/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200401.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 1, 2020, Vol. 24, No. 91 Headlines 24 HOUR FITNESS: Moody's Cuts CFR to Caa3 & Sr. Unsec. Rating to C 305 EAST 61ST: Trustee Hires Maltz Auctions & Rosewood as Broker ABERCOMBIE & FITCH: Moody's Alters Outlook on Ba3 CFR to Neg. ALGOMA STEEL: S&P Puts 'B-' ICR on Watch Neg. on Liquidity Concerns ALPINE 4 TECHNOLOGIES: Delays Filing of 2019 Annual Report AMERICAN DENTAL: Moody's Places B3 CFR on Review for Downgrade AMYNTA HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B-' ICR AP GAMING: Moody's Lowers CFR to B3, Outlook Negative APACHE CORP: S&P Downgrades ICR to 'BB+'; Outlook Negative APCO HOLDINGS: S&P Lowers ICR to B- on Severe Operating Challenges APOLLO COMMERCIAL: S&P Lowers ICR to 'B+' as Risks on COVID-19 Loom ARIZONA CALL-A-TEEN: May 5 Disclosure Statement Hearing Set ARUBA INVESTMENTS: Moody's Alters Outlook on B2 CFR to Negative ASBURY GRAIN: U.S. Trustee Unable to Appoint Committee ASHTON WOODS: S&P Alters Outlook to Stable, Affirms 'B-' ICR AT HOME GROUP: S&P Downgrades ICR to 'CCC+'; Outlook Negative ATLANTIC AVIATION: S&P Places BB- ICR on CreditWatch Negative ATOKA COUNTY HEALTHCARE: PCO Files 17th Report AUTOKINITON US: S&P Cuts ICR to 'B'; Ratings on Watch Negative AVSC HOLDING: Moody's Cuts CFR to Caa2, On Review for Downgrade BCP RAPTOR II: Fitch Lowers LongTerm IDR to B-, Outlook Negative BCP RAPTOR: Fitch Lowers LT IDR to B-, Outlook Negative BIOLASE INC: Incurs $17.9 Million Net Loss in 2019 BIOSTAGE INC: Incurs $8.33 Million Net Loss in 2019 BLACKSTONE MORTGAGE: S&P Lowers ICR to 'B+', Outlook Negative BLOX INC: Plans to Appeal Withdrawal of Exploration License BLUE EAGLE: Hires Keller Williams as Real Estate Broker BLUESTEM BRANDS: Hires Kirkland & Ellis as Counsel BLUESTEM BRANDS: Hires Raymond James as Investment Banker BOMBARDIER INC: Fitch Lowers LT Issuer Default Rating to CCC CALCEUS ACQUISITION: Moody's Alters Outlook on B1 CFR to Negative CARBO CERAMICS: Case Summary & 30 Largest Unsecured Creditors CASINO REINVESTMENT: S&P Affirms 'BB' 2005A Revenue Bond Rating CLARIOS GLOBAL: S&P Lowers ICR to 'B'; Outlook Stable CLAROS MORTGAGE: S&P Downgrades ICR to 'B+' on COVID-19 Risks CLEARPOINT NEURO: Incurs $5.54 Million Net Loss in 2019 CMK INVESTMENT: Seeks to Hire Wallace Jordan as Counsel CNC PUMA CORPORATION: Hires Tang & Associates as Counsel COMSTOCK MINING: Incurs $3.81 Million Net Loss in 2019 CONTAINER STORE: S&P Cuts ICR to 'B-'; Ratings on Watch Negative CONUMA COAL: S&P Cuts ICR to 'CCC+'; Outlook Negative CRC BROADCASTING: Hires Radiotvlaw Associates as Special Counsel CRC MEDIA: Hires Radiotvlaw Associates as Special Counsel CREATIVE GLOBAL: April 1 Plan Confirmation Hearing Set CUSHMAN & WAKEFIELD: S&P Affirms BB- Long-Term ICR; Outlook Stable CVENT INC: S&P Downgrades ICR to 'CCC+' on Macroeconomic Weakness CYXTERA DC: S&P Downgrades ICR to 'CCC' on COVID-19 Impact DALF ENERGY: U.S. Trustee Unable to Appoint Committee DANA INC: S&P Puts 'BB' ICR on Watch Neg. on Pandemic Uncertainty DASEKE INC: S&P Downgrades ICR to 'B-' on Expected COVID-19 Impact DCP MIDSTREAM: Fitch Places BB+ LT IDR on Rating Watch Negative DECO ENTERPRISES: Taps Raymond H. Aver APC as Insolvency Counsel DIAMOND SPORTS: Moody's Places Ba3 CFR on Review for Dowgrade DYNAMIC PRECISION: S&P Lowers ICR to 'CCC+' on Refinancing Risk ENCINO ACQUISITION: S&P Downgrades ICR to 'B-'; Outlook Negative EP ENERGY: Fourth Amended Joint Plan Confirmed by Judge EVERI PAYMENTS: Moody's Cuts CFR to B2, Outlook Negative FARR BUILDERS: U.S. Trustee Unable to Appoint Committee FORD MOTOR: S&P Cuts ICR to BB+; Ratings on CreditWatch Negative FOSSIL GROUP: Moody's Cuts CFR to B2, Outlook Negative FRONTIER COMMUNICATIONS: Continues Talks on Possible Restructuring G.D.S. EXPRESS: Hires Barnes Wendling as Accountant GIP III STETSON: Fitch Lowers IDR to B- & Alters Outlook to Stable GMJ MACHINE: Bankruptcy Administrator Unable to Appoint Committee GP RARE EARTH: Seeks to Hire Collector's Edge Minerals as Broker GUMP'S HOLDINGS: Committee Taps Schwartz Law as Counsel HEXION INC: S&P Downgrades ICR to 'B-' on Expected Lower Demand HGIM CORP: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative HOOD LANDSCAPING: Acree Buying 133 Acres of Sparks Land for $225K HUSCH & HUSCH: U.S. Trustee Unable to Appoint Committee ICAHN ENTERPRISES: S&P Alters Outlook to Neg., Affirms 'BB+' ICR INDOOR SPORTS: Hires Bronson Law Offices as Counsel INPIXON: Obtains $1.6 Million from Common Stock Sale INTERNATIONAL GAME: Moody's Lowers CFR to Ba3, Outlook Negative ISLET SCIENCES: Seeks to Hire Schwartz Law as Bankruptcy Counsel JAMES WINDELL ETHRIDGE: Oats & Marino Represents 2 Suppliers K&N PARENT: Moody's Cuts CFR to Caa3, Outlook Negative KARISCOM LLC: Seeks to Hire Guidant Law as Counsel LANDS' END: Moody's Places B3 CFR on Review for Downgrade LIFEPOINT HEALTH: S&P Alters Outlook to Stable, Affirms 'B' ICR LOVE FREIGHTWAYS: Seeks to Hire Larson Zirzow as General Counsel LTI HOLDINGS: S&P Downgrades ICR to CCC+; Outlook Negative MACY'S INC.: S&P Downgrades ICR to BB; Outlook Negative MAIN EVENT: Moody's Cuts CFR to Caa2, Outlook Negative MAISON PREMIERE: April 16 Plan & Disclosure Hearing Set MANN REALTY: Trustee Asks to Distribute Remaining Proceeds to S&T MARY MALONE: Chatman Buying Dallas Property for $1.95 Million MBH HEALTH: Case Summary & 30 Largest Unsecured Creditors MBH HIGHLAND: Case Summary & 30 Largest Unsecured Creditors MBH WEST VIRGINIA: Case Summary & 30 Largest Unsecured Creditors MEDALLION GATHERING: S&P Lowers ICR to B-; Outlook Negative MEDALLION MIDLAND: Fitch Lowers LT IDR to B & Alters Outlook to Neg MICHAELS COS: S&P Downgrades ICR to 'B'; Outlook Negative MILLERS ALE: Moody's Cuts CFR to Caa1, Outlook Negative MODELL'S SPORTING: Seeks to Hire Cole Schotz as Counsel MOUNTAIN PROVINCE: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg MTE HOLDINGS: Potter Anderson 4th Update on Service Providers NAPA MANAGEMENT: Moody's Cuts CFR to Caa1, On Review for Downgrade NATIONAL CINEMEDIA: Moody's Places B1 CFR on Review for Downgrade NAVITAS MIDSTREAM: Fitch Lowers LT IDR to B-, Outlook Negative NEUBASE THERAPEUTICS: Incurs $4.5-Mil. Net Loss in First Quarter NXT ENERGY: To Release its 2019 Year-End Results on April 6 OCCIDENTAL PETROLEUM: S&P Cuts ICR to BB+; Ratings on Watch Neg. ORYX MIDSTREAM: Fitch Lowers LT IDR to B & Alters Outlook to Neg PACIFICLAND INTERNATIONAL: Involuntary Chapter 11 Case Summary PARADIGM MIDSTREAM: S&P Lowers ICR to 'B-'; Outlook Negative PG&E CORP: GER, 2 Others Resign as Tort Committee Members PG&E CORPORATION: Expand PricewaterhouseCoopers Scope of Works PLATTSBURGH MEDICAL: PCO Files 4th Report PROFRAC SERVICES: Moody's Cuts CFR to Caa2, Alters Outlook to Neg. PURADYN FILTER: Delays Filing of 2019 Annual Report QBS PARENT: S&P Revises Outlook to Negative on Low Oil Prices QUEST PATENT: Incurs $1.31 Million Net Loss in 2019 QUORUM HEALTH: Receives Noncompliance Notice from NYSE RANDOLPH HOSPITAL: Appoints Creditors' Committee RED LOBSTER: Moody's Cuts CFR to Caa1, Outlook Negative REMNANT OIL: Circle Buying New MExico Assets for $6 Million RENTPATH HOLDINGS: Sale of At Least $587.5M to Fund Plan REVLON INC: S&P Lowers ICR to CCC- on Expected Liquidity Pressures REYES DRYWALL: Hires David C. Johnston as Attorney RICHARD A. NEISLER JR.: Kizer Represents Crockett Gin, 2 Banks RICKY TUCKER: Selling Tift County Property for $1.96 Million RIO PROPERTY: Hires Moyes Sellers as Bankruptcy Counsel S & H HARDWARE: Hires Heier Weisbrot as Accountant SARAH ZONE: April 15 Plan Confirmation Hearing Set SARATOGA AND NORTH CREEK: Voluntary Chapter 11 Case Summary SCIENTIFIC GAMES: Moody's Cuts CFR to B3, Outlook Negative SCREENVISION LLC: Moody's Lowers CFR to B2, On Review for Downgrade SHAPE TECHNOLOGIES: Moody's Cuts CFR to Caa2, Outlook Negative SLIDEBELTS INC: U.S. Trustee Appoints Creditors' Committee SOJOURNER-DOUGLASS: Trustee Selling Baltimore Properties for $650K SUITABLE TECHNOLOGIES: U.S. Trustee Unable to Appoint Committee SUMMIT MIDSTREAM: S&P Lowers ICR to 'B' on Revised Forecast SUNYEAH GROUP: Hires Tauber-Arons to Auction Equipment SURGERY PARTNERS: S&P Places 'B-' ICR on CreditWatch Negative TARONIS TECHNOLOGIES: Signs $1.4M Securities Settlement Agreement TARONIS TECHNOLOGIES: Signs $1.5M Securities Settlement Agreement TARONIS TECHNOLOGIES: Signs $2.2-Mil. Stock Purchase Agreement TBH19 LLC: Court Denies Bid for Chapter 11 Trustee Appointment TENET HEALTHCARE: S&P Alters Outlook to Stable, Affirms 'B' ICR TH REMODELING: Unsecureds Owed $809K to Recover 12% THOR INDUSTRIES: Moody's Lowers CFR to B1, Outlook Negative TOUCHPOINT GROUP: Delays Form 10-K Filing Due to COVID-19 Pandemic UNITED AIRLINES: S&P Cuts ICR to 'BB-'; Ratings on Watch Negative VALERITAS HOLDINGS: Toll Global Resigns as Committee Member VERMILLION INC: Reports $1.3 Million Product Revenue for Q4 VIRTUAL CITADEL: Block Data Buying All Assets for $5M Cash VISTEON CORP: S&P Cuts ICR to BB-; Ratings on CreditWatch Negative VYCOR MEDICAL: Reports $1.12 Million Net Loss for 2019 W. KEN TGANSKE: Reikenas Buying Bristol Property for $675K WATERBRIDGE MIDSTREAM: Fitch Cuts IDR to B & Alters Outlook to Neg. WEDDINGWIRE INC: Moody's Alters Outlook on B3 CFR to Negative WINDOM RIDGE: Wayne Rentals Buying Wayne Properties for $33K WINEBOW GROUP: S&P Lowers ICR to 'CCC' as Debt Maturities Approach WITTER HARVESTING: April 21 Disclosure Statement Hearing Set WOK HOLDINGS: Moody's Cuts CFR to Caa2, Outlook Negative WOODFORD EXPRESS: S&P Downgrades ICR to 'CCC+'; Outlook Negative YOUNGEVITY INTERNATIONAL: Issues $1M Note to Daniel Mangless ZANDER REALTY: Hires Wallace Jordan as Counsel ZPOWER TEXAS: Dykema Gossett Represents Schultz Family [] S&P Revises U.S. Student Housing Projects Outlook to Negative ********* 24 HOUR FITNESS: Moody's Cuts CFR to Caa3 & Sr. Unsec. Rating to C ------------------------------------------------------------------ Moody's Investors Service downgraded 24 Hour Fitness Worldwide, Inc.'s ratings including its Corporate Family Rating to Caa3 from Caa1, Probability of Default Rating to Caa3-PD from Caa1-PD, first lien bank credit facilities to Caa3 from B2 and senior unsecured notes to C from Caa2. The outlook is stable. The downgrade reflects 24 Hour Fitness' rapidly deteriorating operating performance and the resultant very high leverage, weak liquidity and high likelihood of a distressed exchange or other default. The company's negative membership trends, very high interest burden and negative free cash flow prior to the coronavirus outbreak, as well as approaching maturities provide limited flexibility to manage through the crisis. The downgrade is in response to the disruption in fitness clubs visitation resulting from efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments to avoid gatherings. These efforts include mandates to close gyms on a temporary basis. The downgrade also reflects the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at fitness clubs once this crisis subsides. The instrument rating downgrades additionally reflect Moody's expectation that recovery values for the credit facility and unsecured notes will be weak in the event of a default in the current economic environment. Moody's is concerned with the company's ability to meet debt service and ultimately refinance its approaching maturities. 24 Hour Fitness' $837 million term loan has a springing maturity to March 2022 from May 2025, three months prior to the June 2022 maturity of its $500 million unsecured notes if more than $100 million of the notes remain outstanding. Moody's took the following ratings actions: Issuer: 24 Hour Fitness Worldwide, Inc. Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Gtd Senior Secured First Lien Revolving Credit Facility, Downgraded to Caa3 (LGD3) from B2 (LGD2) Gtd Senior Secured First Lien Term Loan, Downgraded to Caa3 (LGD3) from B2 (LGD2) Senior Unsecured Regular Bond/Debenture, Downgraded to C (LGD6) from Caa2 (LGD5) Outlook Actions: Issuer: 24 Hour Fitness Worldwide, Inc. Outlook, remains Stable RATINGS RATIONALE The Caa3 CFR reflects elevated probability of a default including a balance sheet restructuring over the next 12 to 18 months. Moody's expect leverage will increase and remain very high with funded debt/EBITDA (excluding operating leases) rising to over 9.0x in 2020 due to a significant decline in earnings. Moody's is also concerned with the company's ability to refinance 2022 debt maturities. The rating is also constrained by the company's high regional concentration with about 50% of its clubs located in California, which is highly impacted by coronavirus, and concentration in the mid-tier price point that faces the most intense and challenging competitive pressures against the budget clubs and smaller local clubs in the fitness club sector. The highly fragmented and competitive fitness club sector has high business risk given its low barriers to entry, exposure to cyclical discretionary consumer spending, and high attrition rates. However, the rating is supported by the company's well-recognized brand name in core markets, as well as longer term trends such as the aging of the US population, the apparent under penetration of fitness clubs and the increased awareness of the importance of fitness. Liquidity is weak with negligible cash, negative projected free cash flow and high likelihood of a covenant violation that limits the ability to utilized unused capacity on the $120 million revolver. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The fitness club industry has been significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in 24 Hour Fitness' credit profile, including its exposure to discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action in part reflects the impact on 24 Hour Fitness of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The stable outlook reflects Moody's expectation that the possibility of a default under Moody's definition including a pre-emptive restructuring such as a distressed exchange is high over the next 12 to 18 months and is appropriately reflected in the Caa3 rating. A ratings upgrade is unlikely given the weak operating environment. However, the ratings could be upgraded if the facilities reopen, earnings recover, and operating metrics meaningfully strengthen including comparable club revenue, new membership conversion and attrition rates. Successful refinancing of its debt well ahead of the March 2022 maturity would also be necessary for an upgrade. The ratings could be downgraded if liquidity deteriorates and ensuing default risk rises further, including through a distressed exchange, or if recovery values weaken. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in San Ramon, California, 24 Hour Fitness Worldwide, Inc. is a leading operator of fitness centers in the US. As of December 31, 2019, the company operated 451 clubs serving approximately 3.4 million members across 13 states and 23 markets, predominantly in California, Texas and Colorado. Revenue was about $1.5 billion in 2019. In May 2014, 24 Hour Fitness was acquired by affiliates of AEA Investors LP, Fitness Capital Partners and Ontario Teachers' Pension Plan for a total purchase price of approximately $1.8 billion. 305 EAST 61ST: Trustee Hires Maltz Auctions & Rosewood as Broker ---------------------------------------------------------------- Kenneth P. Silverman, the Chapter 11 Trustee of 305 East 61st Street Group, LLC, seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Maltz Auctions, Inc. and Rosewood Realty Group as its co-real estate brokers to market and sell the Debtor's real property known as and located at 305 East 61st Street, New York, New York. The brokers have agreed to be paid as follows: a. a total of one-half percent of the Staking Horse Bid; plus b. ten percent of the amount by which the final purchase price for the real property exceeds the Staking Horse Bid. Maltz Auctions does not represent any interest adverse to the Debtor's bankruptcy estate within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. Richard Maltz, chief executive officer of Maltz Auctions, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Richard B. Maltz Maltz Auctions, Inc. 39 Windsor Place, Central Islip, NY 11722 Phone: 516.349.7022 Fax: 516.349.0105 E-mail: info@MaltzAuctions.com Greg Corbin Rosewood Realty Group 38 East 29th Street New York, NY 10016 Phone: (212) 359-9900 www.rosewoodrealtygroup.com 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. At the time of filing, the Debtor was estimated to have assets and debt of $10 million to $50 million. 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. ABERCOMBIE & FITCH: Moody's Alters Outlook on Ba3 CFR to Neg. ------------------------------------------------------------- Moody's Investors Service changed Abercrombie & Fitch Management Co.'s ratings outlook to negative from stable. Concurrently, Moody's affirmed the company's Ba3 corporate family rating, Ba3-PD probability of default rating and Ba2 senior secured term loan rating. The speculative grade liquidity rating remains SGL-1. The change in outlook to negative from stable reflects the risk that credit metrics could weaken for a prolonged period as a result of lower discretionary consumer spending and high promotional activity in the apparel sector as a result of the COVID-19 outbreak. Moody's projects a significant decline in revenues and EBITDA in 2020 including the impact of temporary store closures in Q1, followed by a moderate recovery in 2021. The declines will likely be higher than the average for apparel companies reflecting the company's mall-based locations, 14-24 year-old demographic, which is more vulnerable to changes in employment conditions, as well as the strengthening US dollar, which negatively impacts Abercrombie's sizeable foreign earnings. Mitigating factors are the company's meaningful online presence of about 32%, and the relatively high proportion of basics such as denim in its assortment. The SGL-1 rating incorporates Moody's expectations for weaker but still very good liquidity over the next 12-18 months. As of February 1, 2020, the company had $671 million of cash and no borrowings under its $400 million asset-based revolving credit facility, which is limited by a borrowing base. Subsequently, Abercrombie borrowed $210 million under its revolver to improve its cash position, and generated additional $50 million of cash by withdrawing excess funds from its Rabbi Trust. Abercrombie's $233 million term loan (outstanding amount) is due on August 7, 2021, however the company has sufficient liquidity to repay its term loan with cash balances, if capital markets remain closed for an extended period. In addition, Moody's believes that Abercrombie has sufficient liquidity to support its operations during a limited period of store closures in Q1 2020. Moody's projects that annual free cash flow will decline to breakeven levels in 2020 from an estimated $40 million in 2019, reflecting a significant earnings decline but mitigated by materially lower CapEx. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Abercrombie's credit profile, including its exposure to US discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Abercrombie remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Abercrombie of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Moody's took the following rating actions for Abercrombie & Fitch Management Co.: Corporate family rating, affirmed Ba3 Probability of default rating, affirmed Ba3-PD Senior secured term loan rating, affirmed Ba2 (LGD3) Speculative grade liquidity rating, unchanged SGL-1 Outlook, changed to negative from stable RATINGS RATIONALE Abercrombie's Ba3 CFR reflects the company's very good liquidity, relatively low levels of funded debt and balanced financial policies. The rating also benefits from the company's sizable market presence and geographic diversification. Abercrombie's well-recognized brands and stable operating performance over the past several years also support its credit profile. The ratings are constrained by the company's very high business risk as a niche retailer in the highly competitive teen apparel market, which is subject to elevated fashion risk, margin pressure from the shift to e-commerce and volatile discretionary spending. Moody's expects 60-80% EBITDA declines in 2020 driven by COVID-19-related disruption. As a result, lease-adjusted debt/EBITDA is projected to increase to about 3.3-3.7 times in 2020 from 2.5 times as of February 1, 2020. Moody's expects credit metrics to improve significantly in 2021, as the company anniversaries the impact of highly promotional activity in Q1 and Q2 2020, and consumer spending starts to recover. As an apparel retailer, the company needs to make ongoing investments in its brands and infrastructure, as well as in social and environmental drivers including responsible sourcing, product and supply sustainability, privacy and data protection. The negative outlook reflects the risk of sustained declines in earnings and liquidity. The ratings could be downgraded if operating performance deteriorates, such that debt/EBITDA is maintained above 4.0 times and EBIT/interest expense is below 1.75 times. The ratings could also be downgraded if the company adopts more aggressive financial policies such as debt-financed share repurchases, or if liquidity weakens, including reduction in cash balances below levels that comfortably cover daily operations and the outstanding debt balance, weaker free cash flow generation or meaningful revolver utilization. The ratings could be upgraded if the company demonstrates a consistent track record of revenue and operating income growth, while maintaining very good liquidity and balanced financial policies. Quantitative metrics include expectations that debt/EBITDA will be sustained below 3.0 times and EBIT/interest expense above 3.5 times. The principal methodology used in these ratings was Retail Industry published in May 2018. Abercrombie & Fitch Management Co. is an indirect subsidiary of Abercrombie & Fitch Co. Through its subsidiaries, the company operates approximately 868 specialty apparel stores and several e-commerce websites in North America, Europe, and the Asia Pacific regions under the "Abercrombie & Fitch", "abercrombie kids", and "Hollister" brands. For the fiscal year ended February 1, 2020, the company generated approximately $3.6 billion in revenues. ALGOMA STEEL: S&P Puts 'B-' ICR on Watch Neg. on Liquidity Concerns ------------------------------------------------------------------- S&P Global Ratings placed all of its ratings on Algoma Steel Inc., including its 'B-' issuer credit rating on the company, on CreditWatch with negative implications. "We estimate Algoma will generate a free-cash-flow deficit in fiscal 2021, which could materially constrain the company's liquidity position. We believe Algoma faces heightened liquidity risk through 2020, based on the potential for significant draws under its US$250 million asset-based revolving loan facility (ABL). We expect the company will end fiscal 2020 (March 31) with a negligible cash position at a time when steel market conditions could be poised for a downturn. S&P Global Ratings estimates a global economic recession this year, with a significant contraction in the (calendar year) second quarter, and the impact of COVID-19 on Algoma's operations is uncertain. We estimate the company will generate a free-cash-flow deficit this year funded with draws on its ABL, but maintain excess borrowing capacity. However, we view there to be increased downside to our cash-flow forecasts," S&P said. "The CreditWatch negative placement reflect our view of the risk that Algoma will face materially weaker liquidity through 2020 that limits its financial flexibility. We expect a global economic recession this year that, in tandem with the uncertain impact of the COVID-19 outbreak, could result in Algoma's earnings and cash flow being below our current expectations for fiscal 2021. In this scenario, we anticipate a higher-than-expected free-cash-flow deficit that leads to elevated draws under Algoma's credit facility," S&P said. S&P expects to resolve the CreditWatch within the next few months, at which time it would expect to have greater visibility on the potential impact of prospective steel market conditions on Algoma's cash flow and liquidity, as well as the company's capacity to mitigate a potential period of sustained pressure. ALPINE 4 TECHNOLOGIES: Delays Filing of 2019 Annual Report ---------------------------------------------------------- Alpine 4 Technologies Ltd. has delayed the filing of its Annual Report on Form 10-K for the year ended Dec. 31, 2019, which was due to be filed with the Securities and Exchange Commission on or before March 30, 2020. On March 4, 2020, the Securities and Exchange Commission issued an order under the Securities Exchange Act of 1934 extending the deadlines for filing certain reports made under the Exchange Act, including annual reports on Form 10-K, for registrants subject to the reporting obligations under the Exchange Act that have been particularly impacted by the COVID-19 (novel coronavirus) ("COVID-19") and which reports have filing deadlines between March 1 and April 30, 2020. Alpine 4 is relying on the Order with respect to its Annual Report due to the reduction in staff, suspension of in-person operations at certain locations of the Company, delays in being able to meet and work with the Company's auditors due to "shelter in place" restrictions in Houston, Texas, and other financial and operational concerns associated with or caused by COVID-19. The Company anticipates that it will be able to file its Annual Report on Form 10-K on or before May 14, 2020. COVID-19 Risk Factors The Company is supplementing the risk factors previously disclosed in its most recent periodic reports filed under the Securities Exchange Act of 1934 with the following risk factors: "We face risks related to Novel Coronavirus (COVID-19) which could significantly disrupt our manufacturing, research and development, operations, sales and financial results. "While we are still providing critical and emergency services, our business will be adversely impacted by the effects of the Novel Coronavirus (COVID-19). In addition to global macroeconomic effects, the Novel Coronavirus (COVID-19) outbreak and any other related adverse public health developments will cause disruption to our international operations and sales activities. Our third-party manufacturers, suppliers, third-party distributors, sub-contractors and customers have been and will be disrupted by worker absenteeism, quarantines and restrictions on our employees' ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, or other travel or health-related restrictions. Depending on the magnitude of such effects on our manufacturing, assembling, and testing activities or the operations of our suppliers, third-party distributors, or sub-contractors, our supply chain, manufacturing and product shipments will be delayed, which could adversely affect our business, operations and customer relationships. In addition, the Novel Coronavirus (COVID-19) or other disease outbreak will in the short-run and may over the longer term adversely affect the economies and financial markets of many countries, resulting in an economic downturn that will affect demand for our products and impact our operating results. There can be no assurance that any decrease in sales resulting from the Novel Coronavirus (COVID-19) will be offset by increased sales in subsequent periods. Although the magnitude of the impact of the Novel Coronavirus (COVID-19) outbreak on our business and operations remains uncertain, the continued spread of the Novel Coronavirus (COVID-19) or the occurrence of other epidemics and the imposition of related public health measures and travel and business restrictions will adversely impact our business, financial condition, operating results and cash flows. In addition, we have experienced and will experience disruptions to our business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to develop and design our products in a timely manner or meet required milestones or customer commitments. "Unfavorable global economic conditions could adversely affect our business, financial condition, stock price and results of operations. "Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. For example, the global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, such as the 2008 global financial crisis, could result in a variety of risks to our business, including, weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all. As another example, our financial results may be negatively impacted by the recent Novel Coronavirus (COVID-19) outbreak. The extent and duration of such impacts remain largely uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of Novel Coronavirus (COVID-19), the extent and effectiveness of containment actions taken and the impact of these and other factors on our operations and the global economy in general. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive such difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn. We, or our third-party service providers, face risks related to health epidemics and other outbreaks, which could significantly disrupt our operations. "Our business could be adversely impacted by the effects of Novel Coronavirus (COVID-19) or other epidemics. A public health epidemic, including Novel Coronavirus (COVID-19), poses the risk that we or our employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. We currently rely, and may continue to rely, on third-party service providers that are located in locales significantly impacted by Novel Coronavirus (COVID-19) and/or who source raw materials, samples, components, or other materials and reports from countries significantly impacted by Novel Coronavirus (COVID-19). We may also experience impacts to certain of our suppliers as a result of Novel Coronavirus (COVID-19) or other health epidemic or outbreak occurring in one or more of these locations, which may materially and adversely affect our business, financial condition and results of operations. The extent to which Novel Coronavirus (COVID-19) impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact." About Alpine Alpine 4 Technologies Ltd. is a publicly traded enterprise with business related endeavors in, software, automotive technologies, electronics manufacturing, and energy services & fabrication technologies. As of April 22, 2019, the Company was a holding company that owned five operating subsidiaries: ALTIA, LLC; Quality Circuit Assembly, Inc.; American Precision Fabricators, Inc.; Morris Sheet Metal, Corp; and JTD Spiral, Inc. Alpine 4 reported a net loss of $7.91 million for the year ended Dec. 31, 2018, compared to a net loss of $2.99 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $26.27 million in total assets, $37.48 million in total liabilities, and a total stockholders' deficit of $11.21 million. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 22, 2019, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. AMERICAN DENTAL: Moody's Places B3 CFR on Review for Downgrade -------------------------------------------------------------- Moody's Investors Service placed American Dental Partners, Inc.'s ratings under review for downgrade. Moody's placed the following ratings on review for downgrade: the B3 Corporate Family Rating, the B3-PD Probability of Default Rating, and the B2 first lien senior secured debt rating. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. On March 18, the Centers for Medicare & Medicaid Services advised that all elective surgeries, non-essential medical, surgical, and dental procedures be delayed in order to increase capacity and resources to fight the coronavirus outbreak. The Centers for Disease Control and Prevention (CDC), several governors and others are advising the same. Based on the guidance to limit non-essential medical and surgical procedures, Moody's believes that dental service organizations (DSOs) like American Dental Partners, Inc., will experience a significant drop in volumes over the coming weeks, and the timing for recovery is uncertain. The ratings review will focus on liquidity and the ability to reduce variable costs and growth capital expenditures to manage through the public health emergency. Moody's expects that there will be significant erosion of operating performance in the second quarter, and perhaps beyond, depending on the duration of the coronavirus crisis. Ratings Placed On Review for Downgrade: Issuer: American Dental Partners, Inc. Probability of Default Rating, Placed on Review for Downgrade, currently B3-PD Corporate Family Rating, Placed on Review for Downgrade, currently B3 Senior Secured Bank Credit Facility, Placed on Review for Downgrade, currently B2 (LGD3) Outlook action: Outlook is ratings under review, from stable RATINGS RATIONALE Notwithstanding the review for downgrade, American Dental's B3 Corporate Family Rating reflects its high leverage, moderate free cash flow, and an aggressive growth strategy. Despite elevated spending to open new dental offices and acquire practices in recent years, revenues and earnings have remained relatively flat. The credit profile is also constrained by Moody's expectation that patients will delay/forego non-urgent dental services during the coronavirus global pandemic. The rating benefits from American Dental's solid market presence within the growing dental service organization industry American Dental has an adequate liquidity profile with limited cash and about $26 million of availability under its revolving credit facility expiring March 2023. While the company has generated moderately positive free cash flow generation in recent quarters, Moody's expects negative free cash flow over at least the next quarter or two. However, Moody's expects that the company will conserve liquidity by reducing new office openings and growth capital expenditures. Moody's considers coronavirus to be a social risk given the risk to human health and safety. Aside from coronavirus, American Dental faces other social risks such as the rising concerns around the access and affordability of healthcare services. However, Moody's does not consider the DSOs to face the same level of social risk as many other healthcare providers. From a governance perspective, Moody's views American Dental's growth strategy to be aggressive given its history of acquisitions and high leverage. American Dental Partners, Inc. provides management services to affiliate dental centers, which are primarily focused on general dentistry and hygiene, with a growing focus on aesthetic segments (orthodontics, endodontics, periodontics). American Dental Partners, Inc. currently operates approximately 290 offices across 21 states. American Dental is majority-owned by JLL Partners, Inc. The company generated about $297 million in net patient service revenue as of September 30, 2019. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. AMYNTA HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B-' ICR ----------------------------------------------------------------- S&P Global Ratings said it revised its outlook on managing general agent (MGA) and auto warranty administrator Amynta Holdings LLC to negative from stable. S&P affirmed its 'B-' long-term issuer credit rating on Amynta Holdings LLC and its 'B-' long-term issue rating on the company's first-lien credit facility. The recovery rating on the first-lien facility remains '3', indicating S&P's expectation for meaningful recovery (55%-60%; rounded estimate: 56%) in the event of a payment default. The revised outlook reflects S&P's expectation that Amynta's adjusted leverage will deteriorate to about 10x for the next 12 months if the current economic fallout and subsequent impact to light-vehicle sales, consumer warranty pressures, and reduction in payrolls persist for the next two to three months. Amynta is a collection of warranty and MGA/specialty risk companies focused on underwriting and administering non-life insurance contracts. Its core business segments are MGA (about 49% of revenues), warranty (41%), and specialty risk (10%). Amynta is exposed to risk associated with light-vehicle sales and reduced consumer spending in its warranty segment, and to a lesser extent faces pressures in its MGA and specialty risk segments from reduced overall economic activity, including higher unemployment and impact on the small business market, which may affect premium levels underwritten. Amid the COVID-19 pandemic, the current limitations on nonessential business and many people's focus on social distancing, rather than purchasing cars or warranty protection, is expected to pressure both revenue and EBITDA, leading to a potential significant spike in leverage. Additionally, as small businesses remain under pressure from the economic fallout, reductions in payrolls and business bankruptcies could negatively affect the premium levels that Amynta's MGA can underwrite. The company has been taking steps to reduce operating expenses where possible while positioning the business to capitalize on market opportunities once things return to a more normal state. Because a portion of the expenses are not variable and cannot be cut when revenue is not there, S&P anticipates the company will face margin pressures for the extent of the fallout. "We assess Amynta's liquidity as adequate based on our expectation that sources will exceed uses of cash by at least 1.2x over the next 12 months, and that this ratio will be sustained even with a 15% decline in EBITDA. Supporting our view is the undrawn revolver and no significant debt maturities," S&P said. Also supporting this assessment are Amynta's satisfactory standing in the credit markets, sound relationships with banks, and likeliness to absorb a high-impact, low-probability event with limited need for refinancing, given its limited working capital and capital expenditure needs (less than 1% of revenue annually). "The negative outlook reflects our view that the COVID-19 pandemic has negatively affected the auto and consumer warranty segments and will erode Amynta's 2020 EBITDA. However, we expect this shock will be short-term, and as such, we expect Amynta's cash flow and EBITDA from its warranty and MGA segments to improve once the U.S. economy returns to a state of normalcy," S&P said. S&P could downgrade the company if this rebound is weaker or the downturn lasts longer than it expected. Some indications of this could include: -- Amynta's debt-to-EBITDA ratio rising above 8.5x and its coverage deteriorating to below 1.5x, indicating sustained pressures on servicing obligations; or -- Its liquidity profile deteriorating further from levels that S&P currently views as adequate. "We could revise the outlook to stable if Amynta improves its leverage and coverage measures such that its debt-to-EBITDA ratio stays below 10x and its EBITDA interest coverage ratio stabilizes above 1.5x." This may happen if the company quickly rebounds from the disruption to its business operations and achieves solid warranty administration sales from potential pent-up demand due to the recent economic fallout," the rating agency said. AP GAMING: Moody's Lowers CFR to B3, Outlook Negative ----------------------------------------------------- Moody's Investors Service downgraded AP Gaming I, LLC's, a subsidiary of PlayAGS Inc., Corporate Family Rating to B3 from B2 and Probability of Default Rating to Caa1-PD from B3-PD. The company's senior secured revolver and term loan were downgraded to B3 from B2. The company's Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-2. The outlook is negative. The downgrade of AP Gaming's CFR is in response to the disruption in casino visitation and gaming machine use resulting from efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments to avoid gatherings and avoid non-essential travel. These efforts additionally include mandates to close casinos, AP Gaming's largest customers, on a temporary basis. The downgrade also reflects the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at casinos once this crisis subsides. Downgrades: Issuer: AP Gaming I, LLC Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Corporate Family Rating, Downgraded to B3 from B2 Senior Secured Bank Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: AP Gaming I, LLC Outlook, Changed To Negative From Stable RATINGS RATIONALE AP Gaming's B3 CFR reflects the meaningful revenue and earnings decline over the next few months expected from efforts to contain the coronavirus and the potential for a slow recovery once conditions improve. The rating is additionally constrained by the company's small size and scale in terms of revenue and EBITDA, both as an absolute number and as compared to its peers. Revenues are largely tied to the volume of gaming machine play. The company can reduce spending on game development and capital expenditures when revenue weakens, but the need to retain a skilled workforce to maintain competitive technology contributes to high operating leverage. The company benefits from its significant EBITDA margins and recurring revenue profile during normal operating periods, along with its growing installed base. The company's elevated geographic and customer concentration remain a key constraint, although concentration levels improved in recent years as a result of organic growth as well as several acquisitions. The downgrade of the company's speculative-grade liquidity rating to SGL-3 from SGL-2 considers the expected decline in earnings and cash flow and diminished covenant cushion. As of the year ended December 31, 2019, AP Gaming had cash of approximately $13 million, and a $30 million undrawn revolving credit facility. The company fully drew down on its revolver in March 2020. Moody's estimates the company could maintain sufficient internal cash sources after maintenance capital expenditures to meet required annual amortization and interest requirements assuming a sizeable decline in annual EBITDA. The expected EBITDA decline will not be ratable over the next year and because EBITDA and free cash flow will be negative for an uncertain time period, liquidity and leverage could deteriorate quickly over the next few months. The company has $6 million of debt maturing in 2020, with no material maturities until its revolver expires in 2022. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in AP Gaming's credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and AP Gaming remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on AP Gaming of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook considers that AP Gaming remains vulnerable to travel disruptions and unfavorable sudden shifts in discretionary consumer spending and the uncertainty regarding the timing of its customers' facilities reopening and the pace at which consumer spending at these properties will recover. Ratings could be downgraded if liquidity deteriorates or if Moody's anticipates AP Gaming's earnings declines to be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. A ratings upgrade is unlikely given the weak operating environment. However, the ratings could be upgraded if customers facilities reopen and earnings recover such that positive free cash flow and reinvestment flexibility is restored and debt-to-EBITDA is sustained below 5.5x. AP Gaming, a subsidiary of PlayAGS Inc., is a designer and supplier of casino gaming products. The company's products are primarily leased to the Class II Native American market and sold into the Class III commercial and Native American gaming marketplace. The company's products include electronic gaming machines, tables games, as well as interactive social games available on mobile devices. Revenue reported for the last twelve-month period ended December 31, 2019 was approximately $305 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. APACHE CORP: S&P Downgrades ICR to 'BB+'; Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Apache Corp. to 'BB+' from 'BBB'. The outlook is negative. "The recent collapse in oil prices will negatively affect Apache's profitability and cash flows. We forecast that Apache's credit measures will be weak for our expectations for the rating, with FFO to debt and debt to EBITDA of below 12% and above 5x, in 2020 based on our revised oil and natural gas price deck assumptions," S&P said. The negative outlook reflects S&P's expectations that Apache's credit measures will be weak for the rating this year. It forecasts FFO to debt below 12% and adjusted debt to EBITDA above 5x this year, before improving in 2021. The recent reduction in capital spending and dividends, coupled with S&P's higher commodity price assumptions, will result in improving credit measures. "We could lower the rating if we project leverage to weaken beyond our current projections, such that FFO to debt remains below 12% and debt to EBITDA remains above 5x on a sustained basis, likely as a result of drilling or project costs exceeding expectations, larger-than-expected production declines on U.S. properties, or weaker-than-expected commodity prices," S&P said. "We could revise the outlook to stable if the company's credit measures improve such that FFO to debt is above 12% and debt to EBITDA is below 5x. This scenario is likely if the company executes its capital plan cost effectively, production declines in the U.S. are within our expectations and commodity prices conform to our price assumptions," the rating agency said. APCO HOLDINGS: S&P Lowers ICR to B- on Severe Operating Challenges ------------------------------------------------------------------ S&P Global Ratings lowered its long-term issuer credit rating on auto warranty administrator APCO Holdings LLC to 'B-' from 'B' and placed it on CreditWatch with negative implications. At the same time, S&P lowered its rating on APCO's $240 million first-lien credit facility ($20 million revolver due 2023 and $220 million term loan due 2025) to 'B-' from 'B' and placed it on CreditWatch negative. The recovery rating of '3', indicating S&P's expectation that lenders would receive meaningful (50%-70%; rounded estimate: 55%) recovery of their principal in the event of a payment default, remains unchanged. "The downgrade reflects our expectation that APCO's adjusted leverage will remain above 9x for the next 12 months if the current economic fallout and subsequent impact to light-vehicle sales persist for the next two months. APCO is a marketer and third-party administrator of vehicle service contracts and other finance and insurance products sold by franchise and nonfranchise auto dealers throughout the U.S. on new and used vehicles. Therefore, the company is exposed to risk associated with light-vehicle sales," S&P said. CreditWatch "The CreditWatch placement reflects our view that the impact of COVID-19 on auto warranty administration sales could last until June. As such, we expect APCO's adjusted leverage and coverage will worsen to minimum 9x and to 1x-1.5x, respectively, impairing our view of the credit fundamentals," S&P said. "The CreditWatch also reflects that if the economic fallout drags out past June, the company could begin to face both liquidity and covenant pressures. In resolving our CreditWatch, we could lower our rating if we do not see revenue stabilize from normalized light-vehicle sales and lead to margin improvement, positive cash flow, and stabilized leverage and coverage levels with reduced risk of a covenant breach," the rating agency said. APOLLO COMMERCIAL: S&P Lowers ICR to 'B+' as Risks on COVID-19 Loom ------------------------------------------------------------------- S&P Global Ratings said it lowered its issuer credit rating on Apollo Commercial Real Estate Finance Inc. to 'B+' from 'BB-'. The outlook is negative. At the same time, S&P lowered its rating on the company's senior secured term loan to 'B+' from 'BB-'. Apollo recently announced that a second loan in its portfolio, a predevelopment loan in Brooklyn ($154.6 million), has stopped paying interest and the underlying properties are being marketed for sale. S&P expects the company's portfolio could come under material stress from the impact of COVID-19. The exposure to margin calls on the company's secured repurchase facilities is exacerbating the risks to the company's portfolio. The company's investment portfolio and the secured repurchase facilities used to fund a large majority of the company's first mortgage loans are now at heightened risk because of uncertainties surrounding the impact of COVID-19. The negative outlook reflects the potential that the company's investment portfolio weakens amid a difficult operating environment. S&P's base-case scenario assumes that the company will operate with leverage of 1.75x-2.25x debt to adjusted total equity over the next 12 months while maintaining sufficient excess liquidity on balance sheet. "We could revise the outlook to stable if the performance of the company's investment portfolio stabilizes and there is more clarity on the full impact of COVID-19," S&P said. "We could downgrade the company if it increases leverage above 2.5x or does not continue reducing the risk in its portfolio while increasing leverage. We could also downgrade the company if it experiences adverse investment performance or does not maintain sufficient liquidity relative to the amount of debt drawn from repurchase facilities," the rating agency said. ARIZONA CALL-A-TEEN: May 5 Disclosure Statement Hearing Set ----------------------------------------------------------- Debtor Arizona Call-A-Teen Youth Resources, Inc., filed with the U.S. Bankruptcy Court for the District of Arizona a Plan of Reorganization and a Disclosure Statement. On March 12, 2020, Judge Madeleine C. Wanslee ordered that: * May 5, 2020, at 10:00 a.m. at the United States Bankruptcy Court, 230 North First Avenue, 7th Floor, Courtroom 702, Phoenix, Arizona is the hearing to consider approval of the Disclosure Statement. * April 28, 2020, is the deadline for any party desiring to object to the Court’s approval of the Disclosure Statement to file a written objection with the Court. * Unless otherwise ordered by the Court, the conclusion of the Disclosure Statement Hearing is the deadline for a secured creditor to make a written election to have its claim treated pursuant to Section 1111(b)(2). A full-text copy of the order dated March 12, 2020, is available at https://tinyurl.com/ss9bc8u from PacerMonitor at no charge. About Arizona Call-A-Teen Youth Resources Arizona Call-A-Teen Youth Resources, Inc. (ACYR) --https://acyraz.org/ -- is a tax-exempt, nonprofit organization that offers services primarily for young people who have either dropped out or are at risk of leaving high school prior to graduation. It provides academic, vocational and employment programs to help individuals discover their potential. Arizona Call-A-Teen Youth Resources sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 19-14311) on Nov. 11, 2019. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $500,000 and $1 million. Judge Madeleine C. Wanslee oversees the case. The Debtor tapped Keery McCue, PLLC as its legal counsel. ARUBA INVESTMENTS: Moody's Alters Outlook on B2 CFR to Negative --------------------------------------------------------------- Moody's Investors Service has revised Aruba Investments, Inc's. outlook to negative from stable. Moody's has affirmed Aruba Investments, Inc.'s B2 Corporate Family Rating and B2-PD Probability of Default Rating. Moody's also affirmed the B1 the first lien senior secured term loans and Caa1 senior unsecured notes. "The negative outlook reflects the anticipation for weakening demand in several of the company's end markets including paints and coatings, metalworking fluids, synthetic rubber and electronics that will experience a slowdown related to the coronavirus," said Domenick R. Fumai, Moody's Vice President and lead analyst for Aruba Investments, Inc. Affirmations: Issuer: Aruba Investments, Inc. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed B1 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD5) Outlook Actions: Issuer: Aruba Investments, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The B2 CFR reflects ANGUS' strong margins and continued free cash flow generation despite the negative impact of weaker macroeconomic conditions and expectations for weakening of credit metrics in 2020. ANGUS' business profile is characterized by geographic diversity and solid market positions serving a varied number of end markets, including several fairly defensive end markets such as pharmaceutical, life sciences and HPC (home and personal care), that partially offset exposure to its industrial-related industries. The company enjoys multiple barriers to entry including advanced formulations and backward integration that support strong profitability and attractive EBITDA margins. ANGUS' rating is constrained by continued elevated leverage with Moody's adjusted Total/Debt EBITDA estimated at 6.1x as of December 31, 2019, and the expectation that leverage will increase modestly in 2020 approaching 6.5x. The lack of scale and significant operational concentration with dependence on two plants are additional considerations limiting the rating. The rating also includes the risks associated with private equity ownership. The negative outlook reflects Moody's expectations that several of ANGUS' end markets, including paints and coatings, metalworking fluids, synthetic rubber and electronics, will suffer from weaker demand in 2020 as economic growth falters due to the coronavirus pandemic. While these market segments account for just over half of the company's sales, other less cyclical end markets such as pharmaceutical, life sciences and HPC should be less susceptible to the current downturn and allow the company to generate sufficient EBITDA to keep leverage below 6.5x and positive free cash flow in 2020, unless the global economic conditions worsen more than currently anticipated. Moody's would likely consider a downgrade if leverage is above 6.5x and free cash flow is negative for a sustained period, there is a significant deterioration in liquidity, or if the company is unable to refinance its revolving credit facility due in November 2021 before year-end. Although not likely over the next 12 months, Moody's would consider an upgrade if financial leverage, including Moody's standard adjustments, is sustained below 5.0x, revenue and free cash flow growth remain positive and the private equity sponsor demonstrates a commitment to more conservative financial policies. Moody's also evaluates environmental, social and governance factors in the rating consideration. As a specialty chemicals company, environmental risks are categorized as moderate. However, the chemical properties of several key raw materials, including ammonia, propane and formaldehyde, could result in future product and environmental liability claims if improperly handled. ANGUS does not currently have any substantial litigation or remediation related to environmental issues. ANGUS has clearly stated sustainability and environment, health and safety policies on its website. Several of the company's products are important chemical intermediates in the pharmaceutical and life sciences industries. Governance risks are elevated due to private equity ownership by Golden Gate Capital, which includes a board of directors with majority representation by members affiliated with Golden Gate Capital, and reduced financial disclosure requirements as a private company. ANGUS also has high financial leverage and a fairly aggressive financial policy. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The chemical sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, exposure to Europe and Asia have made it potentially vulnerable to shifts in market sentiment in these unprecedented operating conditions and ANGUS remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on ANGUS of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Moody's expects ANGUS to have good liquidity over the next 12 months with available cash on the balance sheet, positive free cash flow generation and access to the revolving credit facility. As of September 30, 2019, the company had $59 million of cash and $62 million of availability with no outstanding borrowings under its revolving credit facility including $3 million in outstanding letters of credit. The term loan does not have any additional financial maintenance covenants beyond the cross protection of the revolver covenant. Debt capital is comprised of a rated $65 million first lien senior secured revolving credit facility due November 2021, $225 million first lien senior secured term loan B due 2022 ($215 million outstanding), $280 million first lien senior secured term loan B (Euro-denominated; $263 outstanding) due 2022, and $225 million senior unsecured notes due 2023. The Caa1 rating on the senior unsecured notes reflects effective subordination to the much larger senior secured credit facilities and structural subordination with regard to the company's foreign subsidiaries. The company's German facility is held in one of its foreign subsidiaries. Aruba Investments, Inc. is a holding company that owns ANGUS Chemical Company. Headquartered in Buffalo Grove, IL, ANGUS produces performance additives for end markets including paints and coatings, pharmaceuticals, metalworking fluids, personal care, agriculture, and biocides. Golden Gate Capital purchased the company from Dow Chemical in a leveraged transaction which closed in February 2015. ANGUS generated approximately $333 million in revenue for the twelve months ending September 30, 2019. The principal methodology used in these ratings was Chemical Industry published in March 2019. ASBURY GRAIN: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Asbury Grain Service, LLC. About Asbury Grain Service Asbury Grain Service, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wisc. Case No. 20-10564) on Feb. 26, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Catherine J. Furay oversees the case. Pittman & Pittman Law Offices, LLC is the Debtor's legal counsel. ASHTON WOODS: S&P Alters Outlook to Stable, Affirms 'B-' ICR ------------------------------------------------------------ S&P Global Ratings said it is revising the rating outlooks on eight U.S. and Canadian homebuilders to stable from positive. These actions come after S&P's economists signaled a "massive hit to global economic activity" from measures to slow the spread of the coronavirus pandemic. The rating agency now expects the decline of U.S. GDP in the second quarter will be "at least double" the 6% drop signaled just last week. "For North American homebuilders, we expect social distancing and higher, even if short-lived, unemployment will stall positive new home sales and price momentum over the next several months. Job losses in the services sector should dampen entry level and first-time move-up home demand while the sharp drop in the stock market might delay luxury and active adult home sales. At the same time, social distancing should slow new home community foot traffic at all price points, at least through the end of the important spring selling season and perhaps longer," S&P said. "There were no rating changes associated with these outlook revisions, and we don't expect a significant number of homebuilder downgrades over the next several months, if economic growth resumes in the second half of the year. Moreover, the builders listed below in the 'BB' category had significant buffer in their credit ratios coming into 2020 so we do not expect ratings downside risk for these companies without a higher likelihood for a weak economic scenario carrying into the 2021 selling season," the rating agency said. S&P will publish research updates on each affected company shortly. Ratings List Ratings Affirmed; Outlook Action To From Ashton Woods USA LLC Ashton Woods Finance Co. Issuer Credit Rating B-/Stable/-- B-/Positive/-- Beazer Homes USA Inc. Issuer Credit Rating B-/Stable/-- B-/Positive/-- Lennar Corp. CalAtlantic Group Inc. Issuer Credit Rating BB+/Stable/-- BB+/Positive/-- Mattamy Group Corp. Issuer Credit Rating BB/Stable/-- BB/Positive/-- MDC Holdings Inc. Issuer Credit Rating BB+/Stable/-- BB+/Positive/-- Meritage Homes Corp. Issuer Credit Rating BB/Stable/-- BB/Positive/-- PulteGroup Inc. Issuer Credit Rating BB+/Stable/-- BB+/Positive/-- Toll Brothers Inc. Toll Brothers Finance Corp. Toll Corp. Issuer Credit Rating BB+/Stable/-- BB+/Positive/-- AT HOME GROUP: S&P Downgrades ICR to 'CCC+'; Outlook Negative ------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based home decor retailer At Home Group Inc. by two notches to 'CCC+' from 'B'. At the same time, S&P lowered its issue-level rating on the company's term loan B to 'CCC+' from 'B'. S&P's '3' recovery rating remains unchanged. "The downgrade reflects our view that At Home's operating performance will be substantially weakened this year due to the coronavirus pandemic following a challenging fiscal year 2020. Therefore, we believe it is increasingly likely that the company will face difficulty in refinancing its debt at par, which leads us to view its capital structure as unsustainable," S&P said. The negative outlook reflects the sizable risk to At Home's operating performance in fiscal year 2021, given the expected decline in its revenue stemming from the coronavirus pandemic, and the execution risks associated with the challenges it has faced over the last 12 months. "We could lower our rating on At Home if we believe there is an increased risk of a default in the next 12 months. This could occur if the company's performance does not rebound sufficiently in advance of its 2022 maturities such that we believe a refinancing at par is increasingly unlikely. We could also lower the rating if we believe the likelihood of a below-par repurchase has materially increased," S&P said. "We could raise our ratings on At Home or revise our outlook to stable if we believe the company will be able to refinance its 2022 term loan at par, which would likely require an improvement in the macroeconomic situation. We would also need to be confident that the company's operating performance would recover and stabilize before raising our rating," the rating agency said. ATLANTIC AVIATION: S&P Places BB- ICR on CreditWatch Negative ------------------------------------------------------------- S&P Global Ratings said business and consumer services providers are facing unprecedented operational disruptions and revenue declines as worldwide social distancing sanctions force nonessential business to temporarily suspend operations and consumers to stay indoors. Most business are commencing with short-term closures (few weeks to a month) but S&P believes extensions are likely. The risk of foregone volumes and revenues during this period of COVID-19-related disruption is substantial, as many services companies provide largely intangible, point of sale experiences. Although 2020 revenue growth will undoubtedly decline, a prolonged economic downturn would have broader reaching credit implications, including a spike in layoffs. Despite the sector's largely variable cost structure, S&P would also expect a contraction in cash flow generation as the elevated debt service needs of its highly leveraged issuers stress liquidity. S&P acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus pandemic. Some government authorities estimate it will peak between June and August, and S&P is using this assumption in assessing the economic and credit implications. The rating agency believes measures to contain COVID-19 have pushed the global economy into recession and could cause a surge of defaults among nonfinancial corporate borrowers. As the situation evolves, S&P will update its assumptions and estimates accordingly. "We plan to publish individual reports as soon as practical. Ratings on CreditWatch reflect significant anticipated stress on revenue and cash flow over the next several months, or possibly longer, that could cause us to lower ratings over a short time frame, even if companies currently have good leverage levels and liquidity cushions. Outlook revisions to negative reflect the possibility of a downgrade over the next six to 12 months. Downgrades typically reflect operating metrics and leverage measures that were already weak compared with downgrade thresholds at the previous rating and are likely to deteriorate over the next year or very thin liquidity in the face of high fixed charges," S&P said. Ratings List Ratings Placed on CreditWatch To From Atlantic Aviation FBO Inc. Issuer Credit Rating BB-/Watch Neg/-- BB-/Stable/-- Grubhub Inc. Issuer Credit Rating B+/Watch Neg/-- B+/Negative/-- The Knot Worldwide Inc. Issuer Credit Rating B/Watch Neg/-- B/Stable/-- KLDiscovery Inc. LD Intermediate Holdings Inc. Issuer Credit Rating B-/Watch Neg/-- B-/Stable/-- GI Revelation Acquisition LLC Issuer Credit Rating B-/Watch Neg/-- B-/Stable/-- Downgraded; Outlook Action To From ConvergeOne Holdings Inc. Issuer Credit Rating B-/Negative/-- B-/Stable/-- DTI Holdco, Inc Issuer Credit Rating CCC+/Negative/-- B-/Negative/-- ATOKA COUNTY HEALTHCARE: PCO Files 17th Report ---------------------------------------------- Deborah Burian, the duly appointed patient care ombudsman for Atoka County Healthcare Authority, pursuant to 11 U.S.C Section 33(b)(2) submits her 17th periodic report with the U.S. Bankruptcy Court for the Eastern District of Oklahoma for the period September 21, 2019 through November 11, 2019. Atoka is certified as a Critical Access Hospital and at the time of the bankruptcy filing, had been deemed to meet the Conditions of Participation by Joint Commission on Health Care Accreditation. Atoka County Medical Center is also a swing-bed in which the hospital may use designated available bed for either medical licensed hospital care or medical licensed skilled nursing. On October 23, 2019, the PCO visit the facility and observed that: -- Tray service to three clients with therapeutic diets met the physician's order. -- Property provides for an ongoing program designed to meet, in accordance with the comprehensive assessments, the interests and physical, mental and psychosocial well-being of residents. -- Two patients receiving IV services lacked appropriate documentation. The staff was unable to produce written policy for managing IV tubing, so it was reported to Chief Nursing Officer for immediate correction. -- No complaints nor concerns were reported during the PCO visit. In the next 60-day monitoring period, the Ombudsman will conduct a site visit and continue to monitor the changing environment including provision of necessary services within state and federal guidelines. The PCO requests Court approval of her 60-day report and for such other relief as the Court deems just and appropriate. A full-text copy of PCO 17 Report is available at https://tinyurl.com/sxnhbye from PacerMonitor.com at no charge. The PCO may be reached at: Deborah Burian 3101 N. Classen Blvd. Suite 217 Oklahoma City, OK 73118 Tel: (405) 623-0778 About Atoka Based in Atoka, Oklahoma, Atoka County Healthcare Authority provides health care services. The Healthcare Authority filed for Chapter 9 bankruptcy protection on Jan. 10, 2017 (Bankr. E.D. Okla. Case No. 17-80016). The Debtor was estimated to have assets of less than $50,000, and debt of between $10 million and $50 million. Jeffrey E. Tate, Esq., at Christensen Law Group PLLC, represents the Debtor. AUTOKINITON US: S&P Cuts ICR to 'B'; Ratings on Watch Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on North American supplier Autokiniton US Holdings Inc. (AGG) to 'B' from 'B+'. S&P also lowered its issue-level ratings on the company's existing senior secured debt to 'B' from 'BB-' and revised the recovery rating to '3' from '2'. The '3' recovery rating indicates S&P's expectation for average (50%-70%; rounded estimate: 50%) recovery for lenders in a default scenario. "Cash flow adequacy metrics will weaken significantly in 2020, and our prior base case had assumed limited headroom for downside risk related to integration costs amid an economic slowdown. S&P Global recently lowered its forecast for global light-vehicle sales as the coronavirus pandemic escalates and global growth falls. We now project U.S. auto sales could decline up to 20% in 2020, and we expect global automakers and suppliers will face intense credit pressures, which will test their liquidity management and the headroom in their credit metrics. Despite Autokiniton US Holdings Inc.'s (AGG's) modest debt burden, following its acquisition of Tower International Inc., we now expect debt to EBITDA to remain well over 5x over the next two years, with free operating cash flow (FOCF) to debt below 5%. Our prior expectation was debt to EBITDA of about 3.5x-4x and FOCF to debt of 5%-10%. As the uncertainty around production shutdowns intensifies, the lower credit quality reflects the exposure to a fiercely competitive auto industry that is marked by cyclical demand and elevated pricing pressure," S&P said. "The CreditWatch placement with negative implications reflects our view that in the near term, AGG's credit metrics and liquidity could be further hurt by effects of the coronavirus pandemic in North America, absent financial sponsor actions to protect liquidity or positive effects of government stimulus packages. We could lower the rating if production stoppage appears likely to extend deep into the second quarter, which could augment cash burn and weaken liquidity," the rating agency said. AVSC HOLDING: Moody's Cuts CFR to Caa2, On Review for Downgrade --------------------------------------------------------------- Moody's Investors Service downgraded AVSC Holding Corp.'s Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa2-PD from B3-PD, its first lien senior secured credit facility (revolver and term loan) to Caa2 from B2 and the ratings on the company's second lien term loan to Ca from Caa2. The ratings have also been placed under review for further downgrade. The downgrade to Caa2 and review reflects Moody's expectation for severe deterioration in PSAV's operating results and liquidity at least through June due to the coronavirus pandemic (COVID-19) that has already prompted a global shutdown of the meeting and events spaces. Moody's expects significant cash flow deficits in the second quarter of 2020, which elevate default risk. Moody's downgraded and placed the following ratings of AVSC Holding Corp. on review for further downgrade: Downgrades: Issuer: AVSC Holding Corp. Probability of Default Rating, Downgraded to Caa2-PD from B3-PD; Placed Under Review for further Downgrade Corporate Family Rating, Downgraded to Caa2 from B3; Placed Under Review for further Downgrade Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa2 (LGD3) from B2 (LGD3); Placed Under Review for further Downgrade Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Ca (LGD6) from Caa2 (LGD6); Placed Under Review for further Downgrade Outlook Actions: Issuer: AVSC Holding Corp. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The meetings and events sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and the COVID-19 containment measures. Furthermore, PSAV is left vulnerable to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on PSAV of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. In its review, Moody's will consider (i) the sufficiency of the company's current and alternative liquidity sources over the near-term; (ii) PSAV's ability to timely and aggressively reduce expenses and capital investments to preserve cash outflows; (iii) the timing of when global travel restrictions will be lifted and containment measures eased, and (iv) the company's ability to restore or halt the deterioration of its credit metrics. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. AVSC Holding Corp., operating under the brand name PSAV, is a leading provider in the audiovisual and event experiences industry delivering creative production, advanced technology and staging to help its customers deliver more dynamic and impactful experiences at their meetings, trade shows and special events. PSAV is the event technology provider of choice at leading hotels, resorts and convention centers. Its business model is based on long-term partnerships with these venues, which establish PSAV as the exclusive on-site provider of event technology services. Following the August 2018 leveraged buyout, PSAV is majority owned by affiliates of Blackstone Group, L.P. The company generated approximately $2.26 billion in annual revenue in 2019. BCP RAPTOR II: Fitch Lowers LongTerm IDR to B-, Outlook Negative ---------------------------------------------------------------- Fitch Ratings has downgraded BCP Raptor II LLC's Long-Term Issuer Default Rating (IDR) to 'B-' from 'B.' Additionally, Fitch has downgraded BCP Raptor II, LLC's (Raptor 2) senior secured term loan to 'B-'/'RR4' from 'BB-'/'RR2'. The Rating Outlook is Negative and Fitch as removed the ratings from Negative Watch. The downgrade of the IDR reflects Raptor 2's inability to post $25 million of EBITDA in 4Q19, a profitability level that, if under-run -- Fitch had previously stated (based on September 2019 information) -- could result in a negative rating action. The actual EBITDA was 10% below $25 million. Furthermore, fiscal 2019 EBITDA under-ran Fitch's forecast. The low yearly and 4Q19 profit performance is in the context of a company that has been operating since before the beginning of 2019 and in a U.S. producing basin (Permian) believed to be the best in the country. Fitch concludes that Raptor 2's system and territory in aggregate pose challenges to business planning and execution. The rating actions occur in a context of certain members of OPEC+ effectively changing the policy of withholding production to maintain relatively stable oil prices. Cartel leader Saudi Arabia has adopted a pump-at-will policy. The pressure on existing policy was acute given the sharp decrease in global energy demand brought on by the coronavirus pandemic. The Negative Outlook reflects Fitch's concern that volumes could fall, on a yoy basis in 4Q20, which could result in a further deterioration in leverage and coverage metrics. Fitch would seek to stabilize the Outlook should growth keep pace with or exceed Fitch's base case expectations and Raptor 2's FFO Fixed Charge Coverage trending towards 2.0x for 2021. As indicated in a Key Rating Driver, the Outlook for Raptor 2's sister-affiliate would also have a bearing on the resolution of the Raptor 2 Outlook. KEY RATING DRIVERS Volume Growth Story Becomes Murky: Lower commodity prices and fears over a global economic slowdown are impacting producer spending/production growth plans across the sector. While the Permian Basin is one of, if not the most, attractive drilling target in North America it is not immune to low oil and gas prices. As such, drilling activity (as measured by the active rig count) in the Permian waned throughout 2019 and into the beginning of 2020. Since the end of February, a number of oil and gas companies have reduced planned development spending and tempered production expectations, making the path to significant year-on-year volume growth for Raptor 2 unclear. Lagging Volumes Slow Expected Deleveraging: Fitch expects volumes gathered and, consequently, Raptor 2 EBITDA to decline in 2020, versus 2019, and growth to remain slow-paced into early 2022. Additionally, Fitch notes that Raptor 2 does have some percent of proceeds contracts, which subjects it to commodity price exposure and basis differential risks. Due in part to asset availability, hub commodity prices and basis differentials, 2019 EBITDA was lower than expectations. Specifically fourth quarter 2019 EBTIDA did not reach Fitch's previous negative ratings sensitivity to meet or exceed $25 million for the period. Fitch anticipates leverage for the year-end 2020 to be above 9.0x, improving through the forecast period as positive volume growth resumes, albeit at a slower pace than previously expected. Scale is a Factor: On a combined basis, dedicated acreage for Raptor 2 and EagleClaw (consolidated) is approximately 650,000. Raptor 2 is a natural gas gathering & processing, produced water gathering and disposal, and crude gathering services provider that operates in the Delaware region of the Permian basin. The company is expected to generate an annual EBITDA less of than $150 million in the near term. Given its single basin focus, Raptor 2 is subject to outsized event risk should there be a slow-down or longer term disruption of Delaware Basin area production. However, partially offsetting the limiting factor is Raptor 2's geographic presence in the Permian where crude production growth has been robust and is expected to be relatively stronger versus other North American producing regions, in the near to intermediate term. Raptor 2 is also somewhat diversified in its business line from providing both natural gas G&P, produced water gathering and disposal, and crude gathering services. Customer Concentration: Raptor 2 has concentrated customer exposure to Diamondback Energy Inc. (FANG; BBB/Stable), Cimarex Energy (XEC; NR), Callon Petroleum Company (CPE; NR), and Colgate Energy, LLC (NR). XEC is expected to be the largest provider of volumes across each service near term, with CPE a close second (for gas gathering service). Both CPE and XEC completed 2019 acquisitions of independent Raptor 2 customers. While both XEC and CPE are better credit quality counterparties than the entities they acquired, both also have more diversified portfolios. This increases the risk that production efforts may be focused elsewhere and growth is slower within Raptor 2 acreage than it would have been otherwise. Corporate Group Impacts: Raptor 2's ratings reflect Fitch's view of the credit on a standalone basis based on the non-recourse structuring of Raptor 2's debt. Fitch notes that the financial results include transactions with affiliate EagleClaw. For instance, in 2019 EagleClaw furnished Raptor 2 with approximately $26 million in cash for the use of a Raptor 2 interconnection and for delivering to EagleClaw natural gas. Given an array of shared services and the existence of several intercompany arrangements/frequent related party transactions, Fitch has set the two long-term IDRs of Raptor 2 and EagleClaw at the same level, by bringing the rating of EagleClaw down to the level of Raptor 2. Sponsor Support: Fitch believes that BCP Raptor II, LLC benefits from supportive sponsors in Blackstone and I Squared Capital, which controls the board of directors. The ratings consider that Blackstone and I Squared have provided additional equity commitments that have been pledged to the company in support of growth capital and liquidity needs, reducing the likelihood of the need for any additional near-term debt or revolving credit facility borrowings. ESG - Governance: Centurion has a relevance score of 4 for Group Structure and Financial transparency as the company operates under a somewhat complex group structure. DERIVATION SUMMARY Raptor 2's best comparable is Navitas Midstream Midland Basin, LLC (B-/Negative). Both are operate in the Permian basin, although they operate in different sub-basins. Raptor 2's customer mix, on average, has a stronger credit quality than Navitas's, which, all things being equal, should enable Raptor 2's customers to have a better chance of financing their drilling plans in 2020 and 2021. Raptor 2's historic run-rate EBITDA has a higher percentage of fixed-fees contracts than Navitas. Raptor 2's expected 2020 FFO Fixed Charge Coverage is expected to be materially below Navitas's figure, while leverage for Raptor 2 is expected to be meaningfully above Navitas's. KEY ASSUMPTIONS -- West Texas Intermediate (WTI) crude oil and Henry Hub (HH) natural gas prices reflect the Fitch Price Deck. For WTI, that includes $38/bbl for 2020, and $45 in 2021. For HH, that includes $1.85/mcf in 2020, and $2.10/mcf in 2021. Ethane consistent with Henry Hub above, Natural Gasoline consistent with WTI above, Propane consistent with the one-year-out NYMEX forwards; -- Production volumes dip in 2020 then ramp up modestly through the remaining forecast period driven by increased production from its customers; No new acreage dedications or new producer customers assumed; -- Modest capital spending of roughly $25 million per year in forecast years (2020-2022) for additional well connects, new customer system integration/build out and system maintenance; -- Equity contributions from sponsors in support of growth capital spending; -- Dividends are not assumed in the model; -- Deleveraging is supported by term loan amortization (1% per annum); -- In its recovery analysis, Fitch utilized a going-concern approach with a 6x EBITDA multiple which is in line with recent reorganization multiples in the energy sector. There have been a limited number of bankruptcies and reorganizations within the midstream space but bankruptcies, Azure Midstream and Southcross Holdco, had multiples between 5x and 7x by Fitch's best estimates. In Fitch's bankruptcy case study report "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries" published in April 2019, the median enterprise valuation exit multiplies for 35 energy cases for which this was available was 6.1x, with a wide range of multiples observed; -- Fitch assumed a going concern EBITDA of roughly $70 million for Raptor 2. As per criteria, the going concern EBITDA continues to embed some, but not all, of the distress that caused the default in the first place. Guided by this requirement, Fitch assumed that on or after 2022 (Fitch WTI price deck price of $50/barrel) Raptor 2 customers require moderate their drilling activity in ways that increase profitability. At the previous recovery exercise (October 2019), Fitch used a going-concern EBITDA of $102 million. For debt, Fitch drew down all (standard) of the $50 million Super Senior Secured Revolving Credit Facility and assumed the term loan is at the 2019 year end level. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Leverage (TD/adjusted EBITDA) for 2021 below 6.8x could lead to a stabilization of the outlook. -- Should Raptor II/BCP Raptor II increase its size, scale, asset, geographic or business line diversity, with a focus on growing EBITDA above $300 million per year while maintaining leverage at or below 6.0x on a sustained basis Fitch would consider a positive rating action; -- Improved liquidity measures. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A negative rating action on EagleClaw. -- Flat to declining volumes reported across Raptor 2's acreage; -- Meaningful deterioration in customer credit quality or a significant event at a major customer that impairs cash flow; -- Leverage above 7.5x on a sustained basis; however, should volumes continue to underperform and leverage be expected to remain elevated Fitch would likely take a negative ratings action; -- FFO Fixed Charge Coverage below 1.5x on a sustained basis.; -- Capital spending inflation versus base case and management budget that pressures liquidity; -- Change in sponsor support as evidenced by a reluctance towards or reduction in the usage of equity contributions and retained cash flow funding for growth spending with funding instead coming from increased revolver borrowings or new incremental debt; -- A significant change in cash flow stability profile, driven by a move away from the current majority of revenue being fee based. If revenue commodity price exposure were to increase, Fitch would likely take a negative rating action. Fitch notes that Raptor 2's does have some percent of proceeds contracts, which subjects it to commodity price exposure. LIQUIDITY AND DEBT STRUCTURE Liquidity Supported by Sponsor: As of Dec. 31, 2019, Raptor 2's liquidity was roughly $38 million, consisting of about $8 million in cash and approximately $30 million of available capacity on its senior secured revolving credit facility. Liquidity is supported by Raptor 2's receipt of sponsor equity commitments for its growth capital spending in 2019 and through 2020. All of Raptor 2's discretionary capex needs are expected to be funded with internal cash flow and the equity commitment. Working capital needs are low and availability on the $50 million super senior revolver should provide enough liquidity to support any cash shortfalls. Maturities are manageable with the term loan maturity date in 2025 and the revolver maturing in 2023. A debt service coverage ratio (as defined) maintenance covenant of 1.1x, became effective June 30, 2019. At December 31, 2019, Raptor 2's was in compliance with all its covenants. Fitch anticipates Raptor 2's will remain in compliance with its covenants over the forecast period. The two sponsors have, on their own credit or the credit of affiliates who are not Raptor 2, caused banks to issue letters of credit in favor of the senior secured debt's collateral agent for an amount of approximately six months of expected interest and scheduled principal repayment. BCP RAPTOR: Fitch Lowers LT IDR to B-, Outlook Negative ------------------------------------------------------- Fitch Ratings has downgraded BCP Raptor, LLC's (doing business as EagleClaw Midstream Ventures) Long-Term Issuer Default Rating to 'B-' from 'B+'. Additionally, Fitch has downgraded BCP Raptor LLC's (EagleClaw) senior secured term loan to 'B-'/'RR4' from 'B+'/'RR4'. The Rating Outlook is Negative and Fitch as removed the ratings from Negative Watch The two-notch downgrades reflect both poor 2019 profitability and an equalization of ratings of EagleClaw to BCP Raptor II LLC's (Caprock). Simultaneous with the action, Caprock was downgraded on its Long-term IDR to 'B-' from 'B.' EagleClaw exceeded $35 million of 4Q19 EBITDA. Fitch had previously stated that a lower EBITDA could result in a negative rating action (the exceedance was 8%). Funds Flow From Operations (FFO) Fixed Charge Coverage for fiscal 2019 was 1.6x. Fitch had said that anything below the 2.0x level could result in a negative rating. The first notch of the two-notch downgrade is for the low FFO Fixed Charge Coverage metric. EagleClaw has until recently been underperforming Fitch forecasts. 4Q19 was, as mentioned, an outperformance. Fiscal 2019 adjusted EBITDA of $124 million was an over-run of a forecast for $118 million (5% outperformance). The forecast was made at a time when 1Q19 financial performance actuals were in hand, as well as volumes through 3Q19. A forecast made in April 2018 foresaw 2019 EBITDA of $174 million, against which the actual was underperformance by 29%. The EBITDA performance of the company, in aggregate leads Fitch to regard EagleClaw's system and territory in aggregate as possessing challenges to business planning and execution. EagleClaw has been operating since 2017 and in a U.S. producing basin (Permian) believed to be the best in the country. The second notch of the two-notch downgrade is done to equalize EagleClaw's IDR with its affiliate Caprock. In 2019 Caprock obtained cash from EagleClaw. The sum was not material to metrics, and Fitch regards these transactions as having a sensible underlying business purpose, yet regards the overall relationship as one warranting an equalization of the ratings at the lowest level of the two relatively equally sized entities. The rating actions occur in a context of certain members of OPEC+ effectively changing the policy of withholding production to maintain relatively stable oil prices. Cartel leader Saudi Arabia has adopted a pump-at-will policy. The pressure on existing policy was acute given the sharp decrease in global energy demand brought on by the coronavirus pandemic. The Negative Outlook reflects Fitch's concern that volumes could decline, which Fitch expects would result in weak leverage and coverage metrics. Fitch would seek to stabilize the Outlook should growth keep pace with or exceed Fitch's base case expectations, FFO Fixed Charge Coverage be trending towards 2.0x for 2021, and Caprock's Outlook also be in line for stabilization. KEY RATING DRIVERS Volume Growth Risks: Fitch's ratings work has long been predicated on expected growth in system volumes over the next several years for EagleClaw's operations. This represents, in Fitch's view, the biggest risk to the entity's credit profile. Volume growth up until recently on EagleClaw's system has been underperforming Fitch's prior expectations, negatively impacted by completion delays, weak commodity prices, and reduced development activities on EagleClaw dedicated acreage. More generally, within the Permian basin field constraints and capacity bottlenecks have led to slower than anticipated growth in volumes. For EagleClaw this has been offset somewhat by the addition of new dedications and the lengthening of dedication contract life. Since the end of February, however, a number of oil and gas companies have reduced planned development spending and tempered production expectations, making the path to significant yoy volume growth for EagleClaw unclear. Deleveraging Takes Longer: As a result of volume underperformance and the negative impacts of commodity prices, EagleClaw's leverage is expected by Fitch to increase in 2020. Fitch now expects leverage above 10.0x in 2020 as volumes decrease yoy across EagleClaw's dedicated acreage, before resuming an upward ramp in 2021. Sponsor Support: Fitch believes that EagleClaw benefits from supportive sponsors in Blackstone Capital Partners and I Squared Capital, which own EagleClaw's ultimate parent. The ratings consider that Blackstone and I Squared have provided significant additional equity commitments pledged to the company in support of growth capital and liquidity needs, including the Delaware Link project and capital associated with recent acquisitions and new customer additions. Fitch believes this additional equity commitment to be crucial in providing EagleClaw significant financial flexibility and alleviating concerns around EagleClaw's ability to meet its near-term financial commitments. Additionally, Blackstone owns exploration and production (E&P) companies operating in the region, Primexx Energy Partners and Jetta Operating Company, both of which have dedicated acreage to EagleClaw. This provides operational support to EagleClaw's gathering and processing system and good visibility into select producer's development plans and geologic performance. Scale: The combined dedicated acreage for EagleClaw (consolidated basis) and Caprock is approximately 650,000. On its own, EagleClaw is a modest-sized midstream services provider in the Permian region and while it is the largest private natural gas gathering and processing company in the Delaware basin, it is nevertheless smaller than certain competitors, and has limited business line diversity. EagleClaw focuses mainly on gas gathering, compression, and processing with roughly 780 MMcf/d of processing capacity at EagleClaw and additional 540 MMcf/d of processing capacity at its affiliate Caprock. EagleClaw also has expanded into crude gathering the acquisition of Pinnacle Midstream and holds significant/is expanding long-haul gas and NGL transportation capacity, further diversifying its midstream service offerings. Given its single basin focus, EagleClaw would be subject to event risk should there be some disruption in Permian region production. Concentration Concerns: EagleClaw is not reliant on a single counterparty for the majority of its volumes, though it does have concentrated customer exposure to Centennial Resource Development, Inc. (Centennial; NR), Concho Resources (BBB/Stable), and PDC Energy, Inc. (PDC; NR). EagleClaw has volumes and acreage dedications from a diverse set of producer customers operating within the Permian basin. Weighted average contract life is over 12 years and the contracts require any associated gas production from dedicated acreage to be gathered and processed by EagleClaw. Corporate Group Impacts: EagleClaw's IDR has been equalized with heretofore lower-rated Caprock. EagleClaw's financial results include transactions with its affiliate Caprock. For instance, in 2019 EagleClaw furnished Caprock with approximately $26 million in cash for the use of a Caprock interconnection and for delivering to EagleClaw natural gas. Given an array of shared services and the existence of several intercompany arrangements/frequent related party transactions, Fitch has set the two long-term IDRs of Caprock and EagleClaw at the same level, by bringing the rating of EagleClaw down to the level of Caprock. Liquidity: Refinancing risk remains an intermediate-term concern with the maturity of the EagleClaw term loan still several years out in mid-2024. That said, notching higher leverage levels in 2020, and then potentially being on a slow glide down in leverage is a concerning scenario. Coverage for interest payments and scheduled principal amortizations is forecasted by Fitch to be adequate. EagleClaw lenders do benefit from a reserve structure. In an extreme scenario, Fitch notes that the current capital markets point to the potential difficulty, from time to time, to obtain waivers or other forms of financial flexibility from bank groups. Group Structure Complexity: EagleClaw has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than publicly traded issuers. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Also, group structure considerations have elevated scope for given inter-family/related party transactions with affiliate companies. ESG - Governance: Centurion has a relevance score of 4 for Group Structure and Financial transparency as the company operates under a somewhat complex group structure. DERIVATION SUMMARY EagleClaw's best comparable is Navitas Midstream Midland Basin, LLC (Navitas; B-/Negative). Both companies have a portion of the business where they are paid in hydrocarbons. Both companies have similar customers average credit quality, and EagleClaw's customer mix shows more diversity than Navitas's. Fitch expects Navitas's leverage to be approximately 7.0x in 2020, lower than Fitch's expectation for EagleClaw. Both companies were pioneers in raising large syndicated loans, and so at this stage are almost midway through their loan's seven-year life. Both companies have about a remaining 10-year weighted average life on their acreage-dedication-based contracts, so contract-asset coverage is good. As the companies each continue to build out their systems, they become almost invulnerable to competition even after the dedications expire. Going forward, Fitch will factor into the rating each company's approaching maturities. In summary, the two companies have a similar features to their credit profile, with Navitas more strongly positioned at its rating because of metrics. KEY ASSUMPTIONS -- West Texas Intermediate (WTI) crude oil and Henry Hub (HH) natural gas prices reflect the Fitch Price Deck. For WTI, that includes $38/barrel (bbl) for 2020, increasing to $45/bbl in 2021. For HH, that includes $1.85/thousand cubic feet (mcf) in 2020, increasing to $2.10/mcf by 2021. Fitch notes that even after the completion of Gulf Coast Express Pipeline, the Waha-Henry Hub differential is very high. Fitch expects this to continue for the balance of 2020. Ethane consistent with Henry Hub above, Natural Gasoline consistent with WTI above, Propane consistent with the one-year-out NYMEX forwards; -- Production volumes dip in 2020 then ramp up modestly through the remaining forecast period driven by increased production from its customers; No new acreage dedications or new producer customers assumed; -- Capital spending funded by internal cash and continued equity contributions from sponsors; -- Delaware Link online in 2Q 2021; -- Dividends are not assumed in the model; -- Deleveraging is supported by term loan amortization (1% per annum); -- In its recovery analysis, Fitch utilized a going-concern approach with a 6x EBITDA multiple which is in line with recent reorganization multiples in the energy sector. There have been a limited number of bankruptcies and reorganizations within the midstream space but bankruptcies, Azure Midstream and Southcross Holdco, had multiples between 5x and 7x by Fitch's best estimates. In Fitch's bankruptcy case study report "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries" published in April 2019, the median enterprise valuation exit multiplies for 35 energy cases for which this was available was 6.1x, with a wide range of multiples observed; -- Fitch assumed a going concern EBITDA of approximately $100 million for EagleClaw. For debt, Fitch fully drew (standard) on the $100 million Super Senior Secured Revolver and assumed the term loan is at the 2019 year end level. In the last recovery exercise (October 2019), Fitch used an EBITDA level of $130 million. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Leverage (total debt/adjusted EBITDA) for 2021 approximately 6.5x could lead to a stabilization of the Outlook; -- A meaningful reduction in leverage to below 6.0x on a sustained basis could lead to an upgrade. -- Improved liquidity measures. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A negative rating action for Caprock -- Flat to declining volumes reported across EagleClaw's acreage; -- Meaningful deterioration in customer credit quality or a significant event at a major counterparty that impairs cash flow; -- Leverage above 7.5x on a sustained basis; however, should volumes continue to underperform and leverage be expected to remain elevated Fitch would likely take a negative ratings action; -- Significant cost overruns on expected growth capex or delays on major capital projects; -- Change in sponsor support as evidenced by a reluctance towards or reduction in the usage of equity contributions and retained cash flow funding for growth spending with funding instead coming from increased revolver borrowings or new incremental debt; -- A significant change in cash flow stability profile, driven by a move away from the current majority of revenue being fee based. If revenue commodity price exposure were to increase, Fitch would likely take a negative rating action. Fitch notes that EagleClaw does have some percent of proceeds contracts, which subjects it to commodity price exposure; -- FFO Fixed Charge Coverage below 1.5x on a sustained basis. LIQUIDITY AND DEBT STRUCTURE Liquidity Supported by Sponsors: EagleClaw's liquidity has been and continues to be supportive of planned growth of the combined Raptor system. EagleClaw owners, Blackstone and I Squared, in May 2019, approved future equity contributions of $378 million to fund the acquisition of Permian Gas from PDC and for growth capital projects including the Delaware Link project and a new gathering and processing agreement with a large, highly rated counterparty. As of Dec. 31, 2019, EagleClaw's liquidity was approximately $110 million, consisting of about $10 million in cash and $100 million of available capacity on its (undrawn) senior secured revolving credit facility. Maturities are manageable with the undrawn revolving credit facility maturing in May 2022. Covenants are manageable with a debt service coverage ratio maintenance covenant of 1.1x (as defined), EagleClaw is currently in compliance with this covenant and Fitch anticipates EagleClaw will remain in compliance with this covenant over the forecast period. A letter of credit in favor of the collateral agent for the account of an entity in the ownership chain for EagleClaw is sized to provide approximately six months of expected interest payments and scheduled principal repayments. BIOLASE INC: Incurs $17.9 Million Net Loss in 2019 -------------------------------------------------- BIOLASE, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $17.85 million on $37.80 million of net revenue for the year ended Dec. 31, 2019, compared to a net loss of $21.52 million on $46.15 million of net revenue for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $31.85 million in total assets, $27.50 million in total liabilities, $3.96 million in total redeemable preferred stock, and $377,000 in total stockholders' equity. BDO USA, LLP, in Costa Mesa, California, the Company's auditor since 2005, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has suffered recurring losses from operations, has negative cash flows from operations and has uncertainties regarding the Company's ability to meet its debt covenants and service its debt. These factors, among others, raise substantial doubt about its ability to continue as a going concern. BIOLASE said, "2019 was a year of continued transformation for us, positioning ourselves to further execute on our strategic goals of returning BIOLASE to a successful growing company and continuing as the clear worldwide industry leader in the dental laser segment. Although we made improvements throughout the year, it will take time for the financial statements to reflect the changes and as such, for the three years ended December 31, 2019 we have reported recurring losses from operations and have not generated cash from operations. Our level of cash used in operations, the potential need for additional capital, and the uncertainties surrounding our ability to raise additional capital or to service our existing debt, raise substantial doubt about our ability to continue as a going concern. As a result, the opinion we have received from our independent registered public accounting firm, on our consolidated financial statements, contains an explanatory paragraph stating that there is a substantial doubt regarding our ability to continue as a going concern." At Dec. 31, 2019, the Company had approximately $6.1 million in cash and cash equivalents, including restricted cash equivalents. Management defines cash and cash equivalents as highly liquid deposits with original maturities of 90 days or less when purchased. The decrease in the Company's cash and cash equivalents by $2.3 million from Dec. 31, 2018 was primarily due to cash used in operating and investing activities of $12.8 million and $0.2 million, respectively, and the effect of exchange rates on cash of $0.1 million, partially offset by cash provided by financing activities of $10.6 million. The $12.8 million of net cash used in operating activities in 2019 was primarily driven by its net loss of $17.9 million during the year. The Company added, "As a result of reduced sales due to the COVID-19 pandemic and actions taken to contain it, cash generated from our operations during the first quarter of 2020 will be less than we anticipated. Moreover, there is no assurance that sales will return to normal levels during the second quarter of 2020 or at any time thereafter. As of the date of the filing of this annual report on Form 10-K, management is evaluating all options to conserve cash and to obtain additional debt or equity financing and/or enter into a collaborative arrangement or sale of assets, to permit the Company to continue operations." A full-text copy of the Form 10-K is available for free at: https://is.gd/cHXFm5 About BIOLASE BIOLASE is a medical device company that develops, manufactures, markets, and sells laser systems in dentistry and medicine. BIOLASE's products advance the practice of dentistry and medicine for patients and healthcare professionals. BIOLASE's proprietary laser products incorporate approximately patented 208 and 56 patent-pending technologies designed to provide biologically clinically superior performance with less pain and faster recovery times. BIOLASE's innovative products provide cutting-edge technology at competitive prices to deliver superior results for dentists and patients. BIOLASE's principal products are revolutionary dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications, and a full line of dental imaging equipment. BIOLASE has sold over 41,000 laser systems to date in over 80 countries around the world. Laser products under development address BIOLASE's core dental market and other adjacent medical and consumer applications. BIOSTAGE INC: Incurs $8.33 Million Net Loss in 2019 --------------------------------------------------- Biostage, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $8.33 million on $0 of revenues for the year ended Dec. 31, 2019, compared to a net loss of $7.53 million on $0 of revenues for the year ended Dec. 31, 2018. The $0.8 million year-over-year increase in net loss was due primarily to a $0.9 million increase in research and development costs and a $0.1 million increase in general and administrative expenses, offset in part by a $0.1 million net decrease in expense from change in the fair value of warrants. In addition, the Company recognized grant income for qualified expenditures from the SBIR grant of $473,000 for the year ended Dec. 31, 2019 compared to $401,000 for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.99 million in total assets, $903,000 in total liabilities, and $1.09 million in total stockholders' equity. RSM US LLP, in Boston, Massachusetts, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has suffered recurring losses from operations, has an accumulated deficit, uses cash flows in operations, and will require additional financing to continue to fund operations. This raises substantial doubt about the Company's ability to continue as a going concern. Operating Highlights On Oct. 30, 2019 Biostage announced the submission of its Investigational New Drug (IND) application to the FDA for the Company's lead product candidate, the CEI, to treat patients with end-stage esophageal disease, absent of cancer, in adults that require a segmental surgical resection to repair the diseased tissue. On March 24, 2020 the Company received a notification from the FDA which notified the Company that the clinical hold on its CEI study was removed and the Company may proceed with its study for its CEI. This FDA approval enables the Company to start its transition to a clinical-stage biotechnology company, and start clinical planning, including engaging with a clinical research organization and site readiness in advance of starting the clinical trial for its CEI product candidate. Summary of Financial Results For the three months ended Dec. 31, 2019, the Company reported a net loss of $1.6 million, ($0.21 per share), compared to a net loss of $1.8 million, ($0.32 per share), for the three months ended Dec. 31, 2018. The $0.2 million year-over-year decrease in net loss was due primarily to a $0.3 million decrease in research and development costs and a $0.1 decrease in general and administrative expenses, offset in part by a $0.2 million decrease in grant income for qualified expenditures from our SBIR grant. Balance Sheet and Cash At Dec. 31, 2019, the Company had operating cash on-hand of $0.9 million and no debt. The Company used net cash in operations of $6.1 million during the year ended Dec. 31, 2019. During the year ended Dec. 31, 2019, the Company received $5.8 million from financing activities, including approximately $1.8 million from the issuance of approximately 488,000 shares of common stock and warrants to investors in private placement transactions, and approximately $4.0 million from the issuance of 1,994,000 shares of its common stock to a group of investors in connection with the exercise of previously issued warrants. Subsequent to the end of the year, the Company received approximately $0.6 million from the issuance of 151,027 shares of common stock and warrants to investors in private placement transactions. The Company also received approximately $0.4 million from the issuance of 214,000 shares of common stock to a group of investors in exchange for the exercise of previously issued warrants. A full-text copy of the Form 10-K is available for free at: https://is.gd/E3iWk7 About Biostage Inc. Headquartered in Holliston, Massachusetts, Biostage -- http://www.biostage.com/-- is a bioengineering company that is developing next-generation esophageal implants. The Company's Cellspan technology combines a proprietary, biocompatible scaffold with a patient's own cells to create an esophageal implant that could potentially be used to treat pediatric esophageal atresia and other conditions that affect the esophagus. The Company's esophageal implant leverages the body's inherent capacity to heal itself as it is a "living tube" that facilitates regeneration of esophageal tissue and triggers a positive host response resulting in a tissue-engineered neo-conduit that restores continuity of the esophagus. These implants have the potential to dramatically improve the quality of life for children and adults. BLACKSTONE MORTGAGE: S&P Lowers ICR to 'B+', Outlook Negative ------------------------------------------------------------- S&P Global Ratings said it lowered its long-term issuer credit rating on Blackstone Mortgage Trust (BXMT) to 'B+' from 'BB-'. The outlook is negative. At the same time, S&P lowered its issue rating on the company's term loan B to 'B+' from 'BB-'. "The downgrade is based on our assumption that transitional commercial real estate lenders that rely on repurchase facilities are facing increased funding risk. We believe that, in the event of material credit deterioration, BXMT could see material erosion in earnings and liquidity. The company's use of repurchase facilities also makes it likely that, if credit were to deteriorate, there could be margin calls that erode the company's liquidity. Other potential strains on liquidity include $3.9 billion of unfunded loan commitments, though the company would primarily use these to fund loans relating to construction and development of real estate-related assets over time," S&P said. The negative outlook on BXMT reflects the company's exposure to margin calls from its repurchase facilities over the next 12 months in an environment where S&P expects there to be significant deterioration in the credit quality of the company's asset portfolio. The rating agency expects BXMT will operate with debt to adjusted total equity between 2.75x to 3.25x. "We could lower the rating on BXMT over the next 12 months if the company's liquidity is depleted through margin calls or if the company's profitability is significantly eroded through increased provisions for loan losses. We could also lower the rating if leverage materially increases," S&P said. "We could revise our outlook on BXMT to stable over the next 12 months if the macroeconomic environment improves, the company's liquidity remains adequate in our view, asset quality is relatively stable, and leverage is within our expectations," the rating agency said. BLOX INC: Plans to Appeal Withdrawal of Exploration License ----------------------------------------------------------- Blox, Inc., provided an update regarding the status of the Mansounia Gold Project. Previously, in its Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on Feb. 20, 2020, the company announced that, on Feb. 17, 2020, it received notice from the Ministry of Mines and Geology (Republic of Guinee) withdrawing its exploration license for the Mansounia concession, leaving the status of its mining license application unknown. The company has since confirmed that its mining license application cannot proceed without a valid exploration license, and that it is ineligible to re-apply for an exploration license due to the expiration of its previous license. At March 26, 2020, the company continues to gather due diligence regarding the decision of the Ministry of Mines to withhold a mining license. Management is investigating all avenues to appeal the Ministry's decision and exploring potential joint-ventures with local partners in an effort to re-assert its interests in the property. About Blox Headquartered in New York, Blox, Inc. is primarily engaged in developing mineral exploration projects in Guinea, West Africa. Blox reported a net loss of $11.61 million for the year ended March 31, 2019, compared to a net loss of $1.49 million for the year ended March 31, 2018. As of Dec. 31, 2019, the Company had $1.13 million in total assets, $764,844 in total liabilities, and $364,542 in total stockholders' equity. Morgan & Company LLP, in Vancouver, Canada, the Company's auditor since 2013, issued a "going concern" qualification in its report dated June 27, 2019, citing that the Company incurred losses from operations since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfill its operating activities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. BLUE EAGLE: Hires Keller Williams as Real Estate Broker ------------------------------------------------------- Blue Eagle Farming, LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Alabama to employ Keller Williams Realty, as real estate broker to the Debtors. Blue Eagle requires Keller Williams to market and sell the Debtors' real property located at 0 Posey Lane, Blountsville, Blount, AL 35031. Keller Williams will be paid a commission of 6% of the sales price. Charlotte Denney, partner of Keller Williams Realty, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Keller Williams can be reached at: Charlotte Denney KELLER WILLIAMS REALTY 307 Commercial St. SE Hanceville, Alabama 35077 About Blue Eagle Farming Blue Eagle Farming and H J Farming are engaged in the business of cattle ranching and farming. Blue Smash Investments operates in the financial investment industry; War-Horse Properties manages companies and enterprises; Eagle Ray Investments and Forse Investments are lessors of real estate while Armor Light, LLC, is engaged in the business of residential building construction. Blue Eagle Farming, LLC, and its affiliate H J Farming, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case Nos. 18-02395 and 18-02397) on June 8, 2018. On June 9, 2018, five Blue Eagle affiliates filed Chapter 11 petitions: Blue Smash Investments LLC, Eagle Ray Investments LLC, Forse Investments LLC, Armor Light LLC, and War-Horse Properties, LLLP (Bankr. N.D. Ala. Case Nos. 18-81707 to 18-81711). The cases are jointly administered under Case No. 18-02395. In the petitions signed by Robert Bradford Johnson, general partner of Blue Eagle Farming, LLC's sole owner, Blue Eagle was estimated to have $1 million to $10 million in assets and $100 million to $500 million in liabilities as of the bankruptcy filing. Judge Tamara O. Mitchell oversees the cases. Burr & Forman LLP is the Debtors' legal counsel. BLUESTEM BRANDS: Hires Kirkland & Ellis as Counsel -------------------------------------------------- Bluestem Brands, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP and Kirkland & Ellis International LLP, as attorney to the Debtors. Bluestem Brands requires Kirkland & Ellis to: a. advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; b. advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; c. attend meetings and negotiating 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 the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; e. prepare pleadings in connection with these chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f. represent the Debtors in connection with obtaining authority to continue using cash collateral and postpetition financing; g. advise the Debtors in connection with any potential sale of assets; h. appear before the Court and any appellate courts to represent the interests of the Debtors' estates; i. advise the Debtors regarding tax matters; j. take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; and k. perform all other necessary legal services for the Debtors in connection with the prosecution of these chapter 11 cases, including: (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. Kirkland & Ellis will be paid at these hourly rates: Partners $1,075 to $1,845 Of Counsel $625 to $1,845 Associates $610 to $1,165 Paraprofessionals $245 to $460 On February 26, 2020, the Debtors paid Kirkland & Ellis $500,000 as advance retainer. Subsequently, the Debtors paid Kirkland & Ellis additional advance payment retainer totaling $1,100,000 in the aggregate. Kirkland & Ellis will also be reimbursed for reasonable out-of-pocket expenses incurred. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the following is provided in response to the request for additional information: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Kirkland & Ellis represented the Debtors during the five-month period before the Petition Date, using the hourly rates listed above. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Yes, for the period from March 9, 2020 through May 31, 2020. Patrick J. Nash, Jr., president of Patrick J. Nash, Jr., P.C., a partner of the law firm of Kirkland & Ellis LLP, and Kirkland & Ellis International, LLP, 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. Kirkland & Ellis can be reached at: Patrick J. Nash, Jr., Esq. Patrick J. Nash, Jr., P.C. KIRKLAND & ELLIS LLP, AND KIRKLAND & ELLIS INTERNATIONAL, LLP Tel: (312) 862-2000 Fax: (312) 862-2200 E-mail: Patrick.nash@kirkland.com About Bluestem Brands, Inc. Bluestem Brands, Inc. and its affiliates are a direct-to-consumer retailer that offers fashion, home, and entertainment merchandise through internet, direct mail, and telephonic channels under the Orchard and Northstar brand portfolios. Headquartered in Eden Prairie, Minnesota, the Debtors employ approximately 2,200 individuals and own and/or lease warehouses, distribution centers, and call centers in 10 other states, including New Jersey, Massachusetts, Georgia, and California. The Debtors' supply chain consists of name-brand vendors -- e.g., Michael Kors, Samsung, Keurig, Dyson -- as well as private label and non-branded sources based in the United States and abroad. For more information, visit https://www.bluestem.com/ Bluestem Brands, Inc., based in Eden Prairie, MN, and its debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10566) on March 9, 2020. In its petition, Bluestem Brands was estimated to have $500 million to $1 billion in both assets and liabilities. The petition was signed by Neil P. Ayotte, executive vice president, general counsel and secretary. The Hon. Mary F. Walrath oversees the case. YOUNG CONAWAY STARGATT & TAYLOR, LLP, and KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP as counsels; FTI CONSULTING, INC., as financial advisor; RAYMOND JAMES & ASSOCIATES, INC., as investment banker; IMPERIAL CAPITAL LLC, as restructuring advisor; and PRIME CLERK LLC as claims and noticing agent. BLUESTEM BRANDS: Hires Raymond James as Investment Banker --------------------------------------------------------- Bluestem Brands, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Raymond James & Associates, Inc., as investment banker to the Debtors. Bluestem Brands requires Raymond James to: a. assist the Debtors in reviewing and analyzing the Debtors' business, operations, properties, financial condition and Interested Parties; b. assist the Debtors in evaluating the Debtors' debt capacity, advise the Debtors generally as to available financing and assist in the determination of an appropriate capital structure; c. assist the Debtors in evaluating potential Transaction alternatives and strategies; d. assist the Debtors in preparing documentation within Raymond James's area of expertise that is required in connection with a Transaction; e. assist the Debtors in identifying Interested Parties regarding one or more particular Transactions; f. on behalf of the Debtors and with the Debtors' prior written consent, contact Interested Parties which Raymond James, after consultation with the Debtors' management, believes meet certain industry, financial, and strategic criteria and assist the Debtors in negotiating and structuring a Transaction; g. advise the Debtors as to potential Business Combination Transactions; h. advise the Debtors on tactics and strategies for negotiating with Stakeholders; i. notwithstanding anything in this Application, assist the Debtors with a Financing Transaction only if requested in writing; j. advise the Debtors on the timing, nature and terms of any new securities, other considerations or other inducements to be offered to their Stakeholders in connection with any Restructuring Transaction; and k. participate in the Debtors' board of directors meetings as determined by the Debtors to be appropriate, and, upon request, provide periodic status reports and advice to the board with respect to matters falling within the scope of Raymond James' retention. Raymond James will be paid as follows: a. Business Combination Transaction Fee. If any Business Combination Transaction closes, the Debtors shall pay Raymond James immediately and directly out of the proceeds at the closing, as a cost of such Transaction, a cash transaction fee (the "Business Combination Transaction Fee") equal to the greater of (1) $1,500,000 and (2) the sum of (x) 0.75% of the Transaction Value up to and including $500,000,000 plus (y) 1% of the Transaction Value above $500,000,000. Notwithstanding the foregoing, if the consummation of a Floor Bid Lender Transaction qualifies as a Business Combination Transaction, the Business Combination Transaction Fee shall be $1,500,000. b. Monthly Advisory Fee and Database Expense Amount. In accordance with the Engagement Letter, the Debtors paid Raymond James a Monthly Advisory Fee of $150,000 on March 6, 2020 and will pay the Advisory Fee on the first business day of each month thereafter during the term of the engagement. The first four Monthly Advisory Fees, if they are paid to Raymond James, shall be fully credited against, and reduce, any Transaction Fee payable under the Engagement Letter, and any Monthly Advisory Fees after the first four such fees will be credited 50% against any Transaction Fee. Raymond James has agreed to waive the flat expense charge of $1,000 for Raymond James's access to electronic financial databases pertinent to this engagement. c. Financing Transaction Fee. If the Debtors request in writing that Raymond James execute a Financing Transaction, the Debtors shall pay Raymond James immediately and directly out of the proceeds of the placement, at closing, of each Financing Transaction as a cost of sale of each Financing Transaction, a cash transaction fee (the "Financing Transaction Fee") equal to 2% of the Proceeds of all first lien senior secured notes, bank debt, and second lien or junior debt capital raised. Provided, however, that to the extent the Financing Transaction includes an uncommitted accordion or similar credit feature, the Financing Transaction Fee for such accordion or similar feature shall be payable upon the commitment of such credit facility or its funding irrespective of the date of such commitment or funding. Notwithstanding the foregoing, in no event shall a Financing Transaction Fee be earned or payable if (1) the Debtors enters into a debtor in possession financing arrangement with a lender group consisting primarily of any of its prepetition secured lenders or their respective affiliates and (2) Raymond James has not worked on any debtor in possession financing arrangement. d. Restructuring Transaction Fee. In conjunction with any Restructuring Transaction, the Debtors shall pay Raymond James a cash transaction fee of $2,000,000 (the "Restructuring Transaction Fee"). The Debtors shall pay the Restructuring Transaction Fee, as a cost of the Restructuring Transaction to Raymond James upon the earlier of (i) the closing of each Restructuring Transaction or (ii) the date on which any amendment to or other changes in the instruments or terms pursuant to which any Existing Obligations were issued or entered into became effective. Notwithstanding the foregoing, if the consummation of a Floor Bid Lender Transaction qualifies as a Restructuring Transaction, the Restructuring Transaction Fee shall be $1,500,000. Geoffrey Richards, managing director of Raymond James & Associates, Inc., 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. Raymond James can be reached at: Geoffrey Richards RAYMOND JAMES & ASSOCIATES, INC. 880 Carillon Parkway St. Petersburg, FL 33716 Tel: (727) 567-1000 E-mail: tom.donegan@raymondjames.com About Bluestem Brands Bluestem Brands, Inc. and its affiliates are a direct-to-consumer retailer that offers fashion, home, and entertainment merchandise through internet, direct mail, and telephonic channels under the Orchard and Northstar brand portfolios. Headquartered in Eden Prairie, Minnesota, the Debtors employ approximately 2,200 individuals and own and/or lease warehouses, distribution centers, and call centers in 10 other states, including New Jersey, Massachusetts, Georgia, and California. The Debtors' supply chain consists of name-brand vendors -- e.g., Michael Kors, Samsung, Keurig, Dyson -- as well as private label and non-branded sources based in the United States and abroad. For more information, visit https://www.bluestem.com/ Bluestem Brands, Inc., based in Eden Prairie, MN, and its debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10566) on March 9, 2020. In its petition, Bluestem Brands was estimated to have $500 million to $1 billion in both assets and liabilities. The petition was signed by Neil P. Ayotte, executive vice president, general counsel and secretary. The Hon. Mary F. Walrath oversees the case. YOUNG CONAWAY STARGATT & TAYLOR, LLP, and KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP as counsels; FTI CONSULTING, INC., as financial advisor; RAYMOND JAMES & ASSOCIATES, INC., as investment banker; IMPERIAL CAPITAL LLC, as restructuring advisor; and PRIME CLERK LLC as claims and noticing agent. BOMBARDIER INC: Fitch Lowers LT Issuer Default Rating to CCC ------------------------------------------------------------ Fitch Ratings has downgraded Bombardier Inc.'s (BBD) Long-Term Issuer Default Rating (IDR) to 'CCC' from 'CCC+' and senior unsecured debt ratings to 'CCC+'/'RR3' from 'B-'/'RR3'. The ratings have been removed from Rating Watch Positive (RWP). The action takes into account the developing impact of the coronavirus pandemic on the company's operations, which led it to suspend production at its Canadian aircraft and rail divisions. KEY RATING DRIVERS Disruption from the Coronavirus: Fitch believes BBD's suspension of production could lead to lower revenue in the near term and another year of negative FCF despite the company's actions to adjust its cost structure. In addition, market disruption caused by the coronavirus creates some uncertainty about completing pending divestitures although they are still planned. Fitch placed BBD's ratings on RWP in February 2020 to recognize the expected improvement in BBD's credit profile, including lower leverage, upon completion of these transactions. However, the impact of the coronavirus on BBD's markets and operations will make it more difficult to achieve better results at the Aviation segment and to generate higher margins and positive FCF. These improvements could still occur but the pace of improvement has become more sensitive to economic conditions. Business Jet Market: The use of aircraft is being significantly curtailed by risks surrounding the coronavirus. It is unknown how quickly the business jet market will return to normal conditions and how flying behavior may be affected over the long term. Although BBD has a strong position in the business jet market, the company's diversification will be lower after it disposes of the transportation business. Negative FCF Concerns Mitigated by Asset Sales: BBD's ratings incorporate BBD's high leverage and negative FCF, which appears unlikely to improve as materially in 2020 as originally expected due to the coronavirus. This concern is reduced in the near term by the use of funds from asset sales to pay down debt and by anticipated margin growth over time in the Aviation segment. The positive impact on leverage will be partly offset by BBD's reduced earnings and cash flow over the long term following the divestitures. Liquidity Adequate Near Term: Fitch believes BBD's liquidity will be sufficient at least through 2020. Liquidity will be supported by more than $5 billion of cash from pending asset sales in 2020 and 2021, as well as the sale of BBD's interest in the A220 program earlier this year. BBD does not have meaningful debt maturities until May and December of 2021. Apart from debt, BBD has funding requirements for pension liabilities and certain retained liabilities related to the sale of the regional jet program. DERIVATION SUMMARY Rating Derivation Summary: BBD's operating profile includes well-established positions in its aerospace and transportation markets. There is significant competition in these markets and several competitors are larger, better capitalized or generate higher margins, putting BBD at a disadvantage with respect to funding future new programs in business jets and supporting working capital at BT. Alstom's agreement to acquire BT is consistent with expected consolidation in the rail equipment sector. In business jets, BBD generates lower revenue and margins than Gulfstream, a subsidiary of General Dynamics Corporation, although margins are benefiting from an updated product line and BBD's increased focus on business jets and aftermarket revenue. BBD's credit profile is weaker than most of its peers due to significant previous investment in developing the A220, which contributed to high leverage and negative FCF. KEY ASSUMPTIONS -- FCF in 2020 is negative compared to a return to positive FCF as originally anticipated; -- Margins at BT through 2020 are low as it completes challenged legacy projects; -- BBD completes pending divestitures; -- Production will be slowed by the impact of the coronavirus, but a solid backlog for the Global 7500 should support a return to higher production when conditions stabilize; -- Aviation margins improve over the long term due to cost efficiencies associated with a refreshed product line and a focus on aftermarket revenue. -- Capex declines following ongoing divestitures and the wind-down of development spending in Aviation. Recovery Analysis: -- The analysis for BBD reflects Fitch's expectation that the enterprise value of the company, and recovery rates for creditors, would be maximized as a going concern rather than through liquidation. Fitch has assumed a 10% administrative claim and a concession allocation of 5%. Fitch expects an inability to refinance debt, combined with reduced end market demand, pushes the company into distress in 2021. -- Going-concern EBITDA includes the business jet and retained aerostructures business. Going-concern EBITDA of approximately $605 million represents Fitch's conservatively estimated stabilize level for sustainable post-restructuring EBITDA and incorporates improvements to underlying operating performance. This figure does not include an estimate for the commercial aircraft business or BT which are being divested. -- An EBITDA multiple of 6.0x is used to calculate a post-reorganization valuation, below the 6.7x median for the industrial and manufacturing sector and above the 5.5x average for the small subset of A&D companies. The multiple incorporates a competitive environment and cyclicality and event risk in the aerospace sector. -- In a distress scenario, Fitch assumes BT is either sold outright, or separated from BBD and excluded from bankruptcy as BT is relatively independent of BBD's Aviation business. Fitch uses a value of $3.5 billion for BBD's 70% interest in BT based on Caisse de depot et placement du Quebec's purchase of a 30% interest for $1.5 billion in 2016. The value is reduced by 30% to reflect execution risk and uncertainty about the long term impact of industry consolidation. BT is more consistently profitable and has lower leverage than the rest of BBD; however, BT makes substantial use of sales of receivables on a non-recourse basis. -- The recovery model produces a Recovery Rating of 'RR3' for unsecured debt, reflecting good recovery prospects (51%-70%) in a distress scenario. The 'RR6' for preferred stock reflects a low priority position relative to BBD's debt. RATING SENSITIVITIES Developments that may, individually or collectively, lead to a negative rating action include: -- YE cash balances decline below $2 billion before there is a clear path to reach positive FCF; -- FCF does not reach break-even in 2021; -- BBD's suspension of non-essential work at most of its Canadian facilities extends significantly beyond the end of April; -- FFO fixed-charge coverage is below 1x; -- The pending sales of BT, aerostructures assets and regional jet business are not completed as planned; Developments that may, individually or collectively, lead to a positive rating action include: -- The impact of the coronavirus pandemic is resolved without a significant long term impact to the business jet market; -- Annual FCF is positive; -- Consistently lower leverage, including debt/EBITDA below 6.0x. LIQUIDITY AND DEBT STRUCTURE BBD's liquidity at Dec. 31, 2019 included cash of $2.6 billion plus $1.3 billion of availability under BT's EUR1.154 billion revolver that matures in 2022. BT has access to a EUR75 million uncommitted short-term revolver. BT also has a letter of credit (LC) facility used to support performance risk and secure advance payments from customers. As of Dec. 31, 2019, covenants in BT's bank facilities included minimum liquidity, minimum equity, and a maximum debt/EBITDA ratio, all calculated for BT on a stand-alone basis. Minimum required liquidity at the end of each quarter was EUR750 million. BBD does not publicly disclose required levels for other covenants. Financial covenants were all met as of Dec. 31, 2019. BBD has other facilities including bilateral agreements and bilateral facilities with insurance companies. BT has arrangements under which it receives amounts from third-party advance providers in exchange for rights to customer payments, and it sells certain receivables on a non-recourse basis. BBD's long-term debt totaled $9.3 billion at Dec. 31, 2019. Scheduled maturities during the next three years include approximately $1.5 billion due in 2021 (EUR414 million in May; USD1.018 billion in December) and $1.7 billion due in 2022. BBD's net pension obligation at Dec. 31, 2019 was nearly $2 billion (79% funded) including unfunded plans. Funded plans were 86% funded. BBD plans to contribute $276 million in 2020 including $47 million at the aerostructures businesses. BBD's debt at Dec. 31, 2019 as calculated by Fitch totaled approximately $11.7 billion. This amount includes approximately $2.1 billion of contract balances and receivables sold under BT's arrangements described, and amounts due under extended payment terms. ESG CONSIDERATIONS ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). CALCEUS ACQUISITION: Moody's Alters Outlook on B1 CFR to Negative ----------------------------------------------------------------- Moody's Investors Service changed Calceus Acquisition, Inc.'s ratings outlook to negative from stable. Concurrently, Moody's affirmed the company's B1 corporate family rating, B1-PD probability of default rating (PDR), and B1 senior secured term loan rating. The change in outlook to negative from stable reflects the risk that credit metrics could weaken for a prolonged period as a result of lower discretionary consumer spending and high promotional activity in the apparel and footwear sector as a result of the COVID-19 outbreak. The negative outlook also reflects the risk that liquidity will decline more than anticipated as a result of an extended period of store closures or weaker than expected earnings. Moody's projects a significant decline in revenues and EBITDA in calendar year 2020 including the impact of temporary store closures, followed by a moderate recovery in 2021. Moody's views Cole Haan's liquidity as adequate and believes the company can withstand a short period of store closures at its operated stores and retail partners and significant promotional activity. Cole Haan had $11 million of cash and full availability under its $115 million asset-based revolving credit facility as of November 30, 2019. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Cole Haan's credit profile, including its exposure to discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Cole Haan remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Cole Haan of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Downgrades: Issuer: Calceus Acquisition, Inc. Corporate family rating, affirmed B1 Probability of default rating, affirmed B1-PD $290 million senior secured term loan, affirmed B1 (LGD4) Outlook, changed to negative from stable RATINGS RATIONALE Cole Haan's B1 CFR reflects its high leverage and exposure to discretionary consumer spending as a premium price point retailer. While Moody's expects that temporary closures at its stores and retail partner locations will result in sharp earnings declines in Q4 FY 2020, followed by continued but decelerating declines through Q2 FY 2021, Cole Haan's strong momentum prior to the COVID-19 outbreak will likely position it better than other apparel and footwear companies in an economic downturn. Moody's expects EBITDA to decline by 40-60% in FYE May 2020 from the LTM period ended November 30, 2019. As a result, Moody's projects that debt/EBITDA will increase to about 4.8 times from 3.3 times (as of November 30, 2019) and EBITA/interest expense will decline to about 1.1 times from 2.8 times. Credit metrics should improve modestly in FYE May 2021, as the company anniversaries sharp Q4 FY 2020 declines but is impacted by lower demand in the first half. Cole Haan's relatively small scale and operations in the highly competitive footwear market also constrain the rating. In addition, the rating incorporates financial strategy risk associated with private equity ownership. As a mono-brand premium retailer, Cole Haan is also exposed to changes in fashion trends and consumers' brand perception. Continued reinvestment in product design, marketing and infrastructure, as well as social factors including responsible sourcing and robust data protection, are necessary to sustain brand value. Nevertheless, the rating is supported by Cole Haan's strong product and digital execution, well-recognized brand and diverse distribution channels, including a sizeable digital business. While the ongoing 'athleisure' fashion trend has been a significant driver of the company's growth, Cole Haan offers a broad range of styles that can adapt to changing trends. The ratings are also supported by the company's adequate liquidity. The ratings could be downgraded if earnings or liquidity deteriorate, if product weakness or operational execution hurt revenue or the brand, or if leverage increases including as a result of debt-financed dividend distributions or acquisitions. Quantitatively, the ratings could be downgraded if debt/EBITDA is sustained above 4.0 times and EBITA/interest expense declines below 2.25 times. The ratings could be upgraded if the company materially reduces private equity ownership and demonstrates a commitment to a more conservative financial policy. An upgrade would also require increased scale and diversification, while maintaining solid revenue and earnings growth and very good liquidity. Quantitatively, the ratings could be upgraded if Moody's-adjusted debt/EBITDA is maintained under 3 times and EBITA/interest expense approaches 3 times. The principal methodology used in these ratings was Retail Industry published in May 2018. Headquartered in Greenland, NH, Cole Haan is a designer and retailer of men's and women's footwear, handbags, and accessories. Net revenues for twelve months ended 30 November 2019 were approximately $738 million. Apax Partners and the company's management team acquired the company from NIKE Inc. in early 2013. CARBO CERAMICS: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: CARBO Ceramics Inc. 575 N. Dairy Ashford Road Suite 300 Houston, TX 77079 Business Description: CARBO Ceramics Inc. -- https://carboceramics.com -- is a global technology company providing products and services to the oil and gas, industrial, and environmental markets. CARBO offers oilfield ceramic technology products, base ceramic proppant, and frac sand proppant for use in the hydraulic fracturing of oil and natural gas wells. Asset Guard Products Inc., a subsidiary of CARBO, offers products intended to protect operators' assets, minimize environmental risks, and lower lease operating expenses through spill prevention, containment, and countermeasure systems for the oil and gas industry. StrataGen, Inc., a subsidiary of CARBO, offers fracture consulting and data services and provides a suite of stimulation software solutions used for designing fracture treatments and for on-site real-time analysis to assist E&P companies in the efficient completion of wells and enhancement of oil and natural gas production. Chapter 11 Petition Date: March 29, 2020 Court: United States Bankruptcy Court Southern District of Texas Three affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- CARBO Ceramics Inc. (Lead Case) 20-31973 ASSETGUARD Products Inc. 20-31974 StrataGen, Inc. 20-31975 Judge: Hon. Marvin Isgur Debtors' General Bankruptcy Counsel: Paul E. Heath, Esq. Matthew W. Moran, Esq. Garrick C. Smith, Esq. Matthew D. Struble, Esq. Trammell Crow Center VINSON & ELKINS LLP 2001 Ross Avenue, Suite 3900 Dallas, TX 75201 Tel: 214.220.7700 Fax: 214.999.7787 Email: pheath@velaw.com; mmoran@velaw.com; gsmith@velaw.com; mstruble@velaw.com - and - David S. Meyer, Esq. Michael A. Garza, Esq. The Grace Building 1114 Avenue of the Americas New York, NY 10036-7708 Tel: 212.237.0000 Fax: 212.237.0100 Email: dmeyer@velaw.com; mgarza@velaw.com Debtors' Special Bankruptcy Counsel: OKIN ADAMS LLP Debtors' Investment Banker: PERELLA WEINBERG PARTNERS L.P. - AND - TUDOR PICKERING, HOLT & CO. Debtors' Financial Advisor: FTI CONSULTING, INC. Debtors' Accountants & Tax Advisors: ERNST & YOUNG LLP - AND - KPMG LLP - AND - WEAVER AND TIDWELL, L.L.P. Debtors' Notice & Claims Agent: PRIME CLERK LLC https://dm.epiq11.com/case/crc/info Total Assets as of December 31, 2019: $145 million Total Debts as of December 31, 2019: $145 million The petitions were signed by Ernesto Bautista III, vice president & chief financial officer. A copy of CARBO Ceramics' petition is available for free at PacerMonitor.com at: https://is.gd/i7luay Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Midwest Proppant, LLC Trade Debt $820,120 555 E. Outer 21 Rd Arnold, MO 63010 Contact: Mike Harman Tel: 636-287-1848 Email: mike@mw-prop.com 2. Greenbrier Management Trade Debt $664,391 Services c/o Green Union Trust 445 South Figueroa Street Ste 401 Los Angeles, CA 90071 Contact: John Lawrence Tel: 503-670-3193 Email: john.lawrence@gbrx.com 3. Well Site Supply, Inc. Trade Debt $362,984 Attn: W. Trent Elliott, Pres. 180 Blue Knob Road Marietta, OH 42750 Contact: Trent Elliot Tel: 740-236-0306 Email: telliot@wellsitessupply.com 4. Greenbrier Management Trade Debt $346,800 Services LLC 13820 Collections Center Dr. Chicago, IL 60693 Contact: John Lawrence Tel: 503-670-3193 Email: john.lawrence@gbrx.com 5. Chemline Inc. Trade Debt $301,759 5151 Natural Bridge Ave St. Louis, MO 63115 Contact: John Pantanella Tel: 314-664-2230 Email: johnp@chemline.net 6. Wisconsin Proppants, LLC Trade Debt $291,936 301 South Bedford Street Suite 1 Madison, WI 53703 Contact: Allana Black Tel: 403-509-4374 Email: arankin@slb.com 7. Thermafoam Operating, LLC Trade Debt $283,235 1240 N. Hwy 77 Hillsboro, TX 76645-3605 Contact: Mike Power Tel: 254-582-2730 Email: mpower@thermafoam.com 8. Wildcat Minerals LLC Trade Debt $266,630 5960 Berkshire Blvd, Ste 800 Dallas, TX 75225-6068 Contact: Pete Melcher Tel: 720-299-0056 Email: pmelcher@wildcatminerals.com 9. KTJ 251 LLC Trade Debt $254,705 400 Water Street, Ste 200 Excelsior, MN 55331 Contact: Joe Ryan Tel: 952-294-1241 Email: joe@oppidan.com 10. Greenbrier Leasing Company LLC Trade Debt $207,399 13799 Collections Center Drive Chicago, IL 60693 Contact: John Lawrence Tel: 503-670-3193 Email: john.lawrence@gbrx.co 11. Capro Industries Trade Debt $178,038 3128 E Harcourt St Rancho Dominguez, CA 90220 Contact: Jules Teffaha Tel: 800-935-3422 Ext 780 Email: jules@capro.net 12. Arcilla Mining & Trade Debt $138,500 Land Company LLC 9474 Highway 57 McIntyre, GA 31054 Contact: Ted Smith Tel: 478-946-3664 Email: tsmith@arcillamining.com 13. Wells Fargo Rail Corporation Trade Debt $136,257 6250 N River Rd Ste 5000 Rosemont, IL 60018 Contact: Dan Schlossberg Tel: 312-630-2415 Email: dan.schlossberg@wellsfargo.com 14. Industrial Chemicals, Inc. Trade Debt $127,252 2042 Montreat Drive Vestavia, AL 35216 Contact: Jeff Lloyd Tel: 704-999-4563 Email: jefflloyd@industrialchem.com 15. Riteks, Inc. Trade Debt $122,780 14550 Torrey Chase Blvd, Ste 460 Houston, TX 77066 Contact: Ryan Boss Tel: 281-569-3500 Email: rboss@riteks.com 16. Dakot Wear Ceramics (PTY) Ltd Trade Debt $119,050 1 Lamb Street Gingindlovu 3800 South Africa Contact: Cobus Kotze Tel: +27 35- 337 0053 Email: cobuskotze@dakot.co.za 17. CFG Community Bank Trade Debt $117,300 1422 Clarkview Road Baltimore, MD 21209 Contact: Michael Hoehn Tel: 410-823-0500 Email: michael.hoehn@cfgcommunitybank.com 18. Bulk Chemical Services LLC Trade Debt $115,206 1355 Terrell Mill Road Marietta, GA 30067 Contact: Nick Mahlberg Tel: 478-491-6425 Email: nmahlberg@bschem.com 19. BlueModus, Inc. Trade Debt $85,850 1641 California St Ste 400 Denver, CO 80202 Contact: Carlos Orozco Tel: 303-759-2100 Ext. 339 Email: corozco@bluemodus.com 20. Oconee Electric Membership Trade Debt $85,011 Attn: Marty Smith, CEO 3445 Hwy 80 W Dudley, GA 31022-0037 Contact: Terri Howard Tel: 478-676-1664 Email: terri.howard@oconeeemc.com 21. Imerys Kaolin Inc. Trade Debt $77,061 100 Mansell CT Roswell, GA 30076 Contact: Kermit Carpenter (Billing Controller) Tel: 770-645-3677 Email: kermit.carpenter@imerys.com 22. Interstate Industrial Sands LLC Trade Debt $72,049 3131 Fernbrook Lane, Ste 238 Plymouth, MN 55447 Contact: Nate Homberg Tel: 763-432-6552 Email: nate@iepholdings.com 23. Gilscot-Guidroz Int'l Trade Debt $69,855 5124 Travella Rd Marrero, LA 70072 Contact: Keith Guidroz, Jr. Tel: 504-731-1997 Email: keith@gilscot.com 24. Fracht FWO Inc. Trade Debt $63,975 16701 Greenspoint Park Drive, Ste. 300 Houston, TX 77060 Contact: Neville Darlaston Tel: 281-248-2020 Email: neville.darlaston@fracht.com 25. Chicago Freight Car Leasing Trade Debt $60,500 425 N. Martingale Rd, 6th Floor Schaumbug, IL 60173 Contact: Jim Kennedy Tel: 847-384-4441 Email: james.kennedy@crdx.com 26. Advanced Handling Systems Inc. Trade Debt $55,255 106 Victoria Drive Lagrange, GA 30240 Contact: Ned Daniel Tel: 706-881-1914 Email: neddaniel2@gmail.com 27. Beaver Steel Services, Inc. Trade Debt $51,975 1200 Arch ST #1 Carnegie, PA 15106 Contact: Todd Davis Tel: 412-429-8860 Email: toddd@beaversteel.com 28. Bo's Wood Products, Inc. Trade Debt $48,351 2427 Hwy 140 NW Adairsville, GA 30103 Contact: Craig Hittler Tel: 478-456-0842 Email: kraig@bowoddproducts.com 29. City of Millen Trade Debt $47,869 548 Cotton Ave Millen, GA 30442 Contact: Jeff Brantley Tel: 478-982-6100 Email: jbrantley@cityofmillenga.gov 30. Kuraray America Inc. Trade Debt $46,525 2625 Bay Area Blvd, Ste 600 Houston, TX 77058 Contact: Arcadio Salas Tel: 281-204-6732 Email: arcadio.salas@kuraray.com CASINO REINVESTMENT: S&P Affirms 'BB' 2005A Revenue Bond Rating --------------------------------------------------------------- S&P Global Ratings revised its outlook on the Casino Reinvestment Development Authority (CRDA), N.J., series 2005A (tax-exempt) and 2005B (taxable) parking fee revenue bonds to negative from positive. At the same time, S&P Global Ratings affirmed its 'BB' rating on the bonds. The bonds are secured by $2.50 out of a $3.00 statutory parking fee collected at 12 casinos in Atlantic City, eight of which remained open before a recent state ordered shutdown, as well as a $1.00 casino contractual fee collected at seven of the currently operating eight casinos. Although statutory parking fees were collected at the Revel Casino (now closed and re-opened as the Oceanside Resort Casino), it did not contribute the $1.00 casino contractual parking fee because it was not part of the original agreement. Another pledged tax, the investment alternative tax (IAT) tax, reached its scheduled expiration date in 2019, but was matched with a corresponding scheduled decline in annual debt service. "We have revised our outlook on the bonds as the result of the governor of New Jersey's executive order temporarily closing all casinos in the state because of the COVID-19 pandemic," said S&P Global Ratings credit analyst David Hitchcock. "Should Atlantic City casinos remain shuttered beyond late summer, or not recover to levels similar to their 2018 activity, we could downgrade the bonds, perhaps by multiple notches," Mr. Hitchcock added. Until the COVID-19 pandemic hit, revenues had been on the upswing, reversing a prior period of declining revenue, and providing adequate coverage of future maximum annual debt service (MADS). Although the governor's order might be temporary, S&P also believes the length of time the order could be in effect is uncertain, and once lifted, hotel and gaming activity will likely to take time to fully recover. The parking revenues in particular are derived from a small number of lots at only a few casino hotels. The CRDA has informed S&P that the parking bond debt service fund already has enough on deposit with the trustee to make full payment on the next June 1, 2020, principal and interest payment date. The following debt service payment date on Dec. 1, would be for an interest-only payment. The bonds also have a debt service reserve currently fully funded by an unrated MBIA Insurance Corp. surety agreement. Due to a short five-year remaining maturity, the debt service reserve could still potentially allow full payment of debt service by final maturity even if revenue coverage was slightly below 1x. Nevertheless, the narrow and volatile revenue stream merits the continuation of the speculative-grade rating on the debt at this time. Improvement of the outlook or coverage would require the casinos to reopen and demonstrate adequate coverage of debt service. Another unknown is the potential impact internet gaming will have on long-term revenue. The CRDA has informed us that the Atlantic City Convention Center was recently named as a potential field hospital during the coronavirus pandemic, but it is unclear whether that could produce additional parking fee revenue. The rating reflects what S&P views as the following credit weaknesses: -- Pledged revenue is generated primarily from a narrow base of a limited number of parking lots connected to certain casino hotels, which is subject to potential volatility due to the discretionary nature of visitor traffic; -- S&P calculates adequate unaudited MADS debt service coverage of 1.35x in fiscal 2019, excluding pledged IAT proceeds received in 2019 that will not be received in future years due to the expiration of the IAT pledge after 2019, and using the lower MADS that occurs after 2019 due to a drop in debt service that was scheduled to match the expiration of the IAT revenue. Increased competition from casino openings in neighboring states, especially Pennsylvania, which has made the city less attractive as a gaming destination; and -- The fixed rate nature of the pledged parking fees and other pledged taxes, which the authority cannot raise. These weaknesses are somewhat offset, in S&P's opinion, by: -- Debt service coverage that is expected to be above 1x, assuming casino operations can resume by late summer. -- A short five-year remaining maturity schedule, combined with a debt service reserve surety that could cushion potential declines even in the event of below 1x annual debt service coverage before then; and -- Efforts by the state, local government agencies, and the CRDA to diversify Atlantic City's economy and stabilize the revenue base. S&P could lower the rating if Atlantic City casinos do not re-open by the fall of 2020, or casino activity does not resume near previous levels once re-opened. Improvement of the outlook to stable or positive would require the casinos to reopen and demonstrate greater-than-slim coverage of debt service. Another unknown is the potential impact on long-term revenue of internet gaming. CLARIOS GLOBAL: S&P Lowers ICR to 'B'; Outlook Stable ----------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Clarios Global L.P. to 'B' from 'B+'. The outlook is stable. S&P is also lowering its issue-level ratings on the company's secured debt to 'B' from 'B+' and on its unsecured debt to 'CCC+' from 'B'. The recovery rating on the secured debt is '3', reflecting S&P's expectation of meaningful (50%-70%; rounded estimate: 50%) recovery in the event of default. The recovery rating on the unsecured debt is '6', reflecting S&P's expectation of negligible (0%-10%; rounded estimate: 5%) recovery in the event of default. "Because of the supply-side and demand-side shock from the coronavirus pandemic, we now expect double-digit, light-vehicle production declines in the U.S., Europe and China. More specifically, we see light-vehicle demand falling 15%-20% in the U.S. and Europe and 8%-10% in China. Together with the decreased volume, we see operational efficiencies arising and ongoing restructuring costs pressuring EBITDA as well. Consequently, we believe debt leverage will remain significantly above 7x in 2020," S&P said. The stable outlook on sponsor-owned Clarios reflects S&P's view that the company will continue to generate positive free operating cash flow over the next 12 months. "We could lower our ratings if the company appeared unlikely to reduce debt leverage toward 7x by the end of 2021 due to a greater-than-expected fall in demand from OEM and aftermarket customers as a result of a decline in miles driven or a drop in consumer confidence, thus weakening EBITDA margins. Moreover, we could lower the rating if the company began to generate negative free operating cash flow generation over the next 12 months, thereby draining liquidity and undermining its ability to invest sufficiently in its business," S&P said. "We could raise the ratings if the company showed solid operational performance and realized targeted cost savings, as demonstrated by expanding margins. Moreover, we would expect to see the company lower its debt to EBITDA to or below 6.5x and generate a ratio of free operating cash flow to debt above 3% on a sustained basis," the rating agency said. CLAROS MORTGAGE: S&P Downgrades ICR to 'B+' on COVID-19 Risks ------------------------------------------------------------- S&P Global Ratings said it lowered its issuer credit and senior secured debt ratings on Claros Mortgage Trust Inc. (CMTG) to 'B+' from 'BB-'. The outlook is negative. The rating action on CMTG reflects S&P's expectation that the credit performance of the firm's loans will deteriorate as a result of the COVID-19-related economic slowdown, which exposes the firm to margin calls on its repurchase agreement funding lines (accounting for approximately 70% of its funding liabilities). At this time, S&P believes that credit deterioration will be most severe on loans to transitional properties in the hardest hit sectors like hospitality and geographies like New York, which account for 19% and 50% of CMTG's loan portfolio,respectively . S&P's ratings on CMTG reflect its: -- Low but rising leverage; -- Focus on higher-risk loans to commercial real estate (CRE) transitional, construction, and land properties; -- Reliance on repurchase agreement funding; and -- Relatively short operating history. S&P views positively the company's access to resources, capabilities, and the industry knowledge of its sponsor, Mack Real Estate Credit Strategies L.P. (MREG), part of a well-established investor, developer, and manager of CRE. "While to date CMTG has had no credit losses in its relatively short history, and currently has no delinquencies or non-performing assets, we expect the COVID-19 economic slowdown to reduce borrowers' capacity to meet their loan obligations, as well as slow the pace of building construction and rehabilitation, and availability of take-out financing. In the near term, we expect this to increase margin calls on loans financed by repurchase agreement lines. We view positively CMTG's efforts to boost liquidity by materially scaling back originations and the slowing pace of borrower drawdowns against CMTG's funding obligations. While approximately 70% of CMTG's debt funding comes from repurchase agreements, we believe that its low leverage, credit terms, and efforts to bolster liquidity should allow it to absorb potential margin calls under expected economic conditions," S&P said. "The negative outlook reflects our view that CMTG is likely to face further credit deterioration and margin calls as the economic slowdown related to COVID-19 continues, which could strain liquidity. That said, at this time we believe CMTG's low leverage, credit terms, and efforts to bolster liquidity should allow it to absorb potential margin calls under expected economic conditions. We do not expect debt to adjusted total equity leverage to increase materially above the fairly low 1.4x seen at year-end 2019," S&P said. Over the next 12 months, S&P could lower the rating if it expects: -- Liquidity to be strained, -- Covenants to be breached, or -- CMTG to take material losses on its loan portfolio from a more severe or prolonged COVID-19-related economic slowdown. "Given the economic outlook, we see little upside over the next 12 months. However, if we expect the economic impact of COVID-19 to be less severe, asset quality is relatively stable, and liquidity remains adequate in our view, we could revise the outlook to stable," S&P said. CLEARPOINT NEURO: Incurs $5.54 Million Net Loss in 2019 ------------------------------------------------------- Clearpoint Neuro, Inc., filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $5.54 million on $11.22 million of total revenues for the year ended Dec. 31, 2019, compared to a net loss of $6.16 million on $7.35 million of total revenues for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $11.93 million in total assets, $7.34 million in total liabilities, and $4.58 million in total stockholders' equity. The Company has incurred net losses since its inception which has resulted in a cumulative deficit at Dec. 31, 2019 of approximately $113 million. Since inception, the Company has financed its operations principally from the sale of equity securities, the issuance of notes payable and license arrangements. As a result, management historically has expressed substantial doubt as to the Company's ability to continue as a going concern. In May 2019, the Company entered into a Securities Purchase Agreement with certain accredited investors under which such investors purchased 2,426,455 shares of the Company's common stock at $3.10 per share, resulting in proceeds of approximately $7.5 million, before deducting offering expenses aggregating approximately $94,000. In addition, in January 2020, the Company entered into a Securities Purchase Agreement with two investors under which the Company issued to such investors an aggregate principal amount of $17.5 million of floating rate secured convertible notes. From the proceeds received from the issuance of the 2020 Secured Notes, which have a five-year term, the Company repaid and retired the 2010 Junior Secured Notes Payable that otherwise would have matured in October and November 2020. As a result, in management's opinion, the Company's cash and cash equivalent balances at Dec. 31, 2019, when combined with the proceeds from issuance of the 2020 Secured Notes (after repayment of the 2010 Secured Notes), are sufficient to support the Company's operations for at least the next twelve months and to alleviate doubt as to the Company's ability to continue as a going concern. In 2019, uses of cash in operating activities consisted of: (i) its $5.5 million loss; (ii) increases in inventory of $1.0 million and prepaid expenses and other current assets of $144,000; and (iii) decrease in the lease liability of $109,000. These uses were offset by: (a) decreases in accounts receivable of $144,000 and other assets of $15,000; (b) increases in accounts payable and accrued expenses of $1.2 million and in deferred revenue of $864,000; and (c) non-cash expenses included in the Company's net loss aggregating $1.8 million and consisting of depreciation and amortization, share-based compensation, amortization of debt issuance costs and original issue discounts and amortization of lease right of use assets, net of accretion in lease liabilities. Net cash flows used in investing activities in 2019 were $160,000 and consisted primarily of an acquisition of medical device license rights. Net cash provided by financing activities in 2019 consisted of proceeds from the 2019 PIPE of $7.4 million and the exercise of warrants of $389,000. These proceeds were partially offset by (i) the prepayment in 2019 of financing costs in connection with the 2020 Secured Notes; and (ii) principal repayments of the 2014 and 2010 Secured Notes of $2.1 million. A full-text copy of the Form 10-K is available for free at: https://is.gd/geJNwy About Clearpoint Neuro Clearpoint Neuro, Inc., formerly known as MRI Interventions, Inc., is a medical device company that develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain under direct, intra-procedural magnetic resonance imaging, or MRI, guidance. From its inception in 1998 to 2002, the Company deployed significant resources to fund its efforts to develop the foundational capabilities for enabling MRI-guided interventions and to build an intellectual property portfolio. In 2003, the Company's focus shifted to identifying and building out commercial applications for the technologies it developed in prior years. CMK INVESTMENT: Seeks to Hire Wallace Jordan as Counsel ------------------------------------------------------- CMK Investment Properties, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Alabama to employ Wallace Jordan Ratliff & Brandt, LLC, as counsel to the Debtor. CMK Investment requires Wallace Jordan to: (a) prepare pleadings and applications and conducting examinations incidental to any related proceedings or to the administration of the bankruptcy case; (b) advise the Debtor of its rights, duties, and obligations as the Debtor operating under Chapter 11 of the Bankruptcy Code; (c) take any and all other necessary action incident to the proper preservation and administration of this Chapter 11 case; and (d) advise and assist the Debtor in the formation and confirmation of a plan pursuant to Chapter 11 of the Bankruptcy Code, the disclosure statement, and any and all matters related thereto. Wallace Jordan will be paid at these hourly rates: Partners $300 to $475 Associates $260 to $310 Of Counsel $350 to $395 Paralegals/Legal Assistants $150 to $165 Law Clerks $200 Wallace Jordan will be paid a retainer in the amount of $10,000. Wallace Jordan will also be reimbursed for reasonable out-of-pocket expenses incurred. Gary W. Lee, partner of Wallace Jordan Ratliff & Brandt, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Wallace Jordan can be reached at: Gary W. Lee, Esq. WALLACE JORDAN RATLIFF & BRANDT, L.L.C. 800 Shades Creek Pkwy., Suite 400 Birmingham, AL 35209 Tel: (205) 874-0343 E-mail: gwlee@wallacejordan.com About CMK Investment Properties CMK Investment Properties, LLC, based in Birmingham, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 20-00862) on March 3, 2020. In the petition signed by Brian M. Kornowicz, member, the Debtor disclosed $1,270,080 in assets and $658,515 in liabilities. Gary W. Lee, Esq., at Wallace Jordan Ratliff & Brandt, LLC, serves as bankruptcy counsel. CNC PUMA CORPORATION: Hires Tang & Associates as Counsel -------------------------------------------------------- CNC Puma Corporation, Inc., seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Tang & Associates, as bankruptcy counsel to the Debtor. CNC Puma Corporation requires Tang & Associates to: a. advise the Debtor regarding matters of bankruptcy law and concerning the requirements of the Bankruptcy Code, and Bankruptcy Rules relating to the administration of the bankruptcy case, and the operation of the Debtor's estate as a debtor-in-possession; b. represent the Debtor in proceedings and hearings in the court involving matters of bankruptcy law; c. assist in compliance with the requirements of the Office of the U.S. Trustee; d. provide the Debtor legal advice and assistance with respect to the Debtor's powers and duties in the continued operation of the Debtor's business and management of property of the estate; e. assist the Debtor in the administration of the estate's assets and liabilities; f. prepare necessary applications, answers, motions, orders, reports and other legal documents on behalf of the Debtor; g. assist in the collection of all accounts receivable and other claims that the Debtor may have and resolve claims against the Debtor's estate; h. provide advice, as counsel, concerning claims of secured and unsecured creditors, prosecution and defense of all actions; and i. prepare, negotiate, prosecute and attain confirmation of a plan of reorganization. Tang & Associates will be paid at these hourly rates: Attorneys $350 Law Clerks $200 Prior to the Petition Date, $10,000 from the Debtor. As of the petition date, the firm has $5,655 of the retainer funds remains unexhausted. Tang & Associates will also be reimbursed for reasonable out-of-pocket expenses incurred. Kevin Tang, partner of Tang & Associates, 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. Tang & Associates can be reached at: Kevin Tang, Esq. TANG & ASSOCIATES 18377 Beach Blvd., Suite 211 Huntington Beach, CA 92648 Tel: (714) 594-7022 Fax: (714) 594-7024 About CNC Puma Corporation CNC Puma Corporation, Inc., filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 20-12069) on March 12, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Kevin Tang, Esq., at Tang & Associates. COMSTOCK MINING: Incurs $3.81 Million Net Loss in 2019 ------------------------------------------------------ Comstock Mining Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $3.81 million on $179,632 of total revenues for the year ended Dec. 31, 2019, compared to a net loss of $9.48 million on $150,289 of total revenues for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $39.57 million in total assets, $16.08 million in total liabilities, and $23.49 million in total equity. The Company has recurring net losses from operations and an accumulated deficit of $235.9 million as of Dec. 31, 2019. As of Dec. 31, 2019, the Company had cash and cash equivalents of $1.0 million. The Company also has long-term debt of $4.9 million that matures in January 2021, for which it does not currently have the ability to repay. The Company intends to finance its operations over the next twelve months through its existing cash, the sale of common stock through its existing equity agreements to issue securities, and proceeds from the planned sale of its Lucerne mineral properties and non-mining assets, and Tonogold securities. These plans are outside of the control of management, and therefore, substantial doubt exists about the Company's ability to continue as a going concern through 12 months from March 30, 2020 (the issuance date of the financial statements). Deloitte & Touche LLP, in Salt Lake City, Utah, the Company's auditor since 2011, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company has incurred recurring losses and cash outflows from operations, has an accumulated deficit and has debt maturing within twelve months from the issuance date of the financial statements that raise substantial doubt about its ability to continue as a going concern. COVID-19 Comstock Mining stated, "Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as "COVID-19," has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, including the implementation of travel bans, quarantine periods and social distancing, have caused material disruptions to global business and an economic downturn. Global equity markets have experienced significant volatility and weakness. Governments and their central banks have reacted with significant fiscal and monetary interventions designed to mitigate the impacts and stabilize economic conditions. The impact and ultimate duration of the COVID-19 outbreak is currently unknown, as is the efficacy of these governmental and central bank interventions. On March 12, 2020, Nevada Governor Stephen Sisolak issued a Declaration of Emergency to facilitate the State's response to the COVID-19 pandemic. The Governor's guidance for the mining industry includes limiting gatherings to no more than 10 people, maintaining social distancing protocols where 10 or less are gathered, limiting travel, and working remotely when possible. "The Company is currently operating in alignment with these guidelines for protecting the health of our employees, partners, and suppliers, and limiting the spread of COVID-19, that could potentially result in delays to the Company's plans for developing our Dayton Resource, MCU's plans for commencing mercury recovery testing, and Tonogold's plans for exploration drilling during the second quarter of 2020. It is not currently possible to reliably estimate the length and severity of these developments and the impact on the financial results and conditions of the Company, and its operating subsidiaries and partners, or in future periods." A full-text copy of the Form 10-K is available for free at: https://is.gd/1vjwek About Comstock Mining Inc. Comstock Mining Inc. -- http://www.comstockmining.com/-- is a Nevada-based, gold and silver mining company with extensive, contiguous property in the Comstock District. The Company began acquiring properties in the Comstock District in 2003. Since then, the Company has consolidated a significant portion of the Comstock District, amassed the single largest known repository of historical and current geological data on the Comstock region, secured permits, built an infrastructure and completed its first phase of production. The Company continues evaluating and acquiring properties inside and outside the district expanding its footprint and exploring all of its existing and prospective opportunities for further exploration, development and mining. CONTAINER STORE: S&P Cuts ICR to 'B-'; Ratings on Watch Negative ---------------------------------------------------------------- S&P Global Ratings lowered all of its ratings on The Container Store, including its issuer credit rating, to 'B-' from 'B' to reflect its expectation that its credit metrics will deteriorate significantly with leverage exceeding its downside threshold of 5.5x as of the end of fiscal year 2020 (ending March 2021). At the same time, S&P placed all of its ratings on the company on CreditWatch with negative implications. The downgrade reflects S&P's expectation for significantly weaker credit metrics this year given its forecast for a sharp decline in sales and cash flow due to the coronavirus pandemic. "We expect The Container Store's performance to remain pressured over the next several quarters based on our forecast for a swift and severe drop in discretionary consumer spending amid a macroeconomic slowdown in the U.S. this year. Given the government mandates in certain regions to avoid nonessential activities as well as consumers' heightened focus on social distancing to prevent the spread of the coronavirus, we expect the company's store traffic to decline materially, which may lead it to close its stores for an extended period. In addition, we expect the demand for Custom Closets, which accounts for roughly half of the company's sales, to fall significantly given the high price point (ranging from $1,000-$10,000) of this discretionary purchase," S&P said. "We expect to resolve the CreditWatch in the next three months as more information becomes available. There is at least a one-in-two chance we will lower our ratings on The Container Store by one notch or more as we evaluate the company's liquidity profile, covenant cushion, and the likelihood that it will receive a covenant waiver or amendment," the rating agency said. CONUMA COAL: S&P Cuts ICR to 'CCC+'; Outlook Negative ----------------------------------------------------- S&P Global Ratings lowered its issuer credit rating (ICR) on Conuma Coal Resources Ltd. to 'CCC+' from 'B'. At the same time, S&P lowered its issue-level rating on the company's senior secured notes to 'B-' from 'B+'. The '2' recovery rating on the notes is unchanged. "We believe Conuma has limited financial flexibility to manage unexpected near-term weakness in its operating results. Conuma generated earnings and cash flow below our expectations in 2019, and we estimate the company's liquidity position is constrained. Lower average metallurgical coal prices, as well as rail and port disruptions that negatively affected sales and cash flow were notable headwinds. The company has a negligible cash position (C$7 million as of Dec. 31, 2019) and limited availability under its US$25 million credit facility. We now consider the company to be vulnerable to near-term unexpected cash outflows. In particular, production disruptions that could stem from the COVID-19 outbreak, which have affected mining companies globally, or weaker-than-expected metallurgical coal prices, are key risks to Conuma's liquidity. S&P Global Ratings expects a global economic recession this year, and provided a further update to its assumptions on March 24, 2020 to include a contraction in the first quarter and a steeper than previously expected contraction in the second quarter," S&P said. The negative outlook reflects S&P's view that the company depends on favorable conditions to meet its financial obligations. S&P believes Conuma could face a liquidity shortfall, given its negligible cash position and availability on its revolving credit facility, in the event the company generates operating results modestly below its expectations. In S&P's view, Conuma has limited flexibility to absorb unexpected cash outflows. "We could lower the ratings if we believe Conuma will generate a free cash flow deficit within the next 12 months to the extent that it increases the likelihood that the company faces a liquidity shortfall or contemplates a distressed exchange of its debt. In our view, this could result from lower–than-expected sales and cash flow related to the curtailment of mining operations, transportation disruptions, or weaker metallurgic coal prices. In this scenario, we would expect Conuma to default without an unforeseen positive development," S&P said. "We could revise the outlook to stable if Conuma's liquidity sustainably improves, most likely from meaningful positive free cash flow available to repay amounts drawn on its revolving credit facility and build its cash position. In this scenario, we would expect a material increase in metallurgical coal prices in tandem with reduced risk associated with global macroeconomic conditions and visibility regarding its planned Hermann project," the rating agency said. CRC BROADCASTING: Hires Radiotvlaw Associates as Special Counsel ---------------------------------------------------------------- CRC Broadcasting Company seeks authority from the US Bankruptcy Court for the District of Arizona to employ Radiotvlaw Associates, LLC as its special counsel. The Debtor wishes to enlist the aid of Anthony T. Lepore, Esq., at Radiotvlaw Associates, LLC, as it relates to all matters that may arise regarding the regulatory requirements of the FCC. Mr. Lepore's current rate is $275 per hour. Mr. Lepore assures the court that he does not represent an interest adverse to the Debtor or the estate. The counsel can be reached through: Anthony T. Lepore, Esq. Radiotvlaw Associates, LLC 4101 Albemarle Street NW, Suite 324 Washington, DC 20016-2151 Phone: (202) 681-2201 Email: anthony@radiotvlaw.net About CRC Broadcasting Company CRC Broadcasting Company, Inc. is a broadcast media company based out of 8145 E Evans Rd, Scottsdale, Arizona. CRC Broadcasting Company, Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-02349) on March 6, 2020, listing under $1 million in both assets and liabilities. Allan D. NewDelman, Esq. at ALLAN D. NEWDELMAN, P.C., is the Debtor's counsel. CRC MEDIA: Hires Radiotvlaw Associates as Special Counsel --------------------------------------------------------- CRC Media West, LLC seeks authority from the US Bankruptcy Court for the District of Arizona to employ Radiotvlaw Associates, LLC as its special counsel. The Debtor wishes to enlist the aid of Anthony T. Lepore, Esq. of Radiotvlaw Associates, LLC, as it relates to all matters that may arise regarding the regulatory requirements of the FCC. Mr. Lepore's current rate is $275 per hour. Mr. Lepore assures the court that he does not represent an interest adverse to the Debtor or the estate. The counsel can be reached through: Anthony T. Lepore, Esq. Radiotvlaw Associates, LLC 4101 Albemarle Street NW, Suite 324 Washington, DC 20016-2151 Phone: (202) 681-2201 Email: anthony@radiotvlaw.net About CRC Media West, LLC CRC Media West, LLC, is a broadcast media company based out of 8145 E Evans Rd, Scottsdale, Arizona. CRC Media West, LLC, filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-02352) on March 6, 2020, listing under $1 million in both assets and liabilities. Allan D. NewDelman, Esq. at ALLAN D. NEWDELMAN, P.C., is the Debtor's counsel. CREATIVE GLOBAL: April 1 Plan Confirmation Hearing Set ------------------------------------------------------ A hearing was held on Feb. 5, 2020, at 9:00 a.m., before the Honorable Sandra R. Klein, United States Bankruptcy Judge for the Central District of California, Los Angeles Division, in Courtroom 1575 at 255 E. Temple Street, Los Angeles, California 90012, to consider the motion for order approving adequacy of Disclosure Statement describing Plan of Reorganization filed by Debtors Creative Global Investment Inc., CGI Gaju LLC, and CGI Paramount LLC. On March 12, 2020, Judge Sandra R. Klein ordered that: * The Motion is granted. * The Disclosure Statement is approved. * April 1, 2020, at 9:00 a.m. is the Confirmation Hearing. * March 18, 2020, is the last date to file and serve any objections and evidence in opposition to assumption or rejection of the Debtors’ executory contracts and unexpired leases. * March 25, 2020, is the last date to file responses to any objections to confirmation of the Plan. A full-text copy of the order dated March 12, 2020, is available at https://tinyurl.com/rqynl2q from PacerMonitor at no charge. The Debtors are represented by: DAVID B. GOLUBCHIK JULIET Y. OH LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234 Facsimile: (310) 229-1244 E-mail: DBG@LNBYB.com, JYO@LNBYB.com About Creative Global Investment Creative Global Investment Inc. is a privately held company engaged in financial investment activities. Creative Global Investment sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-13044) on March 20, 2019. At the time of the filing, the Debtor disclosed $36,691 in assets and $5,388,873 in liabilities. The case has been assigned to Judge Sandra R. Klein. Levene, Neale, Bender, Yoo & Brill LLP is the Debtor's legal counsel. CUSHMAN & WAKEFIELD: S&P Affirms BB- Long-Term ICR; Outlook Stable ------------------------------------------------------------------ S&P Global Ratings said it affirmed its 'BB-' long-term issuer credit rating on Cushman & Wakefield (C&W). The outlook remains stable. At the same time, S&P affirmed its 'BB-' rating on its first-lien term loan B. The recovery rating on the first-lien debt is '3', reflecting its expectation of meaningful recovery (50%-70%; rounded estimate 65%) in the event of default. "We are affirming our ratings on C&W because despite better-than-expected 2019 results, there is uncertainty regarding the impact recent macro trends may have on 2020 earnings--in particular in C&W's capital markets segment. The capital markets segment generated 15% of total fee revenues for 2019 and has a higher EBITDA margin than other segments. This segment is likely to be the most volatile in times of stress across the commercial real estate services sector, with potential decreases in capital markets EBITDA of as much as 30%-70% in a severe recession scenario, in our view. The company noted at its recent investor day that it has not seen a meaningful impact on transaction activity so far this year and does not expect a significant impact. Although, we believe transaction activity could decline substantially if conditions continue to deteriorate resulting in a global recession," S&P said. However, C&W generates a majority of its capital markets revenue in the second half of the year, and in the fourth quarter in particular. So, if conditions normalize during the second quarter, the potential impact may not be as meaningful as S&P estimates. "We expect the company to continue to invest excess cash flows in cost-reduction projects, recruiting, and in-fill acquisitions. Given the company's ample balance sheet cash, its $1 billion revolver that is currently undrawn, and its stronger ability to generate free cash flow, our assessment of its liquidity has improved to strong," S&P said. The stable outlook reflects S&P's expectation that current macro trends could lead to an increase in leverage to 4.0x-5.0x debt to adjusted EBITDA over the next 12 months. "We could lower the rating on C&W if leverage significantly increases and remains above 5.0x debt to adjusted EBITDA. If the company engages in a large debt-funded acquisition that we find to be outside of its current strategy, we could also lower the rating," S&P said. "If C&W reduces leverage to less than 4x debt to adjusted EBITDA on a sustainable basis with minimal legacy merger-related costs, we would consider raising the rating," the rating agency said. CVENT INC: S&P Downgrades ICR to 'CCC+' on Macroeconomic Weakness ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Tysons Corner, Va.-based Cvent Inc. to 'CCC+' from 'B-'. The outlook is developing. S&P also lowered its issue-level rating on the company's secured term loan to 'CCC+' from 'B-'; the recovery rating remains '3'. "The downgrade reflects our view that social distancing measures adopted in the U.S. to slow the spread of the new coronavirus will significantly lower demand for event- and conference-management software solutions during the course of the crisis. Cvent has delivered strong double-digit growth for several years and we believe it has a durable market position, but the nature of its business as an events-technology provider make it particularly vulnerable in this crisis. We believe that after the crisis passes, Cvent will remain a leading provider and will likely benefit from the release of pent-up demand. In addition, we believe the company has the liquidity to be able to survive until the next seasonally strong booking period in the second half of 2020, which should set up a strong 2021 if the season is good. However, to affirm the 'B-' rating in the face of expected negative free cash flow, we would have to have be more certain about the forecast and the timing of the recovery. In addition, the company may need to grant concessions to customers to preserve business relationships, although concessions may come with favorable contract extensions," S&P said. The developing outlook reflects S&P's view that upside and downside cases are roughly equally plausible. It also reflects the company's good market position, strong track record of revenue growth, and liquidity that S&P believes can provide support through a downturn that peaks in the second quarter, but also seasonal bookings and cash flow patterns, and uncertainty about the depth and duration of the coming recession. "We could raise the rating if the spread of coronavirus is contained by mid-2020 allowing bookings to return to pre-crisis levels in the second half, which will support a strong rebound in 2021 such that unadjusted free operating cash flow returns to near breakeven, and we believe that the risk that the virus will return in additional waves is low," S&P said. "We could lower the rating if the crisis extends into the second half and bookings remain constrained at very low levels, potentially leading to a weak year in 2021. We could also lower the rating if total liquidity falls below $60 million, which incorporates cash needed to run the business and a cushion in case covenants compel the repayment of part of the revolving credit facility," S&P said. CYXTERA DC: S&P Downgrades ICR to 'CCC' on COVID-19 Impact ---------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on Cyxtera DC Holdings Inc. to 'CCC' from 'B-' to reflect increased likelihood of a default or distressed exchange over the next year. "We downgraded Cyxtera to 'CCC' because we believe the company does not have sufficient liquidity cushion to absorb an extended period with both elevated churn and an inability to attract new colocation clients. This will weaken EBITDA interest coverage, which we now forecast will fall below our downgrade threshold of 1.5x. We also forecast debt to EBITDA remaining unsustainable in 2020," S&P said. The negative outlook reflects S&P's view that the company is vulnerable to nonpayment of its financial obligations over the next year given the adverse economic conditions and limited liquidity cushion. "We could lower the rating if the recession induced by the COVID-19 pandemic significantly restricts cash flow improvement, such that we believe a default or restructuring is likely within six months. This could be caused by pricing pressure, elevated churn, and an inability to obtain new clients," S&P said. "We could upgrade Cyxtera over the next year if the company increases revenue, combined with successful cost-reduction initiatives that improve EBITDA margin, and the company deleverages on a sustained basis. We could also raise the rating if Cyxtera improves its liquidity position," S&P said. DALF ENERGY: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of DALF Energy, LLC. About DALF Energy DALF Energy, LLC, a privately held company in the oil and gas extraction business, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 20-50369) on Feb. 17, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Craig A. Gargotta oversees the case. DANA INC: S&P Puts 'BB' ICR on Watch Neg. on Pandemic Uncertainty ----------------------------------------------------------------- S&P Global Ratings placed all of its ratings on Dana Inc. on CreditWatch with negative implications, including its 'BB' issuer credit rating. Dana's revenue, profit, and cash flow will contract significantly due to the decline in global auto production related to the shutdown of most plants in Europe and the U.S., as well as greater declines in the heavy duty truck and off-road truck markets. S&P now expects global light-vehicle sales to decline by almost 15% in 2020 and believe Dana will find it difficult to maintain its operating performance during the year. While the company may cut its costs to soften the blow, it will not likely be able to reduce its costs nearly fast enough to adjust to the shock from the pandemic. In the commercial truck and off highway markets, Dana was already seeing weaker demand and with the current pandemic, these sectors will weaken more than S&P previously expected. CreditWatch The CreditWatch placement reflects at least a one-in-two likelihood S&P will lower its issuer credit rating on Dana. S&P expects to resolve the CreditWatch when it learns more about the coronavirus' effect on Dana's financial position. S&P would likely lower its ratings on the company if it expects the company's debt to EBITDA to remain above 4x and its free operating cash flow to debt to remain below 10% with little prospect for an improvement over 2020-2021. "We expect to resolve the CreditWatch in the coming months and are monitoring the group's operating performance and liquidity situation, including its covenant compliance," S&P said. DASEKE INC: S&P Downgrades ICR to 'B-' on Expected COVID-19 Impact ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Addison, Texas-based flatbed trucking provider Daseke Inc. to 'B-' from 'B'. The outlook is negative. At the same time, S&P is lowering its issue-level rating on Daseke's senior secured term loan to 'B-' from 'B'. The recovery rating on this debt remains '3', indicating S&P's expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. "We assume a U.S. recession would cause a decline in demand in Daseke's manufacturing and industrial end markets, resulting in weaker credit measures. S&P Global's economists believe that the U.S. is entering a recession--if not already in one. Therefore, we assume Daseke's adjusted debt leverage will increase substantially to the high-6x area in 2020 as the company's end markets contract due to lower economic activity as a result of the coronavirus. Depending on the depth and longevity of a U.S. recession, there is the potential for additional downside risk to our forecast," S&P said. The negative outlook on Daseke reflects S&P's expectation that the company's industrial end markets will weaken due to the impact of a recessionary environment. The rating agency assumes Daseke's debt leverage will rise in 2020 as a result. "We could lower our ratings on Daseke in the next 12 months if the downturn in the economy and weaker industrial production caused the flatbed and specialized trucking markets to weaken beyond our expectations. This could cause the company to experience strained liquidity or for leverage to rise to unsustainable levels," S&P said. "We could revise the outlook on Daseke to stable if its credit measures did not deteriorate as much we expected, with the company's debt-to-EBITDA ratio in the low-5x area or better and its FOCF-to-debt ratio in at least the low-single-digit percent area. We would also need to see the company maintain sufficient headroom to its covenants of at least 15%," S&P said. DCP MIDSTREAM: Fitch Places BB+ LT IDR on Rating Watch Negative --------------------------------------------------------------- Fitch Ratings placed DCP Midstream, LP (DCP) and DCP Midstream Operating, LPs' Long-Term (LT) Issuer Default Rating (IDR) of 'BB+, senior unsecured ratings of 'BB+'/'RR4', and junior subordinated notes and preferred equity ratings of 'BB-'/'RR6' on Rating Watch Negative (RWN). The Rating Watch mainly reflects the concern that DCP will operate with leverage closer to the negative rating sensitivity of 5.5x beyond 2020 given the entities' direct exposure to commodity prices and volumetric risk. Fitch forecasts DCP to pose weaker results in 2020 and 2021 driven by its unhedged gross margin under Fitch's updated price deck. Additionally, DCP's G&P volumes are expected to be lower than previously anticipated driven by curtailed E&P producer customers' activities. However, Fitch recognizes DCP's recently announced distribution cut and capex reduction, as well as cost reduction initiatives, as constructive measures that can help offset decline in EBITDA and enhance FCF. Fitch intends to resolve the Watch after monitoring DCP's operational performance and financial policy for the next two quarters. KEY RATING DRIVERS Elevated Leverage: Fitch calculated DCP's leverage (total debt with equity credit to adjusted EBITDA) to be 5.0x in 2019, and forecasts DCP's leverage to be above 5.0x in 2020 and 2021. DCP has taken steps to increase its FCF by reducing distributions by 50% to annualized $1.56/unit and 2020 growth capex by 75%. However, under Fitch's updated price deck G&P business will be directly impacted by producer counterparties that have reduced capex drilling activities and operations on DCP's footprint. Additionally, DCP's hedges on NGLs tend to be short tenor leaving DCP exposed to hedge roll over risk, as well as longer term exposure to commodity prices. At the time of setting 2020 guidance, approximately 21% of gross margins were unhedged, so continued commodity price weakness will pose challenges for DCP's operational performance in the near term. This level of begin-year hedging is consistent with the launch of 2018 and 2019 guidance. Fitch notes that DCP has room, without bumping up against prudent machinery-operational and customer-volume-decline cushions, to hedge a larger amount of therms, gallons ,and barrels. DCP's hedging the minority of its opportunity is factored into the rating. Volumetric Risks: DCP's ratings reflect that its operations are exposed to volumetric risks associated with the domestic production and demand for natural gas and NGLs. DCP's well-head volumes have been about level since the 2Q18. Fitch forecasts DCP's G&P volumes to be weaker in 2020 and 2021 driven by slower producer activities in areas such as the DJ basin and the Anadarko basin. For its Logistics & Marketing segment (NGL and gas pipelines, Storage and fractionators), Fitch expects total throughput volume to also decline in the forecast years given the lower production as well as unfavorable commodities price. However, offsetting some of the operational decline for the L&M segment is the full year contribution (approximately $80 million-$90 million) from DCP's equity investment in Gulf Coast Express Pipeline (GCX). Ownership Support: Fitch rates DCP on a standalone basis, with no explicit notching from its parent companies' ratings; however, DCP's ratings reflect that DCP's owners have been and are expected to remain supportive of the operating and credit profile of DCP. DCP's ultimate owners of its general partner, Enbridge, Inc. (ENB; BBB+/Stable) and Phillips 66 (PSX; not rated) have in the past exhibited a willingness to inject capital, forgo dividends and generally provide capital support to DCP. Scale and Scope of Operations: DCP's ratings reflect the size and scale, and diversity of its asset base. DCP's ratings recognize that it is one of the largest producers of natural gas liquids (NGLs) and processors of natural gas in the U.S. The partnership has a robust operating presence in most of the key production regions within the U.S. The size and breadth of DCP's operations allow it to offer its customers end-to-end gathering, processing, storage and transportation solutions, giving it a competitive advantage within the regions where they have significant scale. Additionally, the partnership's large asset base provides a platform for growth opportunities across its footprint. DCP has a particular focus on the Denver Julesburg Basin and the Permian Basin, areas in need of gathering and processing infrastructure as production in the liquids-rich regions of these plays continues to increase. DERIVATION SUMMARY DCP's ratings are reflective of its favorable size, scale, geographic and business line diversity within the natural gas gathering and processing and the logistics space. The ratings recognize that DCP has greater exposure to commodity prices than many of its midstream peers, with 70% of gross margin supported by fixed-fee contracts. This commodity price exposure has been partially mitigated in the near term through DCP's use of hedges for its NGL, natural gas and crude oil price exposure, pushing the percentage of gross margin, either fixed-fee or hedged, up to 79% in 2020. This helps DCP's cash flow stability, but exposes it to longer-term hedge roll-over and commodity price risks. DCP is larger and more geographically diversified than its rated peers EnLink Midstream LLC (ENLC; BB+/Negative) and Enable Midstream Partners, LP (ENBL; BBB-/Stable). Fitch expects DCP's leverage to be similar ENLC's of about 5.0x - 5.5x range in the near term, but higher than ENBL's, which Fitch expects to be below 4.5x. Further, ENBL and ENLC also have lower direct commodities price exposure relative to DCP, as more of their revenue is supported by fixed-fee contracts. DCP has roughly 70% of its gross margin supported by fixed-fee contracts, while ENBL and ENLC each have greater than 90%. Fitch intends to resolve the Watch after monitoring DCP's operational performance and financial policy for the next two quarters. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - Fitch price deck base case WTI oil prices of $38/barrel in 2020, $45 in 2021, and $50 in 2022: and Henry Hub natural gas price of $1.85/mcf in 2020, $2.10 in 2021, and $2.25 in 2022; - Maintenance capital of roughly $60 million-$80 million annually. Growth spending of approximately $150 annually in 2020; - G&P and NGL throughput volumes decline in 2H20 in 2021; - Preferred Equity and Junior Subordinated notes receive 50% equity credit. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Fitch may remove the Rating Watch Negative if DCP can execute on its operational performance and implements financial policies that will create a visible path to bring leverage (defined as total debt to adjusted EBITDA) below 5.5x on a sustained basis while distribution coverage is over 1.1x; - The rating could be stabilized if volumes don't fall significantly and the company executes a disciplined hedging policy. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Leverage expected above 5.5x on a sustained basis and/or distribution coverage consistently below 1.1x would likely result in at least a one-notch downgrade; - Volumes fall significantly and the company fails to execute a disciplined hedging policy; - A significant change in the ownership support structure from GP owners ENB and PSX to the consolidated entity particularly with regard to the GP position on commodity price exposure, distribution policies and capital structure at DCP, the operating partnership. LIQUIDITY AND DEBT STRUCTURE Manageable Liquidity: DCP's liquidity is manageable with roughly $200 million in borrowings outstanding under its $1.4 billion revolving credit facility as of Dec. 31, 2019. DCP had a debt maturity of $600 million senior notes that was paid down by drawing on the revolver. After the debt maturity the outstanding balance on the credit facility is approximately $800 million. DCP's credit facility matures in December 2024. The credit facility has a leverage covenant that requires DCP's consolidated leverage ratio not to exceed 5.0x for each quarter. The leverage ratio would be stepped up to 5.5x for three quarters following any qualified acquisition. Importantly, for covenant calculation purposes, DCP's preferred equity and junior subordinated notes are given 100% equity treatment (versus Fitch's 50% equity treatment), so the issuance of preferred equity would help improve liquidity and leverage where the proceeds are expected to be used to pay down debt. The next debt maturity for DCP is its $500 million senior notes due September 2021. DCP has a long relationship with the brokers they utilize for their hedging program. DCP trades all five purity products on the International Continental Exchange (ICE), there are no bi-lateral trades. There are no special demands for a sizable amount of collateral, say $100 million. During the last downturn in 2015, DCP was not faced with sizable collateral demands either. These factors do not add to DCP's liquidity risk. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch applies 50% equity credit to DCP's junior subordinated notes and to its existing preferred equity in Fitch's forecasts. Fitch typically adjusts master limited partnership EBITDA to exclude equity interest in earnings from non-consolidated affiliates but includes cash distributions from non-consolidated affiliates. DECO ENTERPRISES: Taps Raymond H. Aver APC as Insolvency Counsel ---------------------------------------------------------------- Deco Enterprises, Inc. seeks authority from the US Bankruptcy Court for the Central District of California to hire Raymond H. Aver, APC, as its general insolvency counsel. Services the counsel will render are: a. represent the Debtor at its Initial Debtor Interview; b. represent the Debtor at its meeting of creditors pursuant to Bankruptcy Code Section 341(a), or any continuance thereof; c. represent the Debtor at all hearings before the US Bankruptcy Court involving the Debtor; d. prepare necessary applications, motions, orders, and other legal papers; e. advise the Debtor regarding matters of bankruptcy law, including the Debtor's rights and remedies with respect to the Debtor's assets and the claims of its creditors; f. represent the Debtor with regard to all contested matters; g. represent the Debtor with regard to the preparation of a disclosure statement and the negotiation, preparation, and implementation of a plan of reorganization; h. analyze any secured, priority, or general unsecured claims that have been filed in the Debtor's bankruptcy case; i. negotiate with the Debtor's secured and unsecured creditors regarding the amount and payment of their claims; j. object to claims as may be appropriate; and k. perform all other legal services for the Debtor other than adversary proceedings which would require further written agreement. Aver Firm received a pre-petition retainer in the sum of $35,000 exclusive of the $1,717 filing fee. Aver Firm's hourly rates are: Raymond H. Aver, Shareholder $525 Ani Minasan, Paraprofessional $175 Aver Firm does not hold or represent an interest adverse to the estate, and is a disinterested person as required by the Bankruptcy Code Sec. 327(a), according to court filings. The firm can be reached through: Raymond H. Aver, Esq. Law Offices of Raymond H. Aver, APC 10801 National Boulevard, Suite 100 Los Angeles, CA 90064 Tel: (310) 571-3511 Email: ray@everlaw.com About Deco Enterprises, Inc. Deco Enterprises, Inc. manufactures lighting fixtures and systems. Deco Enterprises, Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11846) on Feb 20, 2020. In the petition signed by Babak Sinai, president/chief executive officer, the Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. Raymond H. Aver, Esq. at the Law Offices of Raymond H. Aver, APC, represents the Debtor as counsel. DIAMOND SPORTS: Moody's Places Ba3 CFR on Review for Dowgrade ------------------------------------------------------------- Moody's Investors Service placed Diamond Sports Group, LLC's Ba3 corporate family rating, Ba3-PD probability of default rating, Ba2 ratings on the company's senior secured credit facility and senior secured notes, and B2 rating on the company's senior unsecured notes on review for downgrade. Concurrently, Moody's downgraded the company's speculative grade liquidity rating to SGL-3 from SGL-2. Downgrades: Issuer: Diamond Sports Group, LLC Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 On Review for Possible Downgrade: Issuer: Diamond Sports Group, LLC Probability of Default Rating, Placed on Review for Downgrade, currently Ba3-PD Corporate Family Rating, Placed on Review for Downgrade, currently Ba3 Senior Secured Bank Credit Facility, Placed on Review for Downgrade, currently Ba2 (LGD3) Senior Secured Regular Bond/Debenture, Placed on Review for Downgrade, currently Ba2 (LGD3) Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently B2 (LGD6 from LGD5) Outlook Actions: Issuer: Diamond Sports Group, LLC Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The review for downgrade reflects the increasing risk on Diamond's performance stemming from the suspensions of the National Basketball Association (NBA) and National Hockey League (NHL) games announced earlier this month as well as heightened risk that the Major League Baseball season-start is pushed back even further than the current mid-April date. These suspensions and delay were in response to the initial rapid outbreak of coronavirus in the US. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Sporting events are significantly affected by the shock given mandates restricting crowd gatherings and sensitivity to consumer demand and sentiment. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Given the evolution of the pandemic within the US, the lockdown imposed in many states as well as the continued increase in the spread of the virus, the ratings were placed on review to reflect the uncertainty over whether the suspended games would eventually be played as well as the risk that the MLB season could be pushed back by months or even cancelled. This would effectively leave Diamond with no new programming to broadcast until Fall when the new NBA and NHL seasons kick off. While Diamond has some ability to flex production costs and team payments if games are not played, a protracted period with no new content would hinder the company's ability to renegotiate with some of its distribution partners. In particular with Dish Network Corporation (DISH, Ba3 RUR), who has not carried the regional sports networks (RSNs) since July 2019, and Comcast, which renews its carriage agreement in September 2020. With no DISH contribution in the first half of 2020, Moody's forecast Diamond's 2020 leverage to be around 6.8x by year end (subject to increase if the DISH blackout continues for an extended period), well above the company's stated 4.5x target (net debt/EBITDA) and Moody's guidance for the Ba3 rating of leverage (Moody's adjusted gross debt/EBITDA) below 5.5x. Moody's review will focus on any further disruption to the various sports games' schedules as well as any progress in renewing Diamond's carriage agreement with Dish and their impact on Diamond's credit profile and ability to reduce leverage. Diamond has an adequate liquidity profile with around $475 million of cash expected at the end of March, following the payment of a $376 million put option and the retirement of $200 million of preferred shares since year end. This cash balance was recently bumped by the company drawing $225 million under its $650 million revolving credit facility, just shy of the 35% that would have required Diamond to comply with a 6.25x net first lien leverage covenant. Headquartered in Hunt Valley, MD, Diamond Sports Group, LLC was formed on March 11, 2019 and is the entity through which Sinclair Broadcast Group, Inc executed the acquisition of the RSNs. Diamond owns and operates 22 RSNs that broadcast NBA, NHL and MLB games on pay-TV platforms. The principal methodology used in these ratings was Media Industry published in June 2017. DYNAMIC PRECISION: S&P Lowers ICR to 'CCC+' on Refinancing Risk --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Dynamic Precision Group Inc. (DPG) to 'CCC+' from 'B-' and revised its outlook to developing. At the same time, we are lowering the rating on the company's revolver and term loan to 'CCC+' from 'B-'. The recovery rating remains '3'. S&P questions DPG's (operates as Paradigm Precision) ability to refinance or extend the maturity of its credit facility given current market uncertainty. The company's $70 million revolver and term loan, which has about $245 million outstanding, both mature in December 2020. However, credit markets have weakened over the past two weeks given the uncertainty surrounding the coronavirus impact on the global economy, and this could hinder the company's ability to refinance or extend maturities. Although S&P expects the company to maintain enough liquidity to weather the lower production on the 737 MAX and potential coronavirus impact, the company does not have enough cash to cover the maturities in December. The company recently drew on its revolver as a precaution, and has about $60 million of cash on hand, but no revolver availability. S&P's developing outlook on DPG reflects uncertainty around the company's ability to refinance or extend the maturities on their revolver and term loan, both due in December 2020, because of the market volatility driven by the coronavirus. However, it also reflects that the company's credit metrics will likely be strong for the rating level, with debt to EBITDA expected to be about 5x in 2020 including the impact of lower production on the LEAP-1B engine for the 737 MAX and the impact of coronavirus. "We could lower the rating on DPG over the next three months (within six months of the maturity) if we believe the company will be unable to refinance its debt. This could be because of continued volatility in markets, because of the coronavirus, or less likely, production on the LEAP-1B being lower than we currently forecast," S&P said. "We could raise our ratings on DPG over the next nine months if the company successfully refinances or extends the maturities on the revolver and term loan. Also, debt to EBITDA would have to remain below 7.5x, despite the impact of lower production on the LEAP-1B and the coronavirus," the rating agency said. ENCINO ACQUISITION: S&P Downgrades ICR to 'B-'; Outlook Negative ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Encino Acquisition Partners LLC to 'B-' from 'B+'. S&P also lowered its issue-level rating on the company's second-lien term loan due 2025 to 'B' from 'BB'. The rating agency revised the recovery rating to '2', reflecting its expectation of a substantial (70%-90%, rounded estimate: 80%) recovery in the event of a payment default. "The downgrade on Encino Acquisition Partners reflects substantially weaker credit metrics, including funds from operations (FFO) to debt well below our prior outlook trigger of 30%, with average debt to EBITDA projected to exceed 3.5x--coming within a turn of the 4x maximum leverage covenant under the credit agreement. We also expect Encino will outspend internally generated cash flow this year, which could strain liquidity because almost 50% of the $1.05 billion borrowing base is already encumbered by outstanding borrowings and letters of credit. Given recent market conditions, we believe lenders may take a more conservative stance during upcoming redetermination cycles, which would amplify credit risk. Notwithstanding the aforementioned factors, Encino is well-hedged across each of its production streams for 2020 and into 2021, and it should benefit from its firm transportation contracts. The company has approximately 80% of expected oil and gas production hedged in 2020 with over 65% hedged in 2021. Likewise, Encino's lack of near-term debt maturities (its credit facility expires in 2023 and its second-lien term loan matures in 2025) provides a longer runway relative to peers," S&P said. The negative outlook reflects S&P's expectation that Encino's cash outflows over the next 12 months, along with potential borrowing base revisions, could put pressure on liquidity with almost half of the company's RBL facility already encumbered. "We could lower the rating if liquidity deteriorates, if we believe the capital structure is no longer sustainable, or if we believe there is a significant possibility of a debt exchange that we could view as distressed," S&P said. "We could revise our outlook on Encino to stable if the company materially reduces revolver borrowings and maintains an FFO-to-debt comfortably above 20%. We believe this scenario could occur if commodity prices rebound and Encino generates sustained free cash flow," S&P said. EP ENERGY: Fourth Amended Joint Plan Confirmed by Judge ------------------------------------------------------- Judge Marvin Isgur entered findings of fact, conclusion of law, and order confirming the Fourth Amended Joint Chapter 11 Plan of EP Energy Corporation and its Affiliated Debtors. The holders of Claims in Class 3 (RBL Claims), Class 6 (1.5L Notes Claims), Class 7A (Unsecured Claims), Class 7B (Parent Unsecured Claims), Class 8 (Convenience Claims), and Class 11 (Existing Parent Equity Interests) are Impaired under the Plan and have voted to accept the Plan in the numbers and amounts required by Section 1126 of the Bankruptcy Code. No Class that was entitled to vote on the Plan voted to reject the Plan. The Plan and each of its provisions are confirmed pursuant to section 1129 of the Bankruptcy Code. The documents contained in or contemplated by the Plan, including the Plan Supplement, are authorized and approved. Upon the Effective Date, the Debtors and the Reorganized Debtors, as applicable, are authorized to exchange the Reinstated 1.25L Notes for New Common Shares in accordance with the Backstop Commitment Agreement, as approved by the Backstop Order. On the Effective Date, the Reorganized Debtors are authorized to enter into the Exit Credit Agreement and all other documents and other collateral documents contemplated. The Exit Facility Documents will constitute legal, valid, binding, and authorized joint and several obligations of the applicable Reorganized Debtors enforceable in accordance with their terms and such obligations shall not be enjoined or subject to discharge or subordination under applicable law, the Plan, or this Confirmation Order. As reported in the Troubled Company Reporter, EP Energy Corporation and its debtor affiliates submitted a Fourth Amended Joint Chapter 11 Plan that projects these recoveries: Class Amount Recovery ----- ------ -------- Class 3 (RBL Claims) $314,710,456 100.00% Class 6 (1.5L Notes Claims) $2,186,617,532 15.13% Class 7A (Unsecured Claims) $845,067,228 3.46% Class 7B (Parent Unsec. Claims) $1,000 100.00% Class 8 (Convenience Claims). $1,750,000 10.00% The Plan treats claims as follows: * Holders of Allowed 1.125L Notes Claims will have their 1.125L Notes reinstated in the principal amount of $1 billion. * Holders of Allowed 1.25L Notes Claims will have their 1.25L Notes reinstated in the principal amount of $500 million. * Holders of Allowed 1.5L Notes Claims will receive on account of such Allowed 1.5L Notes Claim, in full and final satisfaction of such Allowed 1.5L Notes Claim, (i) its Pro Rata share of 100% of the New Common Shares (which shall be distributed to holders of Allowed 1.5L Notes Claims on or about the Effective Date), subject to dilution by the Rights Offering Shares, the Backstop Commitment Premium, the Unsecured Claims Shares, and the EIP Shares. * Holders of Allowed Unsecured Claims will receive its pro rata share of 1.75% of the New Common Shares outstanding as of the Effective Date after giving effect to all Plan distributions, the Rights Offerings, and the Backstop Commitment Agreement (including the Backstop Commitment Premium). * Holders of Parent Unsecured Claims will receive the lesser of (a) payment in cash of 100% of such Allowed Parent Unsecured Claim, or (b) its Pro Rata share of the Cash on EP Energy's balance sheet on the Effective Date. * Holders of Allowed Convenience Claims will receive the lesser of (a) payment in cash of 10% of such Allowed Convenience Claim, or (b) their Pro Rata share of the Convenience Claim Distribution Amount. * Holders of Existing Parent Equity Interests will receive, on account of available assets of EP Energy, their Pro Rata share of $500,000 in Cash. A full-text copy of the Disclosure Statement dated January 13, 2020, is available atÂ https://tinyurl.com/u574gb5 from A full-text copy of the Order Confirming the Plan entered March 12, 2020, is available at https://tinyurl.com/unlhtgm from PacerMonitor at no charge. The Debtors are represented by: WEIL, GOTSHAL & MANGES LLP Alfredo R. Perez Clifford W. Carlson 700 Louisiana Street, Suite 1700 Houston, Texas 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511 E-mail: Alfredo.Perez@weil.com Clifford.Carlson@weil.com – and – WEIL, GOTSHAL & MANGES LLP Matthew S. Barr Ronit Berkovich Scott R. Bowling David J. Cohen 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 E-mail: Matt.Barr@weil.com Ronit.Berkovich@weil.com Scott.Bowling@weil.com DavidJ.Cohen@weil.com About EP Energy EP Energy Corporation and its direct and indirect subsidiaries(OTC Pink: EPEG) -- http://www.epenergy.com/-- are a North American oil and natural gas exploration and production company headquartered in Houston, Texas. The Debtors operate through a diverse base of producing assets and are focused on the development of drilling inventory located in three areas: the Eagle Ford shale in South Texas, the Permian Basin in West Texas, and Northeastern Utah. EP Energy Corporation and its subsidiaries sought Chapter 11 protection on Oct. 3, 2019, after reaching a deal with Elliott Management Corporation, Apollo Global Management, LLC, and certain other noteholders on a bankruptcy exit plan that would reduce debt by 3.3 billion. The lead case is In re EP Energy Corporation (Bankr. S.D. Tex. Lead Case No. 19-35654). EP Energy was estimated to have $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. Judge Marvin Isgur oversees the case. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; Evercore Group L.L.C. as investment banker; and FTI Consulting, Inc. as financial advisor. Prime Clerk LLC is the claims agent. EVERI PAYMENTS: Moody's Cuts CFR to B2, Outlook Negative -------------------------------------------------------- Moody's Investors Service downgraded EVERI Payments Inc.'s Corporate Family Rating to B2 from B1 and Probability of Default Rating to B2-PD from B1-PD. The company's senior secured revolver and term loan were downgraded to B1 from Ba3, and senior unsecured notes were downgraded to Caa1 from B3. The company's Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-1. The outlook is negative. The downgrade of EVERI's CFR is in response to the disruption in casino visitation and gaming machine use resulting from efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments to avoid gatherings and avoid non-essential travel. These efforts additionally include mandates to close casinos, EVERI's customers, on a temporary basis. The downgrade also reflects the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at casinos once this crisis subsides. Downgrades: Issuer: EVERI Payments Inc. Probability of Default Rating, Downgraded to B2-PD from B1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-1 Corporate Family Rating, Downgraded to B2 from B1 Senior Secured Bank Credit Facility, Downgraded to B1 (LGD3) from Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD5) from B3 (LGD5) Outlook Actions: Issuer: EVERI Payments Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE EVERI's B2 CFR reflects the meaningful revenue and earnings decline over the next few months expected from efforts to contain the coronavirus and the potential for a slow recovery once conditions improve. The rating further reflects the company's exposure to the slot machine replacement cycle demand in the US gaming market in addition to the company's high debt level resulting primarily from debt financing related to the December 2014 acquisition of Multimedia Games. Revenues are largely tied to the volume of gaming machine play and cash withdrawal transactions in gaming facilities. The company can reduce spending on game development and capital expenditures when revenue weakens, but the need to retain a skilled workforce to maintain competitive technology contributes to high operating leverage. The company benefits from the demonstrated stability and growth of its Fintech operating segment, with a growing installed base and increased daily win per unit in its gaming business, during normal operating circumstances. The downgrade of the company's speculative-grade liquidity rating to SGL-3 from SGL-1 considers the expected decline in earnings and cash flow and increased risk of a covenant violation. As of the year ended December 31, 2019, EVERI had cash of approximately $290 million (cash was $126 million net of settlement receivables/liabilities), and a $35 million undrawn revolving credit facility. The company fully drew down on its revolver in March 2020. Moody's estimates the company could maintain sufficient internal cash sources after maintenance capital expenditures to meet required annual amortization and interest requirements assuming a sizeable decline in annual EBITDA. The expected EBITDA decline will not be ratable over the next year and because EBITDA and free cash flow will be negative for an uncertain time period, liquidity and leverage could deteriorate quickly over the next few months. The company has no near-term debt maturities, with its revolving credit facility maturing in 2022 and term loan maturing in 2024. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in EVERI's credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and EVERI remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on EVERI of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook considers that EVERI remains vulnerable to travel disruptions and unfavorable sudden shifts in discretionary consumer spending and the uncertainty regarding the timing of its customers' facilities reopening and the pace at which consumer spending at these properties will recover. Ratings could be downgraded if liquidity deteriorates or if Moody's anticipates EVERI's earnings declines to be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. A ratings upgrade is unlikely given the weak operating environment. However, the ratings could be upgraded if customers facilities reopen and earnings recover such that positive free cash flow and reinvestment flexibility is restored and debt-to-EBITDA is sustained below 4.5x. EVERI Payments Inc., a wholly owned subsidiary of Everi Holdings Inc. (NYSE: EVRI), is a provider of video and mechanical reel gaming content and technology solutions, integrated gaming payments solutions, compliance and efficiency software, and loyalty and marketing software and solutions. For the latest 12-month period December 31, 2019, EVERI reported revenue of about $533 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. FARR BUILDERS: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Farr Builders, LLC. About Farr Builders Farr Builders, LLC, a general contractor based in San Antonio, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50324) on Feb. 7, 2020. At the time of the filing, the Debtor disclosed $3,792,881 in assets and $2,345,269 in liabilities. Judge Ronald B. King oversees the case. Heidi McLeod Law Office is the Debtor's bankruptcy counsel. FORD MOTOR: S&P Cuts ICR to BB+; Ratings on CreditWatch Negative ---------------------------------------------------------------- S&P Global Ratings downgraded its long-term issuer credit rating on Ford Motor Co. to 'BB+' from 'BBB-' and assigned issue-level ratings of 'BB+' on the company's unsecured debt. The downgrade follows the company's decision to suspend production at its manufacturing sites in Europe for four weeks and halt production in North America to clean these facilities and boost containment efforts for the COVID-19 coronavirus. S&P expects Ford's EBITDA margin to remain below 6% on a sustained basis and believes that the company's free operating cash flow to debt is unlikely to exceed 15% on a consistent basis. Ford has drawn $13.4 billion on its corporate credit facility and $2 billion on its supplemental credit facility. S&P believes the company's current cash position stands at about $36 billion. Meanwhile, S&P placed the ratings on CreditWatch with negative implications, which reflects at least a 50% chance that it could lower the ratings depending on factors such as the duration of the plant shutdowns, the rate of cash burn, and the adequacy of Ford's liquidity position. The coronavirus has delivered supply-side and demand-side shocks to light-vehicle demand. The decision to downgrade Ford Motor Co. investment grade to speculative grade reflects that the company's credit metrics and competitive position became borderline for the investment-grade rating prior to the coronavirus outbreak, and the expected downturn in light-vehicle demand made it unlikely that Ford would maintain the required metrics. "The CreditWatch placement with negative implications, which reflects at least a 50% chance that we could lower the rating on Ford on account of longer-than-expected plant shutdowns or a potential economic recession leading to negative cash flow generation, eroding liquidity, and higher debt leverage. We expect to resolve the CreditWatch placement over the next 90 days, once we have a better understanding of how long the light-vehicle production and demand will remain curtailed due to government efforts to contain the spread of the coronavirus," S&P said. FOSSIL GROUP: Moody's Cuts CFR to B2, Outlook Negative ------------------------------------------------------ Moody's Investors Service downgraded Fossil Group, Inc.'s ratings, including its corporate family rating to B2 from Ba3; probability of default rating to B2-PD from Ba3-PD, and senior secured term loan to B2 from Ba3. At the same time, Moody's downgraded the company's speculative grade liquidity rating to SGL-3 from SGL-1. The ratings outlook is negative. The downgrade and negative outlook reflect the disruption caused by the rapid global spread of the coronavirus and the Fossil's already weak operating performance related to declining traditional watch sales and challenges with older generation Connected watches. Widespread temporary store closures and expected weaker discretionary consumer spending will likely lead to significant declines in revenue and earnings, pressuring free cash flow in 2020. While Its recent bank amendment improved cushion under its term loan maximum total leverage covenant, Moody's believe that compliance could become tenuous in a more prolonged or severe downturn scenario. Downgrades: Issuer: Fossil Group, Inc. Probability of Default Rating, Downgraded to B2-PD from Ba3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-1 Corporate Family Rating, Downgraded to B2 from Ba3 Senior Secured Bank Credit Facility, Downgraded to B2 (LGD4) from Ba3 (LGD3) Outlook Actions: Issuer: Fossil Group, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The apparel sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Fossil's credit profile, including its exposure to discretionary consumer spending, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Fossil remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Fossil of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Fossil's B2 CFR reflects its high reliance on watch products for the significant majority of sales, the highly discretionary nature of the product category and declining sales due to technological change. Over time, Moody's believes growth opportunities exist for Fossil, through increased scale in its connected business, international expansion and e-commerce. However, it will take some time for the connected business to gain the scale needed to offset the declining traditional watch business. While having a diverse portfolio of brands, the rating also considers Fossil's high reliance on certain licensed brands, such as Michael Kors, for sales. The rating also reflects Fossil's position as one of the world's largest manufacturers and distributors of watches. The company has a broad portfolio of owned and licensed brands, which provide it with broad distribution across a wide range of retailers, and broad international reach, with the majority of its consolidated net sales generated outside the US. While Fossil has a high reliance on third party licensing sales, the company's demonstrated manufacturing, design and distribution capabilities provide a high likelihood of maintaining relationships with a broad range of sizeable lifestyle brand owners. The rating also takes into consideration the company's recent margin improvements stemming from significant cost savings actions and moderate financial leverage. Liquidity is adequate, supported by $200 million of cash as of December 28, 2019, and more that $100 million of estimated proceeds from the incremental revolver borrowings announced on March 27, 2020. The negative outlook reflects the risks associated with the rapid spread of the coronavirus, the potential for a prolonged contraction in discretionary consumer spending, and the negative impact this would have on earnings, free cash flow and covenant compliance. Ratings could be downgraded if liquidity weakens due to prolonged free cash flow burn or covenant compliance concerns. Quantitative metrics include EBITA/Interest sustained below 1.25 times. Ratings could be upgraded if the company resumes revenue growth and profit margin expansion while maintaining adequate liquidity, including solid positive free cash flow and ample covenant cushion. Metrics include maintaining EBITA/Interest coverage over 2.0 times. Fossil Group, Inc. is a global design, marketing and distribution company that specializes in consumer lifestyle and fashion accessories. Principal offerings include an extensive line of men's and women's fashion watches, jewelry, handbags, small leather goods, and accessories sold under a diverse portfolio of proprietary and licensed brands. Revenue exceeded $2.2 billion in fiscal 2019. The principal methodology used in these ratings was Apparel Methodology published in October 2019. FRONTIER COMMUNICATIONS: Continues Talks on Possible Restructuring ------------------------------------------------------------------ Frontier Communications Corporation disclosed in a Form 8-K filed with the Securities and Exchange Commission that since January 2020, it has been engaged in discussions with certain holders of the Company's unsecured notes with respect to potential deleveraging or restructuring transactions which may include the filing of Chapter 11 cases under the U.S. Bankruptcy Code to implement the transactions. The Company has entered into confidentiality agreements (the "NDAs") with those noteholders in connection therewith. Pursuant to the terms of the NDAs, the Company agreed to publicly disclose certain confidential information regarding the Company provided to the NDA Parties pursuant to the NDAs upon the occurrence of certain events. The Cleansing Materials are available for free at https://is.gd/bu3nYT The Cleansing Materials contain the Company's preliminary estimates of certain financial results for the year ended Dec. 31, 2019, based on currently available information. The Company has not yet finalized its results for this period and its consolidated financial statements as of and for the year ended Dec. 31, 2019 are not currently available. The Company's actual results remain subject to the completion of the year-end closing process, which includes review by management and the Company's board of directors, including the audit committee. While carrying out such procedures, the Company may identify items that require it to make adjustments to the preliminary estimates of its results set forth therein. As a result, the Company's actual results could be different from those set forth therein and the differences could be material. Additionally, the Company's estimates are forward-looking statements based solely on information available to it as of the date of the Cleansing Materials and may differ from actual results and such differences may be material. Therefore, a reader should not place undue reliance on these preliminary estimates of the Company's results. The preliminary estimates of the Company's results included therein have been prepared by, and are the responsibility of, the Company's management. The Company's independent auditors have not audited, reviewed or compiled such preliminary estimates of the Company's results. Accordingly, KPMG LLP expresses no opinion or any other form of assurance with respect thereto. The preliminary estimates of certain financial results presented therein should not be considered a substitute for the information to be filed with the SEC in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 once it becomes available. Frontier said, "While the Company continues to actively engage in discussions with the holders of the Company's unsecured notes, including the NDA Parties, regarding potential deleveraging or restructuring transactions, the Company cannot assure you if, or when, the Company will reach an agreement with its noteholders or the terms of any such agreement. As announced on March 16, 2020, the Company made the decision to defer approximately $322 million in interest payments on its unsecured notes and take advantage of the 60-day grace period allowed under the governing indentures to facilitate the ongoing discussions with holders of its unsecured notes. The Company expects to continue to provide quality service to its customers without interruption and work with its business partners as usual during the course of these discussions and any potential transaction. About Frontier Communications Headquartered in Norwalk, Connecticut, Frontier Communications Corporation (NASDAQ: FTR) -- http://www.frontier.com/-- is a provider of communications services to urban, suburban, and rural communities in 29 states. Frontier offers a variety of services to residential customers over its fiber-optic and copper networks, including video, internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Business offers communications solutions to small, medium, and enterprise businesses. The Company incurred net losses of $643 million in 2018, $1.80 billion in 2017, and $373 million in 2016. As of Sept. 30, 2019, Frontier had $17.56 billion in total assets, $2.74 billion in total current liabilities, $580 million in deferred income taxes, $1.64 billion in pension and other post-retirement benefits, $398 million in other liabilities, $16.30 billion in long-term debt, and a total deficit of $4.10 billion. * * * As reported by the TCR on Aug. 14, 2019, Moody's Investors Service downgraded the corporate family rating of Frontier Communications Corporation to Caa2 from Caa1 and the probability of default rating to Caa3-PD from Caa1-PD. The downgrade of the CFR reflects an updated assessment of the company's probability of default and recovery expectations following weak second quarter 2019 revenue and EBITDA results, continued negative net customer addition trends and reduced expectations regarding cost efficiency programs going forward. As reported by the TCR on March 19, 2020, Fitch Ratings downgraded Frontier Communications Corporation's and its subsidiaries' Long-Term Issuer Default Rating to 'C' from 'CC'. Frontier has not reported earnings for 2019. Fitch expects Frontier to report negative revenue trends in 2019, slightly less than the nearly 6% decline in 2018. Revenues could remain pressured in 2020 due to economic weakness arising from the slowing economy and disruptions from the coronavirus pandemic. While telecom operators are not expected to be materially affected by the latter at this time, Fitch expects to see some weakness, primarily from small and medium businesses. The TCR reported on March 20, 2020 that S&P Global Ratings lowered the issuer credit rating on U.S.-based telecommunications service provider Frontier Communications Corp. to 'SD' (selective default) from 'CCC-'. The downgrade follows Frontier's election to not make about $322 million of interest payments on its unsecured California, Texas, and Florida (CTF) notes and legacy unsecured notes (including the 8.875% senior notes due 2020, 10.5% senior notes due 2022, 11.0% senior notes due 2025, and 6.25% senior notes due 2021) and to enter a 60-day grace period while it weighs options to address its capital structure. G.D.S. EXPRESS: Hires Barnes Wendling as Accountant --------------------------------------------------- G.D.S. Express, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Ohio to employ Barnes Wendling CPAs, Inc., as accountant to the Debtor. G.D.S. Express requires Barnes Wendling to: a. prepare tax returns; b. communicate with various taxing authorities; and c. perform all other necessary and general tax services required throughout the Chapter 11. Barnes Wendling will be paid at these hourly rates: Directors $330 to $400 Managers $250 Supervisors $175 Staff Accountants $125 During the 12 month period ending December 27, 2019, the Debtors paid fees to Barnes Wendling in an amount totaling $60,000 for its accounting and tax services. Barnes Wendling will also be reimbursed for reasonable out-of-pocket expenses incurred. Michael S. Essenmacher, partner of Barnes Wendling CPAs, Inc., 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. Barnes Wendling can be reached at: Michael S. Essenmacher BARNES WENDLING CPAS, INC. 1350 Euclid Ave., Suite 1400 Cleveland, OH 44115 Tel: (216) 566-9000 About G.D.S. Express G.D.S. Express, Inc. -- http://www.gdsexpress.com/-- is a family-owned trucking company that provides services in 48 states, with general freight and garment-on-hangers service in both the U.S. and Mexico. It operates with 75 owner operators and 60 company trucks. Headquartered in Akron, Ohio, G.D.S. Express was founded in 1990 by Jack Delaney, a former Roadway Express executive. G.D.S. Express and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 19-53034) on Dec. 27, 2019. At the time of the filing, G.D.S. Express had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Alan M. Koschik oversees the cases. Brouse McDowell, LPA is the Debtors' legal counsel. The U.S. Trustee for Region 9 appointed a committee of unsecured creditors on Jan. 15, 2020. The committee is represented by Levinson LLP. GIP III STETSON: Fitch Lowers IDR to B- & Alters Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has downgraded GIP III Stetson I, L.P. and GIP III Stetson II, L.P. 's Issuer Default Rating to 'B-' from 'B+' and senior secured rating to 'CCC'/'RR6' from 'B-'/'RR6'. The Rating Outlook is revised from Negative to Stable. The downgrade reflects GIP Stetson's unsustainable high leverage following EnLink Midstream LLC's (ENLC; BB+/Negative) approximately 50% distribution cut, a move that enhances FCF and liquidity at ENLC, but worsens GIP Stetson's credit profile. Fitch now forecasts GIP Stetson's leverage to be approximately 10x for 2020 and 2021. The excess cash flow sweep provision mandated GIP Stetson to distribute 75% of its excess cash flow when leverage is above 5.0x. The Stable Outlook is reflective of Fitch's view that ENLC should now have adequate liquidity to operate through 2020 following its recent distribution and capex reduction. Given GIP's sole reliance on distribution from ENLC to meet its debt service and with a small cushion remaining above its 1.1x debt service coverage ratio (DSCR) covenant (as defined in the credit agreement), no additional distribution cut will be made in the near term, in Fitch's view. Moreover, GIP Stetson's ratings also consider the structural subordination of GIP Stetson's debt to ENLC's and EnLink Midstream Partners, LP's (ENLK; BB+/Negative) debt and preferred security. The rating also reflects GIP Stetson's profile of cash flow concentration, as the cash flow used to service GIP Stetson's term loan is solely dependent on dividends received from ENLC. Therefore, Fitch primarily assesses GIP Stetson's credit profile and metrics on its stand-alone financial characteristics with the recognition that GIP Stetson's earnings and cash flow are very much tied to ENLC's performance and equity distributions. KEY RATING DRIVERS Credit Metrics Significantly Weakened: Following ENLC's approximately 50% distribution cut to $0.375/unit, on an annual distribution basis, Fitch projects GIP Stetson's YE leverage to be unsustainably high at close to approximately 10x in both 2020 and 2021. GIP Stetson currently owns approximately 41% of ENLC's outstanding shares. Fitch views that under ENLC's current distribution policy, GIP Stetson will sufficiently service its required interest expense and modestly deleverage through its cash flow sweep in 2020. GIP Stetson's DSCR is forecasted to be close to 1.3x-1.4x in the forecast years under the current distribution level. The excess cash flow sweep provision mandated GIP Stetson to distribute 75% of its excess cash flow when leverage is above 5.0x. Further distribution cuts at ENLC will severely impact GIP Stetson, which is currently weakly positioned at the 'B-' rating level. Cash Flow Concentration: GIP Stetson's ratings reflect concerns around cash flow concentration in receiving dividend distribution from its subsidiary ENLC. Cash flow to service GIP Stetson's term loan is solely dependent on dividends received from the operating entity. Any outsized events or financial distress at ENLC resulting in material dividend reduction would impair cash flow to GIP Stetson. However, Fitch notes that approximately 90% of ENLC's gross operating margin is tied to long-term fee-based services, which should provide some levels of cash flow stability. Further, ENLC also has historically had a strong focus on fee-based contracts to mitigate commodity price volatility. Structural Subordination: GIP Stetson's ratings also reflect that the $1.0 billion senior secured term loan is structurally subordinated to the senior debt at the subsidiaries-level, ENLC and ENLK, and is solely reliant on the dividend distribution from its subsidiaries for debt service payment. Cash flow generated at its operating subsidiary ENLK is prioritized to service debt and interest payment at ENLK and ENLC. Additionally, GIP Stetson's term loan is only secured by pledged equity interest in ENLC and is junior to both senior debt and preferred equity at the subsidiaries in recovery claims should a credit event default occurs at either ENLC or ENLK. Under Fitch's parent-subsidiary linkage analysis, GIP also exhibits a weaker credit profile relative to its subsidiary ENLK given the cash flow structure and provisions around ENLC's distribution. Global Infrastructure Partners' Track Record: Fitch notes that Global Infrastructure Partners has a wealth of expertise as to operations best practices and financial structuring. The firm has invested or committed over $20 billion in equity capital in the energy sector, specifically within across the midstream space as well. ESG: GIP III Stetson I, L.P. and GIP III Stetson II, L.P. have an ESG Relevance Score of 4 for Group Structure and Financial Transparency that reflects the companies' complex group structure with significant structural subordination. DERIVATION SUMMARY GIP Stetson generates its cash flow from distribution payments from EnLink Midstream LLC (ENLC). The cash flow structure is similar to Equitrans Midstream Corporation (ETRN; NR). For GIP Stetson, its IDRs and ratings also reflect the structural subordination, in which GIP Stetson's term loan is junior to the senior debt and preferred security at ENLC. ETRN's ratings are also reflective of its structural subordination at the EQM Midstream (EQM; BB/Negative) family structural and cash flow reliance on EQM's distribution. Relative to ETRN, GIP Stetson has a slightly higher leverage level, with Fitch forecasting ETRN's stand-alone leverage to be below 4.5x in 2020. Additionally, Fitch also merits a two-notch separation in the IDRs of ETRN and its operating subsidiary EQM Midstream Partners. The Negative Outlook at ETRN and EQM reflects Fitch's continued concerns around near term challenges at EQT's credit profile in a weak natural gas price environment, higher liquidity risks and execution risks around its asset sales, and uncertainties around the Mountain Valley Pipeline (MVP) project execution as it experiences regulatory and environmental challenges with multiple delays and cost overruns. For select historic holdco comparison, prior to the inter-family transaction that took place in 2018 between Williams Companies, Inc. (WMB, BBB/Rating Watch Positive) and Williams Partners, L.P., Williams Companies was primarily a holdCo receiving distribution from Williams Partners. WMB had leverage of approximately 2.5x in 2017. Relative to ENLC, WMB is significantly larger and more diversified geographically. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Distribution remains level throughout forecast years; - Deleveraging supported by term loan amortization (1% per annum) and debt repayment under excess cash flow sweep; - Excess cash flow after required debt service payments is distributed to Global Infrastructure Partner. Recovery Assumption: In its recovery analysis, Fitch assumes a default scenario at the HoldCo (GIP Stetson) level caused by a suspension of distribution from ENLC. In such a distressed scenario, Fitch assumes ENLC's EBITDA falls to a level of $600 million. In calculating the 41% equity value that GIP Stetson owns, Fitch applies a going-concern (GC) approach to value ENLC's EBITDA using a 6x multiple. This multiple is consistent with the 6x multiple that is in line with recent reorganization multiples in the energy sector and issuers in the midstream energy space that has G&P operations. Assuming an approximately 100% drawn revolver at ENLC, there would be no residual equity value left for GIP Stetson's 41% ownership stake in ENLC. In such scenario, Fitch determine the recovery rating for GIP Steton's term loan B to be 'RR6', which represents 'poor' recovery prospects in the event of default. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Stand-alone debt to distributions below 4.0x on a sustained basis could lead to positive rating action. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Negative rating action could happen if stand-alone debt to distributions received exceeds 5.0x on a sustained basis; -- Multi-notch downgrade at ENLC; -- Any recovery scenario that Fitch does in the future that would incorporate both the opco at ENLC and holdco at GIP Stetson going into bankruptcy (if and when such a scenario is used) would probably cause a multi-notch downgrade to GIP Stetson loan, on account of (i) an assumed draw on the ENLC revolver (per criteria) and (ii) bankruptcy administration costs at the ENLC and GIP Stetson level (iii) structural subordination of the GIP Stetson term loan relative to ENLC's debt. These assumptions would drastically reduce the value available for GIP Stetson. LIQUIDITY AND DEBT STRUCTURE Liquidity Weakened: Following ENLC's 50% distribution cut, GIP Stetson's cash flow is significantly weakened. While Fitch views that the under current ENLC's current distribution policy GIP Stetson will sufficiently to service its required interest expense and deleverage through its cash flow sweep in 2020, the deleveraging pace is now much slower given the lower distribution received from ENLC. The excess cash flow sweep provision mandated GIP Stetson to distribute 75% of its excess cash flow when leverage is above 5.0x. The remaining amount is the cash flow available as distribution to Global Infrastructure Partners. GIP Stetson also has a six-month debt service reserve account in place supported by letters of credits. The instrument that provides back-up liquidity directed toward term loan holders is in the form of a LOC issued by a bank. The LOC is for approximately $35million-$40 million, which represents six months of expected interest and schedule principal repayments. The LOC is written in favor of the collateral agent. The obligation to repay the LOC resides at an entity above GIP Stetson, in GIP Stetson's ownership chain. GMJ MACHINE: Bankruptcy Administrator Unable to Appoint Committee ----------------------------------------------------------------- The U.S. Bankruptcy Administrator for the Southern District of Alabama on March 26 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of GMJ Machine Company, Inc. About GMJ Machine Company GMJ Machine Company, Inc. manufactures specialized components for the aerospace, defense, general aviation, and energy industries. GMJ Machine Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 20-10632) on Feb. 27, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Jerry C. Oldshue oversees the case. Robert M. Galloway, Esq., at Galloway, Wettermark & Rutens, LLP, is the Debtor's legal counsel. GP RARE EARTH: Seeks to Hire Collector's Edge Minerals as Broker ---------------------------------------------------------------- GP Rare Earth Trading Account LLC seeks authority from the US Bankruptcy Code for the Eastern District of Wisconsin to hire Collector's Edge Minerals Inc. to act as non-exclusive sales agent for the sale of certain fine minerals owned by Debtor. The professional services to be rendered by the broker are: a. act as the exclusive broker for the sale of certain fine minerals; b. show, advertise, clean, and exhibit the specimens through multiple channels to try to obtain the highest value for the minerals; c. communicate with potential purchasers; d. act as an intermediary between Debtor and the purchaser to process the paperwork to complete the sale; and e. arrange shipping/delivery of the Specimens to the final purchaser. The broker will earn a 30 percent commission of all sales. The broker's earned commission will be as follows: a. the first $10,000,000 of aggregate gross sales shall be 5 percent if the sale is agreed within the initial 180 effective days, and 10 percent thereafter; b. the next $10,000,001 through $20,000,000 of aggregate gross sales shall be 5 percent; c. the next $20,000,001 through $30,000,000 of aggregate gross sales shall be 4 percent; d. the next $30,000,001 through $40,000,000 of aggregate gross sales shall be 3 percent; e. the next $40,000,001 through $50,000,000 of aggregate gross sales shall be 2 percent; f. the next $50,000,001 or more of aggregate gross sales shall be 1 percent. The broker neither holds nor represents an interest adverse to the estates, has no conflict of interest with Debtors, and is a disinterested person, according to court filings. The firm can be reached through: John Kustusch Collector's Edge Minerals Inc. 490 Orchard St Golden, CO 80401 Phone: +1 303-278-9724 About Greenpoint Tactical Income Fund Greenpoint Tactical Income Fund LLC is a private investment fund headquartered in Madison, Wis. GP Rare Earth Trading Account LLC is a wholly-owned subsidiary of Greenpoint Tactical Income Fund. Greenpoint Tactical Income Fund and GP Rare Earth sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wis. Lead Case No. 19-29613) on Oct. 4, 2019. At the time of filing, the Debtors each had estimated assets of between $100 million and $500 million and liabilities of between $10 million and $50 million. The cases have been assigned to Judge G. Michael Halfenger. The Debtors tapped Steinhilber Swanson LLP as their legal counsel; Husch Blackwell LLP, as special counsel; and MorrisAnderson & Associates Ltd. as their accountant and financial advisor. The Office of the U.S. Trustee appointed a committee of equity security holders on Dec. 5, 2019. The equity committee is represented by Freeborn & Peters LLP. GUMP'S HOLDINGS: Committee Taps Schwartz Law as Counsel ------------------------------------------------------- The Official Committee of Unsecured Creditors of Gump's Holdings, LLC, and its debtor-affiliates, seeks authority from the US Bankruptcy Court for the District of Nevada to retain Schwartz Law, PLLC, as its counsel. The Committee requires Schwartz Law to: a. assist the Committee in investigating, researching and analyzing the sale of the Debtors’ assets and the liens of Sterling Senior Revolving Credit Facility, Tico Investment and Methuselah Capital Partners and providing services ancillary to this investigation; b. advise the Committee with respect to its powers and duties as a committee of unsecured creditors; c. prepare on behalf of the Committee all motions, applications, answers, orders, reports and papers necessary to the prosecution of these bankruptcy cases; d. represent the Committee and rendering such other services as may be required during the course of the bankruptcy proceedings; e. represent the Committee in all proceedings before the Court and in any other judicial or administrative proceeding where the rights of the unsecured creditors may be litigated or otherwise affected; f. advise and consult with the Committee concerning the prosecution of the bankruptcy cases, the estates' assets, and the claims of secured, priority and unsecured creditors; g. investigate pre-petition transactions and prosecuting, if appropriate, preference and other avoidance actions or any other causes of action held by the estate; h. defend, if necessary, any motions, contested matters and/or adversary proceedings, and analyze and prosecute any objections to claim; i. conduct examinations of witnesses, claimants and other persons, as appropriate; j. assist the Committee with the negotiation, documentation and any necessary Court approval of transactions disposing of property of the estate; and k. perform all other necessary legal services and provide all other necessary legal advice to the Committee in connection with this Chapter 11 case. Samuel A. Schwartz, Esq.'s current hourly billing rate is $815. Mr. Schwartz, principle of Schwartz Law, assures the court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. The firm can be reached through: Samuel A. Schwartz, Esq. SCHWARTZ LAW, PLLC 601 East Bridger Avenue Las Vegas, NV 89101 Tel: 702-385-5544 Fax: 702-385-2741 Email: saschwartz@nvfirm.com About Gump's Holdings Gump's Holdings, LLC -- http://www.gumps.com/-- operates as a holding company. The company, through its subsidiaries, sells furniture, lighting, rugs, linens, apparel and jewelry. Gump's Holdings, Gump's Corp. and Gump's By Mail, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case Nos. 18-14683 to 18-14685) on Aug. 3, 2018. In the petitions signed by Tony Lopez, CFO and chief operating officer, the Debtor disclosed these assets and liabilities: Assets Liabilities ------------ ------------ Gump's Holdings, LLC $47,031 $16,456,335 Gump's Corp. $9,812,318 $23,713,258 Gump's By Mail, Inc. $4,198,319 $23,755,942 The Debtors tapped Garman Turner Gordon LLP as counsel; Lincoln Partners Advisors LLC as financial advisor; and Donlin, Recano & Company Inc. as claims and notice agent. The U.S. Trustee for Region 17 appointed an official committee of unsecured creditors on Aug. 20, 2018. The committee tapped Brownstein Hyatt Farber Schreck, LLP as its legal counsel. HEXION INC: S&P Downgrades ICR to 'B-' on Expected Lower Demand --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based Hexion Inc. to 'B-' from 'B'. The outlook is negative. At the same time, S&P is lowering its issue-level rating on the company's term loan facility to 'B+' from 'BB-' with a '1' recovery rating, indicating its expectation for very high recovery (90%-100%; rounded estimate: 95%) in a payment default. S&P is also lowering the issue-level rating on the company's unsecured notes to 'CCC+' from 'B-' with a '5' recovery rating, indicating its expectation for modest recovery (10%-30%; rounded estimate: 10%). The downgrade reflects S&P's expectation that economic recessions in many parts of the world, including in the U.S., will depress Hexion's EBITDA and cause credit metrics to deteriorate in 2020. This follows Hexion's weaker-than-expected performance in 2019. S&P believes that Hexion's meaningfully lower debt and interest costs following its emergence from bankruptcy in 2019, along with the absence of near-term debt maturities, are credit positives. However, S&P expects Hexion to face very challenging macroeconomic conditions over the next 12 months and credit metrics weaker than expectations. The challenging operating conditions S&P now expects for 2020 were not factored into its previous rating. It now anticipates S&P Global Ratings-adjusted debt to EBITDA will be above 7x on a forward-looking (based on 2020 and 2021) weighted-average basis, compared to its previous expectation of about 5x. This is based on S&P's expectation that earnings will fall in 2020 on lower demand, especially in the company's cyclical end markets. A key underlying assumption is economic activity will contract in the U.S. in 2020. S&P expects U.S. GDP growth will be flat at best. While lower oil prices could help preserve margins and improve liquidity, S&P expects it would only be a partial offset to top-line weakness, as the company tends to pass on most raw material fluctuations to its customers. The negative outlook on Hexion reflects the potential for weaker earnings and credit metrics than what S&P considered in its ratings. S&P's base case assumes a contraction in the U.S. and European economies, which hurts demand for the company's products. Factoring in potential demand obstacles from a weaker macroeconomic environment, it expects S&P Global Ratings-adjusted debt to EBITDA of between 7x and 8x on a weighted–average, forward-looking basis. Despite these assumptions, S&P believes uncertainty related to the coronavirus impact on various sectors of the economy could portend a greater economic slowdown than the rating agency factors into its ratings. S&P reflects this uncertainty in its negative outlook. "We could lower the rating over the next 12 months if credit measures deteriorate such that debt to EBITDA approaches double digits. We could also lower the ratings if liquidity weakens and we believe sources of funds will decline below 1.2x uses or that the company has no prospects of generating positive free cash flow," S&P said. "We could revise our outlook to stable over the next 12 months if Hexion's earnings weaken less than we anticipate or if we believe end markets could bounce back in a short period so that debt to EBITDA improves from our base case with no prospects for weakening. We could raise the rating over the next year if the company's business strength materially improves and performance exceeds our expectations, improving debt to EBITDA below 6.5x on a sustained basis. We would also expect liquidity sources to remain above 1.2x uses," the rating agency said. HGIM CORP: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative ---------------------------------------------------------------- Moody's Investors Service downgraded HGIM Corp.'s Corporate Family Rating to Caa1 from B3, its Probability of Default Rating to Caa1-PD from B3-PD and its term loan rating to Caa1 from B3. The rating outlook was changed to negative from stable. "HGIM's contract backlog has been shrinking and the commodity price collapse in the first quarter of 2020 poses a substantial challenge for the company to both improve its contract and spot revenue outlook," commented Sreedhar Kona, Moody's senior analyst. "The negative outlook reflects the likelihood of HGIM's financial leverage weakening significantly as near-term improvement of offshore fundamentals is unlikely." Downgrades: Issuer: HGIM Corp. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Senior secured Term Loan, Downgraded to Caa1 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: HGIM Corp. Outlook, Changed to Negative from Stable RATINGS RATIONALE HGIM's downgrade to Caa1 CFR reflects the potential for the company's financial leverage to increase substantially in light of the commodity price collapse and expected steep declines in producer activity. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The OFS sector has been one of the sectors most significantly affected by the shock given its sensitivity to demand and oil prices. More specifically, the weaknesses in HGIM's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and HGIM remains vulnerable to the outbreak continuing to spread and oil prices remaining weak. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on HGIM of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. HGIM will have weak liquidity. As of September 30, 2019, HGIM had a cash balance of $89 million and this cash balance is the only source of liquidity for the company. Moody's expects HGIM's cash balance to decrease to about $50 million by year-end 2020 as the company consumes some of the cash to meet its debt service needs and its maintenance capital spending. HGIM will be required to maintain compliance with three covenants under the term loan credit agreement. The covenants will include a minimum consolidated interest coverage ratio of 1.1x, asset coverage ratio of 1.75x and minimum liquidity of $10 million. The company will face a significant risk of covenant breach during 2020 as it may not generate sufficient cash flow to meet its interest coverage covenant. HGIM's Caa1 CFR reflects offshore sector's extremely low activity and the oversupply of Offshore Supply Vessels (OSV) resulting in a persistence of very low dayrates and utilization of the OSVs. HGIM's modest firm-contract backlog has been shrinking and the company is heavily reliant on spot market utilization to generate its cash flow. The offshore market fundamentals make it unlikely for the company to supplement the declining backlog with new contracts. As the contribution of revenues from spot market continues to increase significantly the company's cash flow is exposed to the volatility of the offshore sector. HGIM is also constrained by its small scale, concentration in Gulf of Mexico and a moderate concentration in a single customer. The $350 million term loan (approximately $349 million outstanding as of September 30, 2019) is the only class of debt in HGIM's capital structure and is rated Caa1, the same as the CFR. The term loan has a first priority senior lien on substantially all the assets of the borrower and guarantor subsidiaries, excluding Harvey Stone Holdings LLC (Harvey Stone). Harvey Stone's 10 year $45 million Secured Notes (unrated, approximately $35 million outstanding as of September 30, 2019) are secured by a First Preferred Ship Mortgage on the Vessel. HGIM's negative rating outlook reflects the persistently weak offshore fundamentals and the company's risk of covenant breach. Factors that could lead to a downgrade include a significant decline in the utilization of the company's fleet resulting in HGIM's further deterioration in liquidity. An upgrade is unlikely in the near-term. An upgrade will be considered if the company improves its cash flow outlook in an improving offshore environment. The company must also maintain adequate liquidity. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. HGIM Corp. (Harvey Gulf International Marine, or Harvey Gulf) provides service vessels to support offshore drilling and production operations predominantly in the US Gulf of Mexico. HOOD LANDSCAPING: Acree Buying 133 Acres of Sparks Land for $225K ----------------------------------------------------------------- Hood Landscaping Products, Inc., filed with the U.S. Bankruptcy Court for the Middle District of Georgia a notice of its proposed sale of its approximately 133.529 acres located in Land Lot 268 and 285 of the 9th Land District in Sparks, Cook County, Georgia known as Parcel No. 0038 010 and described in that Warranty Deed recorded in the Cook County Clerk's Office on Oct. 2, 2013 in Deed Book 726, page 279, to Acree Investments, Ltd. for a gross sale price of $225,000. A hearing on the Motion is set for March 25, 2020 at 10:30 a.m. The Debtor owns the real estate. The real estate is subject to the following liens, listed in the order of priority: 1. Farmers and Merchants Bank ("FMB") by a security deed recorded in the Cook County, Georgia Clerk's Office on May 26, 2005 in Deed Book 504, page 329-331. FMB filed a proof of claim in this case for $5,387,382. 2. Cook County Tax Commissioner for real estate taxes estimated to be in the amount of $6,337. 3. American Zurich Insurance Co. by a Fi. Fa. issued by the Superior Court of Cook County Georgia in case no. 2015-CV-025 against Hood Landscaping Products, Inc. recorded in Lien Docket 45, Page 243 on 6-15-2017 in the amount of $180,636. 4. Georgia Department of Labor by an Unemployment Contribution Fi. Fa. 201808946; dated 2/16/18 and recorded in Lien Book 48, Page 301 on 3-28-18 in the amount of $1,726. 5. Georgia Department of Labor by an Unemployment Contribution Fi. Fa. 201823940 recorded in Lien Book 50, Page 229 on 7-16-18 in the amount of $1,726. 6. Georgia Department of Labor by an Unemployment Contribution Fi. Fa. 201840807 recorded in Lien Book 5 Page 235 on 10-15-18 in the amount of $818. 7. Trinity Packaging Corp. by a Fi. Fa. issued by the Superior Court of Cook County Georgia in case no. 2018-CV-F008 against Hood Landscaping Products Inc. recorded in Lien Book 52, Page 48 on 12-11-18 in the amount of $27,936. 8. Georgia Department of Labor by an Unemployment Contribution Fi. Fa.201858142 recorded in Lien Book 52, Page 116 on 1-25-19 in the amount of $818. 9. Georgia Department of Labor by an Unemployment Contribution Fi. Fa 201912507 recorded in Lien Docket 52, Page 276 on 4/15/2019 in the amount of $848. The Debtor proposes to sell the real estate free and clear of liens and claims to the Buyer for a gross sale price of $225,000. There will be no realtor commission will be paid as part of the sale. The terms of sale are contained in their Sales Contract dated Feb. 14, 2020. The Debtor proposes to disburse the sale proceeds of the real estate sale at closing to pay the following: Attorney fees to closing attorney Pearce Scott, closing costs, past due and current real estate taxes owed to Cook County Tax Commissioner and to pay the remainder of the sale proceeds to FMB on account of its ﬁrst priority security deed. Since FMB’s secured claim exceeds the sale price of the real estate, no sale proceeds will be paid to the subordinate lienholders (other than Cook County Tax Commissioner). A copy of the Contract is available at https://tinyurl.com/w3sl65v from PacerMonitor.com free of charge. The Purchaser: ACREE INVESTMENTS, LTD. P.O. Box 68 Adel, GA 31620 About Hood Landscaping Hood Landscaping Products, Inc., a wholesaler of landscaping equipment and supplies in Adel, Georgia., filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No. 19-70644) on June 3, 2019. In the petition signed by CFO Leon Hood, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. Judge John T. Laney III oversees the case. Kelley, Lovett, Blakey & Sanders, P.C., is the Debtor's counsel. HUSCH & HUSCH: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Husch & Husch, Inc. About Husch & Husch Husch & Husch, Inc. -- http://www.huschandhusch.com/-- is a family-owned and operated agricultural chemical and fertilizer company located in Harrah, Washington. It provides conventional and organic fertilizers, micro nutrient technology, and chemicals to help make lawn, garden, agronomic crops, and fruit trees grow to their full potential. Husch & Husch was founded in 1937 by Pete Husch. Husch & Husch, Inc., based in Harrah, WA, filed a Chapter 11 petition (Bankr. E.D. Wash. Case No. 20-00465) on March 4, 2020. In the petition signed by CFO Allen Husch, the Debtor disclosed $12,284,732 in assets and $5,966,019 in liabilities. Dan O'Rourke, Esq., at Southwell & O'Rourke, P.S., is the Debtor's bankruptcy counsel. ICAHN ENTERPRISES: S&P Alters Outlook to Neg., Affirms 'BB+' ICR ---------------------------------------------------------------- S&P Global Ratings said it revised its outlook on Icahn Enterprises L.P. to negative from stable. At the same time, S&P affirmed its 'BB+' issuer credit and senior unsecured debt ratings. The recovery rating on the debt issues remains '3', indicating its expectation for meaningful (65%) recovery in the event of a default. S&P anticipates that Icahn's portfolio value deteriorated meaningfully during the first quarter of 2020 amid increased volatility in oil and equity markets. CVR Energy, one of Icahn's largest positions, is trading at approximately a 60% discount relative to the value at the beginning of the year following a significantly decline in oil prices. On the other hand, the investment unit, one of the most sizable segments in the portfolio, could exhibit some degree of volatility given fluctuations in equity markets. These two segments represented about 69% of the portfolio as of Dec. 31, 2019. "While estimating the fair value of other non-listed investments in the portfolio might be more challenging, we believe that the company's loan-to-value (LTV) ratio could have approached or modestly surpassed 45%, our downside trigger for the company. We intend to monitor fluctuations in oil and equity markets during the next 12 months and assess the corresponding impact on the LTV ratio," S&P said. The negative outlook reflects S&P's expectation that the company could sustain an LTV ratio above 45% during the next 12 months absent any significant uptick in equity and oil markets. "We could lower the ratings if the company operates with an LTV ratio above 45% for a sustained period of time. Alternatively, we could lower the ratings if the portfolio becomes more concentrated, asset quality deteriorates, or the liquidity of the portfolio diminishes," S&P said. "We view an upgrade over the next 12 months as unlikely. That said, we could revise the outlook to stable if the LTV ratio declines comfortably below 45% for a sustained period of time while the portfolio's diversity, liquidity, and asset quality do not deteriorate," the rating agency said. INDOOR SPORTS: Hires Bronson Law Offices as Counsel --------------------------------------------------- Indoor Sports Group Corp. seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Bronson Law Offices, P.C., as counsel to the Debtor. Indoor Sports requires Bronson Law Offices to: (a) assist in the administration of its Chapter 11 proceeding; (b) prepare or review operating reports; (c) set a bar date; (d) provide for the use of cash collateral, if necessary; (e) review claims and resolve claims which should be disallowed; and (f) assist in reorganizing and confirming a Chapter 11 plan. Bronson Law Offices will be paid at these hourly rates: H. Bruce Bronson $450 Legal Assistants $150 Bronson Law Offices received a payment of $6,717 from Mr. Ronald A. Echavarria, a friend of the CEO and sole owner of the Debtor. Bronson Law Offices will also be reimbursed for reasonable out-of-pocket expenses incurred. H. Bruce Bronson, partner of Bronson Law Offices, P.C., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Bronson Law Offices can be reached at: H. Bruce Bronson, Esq. BRONSON LAW OFFICES, P.C. 480 Mamaroneck Ave. Harrison, NY 10528 Tel: (914) 269-2530 E-mail: hbbronson@bronsonlaw.net About Indoor Sports Group Corp. Indoor Sports Group Corp. -- http://uscgymnasticsandbaseball.com-- offers gymnastics and baseball training in Yonkers, NY. Indoor Sports Group Corp., based in Yonkers, NY, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-22347) on March 4, 2020. In the petition signed by Andres Diaz, president, the Debtor disclosed $119,000 in assets and $4,192,000 in liabilities. The Hon. Robert D. Drain oversees the case. H. Bruce Bronson, Esq., at Bronson Law Offices, P.C., serves as bankruptcy counsel. INPIXON: Obtains $1.6 Million from Common Stock Sale ---------------------------------------------------- Pursuant to the terms and conditions of that certain Equity Distribution Agreement, dated as of March 3, 2020, by and between Inpixon and Maxim Group LLC, since March 3, 2020, the Company has sold 1,145,608 shares of common stock at a weighted average price per share between $1.2162 and $2.1091. These sales resulted in gross proceeds to the Company of approximately $1,637,129. The Company paid Maxim compensation of approximately $65,485, based on a rate of 4.0% of the gross sales, for net proceeds to the Company equal to $1,571,644. Prior to these sales, the Company had not made any sales under this "at-the-market" equity offering program. Such sales were made pursuant to the Company's Registration Statement on Form S-3 (File No. 333-223960) filed with the Securities and Exchange Commission on March 27, 2018, as amended on May 15, 2018 and declared effective on June 5, 2018, the base prospectus dated June 5, 2018 included in the Form S-3 and the prospectus supplement relating to the offering filed with the Securities and Exchange Commission on March 3, 2020. Issuance of Shares to Chicago Venture Since March 20, 2020, Inpixon has issued an aggregate of 602,417 shares of common stock to Chicago Venture Partners, L.P., the holder of that certain outstanding promissory note issued on June 27, 2019, in each case at a price per share equal to the Minimum Price as defined in Nasdaq Listing Rule 5635(d) for a weighted average price per share equal to approximately $1.17, in connection with exchange agreements pursuant to which the Company and CVP agreed to (i) partition new promissory notes in the form of the Original Note in the aggregate original principal amount equal to $702,951 and then cause the outstanding balance of the Original Note to be reduced by an aggregate of $702,951; and (ii) exchange the partitioned notes for the delivery of the Shares. As of March 27, 2020, the Original Note has been satisfied in full. CVP is also the holder of outstanding promissory notes issued by the Company on Dec. 21, 2018 and Aug. 8, 2019, with outstanding balances, as of March 17, 2020 of approximately $222,000, and $2.0 million, respectively. CVP is also affiliated with certain other holders of outstanding promissory notes issued by the Company, including those notes issued on (i) November 22, 2019 with an outstanding balance as of March 17, 2020 of approximately $1.1 million; (ii) Sept. 17, 2019 with an outstanding balance as of March 17, 2020 of approximately $1.1 million and (iii) March 18, 2020 with an original principal amount equal to $6,465,000. As of March 27, 2020, including the issuance of the shares of the Company's common stock, Inpixon has a total of 7,277,087 issued and outstanding shares of common stock. About Inpixon Headquartered in Palo Alto, California, Inpixon (Nasdaq: INPX) is an indoor intelligence company that specializes in capturing, interpreting and giving context to indoor data so it can be translated into actionable intelligence. The company's indoor location and data platform ingests diverse data from IoT, third-party and proprietary sensors designed to detect and position all active cellular, Wi-Fi, UWB and Bluetooth devices, and uses a proprietary process that ensures anonymity. Paired with a high-performance data analytics engine, patented algorithms, and advanced mapping technology, Inpixon's solutions are leveraged by a multitude of industries to do good with indoor data. This multidisciplinary depiction of indoor data enables users to increase revenue, decrease costs, and enhance safety. Inpixon customers can boldly take advantage of location awareness, analytics, sensor fusion and the Internet of Things (IoT) to uncover the untold stories of the indoors. Inpixon reported a net loss of $33.98 million for the year ended Dec. 31, 2019, compared to a net loss of $24.56 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $21.22 million in total assets, $15.17 million in total liabilities, and $6.05 million in total stockholders' equity. Marcum LLP, in New York, NY, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 3, 2020, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. INTERNATIONAL GAME: Moody's Lowers CFR to Ba3, Outlook Negative --------------------------------------------------------------- Moody's Investors Service downgraded International Game Technology PLC's Corporate Family Rating to Ba3 from Ba2 and Probability of Default Rating to Ba3-PD from Ba2-PD. The company's notes were downgraded to Ba3 from Ba2. The company's Speculative Grade Liquidity rating remains SGL-3. The outlook is negative. The downgrade of IGT's CFR is in response to the disruption in casino visitation, gaming machine use, and lottery operations resulting from efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments to avoid gatherings and avoid non-essential travel. This includes the coronavirus outbreak in Italy, which is under strict lockdown measures with only essential businesses open and travel restrictions. Italy accounts for more than 30% of IGT's revenue. These efforts additionally include mandates to close retail locations and casinos, IGT's large customers, on a temporary basis. The downgrade also reflects the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at casinos once this crisis subsides. Downgrades: Issuer: International Game Technology PLC Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD Corporate Family Rating, Downgraded to Ba3 from Ba2 Senior Secured Regular Bond/Debenture, Downgraded to Ba3 (LGD3) from Ba2 (LGD3) Issuer: International Game Technology Senior Secured Regular Bond/Debenture, Downgraded to Ba3 (LGD3) from Ba2 (LGD3) Outlook Actions: Issuer: International Game Technology PLC Outlook, Changed To Negative From Stable Issuer: International Game Technology Outlook, Changed To Negative From No Outlook RATINGS RATIONALE International Game Technology PLC's Ba3 CFR reflects the meaningful revenue and earnings decline over the next few months expected from efforts to contain the coronavirus and the potential for a slow recovery once conditions improve. Revenues are largely tied to the volume of gaming machine play and lotteries. The company can reduce spending on game development and capital expenditures when revenue weakens, but the need to retain a skilled workforce to maintain competitive technology contributes to high operating leverage. The credit profile benefits from IGT's large and relatively stable revenue base during normal operating periods, with more than 80% achieved on a recurring basis, and high barriers to entry. Further support is provided by the company's vast gaming-related software library and multiple delivery platforms, as well as potential growth opportunities in IGT's digital, mobile gaming, sports betting, and lottery products. IGT, through its joint venture with minority partners, is concessionaire of the world's largest instant lottery (Italy) and Italy's draw based lottery, and holds facility management contracts with some of the largest lotteries in the US. IGT is constrained by its material exposure to soft slot replacement demand trends in the US as well as significant revenue concentration (about one-third) coming from its Italian operations, along with Italian gaming tax increases. The speculative-grade liquidity rating of SGL-3 considers the expected decline in earnings and cash flow and increased risk of a covenant violation. As of the year ended December 31, 2019, IGT had cash of approximately $663 million, and $1.75 billion of undrawn revolving credit facility capacity. Moody's estimates the company could maintain sufficient internal cash sources after maintenance capital expenditures to meet required annual amortization and interest requirements on it's debt assuming a sizeable decline in annual EBITDA. The expected EBITDA decline will not be ratable over the next year and because EBITDA and free cash flow will be negative for an uncertain time period, liquidity and leverage could deteriorate quickly over the next few months. The company has $463 million of debt maturing in 2020, the vast majority of which was retired at maturity on March 5, 2020. IGT could reduce or eliminate the $163 million of ordinary share dividends or $137 million in dividends to non-controlling interests to preserve cash. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in IGT's credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and IGT remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on IGT of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook considers that IGT remains vulnerable to travel disruptions and unfavorable sudden shifts in discretionary consumer spending and the uncertainty regarding the timing of its customers' facilities reopening and the pace at which consumer spending at those properties will recover. Ratings could be downgraded if liquidity deteriorates or if Moody's anticipates IGT's earnings declines to be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. A ratings upgrade is unlikely given the weak operating environment. However, the ratings could be upgraded if customer facilities reopen and earnings recover such that positive free cash flow and reinvestment flexibility is restored and debt-to-EBITDA is sustained below 5.0x. International Game Technology PLC is a global leader in gaming, from Gaming Machines and Lotteries to Interactive Gaming and Sports Betting. The company operates under four business segments: North America Gaming & Interactive, North America Lottery; International, and Italy. The company's consolidated revenue for the last twelve-month period ended December 31, 2019 was approximately $4.8 billion. International Game Technology has corporate headquarters in London, and operating headquarters in Rome, Italy; Providence, Rhode Island; and Las Vegas, Nevada. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. ISLET SCIENCES: Seeks to Hire Schwartz Law as Bankruptcy Counsel ---------------------------------------------------------------- Islet Sciences, Inc. seeks authority from the U.S. Bankruptcy Court for the District of Nevada to hire Schwartz Law, PLLC, as its counsel. Islet Sciences requires Schwartz Law to: a. advise the Debtor with respect to its powers and duties as debtor and debtor-in-possession in the continued management and operation of its business and property; b. attend meetings and negotiate with representatives of creditors and other parties in interest and advise and consult on the conduct of the Chapter 11 Case, including all of the legal and administrative requirements of operating in Chapter 11; c. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on its behalf, the defense of any actions commenced against the estate, negotiations concerning all litigation in which the Debtor may be involved and objections to claims filed against the estate; d. prepare on behalf of the Debtor all motions, applications, answers, orders, reports and papers necessary to the administration of the estate; e. negotiate and prepare on the Debtor's behalf plan(s) of reorganization, disclosure statement(s) and all related agreements and/or documents and take any necessary action on behalf of the Debtor to obtain confirmation of such plan(s); f. advise the Debtor in connection with any sale of assets; g. appear before this Court, any appellate courts, and the U.S. Trustee, and protect the interests of the Debtor's estate before such courts and the U.S. Trustee; and h. perform all other necessary legal services and provide all other necessary legal advice to the Debtor in connection with this Chapter 11 Case. Schwartz Law will be paid based on the rates of its professionals: Attorneys $295-$475 Legal Assistants & Support Staff $125-$195 Samuel A. Schwartz, Esq., the principal of Schwartz Law, assures the Court that the firm does not hold any interest adverse to the Debtor's estate and creditors, and is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Samuel A. Schwartz, Esq. SCHWARTZ LAW, PLLC 601 East Bridger Avenue Las Vegas, NV 89101 Tel: 702-385-5544 Fax: 702-385-2741 About Islet Sciences Inc. Islet Sciences, Inc., a biotechnology company, is engaged in the research, development and commercialization of new medicines and technologies for the treatment of metabolic diseases and related indications covering unmet medical needs. On May 29, 2019, creditors filed an involuntary Chapter 7 petition against Islet Sciences(Bankr. D. Nev. 19-13366). The case was converted to one under Chapter 11 on Sept. 18, 2019. Judge Mike K. Nakagawa oversees the case. Brownstein Hyatt arber Schreck, LLP is the Debtor's legal counsel. JAMES WINDELL ETHRIDGE: Oats & Marino Represents 2 Suppliers ------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Oats & Marino, A Partnership of Professional Corporations provided notice that it is representing these creditors in the Chapter 11 cases of James W. Ethridge and Janet D. Ethridge: Otto Hebert Lumberyard, Inc. 13717 St. Elmo Rd. Erath, La 70533 * Nature of Claim: Materials provided to Lake Arthur South Properties, Inc. development * Approximate Claim Amount: $8,376.87 Acadiana Shell & Limestone, Inc. 627 Eloi Broussard Rd. Lafayette, La 70508 * Nature of Claim: Materials provided to Lake Arthur South Properties, Inc. development * Approximate Claim Amount: $23,790.06 The parties listed above are all creditors and parties in interest of the Debtors. Each party listed above has consented to this multiple representation by Oats & Marino. The undersigned is authorized to make the foregoing statements on behalf of the above-listed parties. The Firm can be reached at: OATS & MARINO A Partnership of Professional Corporations Philip T. DeBaillon, Esq. 100 East Vermilion Street, Suite 400 Lafayette, LA 70501 Tel: (337) 233-1100 Fax: (337) 233-1178 E-mail: PDeBaillon@oatsmarino.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/PPSzQy The Chapter 11 case in In re James W. Ethridge and Janet D. Ethridge (Banks. W.D. Louis. Case No. 19-50878). K&N PARENT: Moody's Cuts CFR to Caa3, Outlook Negative ------------------------------------------------------ Moody's Investors Service has downgraded K&N Parent, Inc.'s corporate family rating to Caa3 from B3, Probability of Default Rating to Caa3-PD from B3-PD, senior secured first lien credit facilities to Caa2 from B2 and second lien term loan to Ca from Caa2. The rating outlook remains negative. The ratings downgrade reflects Moody's view that K&N's leverage profile will remain elevated and its liquidity position weak as cash flow and earnings generation will be pressured during challenging economic conditions in 2020, especially given the discretionary nature of its products. As a result, Moody's views default risk to be heightened, including the potential for a distressed exchange as the current debt capital structure appears unsustainable. The following rating actions were taken: Downgrades: Issuer: K&N Parent, Inc. Corporate Family Rating, Downgraded to Caa3 from B3 Probability of Default Rating, Downgraded to Caa3-PD from B3-PD Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa2 (LGD3) from B2 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Ca (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: K&N Parent, Inc. Outlook, Remains Negative RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The automotive parts sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in K&N's credit profile, including its exposure to final consumer demand has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and K&N remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on K&N of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. K&N's ratings broadly reflect its limited revenue scale, high financial leverage (debt/EBITDA at 7.6x September 2019) and constrained liquidity as the company had been reliant upon additional capital infusions from its sponsor. K&N's performance weakened during 2019 from unfavorable shifts in its product and channel mix and higher unabsorbed costs as a result. In addition, the company has undertaken various corporate initiatives, specifically the movement of its production and distribution facilities, that the company expects to have longer-term growth benefits. In the near-term though, the costs to effectuate these corporate initiatives have required additional capital and likely additional usage under its revolving credit facility. As well, ongoing execution risk remains to realize any benefits of its initiatives during a recessionary environment in 2020. The impact of the coronavirus pandemic on consumer spending will, in Moody's view, likely pressure K&N's earnings and cash flow over the next two quarters at least as consumers can put off discretionary purchases for their vehicles and opt for less premium-priced products. This impact on its business, combined with any remaining costs to complete its corporate initiatives or an inability to flex its cost structure, will stress the company's liquidity position and elevate financial leverage to unsustainable levels. Therefore, Moody's views an increased potential for a restructuring of the company's debt through a distressed exchange. The negative outlook reflects the risk that K&N's liquidity position deteriorates through any cash burn impact a drop in earnings during a recessionary environment may have on the company. The ratings could be downgraded if the company continues to generate negative free cash flow or earnings prospects weaken, leading to potential covenant compliance issues. The ratings could also be downgraded if the company undertakes a pre-emptive restructuring of its debt at sub-par levels and/or Moody's estimates of ultimate recovery deteriorate further. The ratings are unlikely to be upgraded in the near-term, but could be if the company is able to maintain an adequate liquidity position as it completes its corporate initiative actions and demonstrates stability in its earnings profile to sustain debt/EBITDA below 8x. The principal methodology used in these ratings was Automotive Supplier Methodology published in January 2020. K&N is a domestically focused designer and manufacturer of performance automotive aftermarket products. The company's products include air filters, air intakes, oil filters, exhausts and accessories. In October of 2016, Goldman Sachs Merchant Banking Division purchased the company for $610 million. Net revenue for the 12 months ended September 30, 2019 was approximately $187 million. KARISCOM LLC: Seeks to Hire Guidant Law as Counsel -------------------------------------------------- Kariscom, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Arizona to employ Guidant Law, PLC, as counsel to the Debtor. Kariscom, LLC requires Guidant Law to represent and provide legal services to the Debtor in the Chapter 11 bankruptcy proceedings. Guidant Law will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. D. Lamar Hawkins, partner of Guidant Law, PLC, 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. Guidant Law can be reached at: D. Lamar Hawkins, Esq. GUIDANT LAW, PLC 402 E. Southern Ave. Tempe, AZ 85282 Telephone: (602) 888-9229 Facsimile: (480) 725-0087 E-mail: lamar@guidant.law About Kariscom LLC Kariscom, LLC, d/b/a VeraPax -- https://www.verapax.com/ -- is an online- based marketing company that provides a wide variety of services for all printing needs. It prints banners, flyers, postcards, brochures, graphic design, stickers, business cards, short run posters, and booklets/magazines. Kariscom, LLC, based in Scottsdale, AZ, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 20-02878) on March 18, 2020. In the petition signed by Heather Lisciarelli, president, the Debtor disclosed $364,572 in assets and $1,154,964 in liabilities. The Hon. Madeleine C. Wanslee presides over the case. D. Lamar Hawkins, Esq., at Guidant Law, PLC, serves as bankruptcy counsel. LANDS' END: Moody's Places B3 CFR on Review for Downgrade --------------------------------------------------------- Moody's Investors Service placed Lands' End, Inc.'s ratings on review for downgrade, including the B3 corporate family rating, B3-PD probability of default rating and B3 senior secured term loan rating. The company's speculative grade liquidity was downgraded to SGL-4 from SGL-2. The outlook was changed to Review for Downgrade from positive. The review for downgrade reflects the risk that as a result of stress in the capital markets due to the coronavirus outbreak, Lands' End may not be able to refinance its term loan in a timely and economical manner. The company's term loan matures on April 4, 2021. The review for downgrade also reflects Moody's expectations that credit metrics and cash flow generation will weaken in 2020 as a result of declining earnings, driven by lower discretionary consumer spending and highly promotional activity in the apparel sector. With over 95% of revenue driven by ecommerce and a consolidated distribution footprint, Lands' End has more flexibility in its cost structure and lower inventory markdown risk compared to traditional apparel retailers, mitigating the impact of top line declines. In addition, the company's focus on value-priced basics diminishes its exposure to declines in discretionary consumer spending. Nevertheless, Moody's projects that promotional activity and lower volumes in the retail business, as well as lower orders in its Outfitters segment will drive 15-25% EBITDA declines in 2020. The SGL downgrade to SGL-4 from SGL-2 reflects the company's approaching debt maturities. Moody's projects that aside from the debt maturity, Lands' End's cash and revolver availability will be sufficient to address its liquidity needs for the next 9-12 months. The company had $77 million of cash as of FYE January 31, 2020, and full availability under the $200 million asset-based revolver. Annual free cash flow is projected to be breakeven to modestly positive, due to a significant reduction in CapEx and cost controls. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Lands' End's credit profile, including its exposure to capital markets conditions and US discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Lands' End remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Lands' End of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Moody's took the following rating actions for Lands' End, Inc.: Corporate family rating, placed on review for downgrade, currently B3 Probability of default rating, placed on review for downgrade, currently B3-PD $515 million ($384 million outstanding) senior secured term loan, placed on review for downgrade, currently B3 (LGD4) Speculative grade liquidity rating, downgraded to SGL-4 from SGL-2 Outlook, changed to Review for downgrade from positive RATINGS RATIONALE The review will focus on Lands' End's ability to address its approaching maturity and the near-term earnings and cash flow impact of consumer demand declines. Lands' End, Inc.'s CFR reflects the highly competitive apparel retail segment in which the company competes and its high leverage. The rating reflects Moody's expectations for lower revenue and earnings in 2020 as result of COVID-19-driven declines in discretionary consumer spending and a highly promotional environment. As a result, Moody's expects debt/EBITDA to increase to 5.5-6.2 times from 4.9 times, and EBIT/interest expense to decline to 1.1-1.2 times from 1.7 times. As an apparel retailer, Lands' End needs to make ongoing investments in its brand and infrastructure, as well as in social and environmental drivers including responsible sourcing, product and supply sustainability, privacy and data protection. Nevertheless, the credit profile benefits from Land's End's large e-commerce operation, which positions it well to capitalize on continued growth in online apparel spending. Lands' End also has a well-recognized brand name and has executed well on its transformation over the past several years, achieving significant positive operating momentum. The ratings could be downgraded if the company does not address its debt maturities in a timely and economical manner. The ratings could also be downgraded if earnings declines are greater than anticipated, or if liquidity deteriorates, including expectations for negative free cash flow. The ratings could be upgraded if the company addresses its near term maturities in a timely and economical manner and maintains good overall liquidity. Quantitatively, the ratings could be upgraded if debt/EBITDA is sustained below 5.5 times, and EBIT/interest expense above 1.5 times. Headquartered in Dodgeville, Wisconsin, Lands' End, Inc. (Nasdaq: LE) is a leading multi-channel retailer of casual clothing, accessories, footwear and home products. ESL Investments, Inc. and its investment affiliates, including Edward S. Lampert, owned 64.8% of the company's outstanding stock. Revenue for the fiscal year ended January 31, 2020 was $1.45 billion. LIFEPOINT HEALTH: S&P Alters Outlook to Stable, Affirms 'B' ICR --------------------------------------------------------------- S&P Global Ratings revised its outlook to stable from positive and affirmed its ratings, including its 'B' issuer credit rating, on LifePoint Health Inc. "The stable outlook reflects our current expectations for material business disruption from the pandemic as well as the possibility that, while we expect the disruption to be temporary, it may be difficult for the company to return to the credit profile that we expected for the higher rating in the next 12 months," S&P said. "We expect the COVID-19 pandemic to materially decrease admissions, especially as elective procedures are cancelled or postponed and the public avoids non-emergency hospital visits. We expect the lower admissions to harm EBITDA and cash flow for at least three months. While we expect pent-up demand for elective procedures to provide some relief after the pandemic, the timing and speed at which volume returns and the company returns to its pre-pandemic credit metrics is uncertain. Nevertheless, we expect LifePoint to have sufficient liquidity to sustain several months of stressed EBITDA and cash flows," S&P said. The stable outlook reflects S&P's view that while the company will likely experience material EBITDA pressure over the near term, it has sufficient liquidity to sustain the pressure over the near term and the rating agency believes the company can sustain free operating cash flow to debt above 2.5%. "We could lower our rating on LifePoint if the company experienced large patient declines and did not experience a return to recent levels such that we expected free cash flow to debt to fall to and remain below 2.5% for an extended period," S&P said. "We could raise our ratings on LifePoint if we came to believe that the company could sustainably generate at least $250 million in recurring annual free operating cash flow. An upgrade would also be predicated on our belief that the company intends to continue to deleverage to the high-5x area," the rating agency said. LOVE FREIGHTWAYS: Seeks to Hire Larson Zirzow as General Counsel ---------------------------------------------------------------- Love Freightways, Inc. seeks authority from the United States Bankruptcy Court for the District of Nevada to hire Larson Zirzow Kaplan & Cottner as its general reorganization counsel. Services Larson Zirzow will render are: (a) prepare on behalf of the Debtor, as debtor in possession, all necessary or appropriate motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtor's bankruptcy estate; (b) take all necessary or appropriate actions in connection with a sale, and/or a plan of reorganization and related disclosure statement, and all related documents, and such further actions as may be required in connection with the administration of the Debtor's estate; (c) take all necessary actions to protect and preserve the Debtor's estate including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the Debtor's estate; and (d) perform all other necessary legal services in connection with the prosecution of the Chapter 11 Case. Larson Zirzow will be paid at these hourly rates: Attorneys $500 Paraprofessionals $220 The retainer fee is $12,717, which already includes the filing fees. Larson Zirzow will receive reimbursement for work-related expenses incurred. Matthew Zirzow, Esq., a partner at Larson Zirzow, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Larson Zirzow can be reached at: Zachariah Larson, Esq. Matthew C. Zirzow, Esq. Larson Zirzow Kaplan & Cottner 850 E. Bonneville Ave. Las Vegas, NV 89101 Tel: (702) 382-1170 Fax: (702) 382-1169 Email: zlarson@lzklegal.com mzirzow@lzklegal.com About Love Freightways, Inc. Love Freightways, Inc. operates a trucking carrier service that provides a wide range of services, including regional, long haul, dry-van, air-ride, and expedited services. The Debtor is owned and controlled by its principal, Nemanja Lovre. Love Freightways, Inc. filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 20-11469) on March 13, 2020, listing under $1 million in both assets and liabilities. Matthew C. Zirzow, Esq. at LARSON ZIRZOW KAPLAN & COTTNER represents the Debtor as counsel. LTI HOLDINGS: S&P Downgrades ICR to CCC+; Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based LTI Holdings Inc. to 'CCC+' from 'B-'. At the same time, S&P lowered its issue-level rating on the company's $1.425 billion first-lien term loan along with the company's $125 million revolving credit facility to 'CCC+' from 'B-', and the rating on the company's $315 million second-lien term loan to 'CCC' from 'CCC+'. The recovery ratings are '4' and '5', respectively. "Leverage is extremely high and unsustainable, in our view. By our estimates, LTI Holdings Inc. ended 2019 with leverage in the mid-10x range as result of lower-than-expected sales with some of its key customers. Furthermore, the company incurred a product liability in third-quarter 2019 that added approximately a turn of leverage. Economists at S&P Global Ratings now expect second-quarter U.S. GDP to decline by about 12% and for 2020 full-year GDP to be materially worse than expected. Therefore, we expect leverage to remain greater than 10x over the next 12 months given our expectations for significantly softer demand in LTI's end markets, as well as our expectations for some supply chain disruptions. However, we do expect the softer demand to be somewhat mitigated by the launch of new products at LTI's top customers, along with increased 5G infrastructure spending at Huawei," S&P said. The negative outlook on LTI reflects S&P's belief that there is at least a one-in-three chance that it could lower the ratings should revenue and EBITDA decline in 2020 further than it expects, causing the rating agency to expect a default within a specified timeframe. S&P expects free cash flow generation to remain minimal over the next 12 months while leverage remains north of 10x over the next year. "We could lower our ratings on LTI if deteriorating operating performance results in a constrained liquidity position. This could occur, for example, from a deterioration in LTI's end markets and a collapse of supply chains, leading to large losses among the company's major customers. We could also downgrade the company if we came to believe free cash flow generation was materially worse than expected, leading us to envision a specific default scenario over the next six to 12 months," S&P said. "We could revise our outlook to stable or consider a higher rating if the company's operations significantly improve, leading to deleveraging and a more sustainable capital structure, in our view. This could happen, for example, if the company is able to expand profitability through higher-than-expected sales in 2020 with healthy EBITDA margins. We would also need to see the resolution of the product liability issue, which would include attainment of insurance proceeds. Under this scenario, we would also expect the company to maintain sufficient liquidity," the rating agency said. MACY'S INC.: S&P Downgrades ICR to BB; Outlook Negative ------------------------------------------------------- S&P Global Ratings lowered all of its ratings on Macy's Inc., including the issuer credit rating to 'BB' from 'BB+'. "The downgrade reflects our expectation that Macy's will significantly underperform our previous base-case forecast. In response to government mandates in the U.S. for all nonessential business to close, Macy's has temporarily closed its stores for two weeks and we expect closures to extend for a meaningful portion of the fleet. As a result, we now expect Macy's revenues and profits to decline significantly in the first two quarters of fiscal 2020 and for a gradual recovery in the back half of the year. Macy's online business, which represents about 25% of sales, remains operational and could offset some of the major sales deterioration at brick-and-mortar locations. We assume a modest pick-up in overall operating results by year end although this will be against the backdrop of an economic recession and intensified competitive pressures. We forecast leverage will remain elevated in fiscal 2020 but decline to the under 4x the following year. As a result, we are revising our financial risk profile score to significant from intermediate," S&P said. The negative outlook reflects the heightened uncertainty regarding the impact of the coronavirus pandemic and impending recession that could impair Macy's ability to reduce leverage to under 4x in 2021 from a spike in 2020. It also reflects S&P's concerns the company may exceed its maximum leverage covenant following weaker near-term profit expectation and higher debt. "We could lower the ratings if we no longer believed Macy's could sustain adequate liquidity because of larger profit declines and cash shortfall, difficulties securing a waiver or amendment to its credit agreement under adequate terms, or an inability to refinance upcoming debt maturities. Additionally, we could lower the ratings if sales and profit remain depressed from a prolonged macroeconomic slump or weakened competitive position such that leverage remains more than 4x in 2021," S&P said. "We could revise the outlook to stable if Macy's is able to address our liquidity concerns and we see a clear path to sustainable sales and profit growth (off a lower base), with leverage improving to under 4x in fiscal 2021. Under this scenario, we would expect profit growth, rather than debt reduction, to contribute to better leverage. An outlook revision would also require us to believe that the company is able to sustain its market position in the department store sector by growing sales without sacrificing profit margins," the rating agency said. MAIN EVENT: Moody's Cuts CFR to Caa2, Outlook Negative ------------------------------------------------------ Moody's Investors Service downgraded Main Event Entertainment Inc.'s Corporate Family Rating to Caa2 from B3 and Probability of Default Rating to Caa2-PD from B3-PD. Moody's also downgraded Main Event's senior secured bank credit facilities to Caa2 from B3. The ratings outlook is negative. "The downgrade reflects its expectation for a material deterioration in earnings, cash flow and credit metrics that are driven by the restrictions and closures across Main Event's entertainment center base due to efforts to contain the spread of the coronavirus including recommendations from Federal, state and local governments" stated Bill Fahy, Moody's Senior Credit Officer. In response to these operating challenges and to strengthen liquidity, Main Event drew down the entire amount available under its $25 million bank revolver and will focus on reducing all non-essential operating expenses and discretionary capex. However, despite these efforts Moody's expects Main Event to generate free cash flow deficits during the quarters that are typically their seasonal cash flow peak. Downgrades: Issuer: Main Event Entertainment Inc. Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: Main Event Entertainment Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The restaurant sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Main Event's credit profile, including its exposure to widespread location closures have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Main Event remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Main Event of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Main Event's credit profile is constrained by its weak credit metrics, small scale and regional concentration, capital intensive business model and exposure to discretionary consumer spending. Main Event credit profile is also constrained by Moody's expectation for weak liquidity largely drivey by free cash flow deficits and no current availability under its revolver credit facility. In a more typical operating environment, Main Event benefits from above average gross margins relative to similarly rated restaurants operators, improved same store sales trends and a reasonable level of brand awareness in its core markets. The negative outlook reflects the uncertainty with regards to the potential length and severity of the closures and the ultimate impact these closures will have on Main Event's revenues, earnings and liquidity. The outlook also takes into account the negative impact on consumers ability and willingness to spend on eating out until the crisis materially subsides. Main Event is a wholly-owned subsidiary of Ardent Leisure US Holding, Inc. whose ultimate Parent is Ardent Leisure Group Limited, a publicly traded leisure and entertainment company based in Australia. This is a rating factor given the potential implications from both a capital structure and operating perspective. Financial policies are always a concern with regards to the potential for extractions of cash flow via dividends, or more aggressive growth strategies. Consumers are also increasingly mindful of sustainability issues, the treatment of work-force, data protection and the source of the products. Entertainment venues that serve food as well as offering various entertainment options by their nature and relationship with sourcing food and packaging, as well as an extensive labor force and constant consumer interaction are deeply entwined with sustainability, social and environmental concerns. While these factors may not directly impact the credit, they could positively or negatively impact brand image over time. Factors that could result in a stable outlook include a clear plan and time line for the lifting of restrictions on entertainment center's that result in a sustained improvement in operating performance, liquidity and credit metrics. A stable outlook would also require leverage of under 6.5 times and good liquidity. Given the current operating environment a ratings upgrade over the near term is unlikely. Factors that could result in a downgrade include a sustained deterioration in liquidity driven by a prolonged period of entertainment center closures. Ratings could also be downgraded in the event that credit metrics remained weak despite a lifting of restrictions on entertainment center and a subsequent recovery in earnings and liquidity. Specifically, ratings could be downgraded in the event debt to EBITDA exceeded 6.5 times on a sustained basis. Main Event Entertainment, Inc., headquartered in Plano Texas, owns and operates 44 leisure family entertainment centers in the United States and is a wholly owned subsidiary of Ardent Leisure US Holding, Inc. whose ultimate Parent is Ardent Leisure Group Limited, a publicly traded leisure and entertainment company based in Australia. Main Event annual revenues are over $315 million. The principal methodology used in these ratings was Restaurant Industry published in January 2018. MAISON PREMIERE: April 16 Plan & Disclosure Hearing Set ------------------------------------------------------- On Jan. 28, 2020, DWD-LaFitte, LLC filed with the U.S. Bankruptcy Court for the Eastern District of New York a motion for entry of an order continuing the confirmation hearing on the plan of Debtor Maison Premiere Corp. and conditionally approving the DWD Disclosure Statement. On March 12, 2020, Judge Elizabeth S. Stong ordered that: * The DWD Disclosure Statement is conditionally approved. * DWD is authorized and directed to transmit a Ballot with the Solicitation Package to those of the Notice Parties that are or represent impaired creditors of the Debtor entitled to vote for use in voting their acceptance or rejection of the DWD Plan. * DWD is authorized to solicit acceptances of the DWD Plan in accordance with the terms of this Order. * April 16, 2020, at 9:30 a.m. is the combined hearing to consider final approval of the DWD Disclosure Statement and confirmation of the DWD Plan. * April 9, 2020, is the deadline to file objections to final approval of the Disclosure Statement and confirmation of the Plan. A full-text copy of the order dated March 12, 2020, is available at https://tinyurl.com/qn26n3b from PacerMonitor at no charge. Attorneys for DWD-LaFitte: CULLEN AND DYKMAN LLP David Edelberg, Esq. Michelle McMahon, Esq. Sophia Hepheastou, Esq. 44 Wall Street New York, New York 10005 Tel: (212) 732-2000 About Maison Premiere Corp. Maison Premiere -- https://maisonpremiere.com/ -- owns and operates an oyster bar, cocktail den & seafood restaurant in Brooklyn, New York. Sauvage -- https://sauvageny.com/ -- is a restaurant in Greenpoint, New York, that serves breakfast, lunch, dinner, brunch, wines, cocktails, and desserts. Maison Premiere Corp., owner of Williamsburg oyster bar Maison Premiere, and Lafitte LLC, owner of French restaurant Sauvage, sought Chapter 11 protection (Bankr. E.D.N.Y. Lead Case Nos.19-43359 and 19-43360) on May 31, 2019. The Hon. Elizabeth S. Stong is the case judge. PICK & ZABICKI LLP is the Debtors' counsel. MANN REALTY: Trustee Asks to Distribute Remaining Proceeds to S&T ----------------------------------------------------------------- Markian R. Slobodian, the Trustee for the Estate of Mann Realty Associates, Inc., asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania to allow him to distribute the remaining sale proceeds from the sale of the Debtor's real estate located at 2008 Idaville Road, Huntington Township, York Springs, Adams County, Pennsylvania to S&T Bank on account of its state court judgment of Jan. 16, 2020 against the Trustee as Garnishee. In his Motion to Sell, the Trustee proposed to distribute certain net proceeds from the sale of the Real Property to Robert M. Mumma, II, as assignee of a first priority mortgage lien on the Real Property by Mercantile Safe Deposit and Trust Co. On Dec. 21, 2018, after notice to all creditors and parties in interest, upon consideration of limited objections to the sale and Motion of Robert M. Mumma, II to withdraw consent to sale, after hearing held on Dec. 20, 2018, upon consent of objecting parties and Respondent Robert M. Mumma, II, and finding good cause for granting the Trustee's Motion to Sell, the Court entered the Sale Order which approved the Trustee's proposed sale but required that the Remaining Proceeds be escrowed by the Trustee in his bank account for the Debtor's bankruptcy estate pending further Order of the Court. On Oct. 22, 2019, after further hearing held on Aug. 20, 2019, the Court entered the Distribution Order which supplemented the Sale Order by directing the Trustee to distribute the Remaining Proceeds to Robert M. Mumma, II, on account of his first priority mortgage lien against the Real Property as assignee of a mortgage dated June 30, 1994, and recorded Oct. 17, 1994, in the original amount of $1 million. On Nov. 15, 2019, the Trustee filed a Supplemental Response to Certain Interrogatories addressed to him as Garnishee in an action by S&T Bank, Successor by Merger to Integrity Bank against Robert M. Mumma, II filed in the Court of Common Pleas of Cumberland County, Pennsylvania to No. 2017-03312. In his Supplemental Response to S&T's Interrogatory No. 1, the Trustee stated that by Order dated Oct. 22, 2019, the Court directed the Trustee to distribute remaining proceeds from the sale of the Idaville Road property to Robert M. Mumma, II, on account of his first priority mortgage lien against the real property. The remaining sale proceeds total $204,365. On Jan. 7, 2020, upon consideration of a Consent Motion for Relief from Automatic Stay filed by S&T Bank, the Court entered an Order, unconditionally and immediately terminating the automatic stay, to the extent applicable, as it affects the interests of S&T Bank in the Proceeds from the Sale of the Idaville Road Property. On Jan. 16, 2020, S&T Bank entered judgment in the State Court Action against the Trustee as Garnishee in the amount of $204,365 as admitted in the Answer to Interrogatories to be in the possession of Garnishee. The State Court Judgment requires the Trustee to distribute the Remaining Sale Proceeds to S&T Bank rather than directly to Robert M. Mumma, II, as set forth in the Court's Distribution Order. In order to satisfy his obligations with regard to the State Court Judgment, the Trustee asks that the Court supplements its Distribution Order to allow him to distribute the Remaining Proceeds to S&T Bank pursuant to its State Court Judgment against the Trustee as Garnishee. About Mann Realty Associates Mann Realty Associates, Inc., previously filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 17-00080) on Jan. 10, 2017. The petition was a "pro se" filing, or case filed without attorney. The Debtor is an affiliate of Kimbob, Inc., which sought bankruptcy protection on March 1, 2017 (Case No. 17-00836). Mann Realty Associates again filed for Chapter 11 bankruptcy protection (Bankr. M.D. Pa. Case No. 17-01334) on March 31, 2017. In the petition signed by Robert M. Mumma, II, its president, the Debtor was estimated to have assets between $10 million and $50 million and debt between $1 million and $10 million. Judge Robert N. Opel II presides over the case. Craig A. Diehl, Esq., at the Law Offices of Craig A. Diehl, serves as the Debtor's bankruptcy counsel. MARY MALONE: Chatman Buying Dallas Property for $1.95 Million ------------------------------------------------------------- Mary Malone asks the U.S. Bankruptcy Court for the Northern District of Texas to authorize the sale of her real property located at 5414 Edlen, Dallas, Texas to Augman Investment Group by Shawn T. Chatman for $1.95 million. Among the assets of Debtor is the Property. She has received a contact for the purchase of the Property for the amount of $1.95 million. The parties have entered into their Contract. There are currently several liens asserted against the Property. The Debtor believes that lien claims exist against the Property by: Dallas County, Chase Bank, Newrez, LLC and the IRS. She has certain disputes concerning the validity and priority of the various lien claimants. She proposes to sell the Property free and clear of all liens claims and encumbrances and allow the liens against the Property to attach to the proceeds of the sale. The Debtor asks the Court to allow her to sell the Property free and clear of all liens claims and encumbrances and that the net sales proceeds (after payments of allowed fees and expenses) be placed into the DIP account with all liens attaching to the proceeds and not to be distributed without further order of the Court. A copy of the Contract is available at https://tinyurl.com/sxxmw66 from PacerMonitor.com free of charge. Mary Malone sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 20-30050) on Jan. 6, 2020. The Debtor tapped Eric Liepins, Esq., as counsel. MBH HEALTH: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------- Debtor: MBH Health Center, LLC 300 56th Street, S.E. Charleston, WV 25304 Business Description: MBH Health Center, LLC owns and operates a psychiatric and substance abuse hospital. Chapter 11 Petition Date: March 29, 2020 Court: United States Bankruptcy Court Middle District of Tennessee Case No.: 20-01941 Debtor's Counsel: Paul G. Jennings, Esq. BASS, BERRY & SIMS PLC 150 Third Ave. S. Suite 2800 Nashville, TN 37201 Tel: 615-742-6200 E-mail: pjennings@bassberry.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Wes Mason III, president of MBH West Virginia, LLC, sole member of the Debtor. A copy of the petition containing, among other items, a list of the Debtor's 30 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/7zwmDo MBH HIGHLAND: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: MBH Highland, LLC 300 56th Street, S.E. Charleston, WV 25304 Business Description: MBH Highland, LLC operates Highland Hospital, a behavioral health medical facility located in Charleston, West Virginia. MBH West Virginia, LLC is the direct parent or owner of MBH Highland, LLC and MBH Health Center LLC. Chapter 11 Petition Date: March 29, 2020 Court: United States Bankruptcy Court Middle District of Tennessee Case No.: 20-01940 Judge: Hon. Charles M. Walker Debtor's Counsel: Paul G. Jennings, Esq. Glenn B. Rose, Esq. Gene L. Humphreys, Esq. BASS, BERRY & SIMS PLC 150 Third Avenue South Suite 2800 Nashville, TN 37201 Tel: (615) 742-6200 Fax: (615) 742-6293 Email: pjennings@bassberry.com grose@bassberry.com ghumphreys@bassberry.com Debtor's Claims & Noticing Agent: STRETTO https://cases.stretto.com/MBH/court-docket/ Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Wes Mason III, president of MBH West Virginia, LLC, sole member of the Debtor. A full-text copy of the petition containing, among other items, a list of the Debtor's 30 largest unsecured creditors is available for free at: https://is.gd/PEH8SW MBH WEST VIRGINIA: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: MBH West Virginia, LLC 3401 Mallory Lane, Suite 100 Franklin, TN 37067 Business Description: MBH West Virginia, LLC owns and operates a psychiatric and substance abuse hospital. Chapter 11 Petition Date: March 29, 2020 Court: United States Bankruptcy Court Middle District of Tennessee Case No.: 20-01939 Judge: Hon. Charles M. Walker Debtor's Counsel: Paul G. Jennings, Esq. BASS, BERRY & SIMS PLC 150 Third Ave. S. Suite 2800 Nashville, TN 37201 Tel: 615-742-6200 E-mail: pjennings@bassberry.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Wes Mason III, president of Meridian Behavioral HealthSystems, LLC. A copy of the petition containing, among other items, a list of the Debtor's 30 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/v3DCQl MEDALLION GATHERING: S&P Lowers ICR to B-; Outlook Negative ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Medallion Gathering & Processing LLC to 'B-' from 'B'. At the same time, S&P lowered its issue-level rating on the company's term loan to 'B-' from 'B+'. S&P also revised its recovery rating on the debt to '3' from '2', indicating its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of default. "The downgrade follows the downward revision of our commodity price deck, which we expect will cause Medallion to have lower adjusted EBITDA and volume flow levels than we previously forecast. We expect the company and its midstream peers will face a more challenging marketplace for the remainder of 2020 and 2021, as producers reevaluate their development timelines and production forecasts. We forecast that Medallion will sustain an adjusted debt-to-EBITDA ratio of 6.5x-7.0x over the next 12 months, although it will have adequate liquidity and the support of its owner, Global Infrastructure Partners (GIP), to maintain stable operations and deleverage over time," S&P said. The negative outlook reflects S&P's expectation that Medallion will realize lower throughput volumes than the rating agency previously forecast and leverage metrics will remain elevated over the next 12 months, with debt-to-EBITDA in the 6.5x-7.0x range. "We could lower the rating if Medallion's capital structure becomes unsustainable and the company's liquidity deteriorates further. This could occur due to a continued underperformance on the company's throughput volumes or if Medallion sustained higher-than-expected operating expenses and capital expenditures without additional support from its sponsors," S&P said. "We could revise the outlook to stable if the company maintains a debt-to-EBITDA ratio of less than 6.5x while increasing its throughput volumes and consistently sweeping cash to pay down its outstanding term loan balance," the rating agency said. MEDALLION MIDLAND: Fitch Lowers LT IDR to B & Alters Outlook to Neg ------------------------------------------------------------------- Fitch Ratings has downgraded Medallion Midland Acquisition, LLC's Long-Term Issuer Default Rating (IDR) to 'B' from 'B+' and senior secured term loan B rating to 'B+'/'RR3' from 'BB'/'RR2'. In addition, Fitch has downgraded Medallion Gathering & Processing, LLC's IDR to 'B' from 'B+'. The Rating Outlooks are being revised to Negative from Stable. The rating actions on Medallion's gathering and processing operations occur in a context of certain members of OPEC+ effectively changing the policy of withholding production to maintain relatively stable oil prices. Cartel leader Saudi Arabia has adopted a pump-at-will policy. The pressure on existing policy was acute given the sharp decrease in global energy demand brought on by the coronavirus. Fitch's price deck for oil and natural gas establishes guideposts for the execution of Fitch's policy of rating through the cycle. The price deck serves as the main basis for the new Fitch forecast. Producer commentary is also used. Based on the price deck and on producer commentary throughout the Permian basin, and including some of Medallion's customers, Fitch now believes leverage in 2020 and 2021 will be higher than the leverage level of 6.0x (total debt [gross]/EBITDA) in Fitch's sensitivity as a development that may lead to negative rating action. Fitch believes that Medallion's operations in the Permian will remain challenged by the declining drilling activities of its producer customers under an adverse commodities price environment, and forecasts leverage ranging from 6.2x-6.6x during 2020-2021. Medallion capped a better than expected 2019 with a strong fourth quarter for volumes and profit, reducing leverage to 6.6x, one turn of leverage lower than Fitch expectations but still above the negative sensitivity. The Negative Outlook reflects Fitch's lower expected trends in production forecasts by customers driven by concerns around near-term challenges in a weak oil price environment. KEY RATING DRIVERS Continued Elevated Leverage: Fitch expects leverage to be elevated in the near term due to moderating producer activity in the backdrop of macro headwinds in a low oil price environment. At YE 2020, leverage under Fitch's rating case, is to remain high at over 6.5x with fixed charge coverage (including amortization) of over 2.0x. This level is above Fitch's downgrade sensitivity of leverage at or below 6.0x for 2020 and more consistent with a 'B' IDR given the geographic, business line and customer counterparty concentration. Fitch projects meaningful deleveraging may be delayed until 2022, when higher expected oil prices motivate drillers to put rigs back to work on Medallion's dedicated acres and reduce leverage to below 5.0x. Leverage is high in part due to increased borrowing to help fund capacity expansion associated with a reciprocal capacity lease agreement. Fitch views this business opportunity as relatively positive even as it increased near-term leverage, as the five-year take or pay contract for this capacity generates some cash flow stability. Revised Price Deck Amidst Further Price Declines: Recent weeks have seen a precipitous drop in benchmark oil prices, predicated on the breakup of OPEC+ and Saudi Arabia's willingness to pump at will. This has come on the tails of persistently weak (North American) oil demand. In February 2020, Fitch downgraded a number of exploration and production (E&P) and midstream companies. Between March 19-20, 2020, Fitch revised its commodity price deck and downgraded a number of E&P issuers. The recent fall in oil prices has only exacerbated ongoing market concerns over the risks faced by small-to-mid-sized gathering and processing issuers, which generally do not have an extensive yet compact territory. There is uncertainty on the evolution of customer volumes, with the range of expected outcomes being slower growth than the past, to volume declines in 2021 reverting to 2019 levels. Volumes will generally be impacted by lower oil prices caused by lower drilling budgets, with the additional possible dynamic of producer bankruptcy and whether long-term contracts may be rejected in bankruptcy court. However, Medallion has a good track record, in the recent past, of incurring no losses from producers during the bankruptcy process. Supportive Sponsor: The ratings recognize that Medallion benefit from a supportive sponsor in Global Infrastructure Partners (GIP), which has and continues to invest a significant amount of equity into Medallion. Fitch anticipates GIP will continue to support accretive growth projects going forward. Customer and Volume Risk: Medallion benefits from fixed-per unit fee contracts that provide no direct commodity price exposure for Medallion. These contracts vary in length, with a weighted average of just over ten years. The contracts are further supported by acreage dedications of roughly 1,030,000 acres and require that all crude oil production within these dedicated acres must flow on Medallion's system. The majority of volumes come from six producers with a portion of key customers being high yield issuers. While the Midland region has some of the lowest breakeven costs and highest producer IRRs in North America, Fitch believes that Medallion's volume growth slows through 2021 (provided oil prices remain consistent with Fitch's base case expectation of $38 WTI for 2020, $45 for 2021 ramping to $52 long term). Given the lower forecasted commodity prices and lower producer budgets/expected production, Medallion has heightened customer risk, from reduced volume. Limited Size and Scale: Medallion's size and scale is limited and generally consistent with a 'B' range Issuer Default Rating. The lack of operational and geographic diversity and EBITDA of below $125 million, though growing in 2019, in Fitch's view subject Medallion to outsized event risk and capital market access risks should there be a slowdown in or longer-term disruption of Midland Basin area production. Fitch believes this limited size and scale to be offset in part by Medallion's operational focus within the Midland region of the Permian basin, which is expected to continue to see significant production growth in the near to intermediate term. Fitch expects Midland region production from Medallion's customers to continue to grow in the intermediate term and that Medallion will be a beneficiary of this growth. Competitive Risks: Medallion is located in and around a significant amount of competing existing infrastructure, which could provide a significant amount of competition on new opportunities within Medallion's operating region. The G&P space is and has recently been a very competitive space with low barriers to entry. Offsetting the competitive risks is an increase in acres dedicated by producer counterparties to Medallion's operations. Medallion's dedicated acreage has increased roughly 50% since October 2017. ESG - Governance: Medallion has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than publicly traded issuers. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY Medallion's ratings reflect the size and scale of operations of the company, high near-term leverage, and a mixed credit quality customer portfolio offset by strong geographic exposure to the Permian Basin and some cash flow stability expected to come from its capacity lease exchange. Fitch typically views the credit profiles of single asset/basin focused midstream service providers as consistent with a 'B' category IDR. The downgrade in IDR to 'B' is reflective of higher than expected leverage from lower trends in production forecasts by customers driven by near term challenges in a weak oil price environment. Medallion has a mix of investment-grade and small high yield counterparties, with Fitch expecting the majority of 2020 production to come from high yield credit quality producers, offset by flat to declining production by YE 2020 from three of its investment-grade counterparties. Medallion's focus on the low production cost Midland Basin of West Texas helps bolster Fitch's expectations for intermediate term production growth within Medallion's acreage. This growth along with Medallion's fixed fee long-term contracts with significant acreage dedications and Fitch's belief that Medallion's assets are critical infrastructure for its customers' production help to somewhat mitigate size and scale concerns. Volumetric risks remain a key concern for Medallion and a partial driver of the downgrade. Fitch notes that volumes on Medallion's system have grown significantly with 2019 Midland volumes growing almost 40% yoy. Fitch believes that growth will return in 2021 at lower rates, but leverage at Medallion will remain high in the near term (2020 and 2021). This leverage should moderate toward the end of the forecast benefiting from the return to production growth and the steady cash flow under Medallion's five-year take or pay arrangement for the new build long-haul crude oil pipeline capacity. The pipeline is expected to begin full capacity service in 2Q 2020, with construction completed. Medallion's size and scale of operations are limited, in line with Oryx Midstream Holdings, LLC (B/Negative), a crude gathering system in the Delaware region of the Permian Basin. Medallion's leverage metrics are lower than Oryx with Fitch projecting total debt/EBITDA for Medallion declining from 6.6x in 2020 to around 6.2x in 2021 compared with Oryx in the range of 7.2x-7.5x through 2020. Medallion's deleveraging is similar to Navitas Midland (B-/Negative), a natural gas and natural gas liquids midstream services provider in the Midland region of the Permian Basin. Fitch estimates leverage for Navitas will decline from above 7.0x in 2020 to about 6.5x in 2021. KEY ASSUMPTIONS - Fitch price deck, e.g., values of West Texas Intermediate in 2020 at US$38/Bbl, in 2021 at US$45/Bbl. - Production by customers for delivery into the Medallion's systems in 2020-2021 falls from the 2019 level, given the typical lag time observed in this industry between capital cuts and declines in production. - Full online production from the long-haul crude oil pipeline in 2Q 2020. - Growth capital expenditures are significantly reduced from management's forecast. - For the Recovery Rating, Fitch utilized a going-concern (GC) approach with a 6x EBITDA multiple which is an approximation of the multiple seen in recent reorganizations in the energy sector. There have been a limited number of bankruptcies and reorganizations within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In its recent Bankruptcy Case Study Report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries" published in April 2019, the median enterprise valuation exit multiplies for 35 energy cases for which this was available was 6.1x, with a wide range. The recovery rating for Medallion's senior unsecured notes was revised to 'RR3' from 'RR2.' Fitch assumed a mid-cycle going concern EBITDA of roughly $101 million. In the previous recovery rating exercise (May 2019), Fitch used a going concern EBITDA in the range of $110 million-$118 million. Fitch calculated administrative claims to be 10%, which is a standard assumption. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Leverage (total debt/adjusted EBITDA) below 6.0x on a sustained basis. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Slowing volume growth across Medallion's system, as evidenced by a significant decline in rig count across Medallion's dedicated acreage or increased moderation in average daily volumes into Medallion's system could lead to a negative ratings action. - Meaningful deterioration in customer credit quality or a significant event at a major customer that impairs expected volumes or cash flow into Medallion's system could lead to a negative ratings action. - Leverage (total debt/adjusted EBITDA) on a sustained basis at or above 7.5x. - FFO fixed-charge coverage sustained below 2.0x. - If Medallion's revenue were to move away from its current significant majority being fee based, for instance if commodity price exposure were to increase above 25%, Fitch would likely take a negative ratings action. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Medallion's liquidity is expected to be adequate. Capital projects have been the driver for additional funding funded by the add-on borrowings under the Term Loan and further equity injection from Medallion's sponsor GIP. Medallion drew its $50 million super senior priority secured revolving credit facility, which is effectively senior to its term loan. Near-term maturities are negligible with the revolver having a 2022 maturity and the term loan having a 2024 maturity. The term loan requires a six-month debt service coverage reserve (DSCR), as well as a cash flow sweep and mandatory amortization of 1% per annum. The instrument that provides back-up liquidity for the DSCR directed toward term loan holders is in the form of a LOC issued by a bank. The LOC is for an approximate $24 million, which represents six months of expected interest and schedule principal repayments. The LOC is written in favor of the collateral agent. The obligation to repay the letter of credit resides at an entity above Medallion in its ownership chain. The term loan requires Medallion to maintain a debt service coverage ratio (as defined in the agreement) of above 1.1x which started being tested at the end of the 1Q18. The revolving credit facility contains restrictions on debt to capital, leverage, and interest coverage ratios. As of Dec. 31, 2019, Medallion was in compliance with all covenants and Fitch expects it to remain so throughout the forecast period. ESG CONSIDERATIONS ESG - Governance: Medallion has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than publicly traded issuers. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. MICHAELS COS: S&P Downgrades ICR to 'B'; Outlook Negative --------------------------------------------------------- S&P Global Ratings downgraded Irving, Texas-based arts and crafts specialty retailer The Michaels Cos. Inc. to 'B' from 'B+'. At the same time, S&P lowered its issue-level rating on the company's term loan to 'B+' from 'BB-'. The '2' recovery rating is unchanged. S&P also lowered its issue-level rating on the company's senior unsecured notes to 'CCC+' from 'B-'. The '6' recovery rating is unchanged. "We anticipate a significant impact to Michaels' operations as a result of the coronavirus pandemic. While the full impact of the outbreak is uncertain at this time, we expect revenues to be pressured throughout the year, with particular weakness in the first fiscal quarter of fiscal 2020 as many states mandate closures of nonessential businesses. We believe temporary closure of most stores is likely, whether mandated or otherwise. At stores that remain open, we expect steep traffic declines in the high-double-digit percent area over the next several weeks as consumers practice social distancing. In our view, the company's online presence, which represents about 5% of sales and includes its buy online pickup in store program, will be insufficient to generate meaningful cash flow while stores are closed. Once the pandemic subsides, we expect a protracted return of transaction volumes, likely to be weakened as a result of a deteriorating economy, while tariff pressures continue," S&P said. The negative outlook reflects uncertainty surrounding the impact of the coronavirus and ensuing recessionary environment, which could hinder Michaels' ability to maintain leverage below 5x in fiscal 2021 and beyond. "We could lower the rating if we believe credit metrics will not recover from the coronavirus shock, such that we expect leverage to remain above 5x. For example, this could occur if economic weakness or social distancing norms result in weak traffic at Michaels' stores and profitability does not improve in line with our forecast," S&P said. "We could revise the outlook to stable if we see a clear path to sustainable revenue and profit recovery, with leverage below 5x. For this to occur, we expect the coronavirus pandemic to have been resolved, with additional certainty around macroeconomic conditions," the rating agency said. MILLERS ALE: Moody's Cuts CFR to Caa1, Outlook Negative ------------------------------------------------------- Moody's Investors Service downgraded Millers Ale House Inc.'s Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded Miller's senior secured bank credit facilities to Caa1 from B3. The ratings outlook is negative. "The downgrade reflects its expectation for a material deterioration in earnings and credit metrics that are driven by the restrictions and closures across Miller's restaurant base due to efforts to contain the spread of the coronavirus including recommendations from Federal, state and local governments" stated Bill Fahy, Moody's Senior Credit Officer. In response to these operating challenges and to strengthen liquidity, Miller's drew down the entire amount available under its bank revolver and will focus on reducing all non-essential operating expenses and discretionary capex. Downgrades: Issuer: Miller's Ale House, Inc Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: Miller's Ale House, Inc Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The restaurant sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Miller's credit profile, including its exposure to widespread location closures have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Miller's remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Miller of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Miller's Caa1 CFR reflects its weak liquidity, modest scale and high geographic concentration in Florida. Miller's credit profile is also constrained by its high leverage as a result of its financial sponsor ownership. Miller benefits from its reasonable level of brand awareness evidenced by its high average restaurant volumes, good day-part distribution and product mix with a relatively high margin alcohol percentage. The negative outlook reflects the uncertainty with regards to the potential length and severity of closures and the ultimate impact these closures will have on Miller's revenues, earnings and liquidity. The outlook also takes into account the negative impact on consumers ability and willingness to spend on eating out until the crisis materially subsides. Miller's private ownership is a rating factor given the potential implications from both a capital structure and operating perspective. Financial policies are always a key concern of privately-owned companies with regards to the potential for higher leverage, extractions of cash flow via dividends, or more aggressive growth strategies. Restaurants by their nature and relationship with sourcing food and packaging, as well as an extensive labor force and constant consumer interaction are deeply entwined with sustainability, social and environmental concerns. While these factors may not directly impact the credit, they should positively impact brand image and result in a more positive view of the brands overall. Factors that could result in a stable outlook include a clear plan and time line for the lifting of restrictions on restaurants that result in a sustained improvement in operating performance, liquidity and credit metrics. Given the current operating environment, a ratings upgrade is currently unlikely. However, an upgrade would require good liquidity including positive free cash flow, debt/EBITDA sustained below 6.5 times and EBIT/interest above 1.25x. Factors that could result in a downgrade include a sustained deterioration in liquidity driven by a prolonged period of restaurant restrictions and closures or an increase in the likelihood of a default for any reason. Ratings could also be downgraded in the event that credit metrics remained weak despite a lifting of restrictions on restaurants and a subsequent recovery in earnings and liquidity. Miller's, with headquarters in Orlando, Florida, owns and operates 97 casual dining restaurants in Florida and Eastern US. Annual net revenues are more than $450 million. Millers is majority owned by affiliates of Roark Capital. The company is not required to release financial statements publicly. The principal methodology used in these ratings was Restaurant Industry published in January 2018. MODELL'S SPORTING: Seeks to Hire Cole Schotz as Counsel ------------------------------------------------------- Modell's Sporting Goods, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Cole Schotz P.C., as counsel to the Debtors. Modell's Sporting requires Cole Schotz to: a. advise the Debtor with respect to its powers and duties as debtor and debtor in possession in the continued management and operation of its business and property; b. advise the Debtor in connection with the sale of its assets, including the negotiation of a stalking horse bid, if any, and the related sale process pursuant to section 363 of the Bankruptcy Code; c. advise the Debtor with respect to the analysis of its pre- petition debt and the negotiation of its post-petition financing; d. attend meetings and negotiate with representatives of creditors and other parties-in-interest and advise and consult on the conduct of this Chapter 11 Case, including all of the legal and administrative requirements of operating in chapter 11; e. take all necessary actions to protect and preserve the Debtor's estate, including prosecuting actions on the Debtor's behalf, defending actions commenced against the Debtor's estate, negotiating in connection with litigation in which the Debtor may be involved, and objecting to claims filed against the Debtor's estate; f. prepare on behalf of the Debtor all motions, applications, answers, orders, reports, and papers necessary to the administration of the estate; g. negotiate and prepare on the Debtor's behalf a plan, disclosure statement, and all related agreements and documents, and take any necessary action on the Debtor's behalf to obtain confirmation of such plan; h. appear before this Court, any other courts, and the U.S. Trustee to protect the interests of the Debtor; and i. perform all other necessary legal services, including but not limited to, negotiating and preparing subtenant leases and related documents, and provide all other necessary legal advice to the Debtor in connection with this Chapter 11 Case. Cole Schotz will be paid at these hourly rates: Members $400 to $990 Associates $275 to $500 Paralegals $210 to $315 During the 90 days prior to the Petition Date, the Debtors paid Cole Schotz $788,848 representing Cole Schotz's fees for services rendered and expenses incurred. As of the Petition Date, Cole Schotz was holding, on behalf of the Debtors, a retainer in the amount of $560,000 (the "Retainer"). Cole Schotz will also be reimbursed for reasonable out-of-pocket expenses incurred. Michael D. Sirota, partner of Cole Schotz P.C., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Cole Schotz can be reached at: Michael D. Sirota, Esq. David M. Bass, Esq. Felice R. Yudkin, Esq. COLE SCHOTZ P.C. 25 Main Street Hackensack, NJ 07602-0800 Tel: (201) 489-3000 Fax: (201) 489-1536 E-mail: msirota@coleschotz.com dbass@coleschotz.com fyudkin@coleschotz.com About Modell's Sporting Goods Modell's Sporting Goods -- https://www.modells.com/ -- is a family-owned and operated retailer of sporting goods, athletic footwear, active apparel, and fan gear. Modell's Sporting Goods operates stores throughout New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, New Hampshire, Delaware, Maryland, Virginia and the District of Columbia. Modell's Sporting Goods, Inc., and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 20-14179) on March 11, 2020. Modell's Sporting Goods was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Vincent F. Papalia is the case judge. The Debtors tapped Cole Schotz P.C. as counsel; Berkeley Research Group, LLC, as restructuring advisor; and Prime Clerk LLC as claims agent. MOUNTAIN PROVINCE: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg ------------------------------------------------------------------- Moody's Investors Service downgraded Mountain Province Diamonds Inc.'s Corporate Family rating to Caa1 from B3, Probability of Default Rating to Caa1-PD from B3-PD, second lien secured rating to Caa1 from B3 and Speculative Grade Liquidity Rating to SGL-4 from SGL-2. The outlook was changed to negative from stable. "The downgrade of MPD's rating is driven by the company's weak coverage metrics and liquidity and Moody's expectation of continued weakness in diamond prices", said Jamie Koutsoukis, Moody's Vice-President, Senior Analyst. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The mining sector has been one of the sectors affected by the shock. More specifically, the weaknesses in MPD's credit profile, including its exposure to diamond prices, has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on MPD of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Downgrades: Issuer: Mountain Province Diamonds Inc. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 Senior Secured Regular Bond/Debenture, Downgraded to Caa1 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: Mountain Province Diamonds Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE MPD's credit (Caa1 negative) is constrained by 1) weak liquidity, 2) a continued weak rough diamond price environment, 3) concentration risk (only produces diamonds, at one mine site), 4) small relative production (3 million carats/year), of lower value diamonds (average price of $63/carat in 2019), and 5) the opaqueness of diamond pricing, including the managed supply-demand characteristics of this luxury good. MPD benefits from 1) operating in a favorable mining jurisdiction (Canada), and 2) consistent mine operation by De Beers. MPD is exposed to environmental risks typical for a company in the mining industry. This includes, but is not limited to site remediation and mine closure, and air emissions. The company is subject to environmental laws and regulations in the areas in which it operates. MPD's liquidity is weak over the next year (SGL-4). The company had CAD35 million in cash and equivalents at December 31, 2019, against Moody's expectation that the company will have slightly negative free cash flow over the next 12 months. The company has an undrawn US$50 million credit facility however it matures in December 2020, so any draws would create a corresponding current liability. MPD has no debt maturities until December 2022. The negative outlook reflects the risk that MPD's performance and credit metrics will deteriorate in 2020 unless rough diamond pricing improves and also incorporates its view that MPD may generate negative free cash flow in 2020, leading to a weaker liquidity profile. The ratings could be downgraded if the company experiences operating challenges at the Gahcho Kue mine or if liquidity weakens further. MPD's CFR could be upgraded if there is a sustained recovery in rough diamond prices that improves the company's profitability, it is able to generate sustained positive free cash flow and MPD is able to maintain total adjusted debt/EBITDA at or below 5x . The principal methodology used in these ratings was Mining published in September 2018. Mountain Province Diamonds Inc., headquartered in Toronto, Ontario, is a publicly-owned company that owns 49% of the Gahcho Kue diamond mine located in Canada's Northwest Territories. De Beers Canada owns the other 51% of the joint venture and is the operator. Each company markets its share of rough diamond production. Revenues for 2019 were CAD276 million and Mountain Province sold 3.3 million carats during this period. MTE HOLDINGS: Potter Anderson 4th Update on Service Providers ------------------------------------------------------------- In the Chapter 11 cases of MTE Holdings LLC, et al., the law firm of Potter Anderson & Corroon LLP submitted a fourth amended verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to provide an updated list of the Ad Hoc Committee of Service Providers that it is representing. On Oct. 22, 2019, Oct. 23, 2019, and Nov. 8, 2019, each of the Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code. On Nov. 20, 2019, the Office of the United States Trustee held a meeting to form an official committee of unsecured creditors. The U.S. Trustee did not appoint an official committee of unsecured creditors at the meeting, and on Dec. 3, 2019, the U.S. Trustee filed the Statement that a Committee of Unsecured Creditors Has Not Been Appointed [Docket No. 164]. Many of the creditors comprising the Ad Hoc Committee submitted questionnaires to the U.S. Trustee and appeared at the Formation Meeting; however, many, if not all, of these creditors have statutory liens pursuant to Chapter 56 of Title 5 of the Texas Property Code. See generally Tex. Prop. Code Ann. Section 56 et seq. Following the Formation Meeting, the creditors that make up the Ad Hoc Committee organized as a group to protect and preserve their rights and the rights of similarly situated creditors in these cases [Docket No. 160]. The Ad Hoc Committee consists of parties who performed labor or provided services to, or furnished or hauled material, machinery, or supplies used in, the Debtors' mineral activities. As of March 27, 2020, members of the Ad Hoc Group and their disclosable economic interests are: Materialmen's Lien ------------------ Alamo Pressure Pumping, LLC 1101 N. Little School Road Arlington, TX 76017 $19,517,624.27 Anchor Drilling Fluids USA 11700 Katy Freeway, Suite 200 Houston, TX 77079 $1,422,536.24 Apergy ESP Systems, LLC 2445 Technology Forest Blvd. Building 4, 12th Floor The Woodlands, TX 77381 $4,851,753.78 Baseline Energy Services, LP 201 Foch Street Fort Worth, TX 76107 $1,226,077.16 Basic Energy Services, LP 801 Cherry Street, Suite 2100 Fort Worth, TX 76102 $3,217,315.85 Covenant Testing Technologies, LLC 1600 Highway 6, Suite 360 Sugar Land, TX 77478 $809,630.8 DuraChem Services 2719 W County Road 114 Midland, TX 79706 $4,474,085.56 Eastham Drilling, Inc. d/b/a Big E Drilling 4710 Bellaire Blvd., Suite 350 Bellaire, TX 77401 $8,861,682.00 FESCO, Ltd. 1000 FESCO Ave. Alice, TX 78332 $1,586,814.77 Flowco Production Solutions, LLC 18511 Imperial Valley Dr. Houston, TX 77073 $601,186.06 Gravity Oilfield Services, LLC 3300 North A Street Building 4, Suite 100 Midland, TX 79705 $11,037,156.80 JW Powerline, LLC 2401 E. Interstate 20 Midland, TX 79701 $5,820,435.78 Knight Energy Services, LLC 19500 State Highway 249, Suite 600 Houston, TX 77070 $156,395.04 Legacy Directional Drilling, LLC 103 Abigayles Row Scott, LA 70583 $5,200,891.18 NCS Multistage, LLC 19450 State Highway 249, Suite 200 Houston, TX 77070 $174,494.52 Peak Oilfield Services, LLC P.O. Box 548 Birdgeport, TX 76426 $928,797.42 ProPetro Services, Inc. 1706 S. Midkiff Building B Midland, TX 79701 $850,377.42 RWLS d/b/a Renegade Services 1937 West Avenue (PO Box 862) Levelland, TX 79336 $3,330,708.55 Select Energy Services, LLC 1233 West Loop South Suite 1400 Houston, TX 77027 $1,674,758.47 Sidewinder Drilling LLC 20475 Highway 249, Suite 300 Houston, TX 77070 $501,662.25 STEP Energy Services Holdings Ltd. 480 Wildwood Forest Drive Suite 300 Spring, TX 77380 $3,784,145.08 Texas Fueling Services 4220 Laura Koppe Houston, TX 77016 $2,245,209.15 Trio Equipment Co. 3683 E Highway 44 Alice, TX 78332 $812,540.30 WaterBridge Texas Midstream LLC Attn: General Counsel 840 Gessner Road, Suite 100 Houston, TX 77024 $7,449,987.00 Nothing contained in this Verified Statement should be construed as a limitation upon, or waiver of any Ad Hoc Committee member's rights to assert, file and/or amend its claim(s) in accordance with applicable law and any orders entered in these cases establishing procedures for filing proofs of claim. The Ad Hoc Committee reserves the right to amend or supplement this Verified Statement in accordance with the requirements set forth in Bankruptcy Rule 2019. Counsel to the Ad Hoc Committee of Service Providers can be reached at: POTTER ANDERSON & CORROON LLP Christopher M. Samis, Esq. L. Katherine Good, Esq. R. Stephen McNeill, Esq. Aaron H. Stulman, Esq. 1313 North Market Street, Sixth Floor P.O. Box 951 Wilmington, DE 19899 Telephone: (302) 984-6000 Facsimile: (302) 658-1192 E-mail: csamis@potteranderson.com kgood@potteranderson.com rmcneill@potteranderson.com astulman@potteranderson.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/bB4fyq and https://is.gd/R9FVHt About MTE Holdings MTE Holdings LLC is a privately held company in the oil and gas extraction business. MTE sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-12269) on Oct. 22, 2019. In the petition signed by its authorized representative, Mark A. Siffin, the Debtor disclosed debts of less than $500 million. Judge Karen B. Owens has been assigned to the case. The Debtor tapped Kasowitz Benson Torres LLP as its bankruptcy counsel; Morris, Nichols, Arsht & Tunnell, LLP as its local counsel; and Stretto as its claims and noticing agent. NAPA MANAGEMENT: Moody's Cuts CFR to Caa1, On Review for Downgrade ------------------------------------------------------------------ Moody's Investors Service downgraded NAPA Management Services Corporation's Corporate Family Rating to Caa1 from B3 and its Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded NAPA's first lien credit facility ratings to B3 from B2. At the same time, Moody's placed the company's ratings on review for further downgrade. The downgrade of NAPA's ratings reflects an expectation of a severe decline in revenue and cash flow in the coming weeks due to postponement of elective procedures amid the worsening COVID-19 outbreak. The company's anesthesia services are tied to non-emergent procedures in the majority of cases, and therefore, will be postponed as the government and medical associations advise to limit non-essential medical and surgical procedures. While Moody's believes that these procedures will ultimately be performed, timing of a recovery is uncertain. Further, NAPA has significant exposure to the New York metropolitan area, which is one of the hardest hit by the coronavirus. At the same time, NAPA has high leverage (debt/EBITDA of above 7 times as of December 31, 2019), weak liquidity and rising refinancing risk. Moody's expects that the company will fully draw its $40 million revolver(which expires in April 2021). In addition to liquidity risk, there is also the risk that the company will pursue a transaction that Moody's considers to be a distressed exchange, and hence a default under Moody's definition. The ratings review will focus on liquidity and the ability to reduce variable costs and expenditures in order to manage through the public health emergency. The rating review will also focus on the company's ability to address the expiration of its revolving credit facility. The following ratings were downgraded: Issuer: NAPA Management Services Corporation Corporate Family Rating to Caa1 from B3; under review for further downgrade Probability of Default Rating to Caa1-PD from B3-PD; under review for further downgrade Senior Secured First Lien Revolver expiring in 2021 to B3 (LGD3) from B2 (LGD3); under review for further downgrade Senior Secured First Lien Term Loan due 2023 to B3 (LGD3) from B2 (LGD3); under review for further downgrade Outlook Action: Outlook changed to rating under review for downgrade from stable RATINGS RATIONALE NAPA's Caa1 CFR reflects the company's weak liquidity and very high financial leverage amid the unfolding COVID-19 outbreak that will significantly reduce the demand for the company's services. It also reflects the company's limited scale and high geographic concentration in New York state, where COVID-19 spread has been rapid. The Caa1 rating is supported by an expectation that the demand for the company's services will return once the COVID outbreak subsides. Moody's considers NAPA's liquidity to be weak. The company had approximately $3 million in cash and $10 million revolver availability at the end of January 2020. Assuming that the company generated a small amount of positive cash flow in the first quarter and drew all of its revolver, Moody's estimates that the company currently has $15-$20 million of liquidity. Depending on the severity of the cash burn over the coming weeks, a substantial portion of this cash could be spent down. As a provider of physician staffing services, NAPA faces significant social risk. Several legislative proposals have been introduced in the US Congress that aim to eliminate or reduce the impact of surprise medical bills. Moody's believes that physician staffing companies like NAPA would be adversely affected if these proposals are enacted and if they use some form of median reimbursement rate as a benchmark. The ratings could be downgraded if NAPA is unable to refinance its revolver in the coming months, if liquidity deteriorates further or if there is an increased likelihood that the company pursues a transaction that Moody's would consider a default. The ratings could be upgraded if the company's operating performance stabilizes, it refinances its revolver and its liquidity improves. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Melville, NY, NAPA Management Services Corporation is a specialty anesthesia management company in the United States. The company partners with hospitals, ambulatory surgery centers and physician offices to provide anesthesia services and perioperative care. NAPA, which is owned by private equity sponsor American Securities, reported revenues of $541 million in the twelve months ended December 31, 2019. NATIONAL CINEMEDIA: Moody's Places B1 CFR on Review for Downgrade ----------------------------------------------------------------- Moody's Investors Service placed all existing credit ratings of National CineMedia, LLC, including the B1 Corporate Family Rating, on review for downgrade. The rating outlook was changed to ratings under review from stable. The Speculative Grade Liquidity Rating was withdrawn because National CineMedia, LLC no longer files financial reports publicly. The rating actions reflect the impact of coronavirus outbreak on National CineMedia, the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. On Review for Downgrade: Issuer: National CineMedia, LLC Probability of Default Rating, Placed on Review for Downgrade, currently B1-PD Corporate Family Rating, Placed on Review for Downgrade, currently B1 Senior Secured Bank Credit Facility, Placed on Review for Downgrade, currently Ba3 (LGD3) Senior Secured Regular Bond/Debenture, Placed on Review for Downgrade, currently Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently B3 (LGD6) Withdrawals: Issuer: National CineMedia, LLC Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 Outlook Actions: Issuer: National CineMedia, LLC Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The consumer services sector related to entertainment and leisure has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in National CineMedia's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread. In response to the federal government's recommendation that public gatherings should be restricted to ten or fewer individuals and people should engage in social distancing due to the widespread coronavirus pandemic, movie theaters closed. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The ratings placed under review due to the coronavirus outbreak's impact on National CineMedia's ability to continue running its core revenue-generating business - cinema advertising-- due to movie theaters closures as well as the effect on the overall economy and consumer sentiment. There is no certainty as to when the movie theaters will reopen. This raises concerns around the company's ability to generate positive operating cash flows and maintain adequate liquidity, especially if the virus continues to spread forcing movie theaters to remain closed beyond June. Even as movie theaters reopen, it is not clear if attendance will rebound quickly given the caution around health safety in public spaces. Since National CineMedia is ultimately compensated based on cinema attendance, the company earnings remain highly vulnerable to consumer sentiment and the public perception of health risks in theaters. The financial health of its customers, undermined by the pandemic, will likely reduce the amount of marketing these companies are willing and able to spend. Consumers discretionary spending on entertainment, including movies, will be hurt by deterioration in in the economy and rise in unemployment. Combined, these factors will substantially erode operating performance and significantly pressure National CineMedia's liquidity over the remainder of 2020. National CineMedia's highly variable cost structure enables the company to reduce costs quickly to limit cash burn during the outbreak. The company does not face near-term debt maturities and had a moderate leverage of 4.2x (including Moody's adjustments) as of 12/31/2019. Its $175 million revolving credit line provides a source of external liquidity that Moody's believes would be sufficient to cover basic cash needs for the balance of the year without external liquidity injection. However, should theater closures continue beyond June, covenant waivers/relief will likely be needed to maintain covenant compliance. National CineMedia's revolving facility is subject to a continuing maximum net total leverage ratio (as defined in the facility agreement) of 6.25x and a springing net senior secured leverage ratio of 4.50x so long as there is a balance outstanding on the revolver. In its review, Moody's will focus on the company's ability to meet covenant compliance requirements under its credit facility or obtain temporary relief/waivers should it be needed, and reduce its cost base sufficiently and in a timely manner to limit cash burn during the theater closures while still preserving the long-term value of the business. The principal methodology used in these ratings was Media Industry published in June 2017. National CineMedia, LLC (NCM), headquartered in Centennial, Colorado, is a privately held joint venture operator of a leading digital in-theater advertising network in North America. National CineMedia, Inc. is NCM's publicly traded managing owner and held a 48.8% ownership interest in NCM as of December 26, 2019. The remaining 51.2% interest is collectively held by founding member theaters including Cinemark Holdings, Inc. (25.0%), and Regal CineMedia Holdings, LLC (26.2%). Revenue for the twelve months ended December 31, 2019 was $445 million. NAVITAS MIDSTREAM: Fitch Lowers LT IDR to B-, Outlook Negative -------------------------------------------------------------- Fitch Ratings has downgraded Navitas Midstream Midland Basin, LLC's Long-Term Issuer Default Rating (IDR) to 'B-' from 'B'. Additionally, Fitch has downgraded Navitas' Super Senior Secured Revolver to 'BB-'/'RR1' from 'BB'/'RR1' and Senior Secured Term Loan to 'B'/'RR3' from 'BB-'/'RR2'. Further, Fitch assigns a senior secured debt rating of 'B'/'RR3' rating to the senior secured term loan C. Navitas' Rating Outlook remains Negative. The rating actions occur in a context of certain members of OPEC+ effectively changing the past policy of withholding production to maintain relatively stable oil prices. Cartel leader Saudi Arabia has adopted a pump-at-will policy. The pressure on existing policy was acute given the sharp decrease in global energy demand brought on by the coronavirus pandemic. 