Restructuring Plan. KCC is the claims agent. Ducera Partners LLC is acting as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison is acting as legal advisor to the Unsecured Noteholders that comprise the Ad Hoc Noteholder Group. HALCON RESOURCES: Seeks to Hire Weil Gotshal as Legal Counsel ------------------------------------------------------------- Halcon Resources Corporation and its debtors-affiliate seek authority from the United States Bankruptcy Court for the Southern District of Texas (Houston) to hire Weil, Gotshal & Manges LLP, as their legal counsel. The Debtors require the firm to: a. take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved and the preparation of objections to claims filed against the Debtors' estates; b. prepare on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports and other pleadings and documents in connection with the administration of the Debtors' Chapter 11 Cases; c. take all necessary actions in connection with any chapter 11 plan and related disclosure statement and all related documents, and such further actions as may be required in connection with the administration of the Debtors' estates; d. take all necessary actions to protect and preserve the value of the Debtors' estates, and all related matters; and e. perform all other necessary legal services in connection with the prosecution of these Chapter 11 Cases; provided, however, that to the extent Weil Gotshal determines that such services fall outside of the scope of services historically or generally performed by Weil Gotshal as lead debtors' counsel in a bankruptcy case, Weil Gotshal will file a supplemental declaration. Weil Gotshal's current customary hourly rates are: Partners and Counsel $1,050 to $1,600 Associates $560 to $995 Paraprofessionals $240 to $420 For the 90 days prior to the petition date, Weil Gotshal received payments and advances in the aggregate amount of $4.3 million. The firm will also be reimbursed for work-related expenses incurred. Weil Gotshal has a remaining credit balance in favor of the Debtors for professional services performed and to be performed, and expenses incurred and to be incurred, in connection with their cases in the amount of f $415,299.98. Gary Holtzer, Esq., a partner at Weil Gotshal, 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. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Holtzer attested that: a. Weil Gotshal did not agree to any variations from, or alternatives to, its standard or customary billing arrangements for its employment with the Debtors; b. No Weil Gotshal professional included in the engagement has varied his rate based on the geographic location of the cases; c. Weil Gotshal represented the Debtors for approximately five months prior to the petition date. The firm's billing rates and material financial terms with respect to this matter have not changed since the Debtors engaged the firm in April of 2019. d. Weil Gotshal , in conjunction with the Debtors, is developing a prospective budget and staffing plan for their bankruptcy cases. Weil can be reached at: Gary T. Holtzer, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119 Tel: (212) 310-8000 Fax: (212) 310-8007 About Halcon Resources Halcon Resources Corporation (OTC PINK: HKRS)is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. During 2017, the Halcon acquired certain property in the Delaware Basin and divested their assets located in the Williston Basin in North Dakota and in the El Halon area of East Texas. As a result, the properties and drilling activities are currently focused in the Delaware Basin. Halcon Resources and its affiliates previously sought bankruptcy protection on July 27, 2016 (Bankr. D. Del. Lead Case No. 16-11724) and emerged from bankruptcy in September 2016 after eliminating $1.8 billion in long-term debt. Halcon Resources Corporation, along with its subsidiaries, again sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-34446) on Aug. 7, 2019, this time to seek confirmation of a prepackaged plan that would cut debt by $750 million. The Debtors disclosed $1,798,838,000 in total assets and $945,175,000 in total liabilities as of March 31, 2019. Perella Weinburg Partners and Tudor Pickering Holt & Co. are acting as financial advisors, Weil, Gotshal & Manges LLP is acting as legal counsel and FTI Consulting, Inc. is acting as restructuring advisor to the Company in connection with the Restructuring Plan. KCC is the claims agent. Ducera Partners LLC is acting as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison is acting as legal advisor to the Unsecured Noteholders that comprise the Ad Hoc Noteholder Group. HARB PROPERTIES: $15K Sale of Lorain Property to Buckeye Approved ----------------------------------------------------------------- Judge Jessica E. Price Smith of the U.S. Bankruptcy Court for the Northern District of Ohio authorized Harb Properties, LLC's sale of the real property located at 1801 E. 34th Street, Lorain, Ohio to Buckeye Home Buyer and/or assigns for $15,000. The Debtor will apply the funds to cover outstanding pre-petition property tax liability on the Real Estate upon the sale of the real estate so that the Real Estate will not be further encumbered by the prepetition tax obligation. About Harb Properties Harb Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-10436) on Jan. 26, 2018. Judge Jessica E. Price Smith oversees the case. HMC/CAH CONSOLIDATED: J. Shaffer Suit vs HAC Not Subject to Stay ---------------------------------------------------------------- District Judge Nanette K. Laughrey entered a ruling that the case captioned JAMES SHAFFER, et al., Plaintiffs, v. HEALTH ACQUISITION COMPANY, LLC, et al., Defendants, Case No. 4:18-cv-00601-NKL (W.D. Mo.) is not subject to an automatic stay of bankruptcy. Defendants Health Acquisition Company, LLC , Empower H.I.S., LLC, Paul L. Nusbaum, Steven F. White, and Jorge A. Perez's filed with the Court a "Suggestion of Bankruptcy Under Chapter 11." On March 26, 2019, Defendants informed the Court that ten acute care rural community hospitals, collectively referred to by the parties as the "HMC Hospitals," have each filed for bankruptcy protection. Defendants assert this action "is so inextricably intertwined" with the operations of the HMC Hospitals that there is no way to parse out Plaintiffs' claims from those in bankruptcy, and thus, "the automatic stay should apply" to this case, in which the HMC Hospitals are not a party. The Court holds that this case is not an action against a debtor in bankruptcy, nor do Plaintiffs assert any derivative claims on behalf of the debtor HMC Hospitals. Rather, plaintiff shareholders of HMC/CAH Consolidated, Inc. ("HMC"), James and Phyllis Shaffer and FLEMCo, LLC, bring this suit derivatively on behalf of HMC. Plaintiffs allege that Defendants formed a conspiracy to deprive HMC of its majority interest in the HMC Hospitals and conspired to use the HMC Hospitals in an illegal billing scheme, thereby decreasing the value of HMC's ownership interest in the HMC Hospitals. Plaintiffs also assert claims for fraud, breach of fiduciary duties of care and loyalty, conversion, and breach of contract on behalf of HMC. The HMC Hospitals are not now, nor have they ever been, parties to this action. Further, this action is not an action "to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate" of any of the HMC Hospitals. If successful, the action would, at most, find Defendants liable for monetary damages; it would not change control of the debtors' property or divest the various estates of possession of the property. A copy of the Court's Order dated April 3, 2019 is available at https://bit.ly/2ZBenBB from Leagle.com. James Shaffer, Phyllis Shaffer & FLEMCo LLC, Plaintiffs, represented by C. Brooks Wood , Wood Law Office LLC. HMC/CAH Consolidated, Inc., A Delaware corporation, Plaintiff, represented by Frank Martin Smith . Health Acquisition Company LLC, A West Virginia limited liability company, Empower H.I.S., LLC, A Florida limited liability company, Paul L. Nusbaum, An individual, Steven F. White, An individual & Jorge A. Perez, An individual, Defendants, represented by Frank Martin Smith & Lauren A. Horsman , Chapman and Cowherd, PC. About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., Marshall C. Turner, Esq., and Matthew Gartner, Esq., at Husch Blackwell LLP, in Kansas City, Mo., represent the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HOUTEX BUILDERS: Oct. 28 Plan Confirmation Hearing -------------------------------------------------- The Bankruptcy Court has approved the Amended Disclosure Statement explaining the Amended Chapter 11 Plan of Liquidation filed by 2203 Looscan Lane, LLC, 415 Shadywood, LLC, HouTex Builders, LLC, subject to amendment. HL Builders, LLC, filed objections to the Disclosure Statement. In the Disclosure Statement Order, the Court refused to entertain objections constituting "attacks on the plan itself," and disagreed with HLB's contention that the Disclosure Statement lacks adequate information, pointing out that, in this case, creditors have actively appeared as this case has progressed and have remained silent. The creditors are currently satisfied with the disclosure statement and have not objected, the Court said. The Court clarified that its approval of any disclosure statement or statements does not mean it has determined that the information is accurate; the Court has determined the information is adequate. The Court also added that approval of the disclosure statement is also not an indication that this Court has determined that the plan will be confirmed. The Court said it made the comments, so all parties are aware of the scope of this order. The Debtors were given by the Court time to file an Amended Plan and Amended Disclosure Statement to correct any typographical errors, then the Court will approve the disclosure statement, set deadlines, and set plan confirmation hearing. Under the Plan, Houtex General Unsecured Claims are impaired. Each holder of an Allowed Houtex General Unsecured Claim shall receive its pro rata distribution of the following: (i) the Independent Bank Certificate of Deposit, (ii) the proceeds of the Lynbrook sale after satisfaction of the Houtex DIP Facility Claim, the CommunityBank Secured Claim and all closing costs for the Lynbrook sale including payment of property taxes, broker's commissions and other customary closing costs, and (iii) the Houtex Remnant Assets after satisfaction of all costs incurred for the maintenance and liquidation of the Remnant Assets as will be further detailed in the Liquidating Trust Agreement. Shadywood General Unsecured Claims are impaired. Holders of Allowed Shadywood General Unsecured Claims shall receive a pro-rata distribution of the proceeds of the Shadywood Remnant Assets if the proceeds are greater than the Shadywood DIP Claim amount, if the proceeds are less than or equal to the Shadywood DIP Claim amount, then the holders of Shadywood General Unsecured Claims shall receive nothing on account of their claims. Looscan General Unsecured Claims are impaired. Holders of Allowed Looscan General Unsecured Claims shall receive a pro-rata distribution of the proceeds of the Looscan Remnant Assets if the proceeds are greater than the Looscan DIP Claim amount, if the proceeds are less than or equal to the Looscan DIP Claim amount, then the holders of Looscan General Unsecured Claims shall receive nothing on account of their claims. A full-text copy of the Corrected Amended Disclosure Statement dated September 3, 2019, is available at https://tinyurl.com/y2pptnuv from PacerMonitor.com at no charge. A blacklined version of the Corrected Amended Plan dated September 3, 2019, is available at https://tinyurl.com/y4b7wf9n from PacerMonitor.com at no charge. Following the Debtors' submission of the Amended Plan and Disclosure Statement, the Court approved the Disclosure Statement and scheduled the hearing to consider confirmation of the plan for October 28, 2019, at 11:00 a.m. October 21, 2019 is fixed as the last day for filing written acceptances or rejections of the plan. Counsel to the Debtors: Charles M. Rubio, Esq. Michael D. Fritz, Esq. 909 Fannin, Suite 3700 Houston, TX 77010 Tel: (713) 333-5100 Email: crubio@diamondmccarthy.com mfritz@diamondmccarthy.com About HouTex Builders Located at 17 Courtlandt Place, Houston, Texas 77006, HouTex Builders, LLC, and affiliates 415 Shadywood, LLC and 2203 Looscan Lane, LLC are privately held companies engaged in activities related to real estate. 2203 Looscan, LLC and 415 Shadywood, LLC, are special purpose entities established for the purpose of constructing new houses. 2203 Looscan, LLC and 415 Shadywood, LLC, are each owned 100% by Charles C. Foster and Lily Foster. HouTex Builders, LLC, 415 Shadywood, LLC, and 2203 Looscan Lane, LLC, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 18-34658) on Aug. 23, 2018. In the petitions signed by Charles C. Foster, manager, the Debtors each estimated assets and liabilities in the range of $1 million to $10 million and in the range of $1 million to $10 million. Judge Jeffrey P. Norman presides over the cases. The Debtors tapped Charles M. Rubio, Esq., at Diamond McCarthy, LLP, as counsel. IMPORT SPECIALTIES: Seeks to Use Cash Collateral of Charter Bank ---------------------------------------------------------------- Import Specialties Incorporated, doing business as Heartland America, asks the U.S. Bankruptcy Court for the District of Minnesota to authorize on an expedited basis use of cash collateral in order to meet operating and administrative expenses. The budget, for the week-ending Sept. 8, 2019, provides for total disbursements of $356,111; of which $143,877 is for salaries and wages, and $75,000 for postage. A copy of the budget is available free of charge at http://bankrupt.com/misc/Import_S_9_Cash_M.pdf As adequate protection, the Debtor will grant Charter Bank replacement liens in postpetition inventory, accounts, equipment, and general intangibles, with the liens having the same priority and effect as that held prepetition. Final hearing on the motion is set for Sept. 18, 2019 at 10 a.m. Any response to the request for final hearing must be delivered by Sept. 12, 2019. About Import Specialties Import Specialties Incorporated, doing business as Heartland America is a privately held company in Chaska, Minnesota that sells products using television, catalog, internet, and mail-order. The Debtor sought Chapter 11 protection (Bankr. D. Minn. Case No. 19-42563) on Aug. 22, 2019. In the petition signed by Mark R. Platt, CEO, the Debtor's assets and liabilities are estimated at $1 million to $10 million. The Hon. Kathleen H. Sanberg oversees the Debtor's case. LAMEY LAW FIRM, P.A. is its bankruptcy counsel. INT'L. RESTAURANT: $29K Sale of Equipment to Inaali Approved ------------------------------------------------------------ Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas authorized the sale by International Restaurant Group, LLC and its affiliates of personal property, including, but not limited to all furniture, fixtures, equipment, tools, and smallwears at the North Josey Location to Inaali Worldwide, Inc. for $29,359. The sale is free and clear of all liens. Upon closing of the sale the Debtor is authorized to pay the claims of Denton County in the amount of $1,344 for tax years 2018 and 2019. All other liens against the Equipment will attach to the proceeds of the sale. Upon closing of the sale, the Debtor is authorized to pay the claims of Benton County in the amount of $2,618 for tax years 2018 and 2019. Upon closing of the sale, all other liens against the Equipment will attach to the proceeds of the sale and the Debtor shall remit the sum of $26,741 to Veritex Community Bank. The Court denied all other relief not specifically requested. About Int'l Restaurant Group International Restaurant Group LLC are privately held companies in Allen, Texas, that operate in the restaurant industry. International Restaurant Group and its affiliates, Al Rahum Enterprises LLC and Al Rahum Holdings LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case Nos. 19-40762 to 19-40764) on March 22, 2019. At the time of the filing, the Debtors each estimated up to $50,000 in assets and $1 million to $10 million in liabilities. Eric A. Liepins, P.C., is the Debtors' legal counsel. JOSEPH BRENNICK: $70K Sale of Wauchula Property to Avanti Approved ------------------------------------------------------------------ Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Joseph A. Brennick's sale of his two unimproved parcels of real property located at 302 W. Main St., Wauchula, Florida, legally described as Lots 1 & 2 Blk 18, Carlton & McEwen ADD, OR89P71 89P427 121P84 194P127, 593P167 DC-600P410411P412, to Avanti Construction Group, Inc. for $70,00, cash. A hearing on the Motion was held on Aug. 29, 2019, at 9:30 a.m. The Seller will be responsible for certain Closing Costs as further detailed in the Contract, which will be paid from the proceeds from the sale at the Closing. In addition, the Seller will be authorized to pay any brokers' fees contemplated by the Contract, in a total amount not to exceed 6%, which will be paid directly from the proceeds from the sale at the Closing. The remainder of the proceeds after payment of the Closing Costs and the Broker Fees will be distributed to Wauchula State Bank. The payment received by Wauchula State Bank will be applied to reduce Wauchula State Bank's secured claim. The IRS' federal tax liens, if any, attach to the Debtor's beneficial interest in the net sale proceeds to the same extent, validity, and priority as existed prepetition. Ordinary and necessary pro-rations will be applied at the Closing pursuant to the terms of the Contract, including pro-rations for 2019 real estate taxes, and for any income and expenses from the Real Property. The sale is free and clear of all clear of all liens, claims, encumbrances, and interests, and debts arising in any way in connection with any acts of the Debtor, claims, obligations, demands, guaranties, options, rights, contractual commitments, restrictions, interests and matters of any kind and nature arising prior to the date the sale closes or relating to acts occurring prior to the Closing Date, and whether imposed by agreement understanding, law, equity or otherwise. Notwithstanding Bankruptcy Rule 6004(g), and 6006(d) and 7062, the Order is effective and enforceable immediately upon entry and there is no reason for delay in the implementation of the Order. A copy of the Agreement attached to the Order is available for free at: http://bankrupt.com/misc/Joseph_Brennick_230_Order.pdf Joseph A. Brennick sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 18-07874) on Sept. 18, 2018. The Debtor tapped Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Postler, P.A., as counsel. KAISER GYPSUM: Court Allows IPA to File Third-Party Complaint ------------------------------------------------------------- In the case captioned MUNIR SEEN, Plaintiff(s), v. 84 LUMBER COMPANY, et. al., Defendants, Docket No. 190225/2018 (N.Y. Sup.), the New York County Supreme Court denied proposed third-party defendant Kaiser Gypsum Company, Inc.'s motion, pursuant to New York City Asbestos Litigation Case Management Order ("NYCAL CMO") Section III(C), to vacate the NYCAL Special Master, Shelley Olsen's Order granting IPA Systems, Inc.'s filing of a third-party complaint against Kaiser Gypsum. IPA's cross-motion to confirm the Special Master's recommendation is granted. Plaintiff Munir Seen commenced this suit on August 10, 2018. Plaintiff filed a First Amended Complaint on August 30, 2018 and a Second Amended Complaint on Sept. 11, 2019 against 28 parties, including IPA. Plaintiff worked as a drywaller for many companies, specifically Dukan Construction and Gus & Brothers, between 1967 and 1980. On Nov. 2, 2018, IPA appeared and answered by way of an Acknowledgement of Receipt of Service and Standard Answer to Simmons Hanly Conroy's Standard Asbestos Complaint. Plaintiff was deposed on Sept. 5, 2018 and in his testimony, he identified Kaiser Gypsum products as a source of his alleged exposure to asbestos. Plaintiff also alleged that he was exposed to asbestos throughout his career from IPA's asbestos-containing joint compound. Plaintiff brought this suit to recover for his personal injuries due to asbestos-exposure, but Kaiser Gypsum was not a party named in the initial suit. On Jan. 30, 2019, about three weeks after the Scheduling Order's deadline, counsel for IPA applied to the Special Master, Shelley Olsen, requesting permission to file a third-party complaint against Kaiser Gypsum pursuant to section XVIII(B) of the NYCAL CMO, alleging that plaintiff also identified Kaiser Gypsum during his deposition. IPA claimed that it could not file a timely third-party complaint because it did not learn of Kaiser Gypsum's potential to be sued (due to its bankruptcy protection) until it saw a Restoration Order dated Jan. 14, 2019 issued by this Court in the Marian Levin and Mark Levin v. Aerco International, Inc., et al., 19025/2016 matter. Defendant, IPA denies all of plaintiff's allegations asserted against it and contends that Kaiser Gypsum is liable to the plaintiff because it manufactured asbestos-containing joint compound to which plaintiff was exposed and suffered injury. However, Kaiser Gypsum filed for Chapter 11 Bankruptcy with the U.S. Bankruptcy Court, Western District of North Carolina, Charlotte Division on Sept. 30, 2016. Since that time, Kaiser Gypsum has been under bankruptcy protections and IPA claims that it had been under the belief that it could not comply with the Jan. 10, 2019, Scheduling Order deadline for filing a third-party action against Kaiser Gypsum. IPA argues that the Special Master's order granting permission for it to file an untimely third-party complaint is consistent with the NYCAL CMO and should be affirmed. This is because the decision was not made arbitrarily or capriciously; rather, it was rendered after weighing all sides' arguments in response, the language of the bankruptcy order, and the language of the NYCAL CMO. Moreover, IPA presents evidence of extenuating circumstances for any delay in having joined Kaiser Gypsum, which is a scenario contemplated by § XVIII(B) of the NYCAL CMO, supra (Untimely Third-Party Complaints). Kaiser Gypsum counters that there were no such extenuating circumstances. Instead, presenting evidence which attempts to establish that because certain lawyers from McGiveny Kluger & Cook were involved in separate cases with Kaiser Gypsum, IPA should also have been apprised earlier of the ability to join them in this matter. IPA was not a party to any of those cases and Kaiser Gypsum's argument is unavailing. This is because the language of the Bankruptcy Order states that the stay and protections are not simply lifted by the granting of the Order alone; rather they are lifted after a party follows the steps enumerated in the Order. To this effect, paragraph 2 of the Bankruptcy Order states: "the automatic stay is hereby lifted, effective as of Oct. 29, 2018 (the 'Effective Date'), pursuant to section 362(d) of the Bankruptcy Code, to permit only those Asbestos Personal Injury Claimants who first satisfy the requirements set forth in paragraph 3 below..." It is evident that IPA first needed to see/obtain the Bankruptcy Order and follow a variety of specific steps to bring Kaiser Gypsum in as a party to this action. Moreover, Kaiser Gypsum has failed to provide sufficient evidence that this Order or information about such steps was readily capable of being discovered earlier by IPA such as to make the delay by IPA unreasonable. The contested Special Master's recommendation is, therefore, confirmed. A copy of the Court's Decision dated April 3, 2019 is available at https://bit.ly/2ZtymDj from Leagle.com. 