/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200413.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 13, 2020, Vol. 24, No. 103 Headlines AFFORDABLE BUILDING: Seeks to Hire Gackle Tax as Accountant AIRSCEL INC: Moody's Cuts CFR to Caa2, Outlook Negative AKORN INC: Rao Akella Reduces Stake to 9.3% AL YEGA: Seeks to Hire Douglas Elliman as Real Estate Broker ALPHATEC HOLDINGS: Expects Q1 Revenue of $29.6M to $30M AMAZING ENERGY: Needs Additional Funds to Remain as Going Concern AMERICA-CV STATION: Empire State Objects to Plan & Disclosures AMERICAN CENTER: Brewer and Leydet Object to Disclosure Statement ASCENA RETAIL: Wendy Hufford Quits as SVP, General Counsel & Secy. BERRY PETROLEUM: S&P Lowers ICR to 'B-' on Lower Commodity Prices BLACKRIDGE TECHNOLOGY: Hires Harris Law Practice as Counsel BLUE SKY EVENTS: Seeks to Hire Bankruptcy Attorney BODY RENEW: Seeks to Hire Rulien & Associates as Accountant BOY SCOUTS: Court Stays Odean Banks' Sexual Abuse Lawsuit BRASSERIE FELIX: Seeks to Hire Morrison Tenenbaum as Counsel BYRDLAND PROPERTIES: Seeks to Hire Mann Conroy as Legal Counsel CARR CREATIVE: Bankr. Administrator Unable to Appoint Committee CARTER'S INC: S&P Alters Outlook to Negative, Affirms 'BB+' ICR CAV INC: Case Summary & 20 Largest Unsecured Creditors CENTRAL GARDEN: Egan-Jones Lowers Senior Unsecured Ratings to B- CENTURYLINK INC: Fitch Affirms BB LongTerm IDR, Outlook Stable CHERRY OPERATING: Case Summary & 4 Unsecured Creditors CINEMARK HOLDINGS: Fitch Cuts LT IDR to B+, Outlook Negative CIRQUE DU SOLEIL: S&P Lowers ICR to 'D' on Missed Payments CLUBCORP HOLDINGS: Moody's Cuts CFR to Caa1, Alters Outlook to Neg. COASTAL INTERNATIONAL: Committee Taps Grobstein as Accountant COMSTOCK RESOURCES: Moody's Cuts CFR to Caa1, Alters Outlook to Neg CONFIE SEGUROS II: Moody's Cuts CFR to Caa1, Alters Outlook to Neg. COOL HOLDINGS: Disposes of Verablue Assets for $150,000 CORE MOLDING: Crowe LLP Raises Going Concern Doubt COTY INC: Moody's Cuts CFR to Caa1, Outlook Negative COUNTRY MORNING FARMS: Bankr. Court Confirms 2nd Amended Plan COVIA HOLDINGS: S&P Downgrades ICR to 'CCC+'; Outlook Negative CP VI BELLA: S&P Alters Outlook to Negative, Affirms 'B' ICR CYBER APPS: Needs More Working Capital to Remain as Going Concern DEAN & DELUCA: Seeks OK for CROs from Argus Management DEAN FOODS: Deloitte & Touche LLP Raises Going Concern Doubt DECO ENTERPRISES: Has Interim Access to Cash Collateral DG INVESTMENT 2: Moody's Alters Outlook on B3 CFR to Negative DIBELLA GENERAL: Hires Center City Law as Counsel DILLARD'S INC: S&P Lowers ICR to 'BB-'; Outlook Negative DONNELLEY FINANCIAL: S&P Downgrades ICR to 'B+'; Outlook Negative ECHO ENERGY: Seeks Court OK for Opportune's Laswell as CRO EMBLEM FINANCE 2: Fitch Affirms BB- Rating ENTRANS INT'L: Moody's Cuts CFR to B3, Outlook Remains Negative EP ENERGY: Ernst & Young LLP Raises Going Concern Doubt EPIC COMPANIES: Committee Hires Reid Collins as Special Counsel EVERI PAYMENTS: Moody's Rates New $125MM Sec. Term Loan 'B1' EXCEL FITNESS: Moody's Cuts CFR to Caa2, Outlook Negative EXTRACTION OIL: S&P Lowers ICR to 'CCC+'; Outlook Negative EYEMART EXPRESS: Moody's Alters Outlook on B2 CFR to Negative FARM STATION: Seeks to Hire Bankruptcy Attorney FIELDWOOD ENERGY: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. FIFTH DAY: Gets Access to Cash Collateral Thru May 6 FITNESS INT'L: Moody's Alters Outlook on Caa1 CFR to Negative FOGO DE CHAO: S&P Downgrades ICR to 'CCC+' On Coronavirus Concerns FOODFIRST GLOBAL: Case Summary & 20 Largest Unsecured Creditors FORUM ENERGY: S&P Downgrades ICR to CCC on Unsustainable Leverage FRANCIS' DRILLING: Baker Hughes Bid to Dismiss Norfolk Suit Nixed G-III APPAREL: S&P Places 'BB' ICR on Watch Negative GAMING & LEISURE: S&P Affirms 'BB+' ICR, Alters Outlook to Negative GASPER RICE: Plan & Disclosure Hearing Reset to May 26 GAVILAN RESOURCES: Moody's Affirms 'Ca' CFR, Outlook Still Negative GB SCIENCES: Gets Notice of Allowance for Claims Protecting CCCMs GEORGE WESTON: Egan-Jones Lowers LC Sr. Unsecured Rating to BB+ GEX MANAGEMENT: Delays Filing of Form 10-K Over COVID-19 Pandemic GIP III STETSON: S&P Downgrades ICR to 'B-' on Distribution Cut GLOBETROTTER INTERMEDIATE: S&P Affirms 'B-' ICR; Outlook Stable GOLDEN NUGGET: Moody's Cuts CFR to Caa1 & Unsec. Rating to Caa2 GRAND CENTRAL WINE: Seeks to Hire AK & Associates as Accountant GRANITE TACTICAL: Unsec. Creditors to Get Full Payment in 5 Years GREENBRIER COS: S&P Alters Outlook to Negative, Affirms 'BB' ICR H & S TOWING: UST Says Plan Patently Unconfirmable HAJJAR BUSINESS: Allowed to Use Cash Collateral on Interim Basis HAMPTON ROADS: Fitch Affirms $9MM Class III Bonds at 'B+' HARRISBURG AIRPORT: Fitch Puts BB+ on Airport Bonds on Watch Neg. HARTSHORNE HOLDINGS: Committee Taps Whiteford Taylor as Counsel HAWAII MOTORSPORTS: Gets Final OK to Borrow from Mahindra Finance HAWAII MOTORSPORTS: Gets Interim, Final Nod on AFC Deal HAWAII MOTORSPORTS: Gets Interim, Final OK on Usher Ent. Deal HAWAII MOTORSPORTS: Obtains Interim Access to Cash Collateral HEATING AND PLUMBING: Unsecureds to Get Revenue, Avoidance Proceeds HIGHPOINT OPERATING: Moody's Cuts CFR to Caa2, Outlook Negative HOLCOMB ACQUISITIONS: To Seek Plan Confirmation on April 28 HYSTER-YALE MATERIALS: S&P Lowers ICR to 'B' on Weaker Demand ILLINOIS VALLEY: Seeks Permission to Use Cash Collateral JACK IN THE BOX INC: Egan-Jones Lowers Sr. Unsecured Ratings to B+ JAGUAR HEALTH: FDA Declines to Issue an EUA for Crofelemer JASON INC: Moody's Affirms 'Ca' CFR, Outlook Negative JEFFERIES FINANCE: S&P Places 'BB-' ICR on CreditWatch Negative JIM'S DISPOSAL: Seeks to Hire Mann Conroy as Special Counsel JOHN DAUGHERTY: Hires Campbell & Riggs as Special Corporate Counsel JOHN DAUGHERTY: Taps Parsons McEntire as Special Litigation Counsel K-9 SPLASH: Seeks Court Approval to Hire Accountant KRONOS WORLDWIDE: S&P Downgrades ICR to 'B-'; Outlook Negative LEARNING CARE GROUP: S&P Cuts ICR to 'CCC' on COVID-19 Impact LEGACY JH762: MTGLQ Objects to Amended Disclosures M M & D HARVESTING: Administrator Unable to Appoint Committee MAD DOGG ATHLETICS: June 8 Plan Confirmation Hearing Set MAGNUM MRO: Seeks to Hire Kellie Vincent CPA as Accountant MARCO GENERAL: Has Until June 30 to File Plan & Disclosures MARX STEEL: Seeks to Hire HooverSlovacek LLP as Attorney MAXLINEAR INC: Moody's Affirms Ba3 CFR, Outlook Stable MCCLATCHY CO: Committee Taps Berkeley Research as Financial Advisor MCCLATCHY CO: Committee Taps Dundon Advisers as Financial Advisor MCCLATCHY COMPANY: Committee Taps Stroock & Stroock as Counsel MCGRAW-HILL GLOBAL: Fitch Alters Outlook on B+ LT IDR to Negative MEDICAL ASSOCIATES: Hires Henry & O'Donnell as Legal Counsel MEDICAL ASSOCIATES: Seeks to Hire Rubino & Company as Accountant MEDTAINER INC: Incurs $276K Net Loss for Quarter Ended Sept. 30 MEG ENERGY: Moody's Alters Outlook on B2 CFR to Negative MERCHANT LLC: Seeks to Hire Donnarumma Law as Special Counsel MESOBLAST LIMITED: Partners with CTSN to Conduct Remestemcel Trial MEYERS REPAIR: Seeks to Hire Marc T. Valentine as Counsel MICROVISION INC: Receives Nasdaq Listing Deficiency Notice MOUNTAIN STATES: Seeks to Hire r2 Advisors as Financial Advisor MOUNTAIN STATES: U.S. Trustee Appoints 2 New Committee Members MURRAY METALLURGICAL: Committee Hires Lowenstein Sandler as Counsel MURRAY METALLURGICAL: Committee Seeks to Hire Financial Advisor MURRAY METALLURGICAL: Committee Taps Wickens Herzer as Co-Counsel MYSTIC TRANSPORTATION: Case Summary & 20 Top Unsecured Creditors NATIONAL QUARRY: Seeks to Hire Iron Horse, Queen City as Appraisers NEW CITY AUTO: Hires Woodward Law as Special Counsel NEW MILLENIUM: Moody's Cuts CFR to C & Alters Outlook to Stable NORTHWEST CAPITAL: Hires William J. Factor as Bankruptcy Counsel NOVATION COMPANIES: Boulay PLLP Raises Going Concern Doubt NULIFE MULHOLLAND: Seeks to Hire Pinnacle Estate as Broker OASIS ON ESSINGTON: Hires Center City Law as Counsel ODES INDUSTRIES: Seeks to Hire Padfield & Stout as Special Counsel OSUM PRODUCTION: Moody's Alters Outlook on B3 CFR to Negative PACE INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors PARADIGM TELECOM: Unsecureds Owed $22M to Recover 1% in Plan PENNSYLVANIA REAL: KPMG LLP Raises Going Concern Doubt PG&E CORP: Court Approves Disclosure Statement Supplement PG&E CORP: Hires Covington & Burling as Special Insurance Counsel PG&E CORP: Seeks to Hire Steptoe & Johnson as Special Counsel PGX HOLDINGS: Moody's Cuts CFR to Ca on Missed Payments PHOENIX PRODUCTS: U.S. Trustee Appoints Creditors' Committee PURE BIOSCIENCE: Needs More Funds to Continue as a Going Concern QBS PARENT: Moody's Cuts CFR to Caa1, Outlook Stable RAILWORKS CORP: Asbestos Claims Too Late, Judge Says RICKEY CONRADT: Seeks to Hire James S. Wilkins as Attorney RIVERA BUSINESS: Court Approves Disclosure Statement ROCHESTER DRUG: U.S. Trustee Appoints Creditors' Committee ROVIG MINERALS: May 5 Hearing on Disclosure Statement RV RENTALS: Seeks to Hire Marc S. Stern as Counsel SAMSONITE INT'L: Moody's Alters Outlook on Ba2 CFR to Negative SANAM CONYERS: Aum Shri Plan Confirmed by Judge SAVE MONEY: Says Plan Ready for Outcome of Hayden Dispute SCRIPPS (E.W.) COMPANY: Moody's Cuts CFR to B2, Outlook Negative SEANERGY MARITIME: L1 Capital Global Has 9.7% Stake as of March 31 SEANERGY MARITIME: Sabby Volatility, et al. Have 9.9% Stake SEMILEDS CORP: Posts $348,000 Net Income in Second Quarter SEMILEDS CORP: Reports Second Quarter Net Income of $348,000 SETEC ASTRONOMY: Seeks to Hire Eric A. Liepins as Counsel SGR WINDDOWN: Says Candy Cube Claims Won't Impact Plan Payouts SHERIDAN HOLDING: Seeks to Hire Jackson Walker as Co-Counsel SKLAR EXPLORATION: Seeks to Hire Berg Hill as Special Counsel SOUTH COAST: Trustee Hires Force Ten as Financial Advisor STATE OF ILLINOIS: S&P Alters Outlook to Negative SUMMIT VIEW: Denlingers Object to Disclosure Statement T-MOBILE US: Fitch Corrects April 1 Ratings Release TAILORED BRANDS: David Edwab Quits as Vice Chairman of the Board TEMBLOR PETROLEUM: Case Summary & 20 Largest Unsecured Creditors TOGA LTD: Incurs $5.2M Net Loss for the Quarter Ended Jan. 31 TORREY HOLDINGS: Seeks Court Approval to Hire Bullock Appraisal TRANS WORLD: Neil S. Subin, et al. Report 65% Equity Stake TRIUMPH GROUP: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. TUMBLEWEED TINY: U.S. Trustee Unable to Appoint Committee UNITED PF: Moody's Cuts CFR to Caa1, Outlook Negative UNITI GROUP: PricewaterhouseCoopers LLP Raises Going Concern Doubt VALUESETTERS INC: Has $595K Net Income for Quarter Ended Jan. 31 VCHP NEPTUNE BEACH: Gets Interim Authority to Use Cash Collateral VCHP SPRINGFIELD: Obtains Interim Cash Collateral Access VERONIQUE'S GOURMET: Seeks to Hire Lionel E. Giron as Counsel VIDEOMINING CORP: Seeks to Hire Ocean Tomo as Broker VYCOR MEDICAL: Fountainhead Capital Increases Equity Stake to 59% W&T OFFSHORE: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. YS GARMENTS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. ZPOWER TEXAS: Seeks to Hire Munsch Hardt Kopf as Counsel [*] Fitch Places 15 Hospital Ratings on Watch Neg. Amid Coronavirus [^] BOND PRICING: For the Week from April 6 to 10, 2020 ********* AFFORDABLE BUILDING: Seeks to Hire Gackle Tax as Accountant ----------------------------------------------------------- Affordable Building Systems, LLC, and Strawmen, LP, seek approval from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Gackle Tax LLC to substitute as their accountant. Pre-petition, the Debtors used Max Bryant of Max Bryant, Inc. PC, as their accountant, but he died. Boyd D. Gackle, CPA, of Gackle Tax will provide general accounting services, including bookkeeping, federal and state tax reports and returns preparation, as needed. Mr Gackle assures the court that his firm represents no interest adverse to the Debtors or their estates in the matters upon which it to be engaged. Gackle Tax's hourly rates are: Boyd D. Gackle $300 CPA associates $200 Staff preparer $125 Bookkeeping services $ 75 Administrative & secretarial $ 75 The firm can be reached through: Boyd D. Gackle, CPA, CGMA Gackle Tax, LLC 600 E. Taylor St., Suite 310 Sherman, TX 75090 Phone: 214-460-7986 About Affordable Building Affordable Building Systems, LLC, doing business as Durra Building Systems, sought Chapter 11 protection (bankr. E.D. Tex. Case No. 11-43655) on Dec. 5, 2011. In the petition signed by John Parker Burg, president, the Debtor estimated assets and liabilities at $1 million to $10 million. The Debtor tapped the Law Office of Donald Johnston as its legal counsel; Melvyn A. Wittmaack as accountant; and Bonds Ellis Eppich Schafer Jones LLP as special counsel. AIRSCEL INC: Moody's Cuts CFR to Caa2, Outlook Negative ------------------------------------------------------- Moody's Investors Service downgraded its ratings for Airxcel, 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 the ratings for its senior secured first lien bank credit facility (to Caa2 from B3) and second lien term loan (to Ca from Caa2). The ratings outlook is negative. The following rating actions were taken: Downgrades: Issuer: Airxcel, Inc. Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa2 (LGD3) from B3 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Ca (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: Airxcel, Inc. Outlook, Changed to Negative from Stable "The downgrades reflect its expectation that the decline in recreational vehicle shipments will be more pronounced amid the COVID-19 crisis and weaker economic outlook, and that this will exert significant pressure on Airxcel's earnings and liquidity in FY2020," says Shirley Singh, Moody's lead analyst for Airxcel. Consumer appetite for high-priced discretionary spend is expected to contract over the coming quarters, which will hurt RV sales and in turn reduce demand for Airxcel products. Moody's expects the fall in earnings to erode liquidity, increasing the company's financial risk given its already high adjusted debt-to-EBITDA (leverage) of between 6.5x and 7.5x. 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 is exposed to the shock given its sensitivity to consumer demand and market 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 Airxcel of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. RATINGS RATIONALE Airxcel's Caa2 CFR broadly reflects the relatively aggressive financial policies by which the company is governed (as evidenced by its high leverage, in part driven by its history of debt-financed acquisitions) and which is compounded by its modest scale, high customer concentration and significant exposure to the cyclical RV market. Moody's expects the company's sales to drop in FY2020, which will exert significant pressure on its earnings and cash flow. Even so, the company's aftermarket presence supporting an installed base of 9 million RV's could moderate earnings volatility, to a certain extent. The rating is also supported by the company's strong market position. The negative outlook reflects the risk that declining RV demand will accelerate and lead to a more pronounced downturn that results in higher leverage and weaker liquidity provisions for the company, including increased ABL reliance and negative free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Airxcel's end-markets and/or economic conditions stabilize, earnings and free cash flow remain positive, adjusted debt/EBITDA is sustained below 7.0x and EBITA/interest is sustained above 1.0x. The ratings could be downgraded if the company's revenue and earnings continue to decline, causing further weakness in liquidity including increased cash consumption and revolver usage such that default risk rises further. Headquartered in Wichita, Kansas, Airxcel manufactures products such as air conditioning and ventilation systems, furnaces, water heaters, window coverings and roofing membranes for RV's. The company also manufactures specialty air conditioners, environmental control units and heat pumps for the telecommunications, education and multi-tenant housing end markets. Airxcel is owned by financial sponsor L Catterton. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. AKORN INC: Rao Akella Reduces Stake to 9.3% ------------------------------------------- Rao Akella disclosed in an amended Schedule 13D filed with the Securities and Exchange Commission that as of April 2, 2020, he beneficially owns 11,733,445 shares of common stock of Akorn, Inc., which represents 9.3 percent. Based on Akorn's Annual Report on Form 10-K filed for the year ended Dec. 31, 2019, there were 126,246,012 shares of common stock outstanding as of Feb. 18, 2020. From March 23, 2020 through April 6, 2020, Mr. Akella sold a total of 3,360,614. A full-text copy of the regulatory filing is available for free at: https://is.gd/Y8ibsU About Akorn Headquartered in Lake Forest, Illinois, Akorn, Inc. -- http://www.akorn.com/-- is a specialty pharmaceutical company engaged in the development, manufacture and marketing of multi-source and branded pharmaceuticals. Akorn has manufacturing facilities located in Decatur, Illinois; Somerset, New Jersey; Amityville, New York; Hettlingen, Switzerland and Paonta Sahib, India that manufacture ophthalmic, injectable and specialty sterile and non-sterile pharmaceuticals. Akorn reported a net loss of $226.8 million for the year ended Dec. 31, 2019, compared to a net loss of $401.91 million on $694.02 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.28 billion in total assets, $1.05 billion in total liabilities, and $234.29 million in total shareholders' equity. BDO USA, LLP, in Chicago, Illinois, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Feb. 26, 2020, citing that the Company has suffered recurring losses from operations and has a net working capital deficiency that raise substantial doubt about its ability to continue as a going concern. * * * As reported by the TCR on Feb. 24, 2020, Moody's Investors Service downgraded the ratings of Akorn, Inc. including the Corporate Family Rating to Caa3 from Caa1. The downgrade reflects the high risk of a near-term bankruptcy filing by Akorn, given its ongoing litigation and $845 million term loan maturity in April 2021. Also in February 2020, S&P Global Ratings lowered its issuer credit rating on Akorn Inc. to 'CCC-' from 'B-' with negative outlook. The negative outlook reflects the increasing possibility that Akorn will file for Chapter 11 protection under the U.S. Bankruptcy Code in the next six months to facilitate repayment of its outstanding debt. AL YEGA: Seeks to Hire Douglas Elliman as Real Estate Broker ------------------------------------------------------------ Al Yega LLC seeks authority from the US Bankruptcy Court for the Southern District of New York to employ Douglas Elliman Real Estate as its real estate broker for the sale of its property located at 435 First St., Mineola, NY 11501. Douglas Elliman will perform all broker services for a fixed fee of no greater than 4 percent of the sale price of the property. In the event a third-party broker introduces a buyer who becomes the successful purchaser, Douglas Elliman will split its fee 50-50, with 2 percent to the third-party broker and 2 percent to the firm. Louis Fisher, agent with Douglas Elliman, attests that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The broker can be reached through: Louis Fisher Douglas Elliman Real Estate 1772 East Jericho Turnpike Huntington, NY 11743 Tel: 631-549-4400 About Al Yega LLC Al Yega LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Al Yega LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code () on Feb. 10, 2020. In the petition signed by Albert Yeganeh, member,the Debtor estimated $1 million to $10 million in both assets and liabilities. Robert J. Spence, Esq. at Spence Law Office, P.C. represents the Debtor as counsel. ALPHATEC HOLDINGS: Expects Q1 Revenue of $29.6M to $30M ------------------------------------------------------- Alphatec Holdings, Inc., announced preliminary total revenue of $29.6 million to $30.0 million and U.S. revenue of $28.7 million to $29.0 million for the first quarter ended March 31, 2020, and provided a business update on its response to the COVID-19 pandemic. Preliminary, unaudited first quarter 2020 results reflect U.S. revenue growth of 25% to 26%. The growth was largely driven by the continuing rapid adoption of recently released ATEC technologies (launched since 2018), with new product sales growing to over 55% of U.S. revenue. "I am inspired by the commitment and resolve demonstrated by the ATEC Family and our customers in delivering strong results despite facing obvious challenges in the final month of the quarter," said Pat Miles, chairman and chief executive officer. "The unprecedented pandemic presents near-term uncertainties, but we have built this company to overcome adversity through extreme focus. We will remain fixated on stewarding better spine surgery through innovation. We know that spine procedures deemed elective in the context of this pandemic will return; there are still patients suffering whose needs can only be adequately addressed with surgical intervention. We will be ready. I am confident that once this global crisis is behind us, ATEC will continue to march forward as spine's most innovative company." The preliminary results are unaudited and therefore subject to change. The Company expects to announce first quarter financial and operating results on May 7, 2020, after market close. Business Update The novel coronavirus has forced ATEC employees to change the way they do business. The California-based Company has been operating under strict social distancing and stay-at-home requirements since March 15, 2020, operating with minimal employee presence in the workplace. Despite this, the Company continues to work closely with its surgeon customers, sales channel agents and supply chain partners to navigate the operational challenges, support necessary procedures, preserve upcoming product releases and build inventory to capably support the increased number of cases expected once restrictions have been lifted following the pandemic. ATEC intends to prioritize and advance its product development programs to ensure that its pipeline of core new technology continues to move forward largely unabated by the economic disruptions; however, the full duration and impact of current environmental factors cannot yet be accurately determined. In the meantime, ATEC employees are facing the uncertainty by embracing the Company's familial culture and supporting each other, personally and professionally. This includes participation in a voluntary salary-to-equity conversion program, through which ATEC leadership preserved over $750,000 in cash compensation in the second quarter to support payroll protection for hourly and underemployed salaried colleagues. It also engendered a sick time "donation" program, whereby ATEC employees forfeited 40 weeks of accrued sick time to be pooled and used by fellow employees deemed unable to work. "I am exceptionally proud of the entire ATEC extended family," added Miles. "A crisis tests organizational character, demonstrating whether a company's culture is congruent with its actions, or merely a collection of consultant buzzwords. I know our teams are 'all in', not because of the words they use, but because of their actions. We are rising to the challenge and remain completely focused on our strategic priorities. The profound confidence demonstrated by ATEC leadership in voluntarily sacrificing a significant percentage of their cash compensation in the second quarter is both humbling and inspiring, as is the donation of hundreds of hours of paid time by ATEC team members for use by fellow employees in need. The ATEC family is fully committed to support our customers over the long term through the perseverance of our mission to revolutionize the approach to spine surgery with the Organic Innovation Machine we have created." As a result of hospitals globally postponing elective procedures to preserve capacity for COVID-19 patients, ATEC is suspending its previously announced 2020 revenue guidance. Following a strong start to the year, revenue will be materially impacted by the pandemic in the near term. While spine surgeries will not be postponed indefinitely, the Company cannot yet determine the extent or duration of those deferrals, nor the requirements or the timing of the recovery once operating room and other pandemic-related constraints have been lifted. ATEC expects to provide an updated outlook as more information becomes available. Balance Sheet Update To extend its cash runway, the Company completed a draw of $20.0 million under its credit facility with Squadron Medical Finance Solutions LLC on April 2, 2020. Including the draw, the Company's preliminary pro forma cash balance at March 31, 2020, was approximately $47.5 million. "We appreciate the continued support from Squadron," said Jeff Black, chief financial officer. "As we remain intensely focused on managing cash burn, particularly during this global pandemic, this injection of capital reinforces our balance sheet." "We believe that ATEC is the best-led and most highly focused pure-play spine company in the industry," said David Pelizzon, President of Squadron Capital. "Our long-term support remains steadfast." To supplement its cash balance, the Company is in the process of submitting an application under the recently enacted Coronavirus Aid, Relief, and Economic Security Act administered by the U.S. Small Business Administration. Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. The Paycheck Protection Program and loan forgiveness are intended to provide economic relief to small businesses such as ATEC, that are adversely impacted under the Coronavirus Disease 2019 (COVID-19) Emergency Declaration (COVID-19 Emergency Declaration) issued by President Trump on March 13, 2020. About Alphatec Holdings, Inc. Alphatec Holdings, Inc. (ATEC) (www.atecspine.com), through its wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC architects and commercializes approach-based technology that integrates seamlessly with the SafeOp Neural InformatiX System to provide real-time, objective nerve information that can enhance the safety and reproducibility of spine surgery. Alphatec reported a net loss of $57 million for the year ended Dec. 31, 2019, compared to a net loss of $28.97 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $169.95 million in total assets, $36.39 million in total current liabilities, $53.45 million in long-term debt, $925,000 in operating lease liability, $11.95 million in other long-term liabilities, $23.60 million in redeemable preferred stock, and $43.63 million in total stockholders' equity. AMAZING ENERGY: Needs Additional Funds to Remain as Going Concern ----------------------------------------------------------------- Amazing Energy Oil and Gas, Co., filed its quarterly report on Form 10-Q, disclosing a net loss of $1,759,927 on $248,962 of total revenue for the three months ended Jan. 31, 2020, compared to a net loss of $1,327,233 on $95,803 of total revenue for the same period in 2019. At Jan. 31, 2020, the Company had total assets of $14,626,381, total liabilities of $15,726,381, and $1,100,000 in total stockholders' deficit. Amazing Energy said, "The Company has incurred operating losses since inception. As of January 31, 2020, the Company has limited financial resources with which to achieve its objectives to obtain profitability and positive cash flows. At January 31, 2020, the Company has an accumulated deficit of US$44,880,630 and a working capital deficit of US$7,047,377. Achievement of the Company's objectives will be dependent upon the Company's ability to obtain additional financing, to locate profitable oil and gas properties and to generate revenue from current and planned business operations, and control costs. The Company plans to fund its future operations by joint venturing, obtaining additional financing from investors, and/or lenders, and attaining additional commercial production. However, there is no assurance that the Company will be able to achieve these objectives, therefore substantial doubt as to its ability to continue as a going concern exists. Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods, there can be no assurances that such methods will prove successful. The financial statements do not include adjustments relating to the recoverability of recorded assets nor the implications of associated bankruptcy costs should the Company be unable to continue as a going concern." A copy of the Form 10-Q is available at: https://is.gd/ppSc7Y Amazing Energy Oil and Gas, Co. engages in the exploration, development, and production of oil and gas in Texas, the United States. In addition, the company provides oilfield services to oil and gas well owners. Amazing Energy Oil and Gas, Co. is headquartered in Plano, Texas. AMERICA-CV STATION: Empire State Objects to Plan & Disclosures -------------------------------------------------------------- ERST Empire State Building, LLC, objects to final approval of the Joint Disclosure Statement and to confirmation of Plan of Reorganization proposed by America-CV Station Group, Inc., Caribevision Holdings, Inc., America-CV Network, LLC, and Caribevision TV Network, LLC. In its objection, ERST points out that: * The Disclosure Statement does not account for significant assets that were disclosed on the Debtors' bankruptcy schedules that could be used to fund distributions to the creditors. * The Disclosure Statement does not indicate how this property right to purchase the new equity was marketed in order to determine the true value of the equity interest. Empire State believes that the FCC licenses alone have a substantial value. Since the Plans and Disclosure Statement were filed within the exclusivity period, Creditors were essentially blocked from competing for this new equity interest. * The Plans do not provide for interest on the general unsecured claims until paid in full but does provide for interest to be paid to old equity. * The Plan, as filed by America-CV Station Group reserves to the Debtor the right to seek cram down of the Plan, but a review of the structure of the Plan, reflects that cram down is not available. A full-text copy of Empire State's objection dated March 27, 2020, is available at https://tinyurl.com/wssgd54 from PacerMonitor at no charge. Attorneys for the Creditor: BEHAR, GUTT & GLAZER, P.A. Brian S. Behar Robert J. Edwards DCOTA, Suite A-350 1855 Griffin Road Fort Lauderdale, Florida 33004 Telephone: (305) 931-3771 E-mail: bsb@bgglaw.com E-mail: redwards@bgglaw.com About America-CV Station Group America-CV Station Group, Inc. is a privately held company primarily in the television station ownership and program production business. It provides broadcasting services. America-CV and affiliate Caribevision Holdings, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 19-16355 and 19-16359) on May 14, 2019. On May 28, 2019, America-CV Network, LLC and Caribevision TV Network, LLC also filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 19-16976 and 19-16977). The cases are jointly administered under Case No. 19-16355). At the time of the filing, each of the Debtors disclosed assets of $10 million to $50 million and liabilities of $1 million to $10 million. Judge Jay A. Cristol oversees the cases. The Debtors tapped Genovese Joblove & Battista, P.A. as their bankruptcy counsel, and Fletcher, Heald & Hildreth, P.L.C. as Genovese's co-counsel. On Feb. 26, 2020, the Debtors filed a Chapter 11 plan of reorganization and disclosure statement. AMERICAN CENTER: Brewer and Leydet Object to Disclosure Statement ----------------------------------------------------------------- Richard Paul Brewer and Joyce Louise Leydet submitted a limited objection and reservation of rights with respect to the Disclosure Statement describing Chapter 11 Plan proposed by debtor The American Center for Civil Justice, Inc. In their objection, the Claimants assert that: * In the Brewer Claims, Claimants allege that, due to actions and/or inaction of the Debtor and ACCJ-RLT and their agents, Claimants were not able to share in the Clearstream Fund and lost other avenues of recovery with respect to collecting the Judgment. * Although significant progress was made toward a resolution, especially in connection with a settlement conference conducted among counsel to the Claimants and the Debtor, ACCJ-RLT, and their counsel on October 24, 2018, the final terms of a resolution acceptable to the Claimants have not yet been reached. * The Claimants object to the Proposed Disclosure Statement and Proposed Plan to the extent that these documents incorporate a negotiated treatment that has not been agreed to by Claimants. To the extent the Proposed Disclosure Statement and the projections contained in it are based on the terms of the Debtors’ proposal to the Claimants, they may be misleading. * Moreover, the Claimants reserve their right to object to the treatment provided to them in the Proposed Plan, to vote against the Proposed Plan, and to respond to the ACCJ Claims Objections. A full-text copy of Brewer & Leydet's objection dated March 27, 2020, is available at https://tinyurl.com/ru5wxvy from PacerMonitor at no charge. Counsel for Claimants: BECKER LLC 354 Eisenhower Parkway Eisenhower Plaza Two, Suite 1500 Livingston, New Jersey 07039 Tel: (973) 422-1100 J. ALEX KRESS, ESQ. E-mail: akress@becker.legal About American Center for Civil Justice American Center for Civil Justice, Inc., is a tax-exempt organization that provides legal services. The organization defends human and civil rights by advocating and aiding lawsuits by victims of oppression, acts of violence and other injustices. American Center for Civil Justice filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No. 18-15691) on March 23, 2018. In the petition signed by Elie Perr, president, the company was estimated to have $10 million to $50 million in assets and liabilities. The Honorable Christine M. Gravelle oversees the case. Timothy P. Neumann, Esq., of Broege, Neumann, Fischer & Shaver LLC, is the Debtors' counsel. ASCENA RETAIL: Wendy Hufford Quits as SVP, General Counsel & Secy. ------------------------------------------------------------------ Wendy Hufford, senior vice president, general counsel and corporate secretary, and a named executive officer, departed from Ascena Retail Group, Inc. on April 10, 2020. Upon execution and non-revocation of a separation agreement and general release with the Company, Ms. Hufford will be entitled to severance benefits under the Company's Executive Severance Plan. About Ascena Retail Ascena Retail Group, Inc. (Nasdaq: ASNA) -- http://www.ascenaretail.com/-- is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. As of Feb. 1, 2020, the Company had $3.07 billion in total assets, $2.99 billion in total liabilities, and $76.6 million in total equity. * * * As reported by the TCR on March 20, 2020, S&P Global Ratings raised its issuer rating on Ascena Retail Group Inc. to 'CCC-' from 'SD' and maintained the 'D' rating on the term loan due August 2022. "The rating action reflects our view of the likelihood of a conventional default or a broad-based restructuring of Ascena's capital structure in the next six months. Our opinion considers the company's unsustainable capital structure, its still significant debt burden following the repurchases, and our expectation for weak performance amid a highly challenging operating environment. The rating also reflects our view that the recent coronavirus outbreak in the U.S. will further pressure store traffic and limit conventional refinancing prospects," S&P said. In October 2019, Moody's Investors Service downgraded Ascena Retail Group, Inc.'s corporate family rating to Caa2 from B3, probability of default rating to Caa2-PD from B3-PD and senior secured term loan rating to Caa2 from B3. The downgrades reflect Moody's view that Ascena's capital structure is likely unsustainable as a result of its weak operating performance, high leverage, and negative free cash flow, creating an elevated risk of a debt restructuring including a material debt repurchase at a significant discount. BERRY PETROLEUM: S&P Lowers ICR to 'B-' on Lower Commodity Prices ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Berry Petroleum Corp. to 'B-' from 'B'. S&P also lowered its issue-level rating on the company's senior unsecured notes due 2026 to 'B' from 'B+'. The '2' recovery rating on these notes reflects S&P's expectation of a substantial (70%-90%, rounded estimate: 85%) recovery in the event of a payment default. "The lower rating reflects our forecast that Berry Petroleum Corp.'s credit metrics will weaken in 2021, including funds from operations (FFO) to debt falling below 20% and debt to EBITDA rising above 4x. Although we expect Berry's debt metrics to remain solid at yearend 2020 due to strong hedges and a sharp reduction in capital spending and dividends, we believe debt ratios and liquidity could deteriorate rapidly in 2021 if oil prices remain weak. In particular, the company's high breakeven cost at about $45 per barrel (Brent-based), makes the company very vulnerable to a sustained slump in oil prices," S&P said. The negative outlook reflects S&P's expectation that credit metrics will deteriorate next year due to lower production and lack of hedges. The rating agency forecasts that debt to EBITDA will exceed 4x and FFO to debt will fall to below 20% next year under its price assumptions. "We could lower the rating if we believe Berry's leverage is unsustainable, or if we believe the company depends on favorable business conditions to meet its financial obligations. This would most likely occur if commodity prices remain depressed for longer than we expect," S&P said. "We could raise our rating on Berry if we expect the company to maintain adequate liquidity, with FFO to debt above 30% and debt to EBITDA below 3x on a sustained basis. This would most likely be due to a recovery in oil prices," the rating agency said. BLACKRIDGE TECHNOLOGY: Hires Harris Law Practice as Counsel ----------------------------------------------------------- Blackridge Technology International seeks approval from the United States Bankruptcy Court for the District of Nevada to hire Harris Law Practice LLC as its counsel. Blackridge requires Harris Law Practice to: a. assist in the examination and preparation of records and reports as required by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rules; b. prepare applications and proposed orders to be submitted to the Court; c. identify and prosecute claims and causes of action assertable by the Debtor on behalf of the estate; d. examine of proofs of claim anticipated to be filed and the possible prosecution of objections to certain of such claims; e. advise the Debtor and prepare documents in connection with the contemplated ongoing operations of the Debtor's business, if any; f. assist and advise the Debtor in performing other official functions as set forth in Section 521, et seq., of the Bankruptcy Code; and g. advise and prepare a Plan of Reorganization, Disclosure Statement and related documents and confirmation of said Plan. Harris Law Practice will be paid at these hourly rates: Stephen R. Harris $550 Paraprofessionals $150 to $300 An advance retainer of $20,000 was paid by John Hayes, a current director of the Debtor, in addition to a $5,000 advance retainer payment paid by John Kosowsky, a former board member of the debtor. Harris Law Practice will also be reimbursed for reasonable out-of-pocket expenses incurred. Stephen R. Harris, a partner at Harris Law Practice, 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. Harris Law Practice can be reached at: Stephen R. Harris, Esq. Harris Law Practice LLC 6151 Lakeside Dr, Ste 2100 Reno, NV 89511 Tel: (775) 786-7600 Fax: (775) 786-7764 Email: steve@harrislawreno.com About Blackridge Technology International Blackridge Technology International develops, markets, and supports a family of products that provide a next generation cyber security solution for protecting enterprise networks and cloud services. Blackridge Technology International filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 20-50314) on March 13, 2020. In the petition signed by Robert J. Graham, president, the Debtor estimated $10 million to $50 million in both assets and liabilities. Stephen R. Harris, Esq. at Harris Law Practice LLC is the Debtor's counsel. BLUE SKY EVENTS: Seeks to Hire Bankruptcy Attorney -------------------------------------------------- Blue Sky Events LLC seeks authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire a bankruptcy attorney. The Debtor proposes to employ John Forest II, Esq., to give legal advice with respect to its powers and duties and to provide all other legal services which may be necessary to advance its Chapter 11 case to a conclusion. The attorney will be employed under a general retainer at the standard rate of $325 per hour. Mr. Forest assures the court that he does not hold interests adverse to the estate of the Debtor or any other party in interest, including the Office of the U.S. Trustee or individuals he employs. Mr. Forest can be reached at: John P. Forest, II, Esq. 11350 Random Hills Rd., Suite 700 Fairfax, VA 22030 Tel: (703) 691-4940 Email: john@forestlawfirm.com About Blue Sky Events LLC Blue Sky Events LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 20-10683) on March 3, 2020, listing under $1 million in both assets and liabilities. John P. Forest, II, Esq. is the Debtor's counsel. BODY RENEW: Seeks to Hire Rulien & Associates as Accountant ----------------------------------------------------------- Body Renew Alaska, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Alaska to hire Rulien & Associates, LLC as its accountant. The primary tasks Rulien will provide include the preparation of tax returns and advice on budgeting and financial projects in connection with Debtor's Chapter 11 case but the firm will also provide general bookkeeping services. The firm will be paid a flat fee of $3,000 per month. Rulien does not represent any interest adverse to Debtor's bankruptcy estate, according to court filings. The firm holds office at: Rulien & Associates, LLC 810 N Street, Suite 301 Anchorage, AK 99501 Phone: (907) 272-1421 E-mail: info@rulien.com About Body Renew Alaska Body Renew Alaska, LLC -- https://bodyrenewalaska.com/ -- is a physical fitness company offering personal training, group fitness classes, weight loss programs, and nutritional counseling. Body Renew Alaska, LLC, filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr D. Alaska Case No. 20-00075) on March 6, 2020. In the petition signed by Brian Horschel, owner and manager, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Gary Spraker oversees the case. Debtor tapped David H. Bundy, P.C. as its legal counsel, and Rulien & Associates, LLC as its accountant. BOY SCOUTS: Court Stays Odean Banks' Sexual Abuse Lawsuit --------------------------------------------------------- District Judge Brian M. Cogan stays the case captioned ODEAN BANKS, Plaintiff, v. BOY SCOUTS OF AMERICA and BOY SCOUTS OF AMERICA, Pack 494, Defendants, No. 20-cv-0878 (BMC) (E.D.N.Y.) pending further order of the District Court for the District of Delaware. Plaintiff brought the action in the Supreme Court for the State of New York, Kings County, against defendants, Boy Scouts of America and BSA, Pack 494, alleging that he was sexually abused by a BSA Scoutmaster many years ago. Defendants' notice of removal alleges that the action is one of more than 274 similar civil actions currently pending in various state and federal courts across the country that assert personal injury tort claims against the BSA and other co-defendants arising from the alleged abuse of children. It further asserts that on Feb. 18, 2020, the BSA and Delaware BSA, LLC, an affiliated non-profit corporation, each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Defendants removed this case under 28 U.S.C. secctio 1452(a), invoking this Court's bankruptcy jurisdiction under 28 U.S.C. section 1334(b). The notice of removal also recites that defendants have filed a nationwide transfer motion in the United States District Court for the District of Delaware under 28 U.S.C. section 157(b)(5), seeking an order from that court transferring all of the abuse claims to that district. That seems highly likely to be granted since it would be inimical to the Chapter 11 process to require the debtors to litigate 274 personal injury claims in nearly as many courts across the country. Accordingly, the Court ordered plaintiff to show cause why the Court should not transfer the case to the District of Delaware rather than awaiting a disposition of the nationwide transfer motion. Notwithstanding plaintiff's failure to respond to the Order to Show Cause, the Court concludes that the appropriate remedy is to stay this action pending disposition of the nationwide transfer motion by the Delaware District Court. Section 362(a)(1) of the Bankruptcy Code, 11 U.S.C. section 362(a)(1), makes it clear that the automatic stay applies to this action, and Section 157(b)(5) of the Judicial Code, 28 U.S.C. section 157(b)(5), makes it equally clear that it is within the discretion of the district court where the Chapter 11 case is pending to determine whether personal injury cases like this one should be tried in the venue in which they were commenced or where the Chapter 11 case is pending. A copy of the Court's Memorandum Decision and Order dated March 3, 2020 is available at https://bit.ly/39xdBGR from Leagle.com. Odean Banks, Plaintiff, represented by Scott Rynecki , Rubenstein & Rynecki. Boy Scouts of America, Defendant, represented by John Anthony Anselmo -- John.Anselmo@lewisbrisbois.com -- Lewis Brisbois Bisgaard & Smith. About the Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets at least $500 million in liabilities as of the bankruptcy filing. The Debtors tapped SIDLEY AUSTIN LLP as general bankruptcy counsel; MORRIS, NICHOLS, ARSHT & TUNNELL LLP as Delaware counsel; and ALVAREZ & MARSAL NORTH AMERICA, LLC as financial advisor. OMNI AGENT SOLUTIONS is the claims agent. BRASSERIE FELIX: Seeks to Hire Morrison Tenenbaum as Counsel ------------------------------------------------------------ Brasserie Felix Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Morrison Tenenbaum, PLLC as its legal counsel. Morrison Tenenbaum will render these professional services: a. advising the Debtor with respect to its powers and duties in the management of its estate; b. assisting in any amendments of schedules and other financial disclosures and in the preparation, review or amendment of a disclosure statement and plan of reorganization; c. negotiating with creditors and taking the necessary legal steps to confirm and consummate a plan of reorganization; d. preparing legal papers; e. appearing before the bankruptcy court; and f. performing all other legal services for the Debtor that may be necessary and proper for an effective reorganization. Morrison Tenenbaum will be compensated at the following hourly rates: Lawrence F. Morrison $525 Brian J. Hufnagel $425 Associates $380 Paraprofessionals $200 Morrison Tenenbaum will also be reimbursed for all out-of-pocket disbursements. Before the petition date, the firm received a retainer fee in the amount of $15,000. Lawrence Morrison, Esq., at Morrison Tenenbaum, disclosed in court filings that his firm is a "disinterested party" within the meaning of Sections 101(14) and 327 of the Bankruptcy Code. The firm may be reached through: Lawrence F. Morrison, Esq. Brian J. Hufnagel, Esq. Morrison Tenenbaum PLLC 87 Walker Street, Floor 2 New York, New York 10013 Email: lmorrison@m-t-law.com bjhufnagel@m-t-law.com About Brasserie Felix Inc. Brasserie Felix Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-40362) on Jan. 21, 2020, listing under $1 million in both assets and liabilities. Morrison Tenenbaum, PLLC represents the Debtor as counsel. BYRDLAND PROPERTIES: Seeks to Hire Mann Conroy as Legal Counsel --------------------------------------------------------------- Byrdland Properties, LLC, seeks approval from the U.S. Bankruptcy Court for the Western District of Missouri to hire Mann Conroy, LLC as its legal counsel. The firm will advise Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm's hourly rates range from $95 to $275. It received a retainer from Debtor in the amount of $20,000 and the filing fee of $1,717. Mann Conroy does not represent any interest materially adverse to Debtor and its bankruptcy estate, according to court filings. The firm can be reached through: Robert S. Baran, Esq. Larry A. Pittman II, Esq. Mann Conroy, LLC 1316 Saint Louis Ave., 2nd Floor Kansas City, Missouri 64101 Tel: (816) 210-9680 (816) 616-5009 Fax: (816) 817-6023 E-mail: rbaran@conroybaran.com lpittman@conroybaran.com About Byrdland Properties Byrdland Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 20-40571) on March 12, 2020. At the time of the filing, Debtor was estimated to have assets of less than $50,000 and liabilities of less than $50,000. Judge Brian T. Fenimore oversees the case. Mann Conroy, LLC is Debtor's legal counsel. CARR CREATIVE: Bankr. Administrator Unable to Appoint Committee --------------------------------------------------------------- The U.S. Bankruptcy Administrator for the Eastern District of North Carolina on April 6 disclosed in a filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Carr Creative Corporation. About Carr Creative Corporation Carr Creative Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. N.C. Case No. 20-01078) on March 11, 2020. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $500,001 and $1 million. Judge David M. Warren oversees the case. Butler & Butler, L.L.P is Debtor's legal counsel. CARTER'S INC: S&P Alters Outlook to Negative, Affirms 'BB+' ICR --------------------------------------------------------------- S&P Global Ratings revised its outlook to negative from stable and affirmed all of its ratings on U.S.-based babies and young children apparel seller Carter's, Inc., including its 'BB+' issuer credit rating and the 'BB+' issue-level rating on the company's unsecured notes. Unprecedented store closures to contain the spread of the COVID-19 in the U.S. and a subsequent recession could significantly hurt the company's revenue and profit. Carter's, Inc. closed all of its retail stores in the U.S. and Canada beginning March 19, 2020. U.S. retail accounted for 53.5% of the company's total net sales in 2019. "Though the company's own digital channel, its key online wholesale customer Amazon, and most of its major big-box wholesale customers such as Walmart, Target, and Costco remain open, we believe sales to those channels will also be affected because consumer demand for nonessential products will be weak due to the economic fallout from the COVID-19 pandemic. We forecast that the company could see revenue decline by mid-teens in 2020, and its leverage could exceed 3x. We currently believe that recovery for Carter's would be faster than its apparel peers because babies and young children outgrow clothes very quickly. Parents will need to replenish and newborns will continue to add to demand." This would likely return leverage to below 3x in 2021. However, a prolonged and deeper recession could lessen demand for Carter's products as income-strapped parents look for secondhand children's clothing or cheaper alternatives, possibly keeping leverage above 3x in 2021," S&P said. The negative outlook reflects heightened uncertainty regarding the impact of the COVID-19 pandemic and a recession in the U.S. and Canada on Carter's credit metrics and cash flow generation capabilities. Prolonged store closures in North America, coupled with a slowdown in consumer spending, could push out the company's ability to recover operationally to near-historical levels. "We could lower our rating if Carter's operating performance is affected for a prolonged period by store closures or a recession and adjusted leverage is sustained above 3x in 2021. Additionally, we could also lower our rating if Carter's experiences a liquidity issue such as a covenant breach that it cannot amend," S&P said. "We could revise the outlook to stable if Carter's can weather the pandemic and we believe the company can restore profitability to near current levels, enabling it to restore credit metrics including leverage below 3x in 2021," the rating agency said. CAV INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: CAV, Inc. d/b/a CareAVan, Inc. 5931 Sea Lion Place Suite 110 Carlsbad, CA 92010 Business Description: CAV Inc. is a transportation services provider in Carlsbad, California. See: http://www.cavtransportation.com/ Chapter 11 Petition Date: April 9, 2020 Court: United States Bankruptcy Court Southern District of California Case No.: 20-01932 Debtor's Counsel: Bruno Flores, Esq. LAW OFFICES OF BRUNO FLORES, APC 2794 Gateway Road Carlsbad, CA 92009 Tel: (760) 448-2222 E-mail: bruno@brunoflores.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Richard Dripps, president. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/nb3RiH CENTRAL GARDEN: Egan-Jones Lowers Senior Unsecured Ratings to B- ---------------------------------------------------------------- Egan-Jones Ratings Company, on March 24, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Central Garden & Pet Company to B- from B+. EJR also downgraded the rating on commercial paper issued by the Company to B from A3. Central Garden & Pet Company is a marketer and producer of branded products and distributors of third-party products in the pet and lawn and garden supplies industries in the United States. The Company operates in two segments: The pet segment and the Garden segment. CENTURYLINK INC: Fitch Affirms BB LongTerm IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings affirmed CenturyLink, Inc. and its subsidiaries at 'BB' with Stable Outlooks. This affirmation primarily reflects progress in reducing debt, realizing merger synergies following the merger with Level 3 Communications, Inc. in late 2017, and additional cost reduction plans implemented in 2019. Fitch's base case assumption reflects further debt reduction over the next few years as the company executes on debt-reduction plans. KEY RATING DRIVERS Prioritization of Debt Reduction: CenturyLink reduced its common dividend in February 2019, cutting the annual dividend payments to approximately $1.08 billion from $2.30 billion. The resulting additional annual FCF of more than $1.2 billion stemming from the reduction is being directed to a faster pace of debt repayment over a three-year period. The company also announced a commitment to a lower and narrower net target leverage range. Over the next few years, the company is targeting a net debt/adjusted EBITDA leverage range of 2.75x-3.25x, down from a previous target range of 3.0x-4.0x. Fitch is encouraged by the revised capital-allocation policies and believes this will better position the company in the long term. The company reduced net debt by approximately $2 billion in 2019, on track relative to the company's original guidance for 2019-2021. However, the coronavirus pandemic is leading to a downturn of unknown depth and duration, and the company's operations are likely to begin to be affected in 2Q20. The initial responses to the pandemic with respect to shelter-in-place policies brought about a sharp increase in demand for connectivity for work-at-home, remote learning and home entertainment, as well as increases on the part of enterprises for business continuity. Over time, the positive effects are likely to be offset by economic weakness given the rise in unemployment that has been pronounced in a number of sectors. With respect to the macroeconomic effects of the coronavirus pandemic, Fitch believes the telecom sector, including CenturyLink, will be more resilient to a downturn than other sectors, with the potential for modest declines in revenue. Fitch expects CenturyLink to continue to benefit from cost-reduction programs initiated in 2019 following the early achievement of synergies from the Level 3 merger. Fitch does not expect material reductions in capital spending, although there is likely to be a reduction in success-based capex spending as demand weakens. Fitch believes the company is likely to prioritize spending and to continue to invest in areas that will enhances its competitive position. Cost Reductions: Operational initiatives were set in motion in early 2019, targeting an annualized $800 million-$1 billion of additional EBITDA-improving initiatives in a three-year period at a cost of $450 million-$650 million. CenturyLink says it achieved a run rate of $430 million in annualized cost savings in 2019. CenturyLink indicated these initiatives, combined with the faster pace of debt reduction, will enable the company to get within its target range within three years. Execution Risk: Fitch believes the dividend-reduction and EBITDA-improvement initiatives signal support for the credit profile, although the EBITDA initiatives are not without execution risk. Fitch believes significant debt reductions are achievable, but there is some execution risk in reaching the full amount targeted by CenturyLink, as part of the sustained FCF will depend on successful execution of EBITDA-improvement initiatives. Alternatives for Consumer Business: CenturyLink disclosed in May 2019 it hired an advisor to consider strategic alternatives for its consumer segment. The company indicated on its 4Q19 call its review was completed, but the next step has not been disclosed. The consumer segment produces approximately one-quarter of the company's revenue. While alternatives are under review, Fitch does not expect any changes to the company's debt-reduction goals, operations or investments in the consumer segment. Key Competitor in Business Services: In an industry where scale is a key factor, CenturyLink is a large competitor and the second-largest operator serving business customers after AT&T Inc. (A-/Stable), and modestly larger than the business customer operations of Verizon Communications Inc. (A-/Stable). CenturyLink's network capabilities, in particular a strong metropolitan network, and a broad product and service portfolio emphasizing IP-based infrastructure and managed services, provide the company with a solid base to grow enterprise segment revenue. Secular Challenges Facing Telecoms: In Fitch's view, CenturyLink continues to face secular challenges similar to other wireline operators in the residential portion of its business. Following the acquisition of Level 3, the consumer business became a much smaller part of the overall business and accounts for approximately one-quarter of revenue, down from 35% in 2016. Fitch expects this percentage to continue to decline over time, given legacy revenue trends and a more targeted investment strategy in the segment. Parent-Subsidiary Relationship: Fitch linked the ratings of CenturyLink and Level 3 Parent based on strong operational and strategic ties. DERIVATION SUMMARY CenturyLink has a relatively strong competitive position based on the scale and size of its operations in the enterprise/business services market. In this market, CenturyLink has a moderately smaller position, in terms of revenue relative to AT&T, and is slightly larger than Verizon. All three companies have an advantage with national or multinational companies, given extensive footprints in the U.S. and abroad. CenturyLink also has a larger enterprise business that notably differentiates it from other wireline operators, such as Windstream Services, LLC and Frontier Communications Corporation (C). AT&T and Verizon maintain lower financial leverage, generate higher EBITDA margins and FCF, and have wireless offerings providing more service diversification compared with CenturyLink. FCF improved at CenturyLink due to the dividend reduction and cost synergies. CenturyLink has lower exposure to the secularly challenged residential market compared with wireline operators, Frontier and Windstream. Within the residential market, incumbent wireline operators face wireless substitution and competition from cable operators with facilities-based triple-play offerings, including Comcast Corp. (A-/Stable) and Charter Communications Inc. Fitch rates Charter's indirect subsidiary, CCO Holdings, LLC 'BB+'/Stable. Cheaper alternative offerings, such as voice over internet protocol and over-the-top video services, provide additional challenges. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer Include: -- Fitch assumes revenues will decline in the mid-single digits in 2020 owing to the effect of the coronavirus pandemic in 2Q20 and continuing into 3Q20 for most revenue segments, with small and medium businesses the slowest to recover over the forecast horizon. -- EBITDA margins are expected to be around 41% in 2020. Cost transformation improved the EBITDA margin in 2019 by 160bps; the improvement in 2020 is expected to be just over half that amount. EBITDA margins reach approximately 42% in 2021 and remain flat thereafter. Fitch's assumptions regarding additional cost savings approximate the midpoint of the $800 million-$1 billion range targeted by the company over 2019-2021, higher than Fitch's prior expectations given the $430 million annualized run-rate CenturyLink achieved exiting 2019. -- Fitch expects capex to be in line with the company's capex guidance of approximately $3.7 billion for 2020 and 2021, toward the lower end of company guidance of $3.6 billion-$3.9 billion. Fitch assumes some lower success-based capex owing to the expectations for the macroeconomic environment. -- FCF directed to delivering over the forecast horizon. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch expects gross leverage (total debt with equity credit/operating EBITDA) to remain at or below 3.0x (FFO leverage of 3.0x), while consistently generating positive FCF in the mid-single digits; -- Additionally, the company will need to demonstrate consistent EBITDA and FCF growth. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A weakening of CenturyLink's operating results, including deteriorating margins and consistent mid-single-digit or greater revenue erosion brought on by difficult economic conditions or competitive pressure the company is unable to offset through cost reductions; -- Discretionary management decisions, including but not limited to execution of M&A activity that increases gross leverage beyond 4.5x (FFO leverage of 4.5x) in the absence of a credible deleveraging plan. BEST/WORST CASE RATING SCENARIO Ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: CenturyLink's total debt as of Dec. 31, 2019, pro forma for refinancing transactions subsequent to the end of the quarter, was $33.7 billion (before finance leases, unamortized discounts, debt issuance costs and other). On the same basis, actual YE debt was $34.8 billion and readily available cash totaled approximately $1.7 billion. As described, the credit agreement was amended and restated in January 2020. The previous $2.17 billion senior secured revolving credit facility had $250 million drawn on the facility as of Dec. 31, 2019. CenturyLink made solid progress on its debt-reduction plans in 2019, reducing net debt by approximately $2 billion. On Jan. 15, 2020, Qwest Corporation redeemed all $850 million of 6.875% senior notes due 2033 and all $250 million of the outstanding 7.125% senior notes due 2043. The credit agreement was amended and restated on Jan. 31, 2020. The company prepaid $1.25 billion of the term loan B on Jan. 24, 2020 using proceeds from a $1.25 billion offering of 4.0% senior secured notes due 2027. The amended credit agreement now consists of a $1.166 billion Term Loan A facility, a $333 million Term Loan A-1 facility, a $5.0 billion Term Loan B facility and a $2.2 billion revolving credit facility (RCF). The Term Loan A, Term Loan A-1 and RCF maturity date was extended to Jan. 31, 2025 from Nov. 1, 2022, and the Term Loan B maturity was extended to March 15, 2027 from Jan. 31, 2025. CenturyLink's secured credit facility is expected to benefit from secured guarantees by Qwest Communications International, Inc. (QCII); Qwest Services Corporation; CenturyTel Investments of Texas, Inc.; and CenturyTel Holdings, Inc. A stock pledge is provided by Wildcat HoldCo, LLC, the parent of Level 3 Parent, LLC to the CenturyLink CTL credit facility. The credit facility is guaranteed on an unsecured basis by Embarq Corporation and Qwest Capital Funding, Inc. The largest regulated subsidiary, Qwest Corporation, does not guarantee CenturyLink's secured facility, nor does Level 3 Parent. The senior secured notes will be guaranteed by the same subsidiaries that guarantee the senior secured credit facilities and will be secured by the same collateral. CenturyLink Communications, LLC was released as a guarantor of the senior secured credit facility, which makes the notes pari passu with the credit facility. The secured RCF and Term Loan A limit CenturyLink's gross debt/EBITDA to no more than 4.75x. The current credit agreement requires cash interest coverage to be no less than 2.0x. In terms of repayment, the company is subject to an excess cash flow sweep of 50%, with step downs to 25% and 0%, at total leverage of 3.5x and 3.0x, respectively. The excess cash flow calculation provides credit for voluntary prepayments and certain other investments. Fitch estimates 2020 FCF, or cash flow from operations less capex and dividends, will be in the $1.8 billion-$2.0 billion range. Fitch's assumptions are modestly lower than CenturyLink's original 2020 post-dividend guidance of approximately $2.0 billion-$2.3 billion. The company indicated capex could range from $3.6 billion to $3.9 billion in 2020, with the low end of the range similar to the $3.63 billion spent in 2019. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. 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). Level 3 Parent, LLC - LT IDR BB; Affirmed Embarq Florida, Inc. - LT IDR BB; Affirmed - Senior secured; LT BBB-; Affirmed Level 3 Financing, Inc. - LT IDR BB; Affirmed - Senior unsecured; LT BB; Affirmed - Senior secured; LT BBB-; Affirmed Qwest Communications International Inc. - LT IDR BB; Affirmed Qwest Capital Funding, Inc. - Senior unsecured; LT BB; Affirmed CenturyLink, Inc. - LT IDR BB; Affirmed - Senior secured; LT BB+; Affirmed - Senior unsecured; LT BB; Affirmed Embarq Corporation - LT IDR BB; Affirmed - Senior unsecured; LT BB; Affirmed Qwest Services Corporation - LT IDR BB; Affirmed Qwest Corporation - LT IDR BB; Affirmed - Senior unsecured; LT BB+; Affirmed CHERRY OPERATING: Case Summary & 4 Unsecured Creditors ------------------------------------------------------ Debtor: Cherry Operating LLC 250 W 26th St. Fl 2 New York, NY 10001-6737 Business Description: Cherry Operating LLC is engaged in activities related to real estate. The Company has an Option Agreement and related agreements to acquire a parking unit at 250 South Street, New York, having a current value of $3.30 million. Chapter 11 Petition Date: April 12, 2020 Court: United States Bankruptcy Court Southern District of New York Case No.: 20-10948 Debtor's Counsel: Kevin J. Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway 22nd Floor New York, NY 10036 Tel: (212) 221-5700 Email: knash@gwfglaw.com Total Assets: $3,633,000 Total Liabilities: $3,315,079 The petition was signed by Aaron Ambalu, manager. A copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/VXU888 CINEMARK HOLDINGS: Fitch Cuts LT IDR to B+, Outlook Negative ------------------------------------------------------------ Fitch Ratings has downgraded the Long-Term Issuer Default Rating for Cinemark Holdings, Inc. and Cinemark USA to 'B+' from 'BB-'. Fitch also affirmed the 'BB+'/'RR1' on the senior secured credit facilities. Fitch also downgraded the senior unsecured notes to 'B+'/'RR4' from 'BB-'/'RR4'. Fitch removed the Rating Watch Negative. The Rating Outlook is Negative. The one-notch downgrade to 'B+' and Negative Outlook reflect Fitch's expectation that theatre closures will likely extend until June at the earliest owing to the coronavirus pandemic. This will materially impact Cinemark's financial performance. Additionally, Fitch remains concerned over the company's ability to quickly return to a normalized course of operations due to either changes in consumer behavior or additional public health mandates that limit theatre attendance capacity. Fitch recognizes that many unknowns remain including the length and severity of the coronavirus outbreak and any lingering long-term consequences to consumer behavior or preferences for out-of-home filmed entertainment. However, Fitch highlights that Cinemark benefits from strong available liquidity that will provide a cushion to support run-rate operating losses until the crisis abates. Cinemark has levers to mitigate operating expenses including deferring operating lease rental payments and minimizing outflows related to salaries and wages and halting capital expenditures. Cinemark had $488.3 million in balance sheet cash at December 2019, and the company drew the $98.8 million of availability under its revolver on March 25, 2020. Fitch believes this provides adequate runway to fund the company's operations through the end of fiscal 2020. Fitch will continue to assess Cinemark's liquidity position if the crisis extends into the summer months and will determine whether this materially changes its view on Cinemark's ability to return to a normalized course of business. Cinemark's credit agreement has a springing maximum consolidated net senior secured leverage ratio covenant of 4.25x that was activated with the revolver draw. Cinemark's actual consolidated net senior secured leverage ratio was roughly 0.69x as of December 2019. Fitch believes that Cinemark has adequate headroom relative to the covenant level. Fitch assumes theatres will re-open by the end of June with a reduced pace of theatrical attendance improving over the back half of 2020. Cinemark has modest annual amortization on its term loan (approximately $6.6 million annually) until it matures in March 2025. Cinemark's next sizeable maturity comes in December 2022 and June 2023, when the 5.125% and 4.875% senior unsecured notes mature. The revolver matures December 2022. Cinemark has some runway to address these near-term maturities. KEY RATING DRIVERS Coronavirus Pandemic: The coronavirus pandemic adds a significant challenge to Cinemark's operations, which are dependent on consumer discretionary spending and attendance. In addition, Cinemark does not have control over the quality and timing of its theatrical film releases. Concerns over public health and safety have resulted in widespread cancellation of live events and mandated closure of out-of-home entertainment venues. Cinemark operates predominantly in the U.S. and has a presence in Latin America. Cinemark's theatres have been closed since mid-March. There is currently no scheduled film content set to be released until roughly late July 2020. Film studios have proactively shifted releases to later in 2020 or sometime in 2021. These delays include Disney's "Mulan" and "Jungle Cruise" (new releases late July 2020), Marvel's "Black Widow" (November 2020) and "The Eternals" (2021), MGM's "No Time to Die" (November 2020) and Universal's "Fast & Furious 9" (2021). Sony moved most of its 2020 film slate to 2021 with the exception of "Fatherhood" (October 2020). Theatre exhibitors could rely on older film studio library content to support a soft re-opening to meet the June time frame. Cinemark's ratings are reliant on the assumption that theatrical exhibition will be a key window for large film releases by the major film studios as it presents an unique opportunity for branding and raising consumer awareness for valuable content/IP. Fitch will continue to monitor any changes to theatrical windowing by the major film studios as it poses a longer-term risk to movie theatre attendance levels to the extent that consumer preferences for in-home filmed entertainment cannibalizes traditional box office. Concerns over the secular declines in theatrical attendance are elevated. Notably, Comcast's NBC Universal's announcement to release certain upcoming titles simultaneously on-demand and in theatres (i.e. "Trolls World Tour") and extend this to titles which were recently available in theatres ("The Hunt", "The Invisible Man" and "Emma") reflects NBCU's inability to show films to a wide audience during this period and recoup the high upfront production and marketing expenditures related to these projects. Fitch does believe that there will be a meaningful rebound in theatrical attendance once the coronavirus crisis has abated. However, the introduction of a premium video on demand (PVOD) offering by a major film studio raises Fitch's concerns that other studios will take similar actions depending on the duration of the coronavirus crisis. This could have a longer-term impact on the existing theatrical windowing even after public health concerns are alleviated and theatres broadly re-open. Fitch believes the implementation of a more permanent PVOD window could require some negotiation with theatre operators. The larger theatre exhibitors have eschewed Netflix films as Netflix continues to favor a simultaneous on-demand and theatrical release strategy. However, there is also increased risk that a growing number of smaller budget or mid-budget titles will be shifted to media companies' individual direct-to-consumer (DTC) platforms (e.g. Disney is launching "Artemis Fowl" on Disney+ and Pixar's "Onward" is already available on that platform). Fitch believes that larger budget or tent-pole releases require the theatrical window owing to the high production and marketing costs associated with these projects. Adequate Liquidity Position: Fitch anticipates a material impact to margins and cash flow from any potential theatre closures owing to the high fixed costs of the business. Cinemark has the ability to reduce some operating costs (i.e. reducing staff and curtailing or halting lease payments). Notably, a high degree of Cinemark's capital expenditures are discretionary. Cinemark also maintains an annual dividend of $1.36 per share (approximately $160 million). These discretionary cash outflows provide Cinemark with levers to manage the business during this period. Cinemark's liquidity is supported by $488 million in balance sheet cash as of December 2019. The company drew down the $98.8 million in availability under its revolver in March 2020. The terms of the credit agreement include a springing maximum consolidated net senior secured leverage ratio covenant of 4.25x that will be tested only if there are revolver borrowings outstanding. Covenant-calculated leverage was roughly 0.69x at December 2019. Fitch continues to believe Cinemark will have sufficient headroom relative to that covenant level. Cinemark has modest annual term loan amortization (approximately $6.6 million annually). The next sizeable maturity comes when the 5.125% senior unsecured notes mature on Dec. 15, 2022. The revolver also matures in 2022. Although Fitch assumes Cinemark will extend these issues well before maturity, refinancing would depend on accommodating capital market access. Scale and Market Position: Cinemark's ratings are supported by its scale, as the third largest theatre exhibitor in the U.S. operating 344 theatres and 4,630 screens across 41 states. The company also has a dominant position in Latin American where it operates 204 theatres and 1,452 screens across 15 countries. Cinemark is the leading theatre exhibitor in Brazil and Argentina, and it is the second largest exhibitor in Chile, Colombia and Peru. Cinemark generated $3.3 billion in revenues and $656 million in Fitch-calculated operating EBITDA (representing a 20% margin) for the year ended December 2019. More Conservative Financial Profile: Cinemark's financial metrics are strong compared to peers in the theatre exhibitor sector. Total leverage and adjusted leverage (including lease equivalent debt) approximated 2.5x and 4.4x, respectively for the year ended December 2019. Increasing Competitive Threats: The ratings factor in the intermediate- to long-term risks associated with increased competition from at-home entertainment media, limited control over revenue trends, shrinking film distribution windows and increasing indirect competition from other distribution channels (video on demand [VOD], over the top [OTT] and streaming services). For the long term, Fitch continues to expect that the movie exhibitor industry will be challenged in growing attendance, and any potential attendance declines will offset some of the growth in average ticket prices and concessions. Dependent on Film Studios' Product: Cinemark and its peers rely on the quality, quantity and timing of movie product, all of which are factors out of management's control. DERIVATION SUMMARY Cinemark's ratings reflect its scale and market position as the third largest theatre chain in the U.S., the largest theatre chain in Brazil and Argentina, and the second largest theatre chain in Colombia, Chile and Peru. Cinemark maintains a more conservative balance sheet than peers, AMC Entertainment and Cineworld plc (B+/Rating Watch Negative), which provides it with a better ability to manage the business through period of operating uncertainty. Cinemark's total leverage and adjusted leverage (including lease equivalent debt) approximated 2.5x and 4.4x, respectively for the year ended December 2019. This compares favorably to AMC Entertainment's total leverage and adjusted leverage (including lease-equivalent debt) of 6.8x and 7.5x respectively at year-end 2019. Cineworld's leverage is expected to approximate 6.0x (including lease adjusted debt) assuming the Cineplex acquisition closes. Cinemark has similar profitability and cash flow margins as compared to Cineworld. KEY ASSUMPTIONS -- Base Case reflects the material impact of the coronavirus pandemic and Cinemark's inability to operate (no revenues) from mid-March until mid-June. Theatres re-open thereafter, but attendance remains challenged owing to lingering health concerns and potential government mandates to limit capacity (i.e. social distancing initiatives). Revenues decline roughly -47% in 2020. -- Run-rate monthly operating losses are estimated at ~20% of normalized operating expenses. EBITDA declines by more than revenues. -- Theatre operations normalize in 2021, but attendance levels/revenues are down relative to 2019. Low single-digit declines thereafter. -- Capex of $180 million in 2020 (60% of the $300 million previous public guidance). -- Dividend maintained at roughly $160 million annually. -- Cinemark draws down on revolver ($98.8 million) in March 2020. -- Liquidity cushion is sufficient to support operations during required theatre closures and period of potentially reduced capacity. -- The company refinances its revolver and the 2022 and 2023 bonds at maturity. Recovery Considerations -- The recovery analysis assumes Cinemark would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. -- Cinemark's going concern EBITDA is based on fiscal 2019 EBITDA of $656 million. Fitch then stresses EBITDA by assuming theatres close due to an event (i.e., coronavirus pandemic). This accelerates declines in theatrical attendance as a result of continued media fragmentation and changing consumer preferences. This equates to a going-concern EBITDA of roughly $300 million, or a roughly 55% stress. Prior recessions provide little precedent for a stress case as historically theatre attendance increased in six of the last eight recessions. This was attributable to the fact that theatrical exhibition remains a relatively cheap form of entertainment. However, the rise of alternative distribution platforms and streaming subscription plans (e.g. Netflix, Hulu, Disney+, HBO Max etc.) could place pressure on theatrical exhibition attendance in future downturns, particularly in urban areas where the cost of an average theatre ticket exceeds $15. Fitch believes that the recently launched theatre subscription plans like AMC's Stubs List and Cinemark's Movie Club could help support attendance levels. -- Fitch employs an enterprise value multiple of 5x to calculate post-reorganization valuation, roughly in-line with the median TMT emergence enterprise value/EBITDA multiple and incorporates the following intro its analysis: (1) Fitch's belief that theatre exhibitors have a limited tangible asset value and that the business model bears the risk of being disrupted over the longer-term by new distribution models; (2) Recent trading multiples (EV/EBITDA) historically in a range of 6-17x; (3) Recent transaction multiples in a range of 9x (e.g. Cineworld Group plc acquired U.S. theatre circuit Regal Entertainment for $5.8 billion in February 2018 for an LTM EBITDA purchase price multiple of roughly 9.0x. AMC purchased U.S. theatre circuit Carmike for $1.1 billion in December 2016 for a purchase price multiple of 9.2x and AMC purchased international circuit Odeon and UCI for $1.2 billion in November 2016 at a purchase price multiple of 9.1x). -- Fitch estimates an adjusted, distressed enterprise valuation of $1.3 billion. -- For Fitch's recovery analysis, leases are a key consideration. While Fitch does not assign recovery ratings for the company's operating lease obligations, it is assumed the company rejects only 30% of its remaining $1.4 billion in operating lease commitments (calculated at a net present value(NPV)) due to their significance to the operations in a going-concern scenario and is liable for 15% of those rejected values. This incorporates the importance of the leased space to the core business prospects as a going concern. Fitch also includes all of Cinemark's finance leases as unsecured obligations in the recovery ($156.4 million outstanding as of December 2019). -- Cinemark had $1.9 billion in total debt as of December 2019 pro forma for the revolver draw. This includes $98.8 million in revolver borrowings, $646 million in term loan borrowings and $1.155 billion in senior unsecured notes. -- The recovery results in a 'BB+'/'RR1' on the secured credit facilities reflecting Fitch's expectation that 91-100% recovery is reasonable. The recovery results in a 'B+'/'RR4' on the secured notes, reflecting an anticipated 31-50% recovery. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Rating Outlook could be revised to Stable if Fitch gains confidence that the severity and duration of the coronavirus pandemic will not materially affect Cinemark's credit profile. -- The ratings for Cinemark have limited upside potential due to the inherent nature of the theatrical exhibition business, the resulting hit-driven volatility and the reliance on film studios for the quantity and quality of films in any given period. In strong box office years, metrics may be stronger in order to provide a cushion in weaker box office years. -- Total leverage (total debt with equity credit/operating EBITDA) sustained below 2.5x and adjusted leverage (including lease equivalent debt) below 4.5x. -- FCF margins sustained in the mid to high single digits. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total leverage sustained above 3.5x and adjusted leverage sustained above 5.5x; - Any deterioration in the liquidity position owing to theatre closures extending past the June time horizon or a slower than expected return to normal operations; - Increasing secular pressure as illustrated in sustained declines in attendance and/or concession spending per patron. BEST/WORST CASE RATING SCENARIO Ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Fitch believes that Cinemark's liquidity is sufficient supported by $488 million in balance sheet cash and the $98.8 million revolver draw. Fitch believes that Cinemark has a number of levers it can utilize to preserve liquidity and stem operating losses in the event of prolonged theatre closures. Cinemark can reduce operating costs by cutting staff or forgoing lease payments. In addition, Cinemark has the flexibility to reduce planned capital expenditures and the discretionary dividend (approximately $160 million annually). Fitch believes this provides adequate runway to fund the company's operations through the end of fiscal 2020. Fitch will continue to assess Cinemark's liquidity position if the crisis continues to extend into the summer months and if this materially changes its view on Cinemark's ability to return to a normalized course of business. Cinemark's credit agreement has a springing maximum consolidated net senior secured leverage ratio covenant of 4.25x that was activated with the revolver draw. Cinemark's actual consolidated net senior secured leverage ratio was roughly 0.69x as of December 2019. Fitch believes that Cinemark has adequate headroom relative to the covenant level and estimates that covenant EBITDA would need to decline by roughly 80% to breach the net senior secured leverage ratio assuming a steady level of cash. Fitch assumes theatres will re-open by the end of June with a reduced pace of theatrical attendance improving over the back half of 2020. Cinemark has modest annual amortization on its term loan (approximately $6.6 million annually) until it matures in March 2025. Cinemark's next sizeable maturity comes in December 2022 and June 2023, when the 5.125% and 4.875% senior unsecured notes mature. The revolver matures in December 2022. Cinemark has some runway to address these near-term maturities. ESG CONSIDERATIONS 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. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. CIRQUE DU SOLEIL: S&P Lowers ICR to 'D' on Missed Payments ---------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on Montreal-based theatrical and live entertainment company Cirque Du Soleil Group to 'D' from 'CCC-'. At the same time, S&P is lowering the issue-level rating on the first-lien debt to 'D' from 'CCC' to reflect the payment default. It is also lowering the rating on the second-lien debt to 'D' from 'C' to reflect the payment default. "We lowered ratings to 'D' because Cirque did not pay principal and interest on its first-lien term loan, and did not pay interest on its second-lien term loan, both due March 31. We do not expect the company to make payments within the five-day grace period. In addition, we expect the event of default on the first-lien term loan will trigger a cross default under provisions in the second-lien term loan credit agreement. It is our understanding that prior to default Cirque had $100 million drawn on the revolving credit facility. In addition to the revolver, Cirque had $784 million of first-lien term loan, $150 million of second lien-term loan, $60 million of unsecured debt and $16 million of letters of credit outstanding under the revolver as of March 31, 2020," S&P said. Environmental, Social, and Governance (ESG) Credit Factors for this Credit Rating change: -- Health and Safety Factors CLUBCORP HOLDINGS: Moody's Cuts CFR to Caa1, Alters Outlook to Neg. ------------------------------------------------------------------- Moody's Investors Service downgraded ClubCorp Holdings, Inc.'s Corporate Family Rating to Caa1 from B3, its Probability of Default Rating to Caa1-PD from B3-PD, and the ratings on the company's senior secured first lien credit facilities to B3 from B2, including its $1,175 million term loan due August 2024 and its $175 million revolver due August 2022. Concurrently, Moody's downgraded the rating on the company's $425 million senior unsecured notes due 2025 to Caa3 from Caa2. The outlook was also changed to negative from stable. Its downgrades and negative outlook reflect ClubCorp's high financial leverage with debt/EBITDA at around 7.3x (pro forma for recent acquisitions), negative free cash flow, and Moody's expectations that headwinds stemming from the coronavirus outbreak will pressure earnings and cash flow generation over the next 12-18 months. The company generates 50% of revenues from dues, which are very high margin and provides support to the company's operating results. However, Moody's expects the social distancing measures and closure of on-premise dining as a response to the coronavirus pandemic and the related weakness in economic conditions, will lower guest visitations which could increase attrition, and will negatively impact the company's operating results in 2020. Given the anticipated decline in the company's earnings, debt/EBITDA financial leverage is expected to increase to over 7.5x and free cash flow generation will continue to be pressured. Downgrades: Issuer: ClubCorp Holdings, Inc. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Senior Secured 1st Lien Revolving Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured 1st Lien Term Loan, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: ClubCorp Holdings, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE ClubCorp's Caa1 CFR reflects the company's high financial leverage with debt/EBITDA at around 7.3x for the twelve months ended December 31, 2019 and its negative free cash flow generation since its 2017 leveraged buy-out. Moody's expects financial leverage to increase above 7.5x debt-to-EBITDA and free cash flows to continue to be pressured over the next 12-18 months because of headwinds related to the coronavirus outbreak. The company's core business as a golf and city club owner/operator is susceptible to discretionary consumer spending and factors such as varying regional weather conditions. High capital outlays for ongoing reinvestment and maintenance of the clubs is necessary to retain a premium service offering. ClubCorp also faces event risk stemming from the potential for large outlays associated with refunds of initiation deposits, of which the current portion of the liability exceeds $200 million. Governance factors include the company's debt financed acquisition strategy, and aggressive shareholder-friendly financial strategies under private equity ownership. The rating also reflects ClubCorp's leadership position in the private club membership business and its solid and growing recurring revenue base prior to the coronavirus pandemic, which is underpinned by a dues-based business model and affluent clientele. ClubCorp benefits from acquiring clubs near densely populated and affluent areas, typically with the goal of clustering its properties to enhance the value proposition of its Optimal Network Experience (or O.N.E.) that provides upgrade offerings and cross-sell opportunities. The company's adequate liquidity reflects access to its $175 million revolver due in 2022, which provides financial flexibility to fund working capital needs over the next 12 months, and lack of near-term maturities until its revolver is due. 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 Lodging, Leisure & Restaurants 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 ClubCorp's credit profile, including its exposure to US quarantines and discretionary consumer spending, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and ClubCorp 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 ClubCorp of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects Moody's expectation that headwinds related to the coronavirus outbreak will pressure ClubCorp's profitability and cash flows, and the uncertainty around the duration of social distancing measures and weak economic conditions, as well as the pace of the rebound once the pandemic begins to subside. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company's operating results and free cash flow generation improve driven by sustained organic revenue growth and EBITDA margin expansion, if debt/EBITDA is sustained below 7.0x and at least adequate liquidity is maintained with less reliance on revolver borrowings. The ratings could be downgraded if operating results deteriorate beyond Moody's expectations, cash outflows or litigation related to membership deposits increase, or if there is a deterioration in liquidity for any reason such as by increasing revolver reliance. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Dallas, Texas, ClubCorp Holdings, Inc., through its subsidiaries, is one of the largest owners, operators and managers of private golf, country, city, sports and alumni clubs in North America, and the largest owner of golf clubs in the US. As of February 25, 2020, the company operated 214 clubs (174 golf & country clubs and 40 city clubs, formerly known as business, sports & alumni clubs), with locations in 27 states, the District of Columbia and two foreign countries (Mexico and China) serving more than 430,000 individual members via over 186,000 memberships. In September 2017, the company was acquired and taken private by affiliates of investment funds managed by Apollo Global Management, LLC in an LBO transaction valuing the firm at approximately $2.3 billion. The company is private and does not publicly disclose its financial results. ClubCorp generated revenue of approximately $1.16 billion for the twelve-month period ended December 31, 2019. COASTAL INTERNATIONAL: Committee Taps Grobstein as Accountant ------------------------------------------------------------- The official committee of unsecured creditors of Coastal International, Inc. received approval from the U.S. Bankruptcy Court for the Northern District of California to hire Grobstein Teeple LLP as its accountant. Grobstein will provide these services: a. obtain and evaluate financial records; b. assist the committee in the analysis and preparation of cash flow projections prepared by Debtor's financial advisors; c. evaluate disclosure statement and plan provisions as they relate to accounting and tax matters; d. assist Debtor and the committee with debtor-in-possession financing; e. analyze and prepare liquidation and feasibility analyses; f. evaluate assets and liabilities of Debtor and its estate; g. evaluate tax issues and tax preparation matters if required; h. provide assistance with avoidance actions if required; i. provide litigation consulting if required; and j. provide accounting and consulting services requested by the committee. The firm will be paid at these rates: Partners and Principals $310 - $505 per hour Managers and Directors $275 - $375 per hour Staff/Senior Accountants $85 - $285 per hour Paraprofessionals $125 per hour Howard Grobstein, a partner at Grobstein, disclosed in court filings that his firm neither holds nor represents any interest materially adverse to the interest of Debtor's estate, creditors and equity security holders. The firm can be reached through: Howard B. Grobstein Grobstein Teeple LLP 6300 Canoga Avenue, Suite 1500W Woodland Hills, California 91367 Telephone: (818) 532-1020 Facsimile: (818) 532-1120 About Coastal International Coastal International, Inc. is a Nevada corporation formed in 1984, which provides trade show installation and dismantling services in the exhibit and event industry. It maintains a staff of trained, full-time employees to handle most any installation and dismantling project from start to finish. Coastal International's operations extend into major cities across the United States. It generated approximately $24 million in revenues in 2018. Coastal International sought creditor protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.19-13584) on Sept. 15, 2019. The case was transferred to the U.S. Bankruptcy Court for the Northern District of California and was assigned a new case number (Case No. 19-bk-13584). At the time of the filing, Debtor was estimated to have assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Hannah L. Blumenstiel oversees the case. Debtor tapped Weiland Golden Goodrich LLP and Finestone Hayes LLP, as its legal counsel; and Grobstein Teeple LLP as its accountant. The Office of the U.S. Trustee appointed a committee of unsecured creditors on Oct. 2, 2019. The committee is represented by Zolkin Talerico LLP. Debtor filed its Chapter 11 plan of reorganization and disclosure statement on Jan. 15, 2020. COMSTOCK RESOURCES: Moody's Cuts CFR to Caa1, Alters Outlook to Neg ------------------------------------------------------------------- Moody's Investors Service downgraded Comstock Resources, Inc.'s Corporate Family Rating to Caa1 from B2, Probability of Default Rating to Caa1-PD from B2-PD and senior unsecured notes rating to Caa2 from B3. Comstock's Speculative Grade Liquidity Rating was downgraded to SGL-4 from SGL-3. The outlook was changed to negative from stable. "Comstock's rating downgrade reflects weakened liquidity because of heavy reliance on the revolver which limits flexibility compounded by challenges from the weak natural gas price environment," said Jonathan Teitel, Moody's Analyst. Downgrades: Issuer: Comstock Resources, Inc. Probability of Default Rating, Downgraded to Caa1-PD from B2-PD Corporate Family Rating, Downgraded to Caa1 from B2 Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Senior Unsecured Notes, Downgraded to Caa2 (LGD5) from B3 (LGD5) Outlook Actions: Issuer: Comstock Resources, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE The downgrade reflects constraints to liquidity because of a heavily used revolver as well as negative effects from the weak natural gas price environment. Comstock has almost half of its 2020 production hedged but less of its 2021 production hedged. The negative outlook reflects the potential for further erosion of liquidity. 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 E&P 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 Comstock's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Comstock remains vulnerable to the outbreak continuing to spread and commodity 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 Comstock of the breadth and severity of the demand and supply shocks, and the broad deterioration in credit quality it has triggered. The SGL-4 rating reflects Moody's view that Comstock has weak liquidity. Comstock's has heavy reliance on the revolver which is a considerable constraint on liquidity. Any reduction during the spring borrowing base redetermination would weaken liquidity further. There is also the possibility that covenants could constrain access to the facility over time. Comstock's RBL revolver has $1.5 billion of elected commitments, a $1.575 billion borrowing base and expires in 2024. As of December 31, 2019, the company had $1.25 billion drawn and $19 million of cash on the balance sheet. Moody's expects positive free cash flow in 2020 could support debt reduction. The $385 million of convertible preferred equity pays dividends at a rate of 10% and has a perpetual maturity. Comstock's Caa1 CFR reflects constrained liquidity in a weak natural gas price environment. Concentrated in the Haynesville Shale, Comstock increased scale and improved credit metrics with its 2019 acquisition of Covey Park, which had highly complementary assets. Proximity to Henry Hub drives low basis differentials for natural gas production and the Haynesville has solid gathering and pipeline infrastructure. Credit quality benefits from long-dated bonds that do not mature until 2025 and 2026. Comstock is majority-owned by Jerry Jones, who has invested a significant amount of equity in the company. Environmental considerations for Comstock include heightened societal concerns regarding climate change and other environmental air quality and safety issues. These lead to increasing environmental regulations on exploration and production company operations, as well as limitations on where these companies can explore for new resources. Comstock's $625 million of senior unsecured notes due 2025 and $850 million of senior unsecured notes due 2026 are rated Caa2, one notch below the CFR, reflecting their effective subordination to the revolver due 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a downgrade include weakening liquidity or EBITDA/interest below 2x. Factors that could lead to an upgrade include reduction in revolver borrowings, improved liquidity, and sustainable production and reserves growth. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Comstock, headquartered in Frisco, Texas, is a publicly traded independent exploration and production company with operations focused in the Haynesville. CONFIE SEGUROS II: Moody's Cuts CFR to Caa1, Alters Outlook to Neg. ------------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of Confie Seguros Holding II Co. to Caa1 from B3, and the probability of default rating to Caa1-PD from B3-PD. The downgrade reflects the insurance broker's likely decline in business activity resulting from the coronavirus and the related economic shock. The rating agency also downgraded Confie's first-lien credit facilities to B3 from B2, and its second-lien term loan to Caa3 from Caa2. Moody's changed the rating outlook to negative from stable based on Confie's weak free cash flow, limited borrowing capacity under its revolving credit facility, and refinancing risk associated with the revolver, which expires in October 2021. RATINGS RATIONALE The downgrade of Confie's ratings reflects Moody's expectation that the coronavirus-related economic downturn will weigh on this monoline broker's revenue, earnings and cash flow given its focus on distributing non-standard auto insurance to the underserved community, which often buys the insurance in Confie stores. Confie generates about half its revenue in California, Louisiana and New York, three of the most severely impacted coronavirus states. Confie has significant variable costs that will decline with falling revenue, and it is taking steps to reduce other expenses and investments to conserve liquidity. Nevertheless, Moody's expects that the company's leverage and coverage metrics will weaken over the next few quarters. The negative rating outlook reflects the uncertainty over the duration and severity of state mandated restrictions on business activity and the ultimate impact on Confie's revenue, earnings and liquidity. The company has drawn nearly all of its revolving credit facility to bolster its cash position as it reduces discretionary spending. Still, Confie faces sizable quarterly interest payments, and its revolver expires in October 2021, creating refinancing risk. The negative outlook also takes into account Confie's customers' reduced ability to purchase insurance during the economic downturn. Moody's estimates that Confie had a pro forma debt-to-EBITDA ratio of nearly 7.5x, (EBITDA - capex) interest coverage of just over 1x, and a free-cash-flow-to-debt ratio in the range of 0%-1% at year-end 2019. These metrics incorporate Moody's adjustments for leases, contingent earnout obligations, completed acquisitions and certain unusual/nonrecurring expenses. The rating agency expects that these metrics will deteriorate over the next few quarters, with financial leverage rising to the high single digits, interest coverage falling below 1x and free cash flow turning negative. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety and the resulting slowdown in business activity. Its action reflects the impact on Confie of the breadth and severity of the shock, and the deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative rating outlook, a ratings' upgrade for Confie is unlikely. Factors that could return the outlook to stable include sustained improvement in operating performance and liquidity, including a refinancing of Confie's revolving credit facility, which matures in October 2021. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio above 9x, (ii) (EBITDA - capex) coverage of interest remaining below 1x, or (iii) free cash flow remaining negative. Moody's has downgraded the following ratings of Confie Seguros Holding II Co.: Corporate family rating to Caa1 from B3; Probability of default rating to Caa1-PD from B3-PD; $90 million (mostly drawn) first-lien revolving credit facility maturing in 2021 to B3 (LGD3) from B2 (LGD3); $665 million first-lien term loan ($636 million outstanding) maturing in 2022 to B3 (LGD3) from B2 (LGD3); $220 million second-lien term loan maturing in 2025 to Caa3 (LGD5) from Caa2 (LGD5). The rating outlook for Confie Seguros Holding II Co. has been changed to negative from stable. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Confie is a leading US personal lines insurance broker focused on the underserved market. The company's primary product offering is non-standard auto insurance, which is coverage for drivers who find it difficult to purchase standard or preferred auto insurance due to driving record, claims history, vehicle type or limited financial resources. The company also sells modest amounts of other personal insurance and small commercial insurance. Confie generated revenue of approximately $470 million for 2019. COOL HOLDINGS: Disposes of Verablue Assets for $150,000 ------------------------------------------------------- Cool Holdings Inc., through its subsidiaries, OneClick International, LLC and OneClick License LLC (collectively, the "Sellers"), entered into an agreement by and among the Sellers and Mr. Carlos Padilla and Ms. Isabel Jarrin (collectively, the "Purchasers"), pursuant to which the Company transferred all of its ownership in Verablue Caribbean Group, S.R.L. held indirectly through the Sellers' membership interest in Verablue, to the Purchasers. The closing of the Disposition occurred concurrently with the execution of the Purchase Agreement on April 6, 2020. Verablue owns and operates the Company's business in The Dominican Republic, consisting of seven retail consumer electronic stores that are authorized resellers of Apple products, and other consumer electronic brands. The Purchase Agreement contains representations, warranties and commitments customary for a transaction of its size and nature. The total consideration for the Disposition was $150,000, including a promissory note for $100,000 payable to the Company, on an "as is, where is" basis, that entails the Purchasers buying all assets and assuming all liabilities of Verablue. Also, subject to certain limitations, the parties have agreed to indemnify each other for breaches of their respective representations, warranties, commitments and other specified matters therein. Furthermore, all trademarks owned by Verablue in The Dominican Republic and in other countries excluding Argentina and North America related to "OneClick" will be assigned to the Purchasers by way of a trademark assignment agreement. About Cool Holdings Cool Holdings, Inc., formerly known as InfoSonics Corporation -- http://www.coolholdings.com-- is a Miami-based company currently comprised of Simply Mac and OneClick, two chains of retail stores and an authorized reseller under the Apple Premier Partner, APR (Apple Premium Reseller) and AAR MB (Apple Authorized Reseller Mono-Brand) programs and Cooltech Distribution, an authorized distributor to the OneClick stores and other resellers of Apple products and other high-profile consumer electronic brands. Cool Holdings reported a net loss of $27.27 million for the year ended Dec. 31, 2018, compared to a net loss of $7.54 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $29.57 million in total assets, $41.07 million in total liabilities, and a total stockholders' deficit of $11.50 million. Kaufman, Rossin & Co., P.A., in Miami, Florida, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 16, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. CORE MOLDING: Crowe LLP Raises Going Concern Doubt -------------------------------------------------- Core Molding Technologies, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a comprehensive loss of $15,970,000 on $284,290,000 of net sales for the year ended Dec. 31, 2019, compared to a comprehensive loss of $4,735,000 on $269,485,000 of net sales for the year ended in 2018. The audit report of Crowe LLP states that the Company’s current liabilities exceed its current assets as of December 31, 2019 as a result of being under a forbearance agreement with its lenders and not securing alternative financing. These conditions raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $179,306,000, total liabilities of $94,880,000, and a total stockholders' equity of $84,426,000. A copy of the Form 10-K is available at: https://is.gd/hQ9bSM Core Molding Technologies, Inc., together with its subsidiaries, manufactures sheet molding compound (SMC) and molder of thermoset and thermoplastic products. It specializes in large-format moldings and offers a range of fiberglass processes, including compression molding of SMC, glass mat thermoplastics, bulk molding compounds, and direct long-fiber thermoplastics; and spray-up, hand lay-up, resin transfer molding, structural foam and structural Web injection molding, reaction injection molding, and utilizing dicyclopentadiene technology. The company serves various markets, including medium and heavy-duty trucks, automobiles, marine, construction, and other commercial markets. It sells its products in the United States, Mexico, and Canada. The company was formerly known as Core Materials Corporation and changed its name to Core Molding Technologies, Inc. in August 2002. Core Molding Technologies was incorporated in 1996 and is headquartered in Columbus, Ohio. COTY INC: Moody's Cuts CFR to Caa1, Outlook Negative ---------------------------------------------------- Moody's Investors Service downgraded Coty Inc.'s Corporate Family Rating to Caa1 from B2 and its Probability of Default rating to Caa1-PD from B2-PD. At the same time, Moody's downgraded the company's senior secured term loan and revolver to B3 from Ba3 (LGD2), and its unsecured global notes to Caa3 from Caa1 (LGD5). Coty's Speculative Grade Liquidity Rating remains unchanged at SGL-4. The rating outlook is negative. The downgrade reflects Moody's view that Coty's financial leverage will increase because of significant declines in revenue and earnings from retail store closures and reduced demand for the company's products related to efforts to contain the coronavirus. The company estimates that 3rd quarter sales, ending March 31, 2020, would be down by 20% and Moody's estimates that year-end sales ending June 30, 2020 will be down in excess of 15%. Moody's expects debt to EBITDA will increase to about 6.5x in 2020 from 5.7x from the twelve months ending December 31, 2019. Lower demand for Coty's products reflects weaker than expected sales and earnings from its consumer beauty products (40% of sales) and from the company's luxury beauty and fragrance products (38% of sales). Demand will be adversely affected by ongoing competitive pressures, closures at department stores and specialty retailers, and governmental recommended social distancing reflecting efforts to contain the coronavirus. Efforts to contain the coronavirus are weakening economic growth globally and add further operating pressure on Coty. The following is a summary of Moody's rating actions: Coty Inc. Ratings Downgraded: Corporate Family Rating to Caa1 from B2 Probability of Default to Caa1-PD from B2-PD First Lien Senior Secured Bank Credit Facility to B3 (LGD2) from Ba3 (LGD2) Guaranteed Unsecured Global Notes to Caa3 (LGD5) from Caa1 (LGD5) The rating outlook is negative RATINGS RATIONALE Coty's Caa1 CFR reflects revenue declines expected for the company's beauty products over the next few quarters driven by efforts to contain the coronavirus and pressure on discretionary consumer income, contributing to high debt to EBITDA financial leverage that Moody's estimates will increase to 6.5x in 2020. The rating also reflects Moody's belief that the company will generate weak free cash flow over the next several quarters due to its ongoing restructuring costs and dividends. Coty's concentration in fragrance and color cosmetics creates exposure to discretionary consumer spending and requires continuous product and brand investment to minimize revenue volatility as these categories tend to be more fashion driven than other beauty products. Coty will remain more concentrated than its primary competitors in mature developed markets. This creates growth challenges and investment needs to more fully build its global distribution capabilities and brand presence. The ratings are supported by the company's large scale, its portfolio of well-recognized brands, and good product and geographic diversification. The negative outlook reflects Moody's belief that Coty faces high execution risk to improve operating performance and reduce leverage. This reflects the company's multi-step turnaround plan that includes the divestiture of its Professional and Hypermarcas businesses, proceeds of which are to be used to repay debt. The turnaround plans also includes the continued refocus of its Consumer Beauty business product mix away from low-value sales. Moody's also recognizes the challenges that Coty will face executing an operational turnaround given governmental mandates for social distancing that will keep department stores and specialty retail closed for about 6-12 months. The SGL-4 Speculative Grade Liquidity Rating reflects Moody's view that Coty's liquidity is weak. Coty's ongoing restructuring actions will consume large amounts of cash and Moody's expects the company to generate negative free cash flow in 2020. The $2.75 billion revolver expiring in 2023 is subject to a maximum total net leverage financial covenant with step downs. The credit agreement is subject to a maximum 5.25x total net leverage covenant that declines to 5.00x in March 2022. The ratio was raised to 5.95x in March 2020, in conjunction with the company's majority acquisition of Kylie Cosmetics, and will return to 5.25x in January 2021. Moody's projects that the company will have weak headroom under the total net leverage covenant over the next 12 months. In terms of Environmental, Social and Governance considerations, the most important factor for Coty's ratings are governance considerations related to its financial policies and board independence. Moody's views Coty's financial policies as aggressive given its appetite for debt financed acquisitions. In addition, the company's board of directors has limited independence given that four of the nine board members are related to JAB, Coty's majority shareholder. 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 products sector has been one of the sectors affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Coty's credit profile, including its exposure to multiple affected countries 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 Coty of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Coty's ratings could be downgraded if the company is unable to stabilize revenue and earnings or continues to generate weak or negative free cash flow over the next 12-18 months. The ratings could also be downgraded if financial leverage continues to increase. A downgrade could also occur if the company is unable to improve liquidity or continues to pursue material debt funded acquisitions or shareholder returns. Coty's ratings could be upgraded if the company generates renewed revenue and earnings growth such that comfortably positive free cash flow is restored. Coty would also need to significantly reduce its financial leverage before an upgrade would be considered. The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. Coty Inc., a public company headquartered in New York, NY, is one of the leading manufacturers and marketers of fragrance, color cosmetics, and skin and body care products. The company's products are sold in over 150 countries. The company generates roughly $8.4 billion in annual revenues. Coty is 60% owned by a German based investment firm, JAB Holding Company S.a.r.l. (JAB), with the rest publicly traded. COUNTRY MORNING FARMS: Bankr. Court Confirms 2nd Amended Plan ------------------------------------------------------------- Bankruptcy Judge Frederick P. Corbit issued his findings of facts and conclusions of law regarding the confirmation of Country Morning Farms, Inc. and Country Morning Farms Cattle, LLC's second amended plan of reorganization. The Debtors filed voluntary Chapter 11 petitions on March 1, 2019. They filed their Second Amended Disclosure Statement and Second Amended Plan of Reorganization on Dec. 4, 2019. The order approving the Second Amended Disclosure Statement and Setting Confirmation was entered by on Dec. 5, 2019. Neither company has unpaid wage claims nor claims for commissions. Neither company has any claims for non-payment to any employee benefit plan. Neither company operates a grain storage facility. Neither company owes a debt to fishermen. There are no claims made by any creditors for pre-petition deposits for purchase or lease of products for any creditor's personal family or household use. Neither debtor, CMF nor CMFC, owes the bankruptcy court for any fees. The Debtors are not paying retiree benefits; therefore, no retiree benefits will be affected by the Plan. The Court finds the Plan has been proposed in good faith and not by any means forbidden by law. All payments made or promised by the Debtors under the Plan for services, or for cost and expenses incident to the case, have been fully disclosed to the Court and are reasonable and have been approved, or if they are to be fixed after confirmation of the Plan, will be subject to approval by the court. Prior to filing the Debtors' bankruptcy petitions, Country Morning Farms, Inc. was owned 100% by Robert and Gerry Gilbert, Country Morning Farms Cattle, LLC is also 100% owned by Robert and Gerry Gilbert. The ownership will not be changed after confirmation. After confirmation the reorganized Debtors intend to continue employing insiders as described in the Second Amended Disclosure Statement. Each holder of a claim or interest has accepted the Plan or will receive or retain under the Plan property of a value, as of the effective date of the Plan, that is not less than the amount that such hold would receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code on such date. With respect to creditors who did not vote and Bank of the West, the Debtors' Second Amended Plan of Reorganization as amended does not discriminate unfairly and is fair and equitable with respect to Bank of the West and each class of claims or interests that is impaired and has not accepted the Plan. The Court further notes that the dairy herd health is good. There is no present need for the Debtors to purchase additional heifers because their heifer replacement program is sufficient to maintain herd size. The size of the milking dairy herd should remain relatively constant and Bank of the West's collateral in the dairy herd should not decrease because cows are replaced upon their deaths. Confirmation of the Plan is not likely to be followed by liquidation, or the need for further financial reorganization of the Debtors. A copy of the Court's Findings of Fact and Conclusions of Law Regarding Confirmation of Debtors' Plan dated March 3, 2020 is available at https://bit.ly/2ydujxV from Leagle.com. Country Morning Farms, Inc., Debtor, represented by William L. Hames -- billh@hawlaw.com -- Hames Anderson & Whitlows PS. US Trustee, U.S. Trustee, represented by James D. Perkins, US Dept of Justice/U S Trustee Office. About Country Morning Farms Country Morning Farms, Inc., is a privately held company in the cattle ranching and farming business. Country Morning Farms grows its own feeds, milk its own cows, and delivers fresh dairy products to its customers. Country Morning Farms filed a Chapter 11 petition (Bankr. E.D. Wash. Case No. 19-00478) on March 1, 2019. The petition was signed by Robert Gilbert, vice president. The case is assigned to Judge Frederick P. Corbit. The Debtor is represented by Siam L. Hames, Esq. at Hames, Anderson, Whitlow & O'Leary. At the time of filing, the Debtor disclosed $6,421,269 in assets and $10,586,970 in liabilities. COVIA HOLDINGS: S&P Downgrades ICR to 'CCC+'; Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based frac sand and industrial minerals producer Covia Holdings Corp. to 'CCC+' from 'BB-'. S&P also lowered its issue-level rating on the company's $1.65 billion senior secured term loan to 'CCC+ from 'BB-'. The '3' recovery rating remains unchanged. S&P views Covia's capital structure as unsustainable given the levels of distress it anticipates in 2020. Its revised forecast for Covia incorporates far more challenging operating conditions in oil and gas end markets than previously anticipated. S&P cut its 2020 price assumption for WTI by about 55%, to $25 a barrel after OPEC meetings failed to yield an agreement on production cuts, and the proliferation of the coronavirus dampened global demand. S&P is now assuming real U.S. GDP will contract 1.3% in 2020 and expects oil and gas producers to cut capital spending by 20% to 30%. This exacerbates an already difficult market environment for frac sand producers, which were already facing oversupply conditions, weak pricing, and tight E&P budgets. S&P is forecasting Covia's adjusted EBITDA will drop about 50% in 2020 from about $208 million in 2019 causing leverage to double from 9.6x in 2019. It also anticipates EBITDA interest coverage will decline below 1x in 2020 as the company consumes $125 million to $150 million in discretionary cash flow (DCF; operating cash flow less capital expenditures). In S&P's view, Covia's operating conditions in 2020 are unsustainable, and the company is vulnerable and depends on favorable business, financial, and economic conditions to meet its financial commitments in the long term. The rating agency no longer believes Sibelco will provide financial support to Covia. S&P previously applied a two-notch positive adjustment to its standalone rating on Covia to reflect its expectation that the company would receive support from its parent Sibelco, which owns 65% of Covia's common equity. S&P based this on Sibelco's conservative financial policy, steady operating history, a promising outlook and strong liquidity position. However, since Sibelco contributed its frac sand operations to create Covia in mid-2018, the European parent has seen the equity value in its investment in Covia drop 98%, and is now facing uncertain prospects in the Eurozone, encompassing Brexit and a likely recession. With the current emphasis on capital retention, S&P considers it increasingly unlikely that Sibelco will provide the level of financial support required to constitute a meaningful intervention in Covia's capital structure if the subsidiary required it. Sibelco and Covia have comparable cash balances at around $300 million, so such an intervention would likely require Sibelco to add debt to its relatively debt-free capital structure. Covia's $1.65 billion term loan due 2025 has no recourse to Sibelco, and in S&P's view assuming that liability, along with over $100 million in annual interest payments would be viewed as compromising the parent entity, particularly in the absence of clear indications for marked improvements in Covia's performance. Covia's prospects depend on limiting liquidity deterioration through the end of the year, and adjusting its production profile to match longer-term demand dynamics. S&P estimates Covia had about $320 million in cash on the balance sheet at the beginning of 2020, and has recently obtained an accounts receivables facility with a maximum of $75 million in accessibility. The cash balance was due in large part to asset sales in 2019, which S&P continues to view as a potential ongoing source of incremental liquidity. This is weighed against S&P's estimate stated earlier of $125 million to $150 million in DCF usage (not including a probable reductions to capital spending from levels around $60 million). With these assumptions, Covia would have to reverse or at least improve its rate of cash flow consumption within the next 12 to 24 months. Furthermore, S&P incorporates the possibility of additional downside risk over the next year while the company is already in a vulnerable state, with diminished access to capital markets. S&P views the low oil and gas prices and economic slow down to be temporary in nature, so if Covia's starting cash position and liquidity management are sufficient, they could bring the company to a stable state. However, S&P believes the shift to in-basin sand is permanent, and therefore the excess capacity for northern white sand and over supply of frac sand in general would have to fall in line with demand, before a smaller albeit more profitable frac sand industry emerges. The negative outlook reflects the possibility of a downgrade over the next 12 months, especially if industry conditions do not improve and S&P views a distressed exchange or payment default to be imminent. "We could lower our ratings on Covia if we anticipate a liquidity shortfall within a year, or if we anticipate Covia will consider a distressed exchange or other form of debt restructuring. This could occur if oil and gas prices decline further than we anticipate and E&P customers cut capital spending even further," S&P said. "We could revise the outlook to stable or raise our rating on Covia if we no longer believe the company's capital structure is unsustainable and we considered liquidity to be adequate. This could occur if industry conditions improve including higher oil and gas prices and strengthening E&P budgets such that DCF was close to nominal or positive," the rating agency said. Covia is America's leading producer of sand-based proppants and serves hydraulic fracturing operations in the U.S., Canada, Argentina, Mexico, China, and northern Europe. The company's energy segment represented approximately 55% of its total revenue in 2019. Covia also supplies multimineral products to industrial customers in the glass, ceramics, construction, coatings, polymers, and foundry end markets. The company operates 36 active mining facilities, with more than 40 million tons of annual mineral processing capacity, and six active coating facilities with more than two million tons of annual coating capacity. Covia's mining and coating facilities span North America and it has operations in China and Denmark. The company had an estimated 1.0 billion tons of proven or probable recoverable mineral reserves as of the end of 2019. Covia is headquartered in Independence, Ohio and is a majority owned by SCR-Sibelco N.V., an Antwerp, Belgium–based global material solutions company. -- U.S. real GDP contracts 1.3% in 2020 then grows 3.2% in 2021; -- West Texas Intermediate (WTI) oil prices of $25 per barrel in 2020 increase to $45 per barrel in 2021; -- Covia's frac sand volumes decline 15% to about 14 million tons and then recover in 2021; -- Average 2020 frac sand prices decline 36% in 2020 and then rise 30% in 2021; -- Support from industrial sand segment with a more limited decline in 2020 revenues at -1.3%, in line with GDP expectations; and -- EBITDA margins fall to 8% for 2020 and recover to about 13% in 2021 S&P views Covia's liquidity to be less than adequate. This is primarily due to S&P's expectations for harsh operating conditions in 2020, which the rating agency is forecasting will lead to significantly negative operating cash flow despite modest releases of cash from reduced working capital. S&P also considers the potential for downside even beyond its forecast, which could strain the company's cash position (the rating agency would consider sufficient under typically stable conditions). Covia recently cancelled its $200 million revolving credit facility and replaced it with a $75 million accounts receivable facility. This, along with about $320 million of balance sheet cash at the beginning of the year are its primary sources of liquidity." S&P also bases its assessment on the following expectations -- S&P expects liquidity sources will exceed uses by at least 2x over the next 12 months; -- Liquidity sources would continue to exceed uses, even if EBITDA declines 15%; however -- S&P does not believe Covia will be able to absorb a high-impact low probability event without refinancing; Principal liquidity sources: -- About $320 million cash and cash equivalents as of Dec. 31, , 2019; and -- Just under $65 million available under the company's new $75 million account receivables credit facility. Principal liquidity uses: -- Approximately $50 million to $60 million in capital spending in 2020; -- Negative operating cash flow of $90 million to $70 million, taking into account some cash released from shrinking working capital; and -- $16.5 million in mandatory debt amortization payments. Covia no longer has financial covenants since the cancellation of its $200 million revolving credit facility in December 2019. -- Covia's capital structure consists principally of senior secured debt, including a $75 million accounts receivable credit facility (not rated; S&P assumes 60% of funds available would be drawn in a distressed scenario) and a $1.65 billion term loan due 2025. -- S&P's simulated default scenario contemplates a default occurring in 2021 in the wake of a protracted deterioration in oil and gas exploration and drilling activity that leads to a material shrinkage in the demand for frac sand and depressed prices. This is exacerbated by a broad and prolonged recession that reduces volumes in the company's industrials minerals segment. Given this scenario, the company would generate increasingly negative free cash flow and would have to fund its debt service and other obligations with available cash until that was exhausted. -- In a default, S&P assumes that creditors would receive more value in a reorganization than a liquidation; therefore, it employs a distressed enterprise value-based analysis. -- To estimate a distressed gross enterprise value, S&P applies an EBITDA multiple of 5x, which is in line with the multiples that it uses for other companies in the metals and mining sector -- Simulated year of default: 2021 -- EBITDA at emergence: $188 million -- Implied enterprise value multiple: 5x -- Gross enterprise value: $940 million -- Net enterprise value (gross enterprise value, $940 million; less 5% administrative expenses, $47 million): $893 million -- Priority claims (accounts receivable facility): $17 million -- Remaining enterprise value: $876 million -- Senior secured debt claims (term loan): $1.63 billion -- Recovery rating: 3 (meaningful recovery expectation: 50%-70%; rounded estimate: 50%) CP VI BELLA: S&P Alters Outlook to Negative, Affirms 'B' ICR ------------------------------------------------------------ S&P Global Ratings said it revised its outlook on CP VI Bella Midco LLC (d/b/a MedRisk) to negative from stable and affirmed its 'B' long-term issuer credit and issue-level ratings on the firm. At the same time, S&P maintained its '3' recovery rating indicating its expectation of meaningful (50%-70%; rounded estimate: 65%) recovery of their principal in the event of a payment default on the company's $60 million revolver and $445 million first-lien credit facility due 2024. S&P has also affirmed its 'CCC+' debt rating and '6' (0%) recovery rating (indicating its expectation of negligible recovery of principal in the event of a payment default) on the company's $200 million second-lien term loan due 2025. MedRisk is an outsourcing insurance services provider that manages PT-related costs on behalf of WC carriers, employers, and government entities. Given company's narrow product focus in PT, it faces severe operating challenges from COVID-19-related to "shelter-in-place" and social distancing policies that medical authorities expect to lead to a significant drop of inbound call volumes with policyholders opting to defer any PT-related treatment, ultimately resulting in a contraction of revenues and putting a pressure on profitability in 2020. "With measures such deferring any nonessential travel and elective procedures in place, we believe most patients would be averse to undertaking PT treatment at this time, which could likely result in a sharp volume drop (near 25%) in claims processed in second-quarter 2020. We expect this to lead to a 15% decline in revenues by year-end 2020, with adjusted EBITDA margins shrinking by 5%. We think this will result in leverage exceeding our 7.5x downside trigger. Previously, we anticipated the firm to deleverage by 4.5x-5.0x by year-end 2020, facilitated by growth in revenues of 5%-6% with EBITDA margins remaining stable at 10%-20%," S&P said. The company has ample liquidity with access to a $57.7 million revolving credit facility. But if the situation worsens, this could pressure the company's quarterly springing financial covenant (maximum consolidated per its first-lien net leverage ratio of 7.75x if the total amount of letters of credit, revolving credit loans, and swing-line loans exceed 35% of revolver commitments) per the first-lien credit agreement. The negative outlook reflects the heightened uncertainty regarding the impact of the coronavirus pandemic and the impending recession on Medrisk's credit metrics and cash flow. Prolonged social distancing measures in North America, coupled with a risk to get the virus through a PT session could affect the company's ability to recover operationally to historical levels in the next six to 12 months. "We could lower our ratings in the next 12 months if Medrisk's operating performance is hurt for a prolonged period by COVID-19 and adjusted leverage rises and remains above 7.0x-7.5x with coverage below 2.0x," S&P said. "We could revise the outlook to stable if Medrisk can weather the pandemic and we believe the company can return to growth with leverage below 7.0x-7.5x in 2021," the rating agency said. CYBER APPS: Needs More Working Capital to Remain as Going Concern ----------------------------------------------------------------- Cyber Apps World Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $35,411 on $0 of net sales for the three months ended Jan. 31, 2020, compared to a net loss of $12,794 on $0 of net sales for the same period in 2019. At Jan. 31, 2020, the Company had total assets of $1,404,189, total liabilities of $290,309, and $1,113,880 in stockholders' equity. The Company's financial statements for the period ended January 31, 2020, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company did not have any revenue in and as of January 31, 2020. Management recognized that the Company's continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses. Since its incorporation, the Company has financed its operations through advances from its controlling shareholders, third-party convertible debt, and the sale of its common stock. Management's plans are to finance operations through the sale of equity or other investments for the foreseeable future, as the Company does not receive significant revenue from its business operations. There is no guarantee that the Company will be successful in arranging financing on acceptable terms. The Company's ability to raise additional capital is affected by trends and uncertainties beyond its control. The Company does not currently have any arrangements for financing and it may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to it. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties. In addition, the independent auditors' report accompanying the Company's July 31, 2019 financial statements contained an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: https://is.gd/uLjNLk Cyber Apps World Inc. focuses on acquiring and developing an e-commerce Internet platform for the purchase and sale of products and services by way of mobile/computer applications online. The company was formerly known as Clean Enviro Tech Corp. and changed its name to Cyber Apps World Inc. in April 2015. Cyber Apps World Inc. was incorporated in 2002 and is based in Las Vegas, Nevada. DEAN & DELUCA: Seeks OK for CROs from Argus Management ------------------------------------------------------ Dean & DeLuca New York Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Argus Management Corporation and appoint two of its personnel as chief restructuring officers. Lawton Bloom, principal of Argus, and Joseph Baum, the firm's managing director, will serve as co-chief restructuring officers for Dean & DeLuca and its affiliates in connection with their Chapter 11 cases. The services to be provided by the CROs and their firm include: (1) working with Debtors and their legal counsel to prepare initial bankruptcy filings, fulfill ongoing filing requirements, and prepare a bankruptcy plan and disclosure statement; (2) working with and overseeing Debtors' officers and professionals on the compiling and formatting of data and analyses; (3) overseeing and coordinating various activities related to the cases; (4) actively communicating with the Office of the United States Trustee for the Southern District of New York and its professionals, the bankruptcy court, any official committees that may be formed, creditors and other parties; and (5) executing affidavits and providing testimony in court proceedings as required. The firm will be paid at these rates: Lawton Bloom $550 per hour Joseph Baum $515 per hour Staff $225 - $400 per hour Paraprofessionals $100 - $175 per hour Prior to the petition date, Debtors provided Argus a retainer in the amount of $250,000. Mr. Baum disclosed in court filings that his firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Argus can be reached through: Joseph Baum Argus Management Corporation 2 Rosenfeld Drive, Suite F Hopedale, MA 01747 Phone: (732) 674-4132 (508) 381-1902 E-mail: jbaum@arguscorp.net info@arguscorp.net About Dean & DeLuca New York Dean & DeLuca New York, Inc. is a multi-channel retailer of premium gourmet and delicatessen food and beverage products under the Dean & DeLuca brand name. It traces its roots to the opening of the first Dean & DeLuca store in the Soho district of Manhattan, New York City by Joel Dean and Giorgio DeLuca in 1977. Affiliate Dean & DeLuca, Inc. was incorporated in Delaware in 1999. On Sept. 29, 2014, Pace Development Corporation, through its wholly owned subsidiary, Pace Food Retail Co., Ltd., acquired 100% of the shares of Dean & DeLuca, Inc. from its then shareholders. Dean & DeLuca New York and six affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-10916) on March 31, 2020. At the time of the filing, Debtors had estimated assets of between $10 million and $50 million and liabilities of between $100 million and $500 million. Debtors tapped Brown Rudnick LLP as their legal counsel, and Stretto as claims and noticing agent. DEAN FOODS: Deloitte & Touche LLP Raises Going Concern Doubt ------------------------------------------------------------ Dean Foods Company filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss (attributable to Dean Foods Company) of $499,942,000 on $7,328,663,000 of net sales for the year ended Dec. 31, 2019, compared to a net loss (attributable to Dean Foods Company) of $326,900,000 on $7,755,283,000 of net sales for the year ended in 2018. The audit report of Deloitte & Touche LLP states that the Company filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the U.S. Code in the United States Bankruptcy Court for the Southern District of Texas on November 11, 2019, which raises substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $2,228,557,000, total liabilities of $2,398,797,000, and a total stockholders' deficiency of $170,240,000. A copy of the Form 10-K is available at: https://is.gd/Wjw7Ze Dean Foods Company is a food and beverage company. The Company provides products such as milk and milk based beverages, ice cream, whipping cream, sour cream, cottage cheese, yogurt, dips, and soy milk. Dean Foods also supplies pickles, juice, juice drinks, and water in the State of Texas. DECO ENTERPRISES: Has Interim Access to Cash Collateral ------------------------------------------------------- Judge Sheri Bluebond authorized Deco Enterprises, Inc., to use cash collateral of up to$1,236,000 during the period from Feb. 20, 2020 through the close of business on April 10, 2020. The Debtor may use the cash collateral (in which Siena Lending Group, LLC claims a security interest) to pay ordinary and necessary operating expenses, pursuant to the budget, as well as pay prepetition priority payroll in accordance with an order of the Court. As adequate protection, the Court ruled that: * Siena Lending is granted an additional replacement security interest and lien on the Debtor's postpetition assets, and * the Debtor's accounts receivable, cash and inventory, in which Siena Lending holds a first priority perfected lien and security interest, must not erode by more than $150,000 during the budget period. Previously, the Debtor obtained permission to use cash collateral of up to $805,000 for the period through March 20, 2020 to pay ordinary business expenses, as well as prepetition priority payroll. According to the Debtor's bankruptcy schedules, the Debtor owes Siena Lending approximately $2,754,923, which debt is secured by a lien on all of the Debtor's personal property valued at approximately $4.4 million, and by a second priority deed of trust (by ABS Capital, LLC) against a certain commercial property in Commerce, California. About Deco Enterprises Deco Enterprises, Inc. manufactures lighting fixtures and systems. Deco Enterprises 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 was estimated to have $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. DG INVESTMENT 2: Moody's Alters Outlook on B3 CFR to Negative ------------------------------------------------------------- Moody's Investors Service affirmed DG Investment Intermediate Holdings 2, Inc.'s credit ratings, including a B3 corporate family rating, a B3-PD probability of default rating, and respective B2 and Caa2 instrument ratings on the security-systems integrator's first- and second-lien credit facilities. However, given concerns over an abrupt and possibly sharp slowdown in business activity in the near term due to the impacts of the COVID-19 epidemic, Moody's has changed Convergint's outlook to negative, from stable. Affirmations: Issuer: DG Investment Intermediate Holdings 2, Inc. ("Convergint") Probability of default rating, affirmed B3-PD Corporate family rating, affirmed B3 $814 million senior secured first-lien term loan maturing 2025, affirmed B2 (LGD3) $75 million senior secured first-lien revolving credit facility, expiring 2023, affirmed B2 (LGD3) $186 million senior secured second-lien bank credit facility maturing 2026, affirmed Caa2 (LGD5) Outlook action Outlook, changed to negative, from stable RATINGS RATIONALE The outlook change to negative, from stable, reflects Moody's expectation for weaker operating performance and higher than anticipated leverage in 2020 due to revenue challenges stemming from the effects of the COVID-19 crisis. The negative outlook also considers a deterioration in liquidity. Security installation projects on customers' premises will be delayed due to coronavirus-related social distancing restrictions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. 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. 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. At this time, the sectors most exposed to the COVID-19 shock are those that are most sensitive to consumer demand and sentiment. Convergint serves a diversified base of customers across industries primarily in the U.S. and Canada. Its exposure is relatively limited to the sectors hardest hit by the crisis, such as retail, transportation, and energy. Nevertheless, some of the smaller companies among Convergint's base of 3,500 customers will face financial hardship, and particularly-challenged sectors such as oil and gas and airlines may see an outright cessation in demand for projects. Convergint is at risk due to the project-based nature of security installation projects and the related lack of recurring, contract- or subscription-based revenues that would otherwise provide cushion against job delays and cancellations. Moody's views Convergint's liquidity as adequate. The company supplemented its healthy cash build-up through 2019 with a full, $75 million draw on its revolving credit facility in March 2020. Cash should sustain the company through a weak 2020 in which free cash flows may be breakeven at best. The company has acted quickly to reduce variable costs and has suspended discretionary travel and marketing expenses. In an effort to conserve funds, it has also reined in its historically active acquisition program. Even with full drawings under its revolver, which would spring a maximum leverage covenant, the company should have adequate cushion to stay within the covenant's parameters. The ratings are supported by a sizable, nearly $1.2 billion revenue base and a strong market presence in the design, installation, and contractual service and maintenance of electronic and physical commercial security systems. Once the coronavirus crisis abates, Moody's expects demand for the integration of security systems to return gradually to robust, pre-crisis levels, with commercial reliance on crucial but increasingly sophisticated and innovative technologies resuming growth. A dynamic technology environment allows for periodic upgrades and retrofits, supporting the re-occurring nature of Convergint's revenues. Security and surveillance are becoming more of a core business process as well, regardless of industry, and as such Convergint has minimal customer or end market concentration, although the U.S. is by far its biggest geographic market. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Convergint experiences higher than anticipated revenue and margin shortfalls in 2020, such that Moody's expects debt-to-EBITDA leverage to hold above 9.0 times on a sustained basis; if the company's liquidity position deteriorates substantially; or if compliance with debt covenants becomes challenged. Although unlikely in the next few quarters, a ratings upgrade may be considered upon the achievement of ongoing strong revenue gains, margin expansion, and significant, sustained deleveraging below 6.0 times. Also, given the aggressive financial strategy implied by both private equity ownership and an active acquisition platform, a ratings upgrade would be considered upon demonstration of restrained financial strategy. DG Investment Intermediate Holdings 2, Inc. (formerly Gopher Sub Inc.; dba Convergint) is a service-based organization that designs, installs, and maintains building systems, with a focus in the areas of security systems, and with ancillary services in fire alarm/notification and life safety. The corporate entity was formed to facilitate Ares Management's early 2018 acquisition of Convergint from another private equity sponsor. Moody's expects the company to generate 2020 revenues of approximately $1.0 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. DIBELLA GENERAL: Hires Center City Law as Counsel ------------------------------------------------- Dibella General Contractors, LLC, seeks authority from the US Bankruptcy Court for the Eastern District of Pennsylvania to employ Center City Law Offices LLC as its counsel. Service Center City will provide are: a. prepare all papers required to be filed in connection with this bankruptcy proceeding including all schedules, statement of financial affairs, list of creditors, operating reports and other papers; b. give the Debtor legal advice with respect to the powers and duties as Debtors in Possession; c. represent the Debtor at its Initial Debtor Interview, its first meeting with creditors, all status hearings, confirmation hearings and any Rule 2004 examinations; d. prepare all necessary applications, answers, complaints, motions, orders, reports and all legal papers; and e. perform all other legal services for the Debtor as Debtor in Possession as may be required and necessary concerning the continued administration of this case including the preparation of the Disclosure Statement and Plan of Reorganization. The hourly rates charged by Center City are: Principal $300 Associates $165 Maggie Soboleski, Esq., disclosed in a court filing that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Maggie S. Soboleski, Esq. Center City Law Offices, LLC 2705 Bainbridge Street Philadelphia, PA 19146 Phone: 215-620-2132 Fax: 215-689-4303 Email: msoboles@yahoo.com About Dibella General Contractors Dibella General Contractors is a general contractor located in Philadelphia. They offer trenching and bathroom remodeling as well as other services. Dibella General Contractors filed an emergency petition for protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 20-11152) on Feb. 25, 2020, listing under $1 million in both assets and liabilities. Maggie Soboleski, Esq. at the Center City Law Offices, LLC, is the Debtor's counsel. DILLARD'S INC: S&P Lowers ICR to 'BB-'; Outlook Negative -------------------------------------------------------- S&P Global Ratings lowered all ratings on Dillard's Inc., including the issuer credit rating to 'BB-' from 'BB'. Severe headwinds will cause a significant deterioration in credit metrics this year. "We anticipate that the fallout from coronavirus pandemic including store closures, lingering social distancing, and general economic downturn will result in a sharp decline in revenue in excess of 20% this year. Although we anticipate Dillard's will offset some sales deleveraging through reduced selling, general, and administrative (SG&A) costs and inventory management, we expect profitability will be severely affected this year. We also expect margins to rebound to less than historical levels in 2021 as Dillard's contends with a recessionary environment, potential acceleration in already negative mall traffic trends, intense competition, and increasing price transparency. In addition, we anticipate negative free operating cash flow (FOCF) in 2020. Thereafter, we expect FOCF generation of approximately $100 million on a sustained basis as the economy rebounds supporting more normalized--though still lower than 2019--demand levels. As such, we have revised our view of Dillard's financial risk profile to significant from intermediate," S&P said. The negative outlook reflects the risk that S&P could lower its rating on the company if a prolonged disruption in consumer spending results in the rating agency's reassessment of Dillard's competitive and financial positon. "We could lower the ratings on Dillard's if operational performance meaningfully weakens compared with our expectations because of protracted decline in the economy and consumer spending, indicating a deterioration in its competitive standing. We could also lower our ratings if we project that adjusted leverage remains at 4x or higher on a sustained basis," S&P said. "We could revise the outlook to stable or raise the ratings on Dillard's if we see a clear path to sustainable sales and profit growth, with leverage remaining less than 4x on a sustained basis while addressing any potential covenant concerns," the rating agency said. DONNELLEY FINANCIAL: S&P Downgrades ICR to 'B+'; Outlook Negative ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Donnelley Financial Solutions Inc. (DFIN) to 'B+' from 'BB-' and its issue-level rating on the senior secured credit facility to 'BB' from 'BB+'. S&P affirmed its 'B' issue-level rating on the senior unsecured debt with a change in recovery ratings to '5' from '6' following the repayment of the company's remaining term loan borrowings in 2019. S&P acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. Some government authorities estimate the pandemic will peak about midyear, and the rating agency is using this assumption in assessing the economic and credit implications. S&P believes the measures adopted to contain COVID-19 have pushed the global economy into recession. As the situation evolves, S&P will update its assumptions and estimates accordingly. "The downgrade reflects our expectation for increased leverage and liquidity pressure from reduced capital markets transaction volumes due to the coronavirus pandemic. We expect that DFIN's operating performance, particularly in its Capital Markets and International segments, will be hurt by the decline in volume of market transactions such as mergers, acquisitions, debt offerings, and IPOs of DFIN's corporate clients. We expect this, along with overall economic challenges, will diminish DFIN's revenue and EBITDA, especially in the second and third quarters of 2020 and cause its S&P adjusted leverage to increase well above 4x. Furthermore, we expect that DFIN's covenant margin of compliance could likely shrink below 10%, during 2020, which would limit revolving credit facility availability thus limiting liquidity and increase the risk of a covenant violation," S&P said. The negative outlook on DFIN reflects the uncertainty and downside risks stemming from the pandemic on the company's operating performance. A greater-than-expected revenue contraction could put additional pressure on the company's credit metrics causing them to remain elevated over an extended period and further shrink the covenant cushion. "We could lower our issuer credit rating if we expect the company's S&P adjusted leverage to increase to above 5x or if free operating cash flow (FOCF) to debt decreases to below 5% for a prolonged period. We could also lower the rating if the company is unable to restore adequate cushion on its covenants or if the financial market environment changes such that we believe the company would be unable to attain a covenant amendment if needed," S&P said. "We will revise the outlook to stable once we see evidence of economic stability such that DFIN's revenues and capital markets transaction volumes have resumed to levels that allow the company to reduce leverage and maintain adequate covenant cushion. An upgrade is unlikely over the next 12 months and would require the company to lower its S&P adjusted leverage below 3.75x and maintain FOCF to debt above 10% on a sustained basis," the rating agency said. ECHO ENERGY: Seeks Court OK for Opportune's Laswell as CRO ---------------------------------------------------------- Echo Energy Partners I LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Opportune, LLC as its restructuring advisor and appoint Gregg Laswell as chief restructuring officer. Mr. Laswell and the firm will assist Debtor in evaluating and implementing strategic and tactical options through the restructuring process. They will also assist in the preparation of financial-related disclosures and financial information necessary to confirm Debtor's Chapter 11 plan; and in any potential of Debtor's assets. Debtor proposes to pay Opportune at these rates: Managing Partner $1,150 per hour Partner $1,050 per hour Managing Director/CRO $875 per hour Directors $775 per hour Managers $685 per hour Senior Consultants $515 per hour Consultants $450 per hour Administrative Professional $275 per hour Debtor will pay the firm a deferred restructuring fee of $250,000 in cash on the effective date of a restructuring transaction. Mr. Laswell, a director at Opportune's subsidiary, Dacarba LLC, disclosed in court filings that Opportune is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Gregg Laswell Opportune, LLC 711 Louisiana Street, Suite 3100 Houston, Texas 77002 Office: 713.490.5050 About Echo Energy Partners I Echo Energy Partners I, LLC -- https://www.echoenergy.com/ -- is an upstream oil and gas firm that partners with financial institutions, pension funds, family offices, and high net worth individuals. It currently manages assets in the SCOOP, STACK, Midland, and Delaware basins in Oklahoma and Texas. Echo Energy Partners I sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31920) on March 24, 2020. At the time of the filing, the Debtor was estimated to have assets of between $50 million and $100 million and liabilities of between $100 million and $500 million. Judge David R. Jones oversees the case. Debtor tapped BRACEWELL LLP as legal counsel; Stretto as claims agent and administrative advisor; and Opportune LLP as restructuring advisor. Gregg Laswell a director at Opportune's subsidiary, Dacarba LLC, is the Debtor's chief restructuring officer. EMBLEM FINANCE 2: Fitch Affirms BB- Rating ------------------------------------------ Fitch Ratings has affirmed the rating of Emblem Finance Company No. 2 Limited at 'BB-sf'/Stable and removed it from Under Criteria Observation where it was placed on March 20, 2020 due to its linkage to HSBC Holdings plc's subordinated debt, following the publication of Fitch's new Bank Rating Criteria on Feb. 28, 2020. Emblem Finance Company No. 2 Limited Adjusted by Inflation Credit XS0332880342; LT BB-sf; Affirmed Following the downgrade of HSBC Holdings plc's subordinated debt (one of the risk-presenting entities) to 'A-'/Negative from 'A'/Stable, the rating for the transaction remains at 'BB-sf'/Stable after applying the Three-Risk Credit-Linked Notes Matrix per Fitch's CLN criteria. KEY RATING DRIVERS The rating of the CLN is linked to three risk-presenting entities: -- JPMorgan Chase & Co.'s ('AA-'/Stable) as the swap counterparty; -- HSBC Holdings plc's subordinated notes ('A-'/Negative) as the qualified investment; -- Votorantim S.A. (VSA) ('BBB-'/ Stable), as the reference entity on the credit default swap; restructuring is selected as a credit event on VSA in the transaction's credit default swap. Coronavirus Impact: Fitch acknowledges the uncertainty and rapidly evolving events related to the coronavirus pandemic and its impact on global markets. This disruption may impact the ratings of the risk-presenting entities. The Negative Outlook placed on HSBC Holdings' subordinated debt reflects the economic disruption driven by the coronavirus pandemic. RATING SENSITIVITIES A change of the ratings assigned to any of the risk presenting entities could result in a change of the rating assigned to the notes based on Fitch's CLN criteria Three-Risk CLN Matrix. Factors that could, individually or collectively, lead to positive rating action/upgrade: 1) Rating Scenarios Regarding VSA (assuming no change to the current rating assigned to HSBC Holdings' Subordinated Notes [CUSIP: 404280AF6] and JPMorgan Chase): -- An upgrade of one notch would result in a rating upgrade of the notes to 'BBsf'. -- An upgrade of two notches would result in a rating upgrade of the notes to 'BB+sf'. 2) Rating Scenarios Regarding HSBC Holdings' Subordinated Notes [CUSIP: 404280AF6] (assuming no change to the current rating assigned VSA and JPMorgan Chase): -- An upgrade of one notch would have no impact on the current rating of the notes. -- An upgrade of two notches would have no impact on the current rating of the notes. 3) Rating Scenarios Regarding JPMorgan Chase (assuming no change to the current rating assigned to VSA and HSBC Holdings' Subordinated Notes [CUSIP: 404280AF6]): -- An upgrade of one notch would have no impact on the current rating of the notes. -- An upgrade of two notches would have no impact on the current rating of the notes. Factors that could, individually or collectively, lead to negative rating action/downgrade: 1) Rating Scenarios Regarding VSA (assuming no change to the current rating assigned to HSBC Holdings' Subordinated Notes [CUSIP: 404280AF6] and JPMorgan Chase): -- A downgrade of one notch would result in a rating downgrade of the notes to 'B+sf'. -- A downgrade of two notches would result in a rating downgrade of the notes to 'Bsf'. 2) Rating Scenarios Regarding HSBC Holdings' Subordinated Notes [CUSIP: 404280AF6] (assuming no change to the current rating assigned VSA and JPMorgan Chase): -- A downgrade of one notch would have no impact on the current rating of the notes. -- A downgrade of two notches would have no impact on the current rating of the notes. 3) Rating Scenarios Regarding JP Morgan Chase (assuming no change to the current rating assigned to VSA and HSBC Holdings' Subordinated Notes [CUSIP: 404280AF6]): -- A downgrade of one notch would result in a rating downgrade of the notes to 'B+sf'. -- A downgrade of two notches would result in a rating downgrade of the notes to 'B+sf'. BEST/WORST CASE RATING SCENARIO Ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. ENTRANS INT'L: Moody's Cuts CFR to B3, Outlook Remains Negative --------------------------------------------------------------- Moody's Investors Service downgraded its ratings for EnTrans International, LLC including the company's corporate family rating (CFR, to B3 from B2) and first lien term loan facility ratings (to Caa1 from B3). The ratings outlook continues to be negative. The downgrades reflect deteriorating business conditions which will impact EnTrans' profitability and key credit metrics near term, with the prospect of improvement unclear until potentially 2021. According to Shirley Singh, Moody's lead analyst for EnTrans, "The company's trailer and oil/gas segments are exposed to revenue pressure over the balance of 2020 and Moody's expects key credit metrics to weaken materially." "The company does, however, possess adequate liquidity to weather the challenging period ahead, but room for error will be limited and the severity and duration of the softness remains unknown but a quick reversion to more normalized market conditions will be critical to stemming downside risk." RATINGS RATIONALE The B3 CFR broadly reflects the company's small size, its expected high financial leverage, and low free cash flow generation near term balanced against a good market position as a leading manufacturer of tank trailers, backlog driven revenues which help production planning, low customer concentration and progress achieved recently in operational improvement initiatives. For 2020, Moody's expects leverage to exceed 7x, and free cash flow to approximate only $5 million to $10 million. The company's free cash flow in 2020 will likely benefit from a working capital reduction that accompanies potentially as much as a 20% reduction in annual revenue. Free cash flow may not meaningfully improve in 2021 should demand not materially rise. The B3 CFR also anticipates that while EnTrans may require borrowings under its $75 million asset-based revolved credit line to cover scheduled term loan amortization of $12.75 million near-term, availability under the line was likely greater than $60 million at Q1-2020. Further, the company's only maintenance covenant is a provision under the revolving credit facility that is unlikely to activate unless EnTrans were to heavily draw upon the line. The covenant arrangement offers EnTrans a degree of flexibility that could help it bridge the low revenue period and also meet working capital needs that could expand with better demand in 2021. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The manufacturing sector has been adversely affected by the shock given its exposure to economic activity in general and market sentiment. Entran's weakening credit profile has 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 actions reflect the impact on Entrans of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative ratings outlook reflects declining backlog over 2019, low room for error in light of the revenue contraction magnitude expected, the potential that backlog may not significantly rebound in 2021, and Entrans' historically volatile free cash flow profile. The Caal rating on the first lien term loan facility, one notch below the CFR, reflects the presence of effectively senior claims -- including priority trade claims and the asset-based revolving credit facility. In a stress scenario, the first lien term loan facility would likely recover at a rate below the family-wide liability recovery rate. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward ratings momentum would depend on a rising backlog trend, leverage below 6.5x with free cash flow of $30 million, and an adequate liquidity profile. Downward ratings pressure would follow revolver borrowings in excess of $25 million or borrowing-based revolver availability of less than $35 million, leverage approaching high 7x, or a weakening liquidity profile. The following rating actions were taken: Downgrades: Issuer: EnTrans International, LLC Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: EnTrans International, LLC Outlook, Remains Negative EnTrans International, LLC is a North American based manufacturer of energy and transportation equipment as well as a provider of aftermarket tank trailer services and parts. Products include aluminum and stainless-steel tank trailers, specialty trailers, and a diverse range of oil & gas equipment. The company operates under brands names including Heil Trailer, Polar, Kalyn Sibert, Jarco and Serva and is considered to be a leading supplier of tank trailers in North America within the petroleum, dry bulk, stainless steel and aluminum categories. The company was formed from the combination of Polar, Heil Trailer, and SERVA, with more than 90% of sales in the US. The company also owns 35% of SJS, a venture with Chinese state-owned Sinopec Limited, which manufactures frack equipment sold in China and exported to North America. The company is owned by private equity firm American Industrial Partners (AIP). Sales for 2019 were $605 million. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. EP ENERGY: Ernst & Young LLP Raises Going Concern Doubt ------------------------------------------------------- EP Energy Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $943 million on $820 million of total operating revenues for the year ended Dec. 31, 2019, compared to a net loss of $1.003 billion on $1,324 million of total operating revenues for the year ended in 2018. The audit report of Ernst & Young LLP states that the Company filed for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code on October 3, 2019 and has stated the significant risks and uncertainties related to the Company's liquidity and Chapter 11 proceedings raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $3.710 billion, total liabilities of $5.243 billion, and a total stockholders' deficit of $1.533 billion. A copy of the Form 10-K is available at: https://is.gd/lAHQv2 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. On Jan. 13, 2020, 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. EPIC COMPANIES: Committee Hires Reid Collins as Special Counsel --------------------------------------------------------------- The official committee of unsecured creditors of Epic Companies, LLC and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas to retain Reid Collins & Tsai LLP as its special litigation counsel. On Jan. 20, 2020, following an extensive investigation by Munsch Hardt, the committee filed a motion, as well as a draft complaint, seeking standing to prosecute claims and causes of action belonging to the Debtors' bankruptcy estates against White Oak Global Advisors, LLC, Acqua Liana Capital Partners, LLC, and participating or syndicated lenders in and under purported, prepetition loans to the Debtors. On Feb. 13, 2020, the Debtors and the committee, as plan proponents, filed a disclosure statement and a joint Chapter 11 plan of liquidation, which Joint Plan provides for any and all "Retained Causes of Action" to be vested in a liquidating trust. Under the Joint Plan, the Retained Causes of Action include: (a) the lender claims; and (b) all claims and causes of action belonging to the Debtors or the Estates against "insiders," as defined under 11 U.S.C. Sec. 101(31), including Thomas Clarke, David Wiley, and their affiliates, such as Orinoco Natural Resources and Oakridge Energy Partners (Insider Claims). The committee requires Reid Collins to: (a) analyze and investigate the lender claims; (b) assist with the Standing Motion as well as the hearing on that motion; (c) prosecute and liquidate the lender claims; (d) advise and communicate with the Committee regarding the lender claims; (e) assist in the transition of the lender claims to the Trust to the extent that the Joint Plan is confirmed; and (f) perform other legal services which are appropriate, necessary, and proper in connection with the pursuit of the lender claims for the benefit of the Estates. The committee proposes to retain Reid Collins under a contingency-fee arrangement with respect to the lender claims pursuant to 11 U.S.C. Sec. 328(a). The contingency-fee arrangement is as follows: a. Reid Collins will receive a contingency fee equal to 5 percent of Gross Recoveries obtained by any of the Estates (or the Trust) prior to any formal mediation or any substantive revisions by Reid Collins to the proposed draft complaint regarding the lender claims; b. Reid Collins will receive a contingency fee equal to 20 percent of Gross Recoveries obtained by any of the Estates (or the Trust) after the commencement of formal mediation or any substantive revisions by Reid Collins to the proposed draft complaint regarding the lender claims, but prior to filing an adversary proceeding regarding those claims; c. Reid Collins will receive a contingency fee equal to 30 percent of Gross Recoveries obtained by any of the Estates (or the Trust) after filing an adversary proceeding regarding the lender claims, but prior to commencing discovery in that proceeding; and d. Reid Collins will receive a contingency fee equal to 40 percent of Gross Recoveries obtained by any of the Estates (or the Trust) after filing an adversary proceeding regarding the lender claims, and after commencing discovery in that proceeding. Reid Collins -— along with Munsch Hardt -— will also represent the Trust with respect to the Insider Claims, if the Joint Plan is confirmed and becomes effective. That representation will be governed by a similar, but slightly different, contingency-fee arrangement: a. Reid Collins and Munsch Hardt will receive a contingency fee equal to 22.5 percent and 7.5 percent, respectively, of Gross Recoveries obtained by the Trust prior to filing an adversary proceeding regarding the Insider Claims; and b. Reid Collins and Munsch Hardt will receive a contingency fee equal to 30 percent and 10 percent, respectively, of Gross Recoveries obtained by the Trust after filing an adversary proceeding regarding the Insider Claims. Eric D. Madden, Esq., a partner at Reid Collins & Tsai, 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. Reid Collins can be reached at: Eric D. Madden, Esq. Reid Collins & Tsai LLP 1601 Elm Street, 42nd Floor Dallas, TX 75201 Tel: (214) 420-8900 Fax: (214) 420-8909 Email: emadden@rctlegal.com About Epic Companies Headquartered in Houston, Epic Companies, LLC, is a full-service provider to the global decommissioning, installation and maintenance markets. Its services include heavy lift, diving and marine, specialty cutting and well plugging and abandonment services. It has limited ongoing operations and is owned 50 percent by Orinoco and 50 percent by Oakridge Natural Resources, LLC, and Oakridge Energy Partners LLC. Epic Companies and six affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-34752) on Aug. 26, 2019. At the time of the filing, Epic Companies had estimated assets of between $10 million and $50 million and liabilities of between $100 million and $500 million. The Debtors tapped Porter Hedges LLP as bankruptcy counsel; S3 Advisors, LLC as restructuring advisor; Epiq Corporate Restructuring, LLC as claims agent; and Lugenbuhl Wheaton Peck Rankin & Hubbard as special counsel. Henry Hobbs Jr., acting U.S. trustee for Region 7, appointed a committee of unsecured creditors on Sept. 6, 2019. The committee is represented by Munsch Hardt Kopf & Harr, P.C. EVERI PAYMENTS: Moody's Rates New $125MM Sec. Term Loan 'B1' ------------------------------------------------------------ Moody's Investors Service assigned a B1 rating to EVERI Payments Inc.'s proposed $125 million senior secured term loan facility. The company's B2 Corporate Family Rating, B2-PD Probability of Default Rating, B1 rated senior secured revolver and term loan, and Caa1 rated senior unsecured notes are unchanged. The company's Speculative Grade Liquidity rating is unchanged at SGL-3. The outlook remains negative. Proceeds from the proposed $125 million senior secured term loan facility, net of fees and expenses, will be used to provide incremental cash liquidity for the company. The additional liquidity is beneficial to improve flexibility to manage in the current weak economy including temporary customer facility closures, but the incremental debt will increase leverage to help cover the company's current cash burn. Assignments: Issuer: EVERI Payments Inc. Senior Secured Bank Credit Facility, Assigned B1 (LGD3) 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 company's 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, 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. The proposed $125 million term loan will add to the company's existing cash balances, and on a pro-forma basis cash would be near $280 million, net of settlement receivables/liabilities. 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. 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. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING 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 this rating was Business and Consumer Service Industry published in October 2016. EXCEL FITNESS: Moody's Cuts CFR to Caa2, Outlook Negative --------------------------------------------------------- Moody's Investors Service downgraded Excel Fitness Holdings, Inc.'s ratings including its Corporate Family Rating to Caa1 from B3, Probability of Default Rating to Caa1-PD from B3-PD, and first lien credit facilities to Caa1 from B3. The outlook is negative. The downgrade reflects Moody's expectations for significant revenue and earnings decline in 2020 due to coronavirus related gym closures and reduced discretionary consumer spending because of higher unemployment. The downgrade also reflects the negative effect on Excel's operating cash flow and liquidity, which will strain the company's ability to open new clubs at the rate initially intended as a new issuance last September. As a result, Moody's expects debt-to-EBITDA to rise to above 7.5x in 2020 with high cash burn during gym closures. Gym closures began in mid-March. Moody's expects efforts to contain the coronavirus will restrict Excel's ability to reopen for an unknown period, and lead to a drop in membership because of higher churn and greater difficulty attracting new members once the clubs reopen. Issuer: Excel Fitness Holdings, Inc. Corporate Family Rating, downgraded to Caa1 from B3 Probability of Default Rating, downgraded to Caa1-PD from B3-PD Senior Secured First Lien Revolving Credit Facility, downgraded to Caa1 (LGD3) from B3 (LGD3) Senior Secured First Lien Term Loan, downgraded to Caa1 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: Excel Fitness Holdings, Inc. Outlook, revised to Negative from Stable RATINGS RATIONALE Excel's Caa1 CFR reflects its high leverage with Moody's adjusted debt-to-EBITDA expected to rise to above 7.5x in 2020 with limited liquidity to sustain operations through a prolonged shutdown. Excel's liquidity is weaker than rated peers entering the downturn with the smallest revolving credit facility to grow its club count through the back half of 2020. The rating also reflects Excel's small scale, moderate geographic concentration and the business risks associated with the highly fragmented fitness club industry including high membership attrition rates, heavy competition from multiple formats, and exposure to shifts in consumer spending and economic cycles. In addition, the rating reflects the event and financial policy risk due to private equity ownership. However, Excel benefits from a history of generating high comparable club revenue growth and the strong Planet Fitness franchise and position as a leader in the low-cost fitness market. Consumers trade down to lower cost memberships during economic recessions, which should help Excel better navigate a downturn relative to peers operating in the mid- and high- price segments. 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 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 Excel's credit profile, including its exposure to US quarantines have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Excel 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 Excel of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects its view that Excel remains vulnerable to coronavirus disruptions and unfavorable shifts in discretionary consumer spending. There is uncertainty regarding the timing of facility re-openings and the pace at which consumer spending at the company's properties will recover. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded should operating performance, credit metrics and liquidity improve. The ratings could be downgraded if there is further deterioration of operating performance, credit metrics or liquidity. Furthermore, ratings could be downgraded should Moody's adjusted debt-to-EBITDA remain elevated or the prospect for a distressed exchange or other default increases. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Austin, TX, Excel Fitness is a franchisee of 78 Planet Fitness clubs across six states with over 620,000 members. Fitness is owned by Altamont Capital Partners (slight majority) with management (including certain founders) owning the remaining equity. 2019 revenues were approximately $136 million. EXTRACTION OIL: S&P Lowers ICR to 'CCC+'; Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered the issuer credit and senior unsecured ratings on independent oil and gas company Extraction Oil & Gas Inc. (XOG) to 'CCC+' from 'B-'. "We expect financial measures, cash flow, and liquidity to weaken as a result of lower crude oil and natural gas prices. The downgrade also reflects the significant decline in our oil price assumptions due to the cessation of OPEC+'s production limits and the resulting price war between Saudi Arabia and Russia, exacerbated by the unprecedented reduction in demand stemming from the coronavirus. In particular, we expect average crude oil prices to be significantly lower for the remainder of 2020, including West Texas Intermediate at $25 per barrel (bbl) and Brent at $30 per barrel. At these levels, financial performance and liquidity will be well below our expectations," S&P said. The negative outlook reflects the upcoming redemption of XOG's $189.9 million series A preferred stock in 2021 at a time of weak capital markets, especially for the exploration and production (E&P) industry. Although not due until Oct 15, 2021, if it is not redeemed before April 15, 2021, the maturity of the credit facility would spring forward to that date. In addition, given the very high yield, and related discount, on its senior notes, S&P believes there is a heightened risk that XOG could pursue a refinancing transaction the rating agency would view as distressed. "We could lower our ratings on XOG if it failed to address the redemption of the series A preferred stock on a timely basis, most likely before Sept 30, 2020. We could also lower ratings if XOG pursued a transaction that we viewed as distressed. Both are likely if crude oil prices and capital markets fail to meaningfully improve from current levels," S&P said. "We could revise our outlook on XOG to stable if it could address the series A preferred stock redemption and we believed the potential for a distressed exchange had become remote. This would likely occur if crude oil prices significantly improved on a sustained basis, supporting improved operating cash flows and better capital market access for the industry," S&P said. EYEMART EXPRESS: Moody's Alters Outlook on B2 CFR to Negative ------------------------------------------------------------- Moody's Investors Service changed Eyemart Express, LLC's ratings outlook to negative from stable. Concurrently, Moody's affirmed Eyemart's B2 corporate family rating, B2-PD probability of default rating and B1 senior secured credit facility ratings. The change in outlook to negative from stable reflects the company's weakened liquidity and earnings as a result of coronavirus-driven temporary store closures. The ratings affirmation reflects the recession-resilient nature of value-priced optical retail and Eyemart's track record of stable growth. Moody's took the following rating actions for Eyemart Express, LLC: Corporate Family Rating, affirmed B2 Probability of Default Rating, affirmed B2-PD $50 million senior secured first lien revolving credit facility due 2022, affirmed B1 (LGD3) $355 million senior secured first lien term loan B due 2024, affirmed B1 (LGD3) 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 non-food 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 Eyemart's credit profile, including its exposure to widespread store closures have left it vulnerable to shifts these unprecedented operating conditions and Eyemart 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 Eyemart of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Eyemart's B2 CFR reflects the company's high leverage, with Moody's-adjusted debt/EBITDA of 5.3 times as of December 28, 2019. Moody's expects earnings to decline significantly in Q2 2020 because of COVID-19-related temporary store closures, and result in leverage increasing over 6 times in 2020. However, Moody's forecasts that Eyemart's earnings will recover relatively quickly as eyeglasses are largely a non-discretionary item. Moody's expects the company to have sufficient liquidity to sustain operations during a limited period of store closures, however that will require significant cost cuts and deferrals. Liquidity over the next 12-18 months will be just adequate, including an estimated current total liquidity of $44 million and expectations for modest positive free cash flow for the full year 2020 assuming significant CapEx reduction. The credit profile is also limited by Eyemart's small scale and limited geographic footprint. In addition, the rating incorporates governance considerations, specifically Eyemart's aggressive financial strategies as a private equity-owned company, such as debt-financed dividend distributions. As a retailer, Eyemart is also subject to social factors including treatment of the workforce, supply chain sustainability, and privacy and data protection. Nevertheless, the credit profile is supported by Eyemart's operations in the recession-resilient and growing optical retail segment. As a retailer of medical necessities, Eyemart should benefit from pent-up demand when its stores reopen. The credit profile also benefits from the company's high operating margins and differentiated offering relative to other optical and big-box retailers, in particular its same-day service. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if weaker than anticipated operating performance or aggressive financial policies, including additional debt financed dividends or an overly aggressive growth strategy, resulted in debt/EBITDA sustained above 6.25 times or EBIT/Interest expense sustained below 1.25 times. A deterioration in the company's liquidity profile including negative free cash flow, could also result in a downgrade. Ratings could be upgraded if strong operating performance, including stable revenue and EBITDA growth, resulted in debt/EBITDA sustained below 5 times with EBIT/Interest expense above 2.25 times. An upgrade would also require an expectation that financial policies will support credit metrics maintained at these levels and that the company maintains a good liquidity profile. Headquartered in Texas, Eyemart Express, LLC is a provider of vision care services and manufacturer and retailer of eyeglasses, with a focus on value price points. The company operated 218 stores, and generated revenue of approximately $294 million for the fiscal year ended December 28, 2019. The company was acquired in December 2014 by affiliates of Friedman Fleischer & Lowe for a total consideration of roughly $800 million. The principal methodology used in these ratings was Retail Industry published in May 2018. FARM STATION: Seeks to Hire Bankruptcy Attorney ----------------------------------------------- Farm Station Cafe LLC seeks authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire a bankruptcy attorney. The Debtor proposes to employ John Forest II, Esq., to give legal advice with respect to its powers and duties and to provide all other legal services which may be necessary to advance its Chapter 11 case to a conclusion. The attorney will be employed under a general retainer at the standard rate of $325 per hour. Mr. Forest assures the court that he does not holds interests adverse to the estate of the Debtor or any other party in interest, including the Office of the U.S. Trustee and the individuals it employs. Mr. Forest can be reached at: John P. Forest, II, Esq. 11350 Random Hills Rd., Suite 700 Fairfax, VA 22030 Tel: (703) 691-4940 Email: john@forestlawfirm.com About Farm Station Cafe LLC Farm Station Cafe LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 20-10684) on March 3, 2020, listing under $1 million in both assets and liabilities. John P. Forest, II, Esq. is the Debtor's legal counsel. FIELDWOOD ENERGY: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. ------------------------------------------------------------------- Moody's Investors Service downgraded Fieldwood Energy LLC's Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa2-PD from B3-PD, first-lien secured term loan to Caa1 from B1, and second-lien term loan to Caa3 from Caa1. Fieldwood's rating outlook was changed to negative from positive. "The sharp drop in global crude oil prices limits Fieldwood's cash flow and refinancing prospects while undermining liquidity given its limited hedge protection beyond 2020 and tightening covenants," commented Sajjad Alam, Moody's Senior Analyst. "The company will likely need to obtain a waiver or an amendment from its lenders to remain in compliance with the financial covenants if oil prices do not recover quickly by mid-2020." Issuer: Fieldwood Energy LLC Ratings Downgraded: Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD $1.1 billion Gtd first lien senior secured term loan, Downgraded to Caa1 (LGD3) B1 (LGD3) $518 million Gtd second lien senior secured term loan, Downgraded to Caa3 (LGD5) from Caa1 (LGD5) Outlook Action: Issuer: Fieldwood Energy LLC Outlook, Changed to Negative from Positive RATINGS RATIONALE The negative outlook reflects Fieldwood's potential covenant violation risks and rising refinancing risk involving $1.3 billion of debt maturities in early-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 E&P sector will be one of the sectors most significantly affected by the shock given its sensitivity to production volume and indirect exposure to oil and gas prices. More specifically, the weaknesses in Fieldwood'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 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 partially reflects the impact on Fieldwood's credit quality of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. Fieldwood has weak liquidity despite having a modest amount of cash on hand. The company fully drew down the remaining availability under its revolving credit facility in early-2020 and has minimal hedge protection beyond 2020. While the company has good hedge protection for 2020, Moody's still expects negative free cash flow if current strip prices prevail during the balance of the year. Even if the company manages to substantially reduce its capital and plugging and abandonment (P&A) expenditures as well as operating and SG&A costs, its cash cushion will decline in 2020. Low oil prices will also present refinancing challenges since the company's $147.6 million credit facility matures in January 2022, closely followed by the April 2022 maturity of its $1.1 billion first-lien term loan. Fieldwood is also facing a potential covenant breach in the second half of 2020 as earnings take a hit. There are three financial covenants governing the first-lien term loan - a total net leverage ratio no greater than 4x, a first-lien net leverage ratio of no greater than 2.25x, and an asset coverage ratio of no less than 1.75x. Fieldwood's alternate liquidity is limited given all of its assets are encumbered. Fieldwood's Caa2 CFR reflects its high refinancing and covenant violation risks as a result of low projected oil prices, elevated financial leverage, and declining liquidity. In the absence of a significant rebound in oil prices, the company will struggle given its limited hedge protection and cash balance to address potential negative free cash flow and ongoing meaningful capital and P&A expenditures. The rating also considers Fieldwood's concentration in the Gulf of Mexico, private ownership, and limited financial disclosures. Fieldwood's key credit strengths are its oil-weighted production base (~71% liquids in 2019), relatively high proportion of proved developed (PD) and behind-pipe reserves that can be brought to production at fairly low costs, high operational control, and good organic growth prospects across its offshore leases. The $1.143 billion first-lien term loan is rated Caa1, one notch above the Caa2 CFR, because it has a priority claim to Fieldwood's assets, and it benefits from the significant loss absorption cushion afforded by the second lien term loan facility in a potential default scenario. The $518 million second-lien term loan is rated one notch below the CFR at Caa3 because of the high proportion of priority claim first-lien debt in Fieldwood's capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Any material decline in production or cash balance could trigger a downgrade. If the company is unable to negotiate a waiver or amendment for its financial covenants, the ratings could also be downgraded. An upgrade could be considered if the company can eliminate the covenant violation risk, makes substantial progress in refinancing the first-lien term loan and sustains an RCF/debt ratio above 10% in an improving price environment. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Fieldwood Energy LLC is an independent oil and gas exploration and production company headquartered in Houston, Texas. FIFTH DAY: Gets Access to Cash Collateral Thru May 6 ---------------------------------------------------- Judge Thomas L. Perkins authorized Fifth Day Restaurants, LLC, d/b/a T.G.I. Fridays, to use the cash collateral of Morton Community Bank on an interim basis through May 6, 2020, pursuant to the budget. The Court ruled that MCB is granted an interim postpetition lien on the Debtor's postpetition receivables and a lien against the Debtor's deposit accounts to replace the loss of any prepetition accounts receivable and deposit accounts. A further hearing on the Debtor's use of the cash collateral will be held on April 28, 2020 at 3:15 p.m. About Fifth Day Restaurants Fifth Day Restaurants, LLC, doing business as T.G.I. Fridays, is in the restaurants industry. Fifth Day Restaurant filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Ill. Case No. 20-80285) on March 2, 2020. In the petition signed by William H. Torchia, manager, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Sumner A. Bourne, Esq., at Rafool & Bourne, P.C., serves as the Debtor's bankruptcy counsel. FITNESS INT'L: Moody's Alters Outlook on Caa1 CFR to Negative ------------------------------------------------------------- Moody's Investors Service downgraded Fitness International, LLC's Corporate Family Rating to Caa1 from B2, Probability of Default Rating to Caa2-PD from B3-PD, and first lien bank credit facilities to B3 from B1. The outlook is negative. The downgrade reflects Moody's view that Fitness International's earnings and liquidity will undergo significant stress over the next twelve months due to coronavirus related club closures and cutbacks in discretionary consumer spending because of higher unemployment. Membership churn is also expected to accelerate during the closure, which along with weaker new enrollment will hinder EBITDA recovery when the clubs reopen. As a result, Moody's expects lease adjusted debt-to-EBITDA to approach 7.0x in 2020. The facility closures began in mid-March. Moody's expects efforts to contain the coronavirus will restrict Fitness International's ability to reopen for an unknown period. Issuer: Fitness International, LLC Corporate Family Rating, downgraded to Caa1 from B2 Probability of Default Rating, downgraded to Caa2-PD from B3-PD Senior Secured First Lien Revolving Credit Facility, downgraded to B3 (LGD2) from B1 (LGD2) Senior Secured First Lien Term Loans, downgraded to B3 (LGD2) from B1 (LGD2) Outlook Actions: Issuer: Fitness International, LLC Outlook, revised to Negative from Stable RATINGS RATIONALE Fitness International's Caa1 CFR broadly reflects its high leverage level, with Moody's lease adjusted debt/EBITDA expected to approach 7.0x in 2020 due to projected earnings decline from club closures as the result of efforts to contain the coronavirus and weaken consumer spending once the clubs reopen. The rating is also constrained by the highly fragmented and competitive fitness club industry, Fitness International's positioning in the industry's more pressured mid-tier price point, exposure to cyclical shifts in discretionary consumer spending, and high attrition rates. However, the rating is supported by a well-recognized brand name, the company's position as the largest non-franchisee fitness center by number of clubs, as well as the longer-term positive fundamentals for the fitness club industry such as its apparent under penetration and an increased awareness of the importance of fitness. Moody's expects the company will take aggressive actions to reduce expenses and preserve cash including renegotiating leases at its 724 clubs, but the extent of the cash burn is driven by uncertain factors such as the length of club closures and the ability to rebuild membership once the clubs reopen. 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 Fitness International'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 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 Fitness International of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects Moody's view that Fitness International remains vulnerable to coronavirus disruptions and unfavorable shifts in discretionary consumer spending. The negative outlook also reflects the uncertainty regarding the timing of gym re-openings and the risk of liquidity stress should gym closures persist. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded should operating performance, credit metrics and liquidity improve. The ratings could be downgraded if there is further deterioration of operating performance, credit metrics or liquidity. Furthermore, ratings could be downgraded should Moody's adjusted debt-to-EBITDA remain elevated or the prospect for a distressed exchange or other default increases. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Fitness International, LLC is the largest non-franchised fitness club operator in the United States. At September 31, 2019, it had over 5.4 million members and operated 724 clubs in 27 US states, the District of Columbia, and 2 Canadian provinces under the LA Fitness brand name. When considering the franchise operators, its chain size is second to the franchised Planet Fitness brand. Common equity in the company is wholly-owned by founding members and the Seidler family. FOGO DE CHAO: S&P Downgrades ICR to 'CCC+' On Coronavirus Concerns ------------------------------------------------------------------ S&P Global Ratings lowered its ratings on U.S.-based churrascaria (Brazilian steakhouse) restaurant operator Fogo de Chao Inc., including its issuer credit rating, to 'CCC+' from 'B' to reflect its expectation for a significant decline in sales and shrinking covenant headroom. The downgrade reflects S&P's view that Fogo's fiscal-year 2020 operating prospects have been substantially weakened by the coronavirus pandemic, which leads it to believe that its capital structure may be unsustainable. The negative outlook reflects the sizable risk to Fogo's operations given S&P's expectation for declining revenue and EBITDA in fiscal year 2020, which will increase the likelihood that the company violates the covenant on its revolver or pursues a distressed restructuring. "We could lower our rating on Fogo if its operating conditions worsen or we anticipate that the recovery in its sales in 2021 will be less robust than expected. We would also lower our rating if we expect the company to breach its covenants, anticipate that its cash burn will accelerate, or see an increased likelihood of a distressed restructuring in the next 12 months," S&P said. "We could raise our rating on Fogo if we no longer view its capital structure as unsustainable. Before raising our rating, we would need to believe its macroeconomic environment has improved, its operations have stabilized and will generate positive free operating cash flow, and that it will not face difficulty in meeting its covenants or fulfilling its debt obligations at par," the rating agency said. FOODFIRST GLOBAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: FoodFirst Global Restaurants, Inc. 420 S. Orange Ave., Ste. 900 Orlando, FL 32801 Business Description: FoodFirst Global Restaurants is the parent company for two of America's Italian restaurant brands: BRIO Tuscan Grille and BRAVO Cucina Italiana. FoodFirst Global Restaurants was formed in 2018 by investment firm GP Investments, Ltd and a group of entrepreneurial investors. Visit https://www.foodfirst.com/index.html for more information. Chapter 11 Petition Date: April 10, 2020 Court: United States Bankruptcy Court Middle District of Florida Eight affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- FoodFirst Global Restaurants, Inc. (Lead Case) 20-02159 FoodFirst Global Holdings, Inc. 20-02161 Brio Marlton, LLC 20-02162 Brio Tuscan Grille of Maryland, Inc. 20-02163 Brio Tuscan Grille of Baltimore, LLC 20-02164 Brio Tuscan Grille of Cherokee, LLC 20-02165 Cherry Hill Two, LLC 20-02166 Bravo Development of Kansas, Inc. 20-02167 Judge: Hon. Karen Jennemann Debtors' Counsel: R. Scott Shuker, Esq. SHUKER & DORRIS, P.A. 121 S. Orange Avenue Suite 1120 Orlando, FL 32801 Tel: (407) 337-2060 Email: rshuker@shukerdorris.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Steven R. Layt, president. A copy of FoodFirst Global Restaurants' petition is available for free at PacerMonitor.com at: https://is.gd/o90u30 List of FoodFirst Global Restaurants' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. 100 Pratt St. Venture, LLC Trade Debt $145,988 PO Box 780462 Philadelphia, PA 19178-0462 Becki Guy Tel: 517-316-9209 Email: guy@rpai.com 2. American Express Pcard Trade Debt $404,477 1801 NW 66th Ave. Ste 103C Fort Lauderdale, FL 33313-4571 Edward C. Washington Tel: 212-640-8581 Email: edward.c.washington@aexp.com 3. Anthem BCBS Trade Debt $473,543 PO Box 645438 Cincinatti, OH 45264-5438 Rocky Zuzo Tel: 412-606-7795 Email: rocky.zuzo@willistowerswatson.com 4. C.H. Robinson Company, Inc. Trade Debt $335,567 P.O. Box 9121 Minneapolis, MN 55480-9121 Mitch Burrus Tel: 952-683-4864 Email: Mitch.burrus@chrobinson.com 5. Cherry Hill Trade Debt $171,066 Town CTR Partn 1260 Shelton Road Attn: Shoshana Magdiele Piscataway, NJ 08854 Linda Hogan Tel:732-985-1900 Ext. 164 Email: lhogan@edgewoodproperties.com 6. Dolphin Mall Associates Trade Debt $159,397 PO Box 6700 Dept 189501 Detroit, MI 48267-1895 Mark Benavides Tel: 248-258-7565 Email: MBenavides@Taubman.com 7. Easton Town Center LLC Trade Debt $140,090 L-3769 Columbus, OH 43260-3769 Darlene Rector Tel: 614-416-8271 Email: drector@steiner.com 8. Fairfax Comp of Virginia Trade Debt $176,785 P.O. Box 67000 Dept 56501 Detroit, MI 48267-0565 AJ Potanko Tel: 412-421-4600 Email: aj@silkandstewart.com 9. Gordon Food Service Trade Debt $1,323,956 P.O. Box 88029 Chicago, IL 60680-1029 Brendan Clarke Tel: 847-252-1640 Email: brendan.clarke@dmadelivers.com 10. Gulfstream Park Racings Trade Debt $195,819 Attn: Accts Receivables 901 S. Federal Hwy Hallandale, FL 33009 Fernella Allen Email: fallen@mmrs.com 11. Hines Global REIT Trade Debt $142,663 4875 Town Center LLC P.O. Box 742632 Atlanta, GA 30374-2632 Helen Ciesla Tel: 517-316-9209 Email: helen.ciesla@hines.com 12. Michael's Finer Meats Trade Debt $253,321 29037 Network Place Chicago, IL 60673-1290 John Bloch Tel: 614-527-4900 Email: jbloch@michaelsmeats.com 13. Open Table Inc. Trade Debt $234,879 29109 Network Place Chicago, IL 60673-1291 Ashley Garcia Tel: 215-510-7397 Email: agarcia@opentable.com 14. Produce Alliance LLC Trade Debt $150,723 PO Box 7762 Carol Stream, IL 60197-7762 Kirk Massey Tel: 303-204-5899 Email: Kirk.massey@producealliance.com 15. ProForma Trade Debt $173,448 6341 Nicholas Drive Columbus, OH 43235 Thomas H. Etgen Tel: 614-760-5800 Ext. 204 Email: Tom.Etgen@proforma.com 16. Rouse - Park Meadows, LLC Trade Debt $229,054 P.O. Box 86 Minneapolis, MN 55486-3096 Jeffrey Krason Tel: 303-792-2999 Ext. 7022 Email: jeff.krason@brookfieldpropertiesretail.com 17. Star-West Franklin PK Mall Trade Debt $133,618 P.O. Box 398008 San Francisco, CA 94139-8008 Robert Dennis Tel: 312-265-7037 Email: rdennis@starwoodretail.com 18. Tysons Corner Center Trade Debt $339,857 P.O. Box 849554 Los Angeles, CA 90087-9554 Eleazar Robinson Tel: 424-229-3647 Email: eleazar.robinson@macerich.com 19. Wasserstrom Company Trade Debt $677,288 P.O. Box 182056 Columbus, OH 43218-2056 Douglas R. Fahrenholtz Tel: 614-737-8481 Email: dougfahrenholz@wasserstrom.com 20. West Farms Mall, LLC Trade Debt $177,258 PO Box 67000 Dept 55501 Detroit, MI 48267-0555 Jennifer Tressel Email: JTressel@Taubman.com FORUM ENERGY: S&P Downgrades ICR to CCC on Unsustainable Leverage ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Forum Energy Technologies Inc. to 'CCC' from 'B-'. The outlook is negative. At the same time, S&P is lowering its issue-level rating on the company's senior unsecured notes to 'CCC' from 'B-'. The '4' recovery rating indicates S&P's expectation for average (30%-50%; rounded estimate: 30%) recovery of principal in the event of a payment default. "Our downgrade considers the heightened risk of a distressed debt exchange. With a significant debt maturity looming, Forum's current debt trading levels, and the weak capital market conditions, we believe there is an increased likelihood that the company could engage in a transaction we could consider to be distressed. Forum has $400 million in senior unsecured notes that mature in October 2021 which currently trade at deeply depressed levels. The company recently announced it had been in discussions with its largest debtholder regarding a potential debt exchange, although ultimately no agreement was reached. If these notes have not been repaid or refinanced by July 2021 the company's credit facility maturity will spring forward to this date, from October 2022. The borrowing base on the credit facility is inventory and receivables-based, and at Dec. 31, 2019 was $253 million, of which the company had $229 million available. The credit facility provides revolving credit commitments of $300 million," S&P said. The negative outlook reflects Forum's unsustainable leverage and the risk that it could engage in a debt exchange or transaction that S&P could view as distressed within the next 12 months. "We could lower the rating if the company engaged in a distressed transaction, as it seeks to address its October 2021 debt maturity. This would most likely result from sustained low commodity prices affecting E&P spending levels and drilling activity, reducing demand for products and services offered by Forum," S&P said. "We could revise the outlook to stable if the company addressed its October 2021 debt maturity in a manner we did not consider to be distressed, and improved its leverage to a more sustainable level, including FFO to debt sustained above 12%. This would most likely require an improvement in both capital market conditions and commodity prices," the rating agency said. FRANCIS' DRILLING: Baker Hughes Bid to Dismiss Norfolk Suit Nixed ----------------------------------------------------------------- The case captioned NORFOLK SOUTHERN RAILWAY CO., Plaintiff, v. BAKER HUGHES OILFIELD OPERATIONS, LLC, Defendant, Case No. 2:19-cv-3486 (S.D. Ohio) is upon Defendant's Motion to Dismiss for Failure to Join Necessary and Indispensable Parties. Upon review, District Judge Sarah D. Morrison denies the Defendant's motion. Sometime between December 2016 and February 2017, Baker Hughes Oilfield Operations, LLC entered into an agreement to sell frac sand to Silver Creek Services or Silver Creek Logistics or Silver Line Logistics, Inc. In order to ship 80 rail cars of frac sand to Wildcat Minerals in Omal, Ohio, Defendant used Francis Drilling Fluids, Ltd. to obtain rail services. FDF used its login connection to engage BNSF Railway Company to transport the frac sand shipments from Knife River, North Dakota (the point of origin) to Chicago, Illinois. FDF then engaged Norfolk Southern Railway Company to transport the frac sand shipments from Chicago, Illinois to Omal, Ohio. Each of the frac sand shipments were transported, delivered, and accepted at the destination. BNSF issued an electronic bill of lading for each frac sand shipment. The bills of lading identified FDF as the shipper, Wildcat as the consignee, and Silver Creek as the party to receive the freight invoices for each shipment. FDF also marked that the shipments were "prepaid." There was no published or private through rate established between BNSF and Plaintiff for the route selected for the shipments. Upon billing FDF and/or Silver Creek, BNSF was paid for the freight charges it incurred. Plaintiff billed Silver Creek for its freight charges but was never paid. On August 2, 2017, Plaintiff filed an action against Silver Creek Services, Inc., in the United States District Court for the Western District of Pennsylvania seeking to collect payment for the freight charges (Case No. 2:17-cv-1016). The action was dismissed without prejudice six months later by stipulation of the parties. On April 3, 2018, Plaintiff filed an action against FDF in the United States District Court for the Western District of Louisiana seeking to collect payment for the freight charges. On Sept. 29, 2018, FDF filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas. As a result, the Western District of Louisiana dismissed Plaintiff's lawsuit against FDF without prejudice, pending resolution of the bankruptcy proceedings. On Feb. 2, 2019, Plaintiff filed a proof of claim for the freight charges in the bankruptcy action. No disbursement has been made to Plaintiff, but the bankruptcy action remains ongoing. On August 12, 2019, Plaintiff filed this action against Defendant alleging five alternative claims: (1) failure to pay rail common carrier freight charges; (2) breach of contract; (3) unjust enrichment; (4) promissory estoppel; (5) quantum meruit. Plaintiff alleges that as the principal for FDF, Defendant remains liable for the freight charges owed to Plaintiff in the amount of $319,800 plus interest, late fees, attorney's fees, and other related charges. On Oct. 2, Defendant filed a Motion to Dismiss for Failure to Join Necessary and Indispensable Parties. Defendant argues that FDF, Silver Creek, Wildcat, and BNSF are all necessary parties to this action because they are parties listed on the freight bills and Plaintiff has already filed actions against Silver Creek and FDF. Defendant further contends that Plaintiff's "allegations necessarily require a finding of liability against the Required Parties, impairing or impeding their interests, as well as exposing Baker Hughes to multiple or inconsistent obligations and judgments." Plaintiff responds that another entity's potential liability to Plaintiff for the freight charges does not compel joinder of that party. According to Judge Morrison, the burden is on the moving party to establish that a party is necessary for purposes of Rule 19(a). Starting with Rule 19(a)(1)(A), the Court must determine if the court can accord complete relief among Plaintiff and Defendant in the absence of FDF, Silver Creek, Wildcat, and/or BNSF. "Completeness is determined on the basis of those persons who are already parties, and not as between a party and the absent person whose joinder is sought." FDF (as the shipper) and Plaintiff (as the carrier) are the parties to the contract (the bill of lading) that was allegedly breached. According to the Complaint, Plaintiff first learned that Defendant had hired FDF to obtain rail services for the shipments when it filed its lawsuit against FDF. Due to the alleged agency relationship between Defendant and FDF, Plaintiff may sue FDF as the shipper and/or it may sue Defendant as the undisclosed principal of the shipper. Thus, FDF is a permissive party to the action; it is not a necessary party under Rule 19(a). Similarly, even if Wildcat may be liable to Plaintiff as the consignee,4 Plaintiff is not required to join it in this action because Plaintiff "is under no requirement to join all parties who might be jointly and severally liable." The Court also considers whether disposing of this action without FDF, Silver Creek, Wildcat Minerals, and/or BNSF would "leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest." According to Judge Morrison, simply stating that Plaintiff's allegations "expose[] Baker Hughes to multiple or inconsistent obligations and judgments," without pointing to facts or legal argument in support is insufficient to satisfy Defendant's burden as the moving party. While it is possible that Defendant may bear the whole loss if it is found liable, that is not the equivalent of double liability. Similarly, even if a subsequent suit for contribution results in inconsistent judgments, that does not equate to "inconsistent obligations" for the purposes of Rule 19(a)(1)(B)(ii). Because FDF, Wildcat, Silver Creek, and BNSF are not necessary parties under Rule 19(a), there is no need to conduct the final two steps of the Rule 19 analysis, Judge Morrison says. Defendant's Motion is denied. A copy of the Court's Opinion and Order dated March 6, 2020 is available at https://bit.ly/2wq6QZP from Leagle.com. Norfolk Southern Railway Company, Plaintiff, represented by Timothy L. Frey -- tfrey@freightlaw.net -- Keenan Cohen & Merrick P.C., pro hac vice & Jeremy R. Kopp -- Jeremy.kopp@ansalaw.com -- Ansa Assuncao, LLP. Baker Hughes Oilfield Operations LLC, formerly known as Baker Hughes Oilfield Operations, Inc., Defendant, represented by Phillip Michael Sarnowski -- psarnowski@ralaw.com -- Roetzel & Andress, LPA. About Francis' Drilling Fluids Ltd. Francis' Drilling Fluids, Ltd. -- http://www.fdfenergy.com/-- provides transportation, transloading, drilling fluid, cleaning, equipment rental and technical services to the oil and gas industry. Headquartered in Lafayette, Louisiana, the company conducts its business under the name FDF Energy Services and employs nearly 500 workers. Francis' Drilling Fluids and its affiliates, FDF Resources Holdings LLC and Francis Logistics LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 18-35441) on Sept. 29, 2018. In the petitions signed by Barry Charpentier, president, the Debtors estimated assets of $10 million to $50 million and liabilities of $50 million to $100 million. Judge Marvin Isgur presides over the cases. The Debtors tapped Norton Rose Fulbright US LLP as their legal counsel; CR3 Partners LLC as restructuring advisor; SSG Capital Advisors, LLC, as investment banker; and JND Corporate Restructuring as claims and noticing agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on October 17, 2018. The committee tapped Greenberg Traurig, LLP as its legal counsel, and Conway MacKenzie, Inc. as its financial advisor. G-III APPAREL: S&P Places 'BB' ICR on Watch Negative ---------------------------------------------------- S&P Global Ratings placed all of its ratings including the 'BB' issuer credit rating on U.S. based apparel seller, G-III Apparel Group Ltd. and 'BB+' issue-level rating on the company's debt on CreditWatch with negative implications. The negative CreditWatch placement reflects the credit risk associated with unprecedented retail store closures aimed at containing the spread of the coronavirus pandemic in the U.S. Despite the drastic and swift measures the company has taken to control expenses, specifically reduced management salaries and the furloughing of 60% of its wholesale employees and 80% of its retail employees, S&P still estimates its credit metrics will deteriorate significantly because of the unprecedented demand drop for its predominately discretionary products. In addition, S&P forecasts a significant drop in margins as retail customers look to liquidate inventory. Further, key retailers' potential inability to recover from the fallout of the coronavirus pandemic and a prolonged recession could further impair the company's recovery in fiscal 2021 (ending January 2022), which could lead to leverage sustained above 3x. The negative CreditWatch placement reflects the potential for a downgrade over the next few months. However, given the uncertainty around the duration of the outbreak, including the potential for it to reoccur after the summer, the ratings could remain on CreditWatch for a longer than normal period. S&P expects to resolve the CreditWatch placement after it assesses the severity and duration of the impact of coronavirus on G-III's credit metrics and cash flow. GAMING & LEISURE: S&P Affirms 'BB+' ICR, Alters Outlook to Negative ------------------------------------------------------------------- S&P Global Ratings revised its rating outlook on U.S. gaming real estate investment trust Gaming & Leisure Properties Inc. (GLPI) to negative and affirmed its 'BB+' issuer credit rating. S&P also affirmed its 'BBB-' rating on its senior unsecured debt. "The negative outlook revision reflects our expectation that GLPI's leverage will remain weak relative to our 6x leverage downgrade threshold over the next 12 months. This follows the company's announcement that it has agreed to acquire the real property associated with the Tropicana Las Vegas Casino Hotel Resort and the land under Penn National's gaming facility under construction in Morgantown, Pa., in exchange for rent credits totaling $337.5 million, which Penn National can apply to 2020 rent. We expect this noncash rent will be included in GLPI's taxable income and that lower cash rent combined with the requirement to distribute at least 90% of its taxable income to shareholders annually to maintain its REIT status will cause GLPI's leverage to increase closer to our 6x leverage downgrade threshold this year. Additionally, the temporary closure of its owned and operated TRS properties and a potential slow recovery will pressure cash flow and leverage," S&P said. The negative outlook reflects S&P's expectation that GLPI's leverage will remain weak over the next 12 months relative to the rating agency's 6x leverage downgrade threshold because of reduced cash rent from the company's largest tenant and the temporary closure of the company's TRS properties. "We could consider lowering the ratings if we expected GLPI to sustain adjusted leverage above 6x over the long run. A deterioration in leverage to this level could result from potential additional rent deferrals or lease modifications, which reduce cash flow generation, or an unwillingness to use stock dividends to minimize the leveraging impact of lower cash rent. We would also consider a downgrade if we believe the credit quality of GLPI's largest tenants would be impaired over the longer term and rent coverage would not improve back above 1.5x after casinos reopen and begin to recover. Additionally, a deterioration in leverage to this level could also result from a large acquisition, where GLPI is unable to raise sufficient equity to keep leverage below this level," S&P said. "We could revise the outlook to stable once we believe GLPI's tenants, cash flow, and leverage are beginning to recover. We believe an upgrade is unlikely over the next few years given GLPI's high tenant concentration and financial policy to maintain leverage at about 5x over the long run. Nevertheless, we could consider higher ratings if GLPI meaningfully increased its tenant diversity and maintained adjusted leverage below the mid-4x area," the rating agency said. GASPER RICE: Plan & Disclosure Hearing Reset to May 26 ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, held a hearing to consider the Second Emergency Agreed Motion for Continuance of Combined Disclosure Statement and Confirmation Hearing, and Extension of Related Deadlines filed by creditor Woodforest National Bank, a national banking association, and agreed to by debtor Gasper Rice Resources, Ltd. On March 27, 2020, Judge Eduardo V. Rodriguez granted the agreed motion and ordered that: * Woodforest's ballot and objection deadlines will be extended to May 6, 2020. * The hearing to consider approval of the Debtor's Disclosure Statement and confirmation of the Debtor's Plan is rescheduled to May 26, 2020, at 2:00 pm. A full-text copy of the order dated March 27, 2020, is available at https://tinyurl.com/wattdjq from PacerMonitor at no charge. Attorneys for Woodforest National Bank: Lloyd A. Lim Rachel I. Thompson REED SMITH LLP 811 Main Street, Suite 1700 Houston, Texas 77002-6110 Telephone: (713) 469-3800 Facsimile: (713) 469-3899 E-mail: llim@reedsmith.com E-mail: rithompson@reedsmith.com Attorney for the Debtor: Margaret Maxwell McClure 909 Fannin, Suite 3810 Houston, TX 77010 Tel: 713-659-1333 Fax: 713-658-0334 E-mail: margaret@mmmcclurelaw.com About Gasper Rice Resources Gasper Rice Resources, Ltd. -- http://www.gasperrice.com/-- is a Texas limited partnership in the oil and gas extraction industry. It operates wells primarily located in the Gulf Coast of Texas and participates as a non-operator in properties located in Texas, Louisiana, Oklahoma and Mississippi. Gasper Rice Resources sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-31371) on March 11, 2019. At the time of the filing, the Debtor disclosed $2,116,190 in assets and $2,484,425 in liabilities. The case is assigned to Judge Eduardo V. Rodriguez. The Debtor is represented by the Law Office of Margaret M. McClure. GAVILAN RESOURCES: Moody's Affirms 'Ca' CFR, Outlook Still Negative ------------------------------------------------------------------- Moody's Investors Service appended a limited default designation to Gavilan Resources, LLC's Ca-PD Probability of Default Rating. Concurrently, Moody's affirmed the company's Corporate Family Rating at Ca and senior secured second lien term loan rating at C. The outlook remains negative. Affirmations: Issuer: Gavilan Resources, LLC Probability of Default Rating, Affirmed Ca-PD /LD (/LD appended) Corporate Family Rating, Affirmed Ca Senior Secured Term Loan, Affirmed C (LGD5) Outlook Actions: Issuer: Gavilan Resources, LLC Outlook, Remains Negative RATINGS RATIONALE The appending of the PDR with an "/LD" designation indicates limited default reflecting missed interest payment on the company's term loan on March 31 as well as the expiration of the grace period which Moody's considers a default. On March 31, the company entered into a forbearance agreement with revolver lenders. Gavilan's Ca CFR reflects the company's unsustainable capital structure and weak liquidity. Gavilan's audited 2019 financials contained a "going concern" qualification. The company is pursuing several options. However, Gavilan faces restricted access to capital markets and its operations are challenged by weak commodity prices. The $450 million senior secured second lien term loan maturing in 2024 is rated C one notch below the CFR and ranks behind the company's revolver. The C rating reflects Moody's views on recovery to the lenders. The negative outlook reflects the high likelihood of the company filing for bankruptcy or pursuing an out of court restructuring. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The PDR could be downgraded to D-PD if the company files for bankruptcy or pursues an out of court restructuring. An upgrade is unlikely unless the company establishes a tenable capital structure with significantly less debt and improved liquidity. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Gavilan, headquartered in Houston, Texas, is a privately-owned independent exploration and production company in the Eagle Ford Shale. GB SCIENCES: Gets Notice of Allowance for Claims Protecting CCCMs ----------------------------------------------------------------- GB Sciences received a Notice of Allowance from the United States Patent and Trademark Office (USPTO) for claims protecting their Cannabinoid Containing Complex Mixtures (CCCMs) for the Treatment of Parkinson's disease (PD), which is owned by the Company's Canadian entity, GBS Global Biopharma, Inc. (GBS). The Notice of Allowance is a significant milestone in the process of patenting intellectual property in that it is the final step before the patent is issued. It signifies that the claims from the patent application have been reviewed successfully and that these claims are considered meritorious. The Company has now paid the patent issue fee and anticipates that the patent claims protecting its PD therapeutics will be issued within 3 to 12 weeks. In addition, GBS has filed a continuation to protect and advance the other therapeutic mixtures in the original patent application entitled "Cannabinoid-Containing Complex Mixtures for the Treatment of Neurodegenerative Disease" that was filed on Oct. 10, 2017. This neurodegenerative patent application also contains CCCM for the treatment of Alzheimer's disease, Lewy body dementia, Huntington's disease, and dementia. Claims for these additional CCCM will be reviewed by the USPTO in the future. About GB Sciences Las Vegas, Nevada-based GB Sciences, Inc., formerly Growblox Sciences, Inc., is developing and utilizing state of the art technologies in plant biology, cultivation and extraction techniques, combined with biotechnology, and plans to produce consistent and measurable medical-grade cannabis, cannabis concentrates and cannabinoid therapies. The Company seeks to be an innovative technology and solution company that converts the cannabis plant into medicines, therapies and treatments for a variety of ailments. GB Sciences incurred net loss of $24.68 million for the 12 months ended March 31, 2019, compared to a net loss of $23.15 million for the 12 months ended March 31, 2018. As of Dec. 31, 2019, the Company had $20.90 million in total assets, $12.60 million in total liabilities, and $8.30 million in total equity. Soles, Heyn & Company, LLP, in West Palm Beach, Florida, the Company's auditor since the year ended March 31, 2014, issued a "going concern" qualification in its report dated July 15, 2019, on the Company's consolidated financial statements for the year ended March 31, 2019, citing that the Company had accumulated losses of approximately $84.7 million, has generated limited revenue, and may experience losses in the near term. These factors and the need for additional financing in order for the Company to meet its business plan, raise substantial doubt about its ability to continue as a going concern. GEORGE WESTON: Egan-Jones Lowers LC Sr. Unsecured Rating to BB+ --------------------------------------------------------------- Egan-Jones Ratings Company, on March 24, 2020, downgraded the local currency senior unsecured ratings on debt issued by George Weston Limited to BB+ from BBB-. George Weston Limited, often referred to as Weston or Weston's, is a Canadian food processing and distribution company. GEX MANAGEMENT: Delays Filing of Form 10-K Over COVID-19 Pandemic ----------------------------------------------------------------- GEX Management, Inc., filed a Form 8-K with the Securities and Exchange Commission notifying the delay in the filing of its Annual Report on Form 10-K for the year ended Dec. 31, 2019 due to the circumstances related to COVID-19. The Company indicated its reliance on the order dated March 4, 2020, issued by the Securities and Exchange Commission under Section 36 (Release No. 34-88318) of the Securities Exchange Act of 1934 granting exemptions from specified provisions of the Exchange Act and certain rules thereunder. The Order provides that a registrant (as defined in Exchange Act Rule 12b-2) subject to the reporting requirements of Exchange Act Section 13(a) or 15(d), and any person required to make any filings with respect to such a registrant, is exempt from any requirement to file or furnish materials with the Commission under Exchange Act Sections 13(a), 13(f), 13(g), 14(a), 14(c), 14(f), 15(d) and Regulations 13A, Regulation 13D-G (except for those provisions mandating the filing of Schedule 13D or amendments to Schedule 13D), 14A, 14C and 15D, and Exchange Act Rules 13f-1, and 14f-1, as applicable, where certain conditions are satisfied. The Company noted that COVID-19 has caused severe disruptions in transportation and limited access to its facilities resulting in limited support from its staff and professional advisors. The Company has also closed its corporate offices and has requested all employees to work remotely until further notice. Employees affected include certain of its key personnel responsible for assisting the Company in the preparation of its financial statements. In view of these circumstances, the Company has been unable to timely provide its auditors and accountants with financial records to provide consent, and therefore allow the Company to file a timely and accurate Annual Report on Form 10-K for its year ended Dec. 31, 2019 by the prescribed date without undue hardship and expense to the Company. This has, in turn, delayed the Company's ability to complete its audit and prepare the Report. Notwithstanding the foregoing, the Company expects to file the Report no later than May 14, 2020 (which is 45 days from the Report's original filing deadline of March 30, 2020). The Company is supplementing the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2018 and its subsequent Quarterly Reports on Form 10-Q with the following risk factor: "The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact of this event. In addition, at this time we cannot predict the impact of Covid-19 on our ability to obtain financing necessary for the Company to fund its working capital requirements. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission." About GEX Management GEX Management -- http://www.gexmanagement.com/-- is a progressive and growing provider of business management, Professional Employment Organization (PEO), and staffing solutions for small to midsize businesses. By means of its value-driven co-employment model, the Company reduces employer stress and increase employee capacity by performing many of the skill-specific and time-intensive office functions that typically distract managers from growing their businesses. The Company likewise minimizes employer-related risks and ensure that its clients are consistently in proper governmental compliance. The Company's service offerings include a robust PEO platform with online and mobile tools that allow its clients and their employees alike to manage their back-office information and conduct a variety of related functions 24-7. GEX Management also provides both long and short-term consulting and staffing solution services, including enterprise strategy and technology consulting, enterprise project management; grey, white and blue collar staffing solutions to middle market clients, and Human Capital Management (HCM) solution capabilities that include interview vetting, background checks, drug screening, employee onboarding, and more. GEX Management reported a net loss of $5.11 million for the year ended Dec. 31, 2018, compared to a net loss of $867,035 for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $4.95 million in total assets, $6.79 million in total liabilities, and a total shareholders' deficit of $1.84 million. GE Management stated in its Quarterly Report for the period ended Sept. 30, 2019 that, "To date, the Company has funded its operations primarily through public and private offerings of common stock, our line of credit, short- term discounted and convertible notes payable. The Company has identified several potential financing sources in order to raise the capital necessary to fund operations through March 31, 2020. "In addition to the aforementioned current sources of capital that will provide additional short-term liquidity, the Company is currently exploring various other alternatives including debt and equity financing vehicles, strategic partnerships, government programs that may be available to the Company, as well as trying to generate additional sales and increase margins. However, at this time the Company has no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all. If the Company is unable to obtain additional funding and improve its operations, the Company's financial condition and results of operations may be materially adversely affected and the Company may not be able to continue operations, which raises substantial doubt about its ability to continue as a going concern. Additionally, even if the Company raises sufficient capital through additional equity or debt financing, strategic alternatives or otherwise, there can be no assurances that the revenue or capital infusion will be sufficient to enable it to develop its business to a level where it will be profitable or generate positive cash flow. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders. If the Company incurs additional debt, a substantial portion of its operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for business activities. The terms of any debt securities issued could also impose significant restrictions on the Company's operations. Broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds. Similarly, if the Company's common stock is delisted from the public exchange markets, it may limit its ability to raise additional funds." GIP III STETSON: S&P Downgrades ICR to 'B-' on Distribution Cut --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit ratings on GIP III Stetson I L.P. (Stetson) and GIP III Stetson II L.P. to 'B-' from 'B' and its issue-level ratings to 'B-' from 'B'. S&P's '3' recovery rating on the $1 billion term loan B due 2025 remains unchanged, indicating its expectation that lenders will receive meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. On March 24, 2020, EnLink Midstream LLC announced it would reduce its cash distributions to equity to $0.375 per unit, which is a 50% decrease from S&P's prior expectation of about $0.75 per unit on an annual basis. Therefore, S&P expects Stetson's leverage to be in the 9x-10x range over the next two years, which led the rating agency to lower its ratings. Conversely, S&P believes the distribution cut will strengthen EnLink's distribution coverage ratio and allow it to reduce its leverage and self-fund its capital spending and distributions without needing to access the capital markets in the near term. Stetson owns approximately 46% of EnLink's outstanding shares and the rating agency assesses the company's credit quality separately from that of EnLink. The stable outlook on Stetson reflects S&P's expectation that the company will maintain adequate liquidity and stand-alone adjusted debt leverage in the 10x area over the next 12 months. The stable outlook also reflects the rating agency's belief that EnLink will maintain a distribution coverage ratio of more than 1.5x. "We could lower our rating on Stetson if we lower our rating on EnLink. We could also lower our rating if EnLink further reduces its distribution, leading us to view Stetson's capital structure as unsustainable," S&P said. "We could upgrade Stetson if we raise our rating on EnLink, which could occur if EnLink maintains stand-alone leverage of less than 4.5x. We could also consider raising our rating if Stetson maintains stand-alone debt to EBITDA of less than 5.0x," the rating agency said. GLOBETROTTER INTERMEDIATE: S&P Affirms 'B-' ICR; Outlook Stable --------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on Globetrotter Intermediate LLC (Quick Base) and 'B' issue-level ratings on the company's first-lien credit facilities. The adverse impact from a U.S. economic recession on 2020 revenue growth is partly mitigated by full cloud subscription-based model. "We acknowledge that a U.S. recession will adversely affect bookings growth and revenue churn, especially in regard to the company's small- to medium-sized business (SMB) customer segment. However, we expect Quick Base's operational performance to be somewhat resilient owing to its fully subscription-based revenue model, diversified end-market exposure and historically high gross revenue retention in the mid-90% area. Additionally, customers will be able to access its cloud-based platform remotely without the need for on-premise installation and support services. Therefore, we expect better revenue visibility in the current environment than some other similarly-rated software companies. However, we still expect revenue growth to slow to the low-double-digit area in 2020 from average revenue growth in the 20% area over the last two years," S&P said. The stable outlook reflects S&P's view that Quick Base will maintain good liquidity and continue growing bookings and revenues in 2020 albeit at a slower rate. While S&P now expects leverage to remain elevated in 2020, the rating agency expects the company to delever rapidly below 10x as the economy recovers and return to positive FOCF generation. "We could lower the rating if there is a greater-than-expected impact of a near-term U.S. recession on bookings, revenue churn and the collection of accounts receivables, or if the macroeconomic slowdown is prolonged into 2021 due to further waves of the COVID-19 outbreak. A downgrade could also follow a continued high level of spending on organic or inorganic growth that drains liquidity or less-than-expected contributions to revenues and EBITDA from such investments," S&P said. In any case, a downgrade would reflect S&P's view that Quick Base's capital structure is unsustainable, which could be signaled by expectations of sustained negative FOCF beyond 2020, EBITDA interest coverage not exceeding 1x, or total cash and revolver availability being maintained below $30 million. "While we view it as unlikely over the next 12 months given current high leverage levels, we could raise the rating if Quick Base is able to reduce leverage to about 7x while improving FOCF to debt towards 5% on a sustained basis. The company could achieve this in the medium term if it is able to maintain organic revenue growth of more than 20% while improving adjusted EBITDA margins toward the mid-30% area and maintaining FOCF above $20 million," S&P said. An upgrade would likely come from sustained strong market growth for model-driven application development tools and the company's ability to win new customers and capture upsell opportunities within its existing customer base from reinforcing its go-to-market strategy. GOLDEN NUGGET: Moody's Cuts CFR to Caa1 & Unsec. Rating to Caa2 --------------------------------------------------------------- Moody's Investors Service downgraded Golden Nugget, LLC's Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded the company's senior secured bank credit facilities to B2 from B1, senior unsecured notes rating to Caa2 from Caa1 and senior subordinated note rating to Caa3 from Caa2. The outlook is negative. "The downgrade reflects that Golden Nugget's credit metrics and asset value are set to materially weaken as they increase debt levels and remove assets from the restricted group at a time of significant earnings and cash flow pressures as a result of coronavirus pandemic related restaurant and casino closures," stated Bill Fahy, Moody's Senior Credit Officer. Golden Nugget intends to distribute its iGaming assets to Landry's Finance Acquisition Co., which is an entity outside of the restricted group that will enter into a new proposed $300 term loan (not rated). "Although proceeds from the term loan will be distributed to GN through an inter-company note and provide much needed liquidity to support Golden Nugget's expected cash flow deficits, the transaction weakens asset value for restricted group lenders" Fahy added. The negative outlook reflects the uncertainty with regards to the potential length and severity of restrictions and closures and the ultimate impact these will have on Golden Nugget's revenues, earnings and liquidity. The outlook also takes into account the negative impact on consumers ability and willingness to spend on gambling and eating out until the crisis materially subsides. Downgrades: Issuer: Golden Nugget, LLC Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Subordinated Regular Bond/Debenture, Downgraded to Caa3 (LGD6) from Caa2 (LGD6) Senior Secured Bank Credit Facility, Downgraded to B2 (LGD2) from B1 (LGD2) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Issuer: Landry's, Inc. Senior Secured Bank Credit Facility, Downgraded to B2 (LGD2) from B1 (LGD2) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: Golden Nugget, 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 and gaming sectors have been two of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Golden Nugget'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 Golden Nugget 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 Golden Nugget of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Golden Nugget's Caa1 rating reflects the governance risks associated with its aggressive financial strategy under its private ownership which include both debt financed acquisitions and dividends which increased leverage prior to any impact on earnings from the coronavirus as well as the distribution of its iGaming assets that will further weaken credit metrics and asset value going forward. Golden Nugget benefits from its material scale, the brand value of its various restaurant and gaming properties, good geographic diversification and adequate liquidity. Golden Nugget's private ownership is a rating constraint given the potential implications from both a capital structure and operating perspective. Financial strategies 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 LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could result in a stable outlook include the lifting of restrictions on restaurant and casino's and a sustained improvement in operating performance, liquidity and credit metrics. Given the current operating environment a ratings upgrade over the near term is unlikely. However, an upgrade would require debt to EBITDA of below 6.5 times and EBITA to interest of above 1.1 times on a sustained basis. A higher rating would also require good liquidity. Factors that could result in a downgrade include a sustained deterioration in liquidity driven by a prolonged period of restaurant and casino 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. Golden Nugget owns and operates the Golden Nugget hotel, casino, and entertainment resorts in downtown Las Vegas and Laughlin, Nevada, Lake Charles Louisiana, Biloxi Mississippi and Atlantic City New Jersey. The company also owns and operates mostly casual dining restaurants under the trade names Landry's Seafood House, ChartHouse, Saltgrass Steak House, Rainforest Café, Bubba Gump, McCormick & Schmicks, Dos Caminos, Bill's Bar & Burger, Joe's Crab Shack, Brick House Tavern + Tap, Morton's Restaurants, Inc, Del Frisco's Double Eagle, Del Frisco's Grille, and Mastro's as well as restaurants from RUI. Golden Nugget is wholly owned indirectly by Fertitta Entertainment, Inc. which is wholly owned by Tilman J. Fertitta. The principal methodology used in these ratings was Restaurant Industry published in January 2018. GRAND CENTRAL WINE: Seeks to Hire AK & Associates as Accountant --------------------------------------------------------------- Grand Central Wine & Spirits LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire AK & Associates, P.A. as its accountant. AK & Associates will provide these services: a. provide Debtor with accounting advice concerning its reporting and compliance duties; b. file semi-annual Form 426, if required, and tax returns; and c. prepare a pro forma balance sheet and income statement for use in preparing a Chapter 11 plan. The firm estimates that the fees will be $200 for each monthly operating report; $400 for each semi-annual Form 426; and $100 per hour for all other accounting services. AK & Associates is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Albert Kim AK & Associates, P.A. 4 East Rolling Crossroads, Suite 211 Catonsville, MD 21228 Phone: (410)719-1000 About Grand Central Wine & Spirits Grand Central Wine & Spirits LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 20-12354) on Feb. 24, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of less than $50,000. Judge Michelle M. Harner oversees the case. The Debtor is represented by The Burns Law Firm, LLC. GRANITE TACTICAL: Unsec. Creditors to Get Full Payment in 5 Years ----------------------------------------------------------------- Debtor Granite Tactical Vehicles, Inc., filed with the U.S. Bankruptcy Court for the Middle District of North Carolina, Winston Salem Division, a Plan of Reorganization and a Disclosure Statement on March 26, 2020. Class X General Unsecured Creditors (which excludes insiders) totaling $37,639 will each receive a promissory note which provides that each holder will receive 100% of its claim, to be paid quarterly over a period of 60 months with no interest to be paid. Quarterly payments are estimated to be $1,882, in the aggregate. Class XII shall consist of Chris Berman and his family any other party, who hold an ownership interest in the Debtor on the day immediately preceding the date of Confirmation of the Plan. The equity security holders will retain their ownership interest in the Debtor with all rights and interest as of the date of the order confirming the Chapter 11 Plan. Class XII equity security holders will receive no payment or dividends until the Class X general unsecured creditors have been paid in full. The Debtor will pay plan payments from funds received from continuing operations. The Debtor anticipates, based upon projected revenue and expenses and the restructuring of current indebtedness, as is more fully explained that the Reorganized Debtor will have sufficient funds to pay debt obligations pursuant to the terms specified in this Plan. The revenues are anticipated to be sufficient to pay all debt obligations as a result, in part, as the revenues continue to increase and the Debtor has taken steps to reduce its monthly outgoing expenses. A full-text copy of the Disclosure Statement dated March 26, 2020, is available at https://tinyurl.com/tp8sha9 from PacerMonitor at no charge. The Debtor is represented by: Dirk W Siegmund Ivey, McClellan, Gatton & Siegmund Post Office Box 3324 Greensboro, North Carolina 27402 Telephone: (336) 274-4658 Facsimile: (336) 274-4540 About Granite Tactical Vehicles Granite Tactical Vehicles, Inc., filed a voluntary Chapter 11 petition (Bankr. M.D.N.C. Case No. 19-50775) on July 30, 2019. At the time of filing, the Debtor was estimated to have assets of $1 million to $10 million and estimated liabilities of $100,001 to $500,000. The case is assigned to Hon. Benjamin A. Kahn. The Debtor is represented by Dirk W. Siegmund, Esq., at Ivey, McClellan, Gatton & Siegmund, in Greensboro, N.C. GREENBRIER COS: S&P Alters Outlook to Negative, Affirms 'BB' ICR ---------------------------------------------------------------- S&P Global Ratings revised its outlook on The Greenbrier Cos. Inc. to negative from stable and affirmed its 'BB' issuer credit rating. "Our negative outlook reflects the risk that The Greenbrier Cos. Inc.'s S&P Global Ratings-adjusted leverage will rise above 3x over the next 12 months as a U.S. recession takes hold. We believe that a real U.S. GDP contraction in calendar year 2020, along with the recent steep drop in oil prices, will pressure demand for a broad range of freight railcar types over the next 12 months," the rating agency said. The negative outlook on Greenbrier reflects the potential that S&P could lower the rating if Greenbrier experiences challenging freight railcar market conditions over the next 12 months, which could cause its leverage to rise above 3x. "We could lower our rating on Greenbrier over the next 12 months if we expect that its debt to EBITDA will increase and stay above 3x for a sustained period. This could occur if volumes decline more significantly than we expect or if operating inefficiencies cause margins to decrease and Greenbrier cannot generate enough positive free cash flow to maintain leverage below 3x," S&P said. "We could revise the outlook to stable over the next 12 months if we believe Greenbrier can maintain leverage below 3x through the anticipated industry downturn. We would also need to believe the company can improve its margins from currently low levels," the rating agency said. H & S TOWING: UST Says Plan Patently Unconfirmable -------------------------------------------------- The United States Trustee objects to the Disclosure Statement filed by Debtor H & S Towing Service, Inc. The U.S. Trustee notes that the Debtor has the burden of proving that a disclosure statement is adequate, including showing that the plan is confirmable or that defects might be cured or involve material facts in dispute. The U.S. Trustee raises these issues: * The Plan is not feasible because the Debtor has not generating enough revenue to fund the proposed Plan payments. To be more specific, since the case was filed the Debtor has only had one month with positive income and has lost more than $357,000 since the case was filed. * Not only has Debtor not made sufficient income to afford any payments called for under the Plan of Reorganization, Debtor has not made enough money to meet its current on-going operating expenses. * The Debtor's Plan is patently unconfirmable. Its feasibility problems cannot be overcome by creditor voting because voting will not affect how much revenue the Debtor generates. A full-text copy of U.S. Trustee's objection to disclosure dated March 27, 2020, is available at https://tinyurl.com/tucf43y from PacerMonitor at no charge. About H & S Towing Service H & S Towing Service, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 19-01801) on April 27, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $1 million and liabilities of less than $1 million. The case is assigned to Judge Henry W. Van Eck. The Law Office of Lawrence G. Frank is the Debtor's counsel. HAJJAR BUSINESS: Allowed to Use Cash Collateral on Interim Basis ---------------------------------------------------------------- Judge John K. Sherwood of the U.S. Bankruptcy Court for the District of New Jersey authorized Hajjar Business Holdings, LLC and its affiliates to use cash collateral on an interim basis strictly in accordance with the budget. The Debtors are allowed to use cash collateral to pay for the operating expenses and costs of administration incurred until the earliest to occur of (i) the date that the Interim Order ceases to be in full force and effect, or (ii) the occurrence of any of these Termination Event: (a) April 20, 2020; (b) If the Debtors will fail to deposit on a daily basis all cash receipts and collections from whatever source in the prepetition lockbox account maintained at PNC Bank, National Association & to PNC Bank Canada Branch, consistent with the prepetition agreement and practices of the parties; (c) the Debtors will fail to make any adequate protection payment to the Secured Lender; (d) any order will be entered reversing, amending, supplementing, staying, vacating, or otherwise modifying the Interim Order in any material respect or terminating the use of Cash Collateral by the Debtors pursuant to the Interim Order; (e) an application will be filed by the Debtor for the approval of any Superpriority Claim; (f) any order will be entered granting relief from the automatic stay; (g) the Debtors will make any payment in respect of a prepetition claim; (h) the Debtors' chapter 11 cases will be dismissed or converted to cases under chapter 7 of the Bankruptcy Code or a trustee under chapter 11 of the Bankruptcy Code will be appointed or elected in the Chapter 11 Case; (i) the Debtors fails to keep and maintain all property in good working order and condition, ordinary wear and tear excepted; (j) the Debtors fail to maintain all insurance required to be maintained pursuant to the Loan Documents, or fail to furnish to the Secured Lender, upon reasonable request, information in reasonable detail as to the insurance so maintained; (k) the Debtors fail to comply with all laws, rules, regulations, and orders of any Governmental Authority applicable to it, its operations or its property; or (l) the Debtors fails to comply with any of the terms or conditions of the Interim Order. The Secured Lender is granted a first priority post-petition security interest and lien in, to and against all of the Debtors' assets, to the same priority, validity and extent that the Secured Lender held a properly perfected pre-petition security interest in such assets, but excluding any claims or recoveries by or on behalf of the Debtors. The Secured Lender is also granted an allowed, superpriority administrative expense claim under section 507(b) of the Bankruptcy Code with respect to the Adequate Protection Obligations. In addition, the Secured Lender will receive an adequate protection payment of $347,000, plus the monthly tax escrow in the approximate amount of $158,000. A final hearing or a further interim hearing on the Debtors' continued use of cash collateral will be conducted by the Court on April 20, 2020 at 10:00 a.m. Objections are due no later than 4:00 p.m. on April 15, 2020. About Hajjar Business Holdings Hajjar Business Holdings, LLC and 12 of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 20-12465) on Feb. 13, 2020. At the time of the filing, Hajjar Business Holdings was estimated to have assets of between $100,000 to $500,000 and liabilities of between $50 million to $100 million. Judge John K. Sherwood oversees the Debtors' cases. Anthony Sodono, III, Esq. and Sari B. Placona, Esq., of McManimon, Scotland & Baumann, LLC, serve as counsel to the Debtors. HAMPTON ROADS: Fitch Affirms $9MM Class III Bonds at 'B+' --------------------------------------------------------- Fitch Ratings has affirmed the following classes of Hampton Roads PPV, LLC (VA) military housing taxable revenue bonds (Hampton Roads Unaccompanied Project), 2007 series A: -- Approximately $199 million class I bonds at 'A-'; -- Approximately $55 million class II bonds at 'BB'; -- Approximately $9 million class III bonds at 'B+'. The Rating Outlook is revised to Negative from Stable on all series of bonds. SECURITY The bonds are special limited obligations of the issuer and are primarily secured by a first lien on all receipts from the operation of the unaccompanied housing project known as Hampton Roads, located at Norfolk Naval Complex. The absence of a cash-funded reserve fund limits protections afforded bondholders. KEY RATING DRIVERS DECLINING Basic Allowance for Housing (BAH) RATES: The Negative Outlook reflects two consecutive years of BAH rate declines, with decreases of -0.7% in 2019 and -4.0% in 2020. Continued BAH declines could stress rental revenues and impact DSCRs, putting pressure on the ratings. The BAH rates assessed and reported are primarily for E-1-E-4 given this is the majority of the tenant mix for Hampton Roads. VOLATILE OCCUPANCY: The negative outlook also reflects the project's fluctuating occupancy rates, and potential impact on rental revenues, and ultimately DSCRs. The project's average occupancy rate was 93.3% in 2019, a decrease from 94.8% in 2018. The occupancy decreased further to 88.7% in January 2020 following a major deployment. HIGH TURNOVER LEVELS: The project continues to experience high turnover levels as a result of deployments, putting ongoing potential negative pressure on project operations. There were two major deployments in 2019, and at the end of 2019, the turnover percentage was 73.1%. SUFFICIENT DEBT SERVICE COVERAGE: The affirmation of the ratings reflects the currently sufficient debt service coverage ratios (DSCRs) of 1.55x, 1.20x and 1.15x for the class I, class II and class III bonds, respectively, based on fiscal 2019 audited financial statements. Audited 2018 DSCRs were 1.69x, 1.31x, and 1.25x. The decline in the DSCRs resulted from a decrease in rental revenue of approximately $900,000 and an increase of operating expenses of approximately $1.1 million. Further increases to operating expenses in 2020 could put negative pressure on the DSCRs. ABSENCE OF CASH RESERVE: The absence of a cash-funded debt service reserve fund detracts from bondholder security for all classes of bonds; however, the class III bonds are the most vulnerable. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: A positive trend in BAH rates and/or increases to the BAH allocation, with all other factors remaining stable to positive, could lead to increased project DSCRs and put positive pressure on the ratings. Sustained declines in operating expenses and/or vacancy rates, which lead to higher project DSCRs, could also put positive pressure on the ratings. Factors that could, individually or collectively, lead to negative rating action/downgrade: Future decreases in BAH would put negative pressure on the ratings. The project could sustain a decrease in BAH of approximately 19.5%, 9%, and 7% (using 2019 BAH and vacancy rates and fiscal 2019 operating expenses) before Class I, Class II and Class III bonds respectively would reach 1.0x coverage. The breakeven percentage for Class I, Class II and Class III bonds declines to 17.5%, 6.5% and 4.5% respectively when using the 2020 BAH rates, assuming the same operating expenses as fiscal 2019. The 2020 BAH rate decline was -4.0%. Over the last 10 years, the steepest decline was -5.8% in 2014 and the largest increase was 9.3% in 2010. Management's inability to maintain high occupancy levels and control operating expenses could also put negative pressure on the ratings, particularly for the Class II and Class III bonds. Based on the fiscal 2019 BAH rates, a 20% and 16% increase to operating expenses and 15% and 13% vacancy rate stress would cause the Class II and Class III bonds respectively to reach 1.0x coverage (all other factors remaining the same). Using the 2020 BAH rates, the breakeven stresses are more sensitive to changes in operating expenses and vacancy rates. A 15% and 10% increase to operating expenses, and a 13% and 11% vacancy rate stress would cause the Class II and Class III bonds to reach 1.0x coverage. While not expected in the near term, base realignment and closure risk cannot be eliminated over the long term. Significant personnel reduction, declining base essentiality or complete closure could have a severely negative impact on the project's operations and financial performance, thereby reducing DSCRs and ultimately negatively weighing on the project's bond ratings. BEST/WORST CASE RATING SCENARIO Ratings of Public Finance issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT PROFILE Hampton Roads/Norfolk Naval Complex (HRNC), located in southeastern Virginia, is the largest naval base in the world, covering approximately 4,631 acres. The housing project located on Norfolk Naval Complex base (known as Hampton Roads) provides apartment residences for single (i.e. unaccompanied) U.S. Navy enlisted personnel. As part of the original development plan, 1,190 new units were added and 722 existing residential units were renovated. The Negative Outlook reflects declining BAH rates, volatile occupancy rates, high turnover rates, and potential for continued increases to project operating expenses. The current 2019 audited DSC levels remain sufficient for the current ratings on the bonds, however, further declines in BAH and/or increases to operating expenses could weaken net income, thereby stressing DSCRs and potentially putting negative pressure on the ratings. The recent outbreak of coronavirus and related government containment measures worldwide creates uncertainty about the potential impact on military housing project operating expenses in the near term (3-4 months), and on BAH rates in the longer term (2021). For the duration of the coronavirus pandemic, project operating expenses are likely to increase due to contamination efforts. Operating expenses may be partially offset by the deferring of routine maintenance items during the period of social distancing. The near-term revenue impact is expected to be limited given the uninterrupted continuation of BAH without the unemployment risks facing the broader multifamily market. However, the Department of Defense's freeze of Permanent Change of Station (PCS) moves adds temporary uncertainty to project vacancy rates, and subsequent impact on rental income, for the duration of the freeze. From a longer-term revenue perspective, the degree to which the coronavirus pandemic affects future BAH rates, and therefore rental income, depends on the broader impact on the community rental rates and longevity of the pandemic. Further, given the reliance on federal appropriations, BAH may be impacted in the longer-term by the uncertainty of future federal programmatic spending on housing programs during an economic downturn. Fitch's ratings are forward-looking in nature, and Fitch will monitor developments in the sector as a result of the virus outbreak as it relates to severity and duration, and incorporate revised base and rating case qualitative and quantitative inputs based on expectations for future performance and assessment of key risks. BAH RATES BAH rates declined approximately 4.0% in 2020, following a 0.70% decrease in 2019. The reversal in BAH rate trends furthers ongoing credit concerns surrounding the project's BAH rate volatility in recent years. Project five-year BAH rates are as follows: 4.0% decrease (2020); 0.70% decrease (2019); 3.1% increase (2018); 2.1% decrease (2017); and 8.4% increase (2016). While this review is based on the Fiscal 2019 audit, with the decline in BAH in 2019 and 2020, the Negative Outlook on the bonds reflects the risk of further BAH declines. Future changes to BAH will be a key credit consideration moving forward. PROJECT OCCUPANCY LEVELS The project experienced a decline in average occupancy rates in 2019 to 93.3% compared with 94.8% in 2018 and 94.6% in 2017. Additionally, the project reported occupancy levels of 88.7% as of Jan. 31, 2020, which reflected a decrease in occupancy as a result of a recent deployment. Over the last few years, the project has averaged two deployments per year, with average turnover rates in 2019 of 73%. Fitch believes that project management will continue to be challenged by the potential for future deployments and the need to reoccupy units. OPERATING EXPENSES Since inception, the project has incurred expenses higher than originally anticipated in the pro forma. Fiscal year 2019 had an operating expense increase of 7.1% from the prior year. Management projected a decline for operating expenses in 2020, reflecting the fact that significant maintenance issues were addressed in 2019; however, this budget projection may be impacted by unanticipated project expenses related to the coronavirus pandemic as discussed earlier. DEBT SERVICE COVERAGE LEVELS The project finished 2019 with DSCRs of 1.55x, 1.20x, and 1.15x for class I, II, and III bonds, respectively. The DSCRs have declined over the past several years and bring the levels closer to 2014, the lowest the project experienced (1.47x for the Class I, 1.14x for the Class II and 1.09x for the Class III). Management is budgeting for stable coverage levels in 2020, which as mentioned earlier, may be impacted by increased operating expenses over the next year. The current 2019 audited DSC levels remain sufficient for the current ratings on the bonds, however, further declines in BAH and/or increases to operating expenses could weaken net income, thereby stressing DSCRs and potentially putting negative pressure on the ratings. Fitch views unaccompanied military housing projects as having more risk than military family housing projects given the varied profile of the respective tenant bases. Unaccompanied housing projects tend to be subject to higher levels of physical wear and higher annual turnover which leads to higher operating expenses. Therefore, Fitch expects that the DSCRs for an unaccompanied project will be higher than those of military family housing transactions at the same rating level. BREAK-EVEN STRESSES Based on 2019 BAH, assuming a 93.3% occupancy (the average rate for 2019) and holding all variables constant, projections show that BAH could withstand a 7% decrease before Class III bonds would fall to 1.0x DSCR. Holding all other variables constant, the occupancy rate would need to decrease by 13% for the Class III bonds DSCR to fall to 1.0x. Assuming a 93.3% occupancy rate and holding all other variables constant, operating expenses could withstand a 16% increase before the Class III bonds DSCR reached 1.0x. These break-even stresses have declined from 2018 when the break-even for Class III resulted from an 11% BAH decline, 16% vacancy, and 25% increase in expenses. The volatility is reflected in the low ratings for the bottom two tranches which are at the most risk of adverse changes to the project. BRAC RISK The first Base Realignment and Closure Commission (BRAC) recommendations were made in 1988, and U.S. Navy facilities in and around Hampton Roads were not included in any of the commission's recommendations. Since the second BRAC review in 1991 and recommendations made in 1993, 1995, and 2005, the BRAC Commission has proposed to relocate Navy activities, ships, personnel, operations, and infrastructure to HRNC. There have not been any recent updates regarding BRAC. Based on a review of the Navy's recommendations to the BRAC Commission and the BRAC Commission's recommendations to the President since 1988, the HRNC, including the Naval Shipyard, Norfolk, Naval Station, Norfolk, Naval Air Station, Oceana, Naval Amphibious Base, Little Creek, Naval Weapons Station, Yorktown, and the related operations and infrastructure in and around them are vital to the U.S. Navy. None of these key facilities have been recommended for closure by the Navy. Consequently, Fitch expects that HRNC will continue to serve the U.S. Navy and retain its status as the largest naval complex in the world. DEBT SERVICE RESERVES The bond debt service reserve fund is satisfied with an AMBAC surety bond sized at maximum annual debt service. Fitch does not assign any value to the AMBAC surety bond and the ratings reflect this. Additionally, at origination, a $6.5 million excess collateral fund agreement (provided by Merrill Lynch with a wrap from AIG) was made should the project face significant cash flow stress. A draw upon this facility would add more debt to the project. Currently, Fitch does not give any credit to this agreement. PROJECT MANAGEMENT Hampton Roads LLC is managed by American Campus Communities, Inc. (ACC). ACC primarily manages student housing properties and currently has over 200 properties with approximately 130,000 student housing beds under its management. The Hampton Roads property financing was the first arrangement where ACC acted as manager for a military housing project. The management of operating expenses is particularly important for Hampton Roads given the high turnover rates at the property. The current credit risks include increases to project vacancy rates and operating expenses, and as such, Fitch will continue to monitor ACC's ability to address and mitigate these concerns. SUMMARY: Future BAH rate increases/decreases coupled with management's ability to maintain occupancy rates (despite high turnover from ongoing base deployments) and to manage operating expenses will be key to the rating moving forward. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. HARRISBURG AIRPORT: Fitch Puts BB+ on Airport Bonds on Watch Neg. ----------------------------------------------------------------- Fitch Ratings has placed the following small regional origination and destination airports on Rating Watch Negative: -- Burlington International Airport, VT (BTV) 'BBB' airport revenue bonds; -- Dayton Airport, OH (DAY) 'BBB' airport revenue bonds; -- Fresno Yosemite International Airport, TX (FAT) 'BBB+' airport revenue bonds; -- Harrisburg International Airport, PA (MDT) 'BB+' senior airport revenue bonds issued by the Susquehanna Area Regional Airport Authority, PA's (SARAA); -- Buffalo International Airport, NY (BUF) 'BBB+' airport revenue bonds issued by the Niagara Frontier Transportation Authority (NFTA). Fitch has affirmed the ratings on the following airports; however, the Rating Outlook has been revised to Negative from Stable: -- Richmond International Airport, VA (RIC) airport revenue bonds issued by the Capital Region Airport Commission at 'A'; -- El Paso International Airport, TX (ELP) general airport revenue bonds at 'A'; -- Hartford-Bradley International Airport, CT (BDL) airport revenue bonds issued by the Connecticut Airport Authority at 'A'; -- Northern Mariana Islands Airport (GSN) bonds issued by the Commonwealth Ports Authority (CPA), Commonwealth of Northern Mariana Islands (CNMI) at 'B+'; -- Long Beach Airport, CA (LGB) airport revenue bonds at 'A-'. In addition, Fitch has affirmed the ratings on the following airports; however, the Rating Outlook has been revised to Negative from Positive: -- TF Green International Airport, RI (PVD) airport revenue bonds issued on behalf of the Rhode Island Airport Corporation at 'BBB+'; -- Birmingham-Shuttlesworth International Airport, AL (BHM) airport revenue bonds issued by the Birmingham Airport Authority at 'A-'. RATING RATIONALE The recent outbreak of coronavirus and related government containment measures worldwide create an uncertain global environment for air travel in the near term. While the above airport issuers' performance data through the most recently available issuer data may not have indicated impairment, material changes in revenue and cost profile are occurring across the sector and are likely to worsen in the coming weeks and months as economic activity suffers and government restrictions are maintained or expanded. Fitch's ratings are forward-looking in nature, and Fitch will monitor developments in the sector as a result of the virus outbreak as it relates to severity and duration, and incorporate revised base and rating case qualitative and quantitative inputs based on expectations for future performance and assessment of key risks. Small Regional O&D Airport Rating Actions The Rating Watch Negative actions assigned to several of the above airport credits reflect, in Fitch's view, elevated near-term downside risks under the current environment given the limitations of air service in these markets and more acute financial pressures to these airports while the traffic downturn continues. Maintenance of key credit metrics such as debt service coverage levels, leverage and liquidity may be more constrained under assumptions Fitch tested in the coronavirus rating and sensitivity case scenario analysis. Airports with a small base of service offerings and under one million in annual enplaned passengers, including Burlington, Dayton, Fresno and Harrisburg, may take a longer time to restore their pre-coronavirus operational levels, and therefore, the financial pressures underway in terms of reduced coverage and lower liquidity could be more severe when compared to other larger regional airports. NFTA, while serving a larger Buffalo market, does face exposures to Canadian-drawn travelers, and relies on its operating cash flows to make subordinate transfers for non-airport operations. Therefore, its overall fiscal profile may be more at risk with the low passenger traffic activity. The Negative Rating Outlook actions apply to the other airport credits cited above that also serve predominantly small regional O&D markets, most of which have annual enplanement bases of around 2 million or less (prior to the current pandemic). The airports are also exposed operationally and financially in the current stressed aviation environment but, in Fitch's view, have financial profiles which can better position them in the near term to manage the risk. The Outlook revisions to Negative from Positive for Birmingham and Rhode Island reflect the very weak operating environment for U.S. aviation and the fact that the duration of the trough in passenger activity remains uncertain rather than airport specific concerns. Severe declines in enplaned passenger traffic will affect operating revenues across all of these airports, with the greatest impacts to occur in the second quarter of 2020 and potentially extend into future periods due to the coronavirus pandemic. These airports have weaker-to-midrange franchise positions and operate with a moderate to high level of dependence on operations from leading carriers. In the near term, Fitch has assessed that for each of the airports above, the unrestricted cash reserves alone are sufficient to meet debt service due through the end of the current calendar year, albeit at varying levels. The drop in air travel is likely to be steeper than during prior global events such as SARS and the Sept. 11 terrorist attacks, and the start of the recovery period is difficult to assess, as the virus spread is still growing in regions where air travel is most prevalent. Given the fast-moving nature of events, conditions are constantly changing, and U.S. airports are facing significant reductions in passenger traffic under this environment. Fitch expects the dramatic reduction in air travel levels to increase financial pressure on all U.S. airports at varying levels, a sector that has had a decade long stretch of traffic expansion and financial stability. The unprecedented requests in recent days for assistance from the federal government by both the air carriers and the airports are indicative of the mutual strains suffered in the aviation industry and demonstrate a clear signal of the present financial pressures. Robust liquidity across most airports, evident through a combination of cash funded bond reserves and additional accounts with unencumbered funds, should provide additional protection to cover upcoming bond payments and is viewed as a mitigating consideration. The CARES Act, which provides a total of $7.4 billion out of $10 billion of federal funding to U.S. airports to use for any lawful airport purpose, provides additional mitigation. The assistance is intended to provide near-term bridge funding for lost revenues until enplanements can meaningfully return to pre-crisis levels. Airports are expected to use the funds for a variety of purposes, ranging from rate relief to air carriers and concession tenants to directly offsetting operating costs and upcoming debt payments. While the passage of the CARES Act reduces the risk of downgrades somewhat, it is not enough to result in Stable Outlooks at this time, given the remaining uncertainties in the sector, including but not limited to, the severity and duration of enplanement losses, the length of the recovery period, the extent of revenue underperformance, and the financial health, willingness, ability of air carriers to make full and timely payments. Fitch also expects airport management to initiate a number of self-protective actions to preserve their fiscal postures, although there are limitations given the broad impairment to the general economy and the industries tied to the aviation sector. Airline agreements in most cases are structured to provide mechanisms to revise airline payment levels in case of large variances to budgeted performance; however, the airlines themselves are financially constrained to the point this approach is not anticipated. Further analysis will follow in the weeks to come with detailed analyses of management reactions and responses, as well as incoming data on traffic, revenues and expense control actions. In the longer term, Fitch will analyze traffic and revenue impacts caused by possible changes in air travel patterns. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: -- A positive rating action is not expected in the near future. However, a return to a stable outlook could be possible, and the ratings affirmed, if Fitch sees sustained recovery in traffic and revenues due to the easing of the pandemic resulting in normal air traffic patterns or the adaption of strategies that convincingly stabilizes the finances. Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: -- A continued period of material traffic declines that presents further challenges to stabilize the finances of the affected airports; -- Further credit erosion of the major air carriers or payment delinquencies to the airports; -- Sustained deterioration in airport liquidity levels. BEST/WORST CASE RATING SCENARIO Ratings of Public Finance issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. FINANCIAL ANALYSIS Fitch conducted a rating case and a sensitivity case to the above credits to assess coverage and liquidity. The rating case scenario, which contemplates airport enplanement declines of approximately 35% in calendar year 2020 relative to 2019 actual levels based on the following assumptions of quarterly traffic activity: 1Q20 (-15%), 2Q20 (-60%); 3Q20 (-40%) and 4Q20 (-20%). For calendar years 2021 and 2022, Fitch assumes 95% and 100% recoveries relative to 2019 levels. Recognizing there are different fiscal year periods for each airport, the assumed traffic levels will be accordingly adjusted. A more severe sensitivity case assumes traffic declines continue at the same peak traffic loss of 2Q20 for an additional quarterly period followed by recoveries that are similar to the rating case. The results of these scenarios will be published as a Coronavirus Stress Tests Report. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. 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). HARTSHORNE HOLDINGS: Committee Taps Whiteford Taylor as Counsel --------------------------------------------------------------- The official committee of unsecured creditors of Hartshorne Holdings, LLC and its affiliates seeks authority from the United States Bankruptcy Court for the Western District of Kentucky to retain Whiteford, Taylor & Preston LLP as its legal counsel. The committee requires Whiteford to: (a) advise the committee regarding its rights, powers and duties pursuant to Bankruptcy Code Section 1103; (b) advise and consult with the committee on the conduct of Debtors' Chapter 11 cases including all legal and administrative requirements under chapter 11; (c) attend meetings and negotiate with representatives of Debtors, the secured and unsecured creditors, equity holders, employees and other parties in interest; (d) advise the committee regarding any contemplated sale of assets or business combinations including the negotiation of asset sales, mergers or joint ventures, formulation and implementation of bidding procedures, evaluation of competing offers, drafting of appropriate documents regarding proposed sales and counseling regarding the closing of such sales; (e) advise the committee regarding prepetition and post-petition financing and cash collateral arrangements and negotiate documents relating thereto; (f) advise the committee on matters relating to Debtors' assumption, assumption and assignment and rejection of executory contracts and unexpired leases; (g) advise the committee on matters relating to the ordinary course of business including employment matters, environmental, banking, insurance, securities, corporate, business operation, contracts, joint ventures, real and personal property, press and public relations matters and regulatory matters; (h) provide advice and counseling on actions to protect and preserve the Debtors' estates including actions and proceedings by the Debtors or other designated parties to recover assets, defense of actions and proceedings brought against the estates, negotiations regarding all litigation in which the committee may be involved and objections to claims filed against the estate; (i) prepare and file necessary motions, applications, answers, orders, reports and papers; (j) review all pleadings, financial and other reports filed by the Debtors in these Chapter 11 cases and advise the committee about the implications; (k) review the nature and validity of any liens asserted against the Debtors' property and advise the committee concerning the enforceability of such liens; (l) investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business and the desirability of the continuance of such business, and any other matter relevant to the cases or to the formulation of a plan; (m) commence and conduct any and all ligation necessary or appropriate to assert rights held by the committee and/or protect assets of the Chapter 11 estate; (n) negotiate and participate in the preparation of the Debtors' plan(s) of reorganization, related disclosure statement(s) and other related documents and agreements and advise and participate in the confirmation of such plan(s); (o) attend meetings with third parties and participate in negotiations with respect to the above matters; (p) appear before the bankruptcy court, other courts and the United States Trustee to protect and represent the interests of the committee and its constituents; (q) meet and coordinate with other counsel and other professionals representing the Debtors and other parties in interest; (r) perform all other necessary legal services and provide all necessary legal advice to the committee in connection with this chapter 11 cases; and (s) handle such other matters as may be requested by the committee. Whiteford Taylor will be paid at these hourly rates: Michael J. Roeschenthaler, Partner $615 Brandy M. Rapp, Partner $470 Richard W. Riley, Counsel $675 Jana S. Pail, Counsel $515 Daniel R. Schimizzi, Associate $425 Jeffrey M. Friedrich, Associate $405 Kelly E. McCauley, Associate $395 J. Zachary Balasko, Associate $365 Susan Harding, Paralegal $295 Whiteford Taylor will also be reimbursed for reasonable out-of-pocket expenses incurred. Michael J. Roeschenthaler, Esq., a partner at Whiteford, disclosed in a court filing that he and his firm are "disinterested" as defined in section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, Mr. Roeschenthaler disclosed that: -- Whiteford has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; -- none of the professionals included in the engagement vary their rate based on the geographic location of the bankruptcy case; -- the firm has not represented the committee in the 12 months prepetition; and -- the committee Whiteford expect to develop a prospective budget and staffing plan. The counsel can be reached through: Michael J. Roeschenthaler, Esq. Whiteford, Taylor & Preston LLP 200 First Avenue, Third Floor Pittsburgh, PA 15222 Phone: (412) 618-5601 Tel. Email: mroeschenthaler@wtplaw.com About Hartshorne Holdings Hartshorne Holdings, LLC and affiliates are engaged in the production and sale of thermal coal through the operation of the Poplar Grove Mine, which is part of the Buck Creek Complex located in the Illinois Coal Basin in Western Kentucky. The Buck Creek Complex includes two mines: (i) the operating Poplar Grove Mine, and (ii) the permitted, but not constructed, Cypress Mine. On Feb. 20, 2020, Hartshorne Holdings, LLC and three affiliates sought Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Lead Case No. 20-40133). Hartshorne Holdings was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Thomas H. Fulton is the case judge. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Frost Brown Todd LLC as local counsel; and FTI Consulting, Inc. as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/hartshorne HAWAII MOTORSPORTS: Gets Final OK to Borrow from Mahindra Finance ----------------------------------------------------------------- Hawaii Motorsports LLC sought the approval of the Bankruptcy Court to obtain post-petition credit under the terms of the inventory finance agreement the Debtor entered into pre-petition with Mahindra Finance USA, LLC. The inventory security agreement allows the Debtor to finance the acquisition of Mahindra utility vehicle inventory, subject to a first-priority security interest granted to Mahindra in the financed inventory. As of the Petition Date, the Debtor owes Mahindra $87,540 under the agreement. The Debtor, pursuant to the motion it filed with the Court, sought to (i) pay adequate protection to Mahindra, upon terms consistent with the inventory security agreement, on the sale of any item of inventory, (ii) obtain credit, upon the terms of the inventory security agreement, including the grant of a security interest upon new inventory acquired. Judge Benjamin P. Hursh granted the Debtor's request on an interim basis, as well as on a final basis. About Hawaii Motorsports Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii. Hawaii Motorsports LLC, based in Kahului, HI, filed a Chapter 11 petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In the petition signed by Barry Usher, manager, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Benjamin P. Hursh is the presiding judge. James A. Patten, Esq., at Patten Peterman Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the Debtor. HAWAII MOTORSPORTS: Gets Interim, Final Nod on AFC Deal ------------------------------------------------------- Hawaii Motorsports LLC sought permission from the Bankruptcy Court to continue, post-petition, the terms of a certain prepetition promissory note and security agreement the Debtor entered into with Automotive Finance Corporation. Pursuant to the promissory note and security agreement, AFC extends credit to the Debtor for the purchase of rental automobile inventory in exchange for which the Debtor grants AFC a first priority security interest in the financed automobile inventory. As of the Petition Date, the Debtor owed AFC $448,369.59 under the promissory note and security agreement. The Debtor also sought to grant AFC a security interest in the financed automobile inventory and to pay adequate protection to AFC upon terms consistent with the promissory note and security agreement, on the sale of any item of inventory and periodically for the depreciation of value of the rental automobile inventory resulting from its use. The Bankruptcy Court approved the motion on an interim basis. Judge Benjamin P. Hursh, thereafter, approved the motion on a final basis, ruling that: * the Debtor may continue to use and sell any vehicle purchased by the Debtor and financed by AFC in pursuant to the terms of the prepetition loan documents; * in the case of a non-sale use (i.e., rental, lease, or other similar use) of a secured vehicle, the Debtor may use proceeds derived from that use in the ordinary course of its business so long as the Debtor timely performs its obligations under the AFC Note with respect to that secured vehicle; * the Debtor may not sell a secured vehicle for less than the payoff amount and the Debtor may not dispose of any secured vehicle through trade, absent written permission from AFC; * upon the sale of a secured vehicle, all proceeds from the sale of such vehicle will be deposited into a separate deposit account to be established and maintained at a financial institution on the list of authorized depositories approved by the United States Trustee; * Within 24 hours of the receipt of the proceeds from the sale of any Secured Vehicle, the Debtor shall remit to AFC the payoff amount. The Debtor will be entitled to use all proceeds over and above the payoff amount in the ordinary course of its business. The Court further ruled that blanket lienholders Hawaii State Federal Credit Union, Wells Fargo Commercial Distribution Finance, LLC, and Automotive Finance Corporation will be granted replacement liens on the excess value of the PMSI floored inventory to the extent the value exceeds the value of the PMSI liens. About Hawaii Motorsports Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii. Hawaii Motorsports, based in Kahului, HI, filed a Chapter 11 petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In the petition signed by Barry Usher, manager, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Benjamin P. Hursh is the presiding judge. James A. Patten, Esq., at Patten Peterman Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the Debtor. HAWAII MOTORSPORTS: Gets Interim, Final OK on Usher Ent. Deal ------------------------------------------------------------- Hawaii Motorsports LLC sought permission from the Bankruptcy Court for the District of Montana to obtain credit (with a priority over all administrative expenses) from Usher Enterprises, Inc. Usher Enterprises, owned by one of the Debtor's member, Barry Usher, allows the Debtor to use its revolving credit card issued by Capital One card to purchase product, clothing and accessories, for retail sale at the Debtor's facilities. The Debtor sells and rents out motorcycles, automobiles, and motorsport paraphernalia. As of the Petition Date, the balance due on the Capital One card was $2,751.36 and the available credit was $2,248.64. Usher Enterprises Inc. agreed that the Debtor continue the use of the Capital One card provided that: (i) the Debtor pays the postpetition charges incurred including interest (at an APR of 25.65%), and (ii) any unpaid amount in excess of the prepetition balance of $2,751 is given priority administrative status pursuant to Section 364 (c) (1) of the Bankruptcy Code. Judge Benjamin P. Hursh approved the motion on an interim basis. Judge Hursh subsequently approved the motion on a final basis, ruling that the Debtor may obtain credit from Usher Enterprises up to the sum of $2,248.64 at any single point in time, on a revolving basis. Any unpaid amount will be accorded administrative priority status, the Court ruled. About Hawaii Motorsports Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii. Hawaii Motorsports LLC, based in Kahului, HI, filed a Chapter 11 petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In the petition signed by Barry Usher, manager, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Benjamin P. Hursh is the presiding judge. James A. Patten, Esq., at Patten Peterman Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the Debtor. HAWAII MOTORSPORTS: Obtains Interim Access to Cash Collateral ------------------------------------------------------------- Hawaii Motorsports, LLC, sought and obtained interim approval from Judge Benjamin P. Hursh to use cash collateral in which these entities have interest: (i) Hawaii State Federal Credit Union, (ii) Wells Fargo Commercial Distribution Finance, LLC, and (iii) Automotive Finance Corporation. The Debtor has disclosed that it owes the secured parties $1,538,179. Each of these secured parties hold security interest liens on the Debtor's prepetition assets including inventory, equipment, deposit accounts, and proceeds, products, rents, and profits from the collateral subject to the Purchase Money Security liens held by flooring financers including Wells Fargo Commercial Distribution Finance, LLC, Automotive Finance Corporation, and Mahindra. Judge Hursh ruled that Hawaii State Federal Credit Union may release the cash deposit subject to the pledge and security agreement, provided that the funds released will be used only for the acquisition of automotive inventory. The Debtor has sought the release of approximately $270,000 of funds on deposit in a share account with Hawaii State Federal Credit Union, which share account Hawaii State Federal Credit Union held pursuant to the prepetition pledge and security agreement. About Hawaii Motorsports Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii. Hawaii Motorsports, based in Kahului, HI, filed a Chapter 11 petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In the petition signed by Barry Usher, manager, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Benjamin P. Hursh is the presiding judge. James A. Patten, Esq., at Patten Peterman Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the Debtor. HEATING AND PLUMBING: Unsecureds to Get Revenue, Avoidance Proceeds ------------------------------------------------------------------- Heating and Plumbing Engineers, Inc., filed on March 25, 2020, filed a Second Amended Disclosure Statement explaining its Second Amended Chapter 11 Plan filed Oct. 31, 2019. During its Chapter 11 case, the Debtor has undertaken significant efforts to restructure its operations and focus on those divisions that have proved to be profitable. The Debtor has closed its Denver-based operations as of Dec. 31, 2019. By closing a majority of its Denver operations, the Debtor will be able to focus on its Colorado Springs-based operations, which have historically proved to be profitable, and have remained profitable during the course of the Debtor's bankruptcy case. Without the losses associated with the Denver operations, the Debtor believes that the company will return to profitability centered around the Colorado Springs operations. The Debtor continues to pursue new projects and opportunities in the Colorado Springs area, and has been successful in generating additional work in Colorado Springs. The Plan proposes to treat claims as follows: * Class 2 Allowed Secured Claim held by the El Paso County Treasurer. Impaired. The claimant will receive amortized repayment of claim over twelve months with statutory interest at 12% per annum. Monthly payments will be approximately $8,710. * Class 3 Allowed Secured Claim held by the State of Colorado. Impaired. The claimant will receive amortized repayment of claim over no more than 5-year period following the Petition Date with statutory interest at a rate of 8% per annum. The claimant will receive monthly payments will be $6,342. * Class 4(a and b) Allowed Secured Claim held by Vectra Bank Colorado and Vectra Equipment Finance. Impaired. Class 4(a) will be repaid based upon 10-year amortization of claim with 5-year balloon plus collection paydowns. Class 4(b) will be amortized and repaid over 60-month period at 6% per annum. * Class 5 Allowed Secured Claim held by the Funds. Impaired. The claim will be amortized with interest at a rate of 4% per annum and repaid over 10-year period with 5-year balloon with negotiated reductions in balance due to interim paydowns. The claim will receive monthly payments prior to balloon payment of $8,443. * Class 6 Allowed Secured Claim held by Lease Plan USA. Impaired. The claim will be amortized and repaid over 5-year period with interest at a rate of 4% per annum. * Class 8 Allowed Claims held by unsecured creditors. Impaired. The class will be paid a variable percentage of the Debtor's Gross Revenue over a five-year period. * Class 9 Interests held by prepetition shareholder. Unimpaired/Impaired. All interests shall be retained on the Effective Date of the Plan, unless Class 8 votes to reject the Plan, in which case all Class 9 Interests shall be cancelled on the Effective Date of the Plan and new interests shall be issued to those parties who contribute New Capital in accordance with Paragraph 9.6 of the Plan. The Class 8 claimants will receive a pro-rata distribution equal to a variable percentage of the HPE Gross Revenue generated over the five-year period commencing on the later of: a) the Effective Date of the Plan; or b) the date following the date on which all Professional Fee Claims are paid in full ("Repayment Term"). The Debtor may use the Gross Revenue percentage payment to the extent necessary to pay any Professional Fee Claimant, however the five-year repayment for Class 8 will not start until after the Professional Fee Claims are paid in full. Payments to unsecured creditors shall commence the earlier of the first day of the first quarter after Professional Fee Claimants are paid in full, or the first day of the fourth quarter following the Effective Date of the Plan. Commencing on the first full month following the Confirmation Date, HPE shall at the conclusion of each month, set aside in a segregated account, the variable percentage of the preceding month’s Gross Revenue. Distributions to Class 8 claimants shall be made on a quarterly basis during the five-year repayment term, resulting in 20 quarterly distributions to unsecured creditors. Class 8 claimants who are interested may request from the Debtor and receive quarterly financial statements detailing the Debtor's gross income and the amount distributed to Class 8. The Debtor retains the right to contest any unsecured claims until the claim objection bar date set out in the Plan. Class 8 claims shall also receive a pro-rata distribution of the net proceeds of any Avoidance Action that the Debtor pursues or that is pursued by the Creditors' Committee. The Debtor has identified payments in the amount of $11,868,559 in the 90 days prior to filing its case, which includes payments made under the Debtor's bonds. The Debtor has determined that a number of these claims are subject to valid defenses or are uncollectable. As previously stated in this Disclosure Statement, the Debtor is still in the process of evaluating the remaining claims in order to determine which, if any, claims are viable and has completed an initial evaluation to determine the total amount of possible preference claims. On or before Dec. 31, 2020, the Debtor will provide a list of all Avoidance Actions it intends to prosecute, and those it does not intend to prosecute. Any Avoidance Actions prosecuted by the Committee will be undertaken at the Committee's sole expense. Pursuant to the Plan, the Debtor will restructure its debts and obligations and HPE will continue to operate in the ordinary course of business. Funding for the Plan shall be from income derived from HPE's ongoing operations. A full-text copy of the Second Amended Disclosure Statement dated March 25, 2020, is available at https://tinyurl.com/taqvce4 from PacerMonitor.com at no charge. Counsel to the Debtor: Lee M. Kutner Keri L. Riley KUTNER BRINEN, P.C. 1660 Lincoln St., Suite 1850 Denver, CO 80264 Telephone: (303) 832-2400 E-mail: lmk@kutnerlaw.com E-mail: klr@kutnerlaw.com About Heating & Plumbing Engineers Founded in 1947, Heating & Plumbing Engineers, Inc., a mechanical contractor, provides HVAC sheet metal, plumbing, and piping systems services in Colorado. Heating & Plumbing Engineers filed a voluntary petition pursuant to Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-16183) on July 19, 2019. In the petition signed by CEO William T. Eustace, the Debtor disclosed $13,845,361 in assets and $14,934,602 in liabilities. Lee M. Kutner, Esq., at Kutner Brinen, P.C., is the Debtor's counsel. HIGHPOINT OPERATING: Moody's Cuts CFR to Caa2, Outlook Negative --------------------------------------------------------------- Moody's Investors Service downgraded HighPoint Operating Corporation's Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa2-PD from B3-PD, and senior unsecured notes rating to Caa3 from Caa1. HighPoint's Speculative Grade Liquidity rating remains unchanged at SGL-3. The outlook was changed to negative from stable. "The downgrade of HighPoint's ratings reflects the negative impact from the weak oil and gas price environment on credit quality, increasing refinancing risks as debt maturities approach and a high cost of capital which elevates risks of restructuring and default," said Jonathan Teitel, Moody's Analyst. Downgrades: Issuer: HighPoint Operating Corporation Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Unsecured Notes, Downgraded to Caa3 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: HighPoint Operating Corporation Outlook, Changed to Negative from Stable RATINGS RATIONALE The downgrade of HighPoint's ratings reflects negative effects of weak commodity prices and challenging capital markets on the company, particularly as debt maturities approach. There are rising risks of restructuring and default, including a distressed exchange which could be deemed a default by Moody's. The negative outlook reflects increasing refinancing risks, rising risk of default and further erosion of liquidity as debt maturities approach. 