2019 had a disappointing start, yet, based on preliminary information, which remains subject to change, Navitas capped the year with a strong fourth quarter for volumes and profit. Based on this preliminary fourth quarter Fitch-adjusted EBITDA, the company had, before the conflict within OPEC+, a solid basis for posting a 2020 that would have met Fitch expectations. Planned capex was higher than previous expectations, yet Navitas has an equity commitment to cover this forecast. Fitch's price deck for oil and natural gas establishes guideposts for the execution of Fitch's policy of rating through the cycle. The price deck serves as the main basis for the new Fitch forecast. Producer commentary is also used. Based on the price deck and based on producer commentary throughout the Permian basin, and including some of Navitas's customers, Fitch now believes leverage in 2020 and 2021 will be higher than the leverage level (6.0x) at which Fitch had previously stated there might be a negative rating action. The Negative Outlook reflects lower expected trends in production forecasts by customers, trends in interest rate volatility, and the expected fulfillment of the equity contribution by a sponsor with an exemplary track record that has solidly supported Navitas's growth. KEY RATING DRIVERS Mostly Fee-Based Contracts: Navitas benefits from having a high percentage (approximately 75%, on Fitch expected 2020 EBITDA) of its contracts with a fixed per unit fee for services provided. The company has roughly 350,000 acres dedicated on its system with an average fixed-fee contract life of roughly 10 years remaining (including contracts where Navitas receives a minimum fee plus some upside related to commodity prices); however, a portion of its evergreen and legacy contracts (for existing production, roughly dedicated 94,000 acres) are structured as percent of proceeds (POP) contracts where Navitas will be exposed to changing commodity prices. Specifically, Navitas, in exchange for processing services provided, takes title to a portion of the natural gas liquids and natural gas processed. Some of these contracts require the customer to make a supplementary cash payment in case the commodity price goes under a pre-set floor, so that Navitas at least gets the floor value. In any case, the commodity price exposure is one factor driving a decline in expected EBITDA compared to what Fitch previously estimated. That said, the volume driver is the more important factor. Revised Fitch Price Deck: Recent weeks have seen a precipitous drop in benchmark oil prices. Natural gas liquids− even ethane−have all fallen in tandem. This has come on the tails of almost a year of weak natural gas prices. In February 2020, Fitch downgraded a number of natural gas-focused exploration and production (E&P) and midstream companies. Between March 19-20, 2020, Fitch revised its commodity price deck and downgraded a number of E&P issuers. One such E&P issuer was Ovintiv, Inc. (unsecured: BBB-/Negative), a Navitas customer and among its highest-rated ones. The recent fall in oil prices has exacerbated ongoing market concerns over the risks faced by midsized single-territory gathering and processing issuers. Some of these companies do not have an extensive yet compact territory, or lengthy minimum volume commitment-type contracts. There is uncertainty on the evolution of customer volumes, with the range of expected outcomes being slower growth than the past, to volume declines in 2021 compared to 2019. Volumes will generally be impacted by lower oil prices causing lower drilling budgets, with the additional possible dynamic of whether there will occur contract rejections (in bankruptcy court) of long-term contracts. Regarding bankruptcy, the record of how gathering service providers fare in a customer bankruptcy, while limited, has been positive for contracts. Sailing Stormy Seas: Navitas has overcome challenges, including a fire at its Newberry Plant, which forced the company to offload gas volumes (and some profits) to nearby competitors. The operational issues put a damper on financial results and slowed expected deleveraging. Furthermore, Navitas has a relatively short list of customers, with a portion of key customers being high yield debt issuers. Navitas is adding incremental processing capacity expected in 2020 and has added larger slug catching capability (removing unwanted liquid build up in natural gas pipelines), both of which are expected to aid in smoother system operation. Delayed Deleveraging: Navitas' leverage (total debt/adjusted EBITDA) is expected to remain above 6.0x through 2021, versus the prior Fitch target of leverage between 5.5x and 6.0x in 2020, due in large part to slower than previously anticipated volume growth. Navitas' volume growth has been consistent with or slightly better than Fitch's prior expectations; however, some operational issues and lower realized commodity-based revenue have led to elevated leverage expected near term. Furthermore, with producers responding to lower prices by cutting spending and production outlooks, the near-term volume picture remains challenged. Fitch does project meaningful deleveraging in 2022, with leverage moving below 5.0x by the end of the forecast period, driven by higher expected oil & gas prices motivating drillers to put rigs back to work on Navitas dedicated acres. The Fitch Price Deck value for 2022 for West Texas Intermediate is $50 per barrel. Liquidity For Near Term Capacity Growth, and a Long Term Maturity: Warburg Pincus contributed significant equity to Navitas in 2019. Additionally, the Sponsor has approved further equity infusions for 2020; however this committed equity has not yet come into the possession of Navitas (the foregoing information was based on preliminary information, and Fitch understands certain funds have been or imminently will be placed with Navitas). Liquidity concerns would arise if sponsor support should be delayed or fail to materialize in its entirety, given current capacity growth spending plans (2020). Additionally, the small loan due in 2022 will need to be pro-actively managed, in Fitch's judgment, in the event that Fitch's forecast for 2021 EBITDA is borne out, and markets from time to time become unsettled, as they are now. Group Structure Complexity: Navitas has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than publicly traded issuers. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Also, group structure considerations have elevated scope for Navitas given inter-family/related party transactions with affiliate companies. DERIVATION SUMMARY Navitas' credit profile and ratings reflect its single territory, high current leverage, and slightly concentrated customer credit risk. The company's natural gas gathering and processing operations are focused on a single-basin, the Permian. Generally, Fitch views single basin focused midstream service providers as being consistent with 'B' category IDRs. Navitas' operations are not as large as EagleClaw's historically, with lower gathered volumes and less processing capacity. Both Navitas and EagleClaw are single basin gathering and processing service providers operating in the Permian, where Fitch expects curtailed producer activity in the near term. Both Navitas and EagleClaw are private equity-owned entities. Neither Navitas or EagleClaw, benefit from minimum volume commitment contracts, and neither have fully fee-based contract portfolios (said another way, both have a portion of contracts directly exposed to commodity prices). Navitas' customer exposure is concentrated at Endeavor Energy Resources (unsecured: BB+/Stable) and SM Energy (unsecured: B-/Rating Watch Negative) with offsetting exposure to larger investment grade names like Apache Corp. (unsecured: BBB/Negative) and Ovintiv, Inc. (unsecured: BBB-/Negative), reflecting a modestly riskier, and slightly more concentrated customer profile versus EagleClaw. The majority of EagleClaw's volumes is expected to come from a more diverse group of producers including a larger portfolio of 'BB' or higher rated issuers. Leverage at Navitas is expected to be at 7.0x in 2020 and decline to approximately 6.5x by year-end 2021. In 2018, EagleClaw's leverage was over 10x, and is expected to be over 10x in 2020. As to coverage, operating EBITDA/interest paid and the debt service coverage ratio (operating EBITDA/(interest paid + required loan amortization)) increase from 2.2x to 3.1x and 1.8x to 2.5x, respectively, for Navitas over the forecast period. KEY ASSUMPTIONS -- Fitch price deck, e.g., 2021 values of Henry Hub, US$2.10/Mcf, National Balancing Point $4.50/Mcf, and West Texas Intermediate $45/(barrel) bbl. Ethane consistent with Henry Hub above, Natural Gasoline consistent with West Texas Intermediate (WTI) above, Propane consistent with the one-year-out NYMEX forwards. -- Production by customers for delivery into the Navitas systems in 2020 does not fall from the 2019 level, reflecting improved customer production in 1Q20 compared to 4Q19, as well as the typical lag time observed in this industry between capex cuts and declines in production. -- Growth capital expenditures are significantly cut from management's forecast. -- The executed equity contribution agreement provides funds in 2020 to partially fund capital expenditures. -- The recovery analysis assumes that Navitas Midstream Midland Basin would be considered a going-concern in bankruptcy. Fitch has assumed a 10% administrative claim (standard). The going-concern EBITDA estimate of $65 million reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of the company. As per criteria, the EBITDA reflects some residual portion of the distress that caused the default. The previous recovery exercise (May 2019) assumed an EBITDA in the range of $70 million-75 million. -- An EV multiple of 6x is used to calculate a post-reorganization valuation and is in line with recent reorganization multiples for the energy sector, including three cases in the last five years from the midstream sector in the U.S. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action Fitch would likely stabilize the Outlook if volumes resume their increase (after what Fitch expects will be a period of decline in 2H20), and EBITDA improves as a result of increased plant capacity utilization, and LTM total debt/adjusted EBITDA (Fitch defined) fell to a value of approximately 7.0x; -- Positive FCF generation combined with leverage (total debt/ adjusted EBITDA) at or below 6.0x on a sustained basis. -- Improved liquidity measures. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A decline in volumes across Navitas' acreage, as evidenced by Navitas operational problems or by a drop in daily volumes through Navitas system; -- Significant cost overruns on project completion; -- Meaningful deterioration in customer credit quality or a significant event at a major customer that impairs cash flow; -- Leverage (total debt/adjusted EBITDA) sustained above 7.5x; -- Funds Flow From Operations Fixed Charge Coverage sustained below 1.5x. LIQUIDITY AND DEBT STRUCTURE Liquidity Adequate: Fitch expects Navitas' liquidity to continue to depend on Warburg infusions of equity. Fitch expects Navitas to fund its growth capex needs through 2020 predominantly with equity commitment from its sponsors, Warburg Pincus and its co-investors (the Sponsors). The sponsors contributed significant equity to Navitas in 2019 and committed more (equity) in 2020; however this 2020 committed equity, based on preliminary information, has yet to become fully available to Navitas. Concerns remain as expected Navitas cash flow generated from operations will be stretched to cover interest payments, required loan amortization and maintenance capex, leaving little cushion for negative variance and growth spending unfunded, should sponsor infusions fail to materialize. Liquidity, as of the end of 2019, was limited to cash on hand of $28 million and $33 million available on the Super Senior Secured revolving credit facility. The company does have an additional $17 million of restricted cash in a debt service reserve account. The Super Senior Secured revolving credit facility was expanded from $50 million to $60 million in June 2019 and has a maturity date of December 2022. Navitas has drawn $20 million on the revolving credit facility. The company's Term Loan B1/B2 do not come due until 2024; however, a 1% annual required amortization, equating to roughly $5 million per year, increase Navitas' liquidity needs over the forecast period. As of December 2019, the total outstanding amount under the Term Loan B1 and Term Loan B2 facility was $392 million and $40 million, respectively. During September 2019, Navitas entered into a new $40 million senior secured term loan agreement, the Term Loan C. Maturity of this term loan is in September 2022 and the proceeds were used to purchase components of the Trident and the Taylor processing plants and the Reagan County lateral pipeline. Along with the required amortization on the Term Loan B/B2, the shorter relative maturity of the Term Loan C represents a minor amount of distress should market conditions continue to remain challenged and deleveraging not occur as expected. Navitas' credit and term loan facilities contain various covenants including limitations on the creation of indebtedness and liens, and related to the operation and conduct of business. The credit facilities do not permit Navitas' Debt Service Coverage Ratio to be less than 1.1x, Total Debt to Capitalization to be more than 50% and Super Senior Leverage ratio to be less than 1.5x. Navitas was in compliance with its covenants as of Dec. 31, 2019, and Fitch expects continued covenant compliance in the near to intermediate term, increasing to above 2x by 2021. ESG CONSIDERATIONS Navitas Midstream Midland Basin, LLC: 4.2; Group Structure: 4 NEUBASE THERAPEUTICS: Incurs $4.5-Mil. Net Loss in First Quarter ---------------------------------------------------------------- Neubase Therapeutics, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $4.51 million for the three months ended Dec. 31, 2019, compared to a net loss of $1.49 million for the three months ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $9.88 million in total assets, $2.85 million in total liabilities, and $7.03 million in total stockholders' equity. The Company had no revenues from product sales, incurred operating losses since inception, and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. As of Dec. 31, 2019, the Company had $7.7 million in cash and during the three months ended Dec. 31, 2019, incurred a loss from operations of $3.8 million and used $2.4 million in cash in operating activities. The Company has funded its operations through the issuance of convertible notes and the sale of common stock and warrants. Neubase said, "The Company will likely need to raise substantial additional funds through one or more of the following: issuance of additional debt or equity, or complete a licensing transaction for one or more of the Company's pipeline assets. If the Company is unable to maintain sufficient financial resources, its business, financial condition and results of operations will be materially and adversely affected. This could affect future development and business activities and potential future clinical studies and/or other future ventures. Failure to obtain additional equity or debt financing will have a material, adverse impact on the Company's business operations. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or debt financings will likely have a dilutive effect on the holdings of the Company's existing stockholders." A full-text copy of the Form 10-Q is available for free at: https://is.gd/5R5wra About NeuBase Therapeutics NeuBase Therapeutics, Inc. -- http://www.neubasetherapeutics.com/ -- is developing the next generation of gene silencing therapies with its flexible, highly specific synthetic antisense oligonucleotides. The proprietary NeuBase peptide-nucleic acid (PNA) antisense oligonucleotide (PATrOL) platform allows for the rapid development of targeted drugs, increasing the treatment opportunities for the hundreds of millions of people affected by rare genetic diseases, including those that can only be treated through accessing of secondary RNA structures. Using PATrOL technology, NeuBase aims to first tackle rare, genetic diseases. NeuBase reported reported a net loss of $26.96 million for the year ended Sept. 30, 2019. For the period from Aug. 28, 2018, to Sept. 30, 2018, the Company reported a net loss of $41,952. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification in its report dated March 7, 2019, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. NXT ENERGY: To Release its 2019 Year-End Results on April 6 ----------------------------------------------------------- NXT Energy Solutions Inc.'s Annual Information Form and Annual Financial Statements, including Management's Discussion and Analysis for the year ended Dec. 31, 2019 will be filed on Monday, April 6, 2020 after market close and the Company presently intends to hold a conference call to discuss the 2019 Results on Tuesday, April 7, 2020 at 4:30 p.m. Eastern Time (2:30 p.m. Mountain Time). However, conference services are currently being rationed and the date and time may change. The Company will provide an appropriate further notification. The 2019 Results would ordinarily have been filed on or before the March 30, 2020 deadline as required under the Canadian Securities Administrators National Instrument 51-102 Continuous Disclosure Obligations. However, as NXT and its external service providers have diverted resources and directed employees to work from home in response to the novel coronavirus (2019-nCoV/COVID-19) pandemic, NXT is taking sufficient time, in this period of crisis, to deliver a proper professional product as permitted by Alberta Securities Commission Blanket Order 51-517 Temporary Exemption from Certain Corporate Finance Requirements (2020 ABASC 33). During the extension period, management and other insiders of the Company will be subject to an insider trading black-out policy. An update as to material business developments since Nov. 14, 2019, being the date of the Company filed its most recent interim financial report for the three and nine month periods ended Sept. 30, 2019. Nigerian SFD Survey On March 26, 2020, NXT received a US$466,000 payment under its US$8.9 million Nigerian SFD survey contract, bringing total payments to date to US$8.4 million. The contracted holdback amount of approximately US$0.5 million is expected be paid to the Company upon the conclusion of negotiations for additional work under the current contract framework. The Department of Petroleum Resources (the "DPR"), a department under the Federal Republic of Nigeria's Ministry of Petroleum Resources responsible for the sustainable development of Nigeria's oil and gas resources, provided written confirmation of their recommendation in favour of NXT's SFD technology based on the recent survey results, noting specifically "in line with federal government aspiration to increase its Oil and Gas reserves base at a considerable reduced cost, risk and optimize exploration cycle, the Stress Field Detection SFD technology is hereby adopted and recommended to be deployed as an independent data exploration tool for hydrocarbon exploration to identify and rank prospect-level leads to focus exploration efforts in the Nigerian Oil and Gas industry". Mr. Liszicasz commented, "The DPR recommendation in support of our SFD survey method is significant and reflects the value NXT and PE Energy delivered. We expect that recommendation from the Federal Republic of Nigeria, a regional leader in technological innovation, to resonate broadly throughout the African oil and gas industry. We completed the 5,000 km line survey in record time and recommended eight primary anomalies in April 2019. Drilling commenced at a location where one anomaly coincided with a seismic prospect, and the well was successfully completed in late 2019. Preliminary results demonstrate that when two independent tools (seismic and SFD) operating on different physical principles recommend the same areas as prospective, the commercial success rate increases considerably. NXT expects to announce these results in the near future. "We are very pleased with our business development progress in Nigeria, other parts of Africa, Latin America and Asia. We will continue to provide updates on our progress as warranted." Targeted Issuer Bid Between Nov. 18, 2019 and Dec. 10, 2019, the Company purchased for cancelation 4,166,667 common shares in the capital of the Company from Alberta Green Ventures Limited Partnership at a price of $0.30 per Common Share for gross expenditures of approximately $1,250,000. The Common Shares purchased and canceled represented approximately 6.08% of the total outstanding Common Shares as at Nov. 14, 2019, being the trading day immediately prior to the commencement of Targeted Issuer Bid. The terms of the Targeted Issuer Bid also provided that the 3,421,648 common share purchase warrants held by AGV expired as of Oct. 31, 2019. Loan Repayment On Dec. 13, 2019, NXT elected to receive, and directed AGV to deliver, subject to receipt of necessary regulatory approvals, 543,673 Common Shares as repayment of the US$250,000 principal amount advanced by the Company to AGV and evidenced by way of promissory note dated Sept. 6, 2019. Regulatory approvals in respect of the Loan Repayment are still pending. About NXT Energy NXT Energy Solutions Inc. is a Calgary-based technology company whose proprietary SFD survey system utilizes quantum-scale sensors to detect gravity field perturbations in an airborne survey method which can be used both onshore and offshore to remotely identify areas with exploration potential for traps and reservoirs. The SFD survey system enables the Company's clients to focus their hydrocarbon exploration decisions concerning land commitments, data acquisition expenditures and prospect prioritization on areas with the greatest potential. SFD is environmentally friendly and unaffected by ground security issues or difficult terrain and is the registered trademark of NXT Energy Solutions Inc. NXT Energy Solutions Inc. provides its clients with an effective and reliable method to reduce time, costs, and risks related to exploration. NXT Energy reported a net loss and comprehensive loss of C$6.96 million for the year ended Dec. 31, 2018, compared to a net loss and comprehensive loss of C$8.97 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had C$33.99 million in total assets, C$4.16 million in total liabilities, C$29.83 million in shareholders' equity. The Company's independent accounting firm KPMG LLP, in Calgary, Canada, 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's current and forecasted cash position is not expected to be sufficient to meet its obligations for the 12 months period beyond the date that these financial statements have been issued. These conditions, along with other matters, indicate the existence of a material uncertainty that casts substantial doubt about the Company's ability to continue as a going concern. OCCIDENTAL PETROLEUM: S&P Cuts ICR to BB+; Ratings on Watch Neg. ---------------------------------------------------------------- S&P Global Ratings lowered its ratings on U.S.-based exploration and production (E&P) company Occidental Petroleum Corp. (Oxy), including its issuer credit rating and unsecured issue-level ratings, to 'BB+' from 'BBB'. At the same time, S&P placed the ratings on CreditWatch with negative implications. The recent collapse in oil prices will hurt Oxy's profitability and cash flows. S&P forecasts that the company's credit measures will be weak for its expectations for the rating, with funds from operations FFO to debt and debt to EBITDA of well below 12% and above 5x, respectively, in 2020 based on its revised oil and natural gas price deck assumptions. The CreditWatch placement reflects the likelihood of a downgrade by year-end 2020 if Oxy does not address its maturities in 2021. S&P views successful execution of asset sales as the most plausible path to achieving this. S&P expects to resolve the CreditWatch, likely toward the end of this year, based on the company's progress on debt reduction. ORYX MIDSTREAM: Fitch Lowers LT IDR to B & Alters Outlook to Neg ---------------------------------------------------------------- Fitch Ratings downgraded Oryx Midstream Holding LLC's Long -term Issuer Default Rating to 'B' from 'B+'. Fitch has also downgraded the senior secured term loan to 'B+'/'RR3' from 'BB'/'RR2'. The Rating Outlook has been revised to Negative from Stable. The rating actions follow headwinds in the macro crude oil environment where the pressure on the OPEC+ existing policy was acute given the sharp decline in global energy demand brought on by the coronavirus. This has led Fitch to revise its base case price deck lower which has resulted in Oryx's weaker metrics. The recommendation is based on forecast leverage in 2020 that is higher than prevailing sensitivity. Fitch expects year-end 2020 leverage to be in the range of 7.2x-7.5x. This remains high for a single basin crude oil gathering and transportation entity which can be subject to outsized producer or event risks. The ratings also reflect Oryx's counterparty risk, limited size, scale and geographic and business line diversity. Fitch expects about 60% of Oryx's 2020E volumes will be comprised of customers without an investment-grade rating. Given its single basin focus and lack of business line diversity, Oryx is subject to event risk should there be a slow-down or longer term disruption of production in the Permian region. Ratings consider that Oryx generates 100% of its cash flow under fixed fee contract with a weighted average tenor of approximately 10 years, which eliminates its direct commodity price risk, but is subject to volumetric risk. These contracts are also backed by acreage dedication from its customers. The Negative Outlook reflects Fitch's concerns around near term challenges in a weak oil price environment and its continued impact on producer activity in the Permian. KEY RATING DRIVERS Elevated Leverage: Oryx's leverage (total debt/ adjusted EBITDA) is expected to remain above 6.0x through 2021, versus Fitch's prior target leverage due to continued lower than expected volume growth. Fitch forecasts Oryx's leverage (total debt/adjusted EBITDA) to be elevated in the range of 7.2x-7.5x for year-end 2020 with the expectation of moderating producer activity in the backdrop of low crude oil price environment. Fitch expects leverage to remain high in 2021, with volumes expected to remain subdued as producers respond to lower prices by cutting spending and the full impact of producers' reduced activity in 2020 would be seen. Fitch notes that Oryx has modest capex requirement from 2021 with the completion of their systems, but believes leverage is critical to the Company's credit profile with limited geographic diversity. West Texas Provider: Oryx is a crude gathering and transportation services provider that operates predominantly in the Northern and Southern Delaware region of the Permian basin, although it now has a presence in the Midland with the Reliance Gathering JV interest, and is expected to generate an annual EBITDA of less than $250 million in the near term. Given its West Texas focus and lack of business line diversity, Oryx is subject to outsized event risk should there be a slow down in its territories in the Permian basin. Customer Exposure: Following the Targa Outrigger acquisition and the Reliance Gathering JV, Oryx has approximately 54 rigs operating on its dedicated acreage across approximately 30 customers with 100% fixed fee contracts that eliminate direct commodity price exposure. These contracts vary in length and have a weighted average tenor of approximately 10 years. Oryx is, however, exposed to customer risk as the majority of its customers are non-investment-grade counterparties, which are estimated to contribute approximately 60% of Oryx's 2020E volumes. Fitch views these high-yield E&P companies as lacking geographic breadth and not having the same downside protection through hedges compared with their investment-grade peers. Some of its major shippers are pure-play Permian players who had been significantly ramping up their production in recent years but have now given guidance curtailing activities in the basin. Supportive Sponsor: Oryx's sponsors have been and expected to remain supportive of the operating profile of Oryx. Stonepeak committed approximately 60% equity for the purchase of Oryx in April 2019 and continues to provide equity infusions for the Oryx's joint venture investment and the Targa Outrigger acquisition in 2H19. Fitch expects the sponsors to continue providing operational and capital support. Group Structure Complexity: Oryx has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than public traded issuers. This has a negative impact on the credit profile, and is relevant in conjunction with other factors. DERIVATION SUMMARY Oryx's ratings are limited by the size and scale of operations of the company, a single basin focused crude oil gathering and transportation service provider operating in the Delaware Basin of the Permian, with a relatively small presence in Midland with its recent JV interest in Reliance Gathering. Fitch typically views the credit profiles of single asset/basin focused midstream service providers as more consistent with a 'B' range IDR. In addition, Fitch's size and scale concerns about midstream energy issuers tends to be focused on facilitating access to capital for meeting funding needs, with larger entities more easily able to access capital markets. Fitch does not expect Oryx to have any near-term need to access capital markets until revolver maturity. Oryx is a crude gathering and intrabasin transportation service provider. Navitas Midstream (B-/ Negative) is a natural gas gatherer and processor but both entities are single basin focused midstream companies. Relative to Navitas Midstream where Fitch expects year-end 2020 levrage to be 7.2x, Oryx is slightly larger in size with greater acreage dedication and generates more cash flow under fixed fee contracts. Oryx's leverage metrics are higher than Medallion with Fitch projecting 2020 leverage for Oryx in the range of 7.2x-7.5x compared with Medallion Midstream Acquisition (B/Negative), at 6.6x for 2020. KEY ASSUMPTIONS - Fitch utilized its WTI oil price deck of $38/barrel in 2020, $45/ barrel in 2021 and $50/ bbl in 2022; - Growth and maintenance capex as per management guidance. Modest capex spent in outer years for additional well connects and systems maintenance; - No distributions are made; - No acquisitions in forecast period; - For the Recovery Rating, Fitch utilized a going-concern (GC) approach with a 6x EBITDA multiple which is an approximation of the multiple seen in recent reorganizations in the energy sector. There have been a limited number of bankruptcies and reorganizations within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In its recent Bankruptcy Case Study Report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries" published in April 2019, the median enterprise valuation exit multiplies for 35 energy cases for which this was available was 6.1x, with a wide range. For Oryx's Going Concern EBITDA, Fitch assumed $170million post default and bankruptcy emergence, driven by falling commodity prices and significant volume growth deterioration. In the previous recovery rating exercise (April 2019), Fitch used a going concern EBITDA assumption of $230 million-$240 million. The multiple was unchanged at 6x. Fitch calculated administrative claims to be 10% which is a standard assumption. The recovery rating for Oryx's senior secured term loan has decreased to 'RR3' from 'RR2'. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Increases its size, scale, asset, geographic or business line diversity, with a focus on EBITDA above $300 million per annum while maintaining leverage (Total Debt/ Adjusted EBITDA) at or below 6.0x basis. Developments That May, Individually or Collectively, Lead to Negative Rating Action - FFO fixed-charge coverage sustained below 2.0x; Leverage (total debt/adjusted EBITDA) to be sustained above 7.5x; - Meaningful deterioration in customer credit quality or a significant event at a major customer that impairs cash flows; - A significant change in cash flow stability profile, driven by a move away from current majority of revenue being fee based. If revenue commodity price exposure were to increase above 25%, Fitch would likely take negative action; - An increase in spending beyond Fitch's current expectations or acquisitions funded in a manner that pressures the balance sheet. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Oryx has access to a $150 million Super Secured revolving credit facility that matures in 2024 in addition to a $1,500 million of senior secured term loan with a manageable maturity of six years (matures in 2026). These facilities have the option of being increased by an aggregate amount of $150 million, of which $25 million can comprise of incremental revolver borrowings. The term loan requires a six-month Debt Service Reserve Account (DSRA), as well as a cash flow sweep and mandatory amortization of 1% per annum. The instrument that provides back-up liquidity directed toward term loan holders is in the form of a letter of credit issued by a bank. The letter of credit is for approximately $ 50 million, which represents six months of expected interest and scheduled principal repayments. The L/C is written in favor of the collateral agent. The obligation to repay the letter of credit resides with Oryx and is back-stopped by Oryx's $150mm revolving credit facility. As of Sept. 30, 2019, unrestricted cash balance was $9 million and $35 million outstanding on the revolver. The credit agreement stipulates financial covenant of a DSCR not less than 1.10x, testing of which commences with test period ending June 30, 2020. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3. ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Oryx has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than public traded issuers. This has a negative impact on the credit profile, and is relevant in conjunction with other factors. PACIFICLAND INTERNATIONAL: Involuntary Chapter 11 Case Summary -------------------------------------------------------------- Alleged Debtor: Pacificland International Development Inc. 150 N. Olympic Blvd. Suite 530 Arcadia, CA 90064 Case Number: 20-13373 Involuntary Chapter 11 Petition Date: March 30, 2020 Court: United States Bankruptcy Court Central District of California Judge: Hon. Vincent P. Zurzolo Alleged creditors who signed the involuntary petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Comanche Capital Partners $4,200,000 Assignee for Evergreen 4540 Campus Drive, Suite 115 Newport Beach, CA 92660 Jeff Auld $300,000 Assignee for Kettle Enterprises, Inc. 18291 Plaza Way #C Tustin, CA 92780 Xinshui GAO $450,000 19811 Colima Rd, #600 Walnut, CA 91789 A full-text copy of the Involuntary Petition is available for free at: https://is.gd/7lX7r2 PARADIGM MIDSTREAM: S&P Lowers ICR to 'B-'; Outlook Negative ------------------------------------------------------------ S&P Global Ratings lowered its long-term issuer credit rating on Paradigm Midstream LLC (Paradigm) to 'B-' from 'B+'. The outlook is negative. S&P also lowered its issue-level rating on the company's $400 million secured first-lien term loan due 2024 to 'B' from 'BB-'. The '2' recovery rating is unchanged, indicating that lenders can expect substantial (70%-90%; rounded estimate 75%) recovery in a default scenario. "Due to the recent decline in commodity prices, we have lowered our throughput and earnings expectations for Paradigm's assets from our previous forecast. While we acknowledge the fact that the company generates a considerable portion of its revenues from minimum volume contracts, at least half of its revenues over our forecast period are dependent on producer activity, both on developed and undeveloped reserves. We believe that these volumes are at most risk if commodity prices remain depressed on a sustained basis, as producers reevaluate their development timelines and production plans. We now expect Paradigm's debt-to-EBITDA ratio will be in the 6.5x-7.0x range in 2020, improving to 6.0x-6.5x in 2021. We believe the company will maintain adequate liquidity over our forecast period and benefit from the support of its financial sponsors," S&P said. The negative outlook reflects S&P's view that credit metrics could be lower than its base-case forecast if there is further weakening in commodity markets, or if producer activity on Paradigm's acreage is lower than expected. Under its base-case scenario, S&P forecasts debt-to-EBITDA of 6.5x-7.0x in 2020, improving to 6.0x-6.5x in 2021. Furthermore, Paradigm's debt servicing from 2021 will be $40 million-$45 million, and material deterioration in cash flows beyond S&P's forecast could put pressure on the company's coverage ratios and liquidity position. "We could lower the rating if the company's capital structure becomes unsustainable or if there is a deterioration in its liquidity position. This could occur due to lower-than-expected throughput volumes on its systems, higher-than-forecast operating expenses, or increased reliance on debt to finance expansion projects," S&P said. "We could revise the outlook to stable if we expect debt-to-EBITDA will remain below 6.5x on a sustained basis. This would occur if Paradigm outperforms our forecast due to stronger volumes on its systems and better-than-expected financial performance," the rating agency said. PG&E CORP: GER, 2 Others Resign as Tort Committee Members --------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 on March 27, 2020, announced the resignation of GER Hospitality, LLC, Adolfo Veronese and Kirk Trostle as members of the committee of tort claimants appointed in the Chapter 11 cases of PG&E Corporation and Pacific Gas and Electric Company. The remaining members of the committee are: 1. Tommy Wehe 2. Angela Loo 3. Karen K. Gowins 4. Agajanian, Inc. 5. Susan Slocum 6. Samuel Maxwell 7. Karen Lockhart 8. Wagner Family Wines-Caymus Vineyards 9. Gregory Wilson About PG&E Corporation PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, as special regulatory counsel. Munger Tolles & Olson LLP, as special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee tapped Baker & Hostetler LLP as its legal counsel, and Trident DMG LLC as its communications consultant. PG&E CORPORATION: Expand PricewaterhouseCoopers Scope of Works -------------------------------------------------------------- PG&E Corporation, and its debtor-affiliates, has filed an amended application with the U.S. Bankruptcy Court for the Northern District of California seeking approval to hire PricewaterhouseCoopers LLP, as management, tax, and advisory consultant to the Debtors. PricewaterhouseCoopers will perform the following services: (a) continue work under the terms of certain expired Original Engagements and/or Supplemental Engagements; and (b) undertake several entirely new projects in connection with the Chapter 11 Cases that were consistent with the Firm's core capabilities and expertise. PricewaterhouseCoopers will be paid at these hourly rates: Accounting Recurring Services Tax Services Partner/Principal $839 to $994 $625 Managing Director $757 to $898 n/a Director/Senior Manager $715 to $807 $500 Manager $525 to $628 $400 Senior Associate $460 to $517 $325 Associate $415 to $450 $250 Administrative $135 $85 PricewaterhouseCoopers will also be reimbursed for reasonable out-of-pocket expenses incurred. Daniel Bowman, principal of PricewaterhouseCoopers LLP, 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. PricewaterhouseCoopers can be reached at: Daniel Bowman PRICEWATERHOUSECOOPERS LLP 300 Madison Ave. New York, NY 10017-6204 Tel: (646) 471-3000 About PG&E Corporation PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, as special regulatory counsel. Munger Tolles & Olson LLP, as special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PLATTSBURGH MEDICAL: PCO Files 4th Report ----------------------------------------- Shireen T. Hart, the patient care ombudsman appointed for Plattsburgh Medical Care PLLC, submits her fourth report with the U.S. Bankruptcy Court for the Northern District of New York pursuant to 11 U.S.C. Section 333(b)(2) regarding the quality of patient care provided to patients of the Debtor for the period November 19, 2019 through January 21, 2020. Plattsburgh Medical Care is a health care business as defined under Section 101(27)(A) of the United States Bankruptcy Code. In a Stipulation and Order Regarding Appointment of Patient Care Ombudsman dated May 17, 2019, the Court directed the United States Trustee to appoint a Patient Care Ombudsman to monitor the quality of patient care and represent the interests of the Debtor's patients. Section 333(b)(2) requires a PCO to submit reports to the Court at 60 day intervals. The PCO's observations: A. There have been no claims on any of the providers' or the Debtor's insurance policies in the relevant time period. B. Neither the Debtor nor any provider has received notice of any pending or forthcoming lawsuit in the relevant time period. C. The Debtor has not made any changes to its medical supply vendors. D. The staffing level for the practice has not changed. E. The PCO discussed with the office manager one online patient complaint in the relevant time period and what if any follow-up is warranted. F. None of the providers is the subject of professional licensure investigations. G. The Debtor reports a hand full of complaints from patients about the wait time for one provider in particular. The Officer Manager explained that all of these complaints appear to have been addressed in-person at the point of care to the satisfaction of the patients. H. The Debtor continues to accept new patients. I. The Debtor was recognized by the National Committee for Quality Assurance as a Patient-Centered Medical Home. This is welcome news, as "medical homes are a model or philosophy of primary care that is patient-centered, comprehensive, team-based, coordinated, accessible, and focused on quality and safety." The PCO says she has not detected a decrease in the quality of care by the Debtor's practice. The Debtor's team continues to be responsive and forthright with the PCO in her efforts to monitor patient care. The PCO will continue to monitor the patients. A full-text copy of the PCO's Fourth Report is available at https://tinyurl.com/vogmkgt from PacerMonitor.com at no charge. The PCO can be reached at: Shireen T. Hart Primmer Piper Eggleston & Cramer PC 30 Main Street, Suite 500 P.O. Box 1489 Burlington, VT 050402-1489 Tel: (802) 864-0880 E-mail: shart@primmer.com About Plattsburgh Medical Care Plattsburgh Medical Care, PLLC, is a New York corporation with its principal place of business located at 675 Route 3, Plattsburgh, N.Y. It is a family medicine medical practice. The sole member is Glenn Schroyer, M.D., who provides medical services to patient through the entity. Plattsburgh Medical Care filed a Chapter 11 bankruptcy petition (Bankr. N.D.N.Y. Case No. 19-10894) on May 13, 2019, estimating under $1 million in both assets and liabilities. The Debtor tapped Nolan Heller Kauffman LLP as its bankruptcy counsel, and Dreyer Boyajian LaMarche Safranko as its special counsel. Shireen T. Hart was appointed Patient Care Ombudsman for Plattsburgh Medical Care PLLC. PROFRAC SERVICES: Moody's Cuts CFR to Caa2, Alters Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded Profrac Services, LLC's Corporate Family Rating to Caa2 from B3, its Probability of Default Rating to Caa2-PD from B3-PD and its term loan rating to Caa2 from B3. The rating outlook was changed to negative from stable. "The commodity price collapse in the first quarter of 2020 poses a substantial challenge for Profrac's equipment utilization and its cash flow outlook. Steep reductions in oil and gas producer capital spending budgets will create untenable business conditions for smaller and single service focused companies such as Profrac," commented Sreedhar Kona, Moody's Senior Analyst. "The prospect of a weak cash flow outlook and significant covenant compliance pressure contribute to the negative rating outlook." Debt List: Downgrades: Issuer: ProFrac Services, LLC Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Senior secured Term Loan Exit Facility, Downgraded to Caa2 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: ProFrac Services, LLC Outlook, Changed to Negative from Stable RATINGS RATIONALE Profrac's downgrade to Caa2 CFR reflects the potential for the company's financial leverage to increase substantially in light of likely steep declines in producer activity, elevating the risk of covenant breach. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The OFS sector has been one of the sectors most significantly affected by the shock given its sensitivity to demand and oil prices. More specifically, the weaknesses in Profrac's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Profrac remains vulnerable to the outbreak continuing to spread and oil prices remaining weak. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Profrac of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. Profrac will have weak liquidity. At year-end 2019, the company had $13 million of cash and $27 million of availability under its $105 million Asset Based Loan (ABL) facility. The company will be required to meet its debt service needs including the term loan amortization, maintenance capital expenditures and cash taxes. Profrac will be challenged to produce free cash flow through 2020 as the EBITDA is likely to decline substantially. The term loan facility will have a maximum leverage covenant of 1.5x. The company will face a significant risk of covenant breach during 2020. ProFrac's Caa2 CFR reflects the company's modest market position in a highly cyclical and commoditized industry. While the company's financial leverage remained low at year-end 2019, the prospect of EBITDA declining by as much as 50% through 2020, substantially worsens the outlook for the company's credit metrics. Moreover, the hydraulic fracturing service within OFS is highly competitive with some significantly larger companies that have greater financial resources, and product and service line diversity. ProFrac benefits from its vertically integrated business model with manufacturing and distribution capabilities, helping the company somewhat differentiate itself in its ability to manage the delivery schedules of the fleet. The $155 million senior secured term loan is rated Caa2, the same as the CFR as it has a first lien on all the assets of the borrower and guarantors, including the subsidiaries (except the ABL collateral) and matures five years from the closing of the transaction. The $105 million ABL revolving credit facility with a 2023 maturity, has a first lien on all the working capital assets of the borrower (ABL collateral) and a second lien on all other assets of the borrower and guarantors. Profrac's negative rating outlook reflects the deteriorating oilfield services fundamentals and the company's risk of covenant breach. Factors that could lead to a downgrade include a significant decline in the utilization of hydraulic fracturing fleet across the industry resulting in ProFrac's EBITDA/Interest to dip below 1x, or a deterioration in liquidity. An upgrade is unlikely in the near-term. An upgrade will be considered if the company improves its cash flow outlook in an improving OFS environment. The company must also maintain adequate liquidity. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. ProFrac, headquartered in Fort Worth, Texas, is a private vertically integrated provider of hydraulic fracturing services to E&P companies in the United States. The Wilks Family owns 100% of the company. PURADYN FILTER: Delays Filing of 2019 Annual Report --------------------------------------------------- Puradyn Filter Technologies Incorporated notified the Securities and Exchange Commission via a Form 12b-25 regarding the delay in the filing of its Annual Report on Form 10-K for the year ended Dec. 31, 2019. The Company needs additional time to complete the financial statements to be included in the Form 10-K. About Puradyn Filter Boynton Beach, Fla.-based Puradyn Filter Technologies Incorporated (OTC BB: PFTI) -- http://www.puradyn.com/-- designs, manufactures, markets and distributes worldwide the Puradyn bypass oil filtration system for use with substantially all internal combustion engines and hydraulic equipment that use lubricating oil. Puradyn Filter reported a net loss of $216,382 for the year ended Dec. 31, 2018, compared to a net loss of $1.23 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $2.47 million in total assets, $12.62 million in total liabilities, and $10.15 million in total stockholders' deficit. Liggett & Webb, P.A., in Boynton Beach, Florida, the Company's auditor since 2006, issued a "going concern" qualification in its report dated March 25, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, noting that the Company has experienced net losses since inception and negative cash flows from operations and has relied on loans from related parties to fund its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. QBS PARENT: S&P Revises Outlook to Negative on Low Oil Prices ------------------------------------------------------------- S&P Global Ratings revised its outlook on QBS Parent Inc. to negative from stable, and affirmed its 'B-' rating on the firm. "The outlook revision to negative reflects our view that QBS Parent Inc. is exposed to substantial downside risk over the next 12 months due to significant declines in oil prices, and that free cash flow may turn negative for the year," S&P said. The negative outlook reflects the challenges from the macroeconomy and oil and gas end markets S&P believes QBS will face over the next 12 months and the resulting weaker operating results relative to the rating agency's previous expectations. "We could lower our rating on QBS if we believe it will not able to generate positive free operating cash flow in the next 12 months, or if it faces weaker demand, sales, and profitability than we currently expect. This could result from end-market turmoil or sustained low commodity prices. We could also lower the rating if the company has less-than-adequate liquidity or if the capital structure is unsustainable," S&P said. "We could revise our outlook to stable if we see minimal impact on company's operating performance. This could occur if commodity prices and the oil and gas end markets stabilized. An outlook revision would also require us to believe that the company can generate no less than $10 million of free operating cash flow annually, while maintaining a sustainable capital structure, mid-20% margins, and at least adequate liquidity," the rating agency said. QUEST PATENT: Incurs $1.31 Million Net Loss in 2019 --------------------------------------------------- Quest Patent Research Corporation filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss attributable to the Company of $1.31 million on $4.14 million of revenues for the year ended Dec. 31, 2019, compared to a net loss attributable to the company of $2.11 million on $7.07 million of revenues for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $5.16 million in total assets, $11.01 million in total liabilities, and a total stockholders' deficit of $5.85 million. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2013, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. At Dec. 31, 2019, the Company had current assets of approximately $2,405,000, current liabilities of approximately $9,545,000. Its current liabilities include approximately $569,000 payable to Intellectual Ventures, approximately $4,483,000 payable to Intelligent Partners and loans payable of $147,000 and accrued interest of approximately $270,000 due to former directors and minority stockholders. As of Dec. 31, 2019, the Company has an accumulated deficit of approximately $19,969,000 and a negative working capital of approximately $7,141,000. Other than salary to its chief executive officer, the Company does not contemplate any other material operating expense in the near future other than normal general and administrative expenses, including expenses relating to its status as a public company filing reports with the SEC. Because the Company's agreements with its litigation funding sources do not require it to make any payments relating to the litigation, the Company does not incur expenses with respect to litigation covered by the funding sources. For 2019, the Company had cash flow from operations $746,523 in its operations, reflecting its loss of $1,310,295, which was offset principally by depreciation and amortization of its intellectual property rights of $529,486, amortization of debt discount on the loan from United Wireless of $349,691, an increase in accounts receivable of $1,850,375, an increase in account payable and accrued liabilities of $954,806,and decreased by the $55,000 loss on derivative liability, and increased by a gain on forgiveness of debt of $27,628 and accrued but unpaid interest of $8,700. Cash flow from financing activities in both 2019 and 2018 related to loans from United Wireless of $0 in 2019 and $250,000 in 2018. In 2019, non-cash investing and financing activities consisted of an account payable of $1,238,219, representing the $1,500,000 payment due to Intellectual Ventures, net of $75,000 advanced at closing and imputed interest of $336,781. In 2018, the Company had no non-cash investing and financing. "We cannot assure you that we will be successful in generating future revenues, in obtaining additional debt or equity financing or that such additional debt or equity financing will be available on terms acceptable to us, if at all, or that we will be able to obtain any third party funding in connection with any of our intellectual property portfolios. We have no credit facilities," Quest Patent said. A full-text copy of the Form 10-K is available for free at: https://is.gd/sUVfv2 About Quest Patent Quest Patent Research Corporation -- http://www.qprc.com/-- is an intellectual property asset management company. The Company's principal operations include the development, acquisition, licensing and enforcement of intellectual property rights that are either owned or controlled by the Company or one of its wholly owned subsidiaries. The Company currently owns, controls or manages eleven intellectual property portfolios, which principally consist of patent rights. QUORUM HEALTH: Receives Noncompliance Notice from NYSE ------------------------------------------------------ Quorum Health Corporation was notified on March 23, 2020 by the New York Stock Exchange that it was not in compliance with the NYSE's continued listing standards as a result of the average closing price of the Company's common stock being less than $1.00 per share over a consecutive 30 trading-day period. As set forth in the March 2020 Notice, as of March 20, 2020, the 30 trading-day average closing share price of the Company's common stock was $0.94. In accordance with the NYSE rules, the Company has a period of six months following the receipt of the March 2020 Notice to regain compliance with the minimum share price requirement. The NYSE rules require the Company to notify the NYSE, within 10 business days of receipt of the March 2020 Notice, of its intent to cure this deficiency or be subject to suspension and delisting procedures. The March 2020 Notice represents the second instance that the Company was not in compliance with this criterion. As previously announced on Dec. 6, 2019, the Company received notice on Dec. 3, 2019 that it was not in compliance with the NYSE's continued listing standards because the average closing price of the Company's common stock was less than $1.00 per share over a consecutive 30 trading-day period. The Company regained compliance with this standard on Jan. 31, 2020 because on such date it had (i) a closing share price of at least $1.00 and (ii) an average closing share price of at least $1.00 over the 30 trading-day period ending on such date. In addition, as previously announced on May 3, 2019, the Company received notice on April 30, 2019 that it was not in compliance with the continued listing standard set forth in Section 802.01B of the NYSE's Listed Company Manual because the Company's average market capitalization was less than $50 million over a consecutive 30 trading-day period and the most recently reported stockholders' equity of the Company was also less than $50 million. In connection with the April notice, on June 10, 2019, the NYSE accepted the Company's 18-month plan with respect to the deficiency under Section 802.01B. The Company currently remains out of compliance with the continued listing standard set forth in Section 802.01B. The Company's common stock will continue to trade under the symbol "QHC", subject to the Company's compliance with the other listing requirements of the NYSE, but will continue to have the designation of ".BC" to indicate the status of the common stock as being "below compliance". About Quorum Health Headquartered in Brentwood, Tennessee, Quorum Health -- http://www.quorumhealth.com/-- is an operator of general acute care hospitals and outpatient services in the United States. Through its subsidiaries, the Company owns, leases or operates a diversified portfolio of 24 affiliated hospitals in rural and mid-sized markets located across 14 states with an aggregate of 1,995 licensed beds. The Company also operates Quorum Health Resources, LLC, a leading hospital management advisory and consulting services business. Quorum Health incurred net losses attributable to the Company of $200.25 million in 2018, $114.2 million in 2017, and $347.7 million in 2016. As of Sept. 30, 2019, Quorum Health had $1.52 billion in total assets, $1.72 billion in total liabilities, $2.27 million in redeemable noncontrolling interest, and a total deficit of $203.36 million. * * * As reported by the TCR on Nov. 19, 2019, S&P Global Ratings lowered the issuer credit rating on Brentwood, Tenn.-based Quorum Health Corp. to 'CCC-' from 'CCC'. The downgrade follows the company's revision of guidance due to the deterioration in revenue-cycle management ahead of the transition to R1 RCM, a slower-than-expected pace of divestitures, and greater prospects for a covenant violation and possible debt restructuring. Moody's Investors Service downgraded the ratings on Quorum Health Corporation, including the Corporate Family Rating to Caa2 from B3, the TCR reported on Nov. 21, 2019. The downgrade of the CFR reflects growing uncertainty as to whether Quorum's divestiture plan will be completed in the months ahead and when the company's earnings will rebound. RANDOLPH HOSPITAL: Appoints Creditors' Committee ------------------------------------------------ William Miller, the bankruptcy administrator for the U.S. Bankruptcy Court for the Middle District of North Carolina, appointed a committee to represent unsecured creditors in the Chapter 11 cases of Randolph Hospital, Inc., MRI of Asheboro, LLC and Randolph Specialty Group Practice. The committee members are: (1) Canopy Partners Agent: Simon Howarth 1331 N. Elm Street, Suite 200 Greensboro, NC 27401 (2) Boston Scientific Corporation Agent: Janine Karwacki 300 Boston Scientific Way Boston, MA 01752 (3) McKesson Corporation Agent: Paul Streeter 1950 Stemmons Fwy Dallas, Tx 75207 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Randolph Hospital Inc. Randolph Hospital -- https://www.randolphhealth.org/ -- operates as a hospital that provides inpatient and outpatient services in North Carolina. The Company offers, among other services, cancer care, imaging, maternity services, cardiac services, surgical services, outpatient specialty clinics, rehabilitation services, and emergency services. Randolph Hospital, Inc. and its affiliates, MRI of Asheboro, LLC and Randolph Specialty Group Practice, filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Lead Case No. 20-10247) on March 6, 2020. The petitions were signed by Louis E. Robichaux IV, chief restructuring officer. At the time of filing, the Debtor was estimated to have $100 million to $500 million in both assets and liabilities. The Debtor is represented by Jody A. Bedenbaugh, Esq. and Graham S. Mitchell, Esq., at Nelson Mullins Riley & Scarborough LLP. RED LOBSTER: Moody's Cuts CFR to Caa1, Outlook Negative ------------------------------------------------------- Moody's Investors Service downgraded Red Lobster Management LLC.'s Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded Red Lobster's senior secured bank credit facility to Caa1 from B3. The ratings outlook is negative. "The downgrade reflects its expectation for a material deterioration in Red Lobster's earnings and credit metrics that are driven by the restrictions and closures across Red Lobster's restaurant base due to efforts to contain the spread of the coronavirus including recommendations from Federal, state and local governments" stated Bill Fahy, Moody's Senior Credit Officer. In response to these operating challenges and to strengthen liquidity, Red Lobster is focusing on reducing all non-essential operating expenses and discretionary capex. Downgrades: Issuer: Red Lobster Management LLC. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: Red Lobster Management LLC Outlook, Remains Negative RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The restaurant sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Red Lobster's credit profile, including its exposure to widespread location closures have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Red Lobster's remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Red Lobsters of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Red Lobster's credit profile is constrained by its very high leverage and modest interest coverage, and the near dated debt maturity of its $380 million term loan in July 2021. In addition, prior to the impact of COVID19, Red Lobster faced challenging operating trends, particularly traffic. Red Lobster benefits from its adequate liquidity position with significant cash balances that will support its near term free cash flow deficits. Red Lobster's credit profile also benefits from its high level of brand awareness and reasonable scale. The negative outlook reflects the uncertainty with regards to the potential length and severity of closures and the ultimate impact these closures will have on Red Lobster's revenues, earnings and liquidity. The outlook also takes into account the negative impact on consumers ability and willingness to spend on eating out until the crisis materially subsides. Red Lobster's private ownership is a rating factor given the potential implications from both a capital structure and operating perspective. Financial policies are always a key concern of privately-owned companies with regards to the potential for higher leverage, extractions of cash flow via dividends, or more aggressive growth strategies. Restaurants by their nature and relationship with sourcing food and packaging, as well as an extensive labor force and constant consumer interaction are deeply entwined with sustainability, social and environmental concerns. With Red Lobster's product offering concentrated towards seafood the company has a well articulated Seafood with Standards commitment to sustainable, traceable and responsible sourcing of seafood, which more recently includes the elimination of plastics straws throughout its restaurants. While these factors may not directly impact the credit, they impact brand image and result in a more positive view of the brand overall. Factors that could result in a stable outlook include a clear plan and time line for the lifting of restrictions on restaurants that result in a sustained improvement in operating performance, liquidity and credit metrics. A stable outlook would also require leverage of under 6.5 times and good liquidity. Factors that could result in a downgrade include a sustained deterioration in liquidity driven by a prolonged period of restaurant closures. Ratings could also be downgraded in the event that credit metrics remained weak despite a lifting of restrictions on restaurants and a subsequent recovery in earnings and liquidity. Specifically, ratings could be downgraded in the event debt to EBITDA exceeded 6.5 times on a sustained basis. Red Lobster owns and operates just over 700 Red Lobster seafood restaurants throughout North America. Red Lobster generates over $2.4 billion of annual revenue. Red Lobster is majority owned by private equity firm Golden Gate Capital and Thai Union Group Public Company Limited. The principal methodology used in these ratings was Restaurant Industry published in January 2018. REMNANT OIL: Circle Buying New MExico Assets for $6 Million ----------------------------------------------------------- Remnant Oil Co, LLC, and Remnant Oil Operating, LLC, ask the U.S. Bankruptcy Court for the Western District of Texas to authorize the private sale of the assets located in the Caprock region of Chaves and Lea Counties, New Mexico to Circle Ridge Production, Inc. for $6 million, subject to adjustments. Objections, if any, must be filed within 21 days from the date of service. Prior to the Petition Date and in the post-Petition Date period, the Debtors actively marketed their assets and sought out opportunities to restructure their debts. On Aug. 29, 2019, the Debtors filed their Public Sale Motion. The Court entered an order approving sale procedures and deadlines relating to the Public Sale Motion on Sept. 10, 2019, which sale deadlines were later extended by order of the Court entered on Oct. 11, 2019. In connection with their prepetition marketing efforts and the Public Sale Motion, the Debtors have spoken with and/or met with numerous prospective purchasers for the Assets. In addition, their Investment Banker, Seaport Global Securities, LLC, contacted hundreds of different entities regarding a potential purchase of the Assets. Through their sale efforts, the Debtors were approached by the Purchaser, which has made an offer to purchase their right, title, and interest in and to the Assets, which Assets are set forth more fully in the Exhibits to their Purchase and Sale Agreement. In general, the Assets cover approximately 13,980 gross acres and contain 174 wells, consisting primarily of the 96-well Rock Queen Unit, the 49-well Drickey Queen Sand Unit, and 29 other wells in the West Caprock Queen Unit, the North Caprock Celero Unit, and other miscellaneous Caprock-areas, the Debtors 18-mile CO2 pipeline, and their right to produce 16,000 bbls daily of fresh water, via two water licenses, L-3776 and L-2661, issued by the New Mexico Office of the State Engineer. The proposed purchase price for the Assets under the PSA is $6 million, subject to adjustments set forth in the PSA. While other prospective purchasers conducted diligence on the Assets, no other offers were received for the Assets. Accordingly, after considering all options, the Debtors negotiated and prepared the PSA for the private sale of the Assets to the Purchaser, as the prospective Purchaser of the Assets. The Debtors have determined to proceed with the Sale as a private sale because, given their extensive marketing efforts to date, they do not believe that another stalking horse process will result in a higher price. The PSA contemplates the assignment to the Purchaser of certain of the oil and gas leases that are the subject of the Lease Assumption Motion, which are located in the Caprock area of New Mexico as well as the assumption and assignment of contracts and agreements ancillary thereto. While the Debtors do not concede that all of the Contracts are executory contracts subject to the assumption and assignment procedures of section 365 of the Bankruptcy Code, they nonetheless will seek the Court's approval of the assumption and assignment of the Leases and Contracts out of an abundance of caution. The Leases and Contracts that the Debtors currently intend to assume and assign to the Purchaser are set forth on Exhibit A -- Sections I-IV to the PSA. The Debtors ask approval of the ability to assume, assign and sell the Contracts and Leases to the Purchaser as part of the Assets sold pursuant to the PSA. The cure amounts, if any, as determined by the Court, necessary to allow assumption and assignment of the Leases and Contracts will be paid by the Purchaser at or before the closing of the Sale, and, except as set forth in the PSA, the Debtors will have no liability for any such Cure Amounts. Upon a review of their books and records, the Debtors have determined that the Cure Amounts for the Leases and Contracts is $0, and request a determination and finding by the Court of such zero Cure Amounts. The Debtors propose that the deadline for the counter-parties to the Leases and Contracts to object to their proposed Cure Amounts as listed herein should be that date which is 21 days after the filing of the Motion. The Debtors ask authority to convey the Assets to the Purchaser, free and clear of all interests. A copy of the PSA is available at https://tinyurl.com/r3x2nbs from PacerMonitor.com free of charge. About Remnant Oil Company Remnant Oil Company, LLC -- https://www.remnantoil.com/ -- was formed specifically to acquire and exploit conventional oil and gas assets within the Permian Basin. Remnant Oil Operating currently owns and operates 480 wells and a leasehold portfolio of 47,162 gross acres in Eddy, Lea, and Chaves counties, New Mexico. Remnant subdivides this leasehold into two groups of properties: the Caprock properties and the non-Caprock properties. Remnant Oil Company and Remnant Oil Operating filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Lead Case No. 19-70106) on July 16, 2019. The petitions were signed by CEO E. Will Gray II. At the time of the filing, Remnant Oil Company was estimated to have $10 million to $50 million in both assets and liabilities while Remnant Oil Operating was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Bernard R. Given, II, Esq., at Loeb & Loeb LLP, serves as the Debtors' bankruptcy bankruptcy counsel; and Modrall Sperling, LLP, is special counsel. On Oct. 22, 2019, the Court appointed Seaport Global Securities, LLC, as the Investment Banker. RENTPATH HOLDINGS: Sale of At Least $587.5M to Fund Plan -------------------------------------------------------- RentPath Holdings, Inc. and its affiliated debtors filed with the U.S. Bankruptcy Court for the District of Delaware a Joint Chapter 11 Plan and a Disclosure Statement on March 12, 2020. A robust marketing process for substantially all of the Debtors' assets resulted to a cash bid from CoStar Group, Inc., a commercial real estate information company, and a credit bid of prepetition first lien claims submitted by RentPath NewCo. The Company and the Board, at the recommendation of the Special Committee, determined that CoStar's bid presented the most value-maximizing transaction possible and entered into a stalking horse asset purchase agreement with CSGP Holdings, LLC, an affiliate of CoStar. The stalking horse bid provides for the going concern sale of interests in the Debtor entity owning all or substantially all of the Debtors' assets for an aggregate purchase price equal to $587.5 million in cash, plus the assumption of certain liabilities. Prior to the Petition Date, the Debtors also engaged in constructive negotiations and discussions with an ad hoc committee of cross holder lenders holding First Lien Claims and Second Lien Claims, an ad hoc group of lenders holding Second Lien Claims, and the Company's equity sponsors. On Feb. 11, 2020, the Company executed a restructuring support agreement (RSA) with lenders, ad hoc group of lenders, and the Company's equity sponsors. The RSA provides for the postpetition continuation of the Debtors' prepetition sale process. Pursuant to the sale process, any and all bids for all or some portion of the Company's business will be evaluated as a precursor to confirmation of the Plan. The Crossholder Ad Hoc Committee agreed to backstop the sale process by having RP Lender Acquisition Corp. ("RentPath NewCo"), submit a binding credit bid of prepetition first lien claims to the Debtors in the amount of $492.7 million pursuant to an asset purchase agreement (the Credit Bid APA). The credit bid will serve as a back-up bid, providing the Debtors with a path to emergence from chapter 11 while pursuing the Stalking Horse bid or any other higher or otherwise better bid. Sale to Third Party Generally, the Plan contemplates the following treatment for creditors and interest holders under a Sale Transaction consummated pursuant to a Third-Party APA. * First Lien Claims. On the Effective Date (or, to the extent there are any Wind Down Reversionary Assets, if applicable, as soon as practicable thereafter), holders of First Lien Claims will receive their Pro Rata share of: (a) the Sale Proceeds Distributable Consideration less the Second Lien Claims Recovery Cash Pool less the Second Lien Sale Distribution Recovery; and (b) if applicable, following the release of the Holdback Funds in accordance with Sections 2.10(b) and 2.10(c) of the Stalking Horse APA, if any, Cash in an amount equal to (x) the First Lien Proportion multiplied by (y) the amount of Holdback Funds actually released. * Second Lien Claims -- On the Effective Date (or, to the extent there are any Wind Down Reversionary Assets, as soon as practicable thereafter), if Class 4 (Second Lien Claims) votes to accept the Plan, Holders of Second Lien Claims will receive their Pro Rata share of: (a) the Second Lien Claims Recovery Cash Pool; (b) the Second Lien Sale Distribution Recovery; and (c) if applicable, following the release of the Holdback Funds in accordance with Sections 2.10(b) and 2.10(c) of the Stalking Horse APA, Cash in an amount equal to (i) the Second Lien Proportion multiplied by (ii) the amount of Holdback Funds actually released. -- On the Effective Date, if Class 4 (Second Lien Claims) votes to reject the Plan, Holders of Second Lien Claims will receive, up to the full amount of such Holder's Allowed Second Lien Secured Claim, if any,its Pro Rata share of the Sale Proceeds Distributable Consideration after the First Lien Claims are satisfied in full in Cash, if any. * General Unsecured Claims -- On the Effective Date, if Class 4 (Second