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. KAR AUCTIONS: Moody's Affirms B1 CFR, Outlook Stable ---------------------------------------------------- Moody's Investors Service affirmed KAR Auctions Services, Inc. credit ratings, including the B1 Corporate Family Rating, B1-PD Probability of Default Rating and B3 senior unsecured rating. Moody's assigned a Ba2 instrument rating to the new senior secured credit facilities, which include i) a $950 million senior secured term loan B maturing in 2026, and ii) a $325 million revolving credit facility maturing 2024. The Speculative Grade Liquidity Rating ("SGL") SGL-1 is unchanged. The outlook is stable. The current senior secured instrument ratings are unchanged and will be withdrawn at transaction close. Proceeds from the proposed new senior secured credit facilities are expected to be used to provide incremental liquidity and to refinance the existing senior secured credit facilities, including i) a term loan B-4 due 2021 with $185 million outstanding, ii) a term loan B-5 due 2023 with $271 million outstanding, and iii) a $350 million revolving facility due 2021 ($72 million currently drawn), all outstanding figures as of June 2019. The rating action incorporates Moody's expectation that the approximately $400 million of incremental liquidity proceeds, after refinancing the existing senior secured debt and paying transaction fees, will be utilized to support investments that will contribute to incremental EBITDA in the near term, rather than shareholder distributions. Ratings could experience downward pressure if more aggressive financial policies result in heightened shareholder distributions. Affirmations: Issuer: KAR Auction Services, Inc Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Unsecured Notes, Affirmed B3 (LGD5) Assignments: Issuer: KAR Auction Services, Inc Senior Secured 1st lien Term Loan B due 2026, Assigned Ba2 (LGD2) Senior Secured 1st lien Revolving Credit Facility due 2024, Assigned Ba2 (LGD2) Unchanged to be withdrawn at close: Issuer: KAR Auction Services, Inc Senior Secured Term Loan B4, Ba2 (LGD2) Senior Secured Term Loan B5, Ba2 (LGD2) Senior Secured Revolving Credit Facility, Ba2 (LGD2) Outlook Actions: Issuer: KAR Auction Services, Inc Outlook, Remains Stable RATINGS RATIONALE The proposed new $950 million term loan issuance, which would increase leverage at closing above the 6.0x downgrade threshold (Moody's adjusted including securitization debt), is credit negative. However, Moody's expects the incremental liquidity of about $400 million will be used to acquire growth assets that will contribute to EBITDA and result in near term deleveraging towards 6.0x by 2020. Historically, KAR's leverage has been closer to 5.0x. Ratings will be pressured in the event excess proceeds are utilized for incremental shareholder distributions. KAR's credit ratings reflect the smaller scale, higher cyclicality, reduced diversification and lower profitability after the spin-off of its salvage auction business ("IAA"), which was completed in June 2019. The company reduced its dividend distribution after the IAA separation, in line with management's announced target of 45-50% of free cash flow. However, the company announced it will complete its pending $120 million share repurchase authorization in 2019 and pursue debt-funded acquisitions. Incremental shareholder-friendly policies or a slower than expected deleveraging trend will pressure ratings. KAR's business model benefits from fairly predictable transaction-based revenues, its consignment revenue model, which does not require acquiring inventory, and low working capital requirements. The credit profile is supported by its still relatively large scale with $2.6 billion of pro forma revenue as of the LTM period ending June 2019. The company's leading #2 market position in North America, after #1 player Manheim, benefits from deep established relationships with dealers and institutional sellers. KAR has good growth prospects over the next 6-12 months, but it faces challenges to adapt to an evolving market. Top line growth from physical auctions will slow down after 2019 as a result of less favorable off-lease historical trends, partially offset by new online channels (albeit online transactions yield lower fees per vehicle) and ancillary services. Moody's anticipates low to mid single-digit organic growth over the next 12-24 months (excluding the pass-through effect of purchased vehicles). KAR continues to invest in TradeRev and other online channels, which pressures margins in the near term but positions the company against the increasing risk of digital disruption. KAR's credit profile reflects its view that the company's financial policy favors shareholders over lenders, based on high financial leverage, shareholder distributions and history of debt-funded M&A. The debt instrument ratings reflect KAR's B1-PD Probability of Default Rating and expected loss for individual instruments. The new senior secured term loan and revolver are rated Ba2 with a loss given default assessment of LGD2, two notches above KAR's B1 Corporate Family Rating, reflecting their seniority to the $950 million senior unsecured notes, which are rated B3 with a loss given default assessment of LGD5, two notches below the CFR. KAR Auction Services, Inc. is the borrower of credit facilities and issuer of senior notes. Borrowings under the credit facilities are secured by a first priority security interest in substantially all assets of KAR Auction Services, Inc. and subsidiary guarantors. The credit facilities and senior notes are guaranteed by all material domestic direct and indirect subsidiaries of the borrower (excluding AFC Funding Corporation, the securitization vehicle). The SGL-1 Speculative Grade Liquidity rating reflects KAR's very good liquidity, including approximately $638 million of cash balance as of June 30, 2019 (pro forma with the term loan refinancing), a $325 million revolving credit facility with full availability as of deal close, and estimated free cash flow to debt between 3-6% over the next 12-24 months (Moody's adjusted). The stable outlook reflects its expectation over the next 12-24 months for low to mid single-digit organic revenue growth (excluding the pass-through effect of purchased vehicles), EBITDA margins above 20%, decreasing leverage trending towards 6.0x and free cash flow to debt above 3.0% (all credit metrics Moody's adjusted). Moody's expects the incremental liquidity from the new term loan issuance will be utilized to acquire assets that will contribute to EBITDA in the near term. The ratings could be upgraded if Moody's expects KAR will be able to sustain strong organic growth above mid-single-digit rates, proving the deceleration in off-lease volumes can be offset with new revenue streams, and Moody's expects management's financial policies will be balanced, allowing total debt to EBITDA (Moody's adjusted including securitization debt) to be sustained under 4.5x and free cash flow above 7.5% of total debt. The ratings could be downgraded if KAR experiences weaker than expected growth and margin pressure as a result of increased competition and online trends that challenge the business model. The ratings could also be downgraded if Moody's expects leverage will be sustained above 6.0x, free cash flow to debt will be sustained below 3.0% or Moody's anticipates aggressive shareholder-friendly financial policies or leveraging debt-financed acquisitions. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. KAR Auction Services, Inc. is a leading provider of vehicle auction services in North America. The company provides whole car auction services (dba ADESA) and through its wholly-owned subsidiary, Automotive Finance Corporation, provides short-term financing to independent dealers. KAR provides physical and online used-car marketplaces where sellers and buyers transact, and also facilitates ancillary services to market participants such as transportation, reconditioning, key cutting and other services. KAR recently completed the spin-off of its salvage auction business (IAA) in June 2019. Pro forma, KAR generated $2.6 billion in revenues as of the last twelve months ending June 2019. KFC HOLDING: Moody's Hikes Sr. Unsecured Notes Rating to Ba3 ------------------------------------------------------------ Moody's Investors Service upgraded Yum! Brands, Inc.'s Corporate Family Rating to Ba2 from Ba3, Probability of Default rating to Ba2-PD from Ba3-PD and senior unsecured ratings to B1 from B2. In addition, Moody's assigned a B1 rating to Yum's proposed new $600 million senior unsecured notes offering. Moody's also upgraded the senior unsecured ratings of KFC Holdings, CO. to Ba3 from B1 and confirmed KFC's senior secured ratings at Ba1. Yum's Speculative Grade Liquidity rating is SGL-1 and the ratings outlook is stable. This concludes Moody's review that was initiated on May 31, 2019. "The upgrade and confirmation reflects our view that Yum will remain commited to its current financial policy that will result in credit metrics that are either in-line with current levels or stronger on a sustained basis while prudently growing the breadth, depth and reach of its restaurant base and maintaining very good liquidity. " stated Bill Fahy, Moody's Senior Credit Officer. Yum has a clearly articulated financial policy with a leverage target of 5.0 times, which is around 5.4 times based on Moody's standard analytical adjustments. "The ratings action also reflects Yum's scale, brand diversity and franchised based business model that adds stability to earnings and reduces overall capital requirements." stated Fahy. Proceeds from the proposed $600 million notes offering at Yum will be used to repay $250 million of maturing senior unsecured notes and borrowings outstanding under its revolving credit as well as general corporate purposes. Moody's ratings are subject to receipt and review of final documentation. Upgrades: Issuer: KFC Holding Co. Senior Unsecured Notes, Upgraded to Ba3 (LGD4) from B1 (LGD4) Issuer: Yum! Brands Inc. Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD Corporate Family Rating, Upgraded to Ba2 from Ba3 Senior Unsecured Notes, Upgraded to B1 (LGD6) from B2 (LGD5) Senior Unsecured Shelf, Upgraded to (P)B1 from (P)B2 Assignments: Issuer: Yum! Brands Inc. Senior Unsecured Notes, Assigned B1 (LGD6) Outlook Actions: Issuer: Yum! Brands Inc. Outlook, Changed To Stable From Rating Under Review Confirmations: Issuer: KFC Holding Co. Senior Secured Revolving Credit Facility, Confirmed at Ba1 (LGD2) Senior Secured Term Loan, Confirmed at Ba1 (LGD2) RATINGS RATIONALE Yum benefits from its significant scale, geographic reach, brand diversity and franchise based business model which helps to add stability to revenues and earnings as compared to some other restaurant operators and reduces overall capital requirements. The reduced earnings volatility that result from Yum being at least 98% franchised and the company's very good liquidity are also credit positives. Yum also has a clearly articulated financial policy with a leverage target of 5.0 times with a goal of returning between $6.5-$7.0 billion to shareholders from 2017 to 2019 which will be funded through a combination of internal cash flow, additional debt and refranchising proceeds. The stable outlook reflects Moody's expectations that Yum maintains a consistent financial policy that results in credit metrics sustained around current levels, particularly leverage of 5.4 times (based on Moody's standard analytical adjustments). The outlook also expects the company to maintain very good liquidity. Factors that could result in an upgrade include a sustained improvement in Pizza Hut US while maintaining good operating performance at KFC and Taco Bell along with a financial that results in debt to EBITDA of aroud 5.0 times and EBIT to Interest of about 3.0 times on a sustained basis. Factors that could result in a downgrade include a sustained deterioration in credit metrics with adjusted debt to EBITDA migrating towards 5.7 times or EBIT to Interest below 2.5 times. Yum is headquartered in Louisville, Kentucky, and is the owner, operator and franchisor of quick service restaurants with brands that include KFC, Taco Bell, and Pizza Hut. Revenues are around $5.5 billion. The principal methodology used in these ratings was Restaurant Industry published in January 2018. LAJ CONSTRUCTION: Case Summary & 6 Unsecured Creditors ------------------------------------------------------ Debtor: LAJ Construction Inc. 8603 Marlboro Ct Stockton, CA 95210-2055 Case No.: 19-25566 Business Description: LAJ Construction Inc. owns six properties in Sacramento, California valued by the Company at $18.86 million in the aggregate. Chapter 11 Petition Date: September 4, 2019 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Hon. Christopher D. Jaime Debtor's Counsel: Mark J. Hannon, Esq. MARK J. HANNON 1114 W Fremont St Stockton, CA 95203-2622 Tel: (209) 942-2229 E-mail: markjhannon@yahoo.com Total Assets: $18,860,100 Total Liabilities: $6,989,494 The petition was signed by Madan Lal Sharma, president. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/caeb19-25566.pdf List of Debtor's Six Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. BPE Law Group $6,700 2339 Gold Meadow Way Ste 101 Gold River, CA 95670-6307 2. Capital One $8,900 PO Box 30285 Salt Lake City, UT 84130-0285 3. City of Sacramento $80 PO Box 2770 Sacramento, CA 95812-2770 4. DK Law Group $35,000 3155 Old Conejo Rd Thousand Oaks, CA 91320-2151 5. Franchise Tax Board $1,100 Bankruptcy Section MS A-340 PO Box 2952 Sacramento, CA 95812-2952 6. Internal Revenue Service $1,121 PO Box 7346 Philadelphia, PA 19101-7346 LEADVILLE CORP: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Leadville Corporation as of Sept. 3, according to a court docket. About Leadville Corporation Headquartered in Aurora, Colorado, Leadville Corporation was organized in 1945 to acquire, explore and develop mining properties, primarily in Lake and Park Counties, Colorado. Alleged creditors, namely La Plata Mountain Resources, Inc., Salem Minerals, Inc., and Black Horse Capital, Inc., filed an involuntary petition against Leadville Corporation (Bankr. D. Colo. Case No. 17-21646) on Dec. 27, 2017. The case is assigned to Judge Michael E. Romero. Leadville is reportedly indebted to the petitioning creditors: (a) $7,501,738 to La Plata Mountain Resources, Inc., based upon judgments it holds against the Debtor; (b) $14,766 to Black Horse Capital, Inc. based upon tax liens it holds against the Debtor; and (c) $17,311 to Salem Minerals, Inc., based upon tax liens it holds against the Debtor. The Petitioning Creditors are represented by Kenneth J. Buechler, Esq., at Buechler & Garber, LLC. Mr. Stephen Peters was appointed Chapter 11 trustee for the Debtor on April 23, 2018. The trustee is represented by Wadsworth Warner Conrardy, P.C. MHI HOLDINGS: Moody's Assigns B2 CFR, Outlook Stable ---------------------------------------------------- Moody's Investors Service assigned initial ratings to MHI Holdings, LLC, including a B2 corporate family rating and a B2-PD probability of default rating, as well as B2 ratings for the company's first lien bank credit facilities. The ratings outlook is stable. Proceeds from borrowings under the credit facilities will help fund the pending merger between MHI and Vigor Industrial LLC, after which ownership of MHI will be held by two financial sponsors. Assignments: Issuer: MHI Holdings, LLC Probability of Default Rating, Assigned B2-PD Corporate Family Rating, Assigned B2 Gtd. Senior Secured 1st Lien Bank Credit Facilities, Assigned B2 (LGD3) Outlook Actions: Issuer: MHI Holdings, LLC Outlook, Assigned Stable RATINGS RATIONALE The B2 CFR broadly reflects the company's high financial leverage and asset intensity, and the potential for pronounced cash flow variability that tends to accompany the US ship repair and marine fabrication businesses, balanced by recent revenue momentum and a favorable demand setting, and MHI's bi-coastal US shipyard presence with well established properties and bid qualifications. According to Moody's lead analyst Bruce Herskovics, "The combination is occurring at a time of rising US defense budgets, with the US Navy aiming for a 355 ship fleet by 2034 -- a backdrop that should present good workflow for MHI's yards in the coming years." Herskovics continued, noting that "While the larger of the two businesses (Vigor) historically experienced more volatility and lower profit margins, Moody's expects smoother performance on a combined basis with opportunities to share best practices and compete for more lucrative projects following the merger, depending of course on the degree of success in ultimate integration." While smoother performance is expected, historical fluctuation in operating results and the risk of a continuation of the same represents a tempering consideration. The calculation of initial leverage is made complicated by some of the same costs that have made income volatile, including recent non-operating expenses associated with environmental and bodily injury liability reserves. Moody's views initial leverage to be approximately 6x (Moody's-adjusted run-rate basis) and anticipates near-term free cash flow of about $15-$20 million, or 3% of adjusted debt. By year two, Moody's expects stronger free cash flow as integration activity subsides, with leverage potentially reducing to the mid-5x range. On a pro forma (unaudited) basis, MHI would have reported very strong revenue/operating performance during the first half of 2019, but Moody's expects more moderate growth over the second half, citing low single-digit percentage growth annually over the balance of 2019 and 2020. The rating envisions that additional acquisition activity could factor into the company's strategy, including an expanded presence at other US Navy and military sealift home ports and/or outside the continental US, and thereby sustain the elevated initial leverage profile. The ratings outlook is stable, reflecting a supportive FY2020-21 US defense budgetary setting, the expectation of near-term free cash flow in excess of scheduled amortization requirements, and the planned $100 million revolving credit line that will be undrawn at transaction close, giving MHI flexibility to integrate the businesses while meeting contracted work volumes. The B2 ratings assigned to the first lien bank credt facilities are on par with the CFR, reflecting their predominance in the company's consolidated debt capitalization. Upward rating momentum would depend on continued revenue growth with an expectation of leverage sustained in the mid-4x range and free cash flow-to-debt of 10% or higher. Downward ratings pressure would mount with leverage climbing to the mid-6x range and softer free cash flow generation (below $20 million per annum), or contract execution problems. MHI Holdings, LLC, pro forma for its merger with Vigor Industries, LLC, provides ship repair, marine fabrication and non-marine fabrication projects in support of the aerospace, defense and infrastructure end-markets, serving a range of government and commercial customers. Combined basis revenues for 2019 should be approximately $820 million. The company will be owned by entities of The Carlyle Group and Stellex Capital Management. The principal methodology used in these ratings was Aerospace and Defense Industry published in March 2018. MILLERBERND SYSTEMS: Sale Scrap Metal to K&K Metal Approved ----------------------------------------------------------- Judge Michael E. Ridgway of the U.S. Bankruptcy Court for the District of Minnesota authorized Millerbernd Systems, Inc.'s sale of the scrap metal stored in its Winsted, Minnesota warehouse to K&K Metal Recycling, LLC for (i) $0.03 per pound for steel; (ii) $0.15 per pound for 304 stainless; and (iii) $0.20 per pound for aluminum. All proceeds of the sale will be held by the Debtor and will not be disbursed without further Order of the Court. About Millerbernd Systems Millerbernd Systems, Inc., is a manufacturer of sanitary stainless steel equipment serving the food & beverage, pharmaceutical, agri-food, industrial, utilites, wind energy and construction industries. It operates out of a 105,000-square-foot manufacturing facility in Winsted, Minnesota. Millerbernd Systems sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Minn. Case No. 18-41286) on April 23, 2018. In the petition signed by CEO Ralph Millerbernd, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Michael E. Ridgway oversees the case. Steven B. Nosek, Esq., and Yvonne R. Doose, Esq., who have an office in St. Anthony, Minnesota, serve as the Debtor's bankruptcy counsel. James L. Snyder, the U.S. Trustee for Region 12 on May 3, 2018, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 case. The Committee retained Goldstein & McClintock LLLP, as lead counsel; and Bassford Remele, P.A., as co-counsel. MILLWASP REALTY: Taps MYC & Associates as Real Estate Broker ------------------------------------------------------------ Millwasp Realty LLC seeks authority from the U.S. Bankruptcy Court for the Eastern District of New York (Brooklyn) to hire real estate broker MYC & Associates, Inc. to assist in the sale of its real properties. The properties are located at 222 and 224 Bay Street, Staten Island, N.Y. MYC will receive a broker commission in the amount of 6 percent of the gross proceeds realized from the sale of the properties. If the Debtor withdraws the properties from sale after the retention of MYC, the firm reserves its right to seek fees at a rate of $225 per hour. for principal shareholders and $75 per hour for associates, plus reimbursement of work-related expenses incurred. Marc Yaverbaum, a member of MYC, 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 estate. MYC can be reached at: Marc P. Yaverbaum MYC & Associates, Inc. 1110 South Avenue, Suite 22 Staten Island, NY 10314 Tel: (347) 273-1258 About Millwasp Realty Millwasp Realty LLC owns in fee simple mixed use buildings located at 222 Bay Street Staten Island, NY 10301 and 224 Bay Street Staten Island, NY 10301 having an aggregate current value of $2 million. The Company previously sought bankruptcy protection on March 7, 2011 (Bankr. E.D.N.Y. Case No. 11-41783) and June 21, 2013 (Bankr. E.D.N.Y. Case No. 13-43811). Millwasp Realty again sought bankruptcy protection (Bankr. E.D.N.Y. Case No. 18-44034) on July 12, 2018. In the petition signed by Jill Sorrentino, managing member, the Debtor disclosed $2 million in assets and $996,807 in liabilities. The case is assigned to Judge Nancy Hershey Lord. Mark R. Bernstein, Esq., at the Law Office of Gregory Messer, PLLC, is the Debtor's counsel. MOHAJER12 CORP: Gets OK to Pay Insurance of Principal and His Kin ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Alabama authorizes Mohajer12 Corp., to use cash collateral to pay the monthly medical insurance premium of its principal, Abdullah Muhammed, and his immediate family. The Court rules that the Debtor must remit all remaining cash collateral on a monthly basis to PNC Bank by the 15th of each month. The Court order is without prejudice to any subsequent request by a party-in-interest for modified adequate protection or restrictions on use of cash collateral, or any right or remedy which may be available to PNC Bank. The Debtor's authority will terminate on the earlier of (i) Nov. 30, 2019, (ii) the appointment of a Chapter 11 Trustee, or (iii) the conversion of the Debtor's case to a case under Chapter 7 of the Bankruptcy Code. About Mohajer12 Corp. Mohajer12 Corp. filed for Chapter 11 bankruptcy (Bankr. S.D. Ala. Case No. 18-02674) on July 3, 2018, estimating less than $1 million both in assets and liabilities. Barry A. Friedman, Esq., of Friedman, Poole & Friedman, P.C., serves as the Debtor's counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. MOHIN ENTERPRISES: 7-Eleven Franchisee Seeks Access to Cash ----------------------------------------------------------- Mohin Enterprises, Inc., asks the U.S. Bankruptcy Court for the District of New Jersey to use cash collateral to continue its business operations. The Debtor estimates selling expenses of at least $20,000 for the second month, $15,000 of which is for payroll. A copy of the budget is accessible for free at: http://bankrupt.com/misc/Mohin_Enterprises_18_Cash_Budget.pdf As adequate protection, the Debtor proposes to grant Investors Bank a replacement lien in its post-petition accounts receivable, and the proceeds thereof. The Debtor will also seek to maintain its current assets at the level existing as of the Petition Date, and to pay monthly interest on a revolving loan. About Mohin Enterprises Mohin Enterprises, Inc., operates a 7-Eleaven franchise in Monmouth County, New Jersey. The Debtor filed a Chapter 11 petition (Bankr. D.N.J. Case No. 19-25690) on Aug. 13, 2019. Judge Christine M. Gravelle presides over the Debtor's bankruptcy case. BROEGE, NEUMANN, FISCHER & SHAVER LLC is counsel to the Debtor. MURPHY OIL: Moody's Rates New $500MM Unsecured Notes 'Ba2' ---------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Murphy Oil USA Inc.'s proposed $500 million senior unsecured note issuance. At the same time, Moody's revised the company's outlook to positive from stable and affirmed its ratings, including its Ba1 Corporate Family Rating and Ba1-PD Probability of Default Rating. The company has a Speculative Grade Liquidity rating of SGL-1. "The positive outlook reflects our expectation that Murphy will continue to maintain leverage of about 2.5x while it rolls out its larger format stores," stated Pete Trombetta, Moody's convenience store analyst. "Moody's also expect Murphy will generate free cash flow of about $150 million annually and maintain a conservative financial policy in regards to its share repurchase activity," added Trombetta. The proceeds of the $500 million senior unsecured note issuance will be used to refinance the company's existing $500 million 6% senior unsecured notes due 2023. Assignments: Issuer: Murphy Oil USA Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD5) Affirmations: Issuer: Murphy Oil USA Inc. Probability of Default Rating, Affirmed Ba1-PD Corporate Family Rating, Affirmed Ba1 Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD5) Outlook Actions: Issuer: Murphy Oil USA Inc. Outlook, Changed to Positive from Stable RATINGS RATIONALE MUSA benefits from its strong credit metrics, very good liquidity, meaningful scale, good market position and geographic reach, and its opinion that consumer demand for motor fuel and value priced convenience items will retain some degree of stability regardless of economic conditions. Moody's expects the company's credit metrics to remain consistent with its Ba1 rating and in line with its debt/EBITDA (as reported) target of 2.5 times, even during times of volatile earnings. MUSA is constrained by its exposure to revenue and earnings volatility related to motor fuel sales which account for a substantial majority of the company's revenue and the company's low merchandise margins, relative to rated peers. While the overall environmental risk for the retail industry is low, fuel retailers are subject to various regulations including federal, state and local environmental laws. These regulations are related to several environmental risks including the use of underground storage tanks. The company maintains insurance to help protect against some of these risks, but maintaining compliance with these environmental requirements affects fuel retailers' overall cost of business. MUSA's ratings could be upgraded if it maintains a balanced growth strategy, financial policy and capital structure that supports the credit profile required of an investment grade rating. An upgrade would also require very good liquidity, increased product diversification to lower its reliance on fuel sales and increase its higher margin merchandise revenues. Quantitatively, an upgrade would require debt/EBITDA maintained below 2.5 times and EBIT/interest sustained near 5.5 times. Ratings could be downgraded if there is deterioration in operating performance resulting in weakening of liquidity or credit metrics, or if its growth strategy negatively impacts liquidity or metrics could also pressure ratings. Specifically ratings could be downgraded if debt/EBITDA is sustained above 3.5 times and EBIT/interest is sustained below 4.0 times. Murphy Oil USA Inc. is the primary operating subsidiary of Murphy USA Inc., and mainly sells retail motor fuel products and convenience merchandise through a total of 1,474 retail stations as of June 30, 2019, almost all of which are located close to Walmart stores. The company's retail stations are located in 26 states, primarily in the Southeast, Southwest, and Midwest United States. Revenues were about $14 billion for the last 12 month period ended June 30, 2019. The principal methodology used in these ratings was Retail Industry published in May 2018. NAVAHO TOUR: Seeks Approval to Use Cash Collateral -------------------------------------------------- Navaho Tour, Inc., seeks permission from the U.S. Bankruptcy Court for the Central District of California to use cash collateral on an interim basis in order to pay necessary expenses including insurance premium and lease payments. The Debtor proposes to grant postpetition liens on and security interests in its property in favor of its lenders. The Debtor has yet to determine the amount of, but anticipates paying, adequate protection to the Lenders: (i) Engs Commercial Finance Co., (ii) Grech Financial Service, Inc., (iii) 1st Source Bank/Coach Finance Group, LLC, (iv) Irizarusa, and (v) Trans Lease. A copy of a 20-day income and expense budget, itemized per vehicle, is available for free at: http://bankrupt.com/misc/Navaho_Tour_49_Cash_M.pdf About Navaho Tour Inc. Navaho Tour Inc. is engaged in the business of arranging and assembling tours for sale through travel agents. Navaho Tour sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-19798) on Aug. 21, 2019. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of the same range. The case is assigned to Judge Sandra R. Klein. Goldbach Law Group, led by founding partner Marc Aaron Goldbach, is the Debtor's counsel. NEW VENTURE 777: Court Authorizes Cash Use Thru Sept. 30 -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida authorizes New Venture 777 LLC to use cash collateral on an interim basis through Sept. 30, 2019, pursuant to a budget. The budget provides for, among other things, $52,500 in inventory replenishment and $12,188 in employee wages and labor. The Court will convene a final hearing on the motion on Sept. 25, 2019 at 10 a.m. at the U.S. Courthouse, 299 E. Broward Blvd., Room 301, Fort Lauderdale, Florida. A copy of the Order is available for free at: http://bankrupt.com/misc/New_Venture_37_Cash_Ord.pdf About New Venture 777 New Venture 777 LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-19719) on July 22, 2019. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of less than $1 million. The case has been assigned to Judge John K. Olson. The Debtor is represented by Moffa & Breuer, PLLC. NORPAC FOODS: PBGC, Int'l. Paper Appointed as Committee Members --------------------------------------------------------------- Gregory Garvin, acting U.S. trustee for Region 18, on Sept. 4 appointed Pension Benefit Guaranty Corp. and International Paper Co. as new members of the official committee of unsecured creditors in the Chapter 11 cases of NORPAC Foods, Inc. and its affiliates. As of Sept. 4, the members of the committee are: (1) Packaging Corporation of America 1 N. Field Court Lake Forest, Illinois 60045 Attention: Vince Carrera Phone: 847-482-8747 Fax: 847-482-8749 VinceCarrera@packagingcorp.com (2) Syngenta Seeds, LLC P.O. Box 18300 Greensboro, NC 27419 Attention: David Conaway, Esq. Phone: 704-576-4490 dconaway@shumaker.com (3) VLM Foods USA Ltd. 8 The Green #6152 Dover, DE 19901 Attention: Mark FeDuke Phone: 302-401-6474 514-426-4100 (ext. 223) Fax: 514-426-5977 Mark@ardovlm.com (4) Mohawk Northern Plastics, LLC dba Ampac 701 A Street NE Auburn, WA 98002 Attention: Eric Bradford, CFO Phone: 920-967-8605 Eric.bradford@proampac.com (5) International Paper Co. 6400 Poplar Ave. Memphis, TN 38197 Attention: Bruce Gilliland Phone: 901-419-1346 bruce.gilliland@ipaper.com (6) Pension Benefit Guaranty Corp. 1200 K. Street, NW Washington, D.C. 20005 Attention: Donika Hristova Phone: 202-229-3126 Fax: 202-326-4112 hristova.donika@pbgc.gov Counsel: Cassandra Burton Phone: 202-229-6778 burton.cassandra@pbgc.gov About NORPAC Foods Inc. Founded in 1924 and headquartered in Salem, Ore., NORPAC Foods, Inc. (www.norpac.com), a farmer-owned cooperative, along with its wholly-owned subsidiaries Hermiston Foods, LLC and Quincy Foods, LLC is an independent, standalone processor of organic and conventional frozen vegetables and fruits in the Pacific Northwest. NORPAC is a cooperative owned by more than 140 members. Quincy and Hermiston are single-member limited liability companies whose sole member is NORPAC. The Debtors own and operate raw processing plants in Brooks and Stayton, Ore., a packaging plant in Salem, Ore., and a raw processing, packaging, and roasting facility in Quincy, Wash. The Debtors have more than 1,125 full-time employees along with up to 1,100 seasonal employees. The Debtors have a diverse supplier base built on an extensive network of more than 220 contract growers made up of family-owned farms (145 farms in Oregon and 75 farms in Washington) spanning more than 40,000 acres. NORPAC Foods, Hermiston Foods and Quincy Foods sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Lead Case No. 19-62584) on Aug. 22, 2019. At the time of the filing, NORPAC Foods disclosed assets of between $100 million and $500 million and liabilities of the same range. The other Debtors had estimated assets of between $10 million and $50 million and liabilities of between $100 million and $500 million. The cases have been assigned to Judge Peter C. McKittrick. The Debtors tapped Tonkon Torp LLP as legal counsel; SierraConstellation Partners LLC as restructuring advisor; and Kurtzman Carson Consultants LLC as noticing agent. PALM BEACH GOLF: Seeks Court Approval to Use Cash Collateral ------------------------------------------------------------ Palm Beach Golf Center and debtor affiliates, namely Palm Beach Golf Center - Boca, Inc., and Waltrav, LLC, ask the U.S. Bankruptcy Court for the Southern District of Florida for permission to use on an interim basis the cash collateral of (i) American Express Bank, FSB; (ii) Flagler Bank; and (iii) Mizuno USA, Inc. As adequate protection, the Debtors propose to grant a replacement lien to AMEX, Mizuno, and Flagler to the same extent as the creditors' prepetition lien on and in all property, pursuant to respective security agreements and related lien documents. The Debtors will use the cash collateral to pay regular operating expenses. About Palm Beach Golf Center Palm Beach Golf Center Inc. and Palm Beach Golf Center - BOCA, Inc., operate retail stores -- https://www.palmbeachgolfcenter.com/ -- that sell golf equipment and supplies. Waltrav, LLC is a limited liability company which owns all the shares of Palm Beach Golf Center and Palm Beach BOCA. On Aug. 22, 2019, Palm Beach Golf Center, Palm Beach BOCA and Waltrav, LLC, sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 19-21268, 19-21269, and 19-21271). In the petitions signed by Mark Travaglini, vice president, Palm Beach Golf Center disclosed total assets of $58,801 and total liabilities of $1,948,566; Palm Beach BOCA disclosed total assets of $18,990 and total liabilities of $1,942,402; and Waltrav disclosed $0 in assets and liabilities. The Hon. Erik P. Kimball oversees the Debtors' cases. KELLEY, FULTON & KAPLAN, P.L., is the Debtors' counsel. PETROSHARE CORP: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: PetroShare Corp. 9635 Maroon Circle, Suite 400 Englewood, CO 80112 Business Description: Colorado-based PetroShare Corp. -- http://www.petrosharecorp.com-- investigates, acquires, and develops crude oil and natural gas properties in the Rocky Mountain or mid-continent portion of the United States, specifically focused in the Denver-Julesburg Basin in northeast Colorado. Chapter 11 Petition Date: September 4, 2019 Two affiliates that simultaneously filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- PetroShare Corp. 19-17633 CFW Resources LLC 19-17634 Court: United States Bankruptcy Court District of Colorado (Denver) Debtors' Counsel: Trey A. Monsour, Esq. POLSINELLI PC 1000 Louisiana St, Suite 6400 Houston, TX 77002 Tel: 713-374-1600 Email: tmonsour@polsinelli.com - and - William Meyer, Esq. POLSINELLI PC 1401 Lawrence Street, Suite 2300 Denver, Colorado 80202 Tel: (303) 572-9300 Email: wmeyer@polsinelli.com - and - James E. Bird, Esq. POLSINELLI PC 900 W. 48th Place, Suite 900 Kansas City, MO 64112 Tel: (816) 360-4343 Email: jbird@polsinelli.com - and - Caryn E. Wang, Esq. POLSINELLI PC 1201 West Peachtree Street NW, Suite 1100 Atlanta, Georgia 30309 Tel: (4040) 253-6016 E-mail: cewang@polsinelli.com Debtors' Financial Advisor: MACCO RESTRUCTURING GROUP LLC Debtors' Claims Agent: BMC GROUP INC PetroShare Corp.'s Total Assets as of June 30, 2019: $36,927,856 PetroShare Corp.'s Total Debts as of June 30, 2019: $45,100,988 CFW Resources LLC's Estimated Assets: $1 million to $10 million CFW Resources LLC's Estimated Liabilities: $10 million to $50 million The petitions were signed by Frederick J. Witsell, president. Full-text copies of the petitions are available for free at: http://bankrupt.com/misc/cob19-17633.pdf http://bankrupt.com/misc/cob19-17634.pdf List of PetroShare Corp.'s 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Gardner Lewis Event Driven Original $1,200,000 Fund LP Unsecured 285 Wilmington-West Chester Pike Noteholder Chadds Ford, PA 19317 Email: joseph.rava@gardnerlewis.com 2. Weatherford Aritificial Trade Vendor $687,985 PO Box 301003 Dallas, TX 75303-1003 Tel: 307-462-2935 Kelly Emanuel-US Collections Mgr Email: Kelly.Emanuel@weatherford.com 3. William D. Moreland Series B $600,000 1655 E Layton Dr Unsecured Englewood, CO 80013 Noteholder Email: wmoreland@comcast.net 4. Pinnacle Family Office Original $500,000 Investments LP Unsecured 5910 N Central Expy Ste 1475 Noteholder Dallas, TX 75206 Email: bk@pinnaclefund.com 5. Clem Borkowski Original & $400,000 ASI Capital Series B 9475 Briar Village PT #220 Unsecured Colorado Springs, CO 80920 Noteholder Email: clem@asicapital.com 6. Cartel Drilling LLC Trade Vendor $358,635 P.O. Box 3186 Mills, WY 82644 Tel: 307-247-4552 Jamie McIntyre - Controller Email: jamie@carteldrilling.com 7. Excell Services LLC Trade Vendor $348,936 36629 US Highway 385 Wray, CO 80758-9667 Tel: 970-332-3151 Peg Vlasin - Accounting Mgr Email: pvlasin@excell-llc.com 8. Wayne L. Laufer Revocable Trust Series B $250,000 1907 B Yacht Haven Rd Unsecured Friday Harbor, WA 98250 Noteholder Email: wlaufer@lauferaa.com 9. M & M Excavation Co. Trade Vendor $246,115 25490 Cutten Rd Greeley, CO 80631 Tel: 970-352-5220 10. Downhole Technology Trade Vendor $214,608 12450 Cutten Rd Houston, TX 770066 Tel: 281-820-2545 Jeff Brown V.P. Finance 11. Jeff Wiepking Series B $200,000 96 Glenmoor LN Unsecured Englewood, CO 80113 Noteholder Email: jwiepking@msn.com 12. Petroleum Exploration & Series B $200,000 Management LLC Unsecured 20203 Highway 60 Noteholder Platteville, CO 80651 Email: wescaff@aol.com 13. Ultimate Investments Series B $200,000 Corp. Inc. Unsecured 1198 Finn Ave Noteholder Lone Tree, CO 80124 Email: lance@ballerusa.com 14. Bart MacGillivray Original $150,000 Attn: Eric Duncan Unsecured Denver, CO 80218 Noteholder Email: pinegardens@live.com 15. John D. Gibbs Original $150,000 16 E St SW Unsecured Ardmore, OK 73401 Noteholder Email: johndgibbs@sbcglobal.com 16. Michael S. Barish IRA Series B $125,000 Rollover Unsecured 200 Columbine St #800 Noteholder Denver, CO 80206 Email: mbarish@cambiar.com 17. Element Services LLC Trade Vendor $116,227 20207 Leola Way Eaton, CO 80615 Tel: 719-688-8114 Email: billing@elementssvc.com 18. Beth Ann Reid Living Trust Series B $100,000 211 Harbour Dr Unsecured Naples, FL 34103 Noteholder Email: bethr80206@aol.com 19. David Kerr Series B $100,000 255 10 MC Donald Rd Unsecured Spring, TX 77380 Noteholder Email: dave@kerrconsulting.com 20. David Morgan Series B $100,000 PO Box 664 Unsecured Liberty Lake, WA 99019 Noteholder Email: ssdmorgan@gmail.com 21. Jon B Kruljac Series B $100,000 9635 Maroon Circle, #400 Unsecured Englewood, CO 80112 Noteholder Email: jkruljac@petrosharecorp.com 22. James Curtis Patton III Original $100,000 4000 Bienville St Ste D Unsecured New Orleans, LA 70119 Noteholder Email: jcurtpatton@gmail.com 23. Jeffrey P. Amen Original $100,000 5400 Autumn Dr. Unsecured Greenwood Village, CO 80111 Noteholder Email: jamen@atbsshow.com 24. Stephen McConahey Original $100,000 1050 Green Oaks Dr. Unsecured Greenwood Village, CO 80121 Noteholder Email: sgmcconahey@gmail.com 25. Albert S. Foley Series B $75,000 310 Green Oak Dr Unsecured Roswell, GA 30075 Noteholder Email: vrod2003@gmail.com 26. David Morgan Series A $75,000 P.O. Box 664 Unsecured Liberty Lake, WA 99019 Noteholder Email: ssdmorgan@gmail.com 27. Laurence Chang Series B $75,000 737 Detroit St Unsecured Denver, CO 80206 Noteholder Email: laurence.chang@comcast.net 28. Randy and Margaret Scholl Series B $75,000 12254 Woodmont Dr. Unsecured Colorado Springs, CO 80921 Noteholder Email: rscholl@q.com 29. Van Wagner Family Series A $65,000 Partnership Unsecured 9405 Kilmer Way Noteholder Arveda, CO 80007 Email: rkvw@yahoo.com 30. Orval Lee Seaman Jr. & Series B $60,000 Yvonne Dee Seaman Unsecured 945 Graland LN Noteholder Highlands Ranch, CO 80126 Email: leemanseaman1492@gmail.com Debtor CFW Resources LLC's stated it has no unsecured creditors. PETROSHARE CORP: In Chapter 11 to Seek Recapitalization or Sale --------------------------------------------------------------- PetroShare Corp. (OTCQB:PRHR), a Colorado-based oil and gas exploration and production company with operations in the Wattenberg Field of the Denver-Julesburg Basin, and its wholly-owned subsidiary on Sept. 4, 2019, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code with the Bankruptcy Court for the District of Colorado. PetroShare intends to pursue efforts to recapitalize the company, which may include the sale of some or all of its assets pursuant to the Bankruptcy Code in a court-supervised process designed to achieve the highest and best price for those assets. The Company believes that its cash position is adequate to continue existing operations as a debtor-in-possession and to maintain most staffing and equipment throughout the court-supervised recapitalization and/or sale process. The Company has filed a series of motions with the Bankruptcy Court requesting authority to continue normal operations, including authority to continue paying trade creditors, royalty interest holders, and employee wages and salaries in the ordinary course of business. The Company will continue to work closely with its suppliers and partners in an effort to ensure that it meets ongoing obligations, and that business continues uninterrupted during the sales process. Stephen J. Foley CEO, of PetroShare, stated "The new Colorado regulatory environment governing oil and gas permitting in the state and the associated uncertainty on rule-making has made it very difficult to attract new capital investment in this sector. We are filing a voluntary Chapter 11 petition in order to proceed with the orderly recapitalization or sale of some or all of the Company’s assets and to continue to pay active vendors, suppliers and other ongoing business expenses without interruption during the process." Mr. Foley continued, "Unfortunately, the collateral damage of Senate Bill 181 has manifested itself in the slowdown of the state’s oil and gas sector, resulting in job losses." Frederick J. Witsell, President stated, "We believe the Colorado oil and gas industry can work with all stakeholders in the implementation of the new regulatory rules. However, in spite of our quality asset base, our virtually zero-emissions facility design and our Shook Pad production trending above our type curves, oil price volatility coupled with the delay in the new rule making process has created uncertainty in the current investment environment in Colorado oil and gas development." The Debtors have also filed motions with the Court seeking authorization to continue to operate their businesses as "debtors-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. The Debtors expect to continue their existing operations without interruption during the pendency of the Chapter 11 Cases. To maintain and continue uninterrupted ordinary course operations during the Chapter 11 Cases, the Debtors have filed a variety of "first day" motions seeking approval from the Court for various forms of customary relief. These motions are designed primarily to minimize the effect of bankruptcy on the Company's operations, customers and employees. Triggering Events The Company said in a filing with the SEC that the commencement of the Chapter 11 cases constitutes an event of default under certain of the Company's debt instruments, including the Secured Term Credit Agreement dated February 1, 2018 and the 10% Unsecured Promissory Notes and the Series B Unsecured Promissory Notes, which results in automatic acceleration of the Company’s obligations under such debt instruments. However, the outstanding obligations under the Secured Credit Agreement were accelerated prior to the filing of the Bankruptcy Petitions and the Unsecured Notes matured by their terms on December 31, 2018. The Company notes that any efforts to enforce payment obligations under the debt instruments are automatically stayed as a result of the filing of the Chapter 11 cases and the creditors' rights of enforcement in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. About PetroShare Corp. Colorado-based PetroShare Corp. (OTCQB:PRHR) -- http://www.petrosharecorp.com/-- investigates, acquires, and develops crude oil and natural gas properties in the Rocky Mountain or mid-continent portion of the United States, specifically focused in the Denver-Julesburg Basin in northeast Colorado. On Sept. 4, 2019, PetroShare Corp. and affiliate CFW Resources LLC sought Chapter 11 protection (Bankr. D. Colo. Lead Case No. 19-17633). As of June 30, 2019, PetroShare Corp. disclosed $36,927,856 in assets and $45,100,988 in liabilities. Polsinelli PC is acting as legal counsel for the company. MACCO Restructuring Group LLC is acting as financial advisor. Mr. Drew McManigle from MACCO, has been retained by the Company as its Chief Restructuring Officer. PHYLLIS HANEY: $25K Sale of Beaver Property Dismissed w/o Prejudice ------------------------------------------------------------------- Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania dismissed Phyllis J. Haney's sale of the real property situate at 188 Blackhawk Road, County of Beaver, Chippewa Twp., Beaver Falls, Beaver County, Pennsylvania, Tax I.D. No. 70-015-0202.000, to Jerry E. and Wendy Drolz for $25,000, without prejudice to refiling within seven days consistent with Local Rule 6004-1(c). A review of the Court's Electronic Access to Sales Information system indicates that the Debtor failed to advertise the sale, which is in violation of W.PA.LBR 6004-1(c). Phyllis J. Haney sought chapter 11 protection (Bankr. W.D. Pa. Case No. 18-22636) on June 29, 2018. The Debtor tapped Robert O Lampl, Esq. , at Robert O Lampl Law Office, as counsel. POWER M.E.P.: Seeks to Hire Eric A. Liepins as Legal Counsel ------------------------------------------------------------ Power M.E.P. Group, Inc. seeks authority from the U.S. Bankruptcy Court for the Eastern District of Texas (Sherman) to hire Eric A. Liepins, P.C. as its legal counsel. The firm will advise the Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm's hourly rates are: Eric Liepins, Esq. $275 Paralegals/Legal Assistants $30 - $50 The Debtor paid the firm a retainer of $5,000, plus the filing fee of $1,717. Eric Liepins, Esq., disclosed in court filings 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 Telephone: (972) 991-5591 Telecopier: (972) 991-5788 Email: eric@ealpc.com About Power M.E.P. Group, Inc. Based in Plano, Texas, Power M.E.P. Group, Inc., filed its Voluntary Petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. E.D. Tex. Case No. 19-42279) on August 22, 2019. Eric A. Liepins, P.C. represents the Debtor as counsel. PRAIRIE ECI: Fitch Puts BB- LongTerm IDR on Rating Watch Negative ----------------------------------------------------------------- Fitch Ratings placed Prairie ECI Acquiror, LP's long-term Issuer Default Rating of 'BB-' and senior secured term loan rating of 'BB-'/'RR2' on Rating Watch Negative. Prairie is a special purpose vehicle, owned by BlackStone Infrastructure Partners, and its partners and affiliates, to hold the general partner and 44% equity interest in Tallgrass Energy, LP (TGE). TGE wholly owns Tallgrass Energy Partners, LP (TEP; TGE and TEP collectively referred to as Tallgrass). The Rating Watches on TEP and Prairie follow a non-binding preliminary proposal letter from Blackstone Infrastructure Partners, LP (BIP), its partners and affiliates (collectively, the Sponsors) to acquire all of the outstanding Class A limited partner interests in TGE not already owned by the Sponsors. TGE's Board of Directors (BOD) intends to form a conflicts committee consisting of independent directors of the BOD to consider the proposal. As such details of the proposed offer are limited. Fitch would look to resolve its Rating Watch if and when there is more clarity around a potential deal, ultimate capital structure and financial policy at Prairie, TGE, and TEP. KEY RATING DRIVERS TEP Rating Watch: Prairie's Rating Watch Negative reflects TEP's similar watch and the potential for a negative rating action associated with the proposed take private transaction. The Rating Watch Negative is reflective of a potential for increased leverage associated with the take private offer, either at TEP, TGE or at Prairie. Fitch has no insight to what the ultimate funding, strategic direction and capital structure at TGE will be. Fitch does expect, however, that at least a portion of the cash consideration needed for the acquisition of TGE's outstanding units will be funded with debt somewhere in the TGE entity. Significant Subordination: Distributions from TGE are Prairie's sole source of earnings and cash flow to support its term loan. Fitch views Prairies cash flow stream as having no diversity and its obligations as being significantly structurally subordinate to the operating needs at Tallgrass, any borrowings on TEP $2.25 billion revolving credit facility, TEP's existing $2.0 billion in senior unsecured notes, and any future operating subsidiary level borrowings. Fitch is concerned that if cash flow or profitability at Tallgrass is impaired for any reason, such as increased costs, counterparty performance, volume underperformance, etc., TGEs distributions could decline and pressure Prairie's credit profile. Stable Distribution from Tallgrass: This structural concern is somewhat alleviated by Fitch's expectations for stable cash flow distributions up to Prairie. Fitch expects TGE to provide stable and modestly growing distribution to Prairie and its limited partner unit holders over the next several years. This distribution is supported by Fitch's expectation that Tallgrass will exhibit near-term cash flow and earnings stability as the vast majority of its revenue is both volume and commodity price insensitive. TEP and subsequently TGE is subject to a fair amount of re-contracting risk at its two main operating assets, Rockies Express Pipeline, LLC (REX) and Pony Express Pipeline (Pony) specifically, in 2019 and 2020. Favorable oil production fundamentals in the Bakken, Powder River (PRB), and Denver Julesburg (DJ) Basins suggest that TEP should be able to re-contract capacity at Pony at rates that help support stable cash flow and modest distribution growth at TGE. REX west-to-east re-contracting is expected to be more challenging, but Fitch expects REX to be able to re-contract open capacity at rates that help support revenue, cash flow, and distribution stability at REX to TGE and ultimately to Prairie. Elevated but Improving Leverage: Exclusive of the take private transaction, Fitch expects Prairie's leverage on a stand-alone basis, defined as Prairie Debt to Distributions received from Tallgrass is expected to be between 3.5x and 4.0x in 2019. This leverage is expected to decline due to the cash flow sweep provisions and mandatory amortization in the term loan. These covenants will help Prairie delever, potentially significantly, over the life of the term loan. However, Fitch expects once leverage under the term loan reaches the 2.5x covenant threshold to allow for no excess cash flow sweep, leverage should remain between 2.0x to 2.5x for the balance of the life of the loan. Refinancing Risk: Refinancing is a longer-term concern for Prairie. While the term loan has some mandatory amortization and a cash flow sweep provision, Fitch does not expect full amortization by the maturity of the term loan. A refinancing or equity contribution will be needed to repay the maturing debt. Prairie could face unfavorable refinancing markets at loan maturity and/or an unwillingness by its sponsors to inject further equity into Prairie or an inability to monetize its equity interests in TGE should there be operating issues or the dividend stream come under pressure and negatively impact Prairie's ability to service its debt. DERIVATION SUMMARY Prairie's ratings largely reflect the structural subordination the loan is expected to have to obligations at TGE, which is the sole provider of cash flow, in the form of equity distributions to Prairie. Fitch currently rates TGE operating subsidiary Tallgrass Energy Partners, LP's (TEP) long-term IDR 'BBB-'/Outlook Stable. Fitch believes that the default risk of Prairie stems from operating performance missteps or funding needs at TGE potentially leading TGE to decrease its distribution. As such, Fitch believes that the credit profiles of Prairie, TGE, and ultimately TEP are linked but that the structural subordination the loan has to TGE and TEP warrants a three-notch separation between the IDRs. This is consistent with how Fitch has approached other midstream holding company term loans where standalone leverage has exceeded 3.0x. Relative to similarly rated midstream holding company peers Fitch expects Prairie to have initial leverage in line with GIP III Stetson (Stetson; BB-/Negative) but higher leverage than Equitrans Corp. (ETRN; BB/Negative). Fitch expects Prairie's stand-alone leverage for 2019 of 3.8x to be in line with Stetson's stand-alone leverage in 2019 of approximately 3.5x. As mentioned, ETRN's expected leverage is significantly lower at 1.3x for 2019. ETRN's leverage merits at least a one-notch higher rating than either Prairie or Stetson. Fitch expects standalone leverage (exclusive of any incremental debt from the proposed take private transaction) at Prairie to be roughly 3.7x in 2019 dropping closer to 3.2x in 2020, and to below 3.0x in 2021 and beyond. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Distributions consistent with Fitch's base case forecast for TEP; -- Amortization and cash flow sweep consistent with loan terms. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Positive rating action at TEP; -- Stand-alone debt to distributions below 3.0x on a sustained basis. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Negative rating action at TEP; -- A decrease in distributions to Prairie from TGE; or increased leverage at Prairie that results in stand-alone leverage (Prairie Debt/Prairie EBITDA, with Prairie EBITDA equal to distributions received less any operating expenses) at or above 4.0x. LIQUIDITY AND DEBT STRUCTURE Liquidity Adequate: Liquidity needs at Prairie are expected to be limited to interest payments and debt amortization. Fitch expects distributions from Tallgrass to be supportive of Prairies ability to meet its debt service obligations and its minimum debt service coverage ratio covenant of 1.1x. The term loan will require a six-month rolling debt service reserve account in support of debt service needs, which will fall away at consolidated net leverage of 3.25x. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch's forecast of Prairie EBITDA is based on the distributions received by Prairie from Tallgrass relative to Prairie's standalone debt. PRINCE ORGANIZATION: Taps Tabani Realty as Real Estate Broker ------------------------------------------------------------- Prince Organization, Nacogdoches LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Texas to hire a real estate broker. In an application filed in court, the Debtor proposes to employ Tabani Realty Hotel Brokerage to assist in the sale of its real property located at 3400 South Street, Nacogdoches, Texas. The firm will receive as compensation a negotiated broker fee of $100,000. Tabani neither holds nor represents any interest adverse to the interest of the Debtor or its estate and is disinterested within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached at: Salman Tabani Tabani Realty Hotel Brokerage 15455 Dallas Parkway, Suite 600 Addison, Tx, 75001 Phone: 972-810-7729 Ext: 2 Email: info@tabanirealty.com About Prince Organization Nacogdoches Prince Organization, Nacogdoches LLC, a privately held company in the traveler accommodation industry, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 19-90145) on June 3, 2019. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The Debtor is represented by Joyce W. Lindauer Attorney, PLLC and The Patel Law Group, PLLC. PRIORITY PAYMENT: Moody's Lowers CFR to B3, Outlook Stable ---------------------------------------------------------- Moody's Investors Service downgraded Priority Payment Systems Holdings, LLC's Corporate Family Rating to B3 from B2 and senior secured credit facility ratings to B2 from B1. Moody's assigned a speculative grade liquidity rating of SGL-4. The outlook remains stable. RATINGS RATIONALE The B3 CFR reflects high leverage of 7.6x as of the twelve months ended June 2019 (on a pro forma basis), resulting from the decline in EBITDA in recent periods and the increase in debt as the company completed a number of acquisitions. The meaningful decline in EBITDA in 2019 is caused by the implementation of new rules by the card networks for e-commerce continuity merchants, which accounted for a significant portion of Priority's revenue and EBITDA prior to the rule changes. Several acquisitions in 2018 and 2019 have helped maintain the revenue base but resulted in a higher debt balance. Free cash flow and liquidity have been reduced. Priority has a stated strategic objective of being a consolidator in the payment processing industry, and Moody's expects continued acquisitions if financial flexibility were to become available over time. The credit profile is supported by the potential for earnings growth from the current trough. In the second quarter of 2019, the decline in the e-commerce business appears to have run its course with reported related operating income of only $0.7 million. The core merchant acquiring business grew sequentially in the low single digits in the second quarter. EBITDA growth may benefit over time from the launch of specialty merchant acquiring, additional real estate customer relationships added in 2019 and expansion in accounts payable outsourcing. Its base case forecast assumes modest sequential EBITDA growth in the second half of 2019 and in 2020. The stable rating outlook is predicated upon sequential EBITDA growth in the second half of 2019 and in 2020, and consistently positive free cash flow generation. The ratings could be upgraded if Priority demonstrates consistent growth in revenue and EBITDA, reduces leverage below 6.0x, increases free cash flow to debt to mid-single digits and improves liquidity. The ratings could be downgraded if EBITDA declines further, if free cash flow is negative or if liquidity weakens further. Priority's liquidity is considered weak (as reflected in the liquidity rating of SGL-4) due to reduced free cash flow generation and limited availability of the revolving credit facility caused by proximity to the total net leverage covenant which steps down in the second half of 2019. The company drew $14 million under its $25 million revolving credit facility in the first half of 2019 to finance acquisitions and share repurchases. Growth in EBITDA and repayment of outstanding revolver balances will be required to maintain covenant compliance in the second half of 2019. Absent this leverage improvement, a waiver or amendment would be required. Priority's unrestricted cash balances as of June 2019 were $5.5 million and expected free cash flow in 2019 on a pro forma basis is about $13 million. The B2 ratings for Priority's secured credit facilities reflect the borrower's B3-PD Probability of Default Rating and a Loss Given Default (LGD) assessment of LGD3. The ratings on the credit facilities are one notch higher than the CFR due to security and senior ranking in the capital structure relative to Priority's unrated subordinated debt. The following rating actions were taken: Assignments: Issuer: Priority Payment Systems Holdings, LLC Speculative Grade Liquidity Rating, Assigned SGL-4 Downgrades: Issuer: Priority Payment Systems Holdings, LLC Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured 1st lien Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3) Senior Secured 1st lien Revolving Credit Facility, Downgraded to B2 (LGD3) from B1 (LGD3) Senior Secured Delayed Draw Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3) Outlook Actions: Issuer: Priority Payment Systems Holdings, LLC Outlook, Remains Stable The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. PWR INVEST: Court OKs Cash Motion, Sets Final Hearing on Sept. 12 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorizes on an interim basis PWR Invest, LP and debtor affiliates to use cash collateral of their prepetition first lien secured lenders pursuant to a budget in order to fund the Debtors' working capital and other general corporate needs pending the final hearing. Unless extended by written agreement of Chambers Energy Management, LP, the interim period is from the date of entry of this Interim Order through the earliest to occur of (i) the entry of the final order, (ii) the cash collateral termination date, or (iii) Sept. 13, 2019. The prepetition first lien secured parties consist of Chambers Energy Management, LP, as the agent for the prepetition first lien lenders, and other financial institutions party to the first lien credit agreement. The Court ruled that: * As adequate protection, Chambers will receive replacement liens upon all property of the Debtors (except for the amount of $569,300 contained in the Debtors' bank account at Northern Trust, of which only the sum of $284,650 will be subject to the first lien adequate protection liens), which liens will be subject and subordinate only to the carve-out and any prior liens. * The Prepetition first lien parties will be granted a perfected security interest by PWR Invest in the income stream from all hedge contracts earned during the interim period; * Gaedeke Oil & Gas (GOGO) agrees to forego any management fee incurred by the Debtors during the interim period; * The Debtors will transfer,upon entry of this Order, all but $569,300 of their funds from the Northern Trust account of Debtor Merge to Debtor Merge's primary cash account at Bank of Texas. The transfer of funds will survive this Order and will not be extended by a final order. Also from the date of entry of the Interim Order, the Debtors will deposit all postpetition cash receipts, and maintain the cash, in the Bank of Texas Account. The Prepetition First Lien Parties will have a perfected security interest in the Bank of Texas Account to secure the obligations to the Pre-petition First Lien Parties; * All cash held or controlled by GOGO will immediately be segregated into a separate cash account upon notice to the U.S. Trustee with a bank that is approved by the U.S. Trustee Depository for the District of Delaware, and such cash will not be held by GOGO, the Debtors, or their affiliates pending entry of a Court order determining whether such cash constitutes cash collateral of the Prepetition First Lien Secured Parties. * The Debtors may pay allowed fees of their professional and the professionals of the Committee, pursuant to approved budget. Amounts paid prior to the carve-out trigger notice will not reduce the carve-out. The Postpetition Carve-out cap is $75,000. * The Prepetition First Lien Agent will have the unqualified right to credit bid any or all of the Prepetition First Lien Obligations in any sale of the collateral. The Court further ruled that beginning Aug. 23, 2019 and every Friday thereafter, the Debtors will prepare and deliver to the Prepetition First Lien Agent, the U.S. Trustee and any committee appointed in these cases: (i) an updated rolling 13-week budget which will supplement and replace the Initial Approved Budget then in effect; provided that the Prepetition First Lien Agent will have one week to approve the updated "rolling budget"; and (ii) a duly certified variance report. The Court will convene a final hearing on Sept. 12, 2019 at 10 a.m. (prevailing Eastern Time). A full-text copy of the Interim Order is available for free at: http://bankrupt.com/misc/PWR_Invest_103_Cash_Ord.pdf About PWR Invest, et al. PWR Invest, LP, and debtor affiliates Oklahoma Merge, LP; Oklahoma Merge Midstream, LP; Oklahoma River Basin, LP; and PWR Oil & Gas General Partners, Inc., operate and develop oil and gas properties predominantly in Oklahoma. On May 22, 2019, PWR Oil & Gas General Partners, Inc., filed a Chapter 11 petition (Bankr. D. Del.). On May 23, 2019, PWR Invest, LP, also sought for Chapter 11 protection. On Aug. 12, 2019, Oklahoma Merge, LP, Oklahoma River Basin, LP, and Oklahoma Merge Midstream, LP, each filed Chapter 11 petitions. The Debtors' Chapter 11 cases are jointly administered under Case No. 19-11164, with that of PWR Invest, LP, as the lead case. As of its Petition Date, PWR Invest estimated assets at $50 million to $100 million, and liabilities at $50 million to $100 million. PRONSKE & KATHMAN, P.C., and BARNES & THORNBURG LLP represent the Debtors. QUANTUM CORP: Reports $21.6M Loss for Quarter Ended Sept. 30, 2018 ------------------------------------------------------------------ Quantum Corporation filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $21.61 million on $89.91 million of total revenue for the three months ended Sept. 30, 2018, compared to a net loss of $5.09 million on $111.78 million of total revenue for the three months ended Sept. 30, 2017. The Company also reported a net loss of $29.10 million on $197.42 million of total revenue for the six months ended Sept. 30, 2018, compared to a net loss of $9.21 million on $226.38 million of total revenue for the six months ended Sept. 30, 2017. As of Sept. 30, 2018, Quantum had $154.19 million in total assets, $355.84 million in total liabilities, and a total stockholders' deficit of $201.64 million. Liquidity and Capital Resources Quantum said, "We consider liquidity in terms of the sufficiency of internal and external cash resources to fund our operating, investing and financing activities. Our principal sources of liquidity include cash from operating activities, cash and cash equivalents on our balance sheet and amounts available under our Amended PNC Credit Facility. "We require significant cash resources to meet obligations to pay principal and interest on our outstanding debt, provide for our research and development activities, fund our working capital needs and make capital expenditures. Our future liquidity requirements will depend on multiple factors, including our research and development plans and capital asset needs. We may need or decide to seek additional funding through equity or debt financings but cannot guarantee that additional funds would be available on terms acceptable to us, if at all. "We had cash and cash equivalents of $10.8 million as of June 30, 2019 which excludes $5.0 million in restricted cash that we are required to maintain under the Credit Agreements. "We are highly leveraged and subject to various debt covenants under our Credit Agreements... including financial maintenance covenants that require progressive improvements in metrics related to our financial condition and results of operations. Our failure to comply with our debt covenants could materially and adversely affect our financial condition and ability to service our obligations." The Company had net cash provided by operating activities of $2.7 million during the six months ended Sept. 30, 2018 compared to cash used in operating activities of $1.3 million during the six months ended Sept. 30, 2017, a net increase of $4.0 million. The change relates primarily to changes in operating working capital balances between periods. Net cash used in investing activities was $1.3 million in the six months ended Sept. 30, 2018 was primarily related to purchases of property and equipment. Net cash used in investment activities in the six months ended Sept. 30, 2017 relates to purchases of property and equipment of $1.2 million offset by proceeds from the sale of assets of $0.3 million and a cash distribution from an investment of $0.3 million. Cash used in financing activities was $6.6 million during the six months ended Sept. 30, 2018 compared to cash provided by financing activities of $2.7 million during the six months ended Sept. 30, 2017, a net change of $9.3 million which is driven primarily by borrowings and repayments under the Company's long-term debt. A full-text copy of the Form 10-Q is available for free at: https://is.gd/7HUQxY About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a scale-out tiered storage, archive and data protection company, providing solutions for capturing, sharing, managing and preserving digital assets over the entire data lifecycle. The Company delivers streaming for video and media applications, along with data protection and archive systems. As of Sept. 30, 2017, Quantum Corp had $211.2 million in total assets, $335.5 million in total liabilities, and a total stockholders' deficit of $124.3 million. Quantum reported a net loss of $42.79 million for the year ended March 31, 2019, compared to a net loss of $43.34 million for the year ended March 31, 2018. As of March 31, 2019, the Company had $172.9 million in total assets, $372.7 million in total liabilities, and a total stockholders' deficit of $199.8 million. RADFORD QUARRIES: Taps Moon Wright as Bankruptcy Counsel -------------------------------------------------------- Radford Quarries, Inc. seeks authority from the United States Bankruptcy Court for the Western District of North Carolina (Statesville) to hire the law firm of Moon Wright & Houston, PLLC as bankruptcy counsel in its Chapter 11 case. The professional services that Moon Wright will render are: a. provide legal advice with respect to its powers and duties as debtors-in-possession in the continued operation of its business and management of its properties; b. negotiate, prepare, and pursue confirmation of a chapter 11 plan and approval of a disclosure statement, and all related reorganization agreements and/or documents; c. prepare on behalf of the Debtor necessary applications, motions, answers, orders, reports, and other legal papers; d. represent the Debtor in all adversary proceedings related to the base case; e. represent the Debtor in all litigation arising from or relating to causes of action owned by the estate or defending causes of action brought against the estate, in any forum; f. appear in Court to protect the interests of the Debtor; and g. perform all other legal services for the Debtor that may be necessary and proper in the chapter 11 proceeding. The firm's hourly rates are: Richard S. Wright $525.00 Andrew T. Houston $500.00 Caleb Brown $280.00 Cole Hayes $280.00 Amy Murray (Paralegal) $150.00 Richard S. Wright, Esq., a partner at Moon Wright, attests that the firm neither holds nor represents any interest adverse to the Debtor's estate, and is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Richard S. Wright, Esq. Cole Hayes, Esq. Moon Wright & Houston, PLLC 121 W. Trade Street, Suite 1950 Charlotte, NCa 28202 Tel: (704) 944-6560 Fax: (704) 944-0380 Email: rwright@mwhattorneys.com About Radford Quarries, Inc. Radford Quarries, Inc. owns a small materials sales business with operations in Ashe, Avery, Watauga, and Wilkes Counties of North Carolina and Johnson County of Tennessee. Its products include crushed stone, sand, dirt, and deicer. Radford Quarries, Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case No. 19-50454) on July 26, 2019. In the petition signed by D.J. Cecile, Jr., vice president and chief financial officer, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Laura T. Beyer. Richard S. Wright, Esq. at Moon Wright & Houston, PLLC, represents the Debtor as counsel. REGDALIN PROPERTIES: Trustee's $747K Studio City Property Sale OK'd ------------------------------------------------------------------- Judge Sheri Bluebond of the U.S. Bankruptcy Court for the Central District of California authorized R. Todd Neilson, Chapter 11 Trustee for Regdalin Properties, LLC, to sell the real property commonly known as 12026 Hoffman Street, #302, Studio City, California, APN: 2368-002-078, to Guerin 16, LLC for $747,000. A hearing on the Motion was held on Aug. 28, 2019 at 10:00 a.m. The Trustee is authorized to pay through escrow all usual and customary costs of sale, including without limitation (a) brokers' commission of 5% (totaling approximately $37,350), (b) escrow fees, (c) title insurance fees, (d) recording fees, (e) messenger fees, and (f) liens of record, in each case to the extent not disputed by the Trustee. The Trustee is authorized to pay through escrow (i) the liens of any and all taxing authorities, (ii) outstanding amounts due and owing to the homeowners association that governs the Property, and (iii) the lien of Bank of the West in the approximate amount of $565,731. To the extent otherwise required to do so, the brokers receiving commissions in connection with the proposed sale are relieved of any obligation that they may otherwise have had to file fee applications. The Trustee's sale of the Property is free and clear of all claims, liens and interests. To the extent that any portion of a claim, lien or interest in or to the Property is not paid through escrow, such claims(s), lien(s), and interest(s) in and to the Property will attach to the net sale proceeds. All occupants of the Property, including without limitation Hrayr Sargsyan and Karine Ghukasyan, are directed to deliver possession of the Property (by personally vacating the Property, removing all of their personal property from the Property, leaving the Property in broom clean condition, and delivering to the Trustee the keys to the Property and any garage door or garage gate remote controls that may exist) within two business days after the entry of the order on the Motion. The order constitutes a writ of assistance and writ of possession for the Property. The Court further orders as follows: a. Upon execution and entry of this Order, the United States Marshals Service is immediately directed to assist the Trustee to enforce the underlying order awarding possession. b. The Trustee and/or his authorized agents will act as substitute custodian of any and all items of personal property seized pursuant to this Order and the U.S. Marshal will have no liability arising from any acts, incidents, or occurrences in connection with the seizure of the personal property located at the subject real property arising in the ordinary authorized scope of duties of the U.S. Marshal (which acts do not include acts arising from negligent or intentional tortious conduct), including any third party claims and the U.S. Marshal will be discharged of his or her duties and responsibilities for safekeeping of the seized goods. c. The U.S. Marshal accomplishing such eviction or seizure will use whatever reasonable force necessary to break open and enter the subject real property regardless of whether the premises or location is locked or unlocked, occupied or unoccupied and to inspect the contents of any room, closet, cabinet, vehicle, container, desk or documents. d. Anyone interfering with the execution of the Order is subject to arrest by law enforcement officials. The overbid procedure proposed in the Motion, as clarified at the hearing on the Motion, is approved. A certified copy of the Order may be filed with the appropriate clerk and/or recorded with the county recorder to evidence conclusively the release or cancellation of the claims, liens, and interests as set forth in the Order. The title company insuring the Trustee's sale of the Property and the escrow agent for such sale, are entitled to rely upon the Order in connection with the sale. The Order constitutes a final and appealable order within the meaning of 28 U.S.C. Section 158(a). The 14-day stay period set forth in Federal Rule of Bankruptcy Procedure 6004(h) is waived; and notwithstanding Federal Rule of Bankruptcy Procedure 6004(h), the Order will be immediately effective and enforceable upon its entry and there will be no stay of the Order. In the absence of any person or entity obtaining a stay pending appeal of the Order, the Trustee, the Estate, and the Buyer are free to close the sale under the Counter Offer at any time, subject to the terms of the Counter Offer. About Regdalin Properties Regdalin Properties, LLC, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-20868) on Sept. 17, 2018, and was represented by Henrik Mosesi, Esq., in Glendale, California. In