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 E&P 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 HighPoint's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and HighPoint 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 HighPoint of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. The SGL-3 rating reflects Moody's expectation that HighPoint will maintain adequate liquidity in 2020. However, liquidity will weaken by 2021 as HighPoint's revolver goes current. HighPoint's $500 million borrowing base revolver expires in July 2022 if more than $100 million of the $350 million senior notes maturing in October 2022 are outstanding (otherwise expiring in 2023). There is risk of a reduction during the spring borrowing base redetermination. As of December 31, 2019, HighPoint had $16 million of cash. It also had $140 million drawn on its revolver and $26 million in letters of credit outstanding. HighPoint's Caa2 CFR reflects increasing debt refinancing risks and rising risk of default, including a distressed exchange which could be deemed a default by Moody's. The company has small scale and basin concentration. There is increasing risk of default and restructuring as debt maturities approach, and as the company's access to capital markets is constrained. HighPoint's planned capital spending in 2020 is significantly lower than spending in 2019. Lower spending in 2020, combined with the effects of reduced spending in the latter half of 2019, will result in a production decline. Growing production and reserves would require significant capital investment. Its production mix garners support from an oil-weighting notwithstanding weaker prices. HighPoint's hedges partially protect cash flow from commodity price volatility. The evolving regulatory environment in Colorado heightens risks associated with the company's DJ Basin concentration. Colorado state legislation passed in 2019 modified oil and gas regulation. Also, Colorado ballot initiatives figured prominently in 2018 and while they did not pass, there have been renewed pushes for similar measures on the 2020 ballot. There are risks that regulations impede drilling activities, increase time to obtain permits and heighten operational costs. The company's acreage is in rural areas of Weld County which might result in a less adverse impact to the extent local regulations are less restrictive than urban areas. HighPoint's $350 million of senior unsecured notes maturing in 2022 and $275 million of senior unsecured notes maturing in 2025 are rated Caa3. This is one notch below the CFR and reflects effective subordination to the revolver. HighPoint Resources Corporation, the company's parent, is a guarantor of the bonds. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a downgrade include increasing default risk including distressed exchanges, weakening liquidity or Moody's view on expected recoveries is lowered. Factors that could lead to an upgrade include addressing near-term debt maturities, less debt, sustainable production and reserves growth, and adequate liquidity. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. HighPoint, headquartered in Denver, Colorado, is a subsidiary of HighPoint Resources Corporation, a publicly-traded independent exploration and production company. It operates in the DJ Basin in Colorado. Average daily production in 2019 was 34 Mboe/d. HOLCOMB ACQUISITIONS: To Seek Plan Confirmation on April 28 ----------------------------------------------------------- Judge Benjamin A. Khan has ordered that the Disclosure Statement filed by Holcomb Acquisitions, Inc., is conditionally approved. April 21, 2020 is fixed as the last date for filing and serving written objections to the Disclosure Statement. The hearing on confirmation of the Plan and final approval of Disclosure Statement is scheduled on April 28, 2020 at 9:30 am in U.S. Bankruptcy Court, 101 South Edgeworth Street, 2nd Floor Courtroom 1, Greensboro North Carolina 27401. April 21, 2020, is fixed as the last day for filing written acceptances or rejections of the Plan. April 21, 2020, is fixed as the last day for filing and serving written objections to the confirmation of the Plan. About Holcomb Acquisitions Holcomb Acquisitions, Inc., which operates under the name Toys & Co., is a retailer of toys, games, hobby, and craft kits. Holcomb sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 19-11233) on Nov. 7, 2019. In the petition signed by its secretary, Marcus Holcomb, the Debtor disclosed a total of $223,359 in assets and $2,372,587 in debt. Samantha K. Brumbaugh, Esq., at IVEY, MCCLELLAN, GATTON & SIEGMUND, LLP, is the Debtor's counsel. HYSTER-YALE MATERIALS: S&P Lowers ICR to 'B' on Weaker Demand ------------------------------------------------------------- S&P Global Ratings lowered its issuer rating on Hyster-Yale Materials Handling Inc. to 'B' from 'B+'. At the same time, S&P lowered its issue-level rating to 'BB-' from 'BB'. A recession in the U.S. and Europe stemming from the COVID-19 pandemic could weaken volume demand beyond S&P's expectations. S&P's economists now believe the U.S. and Europe are in a recession, as the fallout from the coronavirus is expected to reduce consumer spending and business investment. Although the severity and longevity of the COVID-19 pandemic remain uncertain, there is increasing risk that reduced demand will limit Hyster-Yale's organic revenue growth in 2020, leading to significant declines. "Our base-case forecast assumes moderately negative free cash flow generation, although we believe the company's operating results could swing greatly during periods of stress. For instance, during the recession in 2007-2009, Hyster-Yale experienced volatility of profitability at a higher rate than the rest of the industry. We expect that sharply worse cash flow generation will significantly weaken credit measures," S&P said. The negative outlook on Hyster-Yale reflects S&P's expectation that the global recession will affect the company's financial results as demand declines and the coronavirus pandemic disrupts the supply chain, resulting in adjusted debt-to-EBITDA ratio increasing to 5x-6.5x from the 3x area and funds from operations (FFO)-to-adjusted-debt ratio declining to about 10%-15% from roughly 25% over the next few quarters. "We could downgrade Hyster-Yale if the operating results and cash flow generation remained below our expectations and raised adjusted debt to EBITDA to above 6.5x, as a result of an increasing cash flow deficit and constrained liquidity. Although less likely in the current economic environment, we would consider a downgrade if Hyster-Yale adopted a more aggressive financial policy and undertook a large-scale debt-funded acquisition that weighed on its financial risk profile," S&P said. "We could revise our outlook to stable if we expected Hyster-Yale's adjusted debt to EBITDA to remain below 6.5x through this downturn and believed there was a clear path to recovery in the company's end markets. We could also revise our outlook to stable if the company significantly expanded its EBITDA margins to above 11% coupled with increased positive free cash flow generation supporting debt leverage sustainability under 6.5x," the rating agency said. ILLINOIS VALLEY: Seeks Permission to Use Cash Collateral -------------------------------------------------------- Illinois Valley Golf Association, Inc., asked the Bankruptcy Court for the District of Oregon to authorize use cash collateral in the amount of $5,802, on an interim basis, for the period from Jan. 31, 2020 through and including March 31, 2020, or $62,453 for the period from Jan. 31, 2020 through and including September 30, 2020, in order to maintain operations pending the submission of a plan of reorganization. As adequate protection, the Debtor proposed to grant each of its secured creditor a replacement lien on all of the post-petition property of the same nature and kind in which each of them has a pre-petition line or security interest. If subsequently directed by the Court, the Debtor proposes to commence making monthly payments of interest only to its lien creditor. The Debtor disclosed that VGM Financial Services has filed a UCC financing to secure its claim against the Debtor's assets consisting of all equipment, fixtures, inventory, goods and software financed or leased from the secured party. About Illinois Valley Golf Association Illinois Valley Golf Association, Corp. -- http://www.ivgolfclub.com/-- owns and operates the Illinois Valley Golf Club, a semi-private golf course that opened in 1977. The I.V Golf Club measures 3049 yards from the longest tees. The course features two sets of tees for different skill levels. Illinois Valley Golf Association, Corp., based in Cave Junction, Ore., filed a Chapter 11 petition (Bankr. D. Ore. Case No. 20-60152) on Jan. 23, 2020. In the petition was signed by Jason Gill, president. In its petition, the Debtor disclosed $1,047,400 in assets and $369,152 in liabilities. The Hon. Thomas M. Renn oversees the case. Rodolfo A. Camacho, Esq., at Law Office of Camacho & Knutson, serves as the Debtor's bankruptcy counsel. JACK IN THE BOX INC: Egan-Jones Lowers Sr. Unsecured Ratings to B+ ------------------------------------------------------------------ Egan-Jones Ratings Company, on March 24, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Jack in the Box Incorporated to B+ from BB. Jack in the Box is an American fast-food restaurant chain founded February 21, 1951, by Robert O. Peterson in San Diego, California, where it is headquartered. The chain has 2,200 locations, primarily serving the West Coast of the United States. JAGUAR HEALTH: FDA Declines to Issue an EUA for Crofelemer ---------------------------------------------------------- The U.S. Food and Drug Administration notified Jaguar Health, Inc. that it was declining to issue an Emergency Use Authorization ("EUA") for crofelemer at this time based on its consideration of section 564 of the FDCA and prioritization factors for the review of EUA requests, including but not limited to the public health need for the product and the urgency of treatment need. On April 2, 2020, Jaguar submitted a request to the FDA pursuant to section 564 of the Federal Food, Drug, and Cosmetic Act for EUA for crofelemer (Mytesi) for the symptomatic relief of diarrhea and other gastrointestinal symptoms in patients with COVID-19 and for patients with COVID-19 who have diarrhea associated with certain antiviral treatments. Notwithstanding the FDA's response to the Company's EUA request, the Company continues to be in discussions with the National Institute of Allergy and Infectious Diseases ("NIAID") regarding NIAID's potential evaluation of antiviral activity of crofelemer against SARS-CoV-2. Given crofelemer's previous antiviral activity against other RNA viruses, the Company believes that crofelemer may reduce viral replication in the gastrotintestinal tract. This would reduce inflammation in the gut as well as mitigate fecal viral shedding, which could be a source of fecal-oral transmission. About Jaguar Health Jaguar Health, Inc. -- - http://www.jaguar.health-- is a commercial stage pharmaceuticals company focused on developing novel, sustainably derived gastrointestinal products on a global basis. The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc., focuses on developing and commercializing proprietary human gastrointestinal pharmaceuticals for the global marketplace from plants used traditionally in rainforest areas. Its Mytesi (crofelemer) product is approved by the U.S. FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. Jaguar reported a net loss of $38.54 million for the year ended Dec. 31, 2019, compared to a net loss of $32.15 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $36.41 million in total assets, $15.84 million in total liabilities, $9.89 million in series A redeemable convertible preferred stock, and $10.67 million in total stockholders' equity. Mayer Hoffman McCann P.C., in San Francisco, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 2, 2020 citing that the Company has experienced losses since inception, significant cash used in operations, and is dependent on future financing to meet its obligations and fund its planned operations. These conditions raise substantial doubt about its ability to continue as a going concern. JASON INC: Moody's Affirms 'Ca' CFR, Outlook Negative ----------------------------------------------------- Moody's Investors Service affirmed and appended with a limited default designation the probability of default rating for Jason Incorporated to Ca-PD/LD following the company's limited default. Concurrently, Moody's affirmed the company's Ca corporate family rating, Caa3 senior secured first lien bank credit facilities rating and C senior secured second lien term loan rating. The Speculative Grade Liquidity Rating remains SGL-4. The ratings outlook remains negative. The rating action follows Jason's missed interest payment that was due on March 31, 2020 under its $89.9 million senior secured second lien term loan. Jason announced it has entered into a forbearance agreement with first lien lenders following the missed interest payment [1]. The expiration of a five-day grace period related to interest payments allowed under the indenture is now considered a default under Moody's definitions. Moody's has subsequently appended the PDR with an "/LD" designation indicating the limited default has occurred, and the "/LD" designation will be removed in three days. The following rating actions were taken: Affirmations: Issuer: Jason Incorporated Corporate Family Rating, Affirmed Ca Probability of Default Rating, Affirmed Ca-PD /LD (/LD appended) Senior Secured 1st Lien Bank Credit Facility, Affirmed Caa3 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Affirmed C (LGD5) Outlook Actions: Issuer: Jason Incorporated Outlook, Remains Negative RATING RATIONALE Jason's Ca CFR reflects the company's deemed untenable capital structure and high likelihood of debt restructuring resulting in high losses on debt claims. The rating also reflects continued deterioration in the company's operating results and ensuing weak liquidity and very high leverage of close to 15x. These risks are counterbalanced by the company's good market position across several businesses, its global footprint, and a well-diversified customer base. Governance risk is moderate, with two of shareholders owning close to 30% and considerable pressure on equity values raising the prospect of a distressed exchange. 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, Jason's untenable capital structure and weakness in its end markets 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 Jason of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative ratings outlook reflects the high perceived likelihood of a near-term default on all obligations, with a missed interest payment and forbearance agreement with the first lien lenders. The ultimate resolution of the capital structure remains highly uncertain. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if the company files for bankruptcy or Moody's estimates of ultimate recovery deteriorate further. Although unlikely, the rating could be upgraded if the company restores its liquidity to adequate levels and reverses the trend of revenue and cash flow declines. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Headquartered in Milwaukee, Wisconsin, Jason Incorporated is a publicly-traded diversified manufacturing company serving industrial, auto and other industries. Its products include finishing (industrial brushes, buffing wheels and compounds) and seating (static and suspension seating for motorcycle, construction, agricultural, lawn and turf-care equipment). Revenue for the twelve months ended December 31, 2019 was $338 million. JEFFERIES FINANCE: S&P Places 'BB-' ICR on CreditWatch Negative --------------------------------------------------------------- S&P Global Ratings said it placed its 'BB-' issuer credit and senior secured debt ratings and 'B+' senior unsecured debt ratings on Jefferies Finance LLC (JFIN) on CreditWatch with negative implications. "The CreditWatch placement primarily reflects our expectation that JFIN will experience higher-than-usual draws on revolving credit commitments and greater difficulty syndicating loans, which could weaken the company's business and liquidity position and result in a downgrade in the next three months. JFIN had $2.4 billion of undrawn commitments in its loan portfolio and $1.2 billion of underwriting commitments (net of $2.0 billion syndicated to third parties) as of Nov. 30, 2019. Elevated draws on unfunded commitments could weaken JFIN's liquidity, in our view." Also, increased borrowings to fund draws against unfunded revolvers and underwriting commitments, as well as potential underwriting losses, could result in increased leverage," S&P said. While JFIN has good amount of liquidity to meet, for the most part, potential draws on unfunded commitments and satisfy underwriting commitments, the aggregate sources of liquidity could fall short of aggregate uses of liquidity in the future. As of Nov. 30, 2019, liquidity included $627 million of unrestricted cash, a $330 million corporate revolver (none outstanding), $1.2 billion of collateralized loan obligation (CLO) and CLO warehouse capacity, and $1.325 billion of fronting lines (none outstanding). Also, JFIN had $212.7 million of undrawn equity capital commitments from members. "The CreditWatch negative placement primarily reflects that we expect higher-than-usual draws on revolving credit commitments and greater difficulty syndicating loans, which could weaken the company's business and liquidity position and result in a downgrade in the next three months. The ratings reflect an expectation that JFIN will operate with debt to adjusted total equity (ATE) below 4.5x, while maintaining adequate funding and liquidity. Also, we expect MassMutual and Jefferies to continue to support JFIN and the company to remain at least moderately strategically important to Jefferies," S&P said. S&P could lower the ratings over the next three months if: -- Liquidity becomes strained and is no longer adequate, in its view; -- Debt to ATE is expected to be above 4.5x on a sustained basis; or -- Jefferies reduces its commitment to JFIN. S&P could affirm the ratings if funding and liquidity risks related to underwriting commitments and undrawn revolving credit commitments are reduced or further mitigated and leverage is maintained within its expectations. JIM'S DISPOSAL: Seeks to Hire Mann Conroy as Special Counsel ------------------------------------------------------------ Jim's Disposal Service, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Missouri to hire Mann Conroy LLC as its special counsel. Mann Conroy will represent the Debtor in the prosecution claims under 11 U.S.C. Secs. 542, 547 and 549. The counsel's proposed compensation is the greater of its hourly rates of up to $295 per hour for attorneys licensed for eight or more years; or up to $195 per hour for attorneys licensed for fewer than eight years; or 35 percent of any net recovery. Mann Conroy is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached at: Robert S. Baran, Esq. Larry A. Pittman, II, Esq. Mann Conroy, LLC 1316 Saint Louis Ave., 2nd FL Kansas City, MO 64101 Phone: (816) 210-9680 / (816) 616-5009 Fax: (816) 817-6023 Email: rbaran@conroybaran.com lpittman@conroybaran.com About Jim's Disposal Service Jim's Disposal Service, LLC, a company that specializes in residential waste solutions, filed a Chapter 11 petition (Bankr. W.D. Mo. Case No. 20-40050) on Jan. 6, 2020. At the time of the filing, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. Judge Brian T. Fenimore oversees the case. Larry A. Pittman, II, Esq., and Robert Baran, Esq., at Mann Conroy, LLC, are the Debtors' bankruptcy attorneys. JOHN DAUGHERTY: Hires Campbell & Riggs as Special Corporate Counsel ------------------------------------------------------------------- John Daugherty Real Estate, Inc. seeks authority from the United States Bankruptcy Court for the Southern District of Texas to hire Campbell & Riggs, P.C. as special corporate counsel. Campbell will assist the Debtor regarding negotiations and a potential sale of its assets. Campbell's customary hourly billing rates are: Winfield M Campbell, Sr. $600 Carole R. Riggs $450 Louise B. Fryklund (paralegal) $130 Winfield M Campbell, Sr., Esq., founding shareholder of Campbell , attests that his firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. The counsel can be reached through: Winfield M Campbell, Sr., Esq. Campbell & Riggs, P.C. 1980 Post Oak Blvd., 24th Fl. Houston, TX 77056 Phone: 713-621-6721 Email: wcampbell@campbellriggs.com About John Daugherty Real Estate John Daugherty Real Estate, Inc. -- https://www.johndaugherty.com -- is a licensed real estate broker in Houston, Texas. John Daugherty Real Estate, Inc. filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31293) on Feb. 27, 2020. In the petition signed by John A. Daugherty, Jr., chief executive officer, the Debtor estimated $1 million to $10 million in both assets and liabilities. Ronald J. Sommers, Esq., at Nathan Sommers Jacobs, A Professional Corporation, serves as the Debtor's counsel. JOHN DAUGHERTY: Taps Parsons McEntire as Special Litigation Counsel ------------------------------------------------------------------- John Daugherty Real Estate, Inc. seeks authority from the United States Bankruptcy Court for the Southern District of Texas to hire Parsons McEntire McCleary PLLC as special litigation counsel. Parsons will analyze and investigate the Debtor's potential claims against various third parties and to prosecute claims that may be properly instituted. Jeffrey R. Parsons, chairman and shareholder of Parsons, attests that his firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jeffrey R. Parsons, Chairman & Shareholder Parsons McEntire McCleary PLLC One Riverway, Ste. 1800 Houston, TX 77056 Phone: 713-960-7315 Email: jparsons@pmmlaw.com About John Daugherty Real Estate, Inc. John Daugherty Real Estate, Inc. -- https://www.johndaugherty.com -- is a licensed real estate broker in Houston, Texas. John Daugherty Real Estate, Inc. filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31293) on Feb. 27, 2020. In the petition signed by John A. Daugherty, Jr., chief executive officer, the Debtor estimated $1 million to $10 million in both assets and liabilities. Ronald J. Sommers, Esq. at Nathan Sommers Jacobs, A Professional Corporation, serves as the Debtor's counsel. K-9 SPLASH: Seeks Court Approval to Hire Accountant --------------------------------------------------- K-9 Splash and Dash, Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Arkansas to hire an accountant to provide services during its Chapter 11 bankruptcy. Debtor proposes to employ Mark Pearson, a certified public accountant based in Little Rock, Ark., to provide these services: a. accounting and tax advice regarding Debtor's position and duties in the operation of its business and management of its finances; b. preparation of all necessary financial reports, monthly operating reports, quarterly summary reports, reconciliation, tax returns, and any other reports, compilations or documents relating thereto; c. other accounting and tax services that may be necessary. Debtor will pay the accountant $165 per hour for his services. His staff will bill at an hourly rate of $65. Mr. Pearson does not represent any of the creditors in Debtor's bankruptcy proceeding or other adverse parties, according to court filings. Mr. Pearson holds office at: Mark Pearson 10012 West Markham Street Little Rock, AR 72205 Phone: 501-223-8444 Fax: 501-228-6464 Email: info@pearson-cpa.com mark@pearson-cpa.com About K-9 Splash and Dash Inc. K-9 Splash and Dash, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ark. Case No. 20-10610) on Feb. 4, 2020, listing under $1 million in both assets and liabilities. Judge Richard D. Taylor oversees the case. The Debtor tapped the Lancaster Law Firm as its legal counsel, and Mark Pearson as its accountant. KRONOS WORLDWIDE: S&P Downgrades ICR to 'B-'; Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Kronos Worldwide Inc. to 'B-' from 'B'. S&P lowered its issue-level ratings on the secured debt by one notch to 'B'. The recovery rating remains '2'. "The downgrade reflects our revised macroeconomic assumptions and the impact we expect that will have on key end markets for titanium dioxide (TiO2), such as architectural coatings. S&P Global Ratings now projects a global recession in 2020, before returning to modest growth in 2021. In this environment, we expect TiO2 demand to decline, especially in cyclical end markets such as architectural coatings. We believe the coronavirus pandemic will reduce near-term demand because of government-mandated restrictions limiting economic activity. We expect that although demand was generally robust in the first quarter, conditions in the coatings and TiO2 markets will begin to weaken in the second quarter. We also expect the financial strain imposed on businesses and consumers during this period will result in weaker demand even after restrictions have been lifted, although the magnitude of that strain and the effectiveness of government relief packages remains to be seen. Our forecast for weaker credit measures in 2020 comes at a time when credit measures at Kronos and its parent Valhi had already weakened considerably in 2019, primarily due to elevated raw material costs. The current ratings are supported by the company's adequate liquidity position and favorable debt maturity profile, with the next maturity being the North American revolver in January 2022," S&P said. The negative outlook on Kronos reflects the potential for weaker earnings and credit measures greater than what S&P has considered in its ratings. S&P's base case assumes that a global macroeconomic recession in the first half of 2020 will lead to significant demand headwinds, margin compression, and weaker credit measures at Kronos. S&P expects EBITDA margins, which declined substantially in 2019, to compress further in 2020 due to demand weakness. Its rating considers consolidated credit measures at the parent Valhi Inc. level, including debt held at Valhi. For the rating, S&P expects debt to EBITDA to remain in the 6x-8x range on a weighted average sustained basis at Valhi Inc. The rating agency expects Kronos will maintain adequate liquidity and that management will maintain a prudent approach to funding growth and returns to shareholders. "We could lower the rating during the next 12 months if we expect weighted average debt to EBITDA at Valhi to consistently exceed 8.0x, which we would consider unsustainable considering the volatile TiO2 sector. This could occur if we believe that sales and earnings will weaken more than we anticipate as a result of the disruptive effect of the coronavirus situation, leading to EBITDA margins that are at least 200 basis points (bps) weaker than expectation. We expect TiO2 pricing and demand to begin to weaken in the second quarter. If such weakening is sharper or longer-lasting than our base case, we could lower the rating. We could also lower the rating if Kronos or Valhi uses additional debt to fund growth plans or returns to shareholders, or if free cash flow turned negative for an extended period, thus pressuring liquidity," S&P said. "We could revise our outlook to stable if the company's 2020 earnings prove more resilient than expected while business and consumer activity remains depressed due to coronavirus-related restrictions, or if we believe that end markets could bounce back quickly, after declining as we expect. In this scenario, we would expect debt to EBITDA consistently below 7x even after factoring in potential downturns in pricing and demand. We believe an improvement in EBITDA margins by about 200 bps above our expectations could result in credit measures at those levels and generate sufficient earnings to account for potential volatility," the rating agency said. LEARNING CARE GROUP: S&P Cuts ICR to 'CCC' on COVID-19 Impact ------------------------------------------------------------- S&P Global Ratings lowered its ratings on U.S.-based early childhood education provider Learning Care Group (US) No. 2 Inc. by two notches, including the issuer credit rating to 'CCC' from 'B-'. The global COVID-19 pandemic and expected broader economic downturn will likely hurt Learning Care Group's operations through at least the second half of 2020. Center closures across the company's fleet will result in ongoing deterioration of credit metrics. S&P believes the declining demand outlook for out-of-home childcare services is much cloudier as a result of the nation's response to the coronavirus and the accompanying rise in unemployment across affected industries given the company's exposure to economic cyclicality. Furthermore, with large swathes of the workforce either laid off or working from home, demand is unlikely to normalize quickly. Although there is high uncertainty about the duration and extent of the coronavirus outbreak, Learning Care Group's long-term financial commitments are unsustainable in the current environment. The negative outlook reflects S&P's expectation that Learning Care's operating performance will remain challenged by the nationwide response to the pandemic and accompanying U.S. economic recession over the next 12 months. "We could lower our ratings on Learning Care if we envision a specific path to default for the company over the next 12 months due to a covenant breach or insufficient liquidity to fund operations or meet debt obligations," S&P said. "We could consider an upgrade if economic conditions improve and we conclude that the company will be able to return to historical levels of occupancy in its centers, resulting in sustained improved positive cash flow, liquidity, and overall debt leverage," the rating agency said. LEGACY JH762: MTGLQ Objects to Amended Disclosures -------------------------------------------------- MTGLQ INVESTORS, L.P., filed its objection to Legacy JH762, LLC's Amended Disclosure Statement. MTGLQ points out that the treatment of Creditor Class 5, as listed in the Amended Disclosure Statement provides in the column for "Class" for property at 60 Midland Road, Pinehurst, NC 28374, however lists in the column for "Treatment" for property located at 1000 N US, #762, Jupiter, Florida. MTGLQ further points out that the debtor fails to provide accurate information regarding creditor's treatment in the Amended Disclosure Statement. MTGLQ does not accept the Amended Disclosure Statement. Attorney for MTGLQ: Alejandro G. Martinez-Maldonado EXL Legal, PLLC 12425 28th Street North, Suite 200 St. Petersburg, FL 33716 Telephone No. (727) 536-4911 E-mail: bk@exllegal.com About Legacy JH762 LLC Legacy JH762, LLC, owns three real properties in Pinehurst, N.C. and Jupiter, Fla., having a total comparable sale value of $5.1 million. Legacy JH762 filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-16308) on May 23, 2019. In the petition signed by James W. Hall, managing member, the Debtor disclosed $5,100,100 in assets and $3,456,044 in liabilities. David L. Merrill, Esq., at The Associates, is the Debtor's counsel. M M & D HARVESTING: Administrator Unable to Appoint Committee ------------------------------------------------------------- The U.S. Bankruptcy Administrator for the Eastern District of North Carolina on April 6, 2020, disclosed in a filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of M M & D Harvesting Inc. About M M & D Harvesting M M & D Harvesting, Inc. is a North Carolina corporation, with its principal place of business located in Plymouth, North Carolina. The Debtor has been in the logging and hauling business for over 20 years. M M & D Harvesting, Inc. filed a voluntary petition seeking relief under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 20-00841) on Feb. 28, 2020, as a Small Business Subchapter V Debtor. In the petition signed by Robert M. Holcomb, Sr., president, the Debtor disclosed $1,473,377 in assets and $1,458,217 in liabilities. Trawick H. Stubbs, Jr., Esq. at Stubbs & Perdue, P.A., is the Debtor's counsel. MAD DOGG ATHLETICS: June 8 Plan Confirmation Hearing Set -------------------------------------------------------- On March 19, 2020, the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, held a hearing to consider the motion for an order approving Disclosure Statement for Plan of Reorganization of debtor Mad Dogg Athletics, Inc. On March 27, 2020, Judge Julia W. Brand approved the Amended Disclosure Statement and ordered that: * April 27, 2020, is the last date by which ballots accepting or rejecting the Plan must be received by counsel for the Debtor. * May 5, 2020, is the last date by which the Debtor must file a Ballot summary, which shall include tabulations of Ballots received. * May 8, 2020, is the last date by which Hymanson must designate any experts. * May 26, 2020, is the last date by which any party objecting to confirmation of the Amended Plan must file and serve its objection and evidence in support thereof. * June 8, 2020, at 10:00 a.m., is the hearing on the confirmation of the Plan and, if necessary, shall continue on June 12, 2020, at 10:00 a.m., in Courtroom 1375 in the at 255 East Temple Street, Los Angeles, California 90012, before the Honorable Julia W. Brand, United States Bankruptcy Judge. A full-text copy of the order dated March 27, 2020, is available at https://tinyurl.com/rukbkpp from PacerMonitor at no charge. The Debtor is represented by: David S. Kupetz Asa S. Hami Claire K. Wu SulmeyerKupetz 333 South Grand Avenue, Suite 3400 Los Angeles, California 90071 Telephone: 213.626.2311 Facsimile: 213.629.4520 E-mail: dkupetz@sulmeyerlaw.com ahami@sulmeyerlaw.com ckwu@sulmeyerlaw.com About Mad Dogg Athletics Mad Dogg Athletics, Inc. -- https://www.maddogg.com/ -- offers a comprehensive portfolio of fitness equipment, programming, and education. The company manufactures home Spinner bikes, Pilates and functional training equipment, and a complete line of Spinning-branded apparel and accessories. With its business founded in 1994 in Los Angeles, California, Mad Dogg operates from its corporate headquarters in Venice, California. Mad Dogg Athletics sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 19-18730) on July 26, 2019. In the petition signed by CEO John R. Baudhuin, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The case is assigned to Judge Julia W. Brand. David S. Kupetz, Esq., at SULMEYER KUPETZ, serves as the Debtor's bankruptcy counsel. Ardent Law Group, P.C., is special litigation counsel. MAGNUM MRO: Seeks to Hire Kellie Vincent CPA as Accountant ---------------------------------------------------------- Magnum MRO Systems, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Kellie Vincent, C.P.A. as an accountant and tax adviser Kellie Vincent will provide accounting and tax advisory services to the Debtor. Kellie Vincent will charge a flat fee of $800 for preparation and filing of Magnum's 2019 federal corporate income tax return. Vincent will charge a flat fee of $100 for preparation and filing of Magnum’s 2019 Texas franchise tax return. Kellie Vincent is a "disinterested person" as such term is defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached at through: Kellie Vincent, CPA Kellie Vincent CPA PO Box 964, Prosper, TX 75078 Phone: (972) 658-1578 Email: kv@kvcpa.com About Magnum MRO Systems Inc. Magnum MRO Systems Inc. was formed in Texas on Jan. 12, 2012 and specializes in industrial supplies and hydraulics. Magnum MRO Systems filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-40033) on Jan. 3, 2020. At the time of filing, the Debtor estimated $1,000,001 to $10 million in both assets and liabilities. Mark A. Castillo, Esq., at Curtis Castillo PC, serves as the Debtor's counsel. MARCO GENERAL: Has Until June 30 to File Plan & Disclosures ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, held a hearing to consider the Stipulation entered into between debtor Marco General Construction, Inc. and creditor West Capital, LLC, to continue the deadline concerning Debtor's Chapter 11 Plan and Disclosure Statement. On March 27, 2020, Judge granted the stipulation and ordered that: * The deadline for the Debtor to file its Chapter 11 Disclosure Statement and Chapter 11 Plan of Reorganization is extended from March 31, 2020, to June 30, 2020. * April 1, 2020, status conference is continued to June 30, 2020, at 11:00 a.m. A full-text copy of the order dated March 27, 2020, is available at https://tinyurl.com/wntscnb from PacerMonitor at no charge. Attorney for the Debtor: Michael Jay Berger LAW OFFICES OF MICHAEL JAY BERGER 9454 Wilshire Boulevard, 6th Floor Beverly Hills, California 90212 Tel: 1.310.271.6223 Fax: 1.310.271.9805 E-mail: michael.berger@bankruptcypower.com About Marco General Construction Marco General Construction, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-14758) on April 25, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $100,000 and liabilities of less than $1 million. The case is assigned to Judge Sheri Bluebond. The Debtor is represented by the Law Offices of Michael Jay Berger. MARX STEEL: Seeks to Hire HooverSlovacek LLP as Attorney -------------------------------------------------------- Marx Steel, LLC, seeks authority from the U.S. Bankruptcy Code for the Southern District of Texas to employ HooverSlovacek LLP as its legal counsel. Marx Steel requires HooverSlovacek to: a. assist, advise and represent the Debtor relative to the administration of the Chapter 11 case; b. assist, advise and represent the Debtor in analyzing its assets and liabilities, investigate the extent and validity of liens, and participate in and review any proposed asset sales or dispositions; c. attend meetings and negotiate with the representatives of creditors; d. assist the Debtor in the preparation, analysis and negotiation of any Chapter 11 plan and disclosure statement accompanying any such plan; e. take all necessary action to protect and preserve the interests of the Debtor; f. appear, as appropriate, before the Bankruptcy Court, the Appellate Courts, and other Courts in which matters may be heard and to protect the interests of the Debtor before said Courts and the United States Trustee; g. handle litigation that arises regarding claims asserted against the Debtor or its assets; and h. perform all other necessary legal services in the bankruptcy case. HooverSlovacek LLP will be paid at these hourly rates: Deirdre Carey Brown $425 Melissa Haselden $400 Curtis McCreight $340 Brendetta Scott $345 Angeline V. Kell $310 Vianey Garza $290 Legal Assistants/Paralegals/Law Clerks $115-$160 On Jan.28, 2020, a retainer of $15,000 was received by HooverSlovacek via cashier's check from Marx Steel. On Feb. 19, 2020, an additional $12,000 was paid by Marx Steel via cashier's check prior to the bankruptcy filing for prepetition invoices in the aggregate amount of $10,346.40, leaving a balance of $16,653.60 as the aggregate retainer for post-petition services and filing fees related to this Chapter 11 case filing. Melissa Haselden, Esq., a partner at HooverSlovacek, 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. HooverSlovacek can be reached at: Melissa A. Haselden, Esq. HooverSlovacek LLP 5051 Westheimer, Suite 1200 Houston, TX 77056 Tel: (713) 977-8686 Fax: (713) 977-5395 Email: haselden@hooverslovacek.com About Marx Steel Marx Steel, LLC is a steel fabricator and plate processing company that manufactures sub-components and sells raw steel plate material to companies in the oil & gas, gas compression and construction industries. Marx Steel, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31849) on March 19, 2020, listing under $1 million in both assets and liabilities. Melissa A. Haselden, Esq. at HOOVER SLOVACEK LLP represents the Debtor as counsel. MAXLINEAR INC: Moody's Affirms Ba3 CFR, Outlook Stable ------------------------------------------------------ Moody's Investors Service affirmed MaxLinear, Inc.'s Ba3 Corporate Family Rating and other ratings following the announcement of MaxLinear's planned acquisition of Intel Corp.'s Home Gateway Platform division for $150 million[1]. Moody's downgraded the Probability of Default Rating to B1-PD from Ba3-PD. The outlook remains stable. Ratings Affirmed: Issuer: MaxLinear, Inc. Corporate Family Rating, Affirmed Ba3 Senior Secured Bank Credit Facility, Affirmed Ba3 (to LGD3 from LGD4) Ratings Downgraded: Issuer: MaxLinear, Inc. Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Outlook Actions: Issuer: MaxLinear, Inc. Outlook, Remains Stable RATINGS RATIONALE The acquisition of Home Gateway will increase MaxLinear's revenue scale by at least $240 million of annual revenue[2], effectively doubling revenues, and will expand MaxLinear's chip product line in gateway, WiFi, and components. Moody's anticipates that the acquisition will also contribute to deleveraging, since MaxLinear reported that the acquisition of Home Gateway would increase the combined company's latest twelve months EBITDA (based on MaxLinear's definition) to $174 million [3]. Although debt will increase due to the incremental $140 million 3 year secured term loan A (unrated) used to fund the acquisition[4], leverage will still be at least 0.5 turns lower (proforma for Home Gateway) than the current 4.4x adjusted debt to EBITDA (LTM December 31, 2019) due to the large EBITDA contribution from Home Gateway. Still, the execution risk of this acquisition is significant due to the weakening global business environment and potential operational disruptions caused by the coronavirus outbreak. Also, since Home Gateway has been operated as a division within Intel with overhead costs allocated to the business, estimates of standalone operating costs, and thus the true profitability of the carved-out operation, are uncertain. The downgrade of the PDR to B1-PD from Ba3-PD reflects the existence of a financial maintenance covenant ("total net leverage" as defined in the term sheet) to govern the new senior secured term loan A[5]. The Ba3 CFR reflects MaxLinear's niche market positions in radio frequency chips used primarily in home networking, wireless infrastructure, and data center systems; free cash flow- generation due to the company's outsourced manufacturing model; and valuable intellectual property- as indicated by the high adjusted gross margins, which Moody's expects will remain above fifty percent, though may be lower in the near term due to the Home Gateway acquisition. The CFR also considers MaxLinear's high proforma adjusted leverage, which Moody's expects will decline to less than 4x (LTM December 31, 2019, proforma for Home Gateway) from 4.4x debt to EBITDA (LTM December 31, 2019, Moody's adjusted). This leverage is high given the significant decline in revenues over the past two years and the still small scale (less than $600 million annual revenues proforma for Home Gateway) relative to key market competitors Broadcom Inc., NXP Semiconductors N.V, and Analog Devices, Inc., which benefit from both broader product lines and larger research and development resources. The small revenue base also contributes to customer concentration, as Commscope Holding Company, Inc. accounted for 14% of MaxLinear's revenues in 2019. This customer concentration generates revenue volatility due to Commscope's fluctuating demand and limits MaxLinear's negotiation leverage, potentially forcing MaxLinear to concede on terms to maintain the customer relationship. The stable outlook reflects Moody's expectation that while organic revenues and profitability will decline near term as global economic activity weakens due to the coronavirus outbreak, MaxLinear will maintain good liquidity and FCF over the period. Moody's expects that the company will have stemmed the decline in its core business and that the Home Gateway business will grow modestly such that organic revenues will decline no more than 5% in the second half of 2020. Moody's expects that the combined business will grow over the next 12 to 18 months with adjusted EBITDA margin briefly declining to the upper teens during the second half of 2020 before recovering to about twenty percent as the pandemic abates and the economy rebounds. FCF will remain consistently positive over the period, reflecting the outsourced manufacturing model. Moody's anticipates that MaxLinear will continue to repay debt with FCF to debt (Moody's adjusted) sustained above the mid-twenties percent level. 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 semiconductor sector has been one of the sectors affected by the shock given its sensitivity to consumer and enterprise demand and sentiment. More specifically, the weaknesses in MaxLinear's credit profile, including its exposure to a global supply chain have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and MaxLinear 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. The rating is supported by governance considerations, specifically MaxLinear's history of debt repayment in excess of required amortization. Specifically, MaxLinear has reduced the balance on the senior secured term loan from the $425 million starting balance in November 2017 to $212 million as of December 31, 2019. Moody's expects that MaxLinear will continue to follow a conservative financial policy, repaying the debt in excess of required amortization and refraining from debt funded shareholder returns. The Speculative Grade Liquidity- rating of SGL-2 reflects MaxLinear's good liquidity, which is supported by consistent FCF and a large cash balance. Moody's expects that MaxLinear will generate annual free cash flow (Moody's adjusted) of at least $75 million. The Term Loan B is not governed by any financial maintenance covenants. Although MaxLinear has no plans to obtain a revolving credit facility, Moody's believes that MaxLinear will maintain a cash balance of at least $70 million, which should provide MaxLinear with good liquidity given MaxLinear's consistent FCF generation. The Ba3 rating on the Term Loan B, which is equal to the Ba3 CFR, reflects the collateral, comprised of a first priority lien on the company's assets, and the minimal amount of unsecured liabilities in the capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS MaxLinear's ratings could be upgraded if: - the company builds scale through organic revenue growth, and - reduces leverage through a combination of debt repayment and EBITDA growth, with debt to EBITDA (Moody's adjusted) sustained below 2.5x, and - sustains EBITDA margin (Moody's adjusted) above the mid-twenty's percent level The ratings could be downgraded if: - Revenues decline, indicating a poor integration of Home Gateway or a failure to reverse the decline in its core business - EBITDA margin (Moody's adjusted) remains below the twenty percent level - MaxLinear does not make steady progress toward reducing leverage to below 3.5x EBITDA (Moody's adjusted) over the next year MaxLinear, Inc., based in Carlsbad, California, is a fabless semiconductor firm that produces radio frequency and mixed-signal integrated circuits used in broadband communications, data centers, and metro and long-haul data transport network applications. The principal methodology used in these ratings was Semiconductor Industry published in July 2018. MCCLATCHY CO: Committee Taps Berkeley Research as Financial Advisor ------------------------------------------------------------------- The official committee of unsecured creditors of The McClatchy Company, and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Berkeley Research Group, LLC as its financial advisor The committee requires Berkeley to: a) advise and assist the committee in its analysis and monitoring of the historical, current and projected financial affairs of the Debtors, including, schedules of assets and liabilities and statements of financial affairs; b) develop and issue periodic monitoring reports to enable the committee to evaluate effectively the Debtors' performance relative to projections and any relevant operational issues, including liquidity, on an ongoing basis; c) evaluate relief requested in cash management motion, including proper controls related to and financial transparency into intercompany and related party transactions; d) analyze both historical and ongoing related party transactions and or material unusual transactions of the Debtors. Such analysis to include developing an oversight protocol with the Debtors' advisors to closely monitor such transactions to prevent value leakage; e) scrutinize cash disbursements on an on-going basis for the period subsequent to the commencement of these cases; f) advise the committee and Counsel in evaluating any court motions, applications, or other forms of relief, filed or to be filed by the Debtors, or any other parties-in-interest; g) analyze the Debtors' assets (tangible and intangible) and possible recoveries to creditor constituencies under various scenarios and developing strategies to maximize recoveries; h) attend committee meetings and court hearings as may be required; i) review and provide analyses of any bankruptcy plan and disclosure statement relating to the Debtors, and if appropriate, the development of any bankruptcy plans proposed by the committee to assess their achievability; j) assist and advise the committee in connection with the mediation ordered in these Cases; k) advise and assist the cCommittee in its assessment of the Debtors' employee needs and related costs, including the proposed employee retention plan and any subsequent proposed employee retention or incentive plans to ensure they are appropriate plans in the context of the case; l) assist in evaluating all purported lien claims by creditors, including the validity and enforcement of such claims; m) monitor Debtors' claims management process, including analyzing claims and guarantees, and summarizing claims by entity; n) advise the committee in connection with any potential claims and causes of action, including preference payments, illegal dividends, fraudulent conveyances, and other potential causes of action that the Debtors' estates may hold against insiders and/or third parties; o) assist with the development and review of a cost/benefit analysis with respect to the assumption or rejection of various executory contracts and leases; p) assist with the review of any tax issues associated with, for example, claims/stock trading, preservation of net operating losses, and refunds from any plan of reorganization and/or asset sales; q) perform other matters as may be requested by the committee from time to time, including rendering expert testimony, issuing expert reports and/or preparing for litigation, valuation and/or forensic analyses that have not yet been identified but as may be requested from time to time by the committee and its counsel. The current standard hourly rates for Berkeley personnel are: Managing Director $825 - $1,095 Director $625 - $835 Professional Staff $295 - $740 Support Staff $135 - $260 Christopher Kearns $1,095 David Galfus $1,040 Jack Surdoval $865 Joe Woodmansee $635 Jay Wu $465 Charles Goodrich $400 John Witkowski $375 Aldo Dianderas $365 Christopher J. Kearns, managing director of Berkeley, attests that his firm is a "disinterested person" as that term is defined in Sec. 101(14) and that the firm neither holds nor represents any interest adverse to the estates. The firm can be reached through: Christopher J. Kearns Berkeley Research Group, LLC 810 Seventh Avenue, Suite 4100 New York, NY 10019 Tel: 646-205-9320 Fax: 646-454-1174 About The McClatchy Company The McClatchy Co. -- https://www.mcclatchy.com/ -- operates 30 media companies in 14 states, providing each of its communities local journalism in the public interest and advertising services in a wide array of digital and print formats. McClatchy publishes iconic local brands including the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the Fort Worth Star-Telegram. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange American under the symbol MNI. On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with a Plan of Reorganization that will cut $700 million of funded debt in half. McClatchy was estimated to have $500 million to $1 billion in assets and debt of at least $1 billion as of the bankruptcy filing. The cases are pending before the Honorable Michael E. Wiles. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as general bankruptcy counsel; Togut, Segal & Segal LLP as co-bankruptcy counsel with Skadden; Groom Law Group as special counsel; FTI Consulting, Inc. as financial advisor; and Evercore Inc. as investment banker. Kurtzman Carson Consultants LLC is the claims agent. MCCLATCHY CO: Committee Taps Dundon Advisers as Financial Advisor ----------------------------------------------------------------- The official committee of unsecured creditors of The McClatchy Company, and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Dundon Advisers LLC as its financial advisor. The committee requires Dundon Advisers to: a. assist the committee with its investigation of certain prepetition transactions, with a focus on the credit default swap or other derivative positions of certain parties; b. assist the committee in identifying, valuing, pursuing estate causes of action relating to the foregoing; c. advise the committee with respect to negotiations with the Debtors and third parties relating to the foregoing; d. review and analysis of the currently-filed and any succeeding proposed disclosure statement and Chapter 11 plan with respect to the foregoing, and, if appropriate, assist the committee in developing an alternative plan of reorganization and disclosure statement therefor; e. attend meetings and participate in discussions with the committee, the Debtors, other creditors, the U.S. Trustee, and other parties in interest and professionals which include discussion of the foregoing matters; f. present at meetings of the committee, as well as meetings with other key stakeholders and parties, regarding the foregoing; g. perform such other advisory services for the committee as may be necessary or proper in these proceedings, subject to the aforementioned scope; and h. provide testimony, issue expert reports and/or prepare for litigation on behalf of the committee, as and when the committee determines appropriate. Dundon Advisers' standard hourly rates are: Alex Mazier $675 Demetri Xistris $525 Eric Reubel $550 Harry Tucker $475 John Roussey $550 Jonathan Feldman $675 Laurence Pelosi $675 Matthew Dundon $700 Peter Hurwitz $675 Phillip Preis $625 Robert Goch $550 Matthew Dundon, principal of Dundon Advisers, attests that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. The firm can be reached through: Matthew Dundon Dundon Advisers LLC P.O. Box 259H Scarsdale, NY 10583 Phone: 917-838-1930 Email: md@dundon.com About The McClatchy Company The McClatchy Co. -- https://www.mcclatchy.com/ -- operates 30 media companies in 14 states, providing each of its communities local journalism in the public interest and advertising services in a wide array of digital and print formats. McClatchy publishes iconic local brands including the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the Fort Worth Star-Telegram. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange American under the symbol MNI. On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with a Plan of Reorganization that will cut $700 million of funded debt in half. McClatchy was estimated to have $500 million to $1 billion in assets and debt of at least $1 billion as of the bankruptcy filing. The cases are pending before the Honorable Michael E. Wiles. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as general bankruptcy counsel; Togut, Segal & Segal LLP as co-bankruptcy counsel with Skadden; Groom Law Group as special counsel; FTI Consulting, Inc. as financial advisor; and Evercore Inc. as investment banker. Kurtzman Carson Consultants LLC is the claims agent. The U.S. Trustee for Region 2 appointed a committee of unsecured creditors. The committee is represented by Stroock & Stroock & Lavan LLP. MCCLATCHY COMPANY: Committee Taps Stroock & Stroock as Counsel -------------------------------------------------------------- The official committee of unsecured creditors of The McClatchy Company and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Stroock & Stroock & Lavan LLP as its legal counsel. The committee requires Stroock to: a) advise the committee of its powers and duties under Section 1103 of the Bankruptcy Code; b) assist and advise the committee in its consultations, meetings and negotiations with Debtors, creditors and other parties; c) assist the committee in its investigation of the acts, conduct, assets, liabilities and financial condition of Debtors; d) assist the committee in connection with any proposed sale of Debtors' assets; e) assist the committee in analyzing the claims of creditors and Debtors' capital structure; f) assist the committee in negotiating with holders of claims, including analysis of possible objections to the priority, amount, subordination or avoidance of claims or transfers of property in consideration of such claims; g) advise and represent the committee in connection with matters generally arising in Debtors' Chapter 11 cases, including Debtors' motion to incur financing, "second day" pleadings and other pleadings; h) assist the committee in its review, analysis and negotiation of any potential compromises or settlements, and the assumption and rejection of executory contracts and unexpired leases; i) assist and advise the committee in connection with the mediation ordered in Debtors' bankruptcy cases; j) assist the committee in connection with any Chapter 11 plan that may be filed; k) appear before the bankruptcy court, any other federal, state or appellate court, and the Office of the United States Trustee; l) take all necessary actions to protect and preserve the interests of the committee and unsecured creditors generally, including (i) review and analysis of any reports prepared in connection with Debtors' potential claims and causes of action, (ii) investigate any potential claims and causes of action, including pre-bankruptcy transactions involving third parties; (iii) potential prosecution of actions on the committee's behalf, (iv) if appropriate, negotiations concerning all litigation in which Debtors are involved, and (v) perform such other diligence and independent analysis as may be requested by the committee; m) respond to inquiries, as appropriate, from individual creditors as to the status of, and developments in, Debtors' bankruptcy cases; n) prepare pleadings; and o) provide other legal services. Stroock's hourly rates are: Partners $1,150 – $1,650 Associates/Special Counsel $550 – $1,095 Paraprofessionals $340 – $510 Stroock is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Erez Gilad, Esq., a partner at Stroock, disclosed that the firm did not agree to a variation of its standard or customary billing arrangements for its employment with the Debtors, and that no professional at the firm varied his rate based on the geographic location of the Debtors' bankruptcy cases. The attorney also disclosed that Stroock did not represent the committee prior to Debtors' bankruptcy filing, and that the firm is currently developing a prospective budget and staffing plan for the committee's review and approval Stroock can be reached through: Erez E. Gilad, Esq. Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, NY 10038 Phone: 212-806-5881 / 212-806-5400 Fax: 212-806-6006 Email: egilad@stroock.com About The McClatchy Company The McClatchy Co. -- https://www.mcclatchy.com/ -- operates 30 media companies in 14 states, providing each of its communities local journalism in the public interest and advertising services in a wide array of digital and print formats. McClatchy publishes iconic local brands including the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the Fort Worth Star-Telegram. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange American under the symbol MNI. On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with a Plan of Reorganization that will cut $700 million of funded debt in half. McClatchy was estimated to have $500 million to $1 billion in assets and debt of at least $1 billion as of the bankruptcy filing. The cases are pending before the Honorable Michael E. Wiles. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as general bankruptcy counsel; Togut, Segal & Segal LLP as co-bankruptcy counsel with Skadden; Groom Law Group as special counsel; FTI Consulting, Inc. as financial advisor; and Evercore Inc. as investment banker. Kurtzman Carson Consultants LLC is the claims agent. MCGRAW-HILL GLOBAL: Fitch Alters Outlook on B+ LT IDR to Negative ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating of McGraw-Hill Global Education Holdings, LLC and McGraw-Hill Global Education Finance, Inc. at 'B+'. The Rating Outlook has been revised to Negative from Stable. The Negative Outlook incorporates the ongoing underlying challenges facing educational publishers, along with efforts to combat them. In higher ed, the growing consumer focus on educational content affordability coupled with significant substitution threat continues. To combat this, MHGE created several lower cost offerings centered on inclusive access, a la carte digital and term-length direct textbook rentals through its existing distribution network, all of which have been well received. Fitch also recognizes the coronavirus pandemic will negatively affect federal, state and local budgets, which may lead to reduced or delayed aggregate spending on education. Although Fitch notes that prior periods of economic stress never led to the cancellation of K-12 adoptions, with only a few instances of one-year delays, the current economic dislocation has little historic precedent. The 'B+' IDR is driven by MHGE's leading position in the domestic K-12 and global higher ed content publisher markets, with additional global exposure to professional education content and services. MHGE is one of the top three K-12 and higher ed digital and physical content creators. MHGE generally outperformed its competitors over the last few years, despite industry issues that resulted in several of its competitors experiencing operating issues. The affirmation comes amid MHGE's ongoing efforts to combine with Cengage Learning Holdings II, Inc. (not rated) in a merger of equals (New MHGE), announced on May 1, 2019. New MHGE generated pro forma combined billings and adjusted cash EBITDA (excluding synergies) of $3.0 billion and $640 million, respectively, and had approximately $4.5 billion in total debt for LTM Dec. 31, 2019. Fitch continues to view the basis for the merger positively. New MHGE will continue to be a leading global provider of a full suite of digital and physical instructional content and services across the industry's broadest range of educational segments. The combined company's increased scale provides the opportunity to remove significant costs, increase funds available for internal and external investments and debt repayment, and maintain meaningful barriers to entry. Fitch believes New MHGE should be able to realize a significant portion of expected consolidation synergies. As of May 2019, new MHGE intended to achieve between $285 million and $370 million in run-rate cost savings by fiscal FYE March 31, 2023, with expected upfront costs of between $190 million and $255 million required to achieve the synergies. Fitch's rating case assumes a blend of expense realization success for each category, ranging from 50% to 100%, generating an aggregate realization of 93% ($304 million) of the mid-point of management's expected run-rate cost savings. Fitch also assumes required one-time upfront costs will total $255 million. KEY RATING DRIVERS Coronavirus: The economic dislocation caused by the coronavirus may adversely affect near-term spending on K-12 and higher ed. Government budgets will be negatively affected by the severe reduction in revenues along with increased spending for prevention and treatment. Fitch believes state budgets are most at risk over at least the near-term given their dependence on sales and/or income taxes for revenue. Local governments should be less affected over the near-term as they derive varying portions of their revenues from property taxes, which are typically escrowed if the property has a mortgage. However, the ultimate scope of financial damage and trajectory of a recovery remain highly uncertain, depending on the severity and duration of the crisis. K-12 educational spending is primarily funded by state and local governments and the current adoption calendar, projected to be relatively flat through 2022, has not yet been adjusted for the coronavirus. Fitch notes that prior periods of economic stress never led to the cancellation of K-12 adoptions, with only a few instances of one year delays. However, given that the current economic dislocation has little historic precedent, Fitch will pay close attention to upcoming near-term adoption calendars for signs of funding stress or delays in timing, with a focus on states' upcoming fiscal year budgets, many of which begin on July 1, 2020. Given that state budgets typically include funding to cover approximately 45% of local educational content purchases, signs of stress at the state level could be a bellwether for adoption delays. For higher ed, while the potential for federal and state cuts in college funding and student aid is always an issue, the unprecedented nature of the current situation could exacerbate this concern. Fitch believes long term enrolment will continue to stabilize as college degrees continue to be a necessity for many employers. In addition, college enrolment typically increases during recessions as jobs are harder to find and people look to augment their skills. Finally, most funding for course materials comes directly from students. However, near-term enrolment could be affected by potential coronavirus disruptions including students delaying starting or returning to school (gap year) and the closing of colleges, some of which were already under financial duress before the crisis. Diversified Revenues: For MHGE's fiscal 2019, 39% of total billings were from higher ed content, 39% from K-12 content, 15% from international, which includes sales of higher ed, K-12 and professional education materials, and 7% from professional education content and services. For Cengage's LTM ended Dec. 31, 2019, 63% of total billings were from their learning segment (higher ed and K-12 content combined), 21% from international, and 16% from Gale, a global platform of library reference material. Market Share: MHGE holds leading positions in its two largest segments. Although the company has a strong market share in the U.S. higher ed publishing market, the overall market remains under significant pressure due to ongoing "share" loss to alternatives, including rental and used textbook offerings. For the U.S. K-12 publishing market, Fitch believes Houghton Mifflin Harcourt, MHGE and Savvas Learning Company (f.k.a. Pearson U.S. K12 Education), collectively hold more than 80% market share. Long-term Digital Opportunity: Fitch believes the transition to digital will lead to a net benefit and expects MHGE to continue investing in its digital products, including through small bolt-on acquisitions. Fitch expects print/digital margins to be roughly in line, as digital textbook price discounts (relative to print) and interactive user experience investments offset the elimination of the cost of manufacturing, warehousing and shipping printed textbooks. In addition, digital products give higher ed publishers a greater opportunity to disintermediate used/rental textbook sellers. Higher Ed Concerns: Higher ed is experiencing significant changes affecting industry sales. Students, concerned about rising educational content costs, are increasingly choosing to rent or purchase used textbooks or not to buy them. The shift from print to digital also disrupted demand predictability and increased lower priced or free alternatives (e.g. open-source content). To combat this, MHGE and Cengage created several lower cost offerings centered on inclusive access, a la carte digital, unlimited single price subscriptions, and term-length textbook rentals via their distribution network. Although these offerings continue to gain traction, it remains too early to determine their long term viability. Merger Rationale: Fitch views the basis for the merger positively. New MHGE will be a leading global provider of a full set of digital and physical instructional content and services across the industry's broadest range of educational segments. The combined company's increased scale provides the opportunity to remove significant costs, increase funds available for internal and external investments and debt repayment, and maintain meaningful barriers to entry. However, the fundamental underlying challenges facing New MHGE will remain, including the growing focus by consumers on educational content affordability and the significant substitution threat, especially in higher ed. Merger Synergies: As of May 2019, new MHGE expected to achieve $285 million to $370 million in run rate cost savings by FYE March 31, 2023, with upfront costs of between $190 million to $255 million required to achieve the synergies. Fitch's rating case estimates New MHGE will achieve approximately 93% ($304 million) of the midpoint of its expected cost savings range along with upfront costs of $255 million. Fitch notes that although it expects New MHGE to also realize revenue synergies, the company did not disclose an expected range nor has Fitch included any benefits in its rating case. Fitch's estimates are based on varying expectations for synergy and upfront cost realizations based on the category and scope of the expected expense cuts and upfront costs, typical industry realizations, and the probability of realizing each category. Fitch's realization expectations range from 50% to 100% of the mid-point of management's synergy expectations and the top end of upfront cost expectations. Post-Merger Leverage: Fitch calculates New MHGE's pro forma Dec. 31, 2019 FFO Leverage at 6.6x, a slight improvement over MHGE's 6.8x actual FFO Leverage. Fitch takes comfort from the fact that no incremental debt is being incurred with the merger. In addition, Fitch expects New MHGE to repay significant debt over the rating horizon using increased FCF driven primarily by expected merger synergy benefits, the strong near term adoption calendar and growing acceptance of alternative higher ed offerings. This combination of EBITDA improvement and debt repayment is expected to drive FFO leverage to 4.0x by fiscal YE March 31, 2023. DERIVATION SUMMARY MHGE is well positioned in the domestic K-12 and global higher ed textbook publisher markets, with additional global exposure to professional education content and services. Following the announced merger of equals between MHGE and Cengage, New MHGE will continue to have a solid position as one of the leading global providers of a full set of content and services across a broader range of education segments. New MHGE's increased scale will provide meaningful advantages and create significant barriers to entry to new or smaller publishers. It will also provide opportunities for product cross-pollination, along with substantial synergies that will improve margins. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer Include: -- MHGE's projections assume Cengage merger closes in the quarter ending Dec. 31, 2020; -- Fitch's first-year projections for New MHGE are based on a fiscal year ending on March 31, 2021; -- Higher Ed: Enrollments in 2020 are weaker than expected given the potential for continued disruption from the coronavirus. Thereafter, enrollment growth is expected to return to stability, leading to low single-digit improvement over the rating case as affordability initiatives continue to gain traction; -- K-12: Some 2020 adoptions are pushed into 2021 as states struggle to balance budgets due to the economic dislocation caused by the coronavirus. Thereafter, adoptions slowly return to the existing calendar, leading to low single-digit growth in the out years driven by market share gains; -- Aggregate remaining segment revenues are expected to increase by low to mid-single digits over the rating horizon; -- Deferred revenues continue to grow as a percentage of total revenues due to increased K-12 digital revenues. Although this hampers GAAP revenue growth, the difference is captured in Fitch's FFO calculation; -- EBITDA margins are expected to improve, driven by cost savings, K-12 longer term volume gains and growing acceptance of alternative higher ed content offerings; -- Following the merger, FFO grows to more than $600 million by fiscal 2024; -- $50 million of annual tuck-in acquisitions in the digital space; -- Aggregate debt repayment of $600 million, including $100 million required amortization; -- No dividends contemplated; -- $400 million sponsor dividend in fiscal YE March 31, 2024, as FFO leverage falls below 5.0x; -- FFO leverage falls below 6.0x during fiscal YE March 31, 2023, ultimately declining to 4.0x by fiscal YE March 31, 2024. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes MHGE would be considered a going concern in bankruptcy and it would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach MHGE's recovery analysis assumes significant coronavirus-related K-12 adoptions delays followed by market share loss driven by an inability to win enough upcoming adoptions and ongoing industry issues in the Higher Ed segment dragging down revenues, which pressure margins. The post-reorganization going concern EBITDA of $400 million is based on Fitch's estimate of MHGE's average EBITDA over a normal cycle, adjusted to include deferred revenues. It also takes into account MHGE's operating performance relative to its competitors and its overall industry segments. Fitch assumes MHGE will receive a going-concern recovery EV multiple of 7.0x EBITDA. The estimate considered several factors. HMHC and Pearson have traded at a median EV/EBITDA of 12.2x and 10.9x, respectively. During the last financial recession, Pearson traded at ~8.0x EV/EBITDA, while neither MHGE nor HMHC were public at the time. In 2014, Cengage emerged from bankruptcy with a $3.6 billion valuation, equating to an emergence multiple of 7.7x. The most recent textbook publishing transaction occurred in February 2019 with Pearson's sale of its K-12 business for 9.5x operating profit (EBITDA was not disclosed). Prior to that, in March 2013 Apollo Global Management LLC acquired MHGE from S&P Global, Inc. for $2.5 billion, or a multiple of estimated EBITDA of approximately 7x. Fitch estimates full recovery prospects for the senior secured credit facilities and rates them 'BB+/RR1', or three notches above MHGE's 'B+' IDR. Although it also estimates full recovery prospects for MHGE's senior unsecured notes, Fitch criteria caps the recovery rating at 'BB/RR2' or two notches above MHGE's IDR. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch does not expect an upgrade in the near term given the uncertainties surrounding the economic impact of the coronavirus; -- Fitch would consider stabilizing the Outlook once there is more clarity around the coronavirus pandemic's effects on the K-12 adoption calendar and higher ed enrollment; -- MHGE establishes a financial policy that results in a significant improvement in operating metrics, including FFO total leverage; -- Pro forma for the acquisition, debt reduction is sufficient enough to drive Fitch-calculated FFO total leverage below 5.0x with the expectation it can be sustained at that level through cyclical adoption troughs. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch-calculated FFO total leverage exceeds 6.0x on a sustained basis into cyclical industry improvement, whether driven by operating results or a leveraging transaction; -- Mid-single-digit cash revenue declines, which may be driven by declines or no growth in digital products caused by a lack of execution or adoption by professors. BEST/WORST CASE RATING SCENARIO Best/Worst Case Rating Scenarios Non-Financial Corporate: Ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of Dec. 31, 2019, MHGE had $392 million in cash, $346 million available ($4.3 million of outstanding L/Cs) under a $350 million revolver due May 2021 and $5 million under an incremental seasonal accounts receivable line due October 2021. There are no material maturities until 2022, when a $1.6 billion term loan matures. Fitch-calculated FFO-adjusted total leverage was 6.6x. Fitch's focus on FFO-adjusted total leverage is in line with how Fitch calculates leverage across the K-12 industry, with the change in deferred revenue included in the calculation of FFO to account for GAAP-driven revenue timing differentials. As digital revenues continue increasing, revenues realized in a given year will eventually match revenues recognized in that year, although Fitch does not expect that to occur within the rating horizon. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. 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). MEDICAL ASSOCIATES: Hires Henry & O'Donnell as Legal Counsel ------------------------------------------------------------ Medical Associates of Mt. Vernon, P.C., seeks authority from the United States Bankruptcy Court for the Eastern District of Virginia to employ Henry & O'Donnell, P.C. as its legal counsel. Henry & O'Donnell, P.C. will give legal advice regarding the Debtor's duties under the Bankruptcy Code, and provide other legal services related to its Chapter 11 case. The hourly rates charged by the firm for the services of its attorneys range from $425 to $525. Henry & O'Donnell received a retainer from the Debtor in the amount of $50,000. Kevin M. O’Donnell, Esq., principal and officer of Henry & O'Donnell, disclosed in a court filing that his firm does not represent any interest adverse to the Debtor or its estate. The firm can be reached through: Kevin M. O'Donnell, Esq. Jeffery T. Martin, Jr., Esq. Henry & O'Donnell, P.C. 300 N. Washington St., Suite 204 Alexandria, VA 22314 Tel: 703-548-2100 About Medical Associates of Mt. Vernon, P.C. Medical Associates of Mt. Vernon, P.C. provides comprehensive and general medical care for acute and chronic illnesses such as heart disease, asthma, migraines, gastrointestinal complications, arthritis, sinus infections, common colds, and many more. Medical Associates of Mt. Vernon, P.C. filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Vir. Case No. 20-10741) on March 8, 2020. In the petition signed by Dr. Albert Herrera, president, the Debtor estimated $500,000 to $1 million in assets and $10 million to $50 million in liabilities. Kevin M. O'Donnell, Esq. at HENRY & O'DONNELL, PC, serves as the Debtor's counsel. MEDICAL ASSOCIATES: Seeks to Hire Rubino & Company as Accountant ---------------------------------------------------------------- Medical Associates of Mt. Vernon, P.C., seeks authority from the United States Bankruptcy Court for the Eastern District of Virginia to employ Rubino & Company as its certified public accountants. Rubino will assist the Debtor in the preparation and filing of federal, state and local tax returns and related schedules and filings, as well as to assist the Debtor generally in the management of its contract and financial accounting responsibilities. The Debtor seeks approval to effect payment of a post-petition retainer to Rubino in the amount of $15,000. Rubino represents no interest adverse to the Debtor or its estate in the matters upon which they are to be engaged by the Debtor, according to court filings. The firm can be reached through: David Albert, CPA 6903 Rockledge Drive, Suite 1200 Bethesda, MD 20817 Phone: 301-564-3636 Email: info@rubino.com About Medical Associates of Mt. Vernon, P.C. Medical Associates of Mt. Vernon, P.C. provides comprehensive and general medical care for acute and chronic illnesses such as heart disease, asthma, migraines, gastrointestinal complications, arthritis, sinus infections, common colds, and many more. Medical Associates of Mt. Vernon, P.C. filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Vir. Case No. 20-10741) on March 8, 2020. In the petition signed by Dr. Albert Herrera, president, the Debtor estimated $500,000 to $1 million in assets and $10 million to $50 million in liabilities. Kevin M. O'Donnell, Esq. at HENRY & O'DONNELL, PC, serves as the Debtor's counsel. MEDTAINER INC: Incurs $276K Net Loss for Quarter Ended Sept. 30 --------------------------------------------------------------- On March 11, 2020, Medtainer, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $276,331 on $526,143 of revenues for the three months ended Sept. 30, 2019, compared to a net loss of $58,268 on $602,302 of revenues for the same period in 2018. At Sept. 30, 2019, the Company had total assets of $2,767,375, total liabilities of $1,664,267, and $1,103,108 in total stockholders' equity. At September 30, 2019, the Company had a working capital deficit of $1,392,254. In addition, the Company has generated operating losses since its inception and has notes payable that are currently in default. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. Medtainer said, "The ability of the Company to continue as a going concern is dependent on the successful execution of its operating plan which includes increasing sales of existing products while introducing additional products and services, controlling operating expenses, negotiating extensions of existing loans and raising either debt or equity financing. There is no assurance that the Company will be able to increase sales or to obtain or extend financing on acceptable terms, or at all, or successfully execute any of the other measures set forth in the previous sentence." A copy of the Form 10-Q is available at: https://is.gd/K3uHCD Medtainer, Inc.., through its subsidiaries, designs, manufactures, brands, and sells proprietary plastic medical grade containers in the United States. The company offers Medtainer containers that store pharmaceuticals, herbs and herbal remedies, teas, and other solids or liquids, as well as coffee, wines and liquors, and food products. It also provides private labeling and branding services for purchasers of containers and other products. In addition, the company sells and distributes humidity control inserts, lighters, smell–proof bags, hydroponic grow towers, and other items. It markets its products directly to end users; and retail public through Internet, as well as wholesalers and other businesses. The company was formerly known as Acology, Inc. and changed its name to Medtainer, Inc. in October 2018. Medtainer, Inc. was incorporated in 1997 and is based in Corona, California. MEG ENERGY: Moody's Alters Outlook on B2 CFR to Negative -------------------------------------------------------- Moody's Investors Service changed MEG Energy Corp.'s outlook to negative from stable. Moody's also affirmed MEG's B2 corporate family rating, B2-PD probability of default rating, Ba3 second lien notes rating, and B3 senior unsecured notes rating. The speculative grade liquidity score was lowered to SGL-2 from SGL-1. "The negative outlook reflects lower cash flow generation and weaker credit metrics that could persist through 2021," said Paresh Chari Moody's analyst. "MEG has hedges in place for 2020 and good liquidity to weather this period of low prices." Downgrades: Issuer: MEG Energy Corp. Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Affirmations: Issuer: MEG Energy Corp. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured Second Lien Regular Bond/Debenture, Affirmed Ba3 (LGD2) Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Outlook Actions: Issuer: MEG Energy Corp. Outlook, Changed to Negative from Stable RATING RATIONALE MEG has hedged over half of its production for 2020, which will provide cash flow support. However, MEG is unhedged for 2021, and if weak oil prices and a wide Canadian heavy oil percent differential persist MEG's cash flows will sharply decrease in 2021. MEG's liquidity position is good, which is supported by a C$800 million revolving credit facility that is undrawn. 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 E&P 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 MEG's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and MEG 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 MEG of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. MEG's B2 CFR is supported by: (1) bitumen production of around 95,000 bbls/d (net of royalties), with substantial reserves in key productive areas of the Athabasca oil sands region; (2) a long-lived reserve base that requires a low C$6 to C$8/bbl to maintain production; (3) a marketing strategy that can move up to two thirds of MEG's blend volumes outside of Alberta by mid-2020; and (4) good liquidity. MEG is constrained by: (1) its exposure to wider Western Canadian heavy oil differentials in 2020, which is caused predominately by capacity constraints and pipeline apportionment; (2) weak credit metrics in 2020 with retained cash flow to debt below 10% that could fall to a stressed level in 2021; and (3) concentration in one asset - the Christina Lake oil sands project. MEG's liquidity is good (SGL-2). Pro forma for the January 2020 senior notes refinancing and debt repayment, at December 31, 2019, MEG will have about C$45 million in cash and an undrawn C$800 million revolving credit facility. The facility matures in July 2024, but will spring to 91 days prior to the US$1 billion note maturity date of March 31, 2024, if more than C$300 million remains outstanding at that time. Moody's expects modest positive free cash flow through 2020. MEG will be in compliance with its sole financial covenant through this period, with the covenant being tested at or above C$400 million of utilization. MEG's senior unsecured notes are rated B3 (one notch below the B2 CFR) and the second lien secured notes are rated Ba3 (two notches above the CFR) due to the priority ranking first lien revolver and second lien notes. The negative outlook reflects its expectation that credit metrics could remain weak through 2021. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: The ratings could be upgraded if retained cash flow to debt is above 25%, EBITDA to interest rises above 4x and if MEG can maintain positive free cash flow. The ratings could be downgraded if retained cash flow to debt is below 10% or if EBITDA to interest falls below 2x. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. MEG is a publicly-listed Calgary, Alberta-based steam-assisted-gravity-drainage (SAGD) oil sands developer and operator. MEG produces over 90,000 bbls/day of bitumen at the Christina Lake project in the Athabasca Oil Sands region in Northern Alberta. MERCHANT LLC: Seeks to Hire Donnarumma Law as Special Counsel ------------------------------------------------------------- The Merchant LLC filed an amended application seeking authority from the US Bankruptcy Court for the District of Connecticut to employ The Donnarumma Law Firm, LLC, as its special counsel. Consummation of an executory contract for the purchase of raw land for development is central to the Debtor's anticipated plan of reorganization. Donnarumma Law represented the Debtor, prepetition, in connection with said purchase transaction, and holds a prepetition claim in the amount of $8,500. Donnarumma Law will continue to represent the Debtor for the special purpose of completing said transaction, and also in assisting in obtaining such permits and approvals as may be necessary for such completion. Donnarumma Law will charge its customary hourly rate of $300 for attorney time and $90 for paralegal time. Donnarumma Law does not represent or hold any interest adverse to the Debtor or to the estate with respect to the matter on which it is to be employed, according to court filings. The firm can be reached through: Francis M. Donnarumma, Esq. The Donnarumma Law Firm, LLC 428 Main St S #7 Woodbury, CT 06798 Phone: +1 203-263-6060 About The Merchant LLC The Merchant LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No. 20-50104) on Jan. 24, 2020, listing under $1 million in both assets and liabilities. Edward P. Jurkiewicz, Esq. at LAWRENCE & JURKIEWICZ represents the Debtor as counsel. MESOBLAST LIMITED: Partners with CTSN to Conduct Remestemcel Trial ------------------------------------------------------------------ Mesoblast Limited's allogeneic mesenchymal stem cell (MSC) product candidate remestemcel-L will be formally evaluated in a randomized, placebo-controlled trial in 240 patients with acute respiratory distress syndrome (ARDS) caused by coronavirus infection (COVID-19). This multi-center Phase 2/3 trial will be conducted as a public-private partnership in a collaboration with the Cardiothoracic Surgical Trials Network (CTSN), which was established by the United States National Institutes of Health's National Heart, Lung and Blood Institute (NHLBI) as a flexible platform for conducting collaborative trials. Mesoblast holds an Investigational New Drug (IND) Application from the United States Food and Drug Administration (FDA) for use of remestemcel-L in the treatment of patients with COVID-19 ARDS, and will provide investigational product for the trial. Mesoblast Chief Executive Dr Silviu Itescu stated: "This significant public-private partnership is a prime example of how the combined resources of industry and government can be leveraged to evaluate in a most efficient and rigorous manner the potential of innovative therapies to make a meaningful difference to patient outcomes." CTSN Chairman Dr A. Marc Gillinov said: "We are excited to work with Mesoblast to make a real impact on the high mortality associated with COVID-19. This randomized controlled trial is in line with our mandate to rigorously evaluate novel therapies for public health imperatives." Professor and System Chair of Population Health Science and Policy and the Edmond A. Guggenheim Professor of Health Policy at the Icahn School of Medicine at Mount Sinai, Dr Annetine Gelijns, said: "The COVID-19 pandemic has resulted in very large numbers of people suffering with ARDS requiring ventilation in hospital intensive care units, with dismal outcomes, placing an enormous burden on the United States health system. We are committed to evaluating whether Mesoblast's mesenchymal stem cell product candidate for ARDS has the potential to make an impact on this unprecedented health crisis." ARDS occurs due to an excessive immune response against the COVID-19 virus in the lungs, with the inflammatory cytokines produced by the immune cells (cytokine storm) destroying the lung tissue. These inflammatory cytokines also can cause damage to other organs such as liver, kidney, and heart. Remestemcel-L is being developed for various inflammatory conditions, and is believed to counteract the inflammatory processes implicated in these diseases by down-regulating the production of pro-inflammatory cytokines, increasing production of anti-inflammatory cytokines, and enabling recruitment of naturally occurring anti-inflammatory cells to involved tissues. The safety and therapeutic effects of remestemcel-L intravenous infusions have been evaluated in over 1,100 patients in various clinical trials. Remestemcel-L was successful in a Phase 3 trial for steroid-refractory acute graft versus host disease (aGVHD) in children, a potentially fatal inflammatory condition due to a similar cytokine storm process as is seen in COVID-19 ARDS. Additionally, a post-hoc analysis of a randomized, placebo-controlled study in 60 patients with chronic obstructive pulmonary disease demonstrated that remestemcel-L significantly improved respiratory function in patients with the same elevated inflammatory biomarkers that are also observed in patients with COVID-19 ARDS. Together, these outcomes provide the rationale for evaluating remestemcel-L in patients with COVID-19 ARDS. Mesoblast Chief Medical Officer Dr Fred Grossman said: "The mortality rate in moderate to severe ARDS due to COVID-19 can be as high as 80%. Remestemcel-L has demonstrated safety, efficacy and significant survival benefit in aGVHD where inflammation is at the core, similar to ARDS from COVID-19. The mechanism of action of remestemcel-L demonstrated in aGVHD supports the evaluation of remestemcel-L to safely tame a similar cytokine storm in the lungs that leads to the high mortality in patients with COVID-19." About Mesoblast Headquartered in Melbourne, Australia, Mesoblast Limited (ASX:MSB; Nasdaq:MESO) -- http://www.mesoblast.com/-- is a global developer of innovative cell-based medicines. The Company has leveraged its proprietary technology platform to establish a broad portfolio of late-stage product candidates with three product candidates in Phase 3 trials - acute graft versus host disease, chronic heart failure and chronic low back pain due to degenerative disc disease. Through a proprietary process, Mesoblast selects rare mesenchymal lineage precursor and stem cells from the bone marrow of healthy adults and creates master cell banks, which can be industrially expanded to produce thousands of doses from each donor that meet stringent release criteria, have lot to lot consistency, and can be used off-the-shelf without the need for tissue matching. Mesoblast has locations in Australia, the United States and Singapore and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). Mesoblast reported a net loss attributable to owners of the Company of US$89.79 million for the year ended June 30, 2019, a net loss attributable to owners of the Company of US$35.29 million for the year ended June 30, 2018, and a net loss attributable to owners of the Company of US$76.81 million for the year ended June 30, 2017. As of June 30, 2019, Mesoblast had US$652.11 million in total assets, US$171.06 million in total liabilities, and $481.05 million in total equity. PricewaterhouseCoopers, in Melbourne, Australia, the Company's auditor since 2008, issued a "going concern" opinion in its report on the Company's consolidated financial statements for the year ended June 30, 2019. The auditors noted that the Company has suffered recurring losses and net cash outflows from operations and other matters that raise substantial doubt about its ability to continue as a going concern. MEYERS REPAIR: Seeks to Hire Marc T. Valentine as Counsel --------------------------------------------------------- Meyers Repair Service LLC seeks authority from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Marc T. Valentine and Associates P.C. as its counsel. Services the counsel will render are: a. give the Debtor legal advice with respect to its powers and duties in the continued operation in the business and management of the property of the Debtor; b. investigate the validity of the various claims filed by the creditors of the Debtor; c. draft legal instruments necessary to the continued operation of the Debtor; d. prepare on the behalf of the Debtor necessary applications, answers, orders, reports, and other legal documents; e. assist the Debtor in the formulation and presentation of a Plan of Reorganization and Disclosure Statement; f. perform other legal services for the Debtor which may be necessary. The firm has agreed to a retainer of $15,000 plus the filing fee of $1,717 of which $750 has been paid to the firm pre-petition. The firm will bill at the rate of $40 per hour for legal assistance and $200 per hour for Marc T. Valentine, Esq. Mr. Valentine attests that he is a "disinterested person" within the meaning of Section 101(14 of the Bankruptcy Code. The firm can be reached through: Marc T. Valentine, Esq. Marc T. Valentine and Associates, P.C. 118 North Center Avenue Somerset, PA 15501 Phone: 814-701-2835 Fax: 814-701-2590 Email: marcvaltax@gmail.com About Meyers Repair Service LLC Meyers Repair Service LLC is classified under truck repair shops located in Somerset, Pennsylvania. Meyers Repair Service LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 20-70097) on Feb. 21, 2020, listing under $1 million in both assets and liabilities. Marc T. Valentine, Esq. at Marc T. Valentine and Associates P.C. represents the Debtor as counsel. MICROVISION INC: Receives Nasdaq Listing Deficiency Notice ---------------------------------------------------------- MicroVision, Inc. received a notice on April 8, 2020 from The Nasdaq Stock Market advising the company that for 30 consecutive business days preceding the date of the notice, the market value of the company's listed common stock was less than $50,000,000, the minimum market value required for continued listing on The Nasdaq Global Market pursuant to Nasdaq's listing requirements. In accordance with Nasdaq's listing rules, the company has 180 calendar days, or until Oct. 5, 2020, to regain compliance with this requirement. This notification is simply a notice of deficiency, not of imminent delisting, and has no current effect on the listing or trading of MicroVision's common stock on The Nasdaq Global Market at this time. During the 180-day compliance period, MicroVision can regain compliance if the market value of the Company's listed common stock is at least $50,000,000 for a minimum of ten consecutive business days. If the company does not regain compliance by Oct. 5, 2020, Nasdaq will notify the company that its securities are subject to delisting. As previously announced, the company also is not currently in compliance with the minimum $1.00 per share bid price requirement for continued listing on The Nasdaq Global Market pursuant to Nasdaq's listing requirements and has until June 9, 2020 to regain compliance with this requirement. The failure to regain compliance with either the minimum market value or the minimum bid price requirements prior to their respective deadlines may cause the company's securities to be subject to delisting. The company said it is monitoring the market value and bid price of its listed common stock. The company continues to execute its business plan and will consider other actions that it may take in order to regain compliance with the listing requirements. About MicroVision MicroVision -- http://www.microvision.com/-- is the creator of PicoP scanning technology, an ultra-miniature sensing and projection solution based on the laser beam scanning methodology pioneered by the company. MicroVision's platform approach for this sensing and display solution means that its technology can be adapted to a wide array of applications and form factors. The Company combines its hardware, software, and algorithms to unlock value for our customers by providing them a differentiated advanced solution for a rapidly evolving, always-on world. MicroVision reported a net loss of $26.48 million for the year ended Dec. 31, 2019, compared to a net loss of $27.25 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $11.84 million in total assets, $15.81 million in total liabilities, and a total shareholders' deficit of $3.98 million. Moss Adams LLP, in Seattle, Washington, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 11, 2020, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. MOUNTAIN STATES: Seeks to Hire r2 Advisors as Financial Advisor --------------------------------------------------------------- Mountain States Rosen LLC seeks authority from the United States Bankruptcy Court for the District of Wyoming to hire r2 Advisors LLC as its financial advisor. Mountain States requires r2 Advisors to: a. advise the Debtor regarding the negotiation strategies and tactics and participating in negotiations as necessary to consummate sale, marketing the opportunity to potential investors; b. assist the Debtor and its counsel as necessary with the financing process, and c. provide other financial advisory services for Debtor as necessary and appropriate for the administration of the Debtor's estate and the Debtor's successful sale. Hourly rates charged by r2 are: Managing Directors $500 Directors $250 Analysts $100-150 The Debtor has paid to r2 a retainer of $25,000 as security for payment of fees, costs, and expenses, which will be applied to final outstanding fees at the end of the engagement. r2 Advisors will also be reimbursed for reasonable out-of-pocket expenses incurred. Thomas M. Kim, partner of r2 Advisors, 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. r2 Advisors can be reached at: Thomas M. Kim, partner of R2 ADVISORS, LLC 1518 Blake Street Denver, CO 80202 Tel: (303) 865-8640 About Mountain States Rosen LLC Mountain States Rosen LLC -- http://mountainstatesrosen.com/-- is a privately held company in the animal slaughtering and processing business. Mountain States Rosen LLC filed its voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No. 20-20111) on March 19, 2020. In the petition signed by Brad Graham, president, the Debtor estimated $10 million to $50 million in both assets and liabilities. The Debtor taps Brad Hunsicker, Esq. at MARKUS WILLIAMS YOUNG & HUNSICKER LLC as counsel. MOUNTAIN STATES: U.S. Trustee Appoints 2 New Committee Members -------------------------------------------------------------- The Office of the U.S. Trustee on April 7, 2020, appointed UFCW Local 174 Pension Fund and International Paper Company as new members of the official committee of unsecured creditors in the Chapter 11 case of Mountain States Rosen LLC. The committee is now composed of: 1. Colorado Atlantic Express, LLC Attn: Tom McCarthy 6600 Smith Road Denver, CO 80207 Phone: 303-287-6297 t.mccarthy@coloradoatlantic.com 2. Reliable Transportation Services LLC Attn: Lucas Brown 642 East State St. Georgetown, OH 45121 Phone: 937-378-2700, X1002 lucas@relyonrts.com 3. JBS USA Food Company Swift Beef Company Attn: Kim Pryor 1770 Promontory Circle Greeley, CO 80634 Phone: 970.347.5686 Kim.Pryor@jbssa.com 4. UFCW Local 174 Pension Fund Attn: Larry Magarik, Trustee 80 Eighth Ave, Suite 901 NY, NY 10011 Phone: 212-897-9806 LMagarik@Magariklaw.com 5. International Paper Company Attn: Ana Hernandez 1740 International Drive Memphis, TN 38197 Phone: 901-419-1845 Ana.Hernandez@ipaper.com About Mountain States Rosen Mountain States Rosen LLC -- http://mountainstatesrosen.com/-- is a privately held company in the animal slaughtering and processing business. Mountain States Rosen sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No. 20-20111) on March 19, 2020. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Cathleen D. Parker oversees the case. The Debtor tapped Markus Williams Young & Hunsicker LLC as its legal counsel. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtor's case. MURRAY METALLURGICAL: Committee Hires Lowenstein Sandler as Counsel ------------------------------------------------------------------- The official committee of unsecured creditors of Murray Metallurgical Coal Holdings, LLC, and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to retain Lowenstein Sandler LLP as its lead counsel. The Committee requires Lowenstein Sandler to: (a) advise the Committee with respect to its rights, duties, and powers in the Chapter 11 Case; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of the Chapter 11 Case; (c) assist the Committee in analyzing the claims of the Debtor's creditors and the Debtors' capital structure and in negotiating with holders of claims and equity interests; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and of the operation of the Debtors' business; (e) assist the Committee in analyzing (i) the Debtors' pre-petition financing, (ii) proposed use of cash collateral, and (iii) the Debtors' proposed debtor-in-possession financing ("DIP Financing"), the terms and conditions of the proposed DIP Financing and the adequacy of the proposed DIP Financing budget; (f) assist the Committee in its investigation of the liens and claims of the holders of the Debtor's prepetition debt and the prosecution of any claims or causes of action revealed by such investigation; (g) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of nonresidential real property and executory contracts, asset dispositions, sale of assets, financing of other transactions and the terms of one or more plans of reorganization for the Debtor and accompanying disclosure statements and related plan documents; (h) assist and advise the Committee as to its communications to unsecured creditors regarding significant matters in the Chapter 11 Case; (i) represent the Committee at hearings and other proceedings; (j) review and analyze applications, orders, statements of operations, and schedules filed with the Court and advise the Committee as to their propriety; (k) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives, including the preparation of retention papers and fee applications for the Committee's professionals; (l) prepare, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints, objections, or comments in connection with any of the foregoing; and (m) perform such other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules, or other applicable law. Lowenstein Sandler will be paid at these hourly rates: Partners $630 - $1,450 Senior Counsel/Counsel $495 - $870 Associates $395 - $675 Paralegals $210 - $370 Lowenstein Sandler will also be reimbursed for reasonable out-of-pocket expenses incurred. Jeffrey L. Cohen, Esq., partner of Lowenstein Sandler, attests that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Cohen disclosed that: -- Lowenstein has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; -- none of the professionals included in the engagement varies his rate based on the geographic location of the Debtors' bankruptcy cases; -- the firm has not represented the committee in the 12 months prior to the Debtors' bankruptcy filing; and -- the committee has reviewed Lowenstein's proposed hourly billing rates, budget and staffing plan. The counsel can be reached through: Jeffrey L. Cohen, Esq Lowenstein Sandler LLP One Lowenstein Drive Roseland, NJ 07068 Tel: 973-597-2500 About Murray Metallurgical Coal Murray Metallurgical Coal Holdings and its subsidiaries are engaged in the mining and production of metallurgical coal. Unlike thermal coal, which is primarily used by the electric utility industry to generate electricity, metallurgical coal is used to produce coke, which is an integral component of steel production. Murray Met primarily owns and operates two active coal mining complexes and other assets in Alabama and West Virginia. On Feb. 11, 2020, Murray Metallurgical Coal Holdings, LLC and five affiliates each filed a voluntary Chapter 11 petition (Bankr. S.D. Ohio Lead Case No. 20-10390). Murray Metallurgical was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge John E. Hoffman, Jr. oversees the cases. The Debtors tapped Proskauer Rose LLP as legal counsel; Evercore Group LLC as investment banker; and Alvarez & Marsal LLC as financial advisor. Prime Clerk LLC, is the claims agent. MURRAY METALLURGICAL: Committee Seeks to Hire Financial Advisor --------------------------------------------------------------- The official committee of unsecured creditors of Murray Metallurgical Coal Holdings, LLC, and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to retain Berkeley Research Group, LLC as its financial advisor. The committee requires Berkeley to: a) advise and assist the committee in its analysis and monitoring of the historical, current and projected financial affairs of the Debtors, including, schedules of assets and liabilities and statements of financial affairs; b) advise and assist the committee with respect to any debtor-in-possession financing arrangements and/or use of cash; c) scrutinize cash disbursements on an ongoing basis for the period subsequent to the commencement of these Cases; d) prepare and issue periodic monitoring reports to enable the committee to effectively evaluate the Debtors' operating performance, their ability to realize or settle claims for avoidance actions, their conduct of proposed 363 sale processes, and their management of their subsequent wind-down activities; e) advise and assist the committee and counsel in reviewing and evaluating any court motions (including any assumption or rejection motions or objections thereto), applications, or other forms of relief filed or to be filed by the Debtors, or any other parties-in-interest; f) analyze the Debtors' and non-Debtor affiliates' assets (tangible and intangible) and possible recoveries to creditor constituencies under various scenarios and developing strategies to maximize recoveries; g) develop strategies to maximize recoveries from the Debtors' assets and advise and assist the committee with such strategies; h) evaluate and monitor, as applicable, the Debtors' proposed wind down plans that would apply after the consummation of asset sales; i) monitor Debtors' claims management process, analyze claims, analyze guarantees, and summarize claims by entity; j) advise and assist the committee in identifying and/or reviewing any preference payments, fraudulent conveyances, and other potential causes of action that the Debtors' estates may hold against insiders and/or third parties; k) review and provide analysis of any bankruptcy plan and disclosure statement relating to the Debtors including, if applicable, the development and analysis of any bankruptcy plans proposed by the committee; l) analyze both historical and ongoing intercompany and/or related party transactions of the Debtors and non-Debtor affiliates; m) advise and assist the committee in the evaluation of the Debtors' operations and/or investments; n) attend committee meetings, court hearings, and auctions as may be required; o) work with the Debtors' tax advisors to ensure that any restructuring or sale transaction is structured to minimize tax liabilities to the estate; p) provide other services as may be requested by the committee from time to time. Berkeley has agreed to a 10 percent discount off of its standard hourly rates. Berkeley's current hourly rates (before the 10% discount)are: Managing Director $825 - $1,095 Director $625 - $835 Professional Staff $295 - $740 Support Staff $125 - $260 Mark Shankweiler $1,040 Edwin Ordway $1,050 Robert Cohen $425 Teddy Hoang $350 Mark Shankweiler, managing director of Berkeley Research Group, attests that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and represents no interest adverse to the committee, the Debtors, their estates, or any other party in interest in the matters upon which it is to be engaged. The advisor can be reached through: Mark Shankweiler Berkeley Research Group, LLC 810 Seventh Avenue, Suite 4100 New York, NY 10019 Phone: 646-205-9320 Fax: 646-454-1174 About Murray Metallurgical Coal Murray Metallurgical Coal Holdings and its subsidiaries are engaged in the mining and production of metallurgical coal. Unlike thermal coal, which is primarily used by the electric utility industry to generate electricity, metallurgical coal is used to produce coke, which is an integral component of steel production. Murray Met primarily owns and operates two active coal mining complexes and other assets in Alabama and West Virginia. On Feb. 11, 2020, Murray Metallurgical Coal Holdings, LLC and five affiliates each filed a voluntary Chapter 11 petition (Bankr. S.D. Ohio Lead Case No. 20-10390). Murray Metallurgical was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge John E. Hoffman, Jr. oversees the cases. The Debtors tapped Proskauer Rose LLP as legal counsel; Evercore Group LLC as investment banker; and Alvarez & Marsal LLC as financial advisor. Prime Clerk LLC, is the claims agent. MURRAY METALLURGICAL: Committee Taps Wickens Herzer as Co-Counsel ----------------------------------------------------------------- The official committee of unsecured creditors of Murray Metallurgical Coal Holdings, LLC, and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to retain Wickens Herzer Panza. Wickens Herzer will serve as co-counsel with Lowenstein Sandler LLP, the committee's lead bankruptcy counsel. The firm will provide these services in connection with the Chapter 11 cases field by Murray Metallurgical and its affiliates: (a) document and schedule review; (b) prepare and file pleadings, motions and legal briefs; (c) prepare responses to similar filings on the part of the Debtors and other parties in interest; (d) execute factual investigation and legal research necessary to support arguments in fact and law; (e) review and address issues presented by sales or other dispositions of assets; (f) review and address issues presented in any plan proposed by the Debtors or any other party; (g) interviews with the Debtors, case professionals, witnesses and experts (as necessary); (h) prepare, and attend at, hearings, depositions, settlement conferences, and other court appearances (as necessary); and (i) provide the committee with advice and co-counsel as to all matters arising in or from these Chapter 11 Cases. Wickens will be paid at these hourly rates: Directors/Shareholders $480 to $270 Attorneys $400 to $150 Paralegals $175 to $75 Attorneys Christopher W. Peer and John A. Polinko are expected to have the primary responsibility for providing services to the committee. The billing rate for Attorney's Peer and Polinko is $350 per hour for bankruptcy matters. Christopher W. Peer, Esq., partner of Wickens, attests that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Peer disclosed that: -- other than discounting travel time to 50 percent of standard rates, Wickens has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; -- none of the professionals included in the engagement varies his rate based on the geographic location of the Debtors' bankruptcy cases; -- the firm has not represented the committee in the 12 months prior to the Debtors' bankruptcy filing; and -- the committee will be approving a prospective budget and staffing plan for Wickens' engagement as appropriate. The counsel can be reached through: Christopher W. Peer, Esq. John A. Polinko, Esq. Wickens Herzer Panza 35765 Chester Road Avon, OH 44011-1262 Tel: (440) 695-8000 Fax: (440) 695-8098 Email: CPeer@WickensLaw.com JPolinko@WickensLaw.com About Murray Metallurgical Coal Murray Metallurgical Coal Holdings and its subsidiaries are engaged in the mining and production of metallurgical coal. Unlike thermal coal, which is primarily used by the electric utility industry to generate electricity, metallurgical coal is used to produce coke, which is an integral component of steel production. Murray Met primarily owns and operates two active coal mining complexes and other assets in Alabama and West Virginia. On Feb. 11, 2020, Murray Metallurgical Coal Holdings, LLC and five affiliates each filed a voluntary Chapter 11 petition (Bankr. S.D. Ohio Lead Case No. 20-10390). Murray Metallurgical was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge John E. Hoffman, Jr. oversees the cases. The Debtors tapped Proskauer Rose LLP as legal counsel; Evercore Group LLC as investment banker; and Alvarez & Marsal LLC as financial advisor. Prime Clerk LLC, is the claims agent. MYSTIC TRANSPORTATION: Case Summary & 20 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Mystic Transportation, LTD 764 New London Turnpike Mystic, CT 06355 Business Description: Mystic Transportation, LTD -- http://www.mystictransportation.com-- offers air freight courier and trucking services. The Company provides expedited freight services, full truck load, heavy Less-than-truckload (LTL), same day and next day air freight domestic/international, low rates to and from 48 states and Canada, specialized equipment including flat bed, over dimension and refrigerated, logistics and consulting, warehousing, and personalized services. Mystic Transportation was established in 1987 by Tom Glynn. Chapter 11 Petition Date: April 10, 2020 Court: United States Bankruptcy Court District of Connecticut Case No.: 20-20531 Judge: Hon. James J. Tancredi Debtor's Counsel: Timothy D. Miltenberger, Esq. COAN, LEWENDON, GULLIVER & MILTENBERGER, LLC 495 Orange Street New Haven, CT 06511-3809 Tel: 203-624-4756 Fax: 203-865-3673 E-mail: tmiltenberger@coanlewendon.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Sandra G. Worth, president. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/kJvUEy NATIONAL QUARRY: Seeks to Hire Iron Horse, Queen City as Appraisers ------------------------------------------------------------------- National Quarry Services, Inc. and NQS Equipment Leasing Company seek authority from the U.S. Bankruptcy Court for the Middle District of North Carolina to employ Iron Horse Auction Company, Inc. and Queen City Auction and Appraisal, LLC. The firms will provide these services: (a) appraise all equipment owned or leased by Debtors; (b) appraise all trucks owned or leased by Debtors; and (c) appraise Debtors' parts and other inventory. The firms' appraisal services are billed at these hourly rates: William B. Lilly, Jr. $300 Sonny Weeks $250 Marcus D. Baysek $250 Teddy Biggers $200 Scotty Baldwin $150 Kristy Wallace (Admin) $100 The firms are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firms can be reached through: William B. Lilly Jr. Iron Horse Auction Company Inc. 174 Airport Rd Rockingham, NC 28379 Phone: +1 910-997-2248 Sonny Weeks Queen City Auction and Appraisal, LLC 3963 Winfield Dr Charlotte, NC, 28205 About National Quarry Services and National Quarry Services National Quarry Services, Inc. -- https://nationalquarryservice.com -- is a full-service rock drilling and blasting company. National Quarry Services and its affiliate NQS Equipment Leasing Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. N.C. Lead Case No. 20-50070) on Jan. 23, 2020. At the time of the filing, the Debtors each had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Benjamin A. Kahn oversees the cases. The Debtors tapped James C. Lanik, Esq., at Waldrep, LLP, as their legal counsel. William Miller, the U.S. bankruptcy administrator for the Middle District of North Carolina, appointed three creditors to serve on the official committee of unsecured creditors in the Debtor's Chapter 11 case. NEW CITY AUTO: Hires Woodward Law as Special Counsel ---------------------------------------------------- New City Auto Group, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Indiana to employ Woodward Law Offices, LLP as its special counsel. Woodward Law will represent the Debtor in pursuit of federal, state, civil or administrative remedies actions for the enforcement of its rights against parties against whom the Debtor holds claims including as a licensed motor vehicle dealer in the State of Indiana and/or to recover damages caused by third-parties to Debtor. The Debtor requests that the court allow it to advance the sum of $10,000 to Woodward Law as a retainer. Woodward Law and members of the firm are disinterested persons within the meaning of Sec. 327(a) and 101 of the Bankruptcy Code, according to court filings. The firm can be reached through: Brian Woodward, Esq. Woodward Law Offices, LLP Weston Court, 200 E. 90th Drive Merrillville, IN 46410 Phone: +1 219-736-9990 About New City Auto Group New City Auto Group, LLC, based in Schererville, IN, filed a Chapter 11 petition (Bankr. N.D. Ind. Case No. 18-21890) on July 16, 2018. In the petition signed by CEO Michael Helmstetter, the Debtor estimated $1 million to $10 million in assets and liabilities. The Hon. James R. Ahler presides over the case. Gordon E. Gouveia II, Esq., at Fox Rothschild LLP, is Debtor's bankruptcy counsel. NEW MILLENIUM: Moody's Cuts CFR to C & Alters Outlook to Stable --------------------------------------------------------------- Moody's Investors Service downgraded the Probability of Default Rating of New Millennium HoldCo, Inc. to D-PD from Caa3-PD, the Corporate Family Rating to C from Caa3 and the senior secured term loan to C from Caa3. The rating outlook was revised to stable from negative. The downgrade of the PDR reflects that New Millennium missed principal and interest payments due March 31, 2020 and did not make such payments within the 5-day grace period, which Moody's considers a default. The downgrade of the CFR and instrument ratings reflects Moody's expectation of weak recovery following the payment default. New Millennium HoldCo, Inc. Downgrades: Probability of Default Rating to D-PD from Caa3-PD Corporate Family Rating to C from Caa3 Senior secured term loans due 2020 to C (LDG5) from Caa3 (LGD 3) Outlook Actions: The outlook was revised to stable from negative. RATINGS RATIONALE New Millennium's C CFR reflects Moody's expectations of weak recovery following the payment default. Moody's expects the company and its lenders will restructure its existing debt arrangements due to the company's weak liquidity and unsustainable capital structure. The stable outlook reflects Moody's view that recovery prospects are appropriately captured in the current ratings. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if, following a restructuring of the company's debt, the company's liquidity improves and its probability of default is otherwise reduced. The current ratings are at the lowest levels on Moody's rating scale and therefore cannot be lowered further. New Millennium headquartered in San Diego, CA, is the parent holding company of Millennium Health LLC. The company provides health care professionals with medication monitoring and drug detection services, pharmacogenetic testing, and clinical tools, predictive analytics data and education used to personalize patient treatment plans to improve clinical outcomes and patient safety. CogenDx is the company's genetics brand which enables clinicians to personalize treatment using molecular diagnostic technology. The company is privately held and publicly available information is limited. In the last twelve months ended December 31, 2019, the company generated revenues of under $200 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. NORTHWEST CAPITAL: Hires William J. Factor as Bankruptcy Counsel ---------------------------------------------------------------- Northwest Capital Holdings LLC seeks approval from the United States Bankruptcy Court for the Northern District of Illinois to employ The Law Office of William J. Factor, Ltd. as its bankruptcy counsel effective as of Feb. 27, 2020. Northwest Capital requires William J. Factor to: a. advise and consult with the Debtor with respect to its powers, rights and duties as a debtor and debtor-in- possession; b. attend meetings and negotiating with creditors, other parties-in-interest, and their respective representatives; c. advise and consult with the Debtor on the conduct of the case, including all the legal and administrative requirements of operating under chapter 11 of the Bankruptcy Code; d. take all necessary action to protect and preserve the Estate, including but not limited to, prosecuting or defend all motions and proceedings on behalf of the Debtor and the Estate; e. prepare and file, or defend, adversary proceedings or other litigation involving the Debtor or its interests in property; f. prepare motions, applications, answers, orders, reports, and other papers necessary to the administration of the cases; g. prepare and negotiate a plan and disclosure statement and all related agreements and documents, and taking any necessary action to obtain confirmation of a plan; and h. perform other necessary legal services and providing other necessary legal advice required by the Debtor in connection with the case. William J. Factor will be paid at these hourly rates: William J. Factor Partner $400 Jeffrey K. Paulsen Partner $375 Angela Snell Partner $375 Elizabeth Peterson Associate $350 Danielle Ranallo Legal Assistant $100 William J. Factor will also be reimbursed for reasonable out-of-pocket expenses incurred. William J. Factor, Esq., a partner at The Law Office of William J. Factor, 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. William J. Factor can be reached at: William J. Factor, Esq. Jeffrey K. Paulsen, Esq. FactorLaw 105 W. Madison Street, Suite 1500 Chicago, IL 60602 Tel: (847) 239-7248 Fax: (847) 574-8233 Email: wfactor@wfactorlaw.com jpaulsen@wfactorlaw.com About Northwest Capital Northwest Capital Holdings LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Northwest Capital filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 20-05334) on Feb. 27, 2020. At the time of filing, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. The case is assigned to Hon. Jack B. Schmetterer. The Debtor's counsel is The Law Office of William J. Factor, Ltd. NOVATION COMPANIES: Boulay PLLP Raises Going Concern Doubt ---------------------------------------------------------- Novation Companies, Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a total comprehensive loss of $10,224,000 on $63,474,000 of service fee income for the year ended Dec. 31, 2019, compared to a total comprehensive loss of $5,261,000 on $55,126,000 of service fee income for the year ended in 2018. The audit report of Boulay PLLP states that the Company has incurred net operating losses and has had negative operating cash flow, combined with the potential impact of COVID-19, this has led to substantial doubt related to the Company to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $19,417,000, total liabilities of $91,476,000, and a total shareholders' deficit of $72,059,000. A copy of the Form 10-K is available at: https://is.gd/hKdGXx Novation Companies, Inc., through its subsidiary, Healthcare Staffing, Inc., provides outsourced health care staffing and related services primarily to Community Service Boards in Georgia. It also owns a portfolio of mortgage securities. The company was formerly known as NovaStar Financial, Inc. and changed its name to Novation Companies, Inc. in May 2012. Novation Companies, Inc. was founded in 1996 and is based in Kansas City, Missouri. NULIFE MULHOLLAND: Seeks to Hire Pinnacle Estate as Broker ---------------------------------------------------------- NuLife Mulholland, LLC, seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire real estate broker Pinnacle Estate Properties, Inc. The firm will assist Debtor in the sale of its real properties located at: (1) 24969 Mulholland Highway, Calabasas, Calif. (for a listing price of $5.299 million); and (2) 24969 1/2 Mulholland Highway, Calabasas, Calif. (for a listing price of $499,000). Debtor agreed to compensate the firm on a contingency fee basis, subject to the sale of the properties of 5 percent of the gross sales price, and 5 percent if the firm represents both seller and buyer. If there is a participating multiple listing service (MLS) broker, such broker will get up to 2.5 percent of the purchase price. David Watkins, a real estate agent employed with Pinnacle, disclosed in court filings that his firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: David Watkins Pinnacle Estate Properties, Inc. 24025 Park Sorrento, Suite 110 Calabasas, CA 91302 Phone: 818-970-2946 Email: David@DavidWatkins.com About Nulife Mulholland NuLife Mulholland LLC owns and operates an addiction treatment center in California. It owns in fee simple an 11.2-acre lot with 7400-square-foot house and 800-square-foot guest house located in Calabasas, Calif., having an appraised value of $7 million. NuLife Mulholland also owns in fee simple a two-acre lot with small vineyard valued at $750,000. NuLife Mulholland sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12407) on Sept. 24, 2019. In the petition signed by its managing member, John D. Meints Jr., Debtor disclosed $8,028,177 in assets and $5,180,697 in debt. Judge Martin R. Barash oversees the case. The Law Offices of Robert M. Yaspan is Debtor's legal counsel. Dr. Timothy J. Stacy has been appointed as patient care ombudsman for the company. The PCO is represented by Resnik Hayes Moradi LLP. OASIS ON ESSINGTON: Hires Center City Law as Counsel ---------------------------------------------------- Oasis On Essington, LLC, seeks authority from the US Bankruptcy Court for the Eastern District of Pennsylvania to employ Center City Law Offices LLC as its counsel. Service Center City will provide are: a. prepare all papers required to be filed in connection with this bankruptcy proceeding including all schedules, statement of financial affairs, list of creditors, operating reports and other papers; b. give the Debtor legal advice with respect to the powers and duties as Debtors in Possession; c. represent the Debtor at its Initial Debtor Interview, its first meeting with creditors, all status hearings, confirmation hearings and any Rule 2004 examinations; d. prepare all necessary applications, answers, complaints, motions, orders, reports and all legal papers; and e. perform all other legal services for the Debtor as Debtor in Possession as may be required and necessary concerning the continued administration of this case including the preparation of the Disclosure Statement and Plan of Reorganization. The hourly rates charged by Center City are: Principal $300 Associates $165 Maggie Soboleski, Esq., disclosed in a court filing that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Maggie S. Soboleski, Esq. Center City Law Offices, LLC 2705 Bainbridge Street Philadelphia, PA 19146 Phone: 215-620-2132 Fax: 215-689-4303 Email: msoboles@yahoo.com About Oasis On Essington LLC Oasis On Essington LLC filed for voluntary Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 20-10286) on Jan. 15, 2020, listing under $1 million in both assets and liabilities. Maggie S. Soboleski, Esq. at Center City Law Offices, LLC, is the Debtor's counsel. ODES INDUSTRIES: Seeks to Hire Padfield & Stout as Special Counsel ------------------------------------------------------------------ Odes Industries, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Padfield & Stout LLP as its special counsel. The Debtor has been attempting to retrieve inventory that was shipped to a location in Indiana but not paid for. The Debtor has filed a lawsuit currently pending in this Court against SMG Global for a return of the inventory. SMG Global has denied any liability for the inventory and substantial appears likely to recover Debtor's assets. Padfield & Stout will represent the Debtor as litigation attorneys for this case. The firm seeks a retainer in the amount of $25,000. The firm's hourly rates are: Partners $450 Associates $250-$375 Paralegals $140 Mark Stout, Esq., partner of Padfield & Stout, assures the court that the firm does not represent any other interest adverse to the Estate of the Debtor. The firm can be reached through: Mark Stout, Esq. Padfield & Stout, LLC 420 Throckmorton St #1210 Fort Worth, TX 76102 Phone: +1 817-338-1616 About Odes Industries Odes Industries, LLC, an all-terrain vehicle (ATV) manufacturer in Forth Worth, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-43582) on Aug. 31, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. The case is assigned to Judge Edward L. Morris. Eric A. Liepins, P.C., is the Debtor's counsel. OSUM PRODUCTION: Moody's Alters Outlook on B3 CFR to Negative ------------------------------------------------------------- Moody's Investors Service changed Osum Production Corp.'s outlook to negative from stable. At the same time, Moody's affirmed Osum's B3 corporate family rating, B3-PD probability of default rating, Ba3 senior secured priority revolving credit facility rating, and B3 senior secured first lien term loan rating. "The negative outlook reflects its expectation that Osum will generate lower cash flow in 2020 as a result of the sharp decline in oil prices, and cash flow could remain depressed into 2021" said Jonathan Reid, Moody's analyst. "Osum's current hedges and its good liquidity should enable it to navigate the pressures it faces in 2020" Affirmations: Issuer: Osum Production Corp. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured First Lien Term Loan, Affirmed B3 to (LGD4) from (LGD3) Senior Secured Revolving Credit Facility, Affirmed Ba3 (LGD1) Outlook Actions: Issuer: Osum Production Corp. Outlook, Changed to Negative from Stable RATINGS RATIONALE Osum's B3 Corporate Family Rating is constrained by: 1) its small size; 2) reduced cash flow as a result of the decline in oil prices and exposure to Canadian heavy oil differentials; 3) concentration in one steam-assisted-gravity-drainage (SAGD) project that produces heavy oil; and 4) provincial curtailment regulations that limit growth. Osum is supported by 1) good liquidity that should enable it to navigate the current low oil price environment in 2020; 2) low maintenance and operating costs; and 3) excellent operating execution, as demonstrated by its ability to grow production over the past several years. Around half of Osum's 2020 production is hedged which helps mitigate pressure on cash flow from weak oil prices, however the company has minimal hedges in place for 2021. If the current weak oil price environment and wide Canadian heavy oil differential persist Osum's cash flows will decline sharply in 2021. Osum has good liquidity supported by cash of around C$100 million as of December 31, 2019 and an undrawn US$15 million revolving credit facility which combined should be ample to absorb any negative free cash flow the company generates in 2020. 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 E&P 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 Osum's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Osum 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 Osum of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. Governance considerations include Osum's less aggressive financial policies despite its private ownership. The company has used free cash flow to build a good liquidity position while still managing to reduce outstanding debt between 2019 and 2020. Osum has good liquidity. At December 31, 2019 Osum had C$102 million of cash, full availability under its US$15 million revolving credit facility that matures in April 2022 and Moody's expects the company will generate modest free cash flow in 2020. The company has around C$50 million in debt maturities and debt repayments in 2020. The term loans contain one financial covenant, and Moody's expects Osum will be well in compliance through 2020. Alternate sources of liquidity are limited as its assets are pledged as collateral to the secured debt. In accordance with Moody's Loss Given Default (LGD) Methodology, the US$15 million super-priority revolving credit facility is rated Ba3 as the US$190 million in senior secured term loans provide cushion. The senior secured term loans are rated at the B3 CFR as they make up the majority of the capital structure. The C$371 million unsecured subordinated intercompany loan is treated as equity due to its deeply subordinated nature. The negative outlook reflects its expectation that cash flow could continue to decline if oil prices remain weak into 2021. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: The ratings could be downgraded if retained cash flow to debt is sustained below 10% (56% in 2019), if interest coverage falls below 2x (4.25x in 2019) or if the company generates negative free cash flow on a sequential basis leading to a deterioration of its liquidity profile. While an upgrade is unlikely given the negative outlook, the ratings could be upgraded if production approached 25,000 bbl/d net of royalties (17,360 bbl/d in 2019), if retained cash flow to debt is sustained above 40% (56% in 2019) and if EBITDA to Interest is sustained above 4x (4.25x in 2019). Osum is a private Calgary, Alberta based exploration and production company with at its Orion SAGD project in Cold Lake, Alberta. Osum is a subsidiary of Osum Oil Sands Corp., which owns significant carbonate bitumen resources. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. PACE INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Pace Industries, LLC 481 South Shiloh Drive Fayetteville, AR 72704 Business Description: Founded in 1970 as a single facility in Harrison, Arkansas, Pace Industries -- https://paceind.com -- is a fully-integrated supplier of aluminum, zinc, and magnesium die cast and finished products in North America. Pace conducts business through nine die casting manufacturing plants (seven in the United States and two in Mexico), two tool and die shops, and two painting and finishing shops. Pace's die cast plants manufacture complex engineered aluminum, zinc, and magnesium die cast and finished products according to customer-supplied proprietary engineering, design, and measurement specifications. Through their tool and die shops, the Debtors sell custom- made steel die cast dies and tooling used to manufacture die castings. Through their painting and finishing facilities, the Debtors offer custom painting and finishing services for both die cast parts and parts manufactured through other processes according to customer-provided specifications. Pace also operates a number of plastic injection molding machines to produce parts for customers of its Port City Group Division. Chapter 11 Petition Date: April 12, 2020 Court: United States Bankruptcy Court District of Delaware Eleven affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Case No. Case No. -------- -------- Pace Industries, LLC (Lead Case) 20-10927 KPI Holdings, LLC 20-10928 KPI Capital Holdings, Inc. 20-10929 KPI Holdings, Inc. 20-10930 KPI Intermediate Holdings, Inc. 20-10931 Pace FQE, LLC 20-10932 Pace Industries, Inc. 20-10933 Pace Industries of Mexico, L.L.C. 20-10934 Port City Group, Inc. 20-10935 Muskegon Castings, LLC 20-10936 Alloy Resources, LLC 20-10937 Debtors' Bankruptcy Co-Counsel: Robert S. Brady, Esq. Edmon L. Morton, Esq. Joseph M. Mulvihill, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: rbrady@ycst.com emorton@ycst.com jmulvihill@ycst.com - and - Matthew A. Feldman, Esq. Rachel C. Strickland, Esq. Debra M. Sinclair, Esq. WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, New York 10019 Tel: (212) 728-8000 Fax: (212) 728-8111 E-mail: mfeldman@willkie.com rstrickland@willkie.com dsinclair@willkie.com Debtors' Financial Advisor: FTI CONSULTING, INC. 350 South Grand Avenue, Suite 3000 Los Angeles, California 90071 Debtors's Special Finance Counsel: HUGHES HUBBARD & REED LLP One Battery Park Plaza, New York, New York 10004 Debtors' Claims, Noticing, & Balloting Agent: KURTZMAN CARSON CONSULTANTS, LLC 1290 Avenue of the Americas, New York, NY 10104 https://www.kccllc.net/pace Estimated Assets (on a consolidated basis): $100 million to $500 million Estimated Liabilities (on a consolidated basis): $100 million to $500 million The petitions were signed by Craig Potter, chief financial officer. A copy of Pace Industries' petition is available for free at PacerMonitor.com at: https://is.gd/yWU7pB List of Pace Industries' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Service Aluminum Corporation Trade Debt $1,647,924 PO Box 744295 Atlanta, GA 30374 3300 N Ridge Road Suite 290 Elliot City, MD 21043 Tom Walters Tel: (410) 465-3300 Email: twalters@servicealuminum.com 2. Sid Tool Co., Inc. Trade Debt $1,575,741 PO Box 78845 Milwaukee, WI 53278 75 Maxess Road Melville, NY 11747 Khyamm Sanders Tel: (714) 307-8396 Email: sanderkh@mscdirect.com 3. Strohwig Industries, Inc. Trade Debt $1,468,567 Dept 00538 Milwaukee, WI 53259 3285 Industrial Road Ritchfield, WI 53075 Michael Retzer Tel: (262) 628-5417 Email: mretzer@strohwig.com 4. Commercial Metals Co. Trade Debt $1,390,811 PO Box 844681 Dallas, TX 75284 65645 N McArthur Boulevard Irving, TX 75039 David Sax Tel: (214) 689-4342 Email: david.sax@cmc.com 5. B&B Metal Processing Company, Inc. Trade Debt $1,042,309 14520 Pioneer Road Newton, WI 53063 Bob Burrows Tel: (920) 693-8261 Email: bbm@bbmetalaprocessing.com 6. Shapiro Sales Company Trade Debt $1,035,877 PO Box 776198 Chicago, IL 60677 9666 Olive Boulevard Suite 500 St Louis, MO 63132 Rick Dobkin Tel: (314) 381-9300 Email: rdobkin@shapirometals.com 7. Onset Financial, Inc. Trade Debt $1,006,239 274 West 12300 Draper, UT 84020 Dustin Bond Tel: (801) 816-0800 Email: dbond@mazumacapital.com 8. Lefton Metal Enterprises Trade Debt $952,471 PO Box 95212 Chicago, IL 60694 111 West Port Plaza #700 St. Louis, MO 63146 Gary Stein Tel: (314) 542-7272 Email: gstein@metalexchangecorp.com 9. Imsamet of Arizona Trade Debt $920,030 3829 South Estrella Parkway Goodyear, AX 85338 David Burlison Tel: (623) 925-4286 Email: david.burlison@realalloy.com 10. Spectro Alloys Corporation Trade Debt $856,551 BIN #130102 PO Box 9201-02 Minneapolis, MN 55480 13220 Doyle Path East Rosemount, MN 55068 Gary Borner Tel: (651) 480-6107 Email: gborner@spectroalloys.com 11. Guangdong Zhaoqing Power Trade Debt $820,222 Foundry Bank of China Ltd. Zhaqing Branch No. 37 Duanzhou 4th Road Zhaoqing 526040 China 32 Jianshe Third Road Zhaoqing 526040 China Phoebe Fu Tel: (86) 758-290-3373 Email: phoebefu@gdzpa.com 12. Scepter Inc. Trade Debt $801,602 MSC 30306 PO Box 415000 Nashville, TN 37241 111 West Port Plaza #700 St. Louis, MO 63146 Guy Riviere Tel: (914) 921-0289 Email: guyriviere8@aol.com 13. Die-Tech & Engineering Inc. Trade Debt $698,235 4620 Herman Avenue SW Wyoming, MI 49509 Bill Berry Tel: (616) 530-9030 Email: w.berry@dietech-gr.com 14. Stanton A. Moss Inc. Trade Debt $683,347 PO Box 896 Bryn Mawr, PA 19010 551 West Lancaster Avenue Suite 209 Haverford, PA 19041 Stanton Moss Tel: (215) 877-8200 Email: stanton@stantonmoss.com 15. Eastern Alloys, Inc. Trade Debt $677,378 PO Box 419834 Boston, MA 02241 Henry Hanning Drive PO Box 317 Maybrook, NY 12543 Jack Turney Tel: (918) 629-1322 Email: jturney@eazall.com 16. Hanson International Inc. Trade Debt $541,505 3500 Hollywood Road St. Joseph, MI 49085 Julie LaVanway Tel: (269) 429-5555 Email: jlavanway@hansonmold.com 17. Bishop International, Inc. Trade Debt $525,454 P.O. Box 223585 Dallas, TX 75222 224 North Corinth Street Dallas, TX 75203 Richie Vaught Tel: (214) 426-6449 Email: rvaught@bishopengine.com 18. Buhlerprince Inc. Trade Debt $503,033 670 Windrest Drive Holland, MI 49423 Amy Lorenz Tel: (616) 394-8287 Email: amy.lorenz@buhlergroup.com 19. Spray-Rite, Inc. Trade Debt $468,362 201 Durham Avenue Pocola, OK 74902 Chelsea Long Tel: (479) 648-3351 Email: clong@spray-rite.net 20. Mold Supplies, Incorporated Trade Debt $446,700 2305 Richfield Parkway Richfield, WI 53076 Roberto Martinez Tel: (915) 591-1296 Email: epmold@aol.com PARADIGM TELECOM: Unsecureds Owed $22M to Recover 1% in Plan ------------------------------------------------------------ Debtor Paradigm Telecom II, LLC, filed the First Amended Disclosure Statement for Chapter 11 Plan of Reorganization dated March 27, 2020. Class 2 Allowed Unsecured Claims are impaired. The Debtor believes the claims in the class will total approximately $22,000,000. However, many of the claims may well be objected to by the Debtor or Counsel for the Unsecured Creditors Committee, Walker & Patterson, P.C. Class 2 claimants will be paid pro rata an initial distribution of 1 percent of their allowed claims on the Effective Date. It is anticipated that the Court will appoint a disbursing agent for the Escrow Fund created pursuant to the Plan. A full-text copy of the First Amended Disclosure Statement dated March 27, 2020, is available at https://tinyurl.com/yx8ax94u from PacerMonitor at no charge. Counsel for the Debtor: FUQUA & ASSOCIATES, PC Richard L. Fuqua 8558 Katy Freeway, Suite 119 Houston, Texas 77024 Tel: (713) 960-0277 Fax: (713) 960-1064 About Paradigm Telecom II LLC Paradigm Telecom II, LLC -- http://www.paradigmtelecom.com/-- is a provider of communications infrastructure to carrier providers. Its services include ethernet, dark fiber, DAS and small cell, fiber to the tower, and international voice and data. It was founded in 2001 and is headquartered in Houston, Texas. Paradigm Telecom II sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 18-34112) on July 27, 2018. In the petition signed by Brian Beers, president, the Debtor was estimated to have assets of less than $500,000 and liabilities of $1 million to $10 million. Judge Jeff Bohm oversees the case. Richard L. Fuqua, II, Esq., at Fuqua & Associates, PC, serves as the Debtor's bankruptcy counsel. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors on Sept. 18, 2018. The committee tapped Walker & Patterson, P.C. as its legal counsel. PENNSYLVANIA REAL: KPMG LLP Raises Going Concern Doubt ------------------------------------------------------ Pennsylvania Real Estate Investment Trust filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss (attributable to PREIT common shareholders) of $38,247,000 on $336,792,000 of total revenue for the year ended Dec. 31, 2019, compared to a net loss (attributable to PREIT common shareholders) of $137,704,000 on $362,400,000 of total revenue for the year ended in 2018. The audit report of KPMG LLP states that in the event the Company does not meet certain covenants applicable under its credit agreements during 2020, the Company's liquidity would not be sufficient to meet its obligations within one year of the date of issuance of the financial statements, which raises substantial doubt about the Company’s ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $2,351,267,000, total liabilities of $1,923,842,000, and a total equity of $427,425,000. A copy of the Form 10-K is available at: https://is.gd/bDbH23 About Pennsylvania Real Estate Investment Trust Pennsylvania Real Estate Investment Trust is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely-populated eastern U.S. with concentrations in the mid-Atlantic's top MSAs. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. PG&E CORP: Court Approves Disclosure Statement Supplement --------------------------------------------------------- Judge Dennis Montali has ordered that the proposed Disclosure Statement Supplement, as modified as set forth on the record of the Conference filed by PG&E Corporation and Pacific Gas and Electric Company, Debtors, is approved. The following information relates to certain events that occurred after the approval of the disclosure statement and supplements the disclosure statement of PG&E Corporation and Pacific Gas and Electric Company, Debtors. All creditors and holders of equity interests are encouraged to read this supplement, the disclosure statement and the plan in their entirety. Governor's Letter Regarding Compliance with Wildfire Legislation and Recent Motion Filed with the Bankruptcy Court. As set forth in Section III.B of the Disclosure Statement, on Dec. 13, 2019, Governor Gavin Newsom (the "Governor" and his office, the "Governor's Office") sent a letter (the "Dec. 13 Letter") to the Utility's management stating, among other things, that the Governor believed that the draft Debtors' and Shareholder Proponents' Joint Chapter 11 Plan of Reorganization shared on Dec. 6, 2019 with the Governor's Office (the "December 6 Plan") did not comply with AB 1054. The Governor's Dec. 13 Letter set forth a number of governance and management requirements that the Governor believed were necessary to comply with AB 1054. The Governor's Dec. 13 Letter further stated that the capital structure set forth in the Dec. 6 Plan would contribute to a reorganized company that, in the Governor's view, would not be positioned to provide safe, reliable, and affordable electric service. The Disclosure Statement further states that the Debtors and the Governor's Office have been in continuing discussions as to these matters. A summary of the terms and provisions of the Case Resolution Contingency Process is set forth in detail in the CRCP Motion, which can be viewed for free at the website maintained by the Debtors in the Chapter 11 Cases at https://restructuring.primeclerk.com/pge/ (the "Case Website"). The Other Commitments: In connection with and subject to the approval of the Case Resolution Contingency Process, the Governor's Office's support for the Plan and the Securitization, and the occurrence of the Effective Date, the Debtors have agreed to certain other matters as follows: a) Dividend Restriction. Reorganized HoldCo (Reorganized PG&E Corporation) will not pay common dividends until it has recognized $6.2 billion in non-GAAP Core Earnings following the Plan Effective Date. That amount would be deployed as capital investment or reduction in debt. "Non-GAAP Core Earnings" means GAAP earnings adjusted for those non-core items identified in the Disclosure Statement; b) Fire Victim Claims Costs. The Reorganized Utility (Reorganized Pacific Gas and Electric Company) intends to file an application with the CPUC for approval of a single post-emergence 30-year securitization transaction of approximately $7.5 billion (the "Securitization"). If the CPUC does not grant approval of the Securitization, the Reorganized Utility will not seek to recover in rates any portion of the amounts paid in respect of "Fire Claims" under the Plan; and c) Net Operating Losses. The Debtors' payment of wildfire claims under the Plan are expected to result in substantial net operating losses ("NOLs"). Consistent with the Debtors' financial projections provided in the Disclosure Statement, the Reorganized Utility will use cash flows generated by application of these NOLs in future years in connection with the Securitization. If this Securitization is not approved or consummated, the Reorganized Utility will use these cash flows to amortize the $6 billion in Temporary Utility Debt that is part of the Debtors’ exit financing under the Plan. Butte County District Attorney Investigation and potential Claims: As set forth in Section II.C.2 of the Disclosure Statement, the Butte County District Attorney's Office (the "Butte County DA") and the California Attorney General's Office opened a criminal investigation of the Nov. 8, 2018 Camp fire (the "Camp Fire"). The Disclosure Statement further discloses that potential criminal charges that could be filed against the Debtors and current or former employees with respect to the Camp Fire include recklessly causing a fire, manslaughter, and related environmental charges. The Debtors could be subject to material fines, penalties, or restitution orders if it is determined that the Debtors failed to comply with applicable laws and regulations in connection with the Camp Fire, as well as non-monetary remedies such as oversight requirements. If the Debtors were found criminally liable, the Debtors could also be liable for claims of restitution on behalf of certain Fire Victims under the California Penal Code. The Debtors believe that any claims for such restitution would constitute Fire Victim Claims and under the Plan would be satisfied solely out of the Fire Victim Trust. A full-text copy of the Supplement to Disclosure Statement dated March 25, 2020, is available at https://tinyurl.com/txabp3g from PacerMonitor.com at no charge. Attorneys for the Debtors: Stephen Karotkin Ray C. Schrock, P.C. Jessica Liou Matthew Goren WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153-0119 Tel: 212 310 8000 Fax: 212 310 8007 E-mail: stephen.karotkin@weil.com ray.schrock@weil.com jessica.liou@weil.com matthew.goren@weil.com - and - Tobias S. Keller Jane Kim KELLER BENVENUTTI KIM LLP 650 California Street, Suite 1900 San Francisco, CA 94108 Tel: 415 496 6723 Fax: 650 636 9251 E-mail: tkeller@kbkllp.com jkim@kbkllp.com Attorneys for Shareholder Proponents: Bruce S. Bennett Joshua M. Mester James O. Johnston JONES DAY 555 South Flower Street Fiftieth Floor Los Angeles, CA 90071-2300 Tel: 213 489 3939 Fax: 213 243 2539 E-mail: bbennett@jonesday.com jmester@jonesday.com jjohnston@jonesday.com 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. 