Lien Claims) votes to accept the Plan, the Holders of General Unsecured Claims will: (a) be paid in full in accordance with the terms and conditions of the particular transaction giving rise to such Allowed General Unsecured Claim; or (b) receive treatment that renders the Holder's Allowed General Unsecured Claim Unimpaired. -- On the Effective Date, if Class 4 (Second Lien Claims) votes to reject the Plan, the Holders of General Unsecured Claims will receive, up to the full amount of such Holder's General Unsecured Claim, their Pro Rata share of the Sale Proceeds Distributable Consideration after the Allowed First Lien Claims and Allowed Second Lien Claims that are Secured Claims are satisfied in full in Cash. * All Intercompany Claims will be adjusted, continued, settled, Reinstated, discharged, or eliminated as determined by the Debtors or Plan Administrator, as applicable, in their respective reasonable discretion with the reasonable consent of the Buyer, consistent with the Sale Transaction Documents, but in no event paid in Cash. * All Intercompany Interests will be cancelled, Reinstated, or receive such other treatment as determined by the Debtors or the Plan Administrator, as applicable, in their respective reasonable discretion with the reasonable consent of the Buyer, consistent with the Sale Transaction Documents. Sale Via Credit Bid Generally, the Plan contemplates the following treatment for creditors and interest holders under a Sale Transaction consummated pursuant to the Credit Bid APA. * First Lien Claims. On the Effective Date, Holders of First Lien Claims will receive, up to the full amount of their Allowed First Lien Claims, (a) their Pro Rata share of sixty percent (60%) of the New Equity Interests (subject to dilution by the equity issued or issuable pursuant to the Management Incentive Plan); (b) the Exit Participation Consideration; and (c) their Pro Rata share of the Cash proceeds of any of the Debtors' assets that are not Acquired Assets and that constitute collateral securing the First Lien Claims pursuant to the First Lien Loan Documents. * Second Lien Claims: -- On the Effective Date, if Class 4 (Second Lien Claims) votes to accept the Plan, (a) with respect to each Eligible Second Lien Holder, the Exit Participation Consideration, or (b) with respect to each Ineligible Second Lien Holder, Cash in an amount required to satisfy section 1123(a)(4) of the Bankruptcy Code as reasonably determined by the Debtors and the Requisite Consenting First Lien Lenders. -- On the Effective Date, if Class 4 (Second Lien Claims) votes to reject the Plan, Holders of Second Lien Claims will not receive or retain any distribution on account of such Holders' Allowed Second Lien Secured Claims, if any. •General Unsecured Claims oOn the Effective Date, if Class 4 (Second Lien Claims) votes to accept the Plan, Holders of General Unsecured Claims will (a) be paid in full in accordance with the terms and conditions of the particular transaction giving rise to such Allowed General Unsecured Claim; or (b) receive treatment that renders the Holder's Allowed General Unsecured Claim Unimpaired. -- On the Effective Date, if Class 4 (Second Lien Claims) votes to reject the Plan, Holders of General Unsecured Claims will not receive or retain any distribution on account of such Holders' Allowed General Unsecured Claims. * All Intercompany Claims will be adjusted, continued, settled, Reinstated, discharged, or eliminated in a tax-efficient manner (to the extent reasonably practicable) as determined by the Debtors or Plan Administrator, as applicable, in their respective reasonable discretion, with the consent of the Requisite Consenting First Lien Lenders (such consent not to be unreasonably withheld), but in no event paid in Cash. * All Intercompany Interests will be cancelled, Reinstated, or receive such other tax-efficient treatment (to the extent reasonably practicable) as determined (a) by the Debtors or the Plan Administrator, as applicable, in their respective reasonable discretion, with the consent of the Requisite Consenting First Lien Lenders (such consent not to be unreasonably withheld) if the Credit Bid APA is an asset purchase agreement, or (b) by the Buyer with the consent of the Debtors (such consent not to be unreasonably withheld) if the Credit Bid APA is a stock purchase agreement. * Management Incentive Plan -- If the Sale Transaction is consummated pursuant to the Credit Bid APA, the Plan contemplates a post-emergence management incentive plan (the "Management Incentive Plan") under which 10 percent of the New Equity Interests (after taking into account the shares issued or issuable pursuant to the Management Incentive Plan) will be reserved for issuance as awards on terms and conditions consistent with the Management Incentive Plan Term Sheet included in the Plan Supplement and as agreed to by the New Board. * Exit Term Loan Facility -- Subject to the terms and conditions of the Plan, including satisfaction of the Second Lien Condition, and the Exit Facility Term Sheet, Holders of Allowed First Lien Claims and Allowed Second Lien Claims who are Eligible Second Lien Holders may elect to participate in the New Money Exit Term Loan B and, for each Holder who elects to participate in accordance with such terms and conditions, receive a pro rata share of 40 percent of the New Equity Interests, where "pro rata" means the proportion that such Holder's New Money Exit Term Loan B bears to the aggregate amount of all New Money Exit Term Loan B Loans issued in accordance with the Plan (subject to dilution by the equity issued or issuable pursuant to the Management Incentive Plan), and Ineligible Second Lien Holders will receive Cash in the amount required to satisfy section 1123(a)(4) of the Bankruptcy Code as reasonably determined by the Debtors and the Requisite Consenting First Lien Lenders, in each case, in accordance with the procedures governing participation in the New Money Exit Term Loan B set forth in Exhibit L hereto (the "New Money Exit Participation Procedures"). Holders of First Lien Claims and Second Lien Claims should carefully review the New Money Exit Participation Procedures for important dates, deadlines, and procedures with respect to participation in the New Money Exit Term Loan B. -- A Sale Transaction pursuant to the Credit Bid APA is expected to leave the Company's business intact and significantly deleverage the Company's balance sheet. Further, regardless of whether a Sale Transaction is consummated pursuant to a Third-Party APA or the Credit Bid APA, the Plan contemplates the following treatment for creditors and interest holders: -- All Priority Non-Tax Claims and Other Secured Claims are Unimpaired under the Plan. •Section 510(b) Claims. On the Effective Date, Section 510(b) Claims will be cancelled, released, discharged, and extinguished and will be of no further force or effect and such Holders will not receive any distribution on account of Section 510(b) Claims. -- Parent Equity Interests. On the Effective Date, Parent Equity Interests will be cancelled, released, and extinguished and will be of no further force or effect, whether surrendered for cancellation or otherwise, and there shall be no distributions for Holders of Parent Equity Interests on account of such interests. In the ordinary course of business, the Debtors incur trade credit on varying terms. As of the Petition Date, the Debtors estimate that there is approximately $25.4 million in general u A full-text copy of the Disclosure Statement dated March 12, 2020, is available at https://tinyurl.com/rqs86yu from PacerMonitor at no charge. The Debtors are represented by: WEIL, GOTSHAL & MANGES LLP Ray C. Schrock, P.C. David N. Griffiths Andriana Georgallas 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 - and - RICHARDS, LAYTON & FINGER, P.A. Daniel J. DeFranceschi Zachary I. Shapiro One Rodney Square 920 N. King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 About RentPath RentPath is a digital marketing solutions company that empowers millions nationwide to find apartments and houses for rent. RentPath Holdings, Inc., and 11 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10312) on Feb. 12, 2020. RentPath Holdings was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities as of the bankruptcy filing. Weil, Gotshal & Manges LLP and Richards Layton & Finger are serving as legal counsel, Moelis & Company LLC is serving as financial advisor, and Berkeley Research Group, LLC is serving as restructuring advisor to RentPath. Prime Clerk LLC is the claims agent. REVLON INC: S&P Lowers ICR to CCC- on Expected Liquidity Pressures ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Revlon Inc. to 'CCC-' from 'CCC+'. Concurrently, S&P lowered its issue-level rating on the company's senior secured term loan to 'CCC-' from 'CCC+', the '4' recovery rating remains unchanged. S&P also lowered its issue-level ratings on the company's two tranches of senior unsecured notes to 'CC' from 'CCC', the '5' recovery ratings remain unchanged. S&P removed the ratings from CreditWatch Negative where they were placed on Feb.13, 2020. "The downgrade reflects our belief that Revlon Inc.'s operating performance will significantly deteriorate this year, further pressuring Revlon's liquidity. The weakening consumer demand amid the spread of the coronavirus and a global recession will further exacerbate Revlon's ability to restore already-declining sales trends, and it increases the risk that Revlon won't be able to refinance upcoming maturities. The company's operating performance has been poor for years because of its own execution issues and structural headwinds in the mass beauty channel," S&P said. The negative outlook reflects the likelihood that S&P will lower its rating on Revlon if the company cannot refinance near-term debt maturities and that it expects an imminent default occurring over the next couple of quarters. "We could lower the rating on Revlon if we believe a default, distressed exchange, or redemption seems inevitable within six months. This could occur if Revlon does not make significant progress toward refinancing or if we believe it would encounter a liquidity crunch or payment default due to operational challenges," S&P said. "We could raise the rating if Revlon addresses its near-term debt maturities by successfully refinancing its capital structure on reasonable terms while stabilizing its operating performance," the rating agency said. REYES DRYWALL: Hires David C. Johnston as Attorney -------------------------------------------------- Reyes Drywall, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of California to employ David C. Johnston, as attorney to the Debtor. Reyes Drywall requires David C. Johnston to: (a) give the Debtor legal advice about various bankruptcy options, including relief under Chapters 7 and 11, and legal advice about non-bankruptcy alternatives for dealing with the claims against it; (b) give the Debtor in Possession legal advice about its rights, powers, and obligations in the Chapter 11 case and in the management of the estate; (c) take necessary action to enforce the automatic stay and to oppose motions for relief from the automatic stay; (d) take necessary action to recover and avoid any preferential or fraudulent transfers, if any are ascertained; (e) appear with the Debtor's president at the meeting of creditors, initial interview with the U.S. Trustee, status conference, and other hearings held before the Court; (f) review and if necessary, objecting to proofs of claim; (g) take steps to obtain Court authority for the sale of assets if necessary; and (h) prepare a plan of reorganization and a disclosure statement and taking all steps necessary to bring the plan to confirmation, if possible. David C. Johnston will be paid at the hourly rate of $360. David C. Johnston will also be reimbursed for reasonable out-of-pocket expenses incurred. David C. Johnston, 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. David C. Johnston can be reached at: David C. Johnston, Esq. Attorney at Law 1600 G Street, Suite 102 Modesto, CA 95354 Tel: (209) 579-1150 Fax: (209) 579-9420 About Reyes Drywall Reyes Drywall, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No. 20-90118) on Feb. 12, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by David C. Johnston, Esq. RICHARD A. NEISLER JR.: Kizer Represents Crockett Gin, 2 Banks -------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Kizer, Bonds, Hughes & Bowen, PLLC provided notice that it is representing these creditors in the Chapter 11 cases of Richard A. Neisler, Jr.: The Bank of Milan P.O. Box 410 Milan, TN 38358 Centennial Bank P.O. Box 548 McKenzie, TN 38201 Crockett Gin Company, LLC 19 Broadway Street Friendship, TN 38034-3857 The Firm can be reached at: Kizer, Bonds, Hughes & Bowen, PLLC Stephen L. Hughes, Esq. P.O. Box 320 Milan, TN 38358 Tel: (731) 686-1198 A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/SG07Xd The Chapter 11 case is In re Richard A. Neisler, Jr. (Banks. W.D. Ten. Case No. 20-10563). RICKY TUCKER: Selling Tift County Property for $1.96 Million ------------------------------------------------------------ Ricky Clay Tucker and Ricky Wayne Tucker ask the U.S. Bankruptcy Court for the Middle District of Georgia to authorize the sale of the real property located on Ferry Lake Road Tifton, Tift County, Georgia for the aggregate purchase price of $1,960,927. Respondent Summit Bridge National Investments IV, LLC may be served via David A. Garland, Esq., its attorney of record, at Moore, Clarke, DuVall & Rodgers, P.C., P.O. Drawer 71727, Albany, Georgia 31708-1727. Summit claims an interest in the Property by virtue of a Deed to Secure Debt between Debtor and Summit, as successor in interest to Synovus Bank, dated Jan. 13, 2014 and recorded in Deed Book 1731, Page 066, Tift County Superior court Records on Jan. 13, 2014. Respondent Tift County Tax Commissioner is an agency of Tift County, Georgia that may be served with the Motion by serving the Honorable R. Chad Alexander, Tax Commissioner, Tift County, at P.O. Box 930, Tifton, Georgia 31793 and 225 North Tift Avenue, Charles Kent Adm. Bldg. Room 105, Tifton, Georgia 31794. Upon information and belief, Tax Commissioner may claim an interest in the Property for ad valorem taxes on the Property. Respondent AgGeorgia Farm Credit, ACA may be served via John T. McGoldrick, Esq., its attorney of record, at Martin Snow, LLP, Post Office Box 1606, Macon, Georgia 31202-1606. AgGeorgia claims a purchase money security interest in irrigation equipment of the Debtors located on the Property by virtue of a Security Agreement dated Feb. 13, 2014 and UCC-1 Financing Statement recorded Lien Book 788, Page 200, Superior Court of Berrien County on Feb. 21, 2014. Respondent Diversified Financial Services, Inc. may be served via Joseph Dent, Esq., its attorney of record, at Watson Spence, LLP, Post Office Box 2008, Albany, Georgia 31702-2008. Diversified claims a purchase money security interest in irrigation equipment of the Debtors located on the Property by virtue of a Security Agreement dated Sept. 19, 2014 and UCC-1 Financing Statement records in Lien Book 804, Page 45-46 on Sept. 24, 2014. The Debtors, as the Sellers, have entered into five separate Purchase and Sale Agreements with four separate Purchasers relating to the purchase and sale of the Property. Each of the Contracts and Purchasers are summarized as follows: a. Northwest Portion of Property Bordering Goat Road: (i) 25 acres, (ii) $5,000/acre, (iii) $12,500 earnest money, (iv) $125,000 purchase price, and (v) Buyer is John Michael Helphrey. b. Northeast Portion of Property Bordering Goat Road: (i) 25 acres, (ii) $5,000/acre, (iii) $12,500 earnest money, (iv) $125,000 purchase price, and (v) Buyers are Paul Joe and Patricia M. Parrish. c. Central Crop Land: (i) 233 acres, (ii) $5,000/acre, (iii) $50,000 earnest money, (iv) $1,165,000 purchase price, and (v) Buyer is TyTy Peanut Co. d. East of Jacob Hall: (i) 49.7 acres, (ii) $5,000/acre, (iii) $24,500 earnest money, (iv) $248,530 purchase price, and (v) Buyer is Grist Farm, LLC. e. South of Ferry Lake Road: (i) 77.2 acres, (ii) $3,850/acre, (iii) $29,739.71 earnest money, (iv) $297,397.10 purchase price, and (v) Buyer is Grist Farm, LLC. In pertinent part, the Contracts provide that the Sellers will sell the specific portion of the Property described in each contract to each respective Purchaser for the price described in such Contract. The total purchase price for the entire property is $1,960,927, subject to a final survey. As more particularly described in the Contracts, each Purchaser has a 14-day due diligence and inspection period which runs from date of execution of each Contract. Each closing will occur on or before April 15, 2020. Each Contract calls for earnest money as set forth in such Contract. The earnest money required for each Contract has been paid and is held in the trust account of Stone & Baxter, LLP, the Debtors' counsel of record. The Debtors move for the entry of an Order: (a) authorizing the Debtors' sale of the Property in accordance with the Contracts, and authorizing and approving the sale free and clear of liens, claims, and interests, with such liens, claims, and interests to attach to the net proceeds of such sale; (b) authorizing disbursal of the proceeds of the sale as follows: 1. pay liens for unpaid ad valorem taxes assessed against the Property through the closing of the sale, including taxes, if any, owing to Tax Commissioner; 2. pay all usual, customary, and reasonable costs associated with the sale as agreed by Debtors and Purchasers in the Contracts; 3. pay to AgGeorgia $68,000, in full satisfaction of its lien against the irrigation equipment; 4. pay to Diversified $61,400, in full satisfaction of its lien against the irrigation equipment; 5. pay to the Debtors, care of the Debtors' counsel at closing of each sale, 1% of the gross purchase price of each such sale, with such proceeds to be held in the trust account of the Debtors' undersigned counsel and applied toward United States Trustee fees that are anticipated to be generated from the distributions contemplated; and 6. pay to Summit at the closing the net due to Seller for application to the Summit indebtedness. (c) determining the value of the Property being sold securing the liens; (d) granting the other relief as set forth in the Motion. The Debtors ask authorization to sell the Property free and clear of all interests, including, but not limited to, all liens, claims, and encumbrances, that may be asserted in, to, or against the Property, with such liens, claims, and encumbrances to attach to the proceeds from the sale of the Property. Consistent with the relief requested, supra, the Debtors ask that they be permitted to pay closing costs, if any, that are attributed to the Debtors under the Contracts from the gross proceeds of the proposed sales. The Debtors believe that time is of the essence in closing the transaction contemplated in the Motion. Therefore, they ask that the Court waives the 10-day stay of any order approving this Motion pursuant to F.R.B.P. 6004(g). A copy of the Contracts is available at https://tinyurl.com/w4a3too from PacerMonitor.com free of charge. Ricky Wayne Tucker and Ricky Clay Tucker sought Chapter 11 protection (Bankr. M.D. Ga. Case No. 18-70448) on April 19, 2018. The Debtor tapped Christopher W. Terry, Esq., at Stone and Baxter, LLP as counsel. RIO PROPERTY: Hires Moyes Sellers as Bankruptcy Counsel ------------------------------------------------------- Rio Property Rentals, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Arizona to employ Moyes Sellers & Hendricks Ltd., as bankruptcy counsel to the Debtor. Rio Property requires Moyes Sellers to: a. provide the Debtor with legal advice with respect to the Bankruptcy; b. represent the Debtor in connection with negotiations involving secured and unsecured creditors; c. represent the Debtor at hearings set by the Court in the Bankruptcy; and d. prepare necessary applications, motions, plans, disclosure statements, orders, reports, or other legal papers necessary to assist in the Bankruptcy and the Debtor's reorganization. Moyes Sellers will be paid at these hourly rates: Cody J. Jess, Member $425 Scott R. Goldberg, Of Counsel $350 Legal Assistants and Paralegals $60 to $235 Prior to the Petition Date, the Debtor paid Moyes Sellers with a fee deposit of $7,000. Moyes Sellers will also be reimbursed for reasonable out-of-pocket expenses incurred. Cody J. Jess, partner of Moyes Sellers & Hendricks Ltd., 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. Moyes Sellers can be reached at: Cody J. Jess, Esq. Scott R. Goldberg, Esq. MOYES SELLERS & HENDRICKS LTD 1850 North Central Avenue, Suite 1100 Phoenix, AZ 85004 Telephone: (602) 604-2121 E-mail: cjess@law-msh.com sgoldberg@law-msh.com About Rio Property Rentals Rio Property Rentals LLC, based in Yuma, AZ, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 20-02315) on March 5, 2020. In the petition signed by Terry Gibbs, manager, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Brenda Moody Whinery presides over the case. Cody J. Jess, Esq., at Moyes Sellers & Hendricks Ltd., serves as bankruptcy counsel to the Debtor. S & H HARDWARE: Hires Heier Weisbrot as Accountant -------------------------------------------------- S & H Hardware & Supply Co., Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Heier Weisbrot & Bernstein, LLC, as accountant to the Debtor. S & H Hardware requires Heier Weisbrot to assist the Debtor in preparing and filing tax returns and related matters. Heier Weisbrot will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. David Heier, partner of Heier Weisbrot & Bernstein, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Heier Weisbrot can be reached at: David Heier HEIER WEISBROT & BERNSTEIN, LLC 1101 Kings Hwy N, Suite 105 Cherry Hill, NJ 08034 Tel: (856) 673-1929 About S & H Hardware & Supply Co. S & H Hardware & Supply Co., Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Pa. Case No. 20-11514) on March 10, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Maureen P. Steady, Esq., at Kurtzman Steady, LLC. SARAH ZONE: April 15 Plan Confirmation Hearing Set -------------------------------------------------- A hearing was held on Feb. 5, 2020, at 9:00 a.m., before the Honorable Sandra R. Klein, United States Bankruptcy Judge for the Central District of California, Los Angeles Division, in Courtroom 1575 located at 255 E. Temple Street, Los Angeles, California 90012, to consider the motion for order approving the adequacy of Disclosure Statement describing Plan of Reorganization filed by Debtor Sarah Zone, Inc. On March 12, 2020, Judge Sandra R. Klein ordered that: * The Motion is granted. * The Disclosure Statement is approved. * April 15, 2020, at 9:00 a.m. is the hearing regarding confirmation of the Plan. * March 25, 2020, is the last date to file and serve any objections and evidence in opposition to confirmation of the Plan. * April 1, 2020, is the deadline to file responses to any objections to confirmation of the Plan. A full-text copy of the order dated March 12, 2020, is available at https://tinyurl.com/rtxkrk3 from PacerMonitor at no charge. The Debtor is represented by: JULIET Y. OH LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234 Facsimile: (310) 229-1244 E-mail: JYO@LNBYB.com About Sarah Zone Sarah Zone, Inc., is a merchant wholesaler of apparel, piece goods, and notions. The company filed its Articles of Incorporation in California on Oct. 5, 2004, according to public records filed with California Secretary of State. Sarah Zone sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-20836) on Sept. 17, 2018. In the petition signed by Tae Hyun Yoo, president, the Debtor disclosed $3,833,130 in assets and $7,301,855 in liabilities. Judge Sandra R. Klein oversees the case. The Debtor tapped Levene, Neale, Bender, Yoo & Brill LLP, as its legal counsel. SARATOGA AND NORTH CREEK: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Saratoga and North Creek Railway, LLC 10 South LaSalle St., Suite 3300 Chicago, Illinois 60603 Business Description: Saratoga and North Creek Railway, LLC is a privately held company in the rail transportation industry. Chapter 11 Petition Date: March 30, 2020 Court: United States Bankruptcy Court District of Colorado Case No.: 20-12313 Debtor's Counsel: Jennifer M. Salisbury, Esq. MARKUS WILLIAMS YOUNG & HUNSICKER LLC 1775 Sherman Street, Suite 1950 Denver, CO 80203 Tel: 303-830-0800 E-mail: jsalisbury@markuswilliams.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by William A. Brandt, Jr., Chapter 11 trustee of San Luis & Rio Grande Railroad, Inc. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors at the time of the filing. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/K9rtMc SCIENTIFIC GAMES: Moody's Cuts CFR to B3, Outlook Negative ---------------------------------------------------------- Moody's Investors Service downgraded Scientific Games International, Inc.'s Corporate Family Rating to B3 from B2 and Probability of Default Rating to B3-PD from B2-PD. The company's senior secured facilities were affirmed at B1 and senior unsecured rated notes downgraded to Caa2 from Caa1. The company's Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-2. The outlook is negative. The downgrade of Scientific Game's CFR is in response to the disruption in casino visitation, gaming machine use, and lottery and sports betting operations resulting from efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments to avoid gatherings and avoid non-essential travel. These efforts include mandates to close casinos, Scientific Game's largest customers, on a temporary basis. The downgrade also reflects the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at casinos once this crisis subsides. Downgrades: Issuer: Scientific Games International, Inc. Probability of Default Rating, Downgraded to B3-PD from B2-PD Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Corporate Family Rating, Downgraded to B3 from B2 Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Senior Subordinated Regular Bond/Debenture, Downgraded to Caa2 (LGD6) from Caa1 (LGD6) Affirmations: Issuer: Scientific Games International, Inc. Senior Secured Bank Credit Facility, Affirmed B1 (LGD3) Senior Secured Regular Bond/Debenture, Affirmed B1 (LGD3) Outlook Actions: Issuer: Scientific Games International, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Scientific Games International, Inc.'s B3 CFR reflects the meaningful revenue and earnings decline over the next few months expected from efforts to contain the coronavirus and the potential for a slow recovery once its gaming customers properties reopen. The rating also considers the company's significant leverage level, following the company's largely debt-financed acquisition of Bally Technologies, Inc. in November 2014 and the January 2018 largely debt financed acquisition of NYX Gaming Group Limited ("NYX"). SGI had been able to reduce leverage levels more recently, although Moody's expects debt/EBITDA will remain high through fiscal 2020. Another key credit concern is the relatively flat outlook for slot machine demand in the US, with the company's new games and cabinets looking to help drive performance in the Gaming operating segment. Revenues are largely tied to the volume of both gaming machine play and lotteries. The company can reduce spending on game development and capital expenditures when revenue weakens, but the need to retain a skilled workforce to maintain competitive technology contributes to high operating leverage. Partly mitigating the credit risks is the company's plan to further leverage recent cost reduction efforts and accelerate its deleveraging efforts. Positive rating consideration is also given to SGI's large recurring revenue base. The contract-based nature of a majority of SGI's revenue, including both in its gaming and lottery businesses, provides a level of revenue and earnings stability, under normal operational times. The company is also well positioned to benefit from the growth of digital gaming products and sports betting, as these markets continue to expand and mature. SGI owns a large portfolio of complementary gaming products and services, both digital and non-digital, that it can utilize and cross-sell globally among its various distribution platforms. Moody's downgraded the speculative-grade liquidity rating to SGL-3 from SGL-2 because of the expected decline in earnings and cash flow and increased risk of a covenant violation. As of the year ended December 31, 2019, SGI had unrestricted cash of $313 million, and $443 million available on the company's $650 million revolver after letters of credit and drawings totaling $207 million. Moody's estimates the company could maintain sufficient internal cash sources after maintenance capital expenditures to meet required annual amortization and interest requirements assuming a sizeable decline in annual EBITDA. The expected EBITDA decline will not be ratable over the next year and because EBITDA and free cash flow will be negative for an uncertain time period, liquidity and leverage could deteriorate quickly over the next few months. The company has $341 million of subordinated notes due in 2021. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Scientific Games' credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Scientific Games remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Scientific Games of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook considers that Scientific Games remains vulnerable to travel disruptions and unfavorable sudden shifts in discretionary consumer spending and the uncertainty regarding the timing of its customers facility re-openings and the pace at which consumer spending at these properties will recover. Ratings could be downgraded if liquidity deteriorates or if Moody's anticipates Scientific Games' earnings declines to be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. A ratings upgrade is unlikely given the weak operating environment. However, the ratings could be upgraded if customers facilities reopen and earnings recover such that positive free cash flow and reinvestment flexibility is restored and debt-to-EBITDA is sustained near 6.0x. Scientific Games is a developer of technology-based products and services and associated content for worldwide gaming, lottery, social and digital gaming markets. Scientific Game Corporation (NASDAQ:SGMS) is the publicly traded parent company of Scientific Games International, Inc., the direct borrower of over $8 billion of rated debt. Consolidated revenue for the latest 12-month period ended December 31, 2019 was $3.4 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. SCREENVISION LLC: Moody's Lowers CFR to B2, On Review for Downgrade ------------------------------------------------------------------- Moody's Investors Service downgraded Screenvision, LLC's existing ratings, including Corporate Family Rating to B2 from B1 and placed all existing credit ratings on review for further downgrade. The rating outlook was changed to ratings under review from stable. The rating actions reflect the impact of coronavirus outbreak on Screenvision, the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Issuer: Screenvision, LLC: Corporate Family Rating, Downgraded to B2 from B1 and Placed on Review for Downgrade Probability of Default Rating, Downgraded to B2-PD from B1-PD and Placed on Review for Downgrade Senior secured first lien revolver due 2023, Downgraded to B2 (LGD3) from B1 (LGD3) and Placed on Review for Downgrade Senior secured first lien term loan due 2025, Downgraded to B2 (LGD3) from B1 (LGD3) and Placed on Review for Downgrade Outlook Actions: Issuer: Screenvision, LLC: Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The consumer services sector related to entertainment and leisure has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Screenvision' credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread. In response to the federal government's recommendation that public gatherings should be restricted to ten or fewer individuals and people should engage in social distancing due to the widespread coronavirus pandemic, movie theaters and sports venue closed. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The ratings were downgraded and placed under review due to the coronavirus outbreak's impact on Screenvision's ability to continue running its core revenue-generating business - cinema advertising, on-screen advertising, in-lobby promotions and integrated marketing programs -- due to movie theaters closures as well as the effect on the overall economy and consumer sentiment. There is no certainty as to when the movie theaters will reopen. This raises concerns around Screenvision's ability to generate positive operating cash flows and maintain adequate liquidity, especially if the virus continues to spread forcing movie theaters to remain closed beyond June. Even as movie theaters and sports venue reopen, it is not clear if attendance will rebound quickly given the caution around health safety in public spaces. Since Screenvision is ultimately compensated based on cinema attendance, the company earnings remain highly vulnerable to consumer sentiment and the public perception of health risks in cinemas. The financial health of Screenvision's customers -- national and local, undermined by the pandemic, will likely reduce the amount of marketing these companies are willing and able to spend. Consumers discretionary spending on entertainment, including movies, will be hurt by deterioration in in the economy and rise in unemployment. Combined, these factors will substantially erode operating performance and significantly pressure Screenvision's liquidity over the remainder of 2020. Screenvision's highly variable cost structure enables the company to reduce costs quickly to limit cash burn during the outbreak. The company does not face near-term debt maturities and had moderate leverage of 2.5x (including Moody's adjustments) as of 12/31/2019. However, its $30 million revolving credit line is small relative to Screenvision scale, and is subject to a springing maximum net first lien leverage ratio of 5.5x tested when the facility is at least 35% used, which affords only $10 million availability before the covenant is triggered. In its review, Moody's will focus on the company's ability to secure sufficient additional liquidity or obtain additional liquidity from its sponsors or other sources if needed, meet the springing covenant compliance requirements under its credit facility or obtain temporary relief/waivers should it be needed, and reduce its cost base sufficiently and in a timely manner to limit cash burn during the outbreak while still preserving the long-term value of the business. The principal methodology used in these ratings was Media Industry published in June 2017. Screenvision, headquartered in New York City, is a privately owned operator of a leading in-theater advertising network in the United States. The company is majority-owned by affiliates of Abry (about 74%), with ownership stakes also held by AMC Entertainment and the company's management. Revenue for the twelve months ended December 31, 2019 was $245 million. SHAPE TECHNOLOGIES: Moody's Cuts CFR to Caa2, Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded its ratings for Shape Technologies Group, Inc., including the company's corporate family rating (CFR to Caa2 from B3) and probability of default rating (to Caa2-PD from B3-PD), along with its first lien senior secured ratings (to Caa2 from B3). The ratings outlook is changed to negative from stable. "Moody's expects Shape's revenue declines to be more pronounced in 2020 as demand volumes reduce in response to worsening economic conditions and end-market softness," said Shirley Singh, Moody's lead analyst for Shape. "As earnings fall, cash generation and liquidity will erode further, increasing the risk of default given an already leveraged balance sheet," added Singh. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The industrial sector has been one of the more exposed sectors affected by the shock given its sensitivity to broad market demand and sentiment. More specifically, the weaknesses in Shape's end markets (particularly automotive) leave it vulnerable to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on Shape of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The following rating actions were taken: Downgrades: Issuer: Shape Technologies Group, Inc. Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Senior Secured Bank Credit Facilities, Downgraded to Caa2 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: Shape Technologies Group, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Shape's Caa2 CFR broadly reflects the company's weak earnings and high financial risk, as evidenced by leverage of 8.0x and negative free cash flow. Its largest end-market (automotive) continues to evidence reduced activity levels, which along with a broader economic slowdown will further erode earnings and cash generation in 2020. The company's free cash flow has been negative for two years, albeit in part reflective of increased working capital and restructuring initiatives. While these incremental expenses will abate in 2020 and benefit EBITDA over time, weakening business fundamentals will continue to drive cash flow deficits. Governance risk is high, evidenced by past debt-financed acquisitions and shareholder distributions. Nonetheless, the rating is supported by the company's leading position within the niche waterjet cutting market and a large installed equipment base that yields significant aftermarket earnings (58% of revenue). The company also benefits from its global footprint and proprietary product offerings, with close to 359 patents. The negative outlook reflects Moody's expectation of continued erosion in the company's earnings and liquidity over the next 12-18 months. The ratings could be downgraded if the company's revenue and earnings decline precipitously, causing further weakening in liquidity including increased cash consumption and revolver usage such that default risk rises further. The ratings could be upgraded if Shape's end markets and/or economic conditions stabilize, earnings and free cash flow turn positive, adjusted debt/EBITDA is sustained below 8.0x, and EBITA/interest remains above 1.0x. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Headquartered in Kent, Washington, Shape is a manufacturer of ultra-high pressure technology and advanced materials processing systems. Shape's products include a cutting head, UHP pump, motion system, and control software that are either sold individually, combined together to form a system, or integrated with robotic cutting cells and other automated material handling solutions to create a broad application-based system. Shape is majority-owned by funds affiliated with American Industrial Partners (AIP), with 49.9% ownership by DCP Capital. Sales for the twelve months ended September 30, 2019 were $438 million. SLIDEBELTS INC: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The Office of the U.S. Trustee on March 26, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 case of SlideBelts, Inc. The committee members are: 1. Glad Evergreen Industry Co., Ltd. Representative: Pearl Chang 3F, No. 296 Nan Ping Road Taichung, Taiwan 40255 Email: pearlchang@gladevergreen.com 2. Audiencex Representative: Regina Geigenberger 13468 Beach Ave. Marina Del Rey, CA 90292 Email: reginag@audiencex.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About SlideBelts Inc. SlideBelts Inc., which conducts business under the name SlideBelts and SlideBelts by Brig Taylor, is an e-commerce apparel and emerging wearable technology company offering products such as leather belts, canvas belts, hats and fingerless gloves. Its products are available on http://www.slidebelts.com/,Amazon, eBay and in select retail shops. SlideBelts filed a Chapter 11 petition (Bankr. E.D. Cal. Case No. 19-25064) on Aug. 12, 2019 in Sacramento, Calif. In the petition signed by Brig Taylor, president and chief executive officer, the Debtor disclosed $5,181,151 in total assets and $7,115,000 in total liabilities. Judge Fredrick E. Clement oversees the case. The Debtor tapped Parsons Behle & Latimer as its legal counsel, and Knobbe, Martens, Olson & Bear, LLP as its special counsel for intellectual property issues. SOJOURNER-DOUGLASS: Trustee Selling Baltimore Properties for $650K ------------------------------------------------------------------ Charles R. Goldstein, the Trustee of Sojourner-Douglass College, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Maryland to authorize the sale of the real and personal property and property interests at: (1) 810 Park Avenue, Baltimore, Maryland, as set forth in the Real Estate Purchase Agreement by and between Citadel Firm, LLC and the Debtor for $600,000; and (2) 249 Aisquith Street, Baltimore, Maryland, as set for the in the Residential Contract of Sale by and between Max Daddy, LLC and the Debtor for $50,000. Since losing its accreditation, the Debtor has been actively pursuing potential partnerships, joint ventures, sales, and other structures that will support the reinstatement of its accreditation. In May 2016, Debtor listed its main campus as well as a secondary administrative building for sale, though such efforts ultimately proved unsuccessful. Since his appointment, the Trustee, in consultation with the Debtor, worked diligently to seek and cultivate offers from parties interested in purchasing some or substantially all of the Debtor's assets. After several months of negotiations between the Trustee, the proposed plan sponsor, and the senior lenders, the reorganization efforts collapsed in December 2018 when the plan sponsor was unable to secure the necessary financing. The Trustee moved quickly to seek and secure the interest of a well-established regional developer to serve as a stalking horse bidder in a proposed section 363 sale process. And when that transaction foundered over an impasse on deal terms, the Trustee pivoted once again to negotiate a sale of substantially all the Debtor's assets to yet another when the bidder could not pay the deposit, which was a condition precedent under that particular asset purchase agreement. As a result, the senior secured lender of two of the properties included in the prior sale filed a motion for relief from the automatic stay; the relief was granted pursuant to a stipulation and order entered on Oct. 7, 2019. In addition, both before and after the Court's entry of the Oct. 7, 2019 order, the Trustee actively marketed all the Debtor's properties. Nevertheless, under the circumstances, the Trustee now asks to sell the Aisquith Property and the Park Avenue Property on a stand-alone basis, or combined, as applicable, for the highest and best offers, as determined within his business judgment. His realtors have continued to show the Properties to interested parties. Pursuant to the Motion, the Trustee asks that the Court authorizes the Proposed Sales to the Purchasers, or to such other party submitting, in the Trustee's business judgment, a higher and/or better offer, free and clear of all liens, claims, encumbrances or other interests. As of the date of the filing of the Motion, no higher and/or better offers for the Properties have been submitted to the Trustee. Accordingly, the Trustee asks approval of these Proposed Sales, subject to higher and/or better offers, with the opportunity for a hearing upon the submission of a higher and/or better bid prior to the Objection Deadline, and the filing of any objections in accordance with the Sale Notice. Pursuant to a letter of intent dated Jan. 11, 2020, Citadel agreed to purchase the Park Avenue Property for $600,000, with $20,000 deposit, in exchange for fee simple good and marketable title of the Park Avenue Property. The interests, land, building, other improvements, and chattels constituting the Park Avenue Property are being sold, and will be conveyed to Citadel in "as is" condition, free and clear of all liens, claims, encumbrances and interests. Citadel does not require property inspections or feasibility studies. The Park Avenue Agreement is not contingent on financing for Citadel. In accordance with the Park Avenue Agreement, closing of the sale will occur no later than 30 days after entry of an order by the Court approving the sale of the Park Avenue Property, subject to higher and/or better offers. Pursuant to the Aisquith Contract, Max Daddy has agreed to pay the Debtor $50,000 in exchange for fee simple good and marketable title of the Aisquith Property. The interests, land, building, other improvements, and chattels constituting the Aisquith Property are being sold, and will be conveyed to Max Daddy in "as is" condition, free and clear of all liens, claims, encumbrances and interests, subject to higher and/or better offers. Max Daddy does not require either residential or environmental inspections. The Aisquith Contract is not contingent on financing for Max Daddy. In accordance with the Aisquith Contract, closing of the sale will occur no later than March 30, 2020, and after entry of an order by the Court approving the sale of the Aisquith Property. In the event the Trustee does not receive any higher and better offers for the Properties or an objection to the Proposed Sales, in accordance with the Sale Notice, the Trustee requests entry of an order, substantially in the form of the Sale Order filed contemporaneously herewith, without the need for a hearing. In the event of no higher and better offers and no objections, the Trustee will file a certification of no objection. A copy of the Agreements is available at https://tinyurl.com/us8za5r from PacerMonitor.com free of charge. About Sojourner-Douglass College Sojourner Douglass College was an American private college organized around an Afrocentric focus of study. The college was formerly known as Homestead-Montebello Center of Antioch University. The college was established in 1972 and is based in Baltimore, Maryland. The College's accreditation was revoked by the Middle States Association of Colleges and Schools effective June 30, 2015, and the College remains closed for instruction. Sojourner-Douglass College, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 18-12191) on Feb. 21, 2018. In the petition signed by Charles W. Simmons, president, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in debt. The Hon. Robert A. Gordon is the case judge. The Debtor is represented by Anu Kmt, Esq. at Kemet Hunt Law Group, Inc. SUITABLE TECHNOLOGIES: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Suitable Technologies, Inc. About Suitable Technologies Headquartered in Palo Alto, California, Suitable Technologies, Inc. -- https://www.suitabletech.com/ -- develops, manufactures, and sells telepresence system and technology platforms in both domestic and international markets. It also maintains an intellectual property portfolio, which includes a number of different patents associated with, among other things, wireless connectivity as well as trademarks in the United States and other foreign jurisdictions. Its primary product is called "Beam", a telepresence device designed to promote remote collaboration, provide individuals with the ability to communicate remotely with others on both a visual and audio basis, and move freely through a workplace using the Company's manufactured devices and companion software. Suitable Technologies, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 20-10432) on Feb. 26, 2020. The Debtor was estimated to have $10 million to $50 million in assets and $50 million to $100 million in liabilities. The Hon. Mary F. Walrath is the case judge. The Debtor tapped Young Conaway Stargatt & Taylor, LLP as counsel; and Stout Risius Ross Advisors, LLC, as investment banker. Asgaard Capital LLC is the staffing provider and its founder, Charles C. Reardon, is presently serving as CRO for the Debtor. Donlin, Recano & Company, Inc., is the claims agent. SUMMIT MIDSTREAM: S&P Lowers ICR to 'B' on Revised Forecast ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Summit Midstream Partners L.P. (SMLP) to 'B' from 'B+'. The outlook is negative. At the same time, S&P is lowering its issue-level ratings on Summit Midstream Holdings LLC senior unsecured debt to 'B-', reflecting its recovery expectation of '5' modest (10%-30%; rounded estimate: 25%) recovery in the event of a default. It is also lowering the preferred stock rating to 'CCC' from 'CCC+'. "The ratings action is underpinned by the downward revision to our commodity price deck, which we expect will cause Summit Midstream Partners L.P.(SMLP) to achieve elevated leverage metrics over the next 24 months, in comparison to our prior forecast. We expect SMLP and its midstream peers will face a more challenging marketplace for the remainder of 2020 and through 2021 as producers reevaluate their development timelines and production forecasts. Despite our expectation that SMLP will begin to position its balance sheet to refinance its upcoming debt maturities, the large debt wall of approximately $975 million due in 2022 highlights elevated refinancing risk, given current capital markets conditions. We expect SMLP to maintain adequate liquidity and support from its sponsor over the next 12 months," S&P said. The negative outlook on SMLP reflects S&P's expectation that the partnership will maintain adequate liquidity, but it will now achieve adjusted debt to EBITDA in the 5.75x-6.25x area over the next 24 months. "We could consider lowering the rating if SMLP's assets experience prolonged operational underperformance, or if SMLP sustains adjusted debt to EBITDA at or above 6.5x. We could also consider lowering the rating if SMLP's liquidity deteriorates and the company breaches its covenants, or if we believe SMLP is unable to refinance its upcoming debt maturities within the next 12-18 months," S&P said. "We could consider revising the outlook to stable if operations improve across SMLP's core and legacy businesses, and if SMLP successfully decreases its debt balance while maintaining adjusted debt to EBITDA below 5.5x. This would also require the company to address its upcoming debt maturities," the rating agency said. SUNYEAH GROUP: Hires Tauber-Arons to Auction Equipment ------------------------------------------------------ Sunyeah Group Corp. asks the U.S. Bankruptcy Court for the Central District of California to (i) authorize the employment of Tauber-Arons, Inc. as auctioneer; (ii) approving the Stipulation Between Kippartners, LP And The Debtor And Debtor-In-Possession; and (iii) authorize the sale of the Equipment Assets free and clear of claims, liens and other interests. Prior to the cessation of operations, the Debtor operated a glass manufacturing, fabrication, and distribution business. It strove to, and provided quality glass products to its customers from all around the world. These products included glass used in, or consisting of, mirrors, shower doors, table tops, windows, partitions, doors, and shelves -- which were manufactured with the Debtors expensive, and technologically advanced machines and equipment ("Equipment") at its manufacturing plant located at: 930 Wanamaker Avenue, Ontario, California 91761 ("Premises"). The Debtor occupied the Premises pursuant to the Standard Industrial Commercial Single-Tenant Lease – Gross dated Nov. 1, 2016 between the Debtor and Kippartners LP ("Landlord"). The Lease had an initial term of 10 years, starting on April 1, 2017 and ending on March 31, 2027. Because the Debtor believed that the Landlord was in breach of the Lease by, among other things, failing to made adequate repairs to the Premises, the Debtor did not pay, and withheld the January 2019 Lease payment from the Landlord. On Feb. 4, 2019, the Landlord filed an unlawful detainer action against the Debtor, styled Kippartners LP v. Sunyeah Group Corporation, Case No. UDFS1900756 ("UD Action") in the Superior Court of California, County of San Bernardino. In the UD Action, the Landlord contended that the Debtor failed to make one or more Lease payments to the Landlord. The Debtor filed an answer to the Landlord's complaint in the UD Action, disputed several of the Landlord's allegations in the UD Complaint, and asserted various affirmative defenses to the UD Claims. Cognizant of, among other things, the substantial amounts of time, attorneys' fees and costs, and disruptions to its business that would result from fully litigating the UD Action, the Debtor did not desire to litigate the UD Action with the Landlord. As a result, on April 16, 2019, the Debtor and the Landlord entered into the Settlement Agreement And Mutual General Release agreement, and accompanying stipulated judgment. In the Stipulated Judgment, the Debtor agreed to, among other things, vacate the Premises and to remove all persons and all of their personal possessions on Dec. 31, 2019. The Landlord contended that the Debtor breached the Settlement Agreement because the September 2019 settlement payment was returned for insufficient funds. Despite the Debtor sending a replacement check for the September 2019 settlement payment and additional fees to the Landlord, on Sept. 13, 2019, the Landlord filed its motion to enforce the Settlement Agreement and Stipulated Judgment in the State Court. The State Court granted the Landlord's motion in December 2019; and, on Dec. 4, 2019, the Court entered its Writ Of Possession Of Real Property in favor of the Landlord and against the Debtor. The Landlord then proceeded to evict, and "lock" the Debtor out of the Premises. In response to the Notice to Vacate, the Debtor made several pre-petition requests to the Landlord for access to the Premises, in order to retrieve its computers, equipment, supplies, and other personal property assets located therein ("Assets"); however, these requests were denied. Shortly before the Petition Date, the Debtor submitted a formal proposal to pay the Landlord the reasonable costs of storage for it to recover the Assets from the Premises. However, the Landlord did not accept such offer. As a result, the Debtor was forced to file the bankruptcy case to, among other things, protect and recover the Assets for the benefit of the estate and its creditors. The Debtor's primary assets are the Equipment, glass-making materials, and other personal property assets locked in the Premises. At the Debtor's request, and with the agreement of the Landlord, Anthony Arons of TA obtained access to the Premises and inspected the Equipment Assets. TA estimates that the Equipment Assets have a combined auction value of approximately $250,000 to 500,000. Accordingly, after payment of TA's expenses (maximum of $9,000), an auction of the Equipment Assets will net at least $241,000 back to the estate. Before filing the Motion, the Debtor has also consulted with the Landlord regarding the proposed auction and employment of TA, and believes that the Landlord -- although contending, among other things, that the Equipment Assets are not property of the estate -- will not object to the Sale, subject to the terms of the Stipulation. Pursuant to the Motion, the Debtor asks a Court order: (1) authorizing the Debtor's employment of TA; (2) authorizing the payment arrangement to compensate TA for its services and expenses related to the Sale, without the need for a further application for compensation; (3) approving the Stipulation; and (4) authorizing the sale of the Equipment Assets at an auction conducted by TA free and clear of all liens, claims, and other interests. Concurrently with the filing of the Motion, the Debtor will also be filing a motion for an order shortening time ("OST Motion"), asking that the Motion be heard on an expedited basis. It is because, as evidenced by a letter sent to the Debtor's counsel from Landlord’s counsel, the Landlord is asserting post-petition administrative storage charges of not less than $23,930 per month -- which, if valid and accurate, would equate to an administrative expense claim accruing at approximately $800 per day. Therefore, it is in the best interest of the Debtor's estate to have the auction conducted by TA as soon as possible. Moreover, pursuant to the Auction Agreement, the Debtor and TA anticipates that the auction would be conducted on March 17, 2020, or shortly after. As a result, TA requires an order approving its employment and the Sale by mid-February, so that it will be given at least a month to inventory, inspect, market the Equipment Assets to be sold at auction. The Debtor has determined that it is in the estate's best interest to sell the Equipment Assets by auction, to ensure fairness and adequacy of the sale price. It proposes to sell the Equipment Assets on an all-cash, as-is, where-is basis, at public auction, without any warranties, representations or contingencies, and free and clear of any liens, claims or interests. A copy of the Agreement is available at https://tinyurl.com/vzf8cfr from PacerMonitor.com free of charge. About Sunyeah Group Corporation Sunyeah Group Corporation, a glass manufacturer in Ontario, Calif., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-21185) on Dec. 30, 2019. The petition was signed by Xiaodong Shi, chief executive officer. At the time of the filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Judge Mark D. Houle oversees the case. Levene, Neale, Bender, Yoo & Brill L.L.P. is the Debtor's bankruptcy counsel. SURGERY PARTNERS: S&P Places 'B-' ICR on CreditWatch Negative ------------------------------------------------------------- S&P Global Ratings placed all of its ratings on Surgery Partners Inc., including its 'B-' issuer credit rating, on CreditWatch with negative implications. "The CreditWatch placement reflects our view that the coronavirus pandemic will significantly reduce Surgery Partners' revenue, EBITDA, and cash flow in 2020 relative to our prior base-case assumptions due to the rapid decline in demand for elective surgical procedures." The U.S. Surgeon General and the American College of Surgeons has recommended that all elective surgical procedures be postponed to conserve much-needed supplies and safety equipment and limit the spread of the coronavirus. Outpatient surgical centers may benefit from the shift of inpatient surgical procedures to outpatient settings, though the degree of this benefit is uncertain," S&P said. TARONIS TECHNOLOGIES: Signs $1.4M Securities Settlement Agreement ----------------------------------------------------------------- Taronis Technologies, Inc., entered into a securities settlement agreement with First Choice International Company, Inc. Under the terms of the SSA, the Company will issue First Choice $1,440,027 of shares of the Company's common stock, par value $0.001 per share at market price. The Company will not directly receive any cash proceeds from the Offering, but outstanding indebtedness of $1,440,027 owed to First Choice will be satisfied in full. The SSA contains customary representations, warranties and agreements by the Company. The issuance of the Common Stock at market price is being made pursuant to a prospectus supplement, which will be filed with the Securities and Exchange Commission on or about March 30, 2020, and accompanying base prospectus relating to the Company's shelf registration statement on Form S-3 (File No. 333-230854), which was declared effective by the SEC on April 24, 2019. About Taronis Technologies Clearwater, Florida-based Taronis Technologies Taronis Technologies, Inc. (TRNX) is a technology-based company that is focused on addressing the global constraints on natural resources, including fuel and water. The Company's two core technology applications -- renewable fuel gasification and water decontamination/sterilization -- are derived from its patented and proprietary Plasma Arc Flow System. The Plasma Arc Flow System works by generating a combination of electric current, heat, ultraviolet light and ozone, that affects the feedstock run through the system to create a chosen outcome, depending on whether the system is in "gasification mode" or "sterilization mode". The Company operates 22 locations across California, Texas, Louisiana, and Florida. Taronis reported a net loss of $15.04 million in 2018 following a net loss of $11.02 million in 2017. As of Sept. 30, 2019, Taronis had $47.76 million in total assets, $11.49 million in total liabilities, and $36.27 million in total stockholders' equity. Marcum LLP, in New York, NY, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 12, 2019, citing that the Company has incurred significant losses, continued to have negative cash flows from its operating activities, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. TARONIS TECHNOLOGIES: Signs $1.5M Securities Settlement Agreement ----------------------------------------------------------------- Taronis Technologies, Inc. entered into a securities settlement agreement with Bespoke Growth Partners, Inc. on March 27, 2020. Under the terms of the SSA, the Company will issue Bespoke $1,479,135 of shares of the Company's common stock, par value $0.001 per share at market price. The Company will not directly receive any cash proceeds from the Offering, but outstanding indebtedness of $1,479,135 owed to Bespoke will be satisfied in full. The SSA contains customary representations, warranties and agreements by the Company. The issuance of the Common Stock at market price is being made pursuant to a prospectus supplement, which will be filed with the Securities and Exchange Commission on or about March 27, 2020, and accompanying base prospectus relating to the Company’s shelf registration statement on Form S-3 (File No. 333-230854), which was declared effective by the SEC on April 24, 2019. About Taronis Technologies Clearwater, Florida-based Taronis Technologies Taronis Technologies, Inc. (TRNX) is a technology-based company that is focused on addressing the global constraints on natural resources, including fuel and water. The Company's two core technology applications -- renewable fuel gasification and water decontamination/sterilization -- are derived from its patented and proprietary Plasma Arc Flow System. The Plasma Arc Flow System works by generating a combination of electric current, heat, ultraviolet light and ozone, that affects the feedstock run through the system to create a chosen outcome, depending on whether the system is in "gasification mode" or "sterilization mode". The Company operates 22 locations across California, Texas, Louisiana, and Florida. Taronis reported a net loss of $15.04 million in 2018 following a net loss of $11.02 million in 2017. As of Sept. 30, 2019, Taronis had $47.76 million in total assets, $11.49 million in total liabilities, and $36.27 million in total stockholders' equity. Marcum LLP, in New York, NY, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 12, 2019, citing that the Company has incurred significant losses, continued to have negative cash flows from its operating activities, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. TARONIS TECHNOLOGIES: Signs $2.2-Mil. Stock Purchase Agreement -------------------------------------------------------------- Taronis Technologies, Inc., entered into a securities purchase agreement with an accredited investor on March 30, 2020, pursuant to which the Company agreed to issue and sell to the Investor, and the Investor agreed to purchase from the Company 10,000,000 shares of the Company's Common Stock, par value $0.001 per share, for a total gross purchase price of $2,200,000. The closing of the Offering is contemplated to occur on March 31, 2020. The SPA contains customary representations, warranties and agreements by the Company and customary conditions to closing. The sale of the Common Stock at a price of $0.22 per share is being made pursuant to a prospectus supplement, which will be filed with the Securities and Exchange Commission on or about March 31, 2020, and accompanying base prospectus relating to the Company's shelf registration statement on Form S-3 (File No. 333-230854), which was declared effective by the SEC on April 24, 2019. About Taronis Technologies Clearwater, Florida-based Taronis Technologies Taronis Technologies, Inc. (TRNX) is a technology-based company that is focused on addressing the global constraints on natural resources, including fuel and water. The Company's two core technology applications -- renewable fuel gasification and water decontamination/sterilization -- are derived from its patented and proprietary Plasma Arc Flow System. The Plasma Arc Flow System works by generating a combination of electric current, heat, ultraviolet light and ozone, that affects the feedstock run through the system to create a chosen outcome, depending on whether the system is in "gasification mode" or "sterilization mode". The Company operates 22 locations across California, Texas, Louisiana, and Florida. Taronis reported a net loss of $15.04 million in 2018 following a net loss of $11.02 million in 2017. As of Sept. 30, 2019, Taronis had $47.76 million in total assets, $11.49 million in total liabilities, and $36.27 million in total stockholders' equity. Marcum LLP, in New York, NY, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 12, 2019, citing that the Company has incurred significant losses, continued to have negative cash flows from its operating activities, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. TBH19 LLC: Court Denies Bid for Chapter 11 Trustee Appointment -------------------------------------------------------------- Vincent P. Zurzolo, the U.S. Bankruptcy Judge for the Central District of California, denied the request of DBD Credit Funding LLC for appointment of a Chapter 11 trustee for TBH19 LLC, case. The various evidentiary objections filed on January 13, 2020 by DBD to the Declaration of Leonard Ross are overruled and stricken from the record. The joinder of HAR-BD, LLC in the motion filed on December 27, 2019 is stricken from the record. The reply of HAR-BD, LLC filed on January 7, 2020, in support of its joinder, is stricken from the record. General Counsel for the Debtor: ROBERT M. YASPAN, Esq. JOSEPH G. McCARTY, Esq. DEBRA R. BRAND, Esq. LAW OFFICES OF ROBERT M. YASPAN 21700 Oxnard Street, Suite 1750 Woodland Hills, CA 91367 Telephone: (818) 905-7711 Facsimile: (818) 501-7711 About TBH19 LLC TBH19, LLC owns a single-family residential property located at 1011 N. Beverly Hills, Calif., having an appraised value of $125 million. The residence is considered one of the crowning achievements of renowned architect Gordon Kaufmann and was built in 1927 for Milton Getz, executive director of the Union Bank & Trust Company. TBH19 is managed by Lenard M. Ross. TBH19 sought for Chapter 11 protection (Bankr. C.D. Cal. Case No. 19-23823) on Nov. 24, 2019. The Debtor disclosed total assets of $125,042,955 and total liabilities of $75,126,312 as of the bankruptcy filing. Judge Vincent P. Zurzolo oversees the case. The Law Offices of Robert M. Yaspan is the Debtor's legal counsel. TENET HEALTHCARE: S&P Alters Outlook to Stable, Affirms 'B' ICR --------------------------------------------------------------- S&P Global Ratings revised its outlook to stable from positive and affirmed its ratings on Tenet Healthcare Corp., including the 'B' issuer credit rating. "The rating action reflects our view for how the COVID-19 pandemic could affect Tenet. The company has improved its operations and thus financial performance and cash flows. However, we believe that trajectory will reverse for an unknown period because of the pandemic," S&P said. The outlook reflects S&P's view of operating performance and cash flow amid uncertainty from the COVID-19 pandemic. While S&P believes Tenet's recent performance has improved, it is difficult to predict if and when the company can return to pre-outbreak levels. The rating agency expects performance to be more consistent with the current rating for the time being. "We could lower our rating on Tenet if there are large patient declines with no return to recent levels, such that we expect free cash flow to reverse from its recent improvement with discretionary cash flow to debt declining below 1.5x. This could also occur if Tenet faces unexpected adverse reimbursement or regulatory changes, or it adopts more aggressive financial policies than we envision," S&P said. "We could raise our ratings on Tenet if we regain confidence that the company can sustainably generate discretionary cash flow to debt of at least 2.5% while reducing leverage below 7x," the rating agency said. TH REMODELING: Unsecureds Owed $809K to Recover 12% --------------------------------------------------- Debtor TH Remodeling & Renovations, Inc. filed an Amended Disclosure Statement in connection with its Plan of Reorganization on March 12, 2020. The Plan is based on the Debtor's belief that the estimated current forced liquidation value of its assets is so small as to offer the potential of no recovery to its general unsecured creditors, and that such cash liquidation would be an economic waste to itself, its creditors and the community in which it is located. Class 9 allowed claims of all other creditors of the debtor, including prepetition unsecured creditors, prepetition secured creditors to the extent that the Court finds the same unsecured in whole or in part in accordance with 11 U.S.C. Sec. 506, subject to an allowance of their claims by the Court, will be paid in cash, an amount equal to 12 percent of the allowed amount of such creditors' claim payable as follows: 2% in cash, (the "initial payment" date), upon the Effective Date of the Plan; and 2% on the next five anniversary dates. Each annual payment shall be approximately $16,183. The claims in this class total approximately $809,150. This class is impaired and its vote will be solicited. Class 10 stockholder of the Debtor, THOMAS HAZARD, will retain 100% of his ownership interest in the reorganized debtor, but will not receive any dividends or payments under the Plan except for wages earned. Said individual noted above own 100 percent of the outstanding shares of the debtor corporation, and is an insider as defined by the Bankruptcy Cod The Debtor is assuming its lease with 42 Windsor Highway LLC on commercial premises located at 42 Windsor Highway, New Windsor, New York. The Debtor does not contemplate rejection or assumption of any other executory contracts or leases. TH Remodeling & Renovations, Inc. plans on increasing its sales team to help further develop and increase sales. The Debtor also plans on building its labor force to improve on production. TH Remodeling & Renovations, Inc. has also re-assessed its profit margins to increase cash flow. During the restructuring process, the Debtor's principal, Thomas Hazard, has been able to focus on the day-to-day operations and will continue to do so in the future. A full-text copy of the Amended Disclosure Statement dated March 12, 2020, is available at https://tinyurl.com/vwrmfzd from PacerMonitor at no charge. The Debtor is represented by: GENOVA & MALIN Hampton Business Center 1136 Route 9 Wappingers Falls, New York 12590 Tel: (845) 298-1600 Andrea B. Malin, Esq. Michelle L. Trier, Esq. About TH Remodeling & Renovations TH Remodeling & Renovations -- https://thremodeling.com/ -- builds and renovates all types of properties from private homes to manufacturing facilities and commercial buildings. The company provides every service property owners need, including roofing, siding, gutter systems, decks & porches, windows & doors, additions and sunrooms. TH Remodeling & Renovations filed a petition under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-35919) on May 31, 2019. In the petition signed by Thomas Hazard, president, the Debtor disclosed $524,027 in assets and $1,551,506 in liabilities. Michelle L. Trier, Esq., at Genova & Malin, is the Debtor's counsel. THOR INDUSTRIES: Moody's Lowers CFR to B1, Outlook Negative ----------------------------------------------------------- Moody's Investors Service downgraded its ratings for Thor Industries, Inc., including the company's corporate family rating (CFR; to B1 from Ba3) and probability of default rating (to B1-PD from Ba3-PD), and the rating on the company's senior secured term loan (to B2 from Ba3). The speculative grade liquidity rating was downgraded to SGL-2 from SGL-1. The ratings outlook is negative. RATINGS RATIONALE The downgrades reflect Moody's expectations that the COVID-19 crisis will result in severe disruptions to consumer spending over the coming quarters and this will lead to a pronounced drop in demand for recreational vehicles (RV) in both North America and Europe. The high price points and discretionary nature of RV's make Thor particularly vulnerable to cyclical downturns and Moody's expects near-term disruptions in consumer spending to coincide with Thor's peak selling season. Moody's anticipates that this will lead to significant sales and earnings pressures and an across the board weakening of key credit metrics. The B1 CFR balances Thor's significant scale and the company's leading market positions against the cyclical and competitive nature of the RV industry that is highly vulnerable to economic downturns. The rating favorably considers Thor's strong competitive standing in North America and Europe, a portfolio of well-known brands, and the company's broad RV offering that touches multiple price points and segments. Moody's-adjusted debt-to-EBITDA was around 2.6x as of January 2020, although Moody's anticipates a significant erosion of earnings over the next few quarters, which will result in a more highly levered balance sheet and reduced financial flexibility. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The RV sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on Thor of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The two notch downgrade of Thor's senior secured term loan rating to B2 from Ba3 reflects Moody's expectation of a lower recovery rate for underlying creditors in the event of a distress scenario given the loan's subordination to a $750 million ABL facility which would presumably be more heavily drawn in such case and is secured by a first-priority interest in bank accounts, accounts receivable and inventory. The negative outlook reflects Moody's expectation that the coronavirus will result in lower demand for RVs over the next few quarters which will in turn result in sales and earnings pressures and a weaker credit profile. Given Moody's expectation of a very challenging operating environment over the next few quarters, upward rating pressure is not anticipated over the near-term. Expectations of a conservative financial policy along with a continued focus on debt reduction would be required for an upgrade. Given Thor's vulnerability to highly cyclical end-markets, Moody's expects the company to maintain credit metrics that are stronger than levels typically associated with companies at the same rating level. A ratings upgrade would involve expectations of a stable RV retail sales environment and would also require maintenance of a good liquidity profile and a demonstrated ability to generate consistently strong free cash flows coupled with substantial availability under the revolver. A weakening of Thor's liquidity profile involving expectations of negative free cash flow, sustained reliance on revolver borrowing or concerns about covenant compliance could result in a ratings downgrade. The loss of a major dealer, or loss of market share, or debt-financed share repurchases or acquisitions over the near-term could also result in downward ratings actions. Any near-term debt-financed acquisitions or share repurchases would likely cause downward rating pressure. The following is a summary of its rating actions: Issuer: Thor Industries, Inc. Corporate Family Rating, downgraded to B1 from Ba3 Probability of Default Rating, downgraded to B1-PD from Ba3-PD Senior Secured Bank Credit Facilities, downgraded to B2 (LGD4) from Ba3 (LGD4) Speculative Grade Liquidity Rating, downgraded to SGL-2 from SGL-1 Outlook, remains Negative Thor Industries, Inc., headquartered in Elkhart, Indiana, is a leading designer and manufacturer of recreational vehicles including travel trailers, fifth wheels, specialty trailers, motorhomes, caravans, and campervans. The company primarily operates in North America and Europe and sells its products under brands such as Keystone, Airstream, Heartland, Jayco, Thor Motorcoach, Hymer, and Niesmann Bischoff. Estimated reported revenues for the twelve months ended January 2020 are about $9 billion. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. TOUCHPOINT GROUP: Delays Form 10-K Filing Due to COVID-19 Pandemic ------------------------------------------------------------------ Touchpoint Group Holdings, Inc. has availed itself of an extension to file its Annual Report on Form 10-K for the year ended Dec. 31, 2019, originally due on March 30, 2020, due to the outbreak of, and local, state and federal governmental responses to, the COVID-19 coronavirus pandemic. Specifically, the Company is relying on an order issued by the Securities and Exchange Commission on March 25, 2020 (which extended and superseded a prior order issued on March 4, 2020), pursuant to Section 36 of the Securities Exchange Act of 1934, as amended (Release No. 34-88465), regarding exemptions granted to certain public companies. The Order allows a registrant up to an additional 45 days after the original due date of certain reports required to be filed with the SEC if a registrant's ability to file such report timely is affected due to COVID-19. The Company's operations and business have experienced disruptions due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and the world. These disruptions include, but are not limited to: office closures and the unavailability of key Company personnel required to prepare the Company's financial statements for the year ended Dec. 31, 2019 due to suggested, and mandated, illness, social quarantining and work from home orders. The Company has also been delayed in preparing the Annual Report due to delays in obtaining information from third parties who have similarly been unavailable and/or have not had sufficient time to complete the items requested. As such, the Company will be relying on the Order and will be making use of the 45-day grace period provided by the Order to delay filing of its Annual Report. The Company plans to file its Annual Report by no later than May 14, 2020, 45 days after the original due date of its Annual Report. The Company has supplemented its risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2018 with the following risk factors: "An occurrence of an uncontrollable event such as the COVID-19 pandemic is likely to negatively affect, and has to date negatively affected, our operations. "The occurrence of an uncontrollable event such as the COVID-19 pandemic is likely to negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and the effects of, and response to, the COVID-19 pandemic has limited access to our facilities, customers, management, support staff and professional advisors. These, in turn, have not only negatively impacted our operations, financial condition and demand for our services, but our overall ability to react timely to mitigate the impact of this event. We anticipate that our first quarter and second quarter 2020 financial results, at a minimum, will be significantly negatively affected by COVID-19; however, the full effect on our business and operation is currently unknown. "Our business may suffer from the severity or longevity of the Coronavirus/COVID-19 Global Outbreak "The demand for our Touchpoint services relies upon, among other things, our customers being able to, and being willing to, on occasions, meet with our staff to understand the ways in which our streaming services through a fully designed app can offer up revenue generating opportunities for the customer. Economic recessions, including those brought on by the COVID-19 Outbreak may have a negative effect on the demand for our services and our operating results. All of the above may be exacerbated in the future as the COVID-19 Outbreak and the governmental responses thereto continues. All of the above may in the future cause, and have to date caused, a material adverse effect on our operating results." About Touchpoint Group Touchpoint Group Holdings Inc., formerly known as One Horizon Group, Inc. -- http://touchpointgh.com/-- is a media and digital technology acquisition and software company, which owns Love Media House, a full-service music production, artist representation and digital media business. The Company also holds a majority interest in 123Wish, a subscription-based, experience marketplace, as well as majority interest in Browning Productions & Entertainment, Inc., a full-service digital media and television production company. Effective Sept. 26, 2019, the Company changed its corporate name from One Horizon Group, Inc. to Touchpoint Group Holdings Inc. One Horizon reported a net loss attributable to common stockholders of $13.77 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders of $7.43 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $5.91 million in total assets, $3.10 million in total liabilities, $605,000 in temporary equity, and $2.20 million in total stockholders' equity. Cherry Bekaert LLP, in Tampa, Florida, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 15, 2019, citing that One Horizon has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. UNITED AIRLINES: S&P Cuts ICR to 'BB-'; Ratings on Watch Negative ----------------------------------------------------------------- S&P Global Ratings lowered all ratings on United Airlines Holdings Inc., including the issuer credit rating to 'BB-' from 'BB', and placing them on CreditWatch with negative implications. S&P also revised its recovery rating on United's unsecured debt to a '4' from a '3'. "We expect United's credit metrics to weaken sharply in 2020 from previous expectations due to the impact of COVID-19. While the company is reducing capacity and some associated costs, and will benefit from the steep decline in oil prices, we expect much weaker traffic to more than offset these benefits. We expect passenger traffic to begin to recover later this year, continuing into 2021," S&P said. A sharp decline in cash generation will weaken liquidity. S&P is revising its assessment of liquidity due primarily to its expectation of sharply lower levels of cash generation over the next 12 months; the rating agency expects sources to cover uses by about 1.3x over this period. As of March 9, 2020, the company had approximately $8 billion of liquidity, composed of about $6 billion of cash and short term investments, and revolver capacity. This includes the proceeds of a recently arranged and funded 364-day $2 billion secured term loan. It also has $20 billion of unencumbered assets, and has suspended share repurchases. The only covenant in its facilities is the requirement to maintain $2 billion of liquidity. S&P has not included any potential sources of additional liquidity that are not yet committed, including the sale of frequent flyer miles, secured financing, or government aid, although the company will likely be able to arrange some of these. "We expect to resolve the CreditWatch as we learn more about the impact of the coronavirus on United's financial position. We would likely lower ratings if air traffic recovery is longer than or weaker than expected, resulting in funds from operations to debt near or below 12% on a sustained basis, resulting in weaker than expected liquidity," S&P said. VALERITAS HOLDINGS: Toll Global Resigns as Committee Member ----------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 on March 27, 2020, announced the resignation of Toll Global Forwarding (USA), Inc., as member of the committee of unsecured creditors appointed in the Chapter 11 cases of Valeritas Holdings, Inc. and its affiliates. The remaining committee members are Boston Analytical, Inc. and Synergistix. About Valeritas Holdings Valeritas Holdings, Inc. (OTCPK: VLRXQ) -- https://www.valeritas.com/ -- is a commercial-stage medical technology company focused on improving health and simplifying life for people with diabetes by developing and commercializing innovative technologies. Valeritas' flagship product, V-Go Wearable Insulin Delivery device, is a simple, affordable, all-in-one basal-bolus insulin delivery option for adult patients requiring insulin that is worn like a patch and can eliminate the need for taking multiple daily shots. V-Go administers a continuous preset basal rate of insulin over 24 hours, and it provides discreet on-demand bolus dosing at mealtimes. It is the only basal-bolus insulin delivery device on the market today specifically designed keeping in mind the needs of type 2 diabetes patients. New Jersey-based Valeritas operates its R&D functions in Marlborough, Mass. Valeritas Holdings and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10290) on Feb. 9, 2020. Valeritas Holdings disclosed $49.2 million in total assets and $38.2 million in total debt as of Sept. 30, 2019. Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped DLA Piper LLP (US) as legal counsel; Lincoln International as investment banker; PricewaterhouseCoopers LLP as financial advisor; and Kurtzman Carson Consultants LLC as claims agent. The U.S. Trustee for Regions 3 and 9 appointed a committee of unsecured creditors in the Debtors' cases. VERMILLION INC: Reports $1.3 Million Product Revenue for Q4 ----------------------------------------------------------- Vermillion, Inc., reported its financial results for the fourth quarter and year ended Dec. 31, 2019. "We are very pleased with the overall business momentum we created in 2019 and the continued growth into 2020. We have also implemented strategies to help manage the impact on our business of the COVID-19 pandemic and actions taken to contain it," stated Valerie Palmieri, president and CEO of Vermillion. "Our team is focused on emerging from COVID-19 even stronger, with an increase in the use of virtual sales tools, as well as a deep product pipeline to address the entire patient life cycle, from endometriosis to ovarian cancer risk management. We remain committed to capitalizing on one of the fastest growing sectors today, women's health." Recent Corporate Highlights Year over Year Results - Fourth Quarter 2019 versus Fourth Quarter 2018: * Product volume increased 93% to 3,854 units up from 1,996 units in the fourth quarter of last year * Product revenue increased 62% to $1.3 million up from $793,000 in the fourth quarter of last year * Total number of customers increased by 83% compared to the fourth quarter of last year * New customers increased 61% compared to the fourth quarter of last year Year over Year Results – Twelve Months of 2019 versus Twelve Months of 2018: * Product volume increased 68% to 12,898 units up from 7,679 units in 2018 * Product revenue increased 59% to $4.4 million up from $2.8 million in 2018 * Total number of customers increased 56% compared to 2018 * New customers increased 56% compared to 2018 Cigna Contract * The Company has executed a preferred in-network contract agreement with CIGNA. This in-network agreement adds another 16M lives to its contracted plans, and includes not only OVA1, but also Overa and its ovarian and carrier genetics testing panels. The Company is pleased with the final agreed prices, which will be effective April 1, 2020. Medicaid Coverage * The Company has made considerable advancements in its state Medicaid coverage. The Company has added a total of 9 state Medicaid plans to its positive coverage list. Having this coverage in place is critical to managing underserved populations, as the Company believes OVA1 is the only technology available today that has adequate sensitivity for early stage Ovarian cancer detection in African American women. State of Connecticut Financing The Company recently concluded an amendment to its agreement with the State of Connecticut Department of Economic Community Development. The Company previously announced a $4M loan from Connecticut, $2M of which it received in 2016. The Company is eligible for the additional $2M based on target revenue and, as of this new amendment, a revised target employment milestone. The Company expects to achieve the revised target employment levels in 2020. Fourth Quarter Financial Highlights: * Product revenue increased 62% to $1.3 million for the fourth quarter 2019, compared to $793,000 for the same period in 2018. The increase is due to an increase in the number of the Company's tests performed. The increase is driven by the launch of OVA1PLUS and an increase in the commercial team during 2019. * The number of OVA1 tests performed increased 93% to 3,854 during the fourth quarter 2019 compared to 1,996 for the same period in 2018. * Revenue on a per test performed basis was $333 in the fourth quarter of 2019 compared to $345 in the third quarter of 2019, and $398 in Q4 of 2018, driven by patient pay in specific geographies. * Gross profit on OVA1 product revenue was $619,000 (a 48% profit margin) for the fourth quarter 2019 compared to $287,000 for the same period in 2018 (a 36% profit margin), * Research and development expenses for the fourth quarter 2019 were $244,000 and increased by $119,000 compared to the same period in 2018. This increase was primarily due to the development of OVAnex, its third-generation serial monitoring product. * Sales and marketing expenses for the fourth quarter 2019 were $2.1M compared to $1.6M the same period in 2018. This increase was primarily due to the increased investment in headcount and personnel-related expenses compared to those in the same period in 2018. * General and administrative expenses for the fourth quarter 2019 were $1.6M compared to $1.3M for the same period in 2018. This increase was primarily due to an increase in legal expenses during 2019. * The cash balance at Dec. 31, 2019 was $11.7 million, Cash utilization in the fourth quarter of 2019 was $2.9M. About Vermillion Headquartered in Austin, Texas, Vermillion, Inc. -- http://www.vermillion.com/-- is dedicated to the discovery, development and commercialization of novel high-value diagnostic and bio-analytical solutions that help physicians diagnose, treat and improve gynecologic health outcomes for women. Vermillion reported a net loss of $11.37 million for the year ended Dec. 31, 2018, following a net loss of $10.50 million for the year ended Dec. 31, 2018. As of Sept. 30, 2019, the Company had $16.53 million in total assets, $4.71 million in total liabilities, and $11.83 million in total stockholders' equity. BDO USA, LLP, in Austin, Texas, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 28, 2019, citing that the Company has suffered recurring losses from operations and has net cash flows deficiencies that raise substantial doubt about its ability to continue as a going concern. VIRTUAL CITADEL: Block Data Buying All Assets for $5M Cash ---------------------------------------------------------- Virtual Citadel, Inc., and affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia to authorize the bidding procedures in connection with the sale of substantially all assets relating to their bitcoin mining operation at Godby Road to Block Data Processing Corp. for $5 million, plus the assumption of liabilities, pursuant to their Asset Purchase Agreement, subject to overbid. The Debtors have retained, subject to Court approval, Highgate Partners as their broker in these Chapter 11 Cases. As part of the proposed sale process, the Debtors, through Highgate Partners and their professionals, will continue to engage in a marketing effort for the Debtors' Assets. The Debtors believe a prompt sale of the Assets represents the best option available to maximize value for all stakeholders in these Chapter 11 Cases. Moreover, it is critical for them to execute on a sale transaction as expeditiously as possible, as they will be utilizing the DIP Lender Bay Point Capital Partners II LP's cash collateral in order to conduct the sale process. Therefore, time is of the essence. To optimally and expeditiously solicit, receive, and evaluate bids in a fair and accessible manner, the Debtors have developed and proposed the Bidding Procedures. The salient terms of the Bidding Procedures are: a. Bid Deadline: April 27, 2020 at 4:00 p.m. (ET) b. Initial Bid: Each Bid must be for all of the Assets and will clearly show the amount of the purchase price. In addition, a Bid (a) must propose a purchase price equal to or greater than the aggregate of the sum of (i) the value of the Bid set forth in the Stalking Horse Agreement, as determined by the Debtors; (ii) the dollar value of the Break-Up Fee in cash, and (iii) $100,000 (the initial overbid amount) in cash; and (b) must obligate the Bidder to pay, to the extent provided in the Agreement, all amounts which the Stalking Horse Bidder under the Agreement has agreed to pay, including any assumed liabilities (as set forth in the Stalking Horse Agreement). c. Deposit: 10% of the proposed purchase price d. Auction: The Auction, if necessary, will be held at the offices of Polsinelli PC, 1201 West Peachtree Street NW, Suite 1100, Atlanta, GA 30309 on April 28, 2020 at 10:00 a.m. (ET), or such other location as identified by the Debtors after notice to all Qualified Bidders. e. Bid Increments: $100,000 f. Sale Hearing: May 5, 2020 g. Sale Objection Deadline: May 1, 2020 h. Closing: TBD i. Bid Protections: $600,000 j. Break-Up Fee: $100,000 k. Contract Cure Objection Deadline: April 10, 2020 at 4:00 p.m. (ET) l. Bay Point will be deemed to be a Qualified Bidder and is not required to make any Good Faith Deposit. Within two business days after entry of the Bidding Procedures Order, the Debtors will cause the Sale Notice to be served on the Contract Counterparties. The Debtors (or their agents) will also serve the Creditor Notice upon all of the parties set forth on their creditor matrix who were not served with a Sale Notice. Finally, they propose to publish Bidding Procedures Notice once in The Atlanta Business Chronicle within five business days after entry of the Bidding Procedures Order. To maximize the value received from the Assets, the Debtors ask to close the Sale as soon as possible after the Sale Hearing. Accordingly, they ask that the Court waives the 14-day stay periods under Bankruptcy Rules 6004(h) and 6006(d). A copy of the APA and Bidding Procedures is available at https://tinyurl.com/u3ovsmk from PacerMonitor.com free of charge. The Purchaser is represented by: GREENBERG TRAURIG, LLP Terminus 200 3333 Piedmont Road NE, Suite 2500 Atlanta, GA 30305 Attn: David R. Yates, Esq. John D. Elrod, Esq. E-mail: yatesd@gtlaw.com elrodj@gtlaw.com About Virtual Citadel Virtual Citadel, Inc. -- https://vcitadel.com -- is a comprehensive turnkey enterprise hosting provider in Atlanta, Georgia. vCitadel owns and operates tier 1 and tier 2 data centers throughout the metro Atlanta area. Founded in 1990, vCitadel provides custom hosting solutions for cloud, data, and co-location applications. Virtual Citadel, Inc., and four affiliates sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 20-62725) on Feb. 14, 2020. The Debtors tapped POLSINELLI PC as counsel; BAKER DONELSON BEARMAN, CALDWELL & BERKOWITZ, PC as conflicts counsel; and GLASS RATNER as financial advisor. VISTEON CORP: S&P Cuts ICR to BB-; Ratings on CreditWatch Negative ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Visteon Corp. to 'BB-' from 'BB' and its issue-level rating on its term loan and revolver to 'BB' from 'BB+'. At the same time, S&P placed all of its ratings on the company on CreditWatch with negative implications. Visteon's revenue, profit, and cash flow will contract significantly due to the decline in global auto production related to the shutdown of most plants in Europe and the U.S. S&P now expects global light-vehicle sales to decline by almost 15% in 2020 and believe Visteon will find it difficult to maintain its operating performance during the year. While the company may cut its costs to soften the blow, it will not likely be able to reduce its costs nearly fast enough to adjust to the shock from the pandemic. While Visteon had forecast a significant improvement in its margin due to the introduction of new products over the next few years, it will likely be challenging for the company to reach the volumes necessary to attain those higher margins. "The CreditWatch placement reflects that there is at least a one-in-two likelihood we will lower our issuer credit rating on Visteon. We expect to resolve the CreditWatch when we learn more about the coronavirus' effect on Visteon's financial position. We would likely lower our ratings on the company if we expect its debt to EBITDA to remain above 4x and its free operating cash flow to debt to remain below 5% with little prospect for an improvement over 2020-2021," S&P said. "We expect to resolve the CreditWatch in the coming months and are monitoring the group's operating performance and liquidity situation, including its covenant compliance," the rating agency said. VYCOR MEDICAL: Reports $1.12 Million Net Loss for 2019 ------------------------------------------------------ Vycor Medical, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss available to common shareholders of $1.12 million on $1.48 million of revenue for the year ended Dec. 31, 2019, compared to a net loss attributable to common shareholders of $1.70 million on $1.51 million of revenue for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.09 million in total assets, $2.45 million in total current liabilities, and a total stockholders' deficiency of $1.35 million. Prager Metis CPAs, LLC, in Hackensack, New Jersey, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has incurred net losses since inception, including a net loss of $796,202 and $1,379,356 for the years ended Dec. 31, 2019 and 2018 respectively, and has not generated cash flows from its operations. As of Dec. 31, 2019, the Company had working capital deficiency of $541,070, excluding related party liabilities of $1,248,904. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. Highlights * The Vycor Medical division recorded revenue of $1,300,000 from the sale of its products for the year ended Dec. 31, 2019, a decrease of $11,000 (or 1%) over 2018. The US continued to experience growth (increase of 28%), primarily as a result of greater adoption and usage following the introduction of the enhanced VBAS model in September 2017, however this was offset by two large international orders in the 2018 period which were not repeated during 2019. Gross margin was 90% compared with 88% in 2018. * Operating expenses for the year were $2,060,000, a reduction of $597,000 or 22% compared to 2018, despite a significant increase in regulatory fees due to the migration to a new EU Notified Body for VBAS and despite increased patent fees due to the filing of 8 new patents for VBAS during the year. Operating loss was $725,000 compared to $1,318,000, a reduction of 45%, and Cash Operating Loss was $121,000 compared to $207,000, a reduction of 42%. Net Loss for the year was $796,000 as compared to $1,379,000 in 2018. * A new large-scale clinical study done by the University of Aberdeen and [the Stroke Division at] the University of Miami Miller School of Medicine has been published in the highly respected scientific journal Cortex. The study reports on the effectiveness of NeuroEyeCoach, one of NovaVision's treatments for patients with blindness associated with brain injury. This is the largest study done to date in the neuro-visual space and analyses the results of approximately 300 patients who underwent the therapy. The study demonstrates that patients achieve major improvements within 2-3 weeks and that NeuroEyeCoach is a highly effective clinical intervention. The findings showed that 87% of patients improved in search time and 80% had made less errors leading to a significant improvement in their ability to deal with their activities of daily living. In fact, patients with significant pre-therapy disability scores benefited the most with 79% of these patients saying they had less disability following the treatment. * Under Vycor's ownership, NovaVision has gone from a business with a prototype therapy to one with a broad suite of proven patient and professional therapies and diagnostic products, utilizing a flexible range of delivery technologies, which this recent study demonstrates. The therapies are protected by 38 patents and have a significant body of clinical data that demonstrates their efficacy. Management has made clear however that, given the company's resources and the large size and diversity of NovaVision's end markets, it believes the most efficient way to fulfill NovaVision's potential is through partnerships. The range of alternatives for NovaVision could comprise distribution and marketing partnerships, licensing, merger, sale and/or a significant restructuring of its activities. COVID-19 "In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China, and has since spread to a number of other countries, including the United States. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, as of the time of the filing of this Annual Report on Form 10-K, several states in the United States have declared states of emergency, and several countries around the world, including the United States, have taken steps to restrict travel. Although neurosurgery is not generally an elective procedure, general hospital dislocation and diversion of resources could impact our revenues. We have implemented business continuity plans for our offices and personnel to enable continuity of service remotely however, if a critical number of our employees become too ill to work, or we are not able to access a sufficient quantity of our inventory for shipment due to enforced office closures, our production ability could be materially adversely affected in a rapid manner. While our operations are principally located in the United States, and our sub-contract manufacturers are located in the United States, we participate in a global supply chain. Disruptions to our supply chain and business operations, or to our suppliers' or customers' supply chains and business operations, could have adverse ripple effects on our manufacturing output and delivery schedule. Any of these and other uncertainties resulting from COVID-19 could have a material adverse effect on our business, financial condition or results of operations." A full-text copy of the Form 10-K is available for free at: https://is.gd/X6JWrF About Vycor Medical Vycor Medical (OTCQB: VYCO) -- http://www.vycormedical.com/-- is dedicated to providing the medical community with innovative and superior surgical and therapeutic solutions. The company has a portfolio of FDA cleared medical solutions that are changing and improving lives every day. The company operates two business units: Vycor Medical and NovaVision, both of which adopt a minimally or non-invasive approach. W. KEN TGANSKE: Reikenas Buying Bristol Property for $675K ---------------------------------------------------------- W. Kent Ganske and Julie L. Ganske ask the U.S. Bankruptcy Court for the Eastern District of Wisconsin to authorize the sale of their single-family residence located at 3114 Saddle Brooke Tr, Town of Bristol, County of Dane, Wisconsin to Tyler and Courtney Riekena for $675,000. The estate has an interest in the Property. The Debtors have ownership interest in the Property, as evidenced by the Warranty Deed, recorded as Document No. 5016412, in the Dane County Register of Deeds on 8-14-2013. After listing the Property on Aug. 29, 2019, and continued marketing, the Debtors received an offer from an unrelated third-party Buyers to purchase the Property for $675,000 is fair value for the Property. They have executed their WB-11 Residential Offer to Purchase. The Property is subject to liens and encumbrances of record as referenced on the Commitment for Title Insurance. The closing on the sale of the Property will take place on March 13, 2020, subject to court approval. The Debtors ask authority to pay out of the closing proceeds any and all closing costs incurred, including the broker commission, title insurance, transfer fees, judgments, prorated real estate taxes, any delinquent real estate taxes, and any other usual costs of closing incurred with the sale of the Property. The sale will be free and clear of liens, with liens to attach to the proceeds of sale. The mortgage balance to First National Bank & Trust Company, 1st Mortgage holder, will be paid from the closing proceeds after all Closing Costs are paid from the closing proceeds. Pursuant to the Order Approving Application by Debtor for Authorization to Employ ReMax Preferred, the Broker is entitled to a commission of 7.5%, to be paid from the proceeds of the sale, included in Closing Costs, and the Debtors will disburse those commission fees at closing. The Debtors ask that the Court approves the commission and authorize the distribution of the Broker's commission at closing. Based on the Debtors knowledge of the Property and its potential market, the offer appears to be reasonable, and should be accepted and approved. The Debtors believe that the sale is in the best interests of the estate. The Debtors ask that the Stay of Order contained in F.R.B.P. 6004 be waived, in order to allow the sale to proceed as scheduled. A copy of the Offer is available at https://tinyurl.com/vnwrm4j from PacerMonitor.com free of charge. W. Kent Ganske and Julie L. Ganske sought Chapter 11 protection (Bankr. E.D. Wisc. Case No. 20-21042) on Feb. 11, 2020. WATERBRIDGE MIDSTREAM: Fitch Cuts IDR to B & Alters Outlook to Neg. ------------------------------------------------------------------- Fitch Ratings downgraded WaterBridge Midstream Operating, LLC's Long-Term Issuer Default Rating to 'B' from 'B+'. Additionally, Fitch has downgraded WBR's Senior Secured Term Loan to 'B+'/'RR3' from 'BB'/'RR2'. The Rating Outlook has been revised to Negative from Stable. The downgrade reflects volume growth underperformance relative to Fitch's prior expectations, which led to 2019 year-end leverage (total debt/adjusted EBITDA) above Fitch's negative sensitivity. Fitch had previously listed a moderation in daily volumes through WBR's system, as well as 2019 leverage above 6.0x as negative rating triggers. The Negative Outlook reflects concerns over the near-term impact of weaker commodity prices on WBR's system volumes, which will further delay expected deleveraging. The rating actions occur in the context of certain members of OPEC+ effectively changing the policy of withholding production to maintain relatively stable oil prices. Cartel leader Saudi Arabia has adopted a pump-at-will policy. The pressure on existing policy was acute given the sharp decrease in global energy demand brought on by the coronavirus. Fitch's price deck for oil and natural gas establishes guideposts for the execution of Fitch's policy of rating through the cycle. The price deck serves as the main basis for the new Fitch forecast. Producer commentary is also used. Based on the price deck and producer commentary throughout the Permian basin, and including some of WBR's customers, Fitch expects WBR to face meaningful headwinds in the near term, and as such a Negative Outlook is warranted. KEY RATING DRIVERS Production Fundamentals Challenge Volume Growth: The outlook for Delaware basin production growth has moderated in recent weeks. Fitch published a new oil and gas price deck, which detailed revised expectations for a weaker commodity price environment caused by the combined effects of waning demand due to the coronavirus outbreak and growing production following the OPEC+ failure to agree on output cuts. Fitch expects volume growth on WBR's system in the southern Delaware to slow due to the macro headwinds faced by WBR's producer customers. While Fitch does expect a rebound in volume growth in the medium-term, near-term volumetric risk is significant due to the previously high growth expectations that drove deleveraging through the forecast period. Slower Deleveraging: WaterBridge's leverage profile is expected to remain elevated for longer than Fitch previously anticipated as a result of volume underperformance in 2019 and near-term headwinds caused by weak commodity prices. Fitch now expects WBR's leverage to be in the 6.5x to 7.0x range at YE20. Leverage is expected to decline through the forecast and remain in-line with Fitch's expectations for Midstream issuers in the 'B' category. Leverage will improve slowly as volumes moderate in the near term and rebound as the commodity price environment improves. Debt is repaid through mandatory amortizations (1% per annum) and an excess cash flow sweep. Limited Scale & Size: WaterBridge is a water midstream/solutions provider that operates predominantly in the Southern Delaware region of the Permian basin, with a small percentage of operations in the Arkoma basin in Oklahoma. Given the predominant single basin focus and lack of business line diversity, WaterBridge possesses outsized sensitivity to a slow-down in Delaware Basin production. The company is expected to generate an annual EBITDA less than $250 million in the near term. Generally, Fitch views small-scale, single-basin-focused midstream service providers with high geographic, customer, and business line concentration and EBITDA below $500 million as being consistent with 'B' category IDRs. Counterparty Risk Exposure: WaterBridge's customer profile is modestly diverse, but sporadic in terms of credit worthiness. Trinity Operating (Private/NR), a wholly owned subsidiary of NextEra Energy, Inc. (A-/Stable), is WaterBridge's largest customer by acreage dedication. Additionally, WBR's largest customer by 2019 volumes was Concho Resources (CXO; BBB/Stable). Many of the remaining customers are small exploration and production (E&P) companies that are either private or high-yield issuers. Fitch views WaterBridge's counterparty risk as being relatively high. ESG Relevance Factors: WaterBridge has an ESG Relevance Score of 4 for Group Structure and Financial Transparency. As a private-equity backed midstream entity it has less structural and financial disclosure transparency than publicly traded issuers. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY WaterBridge's leverage metrics are expected to remain high in the near term. Leverage at the end of 2020 is expected to be in the 6.5x to 7.0x range but is expected to improve as the commodity price environment improves and production volumes rebound. WBR's leverage compares favorably with similarly located single basin Permian gathering and processing names rated in the 'B' category. Relative to Permian peers BCP Raptor, LLC (B-/Negative) and BCP Raptor II, LLC (B-/Negative), WaterBridge's leverage is lower in the in near term, while growth is forecast to be faster, and size and scale more robust (both in terms of EBITDA and total asset size). WaterBridge's size and leverage metrics are both better than its Permian focused gas gathering and processing peer Navitas Midstream (B-/Negative). WaterBridge has more acreage dedicated to it, and a slightly more diversified and highly rated counterparty portfolio. Relative to Medallion Gathering & Processing, LLC (B/Negative), WaterBridge is larger in terms of size and scale of operations, but leverage is expected to be comparable in the near term. WaterBridge is unique in the midstream sector in that it is a pure play water solutions business. Many of the peers aforementioned are traditional midstream entities engaged in crude oil gathering, or gas gathering & processing. WaterBridge's early mover presence in the space should provide a competitive advantage in establishing healthy customer relationships and operational strength. KEY ASSUMPTIONS - Fitch base case WTI assumption of $38/bbl in 2020, moving to a $52 long-term price assumption; - System volumes decline in 2020 particularly in the back half of the year and remain lower into 2021 before recovering in 2022; No new acreage dedications or new producer customers assumed; - Deleveraging aided by term loan amortization (1% per annum) and debt repayment under excess cash flow sweep; - Centennial Transaction is completed; - The recovery analysis assumes that WaterBridge would be considered a going-concern in bankruptcy. Fitch has assumed a 10% administrative claim (standard). The going-concern EBITDA estimate of $152 million reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of the company. As per criteria, the EBITDA reflects some residual portion of the distress that caused the default; - An EV multiple of 6x is used to calculate a post-reorganization valuation and is in line with recent reorganization multiples for the energy sector, including three cases in the last five years from the midstream sector in the U.S. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Fitch would seek to stabilize the outlook if leverage (total debt/adjusted EBITDA) were expected to be below 6.0x; - Should WaterBridge increase its size, scale, asset, geographic or business line diversity, with a focus on growing EBITDA above $300 million per year Fitch would consider a positive rating action; - Leverage at or below 5.5x on a sustained basis would warrant an upgrade; Developments That May, Individually or Collectively, Lead to Negative Rating Action - Declining volume growth expected across WaterBridge's acreage, as evidenced by a decline in rig count or a moderation in daily volumes through its system; - Meaningful deterioration in counterparty credit quality or a significant event at a major counterparty that impairs cash flow; - Leverage above 7.0x on a sustained basis; - FFO fixed charge coverage below 2.0x; - A significant change in cash flow stability profile, driven by a move away from current majority of revenue being fee based. If revenue commodity price exposure were to increase above 25%, Fitch would likely take a negative rating action. LIQUIDITY AND DEBT STRUCTURE Liquidity Adequate: As of Dec. 31, 2019 WaterBridge had approximately $26 million of cash on hand and roughly $105 million available on their $150 million super-senior revolving credit facility. The revolver matures in 2024, and has a net leverage covenant of 5.0x when funded. WaterBridge's primary cash obligations are interest payments on its $1 billion senior secured TLB that matures in 2026. The term loan has a standard mandatory amortization of 1% per annum as well as a 100% excess cash flow sweep stepping down to 50% at 4.5x First Lien Net Leverage ratio and becomes 0% if the ratio is below 3.5x. Fitch acknowledges that its own leverage calculations differ from those of the covenant calculations and WaterBridge was in compliance with its covenants as of Dec. 31, 2019. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch included existing preferred securities in its debt calculations and assigned them 0% equity credit. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3. ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. WaterBridge has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than publicly traded issuers. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. WEDDINGWIRE INC: Moody's Alters Outlook on B3 CFR to Negative ------------------------------------------------------------- Moody's Investors Service affirmed WeddingWire, Inc.'s B3 corporate family rating and its B3-PD probability of default rating. Moody's also affirmed the B2 instrument ratings for WeddingWire's first-lien debt, including a $445 million term loan and $25 million revolving credit facility. The Caa2 rating on the company's $175 million second-lien term loan has also been affirmed. The outlook has been changed to negative, from stable. Issuer: WeddingWire, Inc. (The Knot Worldwide Inc.) Affirmations: -- Corporate family rating, affirmed B3 -- Probability of default rating, affirmed B3-PD -- $25 million first-lien senior secured revolving credit facility due 2023, affirmed B2 (LGD3) -- $445 million (amortized principal) first-lien senior secured term loan due 2025, affirmed B2 (LGD3) -- $175 million second-lien senior secured term loan due 2026, affirmed Caa2 (LGD5) -- Outlook, changed to negative, from stable RATINGS RATIONALE The change in WeddingWire's outlook to negative takes into account Moody's expectation for an abrupt, substantial decline in the company's 2020 revenue due to delays in wedding planning activities stemming from the COVID-19 pandemic. Reduced profits will strain free cash flow and cause Moody's-adjusted debt-to-EBITDA leverage to increase to above 7.5 times at the end of 2020, after having moderated in 2019 to an estimated 6.5 times. Moody's believes WeddingWire has adequate liquidity for 2020, in the form of cash on hand and an eventual full draw-down of its $25 million revolver, which together provide roughly $70 million of liquidity. Moody's outlook change captures the uncertainty surrounding the severity and duration of the coronavirus crisis. Moody's recognizes WeddingWire's otherwise favorable business model, through which revenue forfeited because of postponed wedding plans is not lost permanently. Rather, it is largely delayed. A subscription-driven revenue model provides a moderately stable baseline of sales as well. Moody's believes that as the health crisis abates, the company's revenue will recover. WeddingWire's ratings are supported by the company's leadership position in the online wedding services marketplace, a position that was cemented by its late-2018 combination of merger with XO Group, the owner of the high-profile The Knot online bridal registry service. Target synergies from the combination were substantially achieved in 2019, and at lower than anticipated cost. Free cash flow in 2019 was negative, and largely due to integration costs. Moody's expects free cash flow to be negative again in 2020, but because of COVID-19-related operating challenges. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Moody's expects that credit quality around the world will continue to deteriorate, especially for those companies in the most vulnerable sectors that are most affected by prospectively reduced revenues, margins and disrupted supply chains. At this time, the sectors most exposed to the shock are those that, like WeddingWire's, are most sensitive to consumer demand and sentiment. Lower-rated issuers are most vulnerable to these unprecedented operating conditions and to shifts in market sentiment that curtail credit availability. Moody's will take rating actions as warranted to reflect the breadth and severity of the shock, and the broad deterioration in credit quality that it has triggered. The negative outlook could be stabilized if revenue growth resumes, and if free cash flow turns neutral or positive, versus its negative expectations. The ratings could be upgraded if the company demonstrates significant top-line growth and if Moody's expects that debt-to-EBITDA leverage (Moody's adjusted) will approach 6.5 times while free cash flow as a percentage of debt holds in the mid-single-digits Alternatively, the ratings could be downgraded if revenue fails to grow, liquidity deteriorates, covenant compliance becomes uncertain, or if financial strategies become more aggressive. With Moody's-expected 2019 revenues of about $325 million, WeddingWire, as a result of its planned late-2018 merger with XO Group (the owner of The Knot online bridal registry service), is a leader in the online wedding services marketplace. The company formally changed its name to The Knot Worldwide Inc. in May 2019. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. WINDOM RIDGE: Wayne Rentals Buying Wayne Properties for $33K ------------------------------------------------------------ Windom Ridge, Inc., asks the U.S. Bankruptcy Court for the Northern District of Iowa to authorize the sale to Wayne Rentals, LLC of the following real properties: (i) Lot 20, Benscoter Addition Planned Unit Development Replat 2, Wayne, Wayne County, Nebraska for $16,000; and (ii) Lot 19, Angel Acres Addition, Wayne, Wayne County, Nebraska. Among the assets that belong to the estate of the Debtor is the Real Property. It proposes to sell the Real Property to the Buyer for $33,000, per the Purchase Agreement, and subject to Court approval. It believes that the sale of the Real Property is in the best interest of the bankruptcy estate, and the Court should enter an Order giving it express authority to sell said Real Estate free and clear of all liens and encumbrances thereon, with the liens attaching to the proceeds. Further, the Debtor asks the Court to give it express authority to complete said sale of neat estate, pay the real estate sales commission, the prorated real estate taxes, and closing costs, with the balance being paid to the Citizens State Bank. The liens will attach to the proceeds of record and as the Court will determine with the following party: Citizens State Bank, 201 Hwy. 20, Laurel, NE 68745. A copy of the Agreement is available at https://tinyurl.com/rl3puh3 from PacerMonitor.com free of charge. About Windom Ridge Inc. Windom Ridge, Inc., is a real estate developer in Wayne, Nebraska. Windom Ridge, Inc., sought Chapter 11 protection (Bankr. N.D. Iowa Case No. 19-01098) on Aug. 13, 2019. In the petition signed by Louis E. Benscoter, Sr., owner, the Debtor was estimated to have assets of up to $50,000 and $1 million to $10 million in debt. Judge Thad J. Collins is assigned to the case. The Debtor tapped Wilford L. Forker, Esq., at Wilford L. Forker, as counsel. WINEBOW GROUP: S&P Lowers ICR to 'CCC' as Debt Maturities Approach ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S.-based wine and spirits distributor Winebow Group LLC to 'CCC' from 'CCC+'. At the same time, S&P lowered issue-level ratings on the company's first-lien term loan to 'CCC' from 'CCC+' with an unchanged recovery rating of '3' and its second lien term loan to 'CC' from 'CCC-' with an unchanged recovery rating of '6'. The downgrade reflects constrained liquidity and refinancing risk as a result of near-term debt maturities, which is aggravated due to economic disruptions caused by the COVID-19 pandemic. Winebow's ABL matures in approximately 12 months from now at the end of March 2021, followed shortly by its first-lien term loan on July 1, 2021. S&P believes the company's inability to refinance its debt before it matures has become more of a possibility due to current volatility in the debt capital markets, especially limiting access to credit for speculative-grade issuers such as Winebow. Moreover, the company's ABL facility remains heavily drawn ($103 million balance as of Dec. 31, 2019) and S&P does not expect the company to generate enough cash to repay the ABL balance by maturity. As a result, the company's liquidity has become constrained. Additionally, the company has tight cushion (less than 10%) on the springing fixed-charge covenant ratio under its ABL agreement(triggered when availability is less than greater of 10% of borrowing base or $13.5 million). Therefore, S&P believes the company has limited access to additional drawings as that may cause a covenant breach. This, combined with the company's very high leverage and minimal cash flow generation, makes S&P believe the company may encounter a default over the next six to 12 months, including a payment default, covenant breach, or possibly a distressed debt exchange. The negative outlook reflects that S&P could lower the rating further if the company does not make concrete progress on refinancing its upcoming debt maturities, thus increasing the likelihood of a default over the next six months. "We could lower our ratings on Winebow if we believe a default over the next six months is inevitable. This could occur if the company does not make significant progress toward refinancing before its first-lien term loan comes current in July 2020 or if we believe the company will encounter a liquidity crunch or payment default due to operational challenges," S&P said. "We could raise the ratings if the company addresses its near-term debt maturities by successfully refinancing its capital structure on reasonable terms while operating performance does not significantly deteriorate," the rating agency said. WITTER HARVESTING: April 21 Disclosure Statement Hearing Set ------------------------------------------------------------ Debtor Witter Harvesting, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, a Disclosure Statement and a Plan. On March 12, 2020, Judge Mindy A. Mora ordered that: * April 21, 2020, at 1:30 p.m. in the United States Bankruptcy Court, 1515 North Flagler Drive, Courtroom A, West Palm Beach Florida 33401 is the hearing to consider approval of the Disclosure Statement. * March 22, 2020, is the deadline for service of order, Disclosure Statement and Plan. * April 14, 2020, is the deadline to file objections to Disclosure Statement. A full-text copy of the order dated March 12, 2020, is available at https://tinyurl.com/rv2pkwl from PacerMonitor at no charge. The Debtor is represented by: Dana Kaplan, Esq. KELLEY, FULTON & KAPLAN, P.L. 1665 Palm Beach Lakes Blvd., Ste. 1000 West Palm Beach, Florida 33401 About Witter Harvesting Witter Harvesting Inc. provides agricultural and crop harvesting services in Okeechobee, Fla. Witter Harvesting sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-14063) on March 29, 2019. At the time of the filing, the Debtor estimated assets and liabilities of between $1 million and $10 million. The case is assigned to Judge Mindy A. Mora. The Debtor tapped Kelley & Fulton, PL, as its bankruptcy counsel; and CPA Tax Solutions, LLC as an accountant. The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case. WOK HOLDINGS: Moody's Cuts CFR to Caa2, Outlook Negative -------------------------------------------------------- Moody's Investors Service downgraded Wok Holdings, Inc.'s Corporate Family Rating to Caa2 from B3 and Probability of Default Rating to Caa3-PD from Caa1-PD. Moody's also downgraded Wok Holdings' senior secured bank credit facilities to Caa2 from B3. The ratings outlook is negative. "The downgrade reflects its expectation for a material deterioration in earnings and credit metrics along with free cash flow deficits that are driven by the restrictions and closures across Wok Holding's restaurant base due to efforts to contain the spread of the coronavirus including recommendations from Federal, state and local governments" stated Bill Fahy, Moody's Senior Credit Officer. In response to these operating challenges and to strengthen liquidity, Wok Holding's is focusing on reducing all non-essential operating expenses and discretionary capex. Downgrades: Issuer: Wok Holdings Inc. Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Bank Credit Facilities, Downgraded to Caa2 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: Wok Holdings Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The restaurant sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Wok Holding's credit profile, including its exposure to widespread location closures have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Wok Holding's remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Wok Holdings of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Wok Holdings' Caa2 CFR reflects its very high leverage and weak interest coverage with EBIT/interest expense of less than 1.0x. It also reflects Wok Holdings' weak liquidity. Moody's expects Wok Holdings to generate significant free cash flow deficits relative to its cash balances and availability under its revolving credit facility. In addition, the company is constrained by its modest scale in terms of number of restaurants and difficult operating trends, even prior to the impact of the coronavirus. Wok Holdings benefits from its brand awareness within the Asian cuisine sector of the restaurant industry, distribution of its restaurants across major MSA's and organic growth of third party delivery in addition to a good distribution of sales throughout the week, within day-parts and by customer age mix. The negative outlook reflects the uncertainty with regards to the potential length and severity of closures and the ultimate impact these closures will have on Wok Holdings' revenues, earnings and liquidity. The outlook also takes into account the negative impact on consumers ability and willingness to spend on eating out until the crisis materially subsides. Wok Holdings' private ownership is a rating factor given the potential implications from both a capital structure and operating perspective. Financial policies are always a key concern of privately-owned companies with regards to the potential for higher leverage, extractions of cash flow via dividends, or more aggressive growth strategies. Restaurants by their nature and relationship with sourcing food and packaging, as well as an extensive labor force and constant consumer interaction are deeply entwined with sustainability, social and environmental concerns. While these factors may not directly impact the credit, they impact brand image and result in a more positive view of the brand overall. Factors that could result in a stable outlook include a clear plan and time line for the lifting of restrictions on restaurants that would result in a sustained improvement in operating performance, liquidity and credit metrics. Given the negative outlook and the current operating environment, an ratings upgrade is unlikely over the near term. However, an upgrade would require a stable operating environment, adequate liquidity and EBIT/interest expense of around 1.0x times. Factors that could result in a downgrade include a sustained deterioration in liquidity driven by a prolonged period of restaurant closures or an increase in the probability of default for any reason. Wok Holdings operates restaurants under the brand name P.F. Chang's China Bistro (Bistro) in the casual dining segment of the restaurant industry. Annual revenue are approximately $900 million. Wok Holdings is owned by TriArtisan Capital Advisors LLC and Paulson & Co Inc. The principal methodology used in these ratings was Restaurant Industry published in January 2018. WOODFORD EXPRESS: S&P Downgrades ICR to 'CCC+'; Outlook Negative ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Woodford Express LLC to 'CCC+' from 'B' to indicate that, given its expected leverage, S&P views its capital structure as unsustainable and dependent on favorable business, financial, and economic conditions to meet its financial commitments. At the same time, S&P is lowering its issue-level rating on the company's senior secured term loan to 'CCC+' from 'B'. S&P's '3' recovery rating remains unchanged. Gulfport Energy Corporation (Gulfport), which supplies over 70% of Woodford's volumes, announced that it is lowering its drilling projections in the SCOOP basin in 2020. Gulfport was also downgraded to "CCC+" with a negative outlook on March 20, 2020. "We believe the company's S&P-adjusted credit metrics will be significantly more stressed than we previously expected based on our updated volume forecast. We now anticipate that Woodford's debt-to-EBITDA will remain about 8x over the next few years, which suggests that its capital structure is unsustainable under the current commodity price environment. We also think that its other customers may revise their drilling plans given the sustained low energy prices, general turmoil in the energy markets, and deteriorating macroeconomic outlook over the past month. Therefore, we now believe that Woodford could undertake a distressed debt exchange or default at some point in the future without support from its sponsor," S&P said. The negative outlook on Woodford reflects S&P's expectation that the company will depend upon favorable business, financial, and economic conditions to meet its financial commitments. S&P expects the company's leverage to remain elevated over the next two years with debt to EBITDA of more than 8x in 2020. "We could downgrade Woodford if we believe a default or distressed exchange offering is likely over the next 12 months," S&P said. "We could raise our rating on Woodford if we expect its capital structure to be sustainable, which could occur if there is an increase in drilling activity on its dedicated acreage," the rating agency said. YOUNGEVITY INTERNATIONAL: Issues $1M Note to Daniel Mangless ------------------------------------------------------------ Youngevity International, Inc., entered into a securities purchase agreement with Daniel Mangless on March 20, 2020, pursuant to which it issued a senior secured promissory note in the principal amount of $1,000,000, due March 20, 2021, bearing interest at 18% per annum. The Note is prepayable, at the option of the Company, at any time without premium or penalty. Pursuant to a Pledge and Security Agreement, dated March 20, 2020, entered into by the Company and CLR Roasters, LLC with Mangless, the Note is secured by a first priority lien granted by CLR in its rights under the Finance, Security and AR AP Monetization Agreement, dated March 6, 2020 by and between H&H Coffee Group Export Corp., H&H Export Y Cia. Ltda and CLR to receive certain payments. Mangless received 50,000 shares of the Company's stock from the Company in connection with his investment. About Youngevity Chula Vista, California-based Youngevity International, Inc. -- http://www.youngevity.com/-- is a multi-channel lifestyle company operating in three distinct business segments including a commercial coffee enterprise, a commercial hemp enterprise, and a multi-vertical omni direct selling enterprise. The Company features a multi country selling network and has assembled a virtual Main Street of products and services under one corporate entity, YGYI offers products from the six top selling retail categories: health/nutrition, home/family, food/beverage (including coffee), spa/beauty, apparel/jewelry, as well as innovative services. Youngevity reported a net loss attributable to common stockholders of $23.50 million for 2018 following a net loss attributable to common stockholders of $12.69 million for 2017. As of Sept. 30, 2019, the Company had $141.18 million in total assets, $85.01 million in total liabilities, and $56.17 million in total stockholders' equity. Mayer Hoffman McCann P.C., in San Diego, California, the Company's auditor since 2011, issued a "going concern" qualification in its report dated April 15, 2019, on the consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has recurring losses and is dependent on additional financing to fund operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. ZANDER REALTY: Hires Wallace Jordan as Counsel ---------------------------------------------- Zander Realty, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Alabama to employ Wallace Jordan Ratliff & Brandt, LLC, as counsel to the Debtor. Zander Realty requires Wallace Jordan to: (a) prepare pleadings and applications and conducting examinations incidental to any related proceedings or to the administration of the bankruptcy case; (b) advise the Debtor of its rights, duties, and obligations as the Debtor operating under Chapter 11 of the Bankruptcy Code; (c) take any and all other necessary action incident to the proper preservation and administration of this Chapter 11 case; and (d) advise and assist the Debtor in the formation and confirmation of a plan pursuant to Chapter 11 of the Bankruptcy Code, the disclosure statement, and any and all matters related thereto. Wallace Jordan will be paid at these hourly rates: Partners $300 to $475 Associates $260 to $310 Of Counsel $350 to $395 Paralegals/Legal Assistants $150 to $165 Law Clerks $200 Wallace Jordan will be paid a retainer in the amount of $10,000. Wallace Jordan will also be reimbursed for reasonable out-of-pocket expenses incurred. Gary W. Lee, partner of Wallace Jordan Ratliff & Brandt, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Wallace Jordan can be reached at: Gary W. Lee, Esq. WALLACE JORDAN RATLIFF & BRANDT, L.L.C. 800 Shades Creek Pkwy., Suite 400 Birmingham, AL 35209 Tel: (205) 874-0343 E-mail: gwlee@wallacejordan.com About Zander Realty Zander Realty, LLC, based in Birmingham, AL, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 20-00861) on March 3, 2020. In the petition signed by Brian M. Kornowicz, member, the Debtor disclosed $1,363,960 in assets and $550,980 in liabilities. Gary W. Lee, Esq., at Wallace Jordan Ratliff & Brandt, LLC, serves as bankruptcy counsel to the Debtor. ZPOWER TEXAS: Dykema Gossett Represents Schultz Family ------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Dykema Gossett PLLC submitted a verified statement that it is representing these creditors in the Chapter 11 cases of ZPower Texas, LLC: a. Howard H. Schultz; b. Jaynie Schultz; c. Andrew Schultz; d. Daniel A. Schultz; e. Andrew Schultz Irrevocable Trust; f. LVS Charitable Lead Annuity Trust; g. HHS Charitable Lead Annuity Trust; h. Schultz Family Investment Partnership, Ltd.; i. Schultz 2011 Grandchildren’s Trust; j. Estate of Leslie Vile Schultz; k. HHS GST, Jaynie Schultz, Trustee; l. LVS GST, Jaynie Schultz, Trustee; m. Schultz Family Foundation; n. HHS GST, Daniel Schultz, Trustee; and o. LVS GST, Daniel Schultz, Trustee. Dykema has conducted a diligent review for any conflicts of interest or potential conflicts of interest and believes it has no conflicts of interest or potential conflicts of interest in its joint representation of the Schultz Family. Dykema has provided a full disclosure regarding this joint representation to each of the Schultz Family, and the Schultz Family has consented to this joint representation by Dykema. Counsel for Howard H. Schultz, et al. can be reached at: DYKEMA GOSSETT PLLC Jeffrey R. Fine, Esq. Aaron M. Kaufman, Esq. 1717 Main Street, Suite 4200 Dallas, TX 75201 Tel: (214) 462-6400 J. Fine Cell: (214) 632-9263 Fax: (214) 462-6401 J. Fine Fax: (855) 230-2518 A. Kaufman Fax: (866) 894-9793 Email: jfine@dykema.com Email: akaufman@dykema.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/5pFl9q About ZPower LLC ZPower -- https://www.zpowerbattery.com -- is a manufacturer of silver-zinc rechargeable microbatteries. The Company serves the consumer electronics, medical, and military and defense industries. ZPower sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Tex. Case No. 20-41158) on March 17, 2020. At the time of the filing, the Debtor estimated assets of between $10 million to $50 million and liabilities of between $10 million to $50 million. The petitions were signed by Glynne Townsend, chief restructuring officer. The case is presided by Hon. Mark X. Mullin. Davor Rukavina, Esq., of Munsch Hardt Kopf & Harr, P.C., is the Debtors' counsel. [] S&P Revises U.S. Student Housing Projects Outlook to Negative ---------------------------------------------------------------- S&P Global Ratings revised the outlook to negative and affirmed its ratings on all U.S. higher education privatized (off balance sheet, or OBS) student housing projects in the wake of the COVID-19 pandemic and the uncertainties surrounding the ultimate economic fallout. The negative outlook reflects S&P's belief that all projects in the sector are facing negative economic or fundamental business conditions that could result in lower ratings over the next one-two years. In addition, the negative outlook reflects expected challenges facing the industry due to a sudden and potentially prolonged decline in student housing occupancy and associated loss of rental revenue, as many colleges and universities have moved to remote learning. This situation is evolving, with uncertainty around the potential effects. "Given this and the lack of clarity around the possible duration of the COVID-19 outbreak, in our opinion, fall 2020 enrollment at U.S. colleges and universities will likely be weaker than expected, and occupancy in privatized student housing projects could be negatively affected. The outlook on projects that already maintain a negative outlook due to project-specific reasons will not change," S&P said. As of March 25, 2020, S&P Global Ratings maintained 63 public ratings on privatized student housing projects in the U.S. While the majority of these projects are secured by a non-recourse pledge of net housing project revenues, a small number benefit from additional financial support from their related underlying institution, whether in the form of a first-fill agreement, or a lease-vacancy guaranty. S&P's ratings on these housing projects range from 'A+' to 'CC'. Approximately 76% of S&P's overall ratings are investment-grade and about 24% of its ratings are in the speculative-grade category--a higher percentage than a few years ago. "A negative outlook is not necessarily a precursor to a rating change and we could revise the outlook to stable over the outlook period. We will review all ratings individually with respect to a project's specific exposure to, and ability to mitigate against, declining occupancy and loss of rental revenue. We could revise the outlook on specific ratings to stable on a case-by-case basis in the near-to-medium term (between three months and one-two years) as we assess risk mitigation. At the same time, we could lower the ratings, some of which could be multi-notch downgrades. In our opinion, while we expect to know more in the next few months about fiscal 2020 operations, there is still uncertainty around fall occupancy. Many student housing projects will be more susceptible to near-term operating pressure associated with decreased occupancy and potential rental revenue refunds, and could require the use of reserves to meet debt service payments in full and on time. Other projects may receive financial support from their sponsor institutions, which we would view positively," S&P said. Since these projects' bonds are typically secured solely by project cash flows non-recourse to the sponsor institution, they rely upon student occupancy and rental revenue generation, and are most vulnerable to missed revenues. With universities encouraging or mandating that students leave campus for their own safety, student housing occupancies are declining. In the past couple of weeks, some of the universities where these projects are located have made announcements to their communities allowing students to terminate or cancel their lease arrangements without charging a cancellation fee or rent after the student has vacated the unit. Many of the privatized student housing projects on these campuses will likely be compelled to also issue rental proration and refunds. In certain cases, the sponsor institutions have agreed to pay the privatized student housing projects the rent they would have received under the terminated or cancelled lease agreements upon submission of appropriate documentation. "In our view, this extraordinary university support is a positive credit factor that mitigates the projects' operating risk in the short term. However, even in these cases, we believe there is medium-term risk related to fall 2020 enrollment and related housing occupancies, and the future ability or willingness of these sponsor institutions to help support the projects," S&P said. Significant enrollment and occupancy losses in fall 2020 could affect even facilities that have experienced strong occupancy historically and received demonstrated financial support from their sponsor institutions. The effects on these projects could be disproportionate, as the situation may vary from campus to campus. "For all credits, an extended COVID-19 duration, and correspondingly more severe economic fallout, has the potential to result in diminished occupancies in student housing that, in the long term, could be inconsistent with current rating levels, in our opinion. It is clear that the current situation is fluid and that the longer-term implications of COVID-19 might not be manifest in the short term," S&P said. The outlook period is two years for investment-grade ratings and one year for non-investment grade ratings. Overall, the negative outlook for individual privatized student housing financings will be resolved over time, as S&P's complete individual reviews and the financial and operating impact from COVID-19 can be better estimated. In particular, S&P Global Ratings will be evaluating, among other things, the following credit factors: -- The timing of each project's debt service payments and its ability to pay debt service in full and on time from operations; -- The role the sponsor institution plays in supporting the project; -- The impact of lost rental revenue or prorated rental refunds on fiscal 2020 financial results, if applicable; -- Fiscal 2020 debt service coverage (DSC) levels and any use of reserves; -- For new construction projects, any delays resulting in negative financial impact on the project; -- Summer and fall 2020 occupancy levels and fiscal 2021 financial projections; and -- Management teams' strategies for addressing potential revenue declines. Credit factors that could lead to a negative rating action in the near term include net project operating revenues that pressure DSC levels or impede the project's ability to make on-time and in-full debt service payments. In the medium term, lower-than-targeted occupancy in fall 2020 that stresses fiscal 2021 operations and DSC levels could also lead to a lower rating. Although S&P understands COVID-19 to be a global risk, it could consider a negative rating action during the outlook period should unforeseen pressures related to the pandemic materially affect demand, finances, DSC, or the trajectory of the project. "We could revise the outlook to stable for projects that are able to demonstrate extraordinary support in the form of financial backing from their university sponsor or alternative revenue sources that mitigates pressure on net project operating revenues, indicating the ability to maintain DSC levels and to make on-time and in-full debt service payments for fiscal 2020 and projected fiscal 2021. We would also consider the strength of the project's capital reserves and assess the project's ability to maintain them at the required covenant levels." In the medium term, projects that achieve target or higher occupancy in fall 2020 that benefits fiscal 2021 operations, reserves, and DSC levels would be viewed positively," S&P said. A list of affected Ratings can be viewed at: https://bit.ly/3ayVYb5 ********* 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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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 2020. 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. 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