the petition signed by Edgar Sargysyan, managing member, the Debtor estimated $10 million to $50 million in assets and liabilities. R. Todd Neilson was appointed as the Debtor's Chapter 11 trustee on Nov. 1, 2018. The Trustee retained Dinsmore & Shohl LLP as his legal counsel. Coldwell Banker is serving as broker. REVOLAR TECHNOLOGY: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------ No official committee of unsecured creditors has been appointed in the Chapter 11 case of Revolar Technology, Inc. as of Sept. 3, according to a court docket. About Revolar Technology Inc. Creditors Nicole Bagley, Praful Shah and Julianna Evans Caplan filed an involuntary Chapter 7 petition against Revolar Technology Inc. (Bankr. D. Colo. Case No. 18-17812 ) on September 5, 2018. The case was converted to one under Chapter 11 on October 30, 2018, and was assigned to Judge Michael E. Romero. The Debtor hired Kutner Brinen, P.C. as its bankruptcy counsel. RIVERWOOD GAS: Court Grants BLM Bid to Junk SAC w/o Leave to Amend ------------------------------------------------------------------ In the case captioned RIVERWOOD GAS AND OIL, LLC, Plaintiff, v. BUREAU OF LAND MANAGEMENT, Defendant, Adv. No. 2:18-ap-01057-NB (Bankr. C.D. Cal.), Bankruptcy Judge Neil W. Bason granted the Defendant’s motion to dismiss Debtor/Plaintiff's Second Amended Complaint without leave to amend. The Second Amended Complaint asserts a single claim for relief against Defendant, the Bureau of Land Management, for alleged violation of the automatic stay of section 362(a). Plaintiff asserts that acts taken by the BLM to terminate certain oil and gas leases of public land (the "BLM Leases") were void for violation of the automatic stay because those acts occurred after Debtor filed its voluntary bankruptcy petition on Nov. 23, 2016. The SAC fails to state a claim for violation of the automatic stay of section 362(a). Construing the SAC in the light most favorable to Debtor, it alleges that Debtor had a sufficient interest in the BLM Leases as of the Petition Date that any subsequent attempt to terminate the BLM Leases constituted (a) an "administrative, or other action or proceeding against the debtor" that could have been commenced prepetition or alternatively (b) an "act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate." But Debtor was not named in any proceeding by BLM, so there was no action "against the debtor" as required by section 362(a)(1). Even taking the factual allegations of the SAC as true, Debtor cannot establish that the BLM's notice (that the BLM Leases had terminated prepetition) constituted a proceeding "against the debtor," as opposed to a proceeding against Western or Tearlach or constituted an act regarding "property" of the estate. Nor does the SAC state a claim for violation of any other paragraph of section 362(a). As for any amendment to the SAC to state a claim, that does not appear possible. As a matter of law, and as the SAC concedes, any purported contractual assignment of the BLM Leases is subject to approval by the BLM. So Debtor had only an expectancy not a property interest in the BLM Leases. Accordingly, the tentative ruling is that the BLM's motion to dismiss must be granted without leave to amend. The SAC also fails to dispute that the BLM Leases were terminated prepetition as to Western, which is the lessee through whom Debtor asserts any interest in the BLM Leases. That undermines Debtor's ability to state any claim for a subsequent violation of the automatic stay because if the BLM Leases were already terminated then the automatic stay could not have applied to protect those leases. A copy of the Court's Memorandum Decision dated April 3, 2019 is available at https://bit.ly/32pbAJL from Leagle.com. Riverwood Gas and Oil LLC, Plaintiff, represented by Giovanni Orantes , Orantes Law Firm PC & Luis A. Solorzano, The Orantes Law Firm, P.C. Bureau of Land Management, Defendant, represented by Kevin P. VanLandingham , US Dept of Justice Civil Div. About Riverwood Gas and Oil Riverwood Gas and Oil LLC is a corporation based in Corona, California. Its business is hydrocarbon exportation of bureau of land management leases in the Kern front production area of Bakersfield, California. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 16-25483) on November 23, 2016. The petition was signed by Joseph M. Hoats, CEO and President of Inviron, sole member of Riverwood. The case is assigned to Judge Neil W. Bason. The Debtor is represented by Giovanni Orantes, Esq., at The Orantes Law Firm P.C. At the time of the filing, the Debtor estimated its assets at $1 billion to $10 billion and debts at $50 million to $100 million. SAM MCFADIN: Auction Sale of Conway Assets Approved --------------------------------------------------- Judge Richard D. Taylor of the U.S. Bankruptcy Court for the Eastern District of Arkansas authorized Sam McFadin's sale of (i) the real property located at 535 Enterprise Ave, Conway, Arkansas, (ii) the improvements located thereon, and (iii) the personal property therein at public auction. The Property will be sold free and clear of all liens, claims, and encumbrances, if any, with the liens attaching to the proceeds of sale, on a strictly "as is, where is" basis, with no warranties being extended by the Debtor with all liens and claims to attach to proceeds. After the auction, the DIP will file a Motion to Approve the sale of the Real Property within five days after such auction, containing the corrected legal description of the Real Property and to file a Report of Sale of the Personal Property. The Property, both Real and Personal defined in the Motion and clarified in the Order, is authorized to be sold by public auction by Wooley Auctioneers Inc., at such time as the Auctioneer may deem appropriate using its best business judgement to maximize advertising and marketing, but to occur within the 30 days after the Order during regular business hours. The Auctioneer fees are to be paid at conclusion of sale for personal property and at closing for real property at amounts noted in the order approving the Debtor's retention of auctioneer dated June 16, 2019 and Application dated April 16, 2019. The administrative fees and expenses of sale, including attorney's fees and costs, closing costs and real estate taxes, will be charged against the proceeds received from the sale of the Real Property. Further, Bank OZK will be paid its full indebtedness as of the date of the sale, net of the aforementioned administrative fees and expenses. The net remaining balance of the proceeds received from the sale of the Property will remain in the Debtor's Counsel's IOLTA account pending further orders of distribution by the Court. About Sam McFadin Sam McFadin sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ark. Case No. 18-14980) on Sept. 14, 2018. The Debtor tapped Kevin P. Keech, Esq., at Keech Law Firm, PA as its legal counsel. SAND CASTLE: Court OK’s Request to End Timeshare Plan on Condo ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina authorizes Sand Castle South Timeshare Owners Association, Inc., to proceed with the steps to terminate its timeshare plan relating to a 40-unit timeshare condominium resort at the Sand Castle South condominium building in Myrtle Beach, South Carolina. The Debtor plans to sell the condominiums used in the timeshare plan in order to pay-off its debts, and then distribute the remaining funds to timeshare owners. The Debtor disclosed that it has accumulated operating deficit of more than $2,000,000 over the years. About Sand Castle South Timeshare Owners Association Sand Castle South Timeshare Owners Association, Inc., is a not-for-profit corporation created to manage, operate and maintain a 40-unit timeshare condominium resort in the Sand Castle South condominium building located at 2207 South Ocean Boulevard, Myrtle Beach, South Carolina. The Association filed a Chapter 11 bankruptcy petition (Bankr. D.S.C. Case No. 19-02764) on May 22, 2019, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Julio E. Mendoza Jr., Esq., at Nexsen Pruet LLC. SEARS HOLDINGS: Sears Cuts 250 Employees at Hoffman Estates HQ -------------------------------------------------------------- Sears is laying off about 250 employees at its Hoffman Estates headquarters although the facility will remain open. According to the Chicago Tribune, citing a notice filed by the retailer with the state, Sears said it is implementing a permanent workforce reduction over a 14-day period, beginning Oct. 28, 2019. Sears said in its letter to the Illinois Department of Commerce and Economic Opportunity that there are "no current plans to close the entire facility." The Hartford Courant recounts that Sears had 4,411 employees in Hoffman Estates and its Loop satellite office as of January 2017, according to state filings. In June 2017, Sears told the Tribune it had fallen short of the 4,250 employees needed to remain eligible for state tax credits. Since then, Sears has announced the elimination of more than 1,100 jobs, mostly in Hoffman Estates. Sears Holdings sought Chapter 11 protection in October 2018 with less than 700 stores -- down from the 3,500 stores when Sears and Kmart merged in 2005. In February 2019, Transform Holdco, an entity controlled by former Sears CEO and its largest shareholder, Edward Lampert, bought Sears and 425 stores out of bankruptcy in a court-sanctioned auction. Since Lampert's purchase, Sears has continued to reduce its retail footprint, announcing plans August to close 26 large-format Sears and Kmart stores from late October through mid-November. About Sears Holdings Sears Holdings Corporation (OTCMKTS: SHLDQ) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as investment banker; DLA Piper LLP as real estate advisor; and Prime Clerk as claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors, including the Pension Benefit Guaranty Corp., and landlord Simon Property Group, L.P., to serve on the official committee of unsecured creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. The U.S. Trustee for Region 2 on July 9, 2019, appointed five retirees to serve on the committee representing retirees with life insurance benefits in the Chapter 11 cases. * * * In February 2019, Bankruptcy Judge Robert Drain has granted Sears Holdings approval to sell the business to majority shareholder and CEO Eddie Lampert for approximately $5.2 billion. Lampert's ESL Investments, Inc., has won an auction to acquire substantially all of Sears' assets, including the "Go Forward Stores" on a going-concern basis. The proposal will allow 425 stores to remain open and provide ongoing employment to 45,000 employees. SENIOR CARE: PM Management's Transfer of Assets to Comal Approved ----------------------------------------------------------------- Judge Stacy G.C. Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas (i) approved the operations transfer and surrender agreement ("OTA") by and between PM Management – New Braunfels NC, LLC ("Transferor"), an affiliate of Senior Care Centers, LLC, and Comal Health Care Center Ltd. Co. ("New Operator"); and (ii) authorized the transfer of the certain assets and operations of the skilled nursing facility known as "Sundance Inn Health Center," located at 2034 Sundance Parkway, New Braunfels, Texas from the Transferor to the New Operator pursuant to the OTA, free and clear of all claims and encumbrances. The Debtors are prohibited from paying any obligations to their employees pursuant to the Transaction Documents, including but not limited to, any severance, retention bonus, or other change in control payment, unless the Court enters an order authorizing such payment. Any severance, retention bonus, or other change in control payment contemplated by the OTA that is payable because of any sale is limited to the extent required by applicable Bankruptcy law. The transferred Assets exclude (i) any and all causes of action, claims, or rights of avoidance or recovery of any transfers or liens under chapter 5 of the Bankruptcy Code or applicable state law; and (ii) all D&O policies of Transferor or any of its affiliates and all rights of every nature and description under or arising out of such insurance policies, including the right to make claims thereunder, to the proceeds thereof. Subject to terms of the Order, the Assets are transferred free and clear of all liens, claims, interests, or encumbrances, including but not limited to successor liability claims, provided, however, that for any party holding a secured interest in the Assets senior to any interest held by Saddleback Sundance, LLC and Saddleback Park Valley, LLC ("Landlord") (or an ownership interest, if any third party owns any goods or equipment located at the Facility), the New Operator will receive such Assets subject to such interest unless such interest is satisfied in a manner agreed to by the holder thereof or as otherwise determined by the Court. Notwithstanding anything in the Order to the contrary, the transfer of the Assets pursuant to the Order will not be free and clear of (a) the liens of Love Funding Corp., which will remain in place and continue to attach to the transferred Assets, or (b) claims related to executory contracts or unexpired leases that are assumed and assigned to the New Operator. Notwithstanding anything in the Order, the Motion, the OTA, or the Transaction Documents, (1) the Debtors and New Operator will abide by all Social Security Administration ("SSA") statutes, regulations, rules, policies, and procedures, including, but not limited to, (a) the transfer of any account holding Social Security benefits, or (b) any New Operator's actions as any beneficiary’s representative payee; (2) nothing will impair or affect SSA's authority, rights, claims or defenses under SSA statutes, regulations, rules, policies, and procedures; and (3) to the extent the Debtors may need to disclose information they possess solely by virtue of being organizational representative payees, the Debtors will seek a protective order or request the information be sealed. Notwithstanding anything in the Order, the Motion, the OTA, or the Transaction Documents, nothing releases, nullifies, precludes or enjoins the enforcement of any police or regulatory liability to a governmental unit arising from or related to the enforcement of any applicable police or regulatory law or regulation (including but not limited to those of the Texas Health and Human Services Commission ("HHSC")) to which any entity would be subject to as the owner, operator or licensee of property from and after the date of the closing of the Sale. Nothing in the Order authorizes the transfer or assignment of any governmental (a) license, (b) permit, (c) registration, (d) authorization, or (e) approval, or the discontinuation of any obligation thereunder, without compliance with all applicable legal requirements and approvals under police and regulatory law. Further, nothing in the Order will impair HHSC's rights to place a vendor hold on Medicaid receivables as part of any Change of Ownership process. The New Operator is not being assigned the Transferors' Medicare Provider Agreements with the Secretary of the United States Department of Health and Human Services ("HHS"), acting through its designated component, the Centers for Medicare & Medicaid Services ("CMS") or the Medicaid provider agreements with the Texas Health and Human Services Commission ("HHSC"), and liabilities arising under the Provider Agreements will remain as the liabilities of the Debtors. Although the New Operator is not being assigned the Provider Agreements, for the sake of clarity, to the extent owned by the Transferor, the New Operator is being assigned the Facility's Medicaid contracted bed allotments, to the extent allowed by applicable law. No release or indemnification will be granted in contravention of Bank of N.Y. Trust Co. v. Off'l Unsecured Creditors' Comm. (In re Pacific Lumber Co.), 584 F.3d 229 (5th Cir. 2009) or Bankruptcy Code section 524(e). Certain equipment and/or vehicles that are subject to leases between certain of the Debtors and Wells Fargo Equipment Finance, Inc., Wells Fargo Bank, doing business as Wells Fargo Equipment Finance, and/or Wells Fargo Financial Leasing, Inc., are, or may be, located at the Facility. Notwithstanding any other term or provision of the Order, subsequent to the transfer of the Assets to the New Operator, Wells Fargo will retain its liens and interests in the Wells Fargo Equipment, which will be transferred to the New Operator subject to such liens and interests, and any rights or interests of the Debtors therein will be deemed to be terminated following the effective date of the transfer to the New Operator. Wells Fargo and the New Operator may enter into such new equipment lease, lease assumption, or other transaction regarding the Wells Fargo Equipment to which such parties may mutually agree and, in the absence of such agreement, Wells Fargo will be permitted to exercise its legal or contractual in rem rights and remedies with respect to the Wells Fargo Equipment, as to which the automatic stay will be terminated upon Closing. With Wells Fargo's consent, the Debtors will file a motion to formally assume or reject any contracts or leases pertaining to the Wells Fargo Equipment, in consultation with the New Operator, within 90 days of the Closing. Love Funding's first priority liens on the assets of the Love Funding Debtors that are not being transferred pursuant to this Order, including the cash and accounts receivable of the Love Funding Debtors will remain in place. Notwithstanding any other provision in the Order, the Motion, the OTAs, or the Transaction Documents, year 2018 ad valorem personal property taxes owed on the affected locations will be paid by the Transferor to the relevant taxing authorities on or before Sept.30, 2019 with interest that has accrued at the state statutory rate of 1% per month pursuant to 11 U.S.C. Sections 506(b) and 511. Further, the amount of the ad valorem personal property taxes on the affected locations accruing between Jan. 1, 2019 and the Effective Time (as defined in the OTA) will be paid by the Transferor to the Saddleback Park Valley, LLC/Saddleback Sundance, LLC (“Sellers”) on or before September 30, 2019, and Park Valley Capital Funding, LLC/First Comal Capital Funding, LLC will receive a credit at closing for the amount of the Personal Property Tax against the Purchase Price as defined in that certain Agreement for Purchase and Sale of Assets between Sellers and Buyers. The remaining ad valorem property taxes for the 2019 tax year will remain attached to the assets and become the responsibility of the New Operator. The holders of liens that secure year 2019 ad valorem property taxes will retain all state law collection and lien enforcement rights and are not enjoined from pursuing collection of all amounts owed for tax year 2019 against the New Operator in the event the 2019 ad valorem property taxes are not paid prior to the state law delinquency date. Notwithstanding any applicable Bankruptcy Rule or Local Bankruptcy Rule to the contrary, this Order is effective and enforceable immediately upon entry, no stay applies, and the Debtors may complete the transactions contemplated hereby immediately. The Order is intended to be, and in respects will be, a final order regarding the relief granted therein, and will not be an interim order. About Senior Care Centers Senior Care Centers, LLC -- https://senior-care-centers.com/ -- is a Dallas-based, skilled nursing and long-term care industry leader in Texas and Louisiana. Senior Care Centers operates and manages more than 100 skilled nursing and assisted/independent living communities in the states of Texas and Louisiana. On Dec. 4, 2018, Senior Care Centers and 120 of its subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Tex. Lead Case No. 18-33967). The Debtors tapped Polsinelli PC as bankruptcy counsel; Hunton Andrews Kurth LLP as conflicts counsel; Sitrik and Company as communications consultant; and Omni Management Group, Inc. as claims, noticing, and administrative agent. On Dec. 14, 2018, the Office of the United States Trustee appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Greenberg Traurig, LLP, as counsel, and FTI Consulting, Inc., as its financial advisor. SENIOR CARE: PM Management's Transfer of Assets to Park Valley OK'd ------------------------------------------------------------------- Judge Stacy G.C. Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas (i) approved the Operations Transfer Agreement ("OTA") by and between PM Management – Park Valley NC, LLC ("Transferor"), an affiliate of Senior Care Centers, LLC, and Park Valley Health Care Center Ltd. Co. ("New Operator"); and (ii) authorized the transfer of the certain assets and operations of the skilled nursing facility known as "Park Valley Inn Health Center," located at 17751 Park Valley, Round Rock, Texas from the Transferor to the New Operator pursuant to the OTA, free and clear of all claims and encumbrances. The Debtors are prohibited from paying any obligations to their employees pursuant to the Transaction Documents, including but not limited to, any severance, retention bonus, or other change in control payment, unless the Court enters an order authorizing such payment. Any severance, retention bonus, or other change in control payment contemplated by the OTA that is payable because of any sale is limited to the extent required by applicable Bankruptcy law. The transferred Assets exclude (i) any and all causes of action, claims, or rights of avoidance or recovery of any transfers or liens under chapter 5 of the Bankruptcy Code or applicable state law; and (ii) all D&O policies of Transferor or any of its affiliates and all rights of every nature and description under or arising out of such insurance policies, including the right to make claims thereunder, to the proceeds thereof. Subject to terms of the Order, the Assets are transferred free and clear of all liens, claims, interests, or encumbrances, including but not limited to successor liability claims, provided, however, that for any party holding a secured interest in the Assets senior to any interest held by Saddleback Sundance, LLC and Saddleback Park Valley, LLC ("Landlord") (or an ownership interest, if any third party owns any goods or equipment located at the Facility), the New Operator will receive such Assets subject to such interest unless such interest is satisfied in a manner agreed to by the holder thereof or as otherwise determined by the Court. Notwithstanding anything in the Order to the contrary, the transfer of the Assets pursuant to the Order will not be free and clear of (a) the liens of Love Funding Corp., which will remain in place and continue to attach to the transferred Assets, or (b) claims related to executory contracts or unexpired leases that are assumed and assigned to the New Operator. Notwithstanding anything in the Order, the Motion, the OTA, or the Transaction Documents, (1) the Debtors and New Operator will abide by all Social Security Administration ("SSA") statutes, regulations, rules, policies, and procedures, including, but not limited to, (a) the transfer of any account holding Social Security benefits, or (b) any New Operator's actions as any beneficiary’s representative payee; (2) nothing will impair or affect SSA's authority, rights, claims or defenses under SSA statutes, regulations, rules, policies, and procedures; and (3) to the extent the Debtors may need to disclose information they possess solely by virtue of being organizational representative payees, the Debtors will seek a protective order or request the information be sealed. Notwithstanding anything in the Order, the Motion, the OTA, or the Transaction Documents, nothing releases, nullifies, precludes or enjoins the enforcement of any police or regulatory liability to a governmental unit arising from or related to the enforcement of any applicable police or regulatory law or regulation (including but not limited to those of the Texas Health and Human Services Commission ("HHSC")) to which any entity would be subject to as the owner, operator or licensee of property from and after the date of the closing of the Sale. Nothing in the Order authorizes the transfer or assignment of any governmental (a) license, (b) permit, (c) registration, (d) authorization, or (e) approval, or the discontinuation of any obligation thereunder, without compliance with all applicable legal requirements and approvals under police and regulatory law. Further, nothing in the Order will impair HHSC's rights to place a vendor hold on Medicaid receivables as part of any Change of Ownership process. The New Operator is not being assigned the Transferors' Medicare Provider Agreements with the Secretary of the United States Department of Health and Human Services ("HHS"), acting through its designated component, the Centers for Medicare & Medicaid Services ("CMS") or the Medicaid provider agreements with the Texas Health and Human Services Commission ("HHSC"), and liabilities arising under the Provider Agreements will remain as the liabilities of the Debtors. Although the New Operator is not being assigned the Provider Agreements, for the sake of clarity, to the extent owned by the Transferor, the New Operator is being assigned the Facility's Medicaid contracted bed allotments, to the extent allowed by applicable law. No release or indemnification will be granted in contravention of Bank of N.Y. Trust Co. v. Off'l Unsecured Creditors' Comm. (In re Pacific Lumber Co.), 584 F.3d 229 (5th Cir. 2009) or Bankruptcy Code section 524(e). Certain equipment and/or vehicles that are subject to leases between certain of the Debtors and Wells Fargo Equipment Finance, Inc., Wells Fargo Bank, doing business as Wells Fargo Equipment Finance, and/or Wells Fargo Financial Leasing, Inc., are, or may be, located at the Facility. Notwithstanding any other term or provision of the Order, subsequent to the transfer of the Assets to the New Operator, Wells Fargo will retain its liens and interests in the Wells Fargo Equipment, which will be transferred to the New Operator subject to such liens and interests, and any rights or interests of the Debtors therein will be deemed to be terminated following the effective date of the transfer to the New Operator. Wells Fargo and the New Operator may enter into such new equipment lease, lease assumption, or other transaction regarding the Wells Fargo Equipment to which such parties may mutually agree and, in the absence of such agreement, Wells Fargo will be permitted to exercise its legal or contractual in rem rights and remedies with respect to the Wells Fargo Equipment, as to which the automatic stay will be terminated upon Closing. With Wells Fargo's consent, the Debtors will file a motion to formally assume or reject any contracts or leases pertaining to the Wells Fargo Equipment, in consultation with the New Operator, within 90 days of the Closing. Love Funding's first priority liens on the assets of the Love Funding Debtors that are not being transferred pursuant to this Order, including the cash and accounts receivable of the Love Funding Debtors will remain in place. Notwithstanding any other provision in the Order, the Motion, the OTAs, or the Transaction Documents, year 2018 ad valorem personal property taxes owed on the affected locations will be paid by the Transferor to the relevant taxing authorities on or before Sept. 30, 2019 with interest that has accrued at the state statutory rate of 1% per month pursuant to 11 U.S.C. Sections 506(b) and 511. Further, the amount of the ad valorem personal property taxes on the affected locations accruing between Jan. 1, 2019 and the Effective Time will be paid by the Transferor to the Saddleback Park Valley, LLC/Saddleback Sundance, LLC by Sept. 30, 2019, and Park Valley Capital Funding, LLC/First Comal Capital Funding, LLC will receive a credit at closing for the amount of the Personal Property Tax against the Purchase Price as defined in that certain Agreement for Purchase and Sale of Assets between Sellers and Buyers. The remaining ad valorem property taxes for the 2019 tax year will remain attached to the assets and become the responsibility of the New Operator. The holders of liens that secure year 2019 ad valorem property taxes will retain all state law collection and lien enforcement rights and are not enjoined from pursuing collection of all amounts owed for tax year 2019 against the New Operator in the event the 2019 ad valorem property taxes are not paid prior to the state law delinquency date. Notwithstanding any applicable Bankruptcy Rule or Local Bankruptcy Rule to the contrary, this Order is effective and enforceable immediately upon entry, no stay applies, and the Debtors may complete the transactions contemplated hereby immediately. The Order is intended to be, and in respects will be, a final order regarding the relief granted herein, and will not be an interim order. About Senior Care Centers Senior Care Centers, LLC -- https://senior-care-centers.com/ -- is a Dallas-based, skilled nursing and long-term care industry leader in Texas and Louisiana. Senior Care Centers operates and manages more than 100 skilled nursing and assisted/independent living communities in the states of Texas and Louisiana. On Dec. 4, 2018, Senior Care Centers and 120 of its subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Tex. Lead Case No. 18-33967). The Debtors tapped Polsinelli PC as bankruptcy counsel; Hunton Andrews Kurth LLP as conflicts counsel; Sitrik and Company as communications consultant; and Omni Management Group, Inc. as claims, noticing, and administrative agent. On Dec. 14, 2018, the Office of the United States Trustee appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Greenberg Traurig, LLP, as counsel, and FTI Consulting, Inc., as its financial advisor. SENIOR CARE: Sept. 6 Hearing on Amended Disclosure Statement ------------------------------------------------------------ A hearing to consider the adequacy of the Disclosure Statement explaining the Chapter 11 Plan of Senior Care Centers, LLC, was held on August 20, 2019. The Debtor announced at that hearing that it will soon be withdrawing show cause order regarding the vendor hold issue since it has received substantially all of the disputed holdback (still working through accounting issues for other holdbacks). The Debtor also announced that the majority of necessary changes to the Disclosure Statement have been made, except for adding information about exit financing. The Debtor now expects to have exit financing not just for the 22 properties it desires to reorganize around, but also for winddown financing for the 35 rejected facilities that the Debtor still operates. The Debtor at that hearing said it will file its amended disclosure statement and the Court continued the hearing on the Disclosure Statement for September 6, 2019 at 9:30 a.m. The Second Amended Disclosure provides that an Unsecured Creditor Trust will be established to investigate and pursue the Unsecured Trust Causes of Action. The Unsecured Creditor Trust will also receive 80% of the New Common Stock and, subject to approval by the Exit Lender, the Unsecured Creditor Trust Note in the principal amount of up to $10 million. The Unsecured Creditor Trust will be funded by the Trust Funding of at least $500,000. TXMS Real Estate Investments, Inc., filed a supplemental objection to the Second Amended Disclosure Statement, complaining that the Second Amended Disclosure Statement confirms the Debtors still cannot provide adequate information regarding the putative "Exit Facility," because any final commitment on this crucial financing remains elusive. TXMS asserts that the Debtors have not presented a meaningful disclosure or otherwise complied with the Court's directive on full disclosure of Exit Financing. TXMS points out that the Debtors' sources and uses failed to satisfy the Court’s specific instructions from the August 7, 2019. According to TXMS, the Debtors' sources and uses exhibit fails to include the high and low ranges the Court directly requested. TXMS complains that the Debtors provide no explanation for why only $500,000 of the $2.87 million of 503(b)(9) claims will be allowed and paid, and provides no means to fund the resulting $2.3 million remaining balance. TXMS asserts that the Debtors' projections calculate the December 2019 rent obligations consuming $3.2 million of this available cash, leaving only $500,000 in actual working capital and no meaningful cushion for any deviation from the Debtors’ own best-case scenario. A blacklined version of the Second Amended Disclosure Statement is available at https://tinyurl.com/y2r5kvgw from PacerMonitor.com at no charge. Counsel for TXMS Real Estate Investments, Inc.: Jason M. Rudd, Esq. Lauren K. Drawhorn, Esq. Nick B. Nelson, Esq. WICK PHILLIPS GOULD & MARTIN, LLP 3131 McKinney Avenue, Suite 100 Dallas, Texas 75204 Tel: (214) 692-6200 Fax: (214) 692-6255 Email: jason.rudd@wickphillips.com lauren.drawhorn@wickphillips.com nick.nelson@wickphillips.com About Senior Care Centers Senior Care Centers, LLC -- https://senior-care-centers.com/ -- is a Dallas-based, skilled nursing and long-term care industry leader in Texas and Louisiana. Senior Care Centers operates and manages more than 100 skilled nursing and assisted/independent living communities in the states of Texas and Louisiana. On Dec. 4, 2018, Senior Care Centers and 120 of its subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Tex. Lead Case No. 18-33967). The Debtors tapped Polsinelli PC as bankruptcy counsel; Hunton Andrews Kurth LLP as conflicts counsel; Sitrik and Company as communications consultant; and Omni Management Group, Inc. as claims, noticing, and administrative agent. On Dec. 14, 2018, the Office of the United States Trustee appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Greenberg Traurig, LLP, as counsel, and FTI Consulting, Inc., as its financial advisor. SERVICE PAINTING: Hires Taps Getzler Henrich as Financial Advisor ----------------------------------------------------------------- Service Painting, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Getzler Henrich & Associates LLC, as restructuring consultant and financial advisor. The services required of Getzler Henrich are: a. prepare plan projections that reflect the Debtor's assumption of the IUPAT CBA, including meeting its obligations thereunder as well as forecasting revenue and expenses as a "union shop", and meeting its obligations under any proposed plan of reorganization; b. participate in the plan confirmation process to the extent necessary, including but not limited to giving testimony at hearings; and c. assist the Debtor in its budgeting and cash management. Getzler Henrich will be paid at these hourly rates: Edward A. Philips, Managing Director $585 Other GHA Directors/Specialists $385-565 Associate Professionals $160-$425 Getzler Henrich will also be reimbursed for reasonable out-of-pocket expenses incurred. Edward Philips, managing director of Getzler Henrich, 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 estate. The firm can be reached through: Edward A. Philips Getzler Henrich & Associates, LLC 1515 Market Street, Suite 1200 Philadelphia, PA 19102 Tel: 215-854-6305 or 215-315-8311 Email: ephillips@getzlerhenrich.com About Service Painting Service Painting, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 18-16843) on Oct. 13, 2018. At the time of the filing, the Debtor estimated assets of less than $1 million and liabilities of less than $1 million. Judge Eric L. Frank presides over the case. The Debtor tapped Kurtzman Steady, LLC, as its legal counsel. SEVEN STARS: Asks Court to Use Wells Fargo Cash Collateral ---------------------------------------------------------- Seven Stars on the Hudson Corp., seeks permission from the U.S. Bankruptcy Court for the Southern District of Florida to use cash collateral of Wells Fargo Bank, N.A., pursuant to a budget. The budget for the month of September 2019 provides for total disbursements of $70,031. Of this amount $30,879 is for rent expense and $15,680 for payroll expense. A copy of the budget is available for free at http://bankrupt.com/misc/Seven_Stars_55_Cash_2nd_M.pdf As adequate protection, the Debtor seeks to pay Wells Fargo $12,500 monthly, and to provide the bank replacement liens on its collateral. About Seven Stars on the Hudson Corp. Seven Stars on the Hudson Corp. -- https://www.rockinjump.com/ftlauderdale/ -- is a trampoline park operator based in Fort Lauderdale, Florida. Seven Stars on the Hudson Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-17544) on June 5, 2019. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of between $1 million and $10 million. The case is assigned to Judge Raymond B. Ray. The Debtor is represented by The Salkin Law Firm, P.A. SHRI VITTHAL: Franchisee Seeks to Use Cash, Sustain Operations -------------------------------------------------------------- Shri Vitthal, Inc., asks the U.S. Bankruptcy Court for the District of New Jersey to use the cash collateral of Investors Bank to continue the Debtor's franchise operation. The Debtor proposes, as adequate protection, (i) to grant Investors Bank a replacement lien in the Debtor's postpetition accounts receivable, and the proceeds thereof. The Debtor also proposes to maintain its current assets at the level existing as of the Petition Date, and to pay monthly interest on a revolving loan. As of the Petition Date, the Debtor owes Investors Bank approximately $159,777 for a judgment entered against the Debtor in the New Jersey Superior Court for Camden County. Pursuant to the budget, the Debtor estimates selling expenses of at least $20,000 for the second month, $15,000 of which is for payroll. A copy of the budget is available for free at: http://bankrupt.com/misc/Mohin_Enterprises_18_Cash_Budget.pdf About Shri Vitthal Shri Vitthal, Inc., operates a 7-Eleven franchise in Monmouth County, New Jersey. It sought Chapter 11 protection (Bankr. D.N.J. Case No. 19-25689) on Aug. 13, 2019. The Hon. Christine M. Gravelle is the case judge. Timothy P. Neumann, Esq., at BROEGE, NEUMANN, FISCHER & SHAVER LLC, serves as counsel to the Debtor. SMOKY MOUNTAIN: Hires Hedrick Gardner as Special Appellate Counsel ------------------------------------------------------------------ Smoky Mountain Country Club Property Owners Association, Inc., seeks authority from the United States Bankruptcy Court for the Western District of North Carolina (Asheville) to hire Hedrick Gardner Kincheloe & Garofalo LLP as special appellate counsel. The Debtor requires Hedrick to: a. review the state court litigation styled SMCC Clubhouse, LLC, v. Smoky Mountain Country Club Property Owners Association, Inc. (Case No. 14-CVS-238) to develop legal arguments; b. prepare briefs and other documents related to the appeal filed by the Debtor; and c. research legal issues related to the appeal. The firm's attorneys who are representing the Debtor bill at $350 per hour. Linda Stephens, Esq., at Hedrick Gardner, disclosed in court filings that the firm does not hold any interest materially adverse to the Debtor’s estate. The firm can be reached through: Linda Stephens, Esq. Hedrick Gardner Kincheloe & Garofalo LLP 4131 Parklake Avenue, Suite 300 Raleigh, NC 27612 Phone: (919) 832-9424 Fax: (919) 832-9425 About Smoky Mountain Country Club Property Owners Association, Inc. The Debtor, a North Carolina nonprofit corporation, is an association of of homeowners of the Smoky Mountain Country Club, a residential planned community, in Whittier, North Carolina. Smoky Mountain Country Club Property Owners Association, Inc. filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case No. 19-10286) on July 26, 2019. In the petition signed by Paul DeCarlo, president, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge George R. Hodges. John R. Miller Jr., Esq. at Rayburn Cooper & Durham, P.A., represents the Debtor as counsel. SPN INVESTMENTS: Oct. 17 Disclosure Statement Hearing ----------------------------------------------------- A hearing has been scheduled on October 17, 2019, at 10:30 a.m., to consider the adequacy of the information contained in the disclosure statement explaining SPN Investments Inc.'s Chapter 11 Plan. Any objections to the Disclosure Statement must be in writing, filed with the Court and served upon the following parties on or before October 3, 2019. Class 4 General unsecured claims are unimpaired. Paid their pro rata share of funds from the Carve Out after payment of priority taxes, if any. Class 1 Secured claims of WELLS FARGO BANK under BUSINESS LOAN AGREEMENT are impaired. On the Effective Date, the Debtor shall turn-over $95,000 of the $99,000 now in the Debtor's cash collateral account to WELLS FARGO. The first $5,000.00 on any recovery shall be paid to WELLS FARGO. The next 40% of any recovery shall constitute unencumbered property of the reorganized debtor, with at least 10% thereof to be paid to general unsecured creditors and 60% paid to WELLS FARGO (the "Carve Out"). All amounts paid to WELLS FARGO from any recovery, from the Liberty Mutual Claims, shall be applied to the loan ending in 8121-42, until that claim is paid in full. Class 2 Secured claims of WELLS FARGO BANK under REVOLVING LINE OF CREDIT are impaired. If there is any residual money from claims described in class 1, this class shall receive and 60% and the remaining amounts shall be paid to the Debtor as part of the Carve. Class 3 FC Marketplace, LLC dba FUNDING CIRCLE. Collateral for this claim is worth less than the senior secured claims of WELLS FARGO therefore it holds only an unsecured claim for the entirety of its allowed claim per 11 U.S.C. Section 506(a). The plan will be funded via the Carve Out described in the treatment of the secured claims of WELLS FARGO NATIONAL BANK ASSOCIATION. A full-text copy of the Disclosure Statement dated August 29, 2019, is available at https://tinyurl.com/yxkznr3a from PacerMonitor.com at no charge. About SPN Investments SPN Investments Inc., d/b/a eInflatables, is a manufacturer of sporting and athletic goods, including sports and fitness equipment. eInflatables offers a selection of inflatable play structures, including water slides, dry slides, wet & dry Slides, combo units, obstacle courses, inflatable games, bouncers and more. SPN Investments Inc. filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-10893) on March 12, 2019. In the petition signed by CEO Valentina Troshchiy, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Erithe A. Smith. Jeffrey S. Shinbrot, Esq., at Jeffrey S. Shinbrot, APLC, is the Debtor's counsel. SRISIRI PHARMA: Hires Gold Lange & Majoros as Counsel ----------------------------------------------------- Srisiri Pharma, Inc. seeks authority from the U.S. Bankruptcy Court for the Eastern District of Michigan (Detroit) to hire Gold, Lange & Majoros, P.C. as its legal counsel. The professional services that Gold Lange will render are: a. provide legal advice with respect to the Debtor's powers and duties as debtors-in-possession in the management of its assets; b. assist the Debtor in maximizing the value of its assets for the benefit of all creditors and other parties in interest; c. commence and prosecute any and all necessary and appropriate actions and/or proceedings on behalf of the Debtor and its assets; d. conduct negotiations with the Debtor's creditors; e. prepare, on behalf of the Debtor, all of the applications, motions, answers, orders, reports and other legal papers necessary in these bankruptcy proceedings; f. draft a plan of reorganization and disclosure statement; g. appear in Court to represent and protect the interests of the Debtor and its estate; and h. perform all other legal services for the Debtor that may be necessary and proper in this Chapter 11 proceeding. The firm's hourly rates are: Stuart A. Gold, Attorney $395 Elias T. Majoros, Attorney $350 John C. Lange, Attorney $350 John W. Nemecek, Attorney $275 Jason P. Smalarz, Attorney $275 Denise White, Paralegal $125 Toni Willis, Paralegal $95 Christine Wilder, Paralegal $85 John Lange, Esq., shareholder and officer of Gold Lange, attests that the firm neither holds nor represents any interest adverse to the Debtor's bankruptcy estate and that the firm is a "disinterested person" as the phrase is defined in Section 101(14) of the Bankruptcy Code. The counsel can be reached through: John C. Lange, Esq. Gold, Lange & Majoros, P.C. 24901 Northwestern Hwy., Suite 444 Southfield, MI 48075 Tel: (248) 350-8220 Email: jlange@glmpc.com About Srisiri Pharma, Inc. Based in Bloomfield Hills, Michigan, Srisiri Pharma, Inc., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-51522) on August 9, 2019, listing under $1 million in both assets and liabilities. John C. Lange, Esq. at Gold, Lange & Majoros, PC is the Debtor's counsel. STERNSCHNUPPE LLC: Lease Agreement with 3 Kids Approved ------------------------------------------------------- Judge Mike K. Nakagawa of the U.S. Bankruptcy Court for the District of Nevada authorized Sternschnuppe, LLC to enter into the proposed lease agreement with 3 Kids, LLC for the leasehold located at 3855 West Harmon Avenue, Las Vegas, Nevada. A hearing on the Motion was held on Aug. 30, 2019 at 1:30 p.m. The Debtor is authorized and empowered to take such action as may be deemed necessary and appropriate to implement the terms of the Order. About Sternschnuppe Sternschnuppe LLC filed a Chapter 11 petition (Bankr. D. Nev. Case No. 16-11242) on March 10, 2016. The petition was signed by Kimberly Michaelis, managing member. The Debtor estimated assets and liabilities at $1 million to $10 million at the time of the filing. The case is assigned to Judge Mike K. Nakagawa. The Debtor is represented by the Law Office of Andras F. Babero. SUPER QUALITY: Oct. 4 Plan Confirmation Hearing ----------------------------------------------- The hearing to consider confirmation of the Fifth Amended Plan of Reorganization of Super Quality Cleaners, LLC, is rescheduled to October 4, 2019, at 9:30 a.m. Class 4. (Unsecured Claims). Allowed Class 4 Claims shall receive their pro rata share of the Net Profits Fund. Distributions from the Net Profits Fund shall continue for 5 years following the Effective Date. Distributions to Class 4 claimants shall not exceed the amount of the Allowed Unsecured Claims plus interest calculated at two and a half percent (2.5%) per annum. Distributions to the Allowed Class 4 claimants shall be made annually on September 1 and shall commence on September 1, 2020. The aggregate distribution to Class 4 shall be guaranteed in the amount of at least $50,000.00 over the term of this Plan. The previous plan proposed a $40,000 aggregate distribution to Class 4 creditors. A full-text copy of the Fifth Amended Plan dated August 29, 2019, is available at https://tinyurl.com/y35c8hm2 from PacerMonitor.com at no charge. A redlined version of the Fifth Amended Plan dated August 29, 2019, is available at https://tinyurl.com/y2kgypdo from PacerMonitor.com at no charge. About Super Quality Cleaners Super Quality Cleaners, LLC is a dry-cleaning plant located in Colorado Springs, Colorado. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 17-20703) on November 21, 2017. At the time of the filing, the Debtor disclosed that it had estimated assets and liabilities of less than $500,000. Judge Michael E. Romero presides over the case. The Debtor hired Wadsworth Warner Conrardy, P.C. as its bankruptcy counsel and Waugh & Goodwin, LLP as its accountant. An official committee of unsecured creditors has not yet been appointed in the Chapter 11 case of Super Quality Cleaners, LLC, as of Jan. 24, according to a court docket. THRUSH AIRCRAFT: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Thrush Aircraft, Inc. 300 Old Pretoria Road Albany, GA 31721 Case No.: 19-10976 Business Description: Headquartered in Albany, Georgia, Thrush Aircraft manufactures a full range of aerial application aircraft used in agriculture, forestry, and firefighting roles. Today, there are more than 2,400 Thrush aircraft operating in some 80 countries around the world. The Company was founded in 2003. Chapter 11 Petition Date: September 4, 2019 Court: United States Bankruptcy Court Middle District of Georgia (Albany) Debtor's Counsel: Matthew S. Cathey, Esq. STONE & BAXTER, LLP 577 Mulberry Street, Suite 800 Macon, GA 31201 Tel: 478-750-9898 Fax: 478-750-9899 E-mail: mcathey@stoneandbaxter.com - and - Ward Stone, Jr., Esq. STONE & BAXTER, LLP 577 Mulberry Street, Suite 800 Fickling and Co. Building Macon, GA 31201 Tel: 478-750-9898 Fax: 478-750-9899 E-mail: wstone@stoneandbaxter.com - and - Gregory D. Taylor, Esq. STONE & BAXTER, LLP Fickling & Co. Building, Suite 800 577 Mulberry Street Macon, GA 31201 Tel: 478-750-9898 Fax: 478-750-9899 E-mail: dtaylor@stoneandbaxter.com - and - A. Keith Logue, Esq. LOGUE LAW, PC 3423 Weymouth Court Marietta, GA 30062 Tel: 770-321-5750 Fax: 770-321-5751 E-mail: keith@logue-law.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by K. Payne Hughes, Sr., president. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/gamb19-10976.pdf List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. GE Aircraft Engines Trade Payable $5,258,854 Beranovuvh 65 Czech Republic 2. Pratt & Whitney ACC Trade Payable $4,016,258 1000 Marie Victorin Blvd. Longueuil, J4G IA1 3. AB&T Trade Payable $736,325 2815 Meredyth Drive P.O. Box 31708 Albany, GA 31708 4. Trumpf Finance Trade Payable $576,956 480 Washington Blvd, 24th Floor Jersey City, NJ 07310 5. Georgia Dept of Labor Trade Payable $387,500 148 Andrew Young International Blvd., NE Atlanta, GA 30303-1751 6. Grant Thornton LLP Trade Payable $377,881 33562 Treasury Center Chicago, IL 60694-3500 7. Transland-Texas, LLC Trade Payable $304,300 1206 Hatton Rd Suite A Wichita Falls, TX 76302 8. IPFS Corporation Trade Payable $280,443 P.O. Box 100391 Pasadena, CA 91189 9. Winthrop Resources Corp Trade Payable $250,423 P.O. Box 55343-0650 Hopkins, MN 55343-0650 10. Hartzell Propeller IT Trade Payable $225,016 One Propeller Place Piqua, OH 45356 11. LEAF Capital Funding, LLC Trade Payable $205,566 2005 Market Street, 14th Floor Philadelphia, PA 19103 12. EMERGYS Trade Payables $169,570 801 E. Campbell Road Ste 690 Richardson, TX 75081 13. Wells Fargo Trade Payable $168,274 Equipment Financing P.O. Box 55485-8178 Minneapolis, MN 55485-8178 14. Turbine Conversions Trade Payables $106,304 18155 120th Ave. Nunica, MI 49448 15. Aviall Trade Payables $97,896 PO BOX 842267 Dallas, TX 75284 16. ACR Machine, Inc. Trade Payable $94,984 21 N. 10th Ave. Coatesville, PA 19320 17. Oxford Global Resources Trade Payables $89,639 PO Box 3256 Boston, MA 02241 18. AG Nav Inc. Trade Payable $87,031 30 Churchill Drive Ontario, L4N 8Z5 19. KPIT Trade Payable $77,186 PO Box 398227 San Francisco, CA 94139 20. Travelers Trade Payables $58,143 CL Remittance Center P.O. Box 660317 Dallas, TX 75266 TIMBERLINE FOUR: Agent Says Receivables Not "Cash Collateral" ------------------------------------------------------------- Kapitus, Inc., as authorized servicing agent for First US Funding, asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to prohibit the use of cash collateral by Timberline Four Seasons Resort Management Company, Inc. Kapitus asserts that since the Debtor has no more interest in the receivables which the Debtor sold to Kapitus and Kapitus purchased from the Debtor, the receivables do not constitute "cash collateral" pursuant to Section 363 of the Bankruptcy Code. Kapitus discloses that the Debtor fails to provide Kapitus with adequate protection for the fact that it fails to make payments under the Factoring Agreement while maintaining possession of the Purchased Receivables. Pursuant to the Agreement, the Debtor sold and Kapitus purchased $169,000 of the Debtor’s receivables for an up-front advance of $130,000. Kapitus seeks Court approval for adequate protection payments of $687 and an award for costs of attorney's fees. About Timberline Four Seasons Resort Management Company Timberline Four Seasons Resort is a family owned and operated company celebrating our 30th skiing year in the Allegheny Mountains of Davis, West Virginia. Timberline Four Seasons Resort filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 19-12775) on April 30, 2019. Albert A. Ciardi, III, at Ciardi Ciardi & Astin, P.C., is the Debtor's counsel. TRESHA-MOB LLC: Voltaire's Limited Objection to Sale Hearing Junked ------------------------------------------------------------------- Chief Bankruptcy Judge Ronald B. King issued an order denying Voltaire Asset Managers II, LLC's Motion for Authority to Prosecute Limited Objection to Sale Hearing on Behalf of Debtor Tresha-Mob, LLC's Estate ("Limited Objection") and Joinder of Cherish Medical Office Building, LLC to the Motion for Authority to Prosecute Limited Objection to Sale Hearing on Behalf of Debtor's Estate. Voltaire cites Louisiana World Exposition v. Fed. Ins. Co. as authority for it to assert an objection on behalf of the estate to the disqualification of Cherish. Under Louisiana World Exposition, a party-in-interest may derivatively pursue claims of the estate when the debtor-in-possession has a duty to do so but refuses. Thus, Voltaire claims that this duty authorizes a court to grant "an equity interest holder," such as Voltaire, derivative "standing to pursue an objection belonging to the Debtor's estate" to the disqualification of a bidder at a section 363 sale. That argument, however, misapplies the holding in Louisiana World Exposition. Although Voltaire presents Louisiana World Exposition as a sort of talisman that mystically allows any party-in-interest to lodge any objection when it disagrees with a court's holding, the holding, in that case, is much more cabined. It merely allows a party-in-interest to pursue a "cause of action on behalf and in the name of the [debtor-in-possession]" when the "the debtor-in-possession is obligated to" pursue the cause of action but "is unable or unwilling to fulfill its obligation--due, for instance, to a conflict of interest." Voltaire has not cited, and this Court has not been able to find, any case in which a court extended such derivative standing to an equity holder to bring an objection to the disqualification of a § 363-sale bidder. In fact, a review of the recent cases on derivative standing suggests the opposite trend, with courts narrowing the circumstances in which derivative standing may be appropriate. In addition, even if Voltaire could achieve derivative standing under Louisiana World Exposition to bring this type of objection, Voltaire cannot satisfy the requirements outlined by the Fifth Circuit. For a party to attain derivative standing, Louisiana World Exposition requires that (1) the claim is colorable, (2) the debtor-in-possession has refused unjustifiably to pursue the claim, and (3) the moving party-in-interest receive leave to sue from the bankruptcy court. Here, the objection that Voltaire seeks to pursue is not "colorable." In its Limited Objection, Voltaire adopts a one-track value-maximization argument that ignores mountains of precedent in which trustees, debtors-in-possession, and courts have rejected the highest bid when it was not the "best bid." While the bid that brings in the most cash often wins, it is "common knowledge" that the "highest bid is not always the best bid," especially if there are "conditions sufficient to overbalance the difference between the two." The Bankruptcy Code thus affords courts "broad flexibility in determining which of several bidders should be deemed the successful bidder at a section 363(b) sale." As such, courts routinely reject the proposition that reviewing courts or fiduciaries are "duty-bound to mechanically accept a bid with the highest dollar amount." Accordingly, Voltaire's Limited Objection is denied. The bankruptcy case is in re: TRESHA-MOB, LLC, Chapter 11, Debtor, Case No. 18-52420-RBK (Bankr. W.D. Tex.). A copy of the Court’s Order dated April 3, 2019 is available at https://bit.ly/2ZI3oCk from Leagle.com. TRESHA-MOB, LLC, Debtor, represented by William B. Kingman & Eric Terry , Eric Terry Law, PLLC. About Tresha-Mob Tresha-MOB, LLC, is a lessor of real estate based in Chicago, Illinois, whose principal assets are located at 9618 Huebner Road San Antonio, TX 78240. Tresha-MOB filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 18-52420) on Oct. 10, 2018. In the petition signed by Michael Horrell, Voltaire Asset Managers II, LLC, manager of Tresha-MOB LLC, the Debtor estimated assets and liabilities of $10 million to $50 million. Eric Terry Law, PLLC, is the Debtor's counsel. UBIOME INC: Blames Founders for FBI Probe, Chapter 11 ----------------------------------------------------- New management of San Francisco-based microbiome testing company uBiome, Inc., largely blamed the business' founders for the FBI investigation into its business practices and the company's subsequent collapse into Chapter 11 bankruptcy. Drs. Jessica Richman and Zachary Apte founded uBiome in 2012 to provide a product which consumers could use to monitor their gut microbes. The scientific basis for uBiome's analytical process is the DNA sequencing of the microbe, which are microscopic organisms that exist throughout nature and are present in many parts of the human body. Using advanced DNA sequencing and utilizing the world's largest microbiome database, the Debtor has historically offered a variety of products to patients and consumers to analyze the DNA of their microbiomes, including "Explorer," "SmartGut," and "SmartJane". uBiome previously operated in two segments: consumer and clinical. On the consumer side, the Debtor's flagship product is its Explorer kits, which have been historically sold online for $89.99 each. The results provided to consumers include suggestions on matters such as diet, weight control, gut inflammation, sleep disorders, and non-dietary supplements. In the clinical diagnostic market, the Debtor's products included SmartGut, an extension of Explorer, working from a stool sample using the same wet lab technology and with enhanced bioinformatics and an expanded array of diagnostics. Unlike Explorer, it was prescribed by a doctor and billed to the customer's insurance. Once SmartGut was launched, it was followed by SmartJane (vaginal swab sample providing diagnoses of STD's, HPV, and other gynecological disorders) (together with SmartGut, "SmartX"). The Debtor suspended sales of its clinical products in response to investigations into certain business practices led by its founders. FBI Probe Curtis G. Solsvig III, who was appointed as acting CEO starting June 27, 2019, explained the Founders implemented certain business strategies with respect to the SmartX products that were highly problematic, contained significant operational (but not scientific) flaws and, in some instances, were of questionable legality. These issues included improper insurance provider billing practices, improper use of a telemedicine physician network (known as the External Clinical Care Network), overly aggressive and potentially misleading marketing tactics, manipulation of customer upgrade testing, and improper use of customer inducements. Moreover, certain information presented to potential investors during the three rounds of capital raise my have been incorrect and/or misleading. Although uBiome believes the science and technology behind uBiome's business model in this developing area is sound, these issues -- among others -- have resulted in significant legal exposure for the Debtor. As a result of the foregoing and other problematic business practices, the Federal Bureau of Investigation opened an investigation on April 26, 2019. The FBI and other federal and state agencies executed a search warrant on the Debtor's San Francisco headquarters and obtained various files, business records and hardware. That same day, the United States Attorney for the Northern District of California issued a subpoena to the Debtor for certain records and documents. Since these events, the Debtor, the Board, and the Debtor's management and advisors have been fully cooperating with the investigating authorities, including the U.S. Department of Justice and the Securities and Exchange Commission, regarding their ongoing investigations. The Debtor intends to continue its cooperation with these authorities despite the filing of this Chapter 11 Case. New Management At the time the search warrant was executed, the Debtor's board of directors (the "Board") was composed of the Founders, Kimmy Scotti, a partner of the venture capital investor 8VC Entrepreneurs Fund I, L.P. and 8VC Fund I, L.P. (together "8VC"), which was an early and significant investor in uBiome, Witt Wisebram, an independent director and one of uBiome's initial creators, and Dr. Joe DeRisi, M.D., a prominent researcher in the microbiome space. Within forty-eight hours of the execution of the search warrant, the three independent Board members -- Ms. Scotti, Dr. DeRisi and Mr. Wisebram -- created a special committee (the "Special Committee") to investigate the allegations, and thereafter retained Milbank LLP ("Milbank") to assist and advise the Special Committee in carrying out an investigation into these matters (the "Investigation"). On April 28, 2019, the Special Committee removed the Founders from their management roles and placed them on paid suspension pending further action by the Special Committee, and also suspended all SmartX business operations. In their place, on April 28, 2019, the Special Committee appointed John Rakow, the Debtor's then-current General Counsel, as Interim Chief Executive Officer. On or about April 28, 2019, Dr. DeRisi resigned from the Board and the Special Committee, and on or about May 9, 2019 and Mr. Wisebram also resigned from the Board and the Special Committee. On June 19, 2019, the Founders tendered their resignations from the Board and executed a Stipulation and Agreement pursuant to which the Founders waived certain rights as majority shareholders of the Debtor and granted an 8VC affiliated entity proxy rights with respect to the Founder's shareholders rights. Mr. Rakow continued as Interim CEO until his resignation on June 28, 2019. Under Mr. Rakow and the Special Committee, uBiome focused on fully cooperating with Milbank and the Investigation, suspended sales of the SmartX product line and all clinical products, refocused uBiome around the Explorer product line, and began preparations for a restructuring of its business. Effective July 2, 2019, the Special Committee removed each Founder as an officer, employee and/or from any other position with the Debtor and stopped compensating them. By written consents of the Board dated June 27 and July 11, 2019, I was appointed as Acting CEO, Ms. Chiu was appointed as Acting CFO and Mr. Bhavaraju was appointed as Acting COO. Pursuant to a written consent of the majority of the Debtor's shareholders dated July 11, 2019, Messrs. Baker and Wells were appointed to the Board as independent directors. Mr. Baker is a retired corporate restructuring partner of Latham & Watkins and former head of the bankruptcy and restructuring group, and Mr. Wells is a partner at DriveTrain, LLC and an experienced distressed advisor. Both have substantial experience acting as fiduciaries and advising in distressed situations. The new Board and management team has been working diligently to explore financial and operational alternatives and to prepare uBiome for a restructuring. This has included, among other things, hiring professionals, including Young Conaway Stargatt and Taylor, LLP as counsel and GLC Advisors & Co., LLC and GLCA Securities, LLC as uBiome's investment banker. uBiome has been working diligently with Young Conaway to prepare for a restructuring either in or out of a chapter 11 bankruptcy. GLC, meanwhile, has been diligently marketing uBiome's assets to potential interested parties in an effort to secure an investor to finance the Restructuring, either as an investor outside of chapter 11 or to provide a debtor-in-possession financing facility and/or to act as a stalking horse bidder in a court-supervised sale process. With the cooperation of the Debtor's management team, GLC has prepared and distributed comprehensive marketing materials, identified possible investors, and participated in management meetings with interested investors. The management team has also maintained close communications with SVB, the Debtor's secured lender. In addition to preparing for the Chapter 11 restructuring, the management team has been assessing the Debtor's strategic business options and preparing a business plan, which is initially focused on the launch of an upgraded Explorer product and various near- and medium-term opportunities, including third-party partnerships. For example, uBiome will begin supplying the Explorer product to CVS in October of 2019 pursuant to a purchase order agreement. In short, while the Debtor experienced a serious setback as a result of the Investigation, the Investigation resulted from the business practices implemented by the Founders, not bad science or bad lab practices. The Debtor has established a new Board and a new Business Plan, and is poised to move forward. This Chapter 11 case will provide the fresh start necessary to do so. uBiome, Inc uBiome, Inc. -- https://ubiome.com/ -- is a microbial genomics company founded in 2012. uBiome combines its patented proprietary precision sequencing with machine learning and artificial intelligence to develop wellness products, clinical tests, and therapeutic targets. uBiome has filed for over 250 patents on its technology, which includes sample preparation, computational analysis, molecular techniques, as well as diagnostic and therapeutic applications. uBiome and its non-debtor foreign affiliates currently employ approximately 100 individuals, of which 35 are located in the United States, 37 in Chile, and 28 in Argentina. On Sept. 4, 2019, uBiome, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 19-11938). The Debtor estimated assets of $50 million to $100 million and liabilities of $10 million to $50 million. The Hon. Laurie Selber Silverstein is the case judge. The Debtor tapped YOUNG, CONAWAY, STARGAT & TAYLOR, LLP as counsel; GOLDIN ASSOCIATES, LLC, as restructuring advisor; GLC ADVISORS & CO., LLC and GLCA SECURITIES, LLC, as investment banker. Donlin Recano & Company, Inc., is the claims agent. UBIOME INC: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------- Debtor: uBiome, Inc. 360 Langton Street San Francisco, CA 94103 Case No.: 19-11938 Business Description: uBiome, Inc. -- https://ubiome.com -- is a microbial genomics company founded in 2012. uBiome combines its patented proprietary precision sequencing with machine learning and artificial intelligence to develop wellness products, clinical tests, and therapeutic targets. uBiome has filed for over 250 patents on its technology, which includes sample preparation, computational analysis, molecular techniques, as well as diagnostic and therapeutic applications. uBiome and its non-debtor foreign affiliates currently employ approximately 100 individuals, of which 35 are located in the United States, 37 in Chile, and 28 in Argentina. Chapter 11 Petition Date: September 4, 2019 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Laurie Selber Silverstein Debtor's Counsel: Joseph M. Barry, Esq. YOUNG, CONAWAY, STARGAT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Email: jbarry@ycst.com - and - Andrew L. Magaziner, Esq. YOUNG, CONAWAY, STARGAT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Email: amagaziner@ycst.com - and - Michael R. Nestor, Esq. YOUNG, CONAWAY, STARGAT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Fax: 302-571-1253 Email: mnestor@ycst.com - and - Jordan E. Sazant, Esq. YOUNG, CONAWAY, STARGAT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Fax: 302-571-1253 Email: jsazant@ycst.com Debtor's Restructuring Advisor: GOLDIN ASSOCIATES, LLC Debtor's Investment Banker: GLC ADVISORS & CO., LLC AND GLCA SECURITIES, LLC Debtor's Notice, Claims, Solicitation & Balloting Agent: DONLIN RECANO & COMPANY, INC. https://www.donlinrecano.com/Clients/ub/Index Estimated Assets: $50 million to $100 million Estimated Liabilities: $10 million to $50 million The petition was signed by Curtis G. Solsvig III, acting chief executive officer. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/deb19-11938.pdf List of Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Cigna Refund Claim $2,134,624 900 Cottage Grove W3SUI Hartford CT 06152 Lauren Sgro (Thorsell) Tel: 860-226-1391 Fax: 415-520-6698 Email: lauren.sgro@cigna.com 2. United Health Care Refund Claim $2,084,100 United Payment Integrity, Attn: Recovery Investigations 4868 Georgia Hwy 85, Suite 206-A Forest Park GA 30297 Richard O'Connor Tel: 952-205-0846 3. Horizon Blue Cross Blue Refund Claim $1,435,431 Shield of NJ P.O. Box 200145 Newark NJ 07102 David Menendez Tel: 973-466-8318 Email: david_menendez@horizonblue.com 4. BRJ Investments, LLC Convertible $719,118 2885 Sanford Avenue SW Notes Grandville MI 49418 Jeff Email: jeff@osf.co 5. Blue Shield of California Refund Claim $424,935 Blue Shield of California Special Investigations Unit 6300 Canoga Avenue Woodland Hills CA 91367 Cheri Hahn Tel: 818-228-6142 Fax: 844-660-6743 Email: cheri.hahn@blueshieldca.com 6. Tricare West Refund Claim $402,253 P.O. Box 202111 Florence SC 92502 Tel: 844-866-9378 7. Bioquimica, Cl S.A. Trade Payable $397,634 Avenida Presidente Battle Y Ordoliez 3756 Santiago, Chile Matias Gutierrez Tel: +56 2 2225-2583 Email: matias.gutierrez@bioquimica.cl 8. Covington & Burling LLP Professional $313,446 850 Tenth Street N.W. Services Washington DC 20001 Douglas Sprague Tel: 415-591-6000 Email: dsprague@cov.com 9. Arnold & Porter Professional $311,804 Kaye Scholer LLP Services P.O. Box 759451 Baltimore MD 21275 Tel: 415-471-3100 Fax: 415-471-3400 Email: invoice@arnoldporter.com 10. Kilpatrick Townsend Professional $296,381 PO Box 39000 Services San Francisco CA 94139 Hyacinth Campbell Tel: 866-244-4934 Email: accountsreceivable@kilpatricktownsend.com 11. Ramsey & Ehrlich LLP Professional $274,107 800 Hearst Avenue Services Albany CA 94710 Lauren Noga Tel: 510-548-3600 Fax: 510-291-3060 Email: lauren@ramsey-ehrlich.com 12. Tricare Refund Claim $273,029 7700 Arlington Boulevard Suite 5101 Falls Church VA 22042 Tel: 844-204-9351 13. Kaiser Foundation Health Plan Refund Claim $270,655 Kaiser Permanente, Attn: Regional Claims Recovery File 50187 Los Angeles CA 90074 Giang Le Tel: 858-614-3164 Email: giang.t.le@kp.org 14. Medica Refund Claim $259,637 P.O. Box 9310 Minneapolis MN 55440 Barbara Horn Tel: 952-992-3134 Email: barbara.horn@medica.com 15. Orrick, Herrington & Professional $233,401 Sutcliffe LLP Services 450 Howard Street San Francisco CA 94105 John Bautista Tel: 304-231-2704 Fax: 304-231-2501 Email: accountsreceivable@orrick.com 16. Salesforce.com Inc. Trade Payable $211,654 P.O. Box 203141 Dallas TX 75320 Jason Foster Tel: 800-667-6389 Email: jason.foster@salesforce.com 17. Premera BCBS Refund Claim $211,213 MS 229 P.O. Box 327 Seattle WA 98111 Tel: 800-364-2991 18. Growth IP Trade Payable $149,460 13480 Chelly Court San Diego CA 92129 Tel: 323-609-3001 Email: admin@growthip.com 19. Ecare India Private Limited Trade Payable $135,530 B.R Complex, 2nd & 3rd Floor Woods Road No. 27/28 Chennai, India Deepak Kumar Sanghi Tel: 800-518-5013 Email: deepak@ecareindia.com 20. Mayo Clinic Health plan Refund Claim $96,192 4001 41st Street NW Rochester MN 55901 Tel: 855-384-0001 21. Harvard Pilgrim Refund Claim $83,100 1600 Crown Colony Drive Quincy MA 02169 Christopher Walsh Tel: 617-509-1727 Email: christopher_walsh@harvardpilgrim.org 22. Leydig, Voit & Mayer, LTD. Trade Payable $75,426 1981 North Broadway, Suite 310 Walnut Creek CA 94596 Joni Simmons Tel: 925-482-0100 Fax: 925-482-0110 Email: jsimmons@leydig.com 23. iDesIgnEDU, LLC Trade Payable $75,000 800 Jackson Street, Suite 384 Dallas TX 75202 Saleen Hearon Tel: 800-581-5418 Email: saleen.hearon@idesignedu.org 24. Aomb Trade Payable $73,809 P.O. Box 645 5600 AP Eindhoven Eindhoven, Netherlands Rene Raggers Tel: +31(0)40-243-3715 Fax: +31(0)40-243-4557 Email: mail@aomb,nl 25. Mintz, Levin, Cohn, Ferris, Professional $66,564 Glovsky, and Popeo, LLP Services P.O. Box 4539 Boston MA 02212 David Siegal Tel: 212-935-3000 Fax: 212-935-3115 Email: dmsiegal@mintz.com 26. SendBridge Inc. Trade Payable $60,688 1895 Jackson Street Apartment 503 San Francisco CA 94109 Email: success@goprimer.com 27. Providence Health Plans Refund Claim $52,314 P.O. Box 6456 Portland OR 97228 Ellen Larsen Tel: 503-574-7334 Email: ellen.larsen@providence.org 28. S-E, Inc. Trade Payable $47,986 4111 N.E. 112th Avenue Vancouver WA 98682 Todd Clevette Email: todd_clevette@sehamerica.com 29. Kekst and Company, Inc. Trade Payable $47,451 P.O. Box 1528 Long Island City NY 11001 Nathan Riggs Tel: 212-521-4800 Email: nathan.riggs@kekstcnc.com 30. Tricare South Refund Claim $45,419 P.O. Box 7032 Camden SC 29021 UBIOME INC: New Management Seeks Quick Sale in Chapter 11 --------------------------------------------------------- San Francisco-based microbiome testing company uBiome, Inc., sought Chapter 11 protection to provide its business with a fresh start under new management, and to preserve approximately 100 jobs through a court-supervised sale process that is intended to maximize the value of the Debtor's assets for the benefit of all stakeholders. Curtis G. Solsvig III, who was appointed as acting CEO starting June 27, 2019, explained in court filings that certain business practices formulated and implemented by the Debtor's original founders have resulted in cessation of certain aspects of the Debtor's business, investigations by certain federal and state investigatory bodies, loss of revenue and significant potential contingent liabilities. In recent weeks, the Debtor has: (1) taken aggressive corrective action at the Board and management levels; (2) implemented various corporate governance controls; (3) relaunched certain of its business operations; (4) committed to cooperate with the Investigations, (5) mitigated the impact of the Investigations, and (6) reduced the cost structure of the Company while preserving the value for the sale process. The Debtor has also recently installed two new independent directors -- D.J. (Jan) Baker and Spencer Wells -- who are both highly qualified and esteemed fiduciaries in the restructuring community. In addition to the installation of Messrs. Baker and Wells to the Debtor's 3-person Board of Directors, the Debtor replaced former management with Curtis G. Solsvig III as acting CEO, Robin Chiu (a Managing Director at Goldin) as acting CFO; and Karthik Bhavaraju (a Senior Director at Goldin) as acting COO. Mr. Solsvig, Ms. Chiu, and Mr. Bhavaraju were appointed to oversee and manage the Debtor's day-to-day business operations, and to assist the Debtor with formulating strategic financial and operational alternatives with the ultimate goals of optimizing the Debtor's business outlook and maximizing the Debtor's value for the benefit of all stakeholders. Through the Chapter 11 case and under the close supervision and direction of the new Board of Directors and acting management, the Debtor intends to undertake a restructuring and sale process to sell a streamlined, refocused, and healthy business to a bidder that will result in the maximum return possible to the Debtor's stakeholders. $8 Million Financing To this end, the Debtor has entered into a postpetition financing agreement with Silicon Valley Bank ("SVB") for a DIP Facility, funded in part through participations with participant parties. The DIP financing will provide the Debtor with up to $8 million in new money borrowings that will be secured by super senior priority and senior priority liens on substantially all of the Debtor's assets. SVB is already owed $5.83 million under a prepetition first lien facility. The Debtor does not have other secured indebtedness. As to unsecured debt, the Debtor estimates that its unsecured trade and other operational debt is $3.5 million, mainly comprised of legal fees and claims held by vendors that were used for the Debtor's clinical operations. The Debtor believes that the DIP Facility will provide the necessary flexibility to allow the Debtor to run a successful sale process, preserve approximately 100 jobs, and to engage in discussions with its creditor constituencies. The Debtor's proposed path is designed to maximize the value of its business and assets, and to provide the maximum recovery possible to the Debtor's creditors. With new management refocusing the Debtor's business model, the Debtor is poised to continue as a growing business in the hands of the successful bidder following a competitive auction process. Sale in 75 Days To satisfy the case milestones set forth in the Debtor's DIP Facility, as well as to prevent deterioration in value of the Debtor's business attendant to a lengthy sale process, the Debtor seeks to consummate a sale of its business within the first 75 days of the Petition Date. uBiome, Inc uBiome, Inc. -- https://ubiome.com/ -- is a microbial genomics company founded in 2012. uBiome combines its patented proprietary precision sequencing with machine learning and artificial intelligence to develop wellness products, clinical tests, and therapeutic targets. uBiome has filed for over 250 patents on its technology, which includes sample preparation, computational analysis, molecular techniques, as well as diagnostic and therapeutic applications. uBiome and its non-debtor foreign affiliates currently employ approximately 100 individuals, of which 35 are located in the United States, 37 in Chile, and 28 in Argentina. On Sept. 4, 2019, uBiome, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 19-11938). The Debtor estimated assets of $50 million to $100 million and liabilities of $10 million to $50 million. The Hon. Laurie Selber Silverstein is the case judge. The Debtor tapped YOUNG, CONAWAY, STARGAT & TAYLOR, LLP as counsel; GOLDIN ASSOCIATES, LLC, as restructuring advisor; GLC ADVISORS & CO., LLC and GLCA SECURITIES, LLC, as investment banker. Donlin Recano & Company, Inc., is the claims agent. VARTEK LLC: Asks Court to Permit Use of Seacoast Cash Collateral ---------------------------------------------------------------- Vartek, L.L.C., asks the U.S. Bankruptcy Court for the Middle District of Florida to use cash collateral on an interim and final basis in order to fund operating expenses and the cost of administering its Chapter 11 case. As adequate protection, the Debtor proposes to grant Seacoast Business Funding replacement liens to the same extent, validity and priority which Seacoast Funding had before the Petition Date. The Debtor and Seacoast Business are parties prepetition to a Purchasing Agreement on the Debtor’s receivables. About Vartek L.L.C Vartek, L.L.C. -- https://vartekllc.com -- is a privately owned manufacturer of flexible PVC hose and tubing. The Company manufactures reinforced hose and non-reinforced tubing products. It serves the construction, industrial, irrigation, landscape, marine, medical, pool, spa, & waterscape markets. Vartek manufactures and maintains a warehouse in Tampa, Florida and a warehouse in San Diego, California. Vartek sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 19-08083) on Aug. 26, 2019. In the petition signed by CRO William A. Long, Jr., the Debtor estimated assets at $1 million to $10 million and estimated liabilities of $10 million to $50 million. Judge Catherine Peek McEwen oversees the Debtor's case. STICHTER, RIEDEL, BLAIN & POSTLER, P.A., represents the Debtor. VERITY HEALTH: Ct. OK's Stipulation to Junk California AG's Appeal ------------------------------------------------------------------ District Judge R. Gary Klausner granted and approved the stipulation entered into between Verity Health System Of California, Inc. and appellant the Attorney General of California to dismiss the appeals case captioned Xavier Becerra, Attorney General of California, Appellant. V. Verity Health System of California, Inc., et al., Appellee, Case No. 2:19-cv-00133-RGK (C.D. Cal.). The Parties will each bear their own costs, fees and expenses in relation to this Appeal. A copy of the Court's Order dated April 3, 2019 is available at https://bit.ly/2LlGVpO from Leagle.com. Verity Health System of California, Inc., In re Debtor, represented by Tania M. Moyron , Dentons US LLP. Xavier Becerra, California Attorney General, Appellant, represented by Alicia Kathleen Berry , Office of Attorney General California Department of Justice. County of Santa Clara, Appellee, represented by Gregory Raymond Jones , McDermott Will and Emery LLP, James W. Kapp , McDermott Will and Emery LLP, pro hac vice & Jessica Mariani , McDermott Will & Emery LLP. Official Committee of Unsecured Creditors of Verity Health System of California, Inc., et al., Appellee, represented by Gregory Allan Bray , Milbank LLP, Mark Shinderman , Milbank LLP & James Cornell Behrens , Milbank LLP. About Verity Health System Verity Health System -- https://www.verity.org/ -- operates as a non-profit health care system in the state of California, with approximately 1,680 inpatient beds, six active emergency rooms, a trauma center, and a host of medical specialties, including tertiary and quaternary care. Verity's two Southern California hospitals are St. Francis Medical Center in Lynwood and St. Vincent Medical Center in Los Angeles. In Northern California, O'Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach are part of Verity Health. Verity Health also includes Verity Medical Foundation. With more than 100 primary care and specialty physicians, VMF offers medical, surgical and related healthcare services for people of all ages at community-based, multi-specialty clinics conveniently located in areas served by the Verity hospitals. Verity Health System was created in a transaction approved by California Attorney General Kamala Harris and completed in December 2015. Verity Health System of California, Inc., and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition signed by CEO Richard Adcock, Verity Health estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Ernest M. Robles presides over the cases. The Debtors tapped Dentons US LLP as their bankruptcy counsel; Berkeley Research Group, LLC, as financial advisor; Cain Brothers as investment banker; and Kurtzman Carson Consultants as claims agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Sept. 17, 2018. VILLA BELLINI: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Villa Bellini Ristorante & Lounge, Inc., according to court dockets. About Villa Bellini Ristorante & Lounge Villa Bellini Ristorante & Lounge Inc. owns and operates an Italian restaurant in Clearwater, Fla. Villa Bellini Ristorante & Lounge sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-06943) on July 24, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. The case is assigned to Judge Catherine Peek Mcewen. The Debtor is represented by Brundage Law, P.A. VILLAS OF WINDMILL: Trustee Taps Rappaport Osborne as Counsel ------------------------------------------------------------- Leslie Osborne, Chapter 11 trustee for Villas of Windmill Point II Property Owners Association, Inc., seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Rappaport Osborne & Rappaport, PLLC as her legal counsel. Rappaport Osborne will represent the trustee in the Debtor's Chapter 11 case to perform ordinary and necessary legal services required in the administration of the estate. The firm has agreed to be compensated in accordance with Section 330 of the Bankruptcy Code. Jordan Rappaport, Esq., a partner at Rappaport Osborne, 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 estate. Rappaport Osborne can be reached at: Jordan L. Rappaport, Esq. Rappaport Osborne & Rappaport, PLLC 1300 North Federal Highway, Suite 203 Boca Raton, FL 33432 Tel: (561) 368-2200 About Villas of Windmill Point II Property Based in Port Saint Lucie, Florida, Villas of Windmill Point II Property Owners Association, Inc. is a non-profit corporation with volunteers that self manages 89 separately deeded, single family residential villa units that are attached in 4 and 5 unit clusters within a PUD (Planned Unit Development) of 9 acres as a Deed Restricted Community with Governing Documents that partially include a Declaration of Covenants and Restrictions, running with the land. Villas of Windmill filed a Chapter 11 petition (Bankr. S.D. Fla. 19-20400) on August 2, 2019. At the time of filing, the Debtor estimated $1 million to $10 million in assets and $1 million to $10 million in liabilities. The Debtor is represented by Brian K. McMahon, Esq., in West Palm Beach, Fla. Leslie S. Osborne was appointed as the Debtor's Chapter 11 trustee. The trustee is represented by Rappaport Osborne Rappaport. VILLAS OF WINDMILL: Trustee Taps Yip Associates as Accountant ------------------------------------------------------------- Leslie Osborne, Chapter 11 trustee for Villas of Windmill Point II Property Owners Association, Inc., seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to hire an accountant. In an application filed in court, the trustee proposes to employ Yip Associates to perform ordinary and necessary accounting services required in the administration of the Debtor's bankruptcy estate. The hourly rates for the financial advisors at Yip Associates range from $195 to $495. Hylton Wynick, a partner at Yip Associates who was designated to provide the services, charges $400 per hour. The current hourly rate for the firm's paraprofessionals is $125. Yip Associates is "disinterested" as defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Hylton Wynick Yip Associates 1001 Yamato Road, Suite 301 Boca Raton, FL 33431 Office: 561-325-6950 Direct: 561-325-6951 Fax: 1-888-632-2672 Email: hwynick@yipcpa.com About Villas of Windmill Point II Property Based in Port Saint Lucie, Florida, Villas of Windmill Point II Property Owners Association, Inc. is a non-profit corporation with volunteers that self manages 89 separately deeded, single family residential villa units that are attached in 4 and 5 unit clusters within a PUD (Planned Unit Development) of 9 acres as a Deed Restricted Community with Governing Documents that partially include a Declaration of Covenants and Restrictions, running with the land. Villas of Windmill filed a Chapter 11 petition (Bankr. S.D. Fla. 19-20400) on August 2, 2019. At the time of filing, the Debtor estimated $1 million to $10 million in assets and $1 million to $10 million in liabilities. The Debtor is represented by Brian K. McMahon, Esq., in West Palm Beach, Fla. Leslie S. Osborne was appointed as the Debtor's Chapter 11 trustee. The trustee is represented by Rappaport Osborne Rappaport. VISUAL HEALTH: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Visual Health Solutions Inc. as of Sept. 3, according to a court docket. About Visual Health Solutions Headquartered in Fort Collins, Colorado, Visual Health Solutions, Inc. -- http://www.visualhealthsolutions.com/-- creates multimedia content, including medical animations, medical illustrations, and interactive graphics for the healthcare industry. Visual Health Solutions' multimedia medical library content includes 3D medical animations, medical device animations, pharmaceutical MOA animations, multimedia programs, medical illustrations, and interactive anatomy models. Visual Health partners with hospitals to create new patient education content and pharmaceutical companies to assist with sales training and product launch or development. Visual Health Solutions filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 17-18643) on Sept. 18, 2017. In the petition signed by CEO Paul Baker, the Debtor estimated assets between $100,000 and $500,000 and liabilities between $1 million and $10 million. Judge Elizabeth E. Brown oversees the case. The Debtor tapped Wadsworth Garber Warner Conrardy, P.C. as its bankruptcy counsel, and Weinman & Associates as its special investigation counsel. WEATHERFORD INT'L: Seeks to Hire Deloitte FAS as Accountant ----------------------------------------------------------- Weatherford International plc and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to hire Deloitte Financial Advisory Services LLP to provide fresh start accounting advisors. The Debtors require Deloitte FAS to: (a) assist Debtors' management in its development of an implementation approach for fresh start accounting, starting with any necessary training support and culminating in a strategy and work plan for the project; (b) advise the Debtors and provide recommendations to Debtors' management in connection with its determination of plan of reorganization (POR) adjustments necessary to record the impact of the POR to the books of entry of the appropriate legal entities, which includes: i. work with the Debtors' accounting, legal and tax advisors to advise Debtors' management as it determines the appropriate recoveries to allowed claimants and the allocation of resulting gains on extinguishment or other earnings impacts to separate legal entities within the Debtors' corporate structure; ii. analyze the POR and other related documents to identify and advise Debtors' management and provide recommendations on accounting adjustments resulting from any POR provisions; and iii. advise Debtors' management in connection with its estimation of recoveries to claimants for accrual accounting purposes, including comparisons with the Debtors' claims database to estimate liabilities related to contingent, unliquidated and disputed claims. (c) assist Debtors' management in its determination of asset and liability fair values and other fresh start adjustments as necessary to comply with the accounting and reporting requirements of Accounting Standards Codification 852, Reorganizations (ASC 852); (d) advise and assist Debtors' management as it records and substantiates adjustments to its opening fresh start balance sheet, as applicable, including assisting the Debtors in their preparation of analyses and packaging of other documentation to support adjustments, including internal control considerations; (e) provide the Debtors with the following related advice and assistance with accounting and financial reporting: i. assist Debtors' management with the preparation of accounting information as it prepares to file for chapter 11 and during the pendency of a bankruptcy; ii. assist Debtors' management as it prepares accounting information and disclosures in support of public and/or private financial filings such as 10-K or 10-Qs or lender statements; iii. assist Debtors' management with other valuation matters as it deems necessary for financial reporting disclosures; iv. advise Debtors' management as it evaluates existing internal controls and/or develops new controls for fresh start accounting implementation; and v. assist Debtors' management with its responses to questions or other requests from the Debtors' external auditors regarding bankruptcy accounting and reporting matters. (f) provide the Debtors with the following valuation services; i. assist Debtors' management with its identification of tangible and intangible assets, as well as liabilities to be revalued at their fair value for fresh start accounting purposes; ii. analyze fair value estimates or other valuations performed by others, if any, including Debtors' management, and assist Debtors' management in identifying additional efforts to address open items; iii. assist Debtors' management with its estimate of the fair value of specific assets and liabilities as specified by Debtors' management, including performing valuations of certain assets and liabilities, or the identification of new intangibles; iv. advise Debtors' management as it assigns assets, including goodwill, and liabilities to reporting units; and v.coordinate valuation information for auditor review and advise management as it addresses company-specific issues surrounding value allocation to specific assets, legal entities, cost centers, operating segments and/or reporting units. Deloitte FAS's hourly rates are: A. Bankruptcy Accounting and Emergence Accounting Services Partner/Principal/Managing Director $700 - $925 Senior Manager/Senior Vice President $625 - $675 Manager/Vice President $525 Senior Associate $475 Associate $375 B. Valuation Services Partner/Principal/Managing Director $480 – 510 Senior Manager $425 – 455 Manager $385 – 415 Senior Associate $340 – 370 Associate $280 – 320 Anthony Sasso, managing director of Deloitte FAS, disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Anthony V. Sasso Deloitte Financial Advisory Services LLP 100 Kimball Drive Parsippany, NJ 07054 Phone: +1 973-602-6000 Fax: +1 973- 602-5050 About Weatherford Weatherford (NYSE: WFT), an Irish public limited company and Swiss tax resident -- http://www.weatherford.com/-- is a multinational oilfield service company providing innovative solutions, technology and services to the oil and gas industry. The Company operates in over 80 countries and has a network of approximately 650 locations, including manufacturing, service, research and development and training facilities and employs approximately 26,000 people. Weatherford reported a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2018, compared to a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2017. As of March 31, 2019, Weatherford had $6.51 billion in total assets, $10.62 billion in total liabilities, and a total shareholders' deficiency of $4.10 billion. On July 1, 2019, Weatherford International plc, Weatherford International, LLC, and Weatherford International Ltd. sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-33694). Thbe Hon. David R. Jones is the case judge. The Debtors tapped Hunton Andrews Kurth LLP and Latham & Watkins LLP as counsel; Alvarez & Marsal North America LLC as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk LLC as claims agent. Henry Hobbs Jr., acting U.S. trustee for Region 7, on July 17, 2019, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases. [*] Morgan Lewis Hires 3 Bankruptcy Partners -------------------------------------------- Morgan Lewis announced Sept. 4, 2019, that three veteran finance lawyers are reuniting as partners at the global law firm. Joining from Bracewell, Kurt Mayr and Jennifer Feldsher focus on corporate restructuring. Joining from Proskauer, Kristen Campana focuses on transactional finance with significant restructuring experience. All three once practiced together at Bracewell. Several members of their team will be joining the firm. Kurt will be resident in Hartford and New York, while Kristen and Jennifer will be resident in New York. Kurt, who joins the leadership team of Morgan Lewis's global finance practice, served at his prior firm as chair of the financial restructuring department and managing partner of the Connecticut office. He has deep experience representing creditor groups on complex matters such as the current restructuring of the Commonwealth of Puerto Rico's debt. Kristen represents a wide variety of direct and alternative lenders, particularly those involving private sources of capital, in domestic and cross-border financings. Jennifer has spearheaded all aspects of the bankruptcy process for debtor and creditor clients, including Chapter 11 proceedings for national and international clients. "We are delighted that Kurt, Jennifer, and Kristen are reuniting at Morgan Lewis," said Firm Chair Jami McKeon. "They are well known to creditors around the world for their wide-ranging industry experience and our clients will benefit from their skill, experience, and reputation for representing traditional lenders and private investment funds in large, complex financing and insolvency scenarios. These three new partners will play a key role in strengthening our capabilities in all facets of direct lending/alternative lender representations." Kurt represents creditors, debtors, private equity sponsors, acquirers, and other interested parties in transactions both out-of-court and under court supervision. He particularly focuses on representing creditors in complex restructurings, including senior bank lenders and ad hoc noteholder groups. Kurt advises clients in a broad array of industries, including financial services, energy, automotive, and tribal gaming. Jennifer represents secured creditors, special situations investment funds, ad hoc groups, and acquirers of assets in all aspects of distressed situations. She also represents troubled corporate debtors in in-court and out-of-court reorganizations, asset sales, and restructurings. Jennifer has advised companies involved in many of the largest restructurings, including in the energy, retail, telecommunications, technology, healthcare, airline, automotive, gaming, and financial services industries. Kristen advises private debt funds, hedge funds, specialty finance companies, business development companies, private equity investors, and issuers in connection with acquisitions, leveraged buyouts, convertible debt, equity investments, letters of credit, and project financings. Her restructuring experience includes bankruptcy reorganizations and liquidations, work-outs, and distressed debt purchases and sales, as well as second lien and mezzanine financings, and other subordinated debt financings. "Kurt, Jennifer, and Kristen are recognized industry leaders who further enhance our capabilities to respond to the needs of our clients," said Jonathan Bernstein, the leader of Morgan Lewis's finance practice. "They will benefit from the combined experience of these new partners in all phases of the lifecycle of financial assets and the wide variety of counterparties involved in transactions involving those assets." [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ---------------------------------------------------------- Grounded: Frank Lorenzo and the Destruction of Eastern Airlines Author: Aaron Bernstein Publisher: Beard Books Softcover: 272 Pages List Price: $34.95 Order a copy today at http://www.beardbooks.com/beardbooks/grounded.html Barbara Walters once referred to Frank Lorenzo as "the most hated man in America." Since 1990, when this work was first published and Eastern Airlines' troubles were front-page news, there have been many worthy contenders for the title. Nonetheless, readers sensitive to labor-management concerns, particularly in the context of corporate restructurings, will find in this book much to support Barbara Walters' characterization. To recap: For a few brief and discordant years, Frank Lorenzo was boss of the biggest airline conglomerate in the free world (Aeroflot was larger), combining Eastern, Continental, Frontier, and People Express into Texas Air Corporation, financing his empire with junk bonds. TAC ultimately comprised a fleet of 451 planes and 50,000 employees, with revenues of $7 billion. But Lorenzo was lousy on people issues, famously saying, "I'm not paid to be a candy ass." The mid-1980s were a bad time to take that approach. Those were the years when the so-called Japanese model of management, which emphasized cooperation between management and labor, was creating a stir. The Lorenzo model was old school: If the unions give you any trouble, break 'em. That strategy had worked for him at Continental, where he'd filed Chapter 11 despite the airline's $60 million in cash reserves, in order to exploit a provision in Bankruptcy Code allowing him to abrogate his contracts with the unions. But Congress plugged that loophole by the time Lorenzo went to the mat with Charles Bryan, I AM chapter president. Lorenzo might have succeeded in breaking the machinists alone, but when flight attendants and pilots honored the picket lines, he should have known it was time to deal. He didn't. Instead he tried again for a strategic advantage through the bankruptcy courts, by filing Chapter 11 in the Southern District of New York where bankruptcy judges were believed to be more favorably disposed toward management than in Miami where Eastern was headquartered. Eastern had to hide behind the skirts of its subsidiary, Ionosphere Clubs, Inc., a New York corporation, in order to get into SDNY. Six minutes later, Eastern itself filed in the same court as a related proceeding. The case was assigned to Judge Burton Lifland, whom Eastern's bankruptcy lawyer, Harvey Miller, knew well, but Lorenzo was mistaken if he believed that serendipitous lottery assignment would be his salvation. Judge Lifland a year later declared Lorenzo unfit to run the airline and appointed Martin Shugrue as trustee. Most hated man or not, one wonders whether the debacle was all Lorenzo's fault. Eastern's unions, in particular the notoriously militant machinists, were perpetual malcontents, and Charlie Bryan was an anti-management zealot, to the point of exasperating even other IAM officers. The book provides a detailed account of the three-and-a-half-year period between Lorenzo's acquisition of Eastern in the autumn of 1986 and Judge Lifland's appointment of the trustee in April 1990. It includes the history of Eastern's pre-Lorenzo management, from World War I flying ace Eddie Rickenbacker to astronaut Frank Borman. Aaron Bernstein won numerous awards during his 20-year career as a professional journalist. He is an associated editor for Business Week. Aaron Bernstein is the editor of Global Proxy Watch, a corporate governance newsletter for institutional investors. He is also a non-resident Senior Research Fellow at the Pensions and Capital Stewardship Project at Harvard Law School. He left BusinessWeek magazine in 2006 after a 23-year career as an editor and senior writer covering workplace and social issues. ********* 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. 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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 ***