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, is special regulatory counsel. Munger Tolles & Olson LLP, is 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. PG&E CORP: Hires Covington & Burling as Special Insurance Counsel ----------------------------------------------------------------- PG&E Corporation, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the Northern District of California to employ Covington & Burling LLP as their special counsel. David B. Goodwin, Esq., Esq., a partner at Covington, served for more than a decade as insurance coverage counsel for PG&E. The Company recently retained Mr. Goodwin and his current law firm, Covington & Burling LLP, to assist with insurance issues arising out of the Debtor's director and officer liability insurance program. While Covington was approved and has been serving as an Ordinary Course Professional in the Chapter 11 Cases -- particularly in connection with attempts to settle the securities class actions and the derivative actions -- recent developments have compelled Covington to dedicate significantly more time to its representation of the Debtors, thus increasing the costs of the representation beyond the maximum allowable under the OCP Order. The Debtors seek to engage Covington as special counsel to provide professional services in connection with the insurance coverage matters discussed above. This includes the analysis of multiple D&O insurance programs; communications with the 13 D&O insurers in the 2017-2018 program and the 17 D&O insurers in the 2018-2020 program; attending mediations and otherwise assisting the Debtor's counsel in attempting to settle the securities and derivative actions; and assisting PG&E in connection with the analysis and renewal of its D&O insurance program. Covington will also provide all other necessary legal services for the Debtors, as related to the above matters, in connection with the above-captioned Chapter 11 Cases, including fact investigation, legal researching, briefing, argument, discovery, reorganization, plan and disclosure statement matters, appearance and participation in hearings, and communications and meetings with parties in interest. Covington has not yet been compensated pursuant to the OCP Order for its post-petition fees and expenses. Currently, Covington is owed approximately $3,008.50 on account of its post-petition services as an ordinary course professional for the Debtors for the month of December 2019 and $138,425 for the month of January 2020. Covington additionally incurred $141,816.11 in fees and expenses for the month of February 2020 (unbilled). Mr. Goodwin 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. Covington can be reached through: David B. Goodwin, Esq. Covington & Burling LLP Salesforce Tower 415 Mission Street, Suite 5400 San Francisco, CA 94105-2533 Phone: +1 415 591 6000 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. PG&E CORP: Seeks to Hire Steptoe & Johnson as Special Counsel ------------------------------------------------------------- PG&E Corporation, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the Northern District of California to employ Steptoe & Johnson LLP as their special counsel. Steptoe & Johnson LLP currently represents PG&E in the pre-petition Ghost Ship fire litigation pending in state court; pre-petition litigation pending in federal court arising out of a May 5, 2017 power outage at a refinery owned Valero Refining Company – California; and several other litigation and pre-litigation matters. Steptoe was compensated pursuant to the OCP Order. Steptoe has been paid in the amount of $140,809.56 on account of its post-petition fees and expenses. Currently, Steptoe is owed approximately $606,913.63 in fees and expenses on account of its post-petition services as an ordinary course professional for the Debtors for the months of October 2019 through January 2020. Laurie Edelstein, Esq., a partner at Steptoe, 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. The firm can be reached through: Laurie Edelstein, Esq. STEPTOE & JOHNSON LLP One Market Plaza Spear Tower, Suite 3900 San Francisco, CA 94105 Tel: +1 415 365 6700 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. PGX HOLDINGS: Moody's Cuts CFR to Ca on Missed Payments ------------------------------------------------------- Moody's Investors Service downgrades PGX Holdings, Inc.'s Corporate Family Rating to Ca from Caa2 and its Probability of Default Rating to D-PD from Caa2-PD. Moody's also downgraded the company's first lien senior secured term loan due 2020 to Caa3 from Caa1 and its second lien senior secured term loan due 2021 to C from Caa3. The outlook remains negative. The downgrade of the PDR to D-PD follows Progrexion's decision to enter into a forbearance agreement with its first and second lien lenders as well as not to pay the March 31, 2020 principal and interest payments due on the first lien term loan and the interest due on the second lien debt. Moody's definition of default captures all missed interest or principal payments according to the original terms of a contractual obligation regardless of the existence of a forbearance agreement. The lenders agreed to forbear until the earlier of April 30, 2020 and certain events of termination. Downgrades: Issuer: PGX Holdings, Inc. Corporate Family Rating, Downgraded to Ca from Caa2 Probability of Default Rating, Downgraded to D-PD from Caa2-PD Senior Secured 2nd lien Term Loan, Downgraded to C (LGD5) from Caa3 (LGD5) Senior Secured 1st lien Term Loan B, Downgraded to Caa3 (LGD3) from Caa1 (LGD3) Outlook Actions: Issuer: PGX Holdings, Inc. Outlook, Remains Negative RATINGS RATIONALE The Ca CFR reflects average recovery prospects for the first lien term loan in the event of bankruptcy or debt restructuring. The company is engaged in discussion with its lenders regarding potential transactions to improve liquidity and capital structure, which Moody's believes is unsustainable at current weak levels of operating performance. The rating also reflects Moody's expectations for weak growth prospects in 2020 and deteriorating liquidity, including approaching debt maturities. The company is projected to have $25 million of balance sheet cash as of March 31, 2020 but does not have a revolving credit facility. Progrexion's first lien term loan ($319 million) matures in September 2020 and its second lien term loan ($110 million) matures in September 2021. The company's financial policy is a key governance consideration under Moody's ESG framework. The negative outlook reflects the uncertainty as to whether the company's negotiations with its lenders will prove to be successful in alleviating the liquidity issues. The negative outlook also captures possibility for lower debt recoveries. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: Progrexion's ratings could be downgraded if Moody's expects weaker recovery prospects. Progrexion's ratings could be upgraded if the company establishes a tenable capital structure and improves liquidity. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. PHOENIX PRODUCTS: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------------ The Office of the U.S. Trustee on April 6 appointed a committee to represent unsecured creditors in the Chapter 11 case of Phoenix Products Inc. The committee members are: (1) Metals USA Carbon Flat Rolled, Inc. c/o Brian Schmidt, Regional Credit Manager Tel: (330) 264-8416 Ext. 203 E-mail: bschmidt@metalsusa.com (2) Blocksom & Co. c/o Greg Wilkerson, President and CEO 110 Menke Road Michigan City, IN 46360 Tel: (219) 879-4541 Ext. 321 E-mail: greg.wilkerson@fiberbond.net (3) Bruce M. Grassano 95178 Woodberry Lane Fernandina Beach, FL 32024 E-mail: bruce.grassano@comcast.net (4) CIT c/o Mike Catey, Vice President 2351 Production Court Richmond, IN 47374 Tel: (765) 220-2568 E-mail: mikec@c-i-t.com (5) Thomas Bethmann 1977 Seminole Rd. Atlantic Beach, FL 32233 Tel: (904) 955-1303 E-mail: tsbethmann@gmail.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 Phoenix Products Phoenix Products, Inc. -- https://acstuff.com/ -- provides components and Technical Data Packages (TDP) for the U.S. Government. It has significant, relevant experience in the machining, fabrication, and assembly of Helicopter Main Rotor Blade Shipping and Storage Containers (SSCs), Engine and Propulsion Systems Containers, Aircraft Flight Worthy Components, and Ground Support Equipment (GSE), including Missile SSCs. Its customer base includes the Department of Defense, Defense Logistics Agency, Lockheed Martin, Sikorsky, Rolls-Royce, and other OEMs. Phoenix Products sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No. 20-60370) on March 18, 2020. At the time of the filing, the Debtor was estimated to have assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. Judge Gregory R. Schaaf oversees the case. Delcotto Law Group, PLLC is Debtor's legal counsel. PURE BIOSCIENCE: Needs More Funds to Continue as a Going Concern ---------------------------------------------------------------- Pure Bioscience, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $666,000 on $349,000 of net product sales for the three months ended Jan. 31, 2020, compared to a net loss of $1,296,000 on $394,000 of net product sales for the same period in 2019. At Jan. 31, 2020, the Company had total assets of $1,468,000, total liabilities of $692,000, and $776,000 in total stockholders' equity. The Company said, "During the six months ended January 31, 2020, we incurred a net loss of $1,791,000 and used cash in operations of $938,000. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date of the financial statements being issued. Our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement the Company's business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. In addition, our independent registered public accounting firm, in its report on the Company's July 31, 2019 financial statements, has raised substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at: https://is.gd/w5Mlrb El Cajon, Calif.-based Pure Bioscience, Inc., manufactures and sells silver dihydrogen SDC-based disinfecting and sanitizing products, which are registered by the Environmental Protection Agency, or EPA, to distributors and end users. The Company also manufactures and sells various SDC-based formulations to manufacturers for use as a raw material in the production of personal care and other products. Silver dihydrogen citrate, or SDC, is a broad-spectrum, non-toxic antimicrobial. QBS PARENT: Moody's Cuts CFR to Caa1, Outlook Stable ---------------------------------------------------- Moody's Investors Service downgraded QBS Parent, Inc.'s corporate family rating to Caa1, from B3, and its probability of default rating to Caa1-PD, from B3-PD. Moody's also downgraded the oil and gas software provider's senior secured first-lien debt, including a $35 million revolving credit facility and $335 million term loan, to B3, from B2. The outlook is stable. Downgrades: Issuer: QBS Parent, Inc. Corporate Family Rating, downgraded to Caa1, from B3 Probability of Default Rating, downgraded to Caa1-PD, from B3-PD $35 million senior secured, first-lien revolving credit facility, expiring 2023, downgraded to B3 (LGD3), from B2 (LGD3) $355 million senior secured, first-lien term loan, maturing 2025, downgraded to B3 (LGD3), from B2 (LGD3) Outlook is stable. RATINGS RATIONALE Quorum's ratings downgrade reflects anticipated weaker operating performance and higher expected leverage in 2020 due to the sharply more negative O&G operating environment and from the effects of the COVID-19 pandemic. Moody's expects a reversal in 2020 of Quorum's strong revenue growth rates of recent years, to a revenue decline this year, as well as margin pressure. As a result, Moody's-adjusted debt-to-EBITDA leverage will rise to roughly 8.0 or 9.0 times, after having declined to below 6.5 times at year-end 2019. (Moody's adjusted debt includes a $9 million capitalized lease adjustment, as well as an assumed full drawing under the company's $35 million revolver.) Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, and energy 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 Quorum'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 company's aggressive financial strategy, as evidenced by high leverage and an active acquisition program, is deemed a governance risk. Recent acquisitions have depleted Quorum's cash position as it enters a highly uncertain operating environment. Moody's considers Quorum's liquidity adequate, by virtue of cash on hand and a full drawdown of its $35 million revolving credit facility. However, Moody's believes that Quorum may face difficulty maintaining its revenue base, particularly from SMBs, in an energy operating environment that could remain depressed through 2020. As a result, Moody's believes the company may have difficulty generating positive free cash flow this year. Quorum's rating is supported by the transformative Coastal Flow acquisition in early 2019. Coastal Flow boosts Quorum's revenue by at least 40%, changing the company's revenue mix as it now derives incremental revenue from operationally focused services in the midstream segment of the energy process chain. As a result of this and other recent acquisitions, Quorum is moving beyond largely upstream ERP services, and into midstream operations that are less exposed to energy commodity prices than the upstream segment. Coastal Flow's integration will provide some insulation from energy market volatility that is once again buffeting the industry. Additionally, Quorum's companywide transition to a more recurring, subscription-based revenue model provides an ancillary buffer to commodity volatility. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: Moody's could downgrade the ratings if revenues and EBITDA in 2020 fall further than expected, reflective, possibly, of longer and deeper than anticipated disruption to social and economic activity due to the COVID-19 epidemic. The ratings could also be downgraded if Moody's expects that liquidity will be insufficient to sustain the company through the downturn, or if compliance with financial covenants appears challenged. Moody's could upgrade Quorum's ratings if the company can sustain its revenue base, if Moody's expects debt-to-EBITDA will remain below 7.5 times, and if free cash flow is at least breakeven. Headquartered in Houston, TX, Quorum is a software development and consulting company that designs, develops, implements, and supports ERP software solutions to companies in the North American energy industry. The company is owned by affiliates of Thoma Bravo Partners as the result of a late-2018 LBO. The principal methodology used in these ratings was Software Industry published in August 2018. RAILWORKS CORP: Asbestos Claims Too Late, Judge Says ---------------------------------------------------- Bankruptcy Judge Michelle M. Harner granted the Plaintiff's motion for summary judgment and denied the Defendants' motion for summary judgment in the case captioned L.K. Comstock & Company, Inc., Plaintiff, v. Irene Reibie, et al., Defendants, Adversary No. 19-00199-MMH (Bankr. D. Md.). L.K. Comstock & Company, Inc., RailWorks Corporation (the parent company), and 20 of their affiliates filed for protection under chapter 11 of the Code on Sept. 20, 2001. The Debtors continued to operate their respective businesses as debtors and debtors-in-possession during the pendency of the chapter 11 cases. The Debtors established a bar date and a supplemental bar date for the filing of proofs of claim by all holders of claims against or interests in any of the Debtors. The Debtors successfully reorganized its business under chapter 11 of the U.S. Bankruptcy Code. Through that process, it worked to identify all parties potentially holding claims against it. The Debtors then sought to address those claims under the terms of its confirmed plan of reorganization and the discharge provisions of the Code. The Order confirming the Plaintiff's plan of reorganization included standard language implementing the discharge provisions of sections 524 and 1141 of the Code, thereby discharging the Plaintiff's liability on prepetition claims (except for the Plaintiff's obligations under the plan). The Plan became effective on Nov. 13, 2002. In 2018 and 2019, approximately 16 years after the Plan Effective Date, individuals who allegedly were exposed to asbestos at various worksites and, in some instances, those individuals' spouse filed separate litigation against the Debtors and others in Pennsylvania state court for injuries allegedly sustained from exposure to asbestos between 8 and 27 years prior to the filing of the bankruptcy case. Ronald Reibie worked as an electrician for, among others, a predecessor of the Plaintiff from 1954 to 1974. Daniel Harrity was employed by various employers from 1955 to 1983. Robert Sage was employed by various employers from 1963 to 1993. Each of these individuals (or their representatives) allege that they were exposed to, and did inhale, asbestos dust and asbestos fibers during their employment, which caused them harm. The Debtors deny being the cause of the injuries. The Debtors subsequently moved to reopen its chapter 11 case and filed this adversary proceeding. The Bankruptcy Court then entered an Order staying the state court litigation solely as to the Debtors. According to Judge Harner, it is easy to understand the claimants' desire to hold parties accountable, as well as their firmness in their factual and legal positions. Unfortunately, the law does not provide a remedy for every wrong, and Congress has made some very difficult (but necessary) policy decisions in the context of parties' rights under the Code. The relevant policy and applicable law preclude the claimants' pursuit of their alleged claims against the Debtors. No aspect of this adversary proceeding, however, affects the claimants' rights and remedies against any party other than the Debtors. Based on the undisputed material facts, the Bankruptcy Court concludes that the claimants' alleged claims against the Debtors were prepetition "claims" under section 101 of the Bankruptcy Code. The Court further determines that, despite the Debtors' reasonable due diligence during its claims identification process, the claimants were unknown creditors at the time of the chapter 11 case. Consequently, the publication notice of the claims bar date in the chapter 11 case, which was approved by the Court, satisfied the notice and due process requirements of the Code, the U.S. Constitution, and the Supreme Court's decision in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950). The Court says this result is supported by the Debtors' actions in its bankruptcy case, what was reasonable and practicable for it to undertake at that time, and the delicate balancing tests underlying both the Code and the Supreme Court's approach to notice and due process in Mullane. The Bankruptcy Court notes that it does not render this decision lightly. The Court says it fully appreciates that the result likely seems harsh and unfair to the claimants. The Court cannot, however, analyze the dispute solely through the claimants' lens and must consider all relevant facts, circumstances, and applicable law. Both the chapter 11 claims process and constitutional due process considerations are meant to provide notice and an opportunity to be heard to all affected parties with "due regard for the practicalities and peculiarities" of the case at hand. When, as here, a chapter 11 debtor has done all that it could reasonably do to identify and provide notice to potential creditors, the debtor has satisfied its obligations and is entitled to the finality and fresh start offered by the Code, the Court explains. A copy of the Memorandum Opinion dated March 2, 2020 is available at https://bit.ly/2wGri9f from Leagle.com. L.K. Comstock & Company, Inc., Plaintiff, represented by Dennis J. Shaffer -- dshaffer@wtplaw.com --Whiteford, Taylor & Preston L.L.P. & J. Daniel Vorsteg -- jdvorsteg@wtplaw.com -- Whiteford Taylor & Preston. Irene Reibie, Irene Reibie, Executrix for Estate of Ronald Reibie, Deceased, Judith Sage & Daniel R. Harrity, Defendants, represented by Jason Timothy Shipp, Goldberg, Persky & White, P.C. Robert J. Sage, Defendant, pro se. About RailWorks Corp. Founded in 1998, RailWorks Corporation -- http://www.railworks.com -- provides reliable construction, maintenance, and material solutions for the rail and rail-transit industries. Baltimore-based RailWorks Corp. and 22 of its affiliates filed voluntary Chapter 11 petitions (Bankr. D. Md. Case Nos. 01-64463 through 01-64485) on Sept. 21, 2001, Judge E. Stephen Derby presiding. Whiteford, Taylor & Preston L.L.P., served as bankruptcy counsel. In November 2002, RailWorks emerged from bankruptcy as a privately held company. It received approval of its reorganization plan effective Oct. 1, 2002. Pursuant to the confirmed plan for reorganization, a litigation trust was created, and it included claims for recovery of avoidable transfers. RICKEY CONRADT: Seeks to Hire James S. Wilkins as Attorney ---------------------------------------------------------- Rickey Conradt, Inc. seeks authority from the US Bankruptcy Court for the Western District of Texas to employ James S. Wilkin, P.C., as its counsel. The Debtor requires James S. Wilkins to: a. give the Debtor legal advice with respect to its power and duties as Debtor-in-possession in the continued operation of its personal management of its property; b. take necessary action to collect property of the estate and file suits to recover the same; c. represent the Debtor-in-possession in connection with the formulation and implementation of a Plan of Reorganization and all matters incident thereto; d. prepare on behalf of the Debtor-in-Possession necessary applications, answers, orders, reports and other legal papers; e. object to disputed claims; and f. perform all other legal services for the Debtor as Debtor-in-possession. James S. Wilkins will be paid $375 per hour to be applied against a retainer of $10,000 for pre-petition and post-petition services. costs and filing fees. James S. Wilkins, Esq., assured the Court that the he does not represent any interest adverse to the Debtor and its estates. James S. Wilkins may be reached at: James S. Wilkin, Esq. James S. Wilkins, P.C. 711 Navarro St Ste 711 San Antonio, TX 78205-1889 Tel: 210-271-9212 About Rickey Conradt, Inc. Rickey Conradt, Inc. is a boutique public insurance adjusting company specializing in commercial, multi-family, and industrial property storm, fire, and flood damages insurance claims. Rickey Conradt, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50612) on March 18, 2020, listing under $1 million in both assets and liabilities. James S. Wilkin, Esq. at JAMES S. WILKINS, P.C., represents the Debtor as counsel. RIVERA BUSINESS: Court Approves Disclosure Statement ---------------------------------------------------- The Court on Feb. 11, 2020, convened a hearing on the First Amended Disclosure Statement regarding the Plan of Reorganization filed by debtor Rivera Business Solutions, Inc., doing business as Rivera Construction. The Court ruled that the Debtor has complied with the disclosure solicitation requirements of Section 1125 and 1126 of the Bankruptcy Code. The judge ruled that the Disclosure Statement filed by the Debtor is approved on a final basis. Bankruptcy counsel to the Debtor: M. Jermaine Watson WATSON & ASSOCIATES, P.C. 325 N. Saint Paul Street, Suite 2200 Dallas, Texas 75201 Telephone: (214) 965-8240 Facsimile: (214) 999-1384 E-mail: jwatson@mjwatsonlaw.com About Rivera Business Solutions Rivera Business Solutions, Inc., d/b/a Rivera Construction, is a privately held company in Garland, Texas that provides construction and remodeling services. It sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 19-32652) on Aug. 7, 2019, in Dallas, Texas. In the petition signed by Oscar Rivera, president, the Debtor was estimated to have assets at $500,000 to $1 million, and liabilities at $1 million to $10 million. Judge Harlin DeWayne Hale is assigned the Debtor's case. M.J. Watson & Associates, P.C., represents the Debtor. ROCHESTER DRUG: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The Office of the U.S. Trustee on April 7, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 case of Rochester Drug Cooperative, Inc. The committee members are: (1) Dena and Anthony Nardolillo 19 Long Pond Rd. Coventry, Rhode Island 02816 Tel: (401) 572-2687 E-mail: nardolillodena@gmail.com (2) Novo Nordisk Attn: Christine Ann Lozier 800 Scudders Mill Rd Plainsboro Township, NJ 08536 Tel: (609) 786-5181 E-mail: ctlz@novonordisk.com (3) Matt Pendley 2105 Nelish Court Independence, KY 41051 Tel: (513) 204-1242 Fax: (513) 204-1254 E-mail: m.pendley@prasco.com (4) Dr. Eric Hestrup 630-788-7990 E-mail: ehestrup@gmail.com (5) Rising Pharma Holdings Attn: Dipesh Patel 2 Tower Center Boulevard, Suite 1401 East Brunswick, NJ 08816 Tel: (908) 296-0998 E-mail: dpatel@risingpharma.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 Rochester Drug Cooperative Rochester Drug Cooperative, Inc., is an independently owned New York cooperative corporation formed in 1905 and incorporated in 1948 with a principal office and place of business located at 50 Jet View Drive, Rochester, New York 14624. Its principal business is to warehouse, merchandise, and then distribute, on a cooperative basis, drugs, pharmaceutical supplies, medical equipment and other merchandise commonly sold in drug stores, pharmacies, health and beauty stores, and durable medical equipment business. It is a wholesale regional drug cooperative that operates as both a buying cooperative and a traditional drug distribution company created for the purpose of helping independent pharmacies compete in the current healthcare environment. Rochester Drug Cooperative sought Chapter 11 protection (Bankr. W.D.N.Y. Case No. 20-20230) on March 12, 2020. The Debtor was estimated to have $50 million to $100 million in assets and $100 million to $500 million in liabilities. The Hon. Paul R. Warren is the case judge. The Debtor tapped Bond, Schoeneck & King PLLC, led by Stephen A. Donato, as counsel. Epiq Corporate Restructuring, LLC, is the claims and noticing agent. ROVIG MINERALS: May 5 Hearing on Disclosure Statement ----------------------------------------------------- Judge JOHN W. KOLWE has ordered that the hearing to consider the approval of the disclosure statement filed by Rovig Minerals, Inc., Rovig Minerals, LLC of MT will be held at 800 Lafayette Street, 3rd Floor, Courtroom Five, Lafayette, Louisiana on May 5, 2020 at 10:00 a.m. April 28, 2020 is fixed as the last day for filing and serving written objections to the disclosure statement. About Rovig Minerals Rovig Minerals, Inc. -- http://www.rovigminerals.com/-- was founded in 1980 in Billings, Mont., to pursue exploration and development of mineral, oil and gas projects around the world. On Sept. 25, 2019, creditors FDF Energy Services LLC, Tri-City Services Inc., Oil Country Tubular Corp., DH Rock Bit Inc., Aldonsa Inc. filed an involuntary Chapter 11 petition against the Debtor (Bankr. W.D. La. Case No. 19-51133). The creditors are represented by Michael A. Crawford, Esq., at Taylor, Porter, Brooks & Phillips. On Oct. 18, 2019, the Debtor and the Petitioning Creditors signed a joint stipulation to convert the involuntary to a voluntary chapter 11 and for entry of a consent order for relief pursuant to 11 U.S.C. Sec. 303(h)(1). The case is assigned to Judge John W. Kolwe. The Debtor tapped H. Kent Aguillard, Esq., and Caleb Aguillard, Esq., as its bankruptcy attorneys. RV RENTALS: Seeks to Hire Marc S. Stern as Counsel -------------------------------------------------- RV Rentals Seattle, Inc., filed a modified application seeking authority from the U.S. Bankruptcy Court for the Western District of Washington to employ the Law Office of Marc S. Stern, as its counsel. RV Rentals requires Marc S. Stern to represent and provide legal services to the Debtor in the bankruptcy case. Marc S. Stern, Esq.'s current hourly rate is $400. The hourly rate for his paralegal, Tanya Bainter, is $125. A retainer of $4,300 was paid to Stern. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Marc S. Stern, a partner of the Law Office of Marc S. Stern, 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. The Firm can be reached at: Marc S. Stern, Esq. LAW OFFICE OF MARC S. STERN 1825 NW 65 th Street Seattle, WA 98117 Tel: (206) 448-7996 E-mail: marc@hutzbah.com About RV Rentals Seattle RV Rentals Seattle, Inc., filed a Chapter 11 bankruptcy petition (Bankr. W.D. Wash. Case No. 20-10759) on March 9, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Marc S. Stern, Esq. SAMSONITE INT'L: Moody's Alters Outlook on Ba2 CFR to Negative -------------------------------------------------------------- Moody's Investors Service revised Samsonite International, S.A.'s outlook to negative from stable. Moody's also affirmed the company's rating including the Ba2 Corporate Family Rating. The Speculative Grade Liquidity rating was downgraded to SGL-2 from SGL-1. Other rating actions affecting the company are listed below. The negative outlook reflects Moody's expectation that reduced travel related to the coronavirus will weaken demand for Samsonite's products leading to lower revenue and earnings. The coronavirus situation continues to evolve, and a high degree of uncertainty remains regarding the degree and pace at which travel related consumer spending will recover once travel restrictions are eased. As a result, the company's liquidity and leverage could deteriorate quickly over the next few months. Samsonite is a designer, manufacturer and distributor of travel luggage, travel accessories, and bags worldwide. As a result, the company is inherently vulnerable to the discretionary nature of its products that are exposed to cyclical consumer spending and travel fluctuations. In terms of consolidated net sales, approximately 60% is categorized by the company as travel related. The remainder is categorized as non-travel, but vulnerable to changes in business and consumer spending. The affirmation of Samsonite's Ba2 CFR acknowledges the company's substantial cash resources that support the company's liquidity to manage through a period of earnings weakness. On March 16, the company refinanced the revolving credit and term loan A portion of its credit facility (the term B portion was not affected). The refinancing resulted in a $200 million increase in revolver capacity, to $850 million from $650 million. Prior to the refinancing, the $650 revolver was undrawn. Samsonite drew down its new revolver to ensure access, given current uncertainties and potential volatility in financial markets. This combined with current cash and cash equivalents provides the company with over $1.2 billion of liquidity. Pro forma for the revolver draw, net debt/EBITDA is low, at about 3.0x and a full turn below the 4.0x level that Moody's indicated could lead to a downgrade. The refinancing also supports the Ba2 CFR in that it extended the maturity of the revolver and term loan approximately 2 years to 2025, lowered pricing, and reset the principal amortization schedule, while maintaining existing covenants. Samsonite's substantial cash sources, low leverage, and increased financial flexibility afforded by the refinancing provide a substantial cushion to absorb a drop in EBITDA related to the meaningful earnings decline over the next few months expected from efforts to contain the coronavirus and the potential for a slow recovery once travel begins to resume. Downgrades: Issuer: Samsonite International S.A. Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Affirmations: Issuer: Samsonite Finco S.ar.l Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5) Issuer: Samsonite International S.A. Probability of Default Rating, Affirmed Ba2-PD Corporate Family Rating, Affirmed Ba2 Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD3) Issuer: Samsonite IP Holdings S.ar.l Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD3) Outlook Actions: Issuer: Samsonite Finco S.ar.l Outlook, Changed to Negative from Stable Issuer: Samsonite International S.A. Outlook, Changed to Negative from Stable Issuer: Samsonite IP Holdings S.ar.l Outlook, Changed to Negative from Stable RATINGS RATIONALE Samsonite's Ba2 CFR reflects expected earnings pressure related to the coronavirus as well as the company's inherent vulnerability to the discretionary nature of its product that are exposed to cyclical consumer spending and travel fluctuations. Tariffs imposed in June 2019 also increased product costs and was incremental to the 10% tariff that was enacted in September 2018 on travel goods imported by Samsonite's US business from China. Samsonite's credit profile benefits from its solid credit metrics heading into the downturn with debt to EBITDA around 3.0x. Positive credit consideration includes Samsonite's good brand strength and market position and its strong geographic diversification. Other favorable credit factors include Samsonite's characteristically high historic gross margins, at between 52.6% and 56.5% during 2015-2019 period. The company mostly sells exclusively its own luggage and products (both Samsonite and Tumi) in its retail stores; Samsonite and Tumi are also sold through other retailers. This distinguishes Samsonite from other luggage retailers that sell various brands. Samsonite also distributes its products through third party retail and online channels. By offering retail as well as wholesale, Samsonite can mitigate some of the inventory risks of other retailers. This gives Samsonite stronger gross margins than the more traditional luggage manufacturing companies. Samsonite has prudent financial policies with measured shareholder returns and solid controls over its related party transactions. 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. Travel related sector's will be one of the sectors most significantly affected by the shock given the sector's inherent sensitivity to consumer demand and sentiment. Continued exposure to travel disruptions and discretionary consumer spending, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions makes it 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 Samsonite of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The downgrade of the liquidity rating to SGL-2 from SGL-1 reflects the diminished projection cushion within the financial maintenance covenants expected as a result of the decline in earnings. Moody's nevertheless views the company's liquidity as good with a no meaningful debt maturities until 2025 aside from debt amortization of about $21 million in 2020 and $27 million in 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if Moody's anticipates that any earnings decline or liquidity deterioration will be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. Debt-to-EBITDA sustained above 4.0x could also lead to a downgrade. A ratings upgrade is unlikely given the anticipated weak operating environment and continuing uncertainty related to the coronavirus. An upgrade would require a high degree of confidence on Moody's part that the travel sector has returned to a period of long-term stability, and that Samsonite demonstrate the ability to generate positive free cash flow, maintain good liquidity, and continue to operate with a debt/EBITDA level at 3.0x or lower. Samsonite is a publicly-traded designer, manufacturer and distributor of travel luggage and bags worldwide. It offers luggage, business, computer, outdoor, and casual bags, as well as travel accessories and slim protective device cases. Major brands include Samsonite, American Tourister and Tumi. Consolidated net sales for the fiscal year-ended December 2019 was $3.64 billion. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. SANAM CONYERS: Aum Shri Plan Confirmed by Judge ----------------------------------------------- Judge Wendy L. Hagenau of the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, confirmed the Disclosure Statement and the First Amended Plan of Reorganization of Aum Shri Ganeshay Namaha, LLC, a debtor affiliate of Sanam Conyers Lodging, LLC. No objections the Disclosure Statement or to the Debtor's Plan of Reorganization were filed, and no party-in-interest appeared in opposition to either the Disclosure Statement or the Plan of Reorganization. The Court further finds that the Debtor’s Plan of Reorganization has been accepted by at least one class that is impaired and that the Plan satisfies the requirements for confirmation set forth in 11 U.S.C. Sec. 1129. As reported in the Troubled Company Reporter, debtor Aum Shri Ganeshay Namaha, LLC, d/b/a Baymont Inn Covington, an affiliate of Sanam Conyers Lodging, LLC, et al., filed a Chapter 11 Plan and a Disclosure Statement on February 14, 2020. Allowed claims of general unsecured claimants will be paid 25% of their allowed claims over a period not to exceed 60 months after the Effective Date. Distributions will be made quarterly from a distribution pool of not less than $6,000. Equity Security Interests will retain their equity interests, but will not be entitled to receive any distributions until all Plan payments to senior classes have been made. A full-text copy of Aum Shri's Disclosure Statement dated Feb. 14, 2020, is available at https://tinyurl.com/ruuxphd from PacerMonitor at no charge. A full-text copy of the order dated March 27, 2020, is available at https://tinyurl.com/utrnyzu from PacerMonitor at no charge. The Debtor is represented by: Edward F. Danowitz Danowitz Legal, P.C. 300 Galleria Parkway, Suite 960 Atlanta, Georgia 30339 About Aum Shri Ganeshay Namaha Aum Shri Ganeshay Namaha, LLC, d/b/a Baymont Inn Covington, owns and operates a single hotel having 50 guest rooms and located at 10111 Alcovy Rd. in Covington, Newton County, Georgia 30014. The Hotel offers 50 guest rooms and is located approximately 25 miles east of downtown Atlanta, approximately 35 miles from Athens, Georgia, and approximately 100 miles from Augusta, Georgia. Aum Shri operates the Hotel under a franchise agreement with Baymont Franchise Systems, Inc. and transacts business as Baymont Inn Covington. Aum Shri acquired the Hotel in March of 2017, and the purchase price was $2,650,000. In order to purchase the Hotel, Aum Shri financed $2,043,750 with Farmers and Merchants bank, a loan in the amount of $375,000 from Bhavnita Patel and $300,000 capital infusion by Sunita Patel. Aum Shri, along with related debtor entities, sought Chapter 11 protection on March 26, 2019 in the U.S. Bankruptcy Court for the Northern District of Georgia. Their cases are jointly administered In re Sanam Conyers Lodging, LLC (Bankr. Lead Case No. 19-54798). Danowitz Legal, PC, is the Debtors' counsel. Judge Wendy L. Hagenau oversees the case. SAVE MONEY: Says Plan Ready for Outcome of Hayden Dispute --------------------------------------------------------- Save Money and Retain Temperature, LLC, filed an Amended Plan of Reorganization and a Disclosure Statement. The Debtor filed chapter 11 due to a shortage of funds caused by its then-project manager, Hayden Building Maintenance Corp. The Debtor has filed an adversary proceeding against Hayden seeking recovery of various preferential and fraudulent transfers, including a transfer in the amount of $1,225,000 on April 10, 2019, just 20 days before the bankruptcy filing. Hayden has filed various motions in the case, including a pending motion to convert or to appoint a chapter 11 trustee that accuses the Debtor of various misdeeds, including that the Debtor has transferred assets to Smart Storm Solutions (owned by Nuhic), failed to disclose assets, failed to protect its primary asset (PAR Project receivable), accepted postpetition advances from Super Heat (owned by Nuhic) and made repayments without proper court approval, and failed to seek approval of postpetition settlements and related payments. From the Debtor's perspective, many of Hayden's allegations are reiterations of prior allegations that were resolved in connection with the UST's Motion or are in the process of being resolved by the Debtor's new bankruptcy counsel. And most, if not all, of the allegations are factually disputed by the Debtor. For example, Hayden repeatedly alleges that the Debtor has obtained unauthorized postpetition financing from Super Heat & Air. From the Debtor's perspective, Super Heat & Air has made advances under its subcontract agreement that are necessary to complete the work on the PAR Project. In any event, the Debtor's Plan proposes to pay the Allowed Claim of Hayden in full. The Debtor's objection to Hayden's claim and adversary proceeding are set for trial in August 2020. The parties have been ordered to mediate and have selected a mediator. Classes under the Plan are: * Class 1: The Allowed Secured Claim, if any, of Super Heat & Air/Denis Nuhic. Super Heat filed a claim in the amount of $1,821,209. Hayden has filed an objection to this claim. * Class 2: The Allowed Secured Claim of Michael Disser based on promissory notes, security agreement and UCC-1 financing statement identifying "all of Debtor's assets." Disser filed a secured claim in the amount of $1,267,000. Hayden has filed an objection to this claim. * Class 3: The Allowed Secured Claim of Nissan Motor Acceptance ("NMAC") based on a security agreement and UCC-1 financing statement identifying a Unicarriers CF50LP forklift. NMAC was scheduled with a claim in the amount of $12,000. * Class 4: All Allowed Unsecured Claims against the Debtor. Filed unsecured claims are approximately $10.2 million, including a claim filed by Hayden in the amount of $6,311,467. The schedules include other unsecured claims. The Debtor has filed an objection to the Hayden claim and an adversary proceeding against Hayden. Hayden has filed objections to unsecured claims filed by Ecowayz, Super Heat and Carol Lewis. * Class 5: All Equity Interest Holders of the Debtor. MacKinnon is the sole member of the Debtor. Payments and distributions under this Plan will be funded with future revenues of the Debtor, including projected new sales. A full-text copy of the Disclosure Statement dated March 25, 2020, is available at https://tinyurl.com/rk9mytz from PacerMonitor.com at no charge. Attorney for ther Debtor: Michael C. Markham JOHNSON, POPE, BOKOR, RUPPEL & BURNS, LLP 401 E. Jackson St., Suite 3100 Tampa, FL 33602 Tel: (813) 225-2500 E-mail: mikem@jpfirm.com About Save Money and Retain Temperature Save Money and Retain Temperature, LLC, is a general contractor, focusing on obtaining clients who have insurance claims relating to disasters like hurricanes. It finds the clients, obtains an assignment of their insurance claim, hires attorneys to prosecute claims against the insurance companies, and in the meantime commences repairs on the clients' property generally before any collection of insurance proceeds. The actual repairs are undertaken by a "project manager" and various subcontractors. Save Money and Retain Temperature sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-04090) on April 30, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. Santana, Byrd & Jaap, P.A., is the Debtor's counsel. SCRIPPS (E.W.) COMPANY: Moody's Cuts CFR to B2, Outlook Negative ---------------------------------------------------------------- Moody's Investors Service downgraded The Scripps (E.W.) Company corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD. Concurrently, Moody's downgraded the rating on the company's senior secured bank credit facility to Ba3 from Ba2 and the rating on the senior unsecured notes to Caa1 from B3. The company's speculative grade liquidity rating has been downgraded to SGL-3 from SGL-2. The outlook is negative. Downgrades: Issuer: Scripps (E.W.) Company (The) Probability of Default Rating, Downgraded to B2-PD from B1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Corporate Family Rating, Downgraded to B2 from B1 Senior Secured Bank Credit Facility, Downgraded to Ba3 (LGD2) from Ba2 (LGD2) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD5) from B3 (LGD5) Outlook Actions: Issuer: Scripps (E.W.) Company (The) Outlook, Changed to Negative from Stable RATINGS RATIONALE The downgrade of the CFR to B2 reflects the economic ripples stemming from the coronavirus pandemic which Moody's expects will have a material impact on EW Scripps' advertising revenue in the second and potentially third quarters of 2020. The company had elevated leverage exiting 2019 and Moody's now expects key credit metrics to deteriorate further and remain consistent with the B2 category for an extended period. EW Scripps' B2 CFR reflects the company's EBITDA exposure to core TV advertising demand, and Moody's expectations that under the current circumstances, EW Scripps' 2020 leverage will be above 7x (Moody's adjusted, pro-forma for 2019 acquisitions and Comcast's carriage fee signed on 1 January 2020 and calculated on a two-year average basis.) Moody's regards the current pandemic as a social risk under its ESG framework, given the substantial implications for health and safety. The response to the coronavirus outbreak with stay at home orders, rapid unemployment increases and a potential looming recession in 2020 will lead to advertising demand -- which is correlated to the economic cycle and consumer confidence -- declining materially in 2020. Given more than half of EW Scripps' revenue is directly exposed to advertising and given the high operating leverage with the majority of broadcasting costs fixed, EBITDA for 2020 could decline by as much as 30% should core ad revenue decline by 15%. The elevated leverage is also a factor of EW Scripps exiting 2019 with very high leverage on the back of two sizeable acquisitions (Cordillera and the Nexstar/Tribune divestitures) which led to the ratings being downgraded by one notch on the back of weakening credit metrics. At the time, Moody's expected that a strong 2020 performance, boosted by record political advertising and improving retransmission fees, would allow the company to more comfortably grow into its B1 rating. More positively, the current COVID-19 pandemic has led to a very strong increase in viewership of local TV as the concerned audiences have sought clear, relevant and trustworthy news from their local broadcasters. While the figures vary by market, Moody's estimates that EW Scripps' channels will have experienced at least a 30% increase in viewership during their news programs in March. EW Scripps is expected to maintain an adequate liquidity profile over the coming 18 months, as reflected by its SGL-3 rating. At the end of 2019, the company had around $33 million of cash on hand and a fully undrawn $210 million available revolving credit facility which expires in April 2022. The company has to comply with a quarterly net first lien leverage covenant of 4.5x (stepping down to 4.25x from September 2021 onward) and Moody's expects EW Scripps to be in compliance with its covenant with adequate headroom through the rest of 2020 at least. Free cash flow generation will depend on the extent of the decline in advertising revenue and at this point, Moody's estimates EW Scripps' free cash flow, absent any material cost cutting, to be neutral in 2020. The negative outlook reflects the low visibility over the current crisis' outcome both in terms of timing and of amplitude of the disruption it may cause in the context of the company's elevated leverage. The Ba3 (LGD2) rating on the company's senior secured facilities reflects their priority ranking ahead of the Caa1 (LGD5) rated senior notes. The instrument ratings reflect the probability of default of the company, as reflected in the B2-PD PDR, an average expected family recovery rate of 50% at default given the mix of secured and unsecured debt in the capital structure, and the particular instruments' rankings in the capital structure. Given the ongoing disruption caused by the coronavirus pandemic, an upgrade is unlikely in the near term. Ultimately, any ratings upgrade would require EW Scripps to return to revenue and EBITDA growth as well as a run-rate leverage of 5.25x. The ratings could be downgraded further should the company's free cash flow deteriorate further putting pressure on the company's liquidity profile or should the decline in EW Scripps' EBITDA be more pronounced and lead to concerns over the company's ability to meet its financial covenants. Headquartered in Cincinnati, OH and founded in 1878, Scripps (E.W.) Company (The) is one of the largest pure-play television broadcasters based on US household coverage of nearly 30%. Broadcasting operations consist of 59 television stations in 42 markets. The company's operations also include a collection of national journalism and content businesses, including Newsy, a national news network; podcast industry leader Stitcher and its advertising network Midroll Media; and fast-growing national broadcast networks Bounce, Grit, Escape and Laff, and Triton, the global leader in digital audio technology and measurement services. The company is publicly traded with the Scripps family controlling effectively all voting rights (93%) and an estimated 28% economic interest with remaining shares being widely held. The company reported approximately $1.42 billion in revenue in 2019. SEANERGY MARITIME: L1 Capital Global Has 9.7% Stake as of March 31 ------------------------------------------------------------------ L1 Capital Global Opportunities Master Funds Ltd. disclosed in a Schedule 13G filed with the Securities and Exchange Commission that it beneficially owns 5,300,000 shares of common stock of Seanergy Maritime Holdings Corp., which represents 9.7 percent, based on 54,589,939 shares of common stock outstanding as of March 31, 2020. A full-text copy of the regulatory filing is available for free at: https://is.gd/8FSnIM About Seanergy Maritime Greece-based Seanergy Maritime Holdings Corp. -- http://www.seanergymaritime.com/-- is an international shipping company that provides marine dry bulk transportation services through the ownership and operation of dry bulk vessels. Seanergy provides marine dry bulk transportation services through a modern fleet of 10 Capesize vessels, with a cargo-carrying capacity of approximately 1,748,581 dwt and an average fleet age of approximately 11 years. The Company is incorporated in the Marshall Islands and has executive offices in Athens, Greece and an office in Hong Kong. Seanergy Maritime reported a net loss of US$11.70 million for the Dec. 31, 2019, a net loss of US$21.06 million for the year ended Dec. 31, 2018, and a net loss of US$3.23 million for the year ended Dec. 31, 2017. As of Dec. 31, 2019, the Company had US$282.55 million in total assets, US$252.69 million in total liabilities, and US$29.86 million in total stockholders' equity. Ernst & Young (Hellas) Certified Auditors Accountants S.A., in Athens, Greece, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 5, 2020 citing that the Company has a working capital deficiency and has stated that substantial doubt exists about the Company's ability to continue as a going concern. In addition, the Company has not complied with a certain covenant of a loan agreement with a bank. SEANERGY MARITIME: Sabby Volatility, et al. Have 9.9% Stake ----------------------------------------------------------- Sabby Volatility Warrant Master Fund, Ltd., Sabby Management, LLC, and Hal Mintz disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of April 9, 2020, they beneficially own 11,700,000 common shares of Seanergy Maritime Holdings Corp., which represents 9.94 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://is.gd/iDzYm0 About Seanergy Maritime Greece-based Seanergy Maritime Holdings Corp. -- http://www.seanergymaritime.com/-- is an international shipping company that provides marine dry bulk transportation services through the ownership and operation of dry bulk vessels. Seanergy provides marine dry bulk transportation services through a modern fleet of 10 Capesize vessels, with a cargo-carrying capacity of approximately 1,748,581 dwt and an average fleet age of approximately 11 years. The Company is incorporated in the Marshall Islands and has executive offices in Athens, Greece and an office in Hong Kong. Seanergy Maritime reported a net loss of US$11.70 million for the Dec. 31, 2019, a net loss of US$21.06 million for the year ended Dec. 31, 2018, and a net loss of US$3.23 million for the year ended Dec. 31, 2017. As of Dec. 31, 2019, the Company had US$282.55 million in total assets, US$252.69 million in total liabilities, and US$29.86 million in total stockholders' equity. Ernst & Young (Hellas) Certified Auditors Accountants S.A., in Athens, Greece, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 5, 2020 citing that the Company has a working capital deficiency and has stated that substantial doubt exists about the Company's ability to continue as a going concern. In addition, the Company has not complied with a certain covenant of a loan agreement with a bank. SEMILEDS CORP: Posts $348,000 Net Income in Second Quarter ---------------------------------------------------------- SemiLEDs Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income attributable to the Company's stockholders of $348,000 on $1.54 million of net revenues for the three months ended Feb. 29, 2020 compared to a net loss attributable to the Company's stockholders of $847,000 on $1.63 million of net revenues for the three months ended Feb. 28, 2019. For the six months ended Feb. 29, 2020 the Company reported net income attributable to the Company's stockholders of $31,000 on $3.10 million of net revenues compared to a net loss attributable to the Company's stockholders of $1.82 million on $2.60 million of net revenues for the six months ended Feb. 28, 2019. As of Feb. 29, 2020 the Company had $14.89 million in total assets, $12.45 million in total liabilities, and $2.44 million in total equity. The Company suffered losses from operations of $3.7 million and $3.7 million, and net cash used in operating activities of $3.5 million and $1.2 million for the years ended Aug. 31, 2019 and 2018, respectively. Gross profit on product sales was $452,000 for the year ended Aug. 31, 2019, and gross loss was $435,000 for the year ended Aug. 31, 2018. Loss from operations for the three and six months ended Feb. 29, 2020 were $392,000 and $951,000, respectively. Net cash used in operating activities for the six months ended Feb. 29, 2020 was $194,000. The Company said these facts and conditions raise substantial doubt about its ability to continue as a going concern. However, at Feb. 29, 2020, the Company's cash and cash equivalents increased to $3.2 million mainly due to issuance of convertible notes. Management believes that it has developed a liquidity plan that, if executed successfully, should provide sufficient liquidity to meet the Company's obligations as they become due for a reasonable period of time, and allow the development of its core business. A full-text copy of the Form 10-Q is available for free at: https://is.gd/Fjdjso About SemiLEDs Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs -- http://www.semileds.com/-- develops and manufactures LED chips and LED components for general lighting applications, including street lights and commercial, industrial, system and residential lighting, along with specialty industrial applications such as ultraviolet (UV) curing, medical/cosmetic, counterfeit detection, horticulture, architectural lighting and entertainment lighting. SemiLEDs reported a net loss of US$3.56 million for the year ended Aug. 31, 2019, compared to a net loss of US$2.98 million for the year ended Aug. 31, 2018. KCCW Accountancy Corp, in Diamond Bar, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Nov. 20, 2019, citing that the Company incurred recurring losses from operations and has an accumulated deficit, which factors raise substantial doubt about its ability to continue as a going concern. SEMILEDS CORP: Reports Second Quarter Net Income of $348,000 ------------------------------------------------------------ SemiLEDs Corporation announced its financial results for the second quarter of fiscal year 2020, ended Feb. 29, 2020. Revenue for the second quarter of fiscal 2020 was $1.5 million, a 2% decrease compared to $1.6 million in the first quarter of fiscal 2020. GAAP net gain attributable to SemiLEDs stockholders for the second quarter of fiscal 2020 was $348,000, compared to a loss of $317,000 in the first quarter of fiscal 2020, or a net profit of $0.08 per diluted share, compared to a net loss of $0.09 per diluted share for the first quarter of fiscal 2020. In the second quarter, the Company shut down its manufacturing production for two weeks due to the Chinese New Year holiday. GAAP gross margin for the second quarter of fiscal 2020 was 36%, compared with gross margin for the first quarter of fiscal 2020 of 33%. Operating margin for the second quarter of fiscal 2020 was negative 26%, compared with negative 36% in the first quarter of fiscal 2020. The Company's cash and cash equivalents was $3.2 million at Feb. 29, 2020, compared to $688,000 at the end of the first quarter of fiscal 2020. The Company is unable to forecast revenue for the third quarter ending May 31, 2020 at this time given the uncertain impact of COVID-19 on the economy and the Company. About SemiLEDs Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs -- http://www.semileds.com/-- develops and manufactures LED chips and LED components for general lighting applications, including street lights and commercial, industrial, system and residential lighting, along with specialty industrial applications such as ultraviolet (UV) curing, medical/cosmetic, counterfeit detection, horticulture, architectural lighting and entertainment lighting. SemiLEDs reported a net loss of US$3.56 million for the year ended Aug. 31, 2019, compared to a net loss of US$2.98 million for the year ended Aug. 31, 2018. As of Nov. 30, 2019, the Company had $12.74 million in total assets, $11.26 million in total liabilities, and $1.48 million in total equity. KCCW Accountancy Corp, in Diamond Bar, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Nov. 20, 2019, citing that the Company incurred recurring losses from operations and has an accumulated deficit, which factors raise substantial doubt about its ability to continue as a going concern. SETEC ASTRONOMY: Seeks to Hire Eric A. Liepins as Counsel --------------------------------------------------------- Setec Astronomy, Inc. seeks authority from the United States Bankruptcy Court for the Eastern District of Texas to hire Eric A. Liepins, P.C., as its counsel. The Debtor requires Eric A. Liepins to provide legal services and represent the Debtor in the Chapter 11 proceedings. Eric A. Liepins will be paid at these hourly rates: Attorneys $275 Paralegals $30 to $50 Eric A. Liepins received from the Debtor a retainer in the amount of $15,000, plus $1,717 filing fee. Eric A. Liepins will also be reimbursed for reasonable out-of-pocket expenses incurred. Eric A. Liepins, a partner of Eric A. Liepins, 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. Eric A. Liepins can be reached at: Eric Liepins, Esq. ERIC A. LIEPINS, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 Fax: (972) 991-5788 About Setec Astronomy, Inc. Setec Astronomy, Inc. -- www.setecmidstream.com -- is a boutique EPC(M) services firm specializing in Total Project Execution. Setec Astronomy, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-60079) on Feb. 10, 2020. In the petition signed by Stephen P. Carter, president, the Debtor estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. James Andrew Carter, Esq. at LAW OFFICE OF JAMES ANDREW CARTER, PC, is the Debtor's counsel. SGR WINDDOWN: Says Candy Cube Claims Won't Impact Plan Payouts -------------------------------------------------------------- SGR Winddown, Inc., and affiliated debtors filed the Revised Disclosure Statement for Plan of Reorganization dated March 27, 2020. The Revised Disclosure Statement provides that the Candy Cube Holdings LLC has asserted that it was involved in the Debtors' restructuring process both before the Petition Date and during the Chapter 11 cases. Further, Candy Cube asserts that prior to the Petition Date, worked with SFCC Loan Investors, LLC (SFCC) and Goldman Sachs Specialty Lending Group, L.P., to foster support for a sale process and a chapter 11 plan, ultimately resulting on Candy Cube putting forth a stalking horse bid for the Debtors' assets on a going concern basis that set the floor for the bidding and sale process implemented by the Debtors. Candy Cube asserts that its efforts between June and October 2019 substantially benefitted the Debtors' stakeholders as a whole and, as such, Candy Cube is entitled to receive payment for a substantial contribution claim. Further, Candy Cube asserts that, on account of its role as a lender to the Debtors post-bankruptcy, Candy Cube has also asserted that it is entitled to recovery for the fees and expenses it incurred as Lender Expenses. The Debtors have paid the undisputed portion of Candy Cube's Lender Expenses as of the date hereof. Candy Cube continues to pursue the portion of its Lender Expenses that the Debtors and the Committee dispute. Candy Cube asserts that it is entitled to recover for its Lender Expenses and Substantial Contribution Claim, as set forth in the documents shared with the Debtors and the Creditors' Committee and filed with the Bankruptcy Court. Candy Cube further asserts that any fees incurred by the Debtors and the Creditors' Committee in connection with disputing and litigating Candy Cube's Lender Expenses and Substantial Contribution Claim will reduce recoveries for certain creditors and may delay payment to all of the Debtors' creditors. Candy Cube has reserved all of its rights with respect to the matters related to these claims against the Debtors and all of its rights with respect to the Plan. The Debtors do not believe that Candy Cube's claims, or the litigation of those claims, will have any meaningful impact on amount or timing of Creditors' distributions under the Plan. Even putting aside the merits of the underlying claims, which the Debtors after consultation with the Creditors Committee, believe are dubious at best, all Professional Fees are capped and are already taken into account in the projections and estimates of recoveries. Material Terms of Plan The Plan provides for the reorganization of the Debtors by retiring, cancelling, extinguishing, and/or discharging the Debtors' existing Equity Interests and issuing New Equity in the Reorganized Debtor to Goldman Sachs. In exchange and as part of a broader settlement (the "Goldman Sachs Settlement"), Goldman Sachs has agreed to the payment of Allowed Administrative and Priority Claims, and to provide certain consideration to fund a reserve (the "Distribution Reserve") for the benefit of Allowed General Unsecured Claims. To fund the Chapter 11 cases, Goldman Sachs has agreed to the Debtors' use of cash collateral, consistent with an approved budget. Material terms of the Plan: (a) The Debtors will be reorganized pursuant to the Plan and continue in operation following the Effective Date. On the Effective Date, shares of New Equity of the Reorganized Debtor shall be issued to Goldman Sachs. (b) Allowed Administrative Claims (including Ordinary Course Liabilities) and Priority Claims will be paid in full, consistent with an Approved Budget. Allowed Administrative Claims will be paid following expiration of an applicable bar date, and Allowed Priority Claims will be paid upon the earlier of the Effective Date and allowance. Any amounts remaining from the budgeted amounts for Administrative Claims and Priority Claims (including Claims or amounts relating to DIP Expenses and a Substantial Contribution Claim asserted by Candy Cube) (defined as the "Claim Residuals"), will be paid as follows: (i) the first $150,000 of the Claim Residuals arising from the DIP Expenses and/or Substantial Contribution Claim will be paid to Class 5 General Unsecured Creditors, and (ii) any remaining balances for any Claim Residuals will be split evenly between General Unsecured Creditors and Goldman Sachs. (c) Allowed Class 5 General Unsecured Creditors will receive their Pro Rata share of $100,000 in cash, plus (i) participation in the Claim Residuals, plus (ii) the following amounts: (i) Non-Cash Assets. 50% of all Cash proceeds received by the Reorganized Debtor on account of certain illiquid assets, including Preserved Causes of Action and Judgments. (ii) Purchaser Membership Interest. As part of the Debtors' recent sale, the Debtors received a membership interest in the purchaser (the "Purchaser Membership Interest"). Under the Purchaser's applicable organization documents, the Purchaser has the right to repurchase the Purchaser Membership Interest for fair market value. With respect to the Purchaser Membership Interest Consideration, the Reorganized Debtor will fund to the Distribution Reserve for the benefit of Allowed General Unsecured Claims as follows, until the aggregate amount received by Class 5 General Unsecured Claims equals the total Allowed amount of such Claims: 1) For amounts received within six months after the Effective Date, 100% of all amounts that are in excess of $12,000,000 minus the Cash amounts received by Goldman Sachs under the Plan, minus any amounts that Goldman Sachs funds or pays to support the Reorganized Debtor's operations after the Effective Date. 2) For amounts received more than six months after the Effective Date, 25% of all amounts that are in excess of the sum of $5,000,000 and any amounts that Goldman Sachs funds or pays to support the Reorganized Debtor's operations after the Effective Date; provided, however, that in the event the total Cash or fair market value of other consideration paid or payable to Goldman Sachs equals or exceeds $7,000,000, plus any amounts that Goldman Sachs funds or pays to support the Reorganized Debtor's operations after the Effective Date, then foregoing amount will be 100% of all excess Purchaser Membership Interest Consideration. (d) The minimum recovery guaranteed for Class 5 General Unsecured Claims is $100,000. The Debtors estimate that recoveries for Class 5 will range between $100,000 and $750,000. Class 2 Goldman Sachs Facility Claims in the amount of $12 million will recover 8.3% to 12.5%. Class 5 General Unsecured Claims totaling $21.71 million will recover 0.5% to 3.5%. A full-text copy of the Revised Disclosure Statement dated March 27, 2020, is available at https://tinyurl.com/qpgpy5s from PacerMonitor at no charge. Counsel to the Debtors: Alan J. Friedman SHULMAN BASTIAN LLP 100 Spectrum Center Drive, Suite 600 Irvine, CA 92618 - and - Jeffrey R. Waxman Eric J. Monzo Brya M. Keilson Morris James LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 SGR Winddown, Inc. Sugarfina Inc. -- https://www.sugarfina.com/ -- operates an "omnichannel" business involving design, assembly, marketing and sale of confectionary items through a retail fleet of 44 "Candy Boutiques", including 11 "shop in shops" within Nordstrom's department stores, a wholesale channel, e-commerce, international franchise, and a corporate and custom channel. Its offerings are sourced from the finest candy makers in the world and include such iconic varieties as Champagne Bears, Peach Bellini, Sugar Lips, Green Juice Bears and Cold Brew Bears. The Debtors employ 335 people, including 71 individuals at their headquarters in El Segundo, Calif. Sugarfina, Inc. and two affiliates sought Chapter 11 protection(Bankr. D. Del. Lead Case No.19-11973) on Sept. 6, 2019. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. The Hon. Mary F. Walrath is the case judge. The Debtors tapped Morris James LLP as counsel, and Force Ten Partners, LLC as financial advisor. BMC Group Inc. is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Sept. 17, 2019. The committee tapped Bayard, P.A. as its legal counsel, and Province, Inc., as its financial advisor. On Oct. 31, 2019, Sugarfina Inc., et al., consummated the sale of substantially all their assets to Sugarfina Acquisition Corp. The Debtors changed their names to SGR Winddown, Inc., et al., following the sale. SHERIDAN HOLDING: Seeks to Hire Jackson Walker as Co-Counsel ------------------------------------------------------------ Sheridan Holding Company I, LLC, seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Jackson Walker LLP. Jackson Walker will serve as conflicts counsel and co-counsel with Kirkland & Ellis LLP and Kirkland & Ellis International LLP, the firms handling the Chapter 11 cases of Sheridan and its subsidiaries. Jackson Walker will provide these services: (1) provide legal advice and services regarding local rules, practices, and procedures, including Fifth Circuit law; (2) provide certain services in connection with the administration of the cases, including preparing agendas, hearing notices, witness and exhibit lists, and hearing binders of documents and pleadings; (3) review and comment on proposed drafts of pleadings to be filed with the court; (4) appear in court and at any meeting with the United States Trustee and creditors; and (5) provide legal advice on any matter on which Kirkland & Ellis may have a conflict or as needed based on specialization. Matthew Cavenaugh, Esq. the firm's attorney who will be providing the services, charges an hourly fee of $750. The rates for other restructuring attorneys at the firm range from $385 to $895 an hour. Paraprofessionals charge between $175 and $185 an hour. Jackson Walker received a retainer of $75,000. Matthew Cavenaugh, Esq., a partner at Jackson Walker, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. /does not hold any interest adverse to the Debtor and its bankruptcy estate, according to court filings. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Cavenaugh made the following disclosures: (1) Jackson Walker and Debtors did not agree to any variations from, or alternatives to, the firm's standard billing arrangements. The rate structure provided by the firm is appropriate and is not significantly different from the rates that Debtors charge for other non-bankruptcy representatives or the rates of other comparably skilled professionals. (2) No professional at the firm varied his rate based on the geographic location of Debtors' bankruptcy cases. The hourly rates used by the firm in representing Debtors are consistent with the rates that it charges other comparable clients regardless of the location of the Chapter 11 case. (3) Mr. Cavenaugh's hourly rate is $750. The rates for other restructuring attorneys range from $385 to $895 an hour while the paraprofessional rates range from $175 to $185 an hour. The firm represented Debtors during the weeks immediately before their bankruptcy filing using those rates. (4) Jackson Walker has not prepared a budget. Jackson Walker can be reached through: Matthew D. Cavenaugh, Esq. Jackson Walker LLP 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Phone: (713) 752-4200 / (713) 752-4284 Fax: (713) 752-4221 Email: mcavenaugh@jw.com About Sheridan Holding Company I Sheridan Holding Company I, LLC and its subsidiaries, SPP I-B GP, LLC, Sheridan Investment Partners I, LLC Sheridan Production Partners I, LLC, Sheridan Production Partners I-A, L.P., Sheridan Production Partners I-B, L.P., and Sheridan Production Partners I-M, L.P. are an independent oil and natural gas investment fund with production and development activities in the Oklahoma, Texas, and Wyoming. They comprise the first of three series of private placement oil and gas investment funds in the Sheridan group, all under the common management of non-debtor Sheridan Production Partners Manager, LLC. Established in 2006 and headquartered in Houston, Texas, the companies have focused on acquiring "unloved" oil and gas properties from large independent operators and conducting exploration and production activities across three states in four geographic areas. Their assets are primarily mature producing properties with long-lived production, relatively shallow decline curves, and lower-risk development opportunities. For more information, visit http://www.sheridanproduction.com/ Sheridan Holding Company I and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-31884) on March 23, 2020. At the time of the filing, Debtors had estimated assets of between $100 million and $500 million and liabilities of between $500 million and $1 billion. Judge David R. Jones oversees the cases. Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as lead bankruptcy counsel; Jackson Walker LLP as conflicts counsel and co-counsel; Evercore Group LLC as investment banker; Alixpartners, LLP as restructuring Advisor; and Prime Clerk LLC as claims agent. SKLAR EXPLORATION: Seeks to Hire Berg Hill as Special Counsel ------------------------------------------------------------- Sklar Exploration Company, LLC and Sklarco, LLC seek approval from the U.S. Bankruptcy Court for the District of Colorado to hire Berg Hill Greenleaf & Ruscitti, LLP as special counsel. Berg Hill will represent Debtor with respect to corporate and bank and lending issues. Giovanni Ruscitti, Esq., at Berg Hill, will be the primary attorney responsible for representing Debtor. His hourly fee is $400. The firm holds a retainer in the amount of $25,000. Mr. Ruscitti disclosed in court filings that Berg Hill does not have an interest materially adverse to the interest of Debtor's bankruptcy estate and creditors. The firm can be reached through: Giovanni M. Ruscitti, Esq. Berg Hill Greenleaf & Ruscitti, LLP 1525 17th St. Denver, CO 80202 Email: gmr@bhgrlaw.com About Sklar Exploration Company Sklar Exploration Company, LLC -- https://sklarexploration.com/ -- is an independent exploration production company owned and managed by Howard F. Sklar. With offices in Boulder, Colo., Shreveport, La., and Brewton, Ala., Sklar owns interests in oil and gas wells located throughout the United States. Its exploration and production activities have historically focused on the hydrocarbon-rich Lower Gulf Coast basins and in the Interior Gulf Coast basins of East Texas, North Louisiana, South Mississippi, South Alabama, and the Florida Panhandle. Sklar Exploration Company and Sklarco, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Lead Case No. 20-12377) on April 1, 2020. At the time of the filing, Sklar Exploration had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Sklarco disclosed assets of between $10 million and $50 million and liabilities of the same range. Debtors are represented by Kutner Brinen, P.C. SOUTH COAST: Trustee Hires Force Ten as Financial Advisor --------------------------------------------------------- Thomas Casey, the Chapter 11 Trustee for South Coast Behavioral Health, Inc. seeks authority from U.S. Bankruptcy Court for the Central District of California to retain Force Ten Partners, LLC, as its financial advisor. The Trustee requires Force 10 to: 1. facilitate the Trustee's analysis of the Debtor's business operations, assets and liabilities; 2. assist the Trustee with preparing cash flow forecasts and financial projections for the Debtor; 3. provide assistance in connection with motions, responses or other court activity; 4. assist the Trustee with preparing the Debtor's monthly operating reports; 5. assist the Trustee in negotiations with parties-in-interest and third parties to effectuate a sale, a plan of reorganization or other forms of a transaction; 6. advise and assist the Trustee in evaluating strategic alternatives including a sale of its assets under Section 363 of the Code or a recapitalization; and, 7. provide other necessary services as mutually agreed upon between Force Ten and the Trustee. Force 10 professionals who will work on the Debtors' case and their hourly rates are: Brian Weiss $650 Chad Kurtz $495 Force 10 will also be reimbursed for reasonable out-of-pocket expenses incurred. Brian Weiss, co-founder and partner with Force 10 Partners, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Force 10 may be reached at: Brian Weiss Force 10 Partners, LLC 20341 SW Birch, Suite 220 Newport Beach, CA 92660 Tel: (949) 357-2368 Mobile: (949)933-7011 E-mail: bweiss@force10partners.com About South Coast Behavioral Health South Coast Behavioral Health, Inc. -- https://www.scbh.com/ -- is a healthcare company that specializes in the in-patient and outpatient treatment of addicts, alcoholics, and persons dealing with mental health issues. It offers a clinically supervised residential sub acute detox services, therapeutic and residential treatment centers, intensive outpatient treatment services, and partial hospitalization programs. South Coast Behavioral Health sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12375) on June 20, 2019. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Mark S. Wallace oversees the case. Nicastro & Associates, P.C., is the Debtor's legal counsel. STATE OF ILLINOIS: S&P Alters Outlook to Negative ------------------------------------------------- S&P Global Ratings revised the outlook to negative from stable and affirmed its 'BBB-' long-term rating on the State of Illinois' general obligation (GO) debt outstanding, its 'BB+' rating on the state's appropriation-backed debt, and its 'BB-' rating on the state's moral obligation debt. "The negative outlook reflects our anticipation that there is at least a one-in-three chance that economic conditions worsen to a degree that affects the state's ability to maintain credit characteristics in line with the investment-grade rating level," said S&P credit analyst Geoffrey Buswick. S&P will be watching to see if the stimulus as currently allocated is sufficient for Illinois to fight the COVID-19 pandemic; if the anticipated growth in the bill backlog does not create service delivery problems; and if the current market volatility worsens the funding status of the already poorly funded pension plans. Over the intermediate term, S&P believes that the state will need to take further action to achieve sustainable structural balance and address its pension liabilities to maintain an investment-grade rating. In addition, the rating reflects S&P's view of governance risks that it views as being above the sector norms due to the constitutional limits the state faces to modify its growing pension costs, and that the state is not contributing to meet static funding, limiting current and future budgetary flexibility. However, S&P views the state's environmental risks as in-line with the rating agency's view of the sector. S&P's outlook revision also reflects its view that the COVID-19 pandemic's impact on the state's economy, budget, and forecast is a social rating factor elevating the public health and safety issues. If economic activity resumes, however, and credit metrics are upheld, the rating agency could revise the outlook to stable. SUMMIT VIEW: Denlingers Object to Disclosure Statement ------------------------------------------------------ Harry Denlinger and Janet Denlinger, creditors, filed an objection to the Disclosure Statement which relates to Summit View, LLC's Chapter 11 Plan of Reorganization dated Jan. 22, 2020. The Denlingers point out that the Debtor fails to fully disclose the events that lead to the Debtor filing its second bankruptcy case. The Denlingers further point out that the Debtor fails to fully disclose the facts that caused this second bankruptcy case. According to the Denlingers, after the first bankruptcy case, the Debtor defaulted on its obligations by failing to comply with its Permits. The Denlingers complain that the Debtor's financial disclosure and projections are inadequate. The Denlingers assert that the Disclosure Statement fails to provide any prepetition financial disclosure of the Debtor's financial operations. The Denlingers point out that the Disclosure Statement fails to provide any disclosure of the costs associated with the development of the Real Property as a residential subdivision according to the residential development Plan and Permits. The Denlingers further point out that the risks and damages to the Real Property, associated with the Debtor's proposed excavation and removal of dirt, are significantly greater than if the Debtor was not authorized to excavate and remove dirt from the Real Property. According to the Denlingers, the Debtor's Plan is based on continued mining and selling of dirt from the Real Property, with no obligation or commitment to regrade or recontour the Real Property as a residential subdivision. The Denlingers complain that the Disclosure Statement should provide: (a) the current value of the Real Property; (b) the name(s) of the appraiser of the Real Property; (c) copies of the appraisal so that creditors can understand the appraiser's methodology or comparable properties to determine and evaluate the value of the Real Property; (d) the background information which supports the Debtor's value(s) of the Real Property; (e) the name of the entity, if any, who will be taking any action to "reshape" the Real Property to allow the development of home construction; (f) the total cost and monthly cost the "regrading contractor" will be paid. The Denlingers assert that assumption and projections contained in the Disclosure Statement must be clearly stated and supported with adequate data and information. The Denlingers point out that the Disclosure Statement should expressly disclose the leases and executory contracts the Debtor will assume and/or reject and any new contract(s) the Debtor has or projects to enter into postpetition/postconfirmation. The Denlingers further point out that the Debtor should disclose the impact on the estate and the Plan if the Debtor is not authorized to extract additional dirt from the Real Property. According to the Denlingers, the Disclosure Statement states the Debtor is not aware of any avoidance actions or preferences. However, the Debtor should disclose any anticipated post confirmation litigation, the names of entities in such litigation, the amount of potential recoveries, and whether the Debtor will pursue such recoveries, or whether such recoveries will be pursued by another entity. Attorneys for Harry Denlinger and Janet Denlinger: John J. Lamoureux Donald E. Hemke Carlton Fields, P.A. P. O. Box 3239 Tampa, FL 33601-3239 Phone: 813-223-7000 Fax: 813-229-4133 E-mail: jlamoureux@carltonfields.com delliottcarltonfields.com dhemke@carltonfields.com bwoolard@carltonfields.com - and - Joseph F. Southron Four Rivers Law PLLC 400 N. Ashley Dr., Suite 1900 Tampa, Florida 33602 Telephone: 813-773-5705 Fax: 813-773-5090 E-mail: joe@fourriverslaw.com - and - J. Michael Shea 6301 Bayshore Blvd. Tampa, Florida 33611 Telephone: (813) 310-8057 Facsimile: (813) 288-1927 E-mail: mike@jmichaelshea.com jmarkette@smlctampa.org About Summit View Summit View, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It previously filed Chapter 11 petition (Bankr. M.D. Fla. Case No. 09-06495) on April 2, 2009. Summit View again sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-10111) on Oct. 24, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The Debtor tapped Alberto F. Gomez, Jr., Esq., at Johnson, Pope, Bokor, Ruppel & Burns, LLP, as its bankruptcy counsel. Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., is special counsel. The Debtor filed its Chapter 11 plan and disclosure statement on Jan. 22, 2020. T-MOBILE US: Fitch Corrects April 1 Ratings Release --------------------------------------------------- Fitch Ratings issued a correction of a release on T-Mobile US originally published on April 1, 2020. It contains the Summary of Financial Adjustments, which was omitted from the original release. The amended ratings release is as follows: Fitch Ratings assigns Long-Term Issuer Default Ratings (IDRs) of T-Mobile US, Inc. (T-Mobile) and T-Mobile USA, Inc. at 'BB+' following the close of the merger with Sprint Corporation (Sprint). Fitch also assigned final ratings to T-Mobile USA, Inc.'s $4 billion secured credit facility, $4 billion secured term loan and proposed multi-tranche secured notes at 'BBB-'/'RR1' and the unsecured senior notes at 'BB+'/'RR3'. Fitch removed Sprint's Rating Watch Positive and upgraded the IDRs of Sprint and Sprint Communications, Inc. (SCI) to 'BB+' from 'B+'. Fitch also upgraded the unsecured senior notes at Sprint, SCI and Sprint Capital Corp. to 'BB+'/'RR4' from 'B+'/'RR4'. On a consolidated basis, the T-Mobile/Sprint combination is expected to have a materially improved business profile with greater scale and improved network capabilities that should enhance its long-term competitive position to gain further market share. The revision of the Outlook to Stable from Positive reflects the change in expectations with the pace for deleveraging versus previous assumptions given the numerous unknowns related to the duration and severity of the coronavirus outbreak, the resulting material negative impact to consumers and the potential negative effects on T-Mobile's financial operating results. Fitch expects T-Mobile's pro forma adjusted core telecom leverage (adjusted debt/EBITDAR) for 2020 will be high, estimated in the upper-4x range. Fitch expects material deleveraging during the forecast period. This is supported by EBITDA growth driven by substantial cost synergies and debt reduction, with adjusted core telecom leverage projected in the low 4x range by 2022 compared to previous expectations in the upper-3x range. A more protracted business interruption from the coronavirus pandemic and/or severe downturn could slow expected deleveraging pace. Fitch withdrew the following ratings as the debt was repaid/terminated at merger closing. Sprint Communications Inc. -- Secured revolving credit facility 'BB+'/'RR1'; -- Secured term loan 'BB+'/'RR1. Sprint Corp. -- Junior guaranteed senior notes 'BB'/'RR2'. KEY RATING DRIVERS Implications of Coronavirus: Fitch expects unprecedented effects due to the coronavirus pandemic across numerous sectors, such as mandated or proactive temporary closures of retail stores in "non-essential" categories and the extension on government guidelines for social distancing through April 30. T-Mobile has closed about 80% of store locations since mid-March, with 20% of stores across the country open to provide service for customers. T-Mobile intends to reopen a number of stores throughout April where allowed by local and state mandates. Numerous unknowns remain, including the length of the outbreak; the timeframe for a full reopening of retail locations and the cadence at which it is achieved; the economic conditions resulting from the pandemic, including unemployment and household income trends, government support of business and consumers; and effects on consumer behavior. Fitch believes the telecom sector has a lower level of risk, particularly when compared to other sectors, such as airlines, retail: nonfood, restaurants, lodging and leisure, automotive, and media, given the integral nature of wireless services in consumer's day-to-day lives with predictable recurring payments supported by low postpaid churn levels. As such, Fitch believes wireless phone services have a high position in consumer priority payments. Given the abrupt changes in general economic conditions resulting from the coronavirus — a quick rise in unemployment and spiking jobless claims for a large portion of the population base - Fitch expects the wireless industry, which includes T-Mobile, will experience an increase in service termination and default of device-financing plans. T-Mobile's exposure to the subprime consumer category with subprime receivables as a percent of total EIP gross receivables was at 47% and 42% for T-Mobile and Sprint, respectively, at the end of 2019 based on financial filings. Fitch's current forecast envisions a scenario with general improvements beginning in the latter half of the second quarter in 2020, without wide-scale recurrences of lockdowns during the second half of 2020 as consumer spending gradually rebounds. Consequently, Fitch revised the forecast for T-Mobile to include pro forma revenue expectations in the mid-$70 billion range compared to previous expectations in upper-$70 billion range and pro forma EBITDA (less leasing revenue) in the mid-teen range compared to previous expectations in the upper-teen range. Over the forecast period in 2023, EBITDA is projected to increase to roughly $20 billion compared to the low-$20 billion range with FCF of roughly $6 billion compared to previous expectations of $8 billion. Merger Drives Scale Benefits: The combination of T-Mobile and Sprint is expected to create significant scale, asset and synergy benefits that should materially improve the combined entities' long-term competitive position, particularly for 5G-network capabilities. T-Mobile is expected to target new and/or improved growth opportunities across multiple segments, including broadband replacement, enterprise, rural, internet of things (IoT) and over-the-top video. The larger combined spectrum portfolio and selective rationalization of Sprint's network should materially enhance and further densify T-Mobile's existing network, resulting in greater speed, capacity, capabilities and geographic reach. Material Deleveraging Expected: Based on Fitch adjustments, T-Mobile's pro forma adjusted core telecom leverage is projected in the upper-4x range for 2020, which is higher than previous expectations in the mid-4x range given uncertainty around financial effects from the coronavirus. Fitch believes deleveraging will occur over the forecast period supported by EBITDA growth that is driven by substantial cost synergies and debt reduction due to FCF growth with excess cash used to repay maturing and prepayable debt. This results in adjusted core telecom leverage in the mid-4x range at the end of 2021 and low-4x range in 2022, about a roughly 12-month delay in the deleveraging trajectory from previous expectations. A more protracted business interruption from the coronavirus pandemic and/or severe downturn could further slow expected deleveraging pace. Synergies, Material Execution Risk: The combined company expects to realize substantial synergies with an expected $6+ billion in run-rate cost synergies following completion of integration plans, representing a net-present value of approximately $43 billion. Fitch believes these synergies are largely achievable due to good line of sight on network-related cost reductions that constitute the majority of cost benefits. Given the scope of the transaction, execution risk with network decommissioning and subscriber migration to T-Mobile's network is high. Fitch believes T-Mobile has a good integration track record following past acquisitions. Regulatory Risk Substantially Reduced: Fitch believes regulatory risk post-merger as substantially reduced following the favorable decision from the federal court judge combined with the state attorney general's decision not to appeal the verdict. The merger remains subject to certain closing conditions, including additional court proceedings (Tunney Act) and approval from the California Public Utilities Commission (CPUC). The CPUC issued a proposal mid-March to approve the merger subject to certain conditions being applied, including buildout requirements, job creation and offerings for low-income customers. Secured Debt Notching: The T-Mobile USA secured debt is expected to be guaranteed on a secured basis by all wholly owned domestic restricted subsidiaries of T-Mobile and Sprint. However, the guarantees at Sprint, SCI, and Sprint Capital Corp. would be unsecured due to secured debt restrictions in the Sprint senior notes indentures. For rated entities with IDRs of 'BB-' or above, Fitch does not perform a bespoke analysis of recovery upon default for each issuance. Instead, Fitch uses notching guidance whereby an issuer's secured debt can be notched up to two rating levels, but notching is capped at 'BBB‒' for IDRs between 'BB+' and 'BB-'. The secured debt (credit facility, term loan and notes) at T-Mobile would receive a one-notch uplift from the IDR. This would reflect superior recovery prospects at the senior secured level of the pro forma capital structure, incorporating the value of the combined wireless network, subscriber base and spectrum portfolio. Unsecured Debt Notching: T-Mobile USA's unsecured notes will be guaranteed on an unsecured basis by T-Mobile US, Inc. and its wholly owned domestic restricted subsidiaries. As a result of the merger agreement, T-Mobile USA senior unsecured notes will also receive unsecured guarantees from all wholly owned domestic restricted subsidiaries of Sprint (subject to customary exceptions). For the Sprint senior unsecured notes, T-Mobile and T-Mobile USA will provide downstream unsecured guarantees to the senior notes at Sprint, SCI and Sprint Capital Corp. However, T-Mobile operating companies will not provide an upstream guarantee to Sprint's unsecured notes at Sprint, SCI or Sprint Capital Corp. As a result, Fitch views the T-Mobile USA senior notes as having a structurally superior position with respect to recovery value compared with the Sprint senior notes due to the guarantee structure. Sprint senior notes do not benefit from a guarantee from T-Mobile operating subsidiaries, only from T-Mobile USA and T-Mobile. With T-Mobile's expected secured leverage materially less than 4x, Fitch does not view structural subordination as being present to where recovery prospects at the unsecured level are impaired below the 'RR4' level. Supported by the strong underlying asset value, the T-Mobile USA senior notes would have a 'RR3' recovery, and Sprint's senior notes would have a 'RR4' recovery. Parent Support: A moderate parent subsidiary linkage exists for the merged T-Mobile, resulting in a one-notch uplift to the standalone IDR. The operational and strategic linkages are strong when combined with material benefits derived from Deutsche Telekom AG (DT) ownership through combined global purchasing scale that provides significant benefits for network, handset and general procurement. DT is expected to consolidate T-Mobile's financials and have perpetual voting proxy over SoftBank's T-Mobile shares, subject to certain conditions. Both parents will also be subject to four-year equity lockup agreements, subject to certain exceptions. Legal linkages with T-Mobile are weak given the lack of parent guarantees or cross default to parent debt. DERIVATION SUMMARY On a consolidated basis, the combination of T-Mobile and Sprint is expected to have a materially improved business profile that would enhance its competitive position relative to Verizon Communications Inc. (A-/Stable) and AT&T Inc. (A-/Stable) as on a standalone basis, both T-Mobile and Sprint lack sufficient scale and resources to compete across certain market segments. The combination would enable T-Mobile to build a more expansive national 5G network leveraging a materially larger spectrum portfolio. It would also expand growth opportunities into other sub-segments including video, broadband, enterprise, rural and IoT. Verizon's rating reflects the relatively strong wireless competitive position, as demonstrated by its high EBITDA margins, low churn, extensive national coverage and lower leverage. AT&T's rating reflects its large-scale operations, diversified revenue streams by customer and technology, and relatively strong operating profitability. Fitch believes T-Mobile has higher exposure to the subprime consumer category than Verizon. Based on receivables data from Verizon's $1.6 billion securitization trust (1Q20), the weighted average FICO score for the receivables was 711, with roughly 70% of the portfolio backed by FICO scores over 650 and more than 50% of the portfolio over 700 as of Dec. 31, 2019. T-Mobile and Sprint's reported subprime receivables as a percent of total EIP gross receivables were at 47% and 42%, respectively, at the end of 2019. T-Mobile has generated strong operating momentum during the past several years due to a well-executed challenger strategy. The company has taken material market share from the other three national operators and caused both AT&T and Verizon to more aggressively adapt and respond to these offerings, such as equipment installment and unlimited data plans. On a merged basis, T-Mobile's postpaid wireless business would have similar wireless scale as AT&T but would be materially smaller than Verizon. Given the strong subscriber momentum underpinned by its Un-carrier branding strategy, Fitch expects T-Mobile will continue to close the share gap against its two larger peers. T-Mobile would have a moderately larger scale than Charter Communications Operating, LLC's (BB+/Stable), with a relatively similar profile for gross leverage (total adjusted debt/EBITDAR) and lower secured leverage. KEY ASSUMPTIONS -- Fitch's Key Assumptions Within the Rating Case for the Issuer -- Total pro forma revenues in the mid-$70 billion range, growing over the forecast period of 2023 in the low-single digits; -- Pro forma EBITDA (less leasing revenue) in the mid-teen range, growing over the forecast period to roughly $20 billion in 2023; -- Pro forma total debt, excluding tower obligations and capital leases, expected in the upper $60 billion range, including an expected secured debt mix (excluding tower obligations and capital leases) of roughly $30 billion; -- FCF ramping over the forecast period to $6 billion in 2023; -- Pro forma core telecom leverage in the upper-4x range in 2020, mid-4x range in YE2021 and low-4x by YE2022. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Strong execution and progress on Sprint integration plans while limiting disruption in the company's overall operations that materially reduces execution risk; -- A strengthening operating profile as the company captures sustainable revenue and cash flow growth due to realized synergy cost savings and continued strong operating momentum due to increased postpaid and prepaid subscribers; -- Reduction and maintenance of core telecom leverage (total debt/EBITDA) below 3x and lease adjusted core telecom leverage (total adjusted debt/EBITDAR) below 4.0x; Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Additional leveraging transaction, or adoption of a more aggressive financial strategy that increases core telecom leverage (total debt/EBITDA) beyond 4x and lease adjusted core telecom leverage (total adjusted debt/EBITDAR) beyond 5x on a sustained basis in the absence of a credible deleveraging plan; -- Weakening of parent support that results in Fitch assessing a moderate linkage no longer exists; -- Perceived weakening of its competitive position; lack of execution on integration plans or failure of the current operating strategy to produce sustainable revenue, strengthening of operating margins and cash flow growth. BEST/WORST CASE RATING SCENARIO Ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: T-Mobile closed the merger using its committed financing that included a $19 billion 364-day secured bridge loan facility with a total tenor of 2 years including extensions, $4 billion seven-year secured term loan facility and $4 billion five-year secured revolving credit facility. Fitch expects the combined entity would have substantial liquidity and diversified market access to appropriately manage liquidity risks. Balance sheet cash is expected to be substantial, supported by secured revolver availability of $4 billion at transaction close. FCF generation is expected to increase materially driven by the realization of run-rate cost synergies and a moderation in capital spending in the fourth year. Fitch's forecast assumes FCF ramping over the forecast period to approximately $6 billion in 2023. T-Mobile's expected liquidity position greatly enhances financial flexibility throughout the integration process given the uncertainties around the level, timing of cash requirements and the larger debt maturity towers due in part to legacy capital structures, principally after 2020. The proposed secured notes issuance provides increased certainty with the capital structure and maturity profile following the use of the secured bridge loan facility to close the merger. SUMMARY OF FINANCIAL ADJUSTMENTS To determine core telecom leverage of the pro forma company, Fitch applied a 2:1 debt to equity ratio to the handset receivables (leasing and EIP), after adding back off balance sheet securitizations. Operating EBITDA excludes leasing revenue. Tower Obligations: Fitch's treatment typically capitalizes the annual operating lease charge using a standard 8x multiple to create a debt-equivalent. The operating lease expense for T-Mobile's tower obligation is included in the annual rent expense. Therefore, Fitch excluded the tower obligations from the total debt quantum as the analysis incorporates the obligation in total adjusted debt metrics that includes capitalized operating lease expense. Added back off-balance debt related to service receivables and EIP receivables facilities at T-Mobile. Added back proceeds from securitization of accounts receivable from cash flow from investing to cash from operations. When appropriate to the issuer's business model, Fitch may present additional ratios to supplement the core approach. T-Mobile's rental expense is high compared to its telecom peers given a denser cell network deployment related to the deployment of higher band spectrum. Consequently, Fitch supplements T-Mobile's core unadjusted credit metrics with lease-adjusted metrics. As part of these adjustments, re-categorized right of use asset amortization and interest associated with finance leases. TAILORED BRANDS: David Edwab Quits as Vice Chairman of the Board ---------------------------------------------------------------- David H. Edwab tendered his resignation as vice chairman of the Board and director of Tailored Brands, Inc. effective April 5, 2020. In addition, Sheldon I. Stein resigned as a director of the Company effective April 8, 2020. The Company said Mr. Edwab's and Mr. Stein's resignations were each for personal reasons and not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. As a result of these resignations and in accordance with the provisions of the Company's Amended and Restated Bylaws, effective as of April 8, 2020, the Board of Directors set the size of the Board at six. About Tailored Brands Tailored Brands, Inc. is an omni-channel specialty retailer of menswear, including suits, formalwear and a broad selection of polished and business casual offerings. The Company delivers personalized products and services through its convenient network of over 1,400 stores in the United States and Canada as well as its branded e-commerce websites at www.menswearhouse.com and www.josbank.com. Its brands include Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G. Tailored Brands reported a net loss of $82.28 million for the year ended Feb. 1, 2020, compared to net earnings of $83.24 million for the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had $2.42 billion in total assets, $2.52 billion in total liabilities, and a total shareholders' deficit of $98.31 million. * * * As reported by the TCR on March 27, 2020, S&P Global Ratings lowered all ratings on Calif.-based specialty apparel retailer Tailored Brands Inc., including its issuer credit rating to 'CCC+' from 'B', reflecting its view of the company's capital structure as unsustainable in light of substantially weakened earnings prospects. TEMBLOR PETROLEUM: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Temblor Petroleum Company, LLC 5201 California Avenue, Suite 340 Bakersfield, CA 93309 Business Description: Temblor Petroleum Company, LLC, located in Bakersfield, CA, is part of the oil & gas exploration & production industry. Chapter 11 Petition Date: April 9, 2020 Court: United States Bankruptcy Court Eastern District of California Case No.: 20-11367 Judge: Hon. Fredrick E. Clement Debtor's Counsel: Leonard K. Welsh, Esq. LAW OFFICE OF LEONARD K. WELSH 4550 California Avenue, Second Floor Bakersfield, CA 93309 Tel: 661-328-5328 E-mail: lwelsh@lkwelshlaw.com Total Assets: $12,688,376 Total Liabilities: $12,198,911 The petition was signed by Philip Bell, managing member. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/RfmU68 List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. California Energy Exchange Five Points $2,918,274 Corporation Pipeline Expansion Attn: Timothy O. Wise Project Supplemental 2981 Gold Canal Drive Funding Rancho Cordova, CA 95670 2. Commercial Trade, Inc. Judgment $2,352,219 c/o Sandra Kuhn McCormack Entered 5330 Office Center Court Ste. C Bakersfield, CA 93309 Tel: 661-632-2100 3. zPaul Graham Drilling Services $1,214,415 P.O. Box 669 Rendered Rio Vista, CA 94571 Tel: 800-336-7285 4. Phillip Bell Loans $706,923 8 Wistar Road Villanova, PA 19085 Tel: 917-209-0130 5. CW Bell TUW Res Tr Loan $485,089 FBO Evan 3140 N. Morning Drive Billings, MT 59102 6. CW Bell TUW Res Tr Loan $485,089 FBO Barbara 10909 Baronet Road Owings Mills, MD 21117 7. CW Bell TUW Res Tr Loan $485,089 FBO Christy 4211 Westland Lane Southport Southport, NC 28461 8. CW Bell TUW Res Tr Loan $485,089 FBO Martha 375 Star Light Drive Fort Mill, SC 29715 9. CW Bell TUW Res Tr Loan $485,089 FBO Philip 8 Wistar Road Villanova, PA 19085 10. Patriot Environmental Complaint- $274,000 Services, Inc. Los Angeles County c/o Jeff J. Astarabadi, Esq. Superior Court Musch Shelist, PC Case No. 19STCV40778 2 Park Plaza, Suite 1075 Irvine, CA 92614 Tel: 562-436-2614 11. zGeo Drilling Fluids Services $268,532 P.O. Box 1478 Rendered Bakersfield, CA 93302 Tel: 661-325-5919 12. zHalliburton Services $223,701 P.O. Box 301341 Rendered Dallas, TX 75303 Tel: 281-871-4000 13. Key Energy Complaint-Harris $198,322 Services, LLC County Judicial c/o Will Rutledge, Esq. District Case No. Dore Rothberg Mckay 2019-43534/Court 17171 Park Row 281 Suite 160 Houston, TX 77084 Tel: 713-651-4300 14. Redline Directional Fresno County $167,838 Services Superior Court c/o Nathan M. Hodges Case No. 19CECG03157 Hodges Law Group 1925 G Street Bakersfield, CA 93301 Tel: 530-219-2591 15. zN.C. Brun & Son Services $153,764 25692 N. Cherokee Lane Rendered Galt, CA 95632 Tel: 916-425-7752 16. zBurke Equipment $153,101 4747 Mariah Mesa Court Rental Paradise, CA 95969 17. zJD Rush Company Purchase of $122,355 5900 East Lerdo Highway Materials Shafter, CA 93263 Tel: 661-392-1900 18. zB&L Equipment Rental, Inc. Equipment $79,823 P.O. Box 22260 Rental Bakersfield, CA 93390 Tel: 661-589-9080 19. zInternational Reservoir Field Evaluation $74,250 Technology 300 Union Blvd., Suite 400 Denver, CO 80228 Tel: 303-279-0877 20. zEnergy Tubulars Services $63,834 3010 Old Ranch Rendered Parkway, Suite 400 Seal Beach, CA 90740 Tel: 562-342-2850 TOGA LTD: Incurs $5.2M Net Loss for the Quarter Ended Jan. 31 ------------------------------------------------------------- Toga Limited filed its quarterly report on Form 10-Q, disclosing a net loss of $5,249,027 on $3,796,869 of revenue for the three months ended Jan. 31, 2020, compared to a net loss of $902,311 on $856,383 of revenue for the same period in 2019. At Jan. 31, 2020, the Company had total assets of $20,260,990, total liabilities of $11,071,577, and $9,189,413 in total shareholders' equity. The Company said, "Our independent auditors have added an explanatory paragraph to their audit issued in connection with the financial statements for the period ended July 31, 2019, relative to our ability to continue as a going concern. The Company, through January 31, 2020, has not yet generated net income for any fiscal year and has accumulated deficit. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty." A copy of the Form 10-Q is available at: https://is.gd/e0Alhu Toga Limited develops social media app for mobile devices. It offers Yippi, a messaging app that focuses on entertainment and security, which allows users to send various messages, photos, and voice messages, as well as broadcasts to up to 100 contacts at a time. The company was formerly known as Blink Couture, Inc. and changed its name to Toga Limited in December 2016. Toga Limited was founded in 2003 and is headquartered in Las Vegas, Nevada. TORREY HOLDINGS: Seeks Court Approval to Hire Bullock Appraisal --------------------------------------------------------------- Torrey Holdings LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire an appraiser. Debtor proposes to employ Bullock Appraisal & Consulting to prepare an appraisal report for its properties located at: (1) 5710 E. Tropicana Avenue #2059, Las Vegas; (2) 3712 Saint Nazaire Ave. Las Vegas; (3) 8101 W. Flamingo Rd, #1127 Las Vegas; (4) 1230 Appaloosa Hills Avenue North Las Vegas; (5) 5151 Pioneer Ave. #203 Las Vegas; and (6) 2651 San Lago Ct., Las Vegas. The firm will charge a flat fee of $3,600 to prepare the report for all six properties. For additional services, the firm will charge $450 per hour for testimony and $400 per hour for consultation and other services. Bullock Consulting is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. About Torrey Holdings Based in Las Vegas, Torrey Holdings, LLC filed a Chapter 11 petition (Bankr. D. Nev. Case No. 20-10449) on Jan. 27, 2020. At the time of filing, the Debtor had estimated assets of between $500,001 and $1 million and liabilities of less than $50,000. Judge Bruce T. Beesley oversees the case. The Debtor tapped Andersen Law Firm, Ltd., as its legal counsel. TRANS WORLD: Neil S. Subin, et al. Report 65% Equity Stake ---------------------------------------------------------- In a Schedule 13D filed with the Securities and Exchange Commission, these entities and individuals reported beneficial ownership of 1,340,024 shares of common stock of Trans World Entertainment Corporation as of March 30, 2020, which represents 65 percent of the shares outstanding: * Neil S. Subin * MILFAM LLC * Alimco Financial Corporation * Alimco Re Ltd. * Jonathan Marcus * AMIL Of Ohio, LLC * Catherine C. Miller Irrevocable Trust dtd 3/26/91 * Catherine C Miller Trust A-2 * Catherine C Miller Trust A-3 * Catherine Miller Trust C * Kimberley S. Miller GST Trust dtd 12/17/1992 * LIMFAM LLC * Lloyd I Miller Trust A-1 * Lloyd I Miller, III Trust A-4 * Lloyd I. Miller, III Irrevocable Trust dtd 12/31/91 * Lloyd I. Miller, III Revocable Trust dtd 01/07/97 * MILFAM I L.P. * MILFAM II L.P. * MILFAM III LLC * Susan F. Miller The percentage is based upon 1,816,311 shares of Common Stock outstanding according to the Schedule 14A filed by the Issuer on Feb. 7, 2020 plus 244,532 shares of common stock of the Issuer that are issuable upon exercise of warrants. A full-text copy of the regulatory filing is available at: https://is.gd/Vwkthd About Trans World Headquartered in Albany, New York, Trans World Entertainment is a multi-channel retailer, blending a 40-year history of entertainment retail experience with digital marketplace expertise. Its brands seamlessly connect customers with the most comprehensive selection of music, movies, and pop culture products on the channel of their choice. The Company has operated as a specialty retailer of entertainment and pop culture merchandise with stores in the United States and Puerto Rico, primarily under the name fye, for your entertainment, and on the web at www.fye.com and www.secondspin.com. Trans World Entertainment, which established itself as a public company in 1986, is traded on the Nasdaq National Market under the symbol "TWMC". Trans World reported a net loss of $97.38 million for the year ended Feb. 2, 2019, following a net loss of $42.55 million for the year ended Feb. 3, 2018. As of Nov. 2, 2019, Trans World had $141.48 million in total assets, $116.60 million in total liabilities, and $24.87 million in total shareholders' equity. The Company incurred net losses of $39.1 million and $31.7 million for the thirty-nine weeks ended Nov. 2, 2019 and Nov. 3, 2018, respectively, and has an accumulated deficit of $89.3 million at Nov. 2, 2019. In addition, net cash used in operating activities for the thirty-nine weeks ended Nov. 2, 2019 was $30.8 million. Net cash used in operating activities for the thirty-nine weeks ended Nov. 3, 2018 was $53.3 million. The Company also experienced negative cash flows from operations during fiscal 2018 and 2017, and expects to incur net losses in the foreseeable future. Based on its recurring losses from operations, expectation of continuing operating losses for the foreseeable future, and uncertainty with respect to any available future funding, as well as the completion of other strategic alternatives, the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year after the date of filing of this Quarterly Report on Form 10-Q (Dec. 23, 2019). TRIUMPH GROUP: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. ---------------------------------------------------------------- Moody's Investors Service downgraded its ratings for Triumph Group, Inc., including the company's corporate family rating (CFR, to Caa2 from Caa1, previously on Review for Downgrade) and probability of default rating (to Caa2-PD from Caa1-PD, previously on Review for Downgrade), as well as the ratings for its senior secured second lien notes (to Caa1 from B3, previously on Review for Downgrade) and senior unsecured notes (to Caa3 from Caa2, previously on Review for Downgrade). The speculative grade liquidity rating was downgraded to SGL-4 from SGL-3. The ratings outlook was changed to Negative from Ratings Under Review. The following summarizes Its rating actions: Issuer: Triumph Group, Inc. Corporate Family Rating, Downgraded to Caa2 from Caa1, previously on review for Downgrade Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD, previously on review for Downgrade Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Senior Secured Regular Bond/Debenture, Downgraded to Caa1 (LGD3) from B3 (LGD3), previously on review for Downgrade Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 (LGD5) from Caa2 (LGD5), previously on review for Downgrade Outlook, Changed to Negative from Ratings Under Review RATINGS RATIONALE The downgrades reflect Moody's expectations that disruptions from the coronavirus will add incremental earnings and cash flow pressures to Triumph's already weak financial profile, which is characterized by a highly leveraged balance sheet and weak cash generation. The downgrades specifically incorporate Moody's expectation that the coronavirus will result in lower throughput volumes for both Triumph's new commercial aircraft build rates as well as its aftermarket MRO business. This will lead to a weaker set of credit metrics and a weaker liquidity profile. The Caa2 corporate family rating broadly balances Triumph's high financial leverage and expectations of weak cash generation against its considerable scale and well-established presence as an aerospace supplier. Moody's recognizes Triumph's de-risking efforts over the last few years which are expected to result in more stable financial performance and less loss-making legacy platforms over the intermediate term. That said, Moody's expects Triumph's credit metrics and cash flow to remain weak during fiscal 2020 and fiscal 2021 as the company liquidates previously-advanced customer payments and incurs elevated costs on exiting platforms such as the Gulfstream G280 and Boeing 747-8. These pressures are now expected to be exacerbated by disruptions from the coronavirus that will negatively impact Triumph's commercial OEM and commercial aftermarket businesses. These earnings and cash flow headwinds will be against a backdrop of a highly-leveraged balance sheet (Moody's adjusted debt-to-EBITDA expected to remain above 7x) and a weak quality of earnings that involves a history of multiple large add-backs to earnings that reduce visibility into sustainable margin levels. 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 aerospace sector has been adversely affected by the shock given its indirect sensitivity via the airline industry to consumer demand and market sentiment. More specifically, Triumph's weakening financial flexibility and exposure to commercial aerospace 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 Triumph of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook incorporates Moody's expectation of meaningful earnings headwinds for at least the next few quarters that will result in a weaker set of credit metrics and a deteriorating liquidity profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include expectations of earnings growth, improved cash generation and a strengthening set of credit metrics. Expectations of an improving liquidity profile with positive free cash generation, anticipated compliance with financial covenants and sizable availability under the revolver credit facility could also result in an upgrade. The de-risking of the business through a divestiture or the use of sale proceeds to reduce debt could also support upward rating movement. Factor that could lead to a downgrade include expectations of sustained negative free cash flow, a breach of financial covenants or limited/no access to external sources of financing. Delays or costs relating to the transfer of work on the G280, or if the strategic review of the Structures business pressures liquidity could also cause downward rating pressure. Weaker operating performance in Triumph's Systems & Support businesses or failure of the 737 MAX program to resume before the second half of 2020 could also result in a downgrade. The principal methodology used in these ratings was Aerospace and Defense Industry published in March 2018. Headquartered in Berwyn, Pennsylvania, Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls and distributes a broad portfolio of aero-structures, aircraft components, accessories, subassemblies and systems. The company serves the commercial aerospace (53% of sales), military (20%), business jet (23%) and regional and other markets (4%). Pro forma revenues (after completed divestitures) for the twelve months ended December 31, 2019 were approximately $3.1 billion. TUMBLEWEED TINY: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- The Office of the U.S. Trustee on April 6, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Tumbleweed Tiny House Company, Inc. About Tumbleweed Tiny House Company Tumbleweed Tiny House Company, Inc. -- https://www.tumbleweedhouses.com/ -- is a manufacturer of tiny house RVs. Tumbleweed Tiny House Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-11564) on March 4, 2020. At the time of the filing, Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. Judge Kimberley H. Tyson oversees the case. Wadsworth Garber Warner Conrardy, P.C. is Debtor's legal counsel. UNITED PF: Moody's Cuts CFR to Caa1, Outlook Negative ----------------------------------------------------- Moody's Investors Service downgraded United PF Holdings, LLC's ratings including its Corporate Family Rating to Caa1 from B2, Probability of Default Rating to Caa1-PD from B2-PD, first lien bank credit facilities to B3 from B1, and second lien term loan to Caa3 from Caa1. The outlook is negative. The downgrade reflects Moody's expectations for significant revenue and earnings declines in 2020 due to coronavirus related gym closures as well as the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend on leisure activities and potentially reduce United PF's membership through attrition and lower new recruitment. United PF's rapid pace of new club openings means many facilities were in the midst of ramping up membership when the coronavirus hit and will be challenged to achieve membership targets, which will hurt the company's profitability. As a result, all of these factors, Moody's expects lease adjusted debt-to-EBITDA to rise from about 7.0x at the close of the LBO transaction in January 2020 to above 9.0x in 2020. Cash burn during gym closures will cause liquidity pressure that will increase should closures persist or if there is a slow recovery once the gyms reopen. Gym closures began in mid-March. Moody's expects efforts to contain the coronavirus will restrict United PF's ability to reopen for an unknown period. Issuer: United PF Holdings, LLC Corporate Family Rating, downgraded to Caa1 from B2 Probability of Default Rating, downgraded to Caa1-PD from B2-PD Senior Secured First Lien Revolving Credit Facility, downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured First Lien Term Loan, downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured First Lien Delayed Draw Term Loan, downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured Second Lien Term Loan, downgraded to Caa3 (LGD6) from Caa1 (LGD6) Outlook Actions: Issuer: United PF Holdings, LLC Outlook, revised to Negative from Stable RATINGS RATIONALE United PF's Caa1 CFR broadly reflects its very high leverage with Moody's lease adjusted debt/EBITDA expected to rise from about 7.0x post the LBO transaction in January 2020 to over 9.0x in 2020 due to earnings decline from temporary gym closures and the drag on consumer spending as a result of the coronavirus crisis. The rating is also constrained by the company's small scale, weak liquidity, as well as the high business risk of the fragmented and competitive fitness club industry given its low barriers to entry, exposure to cyclical shifts in discretionary consumer spending, and high attrition rates. In addition, the rating reflects the event and financial policy risk due to private equity ownership. However, the ratings are supported by the company's franchise relationship with Planet Fitness, the US's largest and fastest growing fitness club chain that has a well-recognized national brand name. United PF is the largest franchise operator within the Planet Fitness system. The rating also benefits from the longer-term positive fundamentals for the fitness club industry such as its apparent under penetration and an increased awareness of the importance of fitness. Given the company is a budget operator, Moody's believes its business would fare better during a recession given its low price point as well as people trading down from more expensive gyms. 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 United PF'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 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 United PF of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects Moody's view that United PF remains vulnerable to coronavirus disruptions and unfavorable shifts in discretionary consumer spending. The negative outlook also reflects the uncertainty regarding the timing of gym re-openings and the risk of liquidity stress should gym closures persist. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded should operating performance, credit metrics and liquidity improve. The ratings could be downgraded if there is further deterioration of operating performance, credit metrics or liquidity. Furthermore, ratings could be downgraded should Moody's adjusted debt-to-EBITDA remain elevated or the prospect for a distressed exchange or other default increases. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Austin, TX, United PF is the US's largest Planet Fitness franchisee. As of November 30, 2019, pro forma for the acquisitions, United PF owns and operates 168 Planet Fitness clubs serving 1.1 million members in 14 different states. Pro forma revenues are about $260 million. The company is owned by American Securities LLC. UNITI GROUP: PricewaterhouseCoopers LLP Raises Going Concern Doubt ------------------------------------------------------------------ Uniti Group Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net income (attributable to common shareholders) of $8,384,000 on $1,057,611,000 of total revenues for the year ended Dec. 31, 2019, compared to a net income (attributable to common shareholders) of $7,989,000 on $1,017,634,000 of total revenues for the year ended in 2018. The audit report of PricewaterhouseCoopers LLP states that the Company's most significant customer, Windstream Holdings, Inc., which accounts for approximately 65.0% of consolidated total revenues for the year ended December 31, 2019, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, and uncertainties surrounding potential impacts to the Company resulting from Windstream Holdings, Inc.'s bankruptcy filing raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $5,017,000,000, total liabilities of $6,500,164,000, and a total shareholders' deficit of $1,483,164,000. A copy of the Form 10-K is available at: https://is.gd/FCnMcx Uniti Group Inc., an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of wireless infrastructure solutions for the communications industry. The Company is based in Little Rock, Arkansas. VALUESETTERS INC: Has $595K Net Income for Quarter Ended Jan. 31 ---------------------------------------------------------------- Valuesetters Inc. filed its quarterly report on Form 10-Q, disclosing a net income of $595,174 on $757,405 of revenues for the three months ended Jan. 31, 2020, compared to a net income of $12,391 on $121,355 of revenues for the same period in 2019. At Jan. 31, 2020, the Company had total assets of $2,800,112, total liabilities of $1,564,739, and $1,235,373 in total stockholders' equity. Valuesetters said, "The Company sustained losses from its continuing operations and as of January 31, 2020, had negative working capital of $1,095,254 and an accumulated deficit of $1,905,033. In addition, the Company may not be able to meet its obligations as they become due and sustain its operations. The Company believes that its existing cash resources are not sufficient to fund its debt payments and working capital requirements. "The Company may not be able to raise sufficient additional debt, equity or other cash on acceptable terms, if at all. Failure to generate sufficient revenues, achieve certain other business plan objectives or raise additional funds could have a material adverse effect on the Company's results of operations, cash flows and financial position, including its ability to continue as a going concern, and may require it to significantly reduce, reorganize, discontinue or shut down its operations. "In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company which, in turn, is dependent upon the Company's ability to meet its financing requirements on a continuing basis, and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in its existence. "Management's plans include: * Seek to raise debt or equity for working capital purposes and to pay off existing debt balances. With sufficient additional cash available to the Company, it can begin to make marketing expenditures and hire people to generate more revenues to pay down its debt obligations. * Continue to look for software niches and other digital products that can be sold via an Internet-based store. Various acquisition opportunities may help us generate the additional revenues we seek. * Continue to provide advisory services to companies seeking to raise capital and assist them with capital raises. "Management has determined, based on its recent history and its liquidity issues that it is not probable that management's plan will sufficiently alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above. Accordingly, the management of the Company has concluded that there is substantial doubt about the Company's ability to continue as a going concern within one year after the issuance date of these financial statements. "There can be no assurance that the Company will be able to achieve its business plan objectives or be able to achieve or maintain cash-flow-positive operating results. If the Company is unable to generate adequate funds from operations or raise sufficient additional funds, the Company may not be able to repay its existing debt, continue to operate its business network, respond to competitive pressures or fund its operations. As a result, the Company may be required to significantly reduce, reorganize, discontinue or shut down its operations. The financial statements do not include any adjustments that might result from this uncertainty." A copy of the Form 10-Q is available at: https://is.gd/4uoZYr Valuesetters Inc. provides consulting, subscription, advertising, and boutique advisory services. It also sells digital goods through its Internet and mobile device platforms in the media and entertainment markets. The company was formerly known as DBS Investments, Inc. and changed its name to Valuesetters, Inc. in December 2003. Valuesetters was incorporated in 1984 and is based in Boston, Massachusetts. VCHP NEPTUNE BEACH: Gets Interim Authority to Use Cash Collateral ----------------------------------------------------------------- Judge Cynthia C. Jackson authorized VCHP Neptune Beach, LLC, to use cash collateral on an interim basis nunc pro tunc to the Petition Date through April 5, 2020 to pay necessary operating expenses. As adequate protection, the Debtor will grant Arena Limited SPV, LLC a replacement lien on all of the Debtor's postpetition assets to the same extent and priority as the lender's prepetition liens and security interest. The Debtor obtained a loan from Arena Limited in the principal amount of $5,580,000 in June 2017, for which Arena Limited filed a UCC-1 financing statement naming the Debtor's affiliate VCHP Springfield LLC as debtor. Previously, debtor Neptune obtained cash collateral access through March 22, 2020 to pay expenses pursuant to the budget, except for hotel management fees and adequate protection payments to Arena Limited. About VCHP Neptune Beach VCHP Neptune Beach, LLC, d/b/a Red Roof Inn Neptune Beach, operates commonly owned value-type hotels pursuant to franchise agreements with and under the flag of Red Roof Hotels. VCHP Neptune Beach filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-00740) on Feb. 28, 2020. On the Petition Date, the Debtor was estimated to have between $1 million and $10 million in both assets and liabilities. The petition was signed by Dmitry Tomkin, Vendian Capital Management Limited as manager of Vendian-Covenant Hospitality Partners, LLC, the sole and managing member. Agentis PLLC is the Debtor's counsel. VCHP SPRINGFIELD: Obtains Interim Cash Collateral Access -------------------------------------------------------- VCHP Springfield, LLC sought and obtained permission from Judge Cynthia C. Jackson to use cash collateral on an interim basis through and including the earlier of April 5, 2020 or five business days from the date of the Court's ruling on either or both of a certain turnover motion (filed by the Debtor) and an exception motion (filed by secured creditor Arena Limited SPV, LLC). With the turnover motion, the Debtor sought the turnover of its assets, which have been under the control and possession of a Court-appointed receiver in a foreclosure action commenced by Arena Limited, which action is pending in the Circuit Court for the Seventh Judicial Circuit of Illinois Sangamaon County. Arena Limited, thereafter, filed the exception motion, seeking to excuse turnover by the receiver. Arena Limited extended a prepetition loan to the Debtor in the principal amount of $5,200,000. The loan is secured by a mortgage and security agreement executed by the Debtor. About VCHP Springfield VCHP Springfield, LLC, d/b/a Red Roof Inn Springfield, d/b/a State House Inn Springfield, operates hotels and motels in Springfield, Illinois under the flag of Red Roof Hotels. The company filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-00741) on Feb. 28, 2020. On the Petition Date, the Debtor was estimated between $1 million and $10 million in both assets and liabilities. The petition was signed by Dmitry Tomkin, Vendian Capital Management Limited as manager of Vendian-Covenant Hospitality Partners, LLC, the managing member. Agentis PLLC is serving as the Debtor's counsel. VERONIQUE'S GOURMET: Seeks to Hire Lionel E. Giron as Counsel ------------------------------------------------------------- Veronique's Gourmet Corporation seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ the Law Offices of Lionel E. Giron, as its counsel. Veronique's Gourmet requires Lionel E. Giron to: a. advise the Debtor with respect to its powers and duties as debtor-in-possession and the management of the property of the estate and to assist the Debtor in performing the duties requires of it as Debtor in possession; b. negotiate, formulate, draft and confirm a plan of reorganization and attend hearings in connection with any proposed disclosure statements, and plans of reorganization; c. examine all claims filed in these proceedings in order to determine their nature, extent, validity and priority; d. advise and assist the Debtor in connection with the collection of assets, the sale of assets, or the refinancing of same in order to implement any plan of reorganization which might be confirmed in these proceedings; e. take necessary actions to protect the assets of this estate from seizure or other proceedings, pending confirmation and consummation of the plan of reorganization in this case; f. advise the Debtor with respect to the rejection or affirmation of executory contracts; g. advise and assist the Debtor in fulfilling its obligations as fiduciaries of the Chapter 11 estate; h. prepare all necessary pleadings pertaining to matters of bankruptcy law before the court; i. prepare applications and reports; j. render other legal services for the Debtor. Lionel E. Giron will be paid at these hourly rates: Principal $350 Associates $300 to $350 Paralegal $150 to $200 Lionel E. Giron, Esq., Attorney $350 Joanne P. Sanchez, Esq., Attorney $300 Sandy Segovia, Sr. Paralagal $200 Samantha Hernandez, Paralegal $175 Jeannette Llamas, Legal Assistant $150 Lionel E. Giron will also be reimbursed for reasonable out-of-pocket expenses incurred. Lionel E. Giron, a partner at Law Offices of Lionel E. Giron, 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. Lionel E. Giron can be reached at: Lionel E. Giron, Esq. Law Offices of Lionel E. Giron 337 N. Vineyard Ave., Suite 100 Ontario, CA 91764 Tel: (909) 397-7260 Fax: (909) 397-7277 Email: ecf@lglawoffices.com About Veronique's Gourmet Corporation Veronique's Gourmet Corporation operates a fine dining restaurant serving the residents and visitors of Dana Point, California. Veronique's Gourmet Corporation filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-10803) on March 5, 2020, listing under $1 million in both assets and liabilities. The Law Offices of Lionel E. Giron, led by principal Lionel E. Giron, serves as counsel to the Debtor. VIDEOMINING CORP: Seeks to Hire Ocean Tomo as Broker ---------------------------------------------------- Videomining Corporation seeks authority from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Ocean Tomo Transactions, LLC to market its intellectual property portfolio for sale. Ocean Tomo will receive a commission on the sale of the Debtor's intellectual property portfolio as follows: a. 12.5 percent of sales price up to the first $3,000,000; b. 15 percent of the sales price between $3,000,001 and $5,000,000; and c. 20 percent of the sales price over $5,000,000. The minimum commission is $250,000. Ocean Tomo is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The broker can be reached through: Joel Lutzker Ocean Tomo Transactions, LLC 500 W. Putnam, Suite 400 Greenwich, CT 06830 Tel: +1 203 542 7219 Email: jlutzker@oceantomo.com About Videomining Corporation VideoMining Corporation -- http://www.videomining.com/-- is an in-store behavior analytics for Consumer Packaged Goods (CPG) manufacturers and retailers. VideoMining's analytics platform utilizes a patented suite of sensing technologies to capture in-depth shopper behavior data. These previously unmeasured insights are then integrated with multiple other data sources such as transactions, planograms, product mapping, loyalty and promotions to fuel comprehensive solutions for optimizing shopper experience and sales performance. The company filed a Chapter 11 petition (Bankr. W.D. Pa. Case No. 20-20425) on Feb. 4, 2020. In the petition signed by Rajeev Sharma, CEO, the Debtor was estimated to have between $10 million and $50 million in assets and between $1 million and $10 million in liabilities. Robert O Lampl Law Office is the Debtor's counsel. VYCOR MEDICAL: Fountainhead Capital Increases Equity Stake to 59% ----------------------------------------------------------------- In an amended Schedule 13D filed with the Securities and Exchange Commission, Fountainhead Capital Management Limited disclosed that as of March 31, 2020 it beneficially owns 15,643,380 shares of common stock of Vycor Medical, Inc., which represents 59.07 percent of the shares outstanding. On March 31, 2020, the Company issued to Fountainhead an aggregate of 535,714 shares of Company Common Stock pursuant to its Fountainhead Consultancy Agreement. As a result of such issuance, Fountainhead's previously-reported holdings of Vycor Common Stock (including shares which it has the option to acquire within 60 days of such date) were adjusted to a total of 15,643,380 shares, comprising ownership of 14,983,381 Vycor Common Shares and Options to purchase 660,000 Vycor Common Shares at $0.27 per share for a period of three years from June 30, 2018. A full-text copy of the regulatory filing is available for free at: https://is.gd/kJ2YCW 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. Vycor Medical reported a net loss available to common shareholders of $1.12 million for the year ended Dec. 31, 2019, compared to a net loss attributable to common shareholders of $1.70 million 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. W&T OFFSHORE: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. --------------------------------------------------------------- Moody's Investors Service downgraded W&T Offshore, Inc.'s Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa2-PD from B3-PD and senior secured second lien notes rating to Caa3 from B3. W&T's Speculative Grade Liquidity Rating was downgraded to SGL-4 from SGL-2. The outlook was changed to negative from stable. "The downgrade of W&T's ratings reflects the negative impact from the weak oil and gas price environment on credit quality, increased refinancing risks as debt maturities approach and a high cost of capital which elevates risks of restructuring and default," said Jonathan Teitel, Moody's Analyst. Downgrades: Issuer: W&T Offshore, Inc. Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Notes, Downgraded to Caa3 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: W&T Offshore, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE The downgrade of W&T's ratings reflects negative effects from weak commodity prices and challenging capital markets on the company, particularly as debt maturities approach. There are rising risks of restructuring and default, including a distressed exchange which could be deemed a default by Moody's. The negative outlook reflects increasing refinancing risks, rising risk of default and further erosion of liquidity as debt maturities approach. 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 E&P 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 W&T's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and W&T 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 W&T of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. The SGL-4 rating reflects Moody's view that W&T's liquidity is weak. The company's revolver expires in October 2022. W&T's revolver has a $250 million borrowing base. Moody's estimates that the company's ability to draw on its revolver could be constrained by financial covenants over time. Reduction in the borrowing base during spring redetermination is possible which would weaken liquidity. As of February 29, 2020, the company had $40 million of cash and $80 million drawn on its $250 million revolver ($6 million of letters of credit were outstanding). W&T's Caa2 CFR reflects refinancing risks and rising risk of default, including a distressed exchange which could be deemed a default by Moody's. The company has offshore concentration and large well abandonment liabilities. The plugging and abandonment liabilities signify higher underlying financial leverage and carry ongoing cash expenditures. W&T benefits from low basis differentials, and sometimes premiums notwithstanding weak commodity prices. W&T's financial policies are among governance considerations. Acquisitions are part of the company's growth strategy, and credit risks could increase if there are further debt-funded purchases. The company has a low capital budget for 2020 with expectations to spend between $15-$25 million, significantly below capital spending in 2019. While benefiting liquidity short-term, significantly lower investment will negatively affect production and reserves growth over time. The company has limited hedges beyond 2020. Environmental considerations that exploration and production companies such as W&T contend with are the effects of environmental regulations on their operations, including those specific to offshore operators, as well as limitations on where they can explore for new resources. Governance considerations include concentrated equity ownership. Tracy Krohn, W&T's chairman and CEO, owns roughly one-third of the company. W&T's $625 million of senior secured second lien notes due November 2023 are rated Caa3, one notch below the CFR reflecting that these notes have a second lien on the collateral relative to the revolver. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a downgrade include increasing default risk including distressed exchanges, weakening liquidity or Moody's view on expected recoveries is lowered. Factors that could lead to an upgrade include refinanced debt with longer tenors, less debt, sustainable production and reserves growth, and adequate liquidity. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. W&T, headquartered in Houston, Texas, is a publicly-traded independent exploration and production company operating offshore in the US Gulf of Mexico. Average daily production for 2019 was 41 Mboe/d. YS GARMENTS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. -------------------------------------------------------------- Moody's Investors Service downgraded YS Garments, LLC's ratings, including its corporate family rating to Caa1 from B2, probability of default rating to Caa1-PD from B2-PD, and senior secured credit facilities to Caa1 from B2. The rating outlook was changed to negative from stable. The downgrade and negative outlook reflect Moody's expectation that the unprecedented disruptions caused by the Coronavirus will result in a significant reduction in consumer and business promotional spending over the next several quarters. While leverage is currently moderate, at less than 4.0 times using Moody's standard adjustments, significantly weaker earnings will lead to a deterioration in credit metrics and free cash flow deficits. While currently supported by balance sheet cash and excess revolver availability, liquidity is expected to be weak as the coronavirus pandemic is expected to result in the cancellation or postponement of many events into the late summer with a slow prolonged recovery. At the same time, Next Level Apparel's financial maintenance covenant, maximum total net leverage, is set to tighten in the second and fourth quarters of 2020. Downgrades: Issuer: YS Garments, LLC Corporate Family Rating, Downgraded to Caa1 from B2 Probability of Default Rating, Downgraded to Caa1-PD from B2-PD Gtd Senior Secured Revolving Credit Facility, Downgraded to Caa1 (LGD3) from B2 (LGD3) Gtd Senior Secured Term Loan, Downgraded to Caa1 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: YS Garments, LLC 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 and promotional products sector have been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Next Level's credit profile, including its exposure to discretionary consumer and business spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Next Level 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 Next Level of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Next Level Apparel's Caa1 CFR reflects its small revenue scale and narrow product focus relative to the global apparel industry, high concentration of sales with two large distributor customers. While the rating reflects governance, risks related to private equity ownership, the company has historically maintained moderate leverage, at less than 4.0x calculated using Moody's standard adjustments, and solid interest coverage of over 3.0x. However, Moody's expects these metrics to deteriorate significantly over the very near term due to reduced consumer and business promotional spending as a result of the coronavirus pandemic. The Caa1 rating also reflects Moody's expectation for near term cash flow deficits as a result of reduced earnings and a high interest expense burden relative to its size. The rating also reflects Next Level Apparel's well-recognized brand name within the wearable promotional products industry, and stable customer relationships illustrated by strong sales momentum with top customers, which is typically driven by recurring purchases for inventory replenishment, limited fashion risk of basic apparel, shift in consumer preference towards higher quality basic apparel designs, fabric and fit, expanding product offerings, and reduced price differentials versus more commoditized basic apparel. Next Level Apparel has grown rapidly since its creation in 2003, and with an asset-light and fully outsourced business model, it has achieved very strong profit margins that are consistent with many premium apparel brands. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if liquidity erodes through free cash flow turning materially negative or covenant violations, or if its probability of default otherwise increases. A ratings upgrade would require a return to revenue and earnings growth, with adequate liquidity including ample covenant cushion and positive free cash flow. Metrics include lease-adjusted debt/EBITDAR sustained below 6.5x and EBITA/Interest over 1.5x. The principal methodology used in these ratings was Apparel Methodology published in October 2019. Headquartered in Gardena, California, Next Level Apparel designs and provides branded active wear to the fashion basic segment of the US wholesale wearables promotional products industry. Revenue for the year ended December 2019 approached $350 million. Private equity firm Blue Point Capital partners acquired a majority stake in the company in August 2018, with management remaining a significant minority shareholder. ZPOWER TEXAS: Seeks to Hire Munsch Hardt Kopf as Counsel -------------------------------------------------------- ZPower Texas, LLC and ZPower, LLC, seek authority from the US Bankruptcy Court for the Northern of Texas to employ Munsch Hardt Kopf & Harr, P.C. as its counsel. Services Munch Hardt will render are: a. serve as attorneys of record for the Debtors in all aspects, to include any adversary proceedings commenced in connection with the Bankruptcy Cases and to provide representation and legal advice to the Debtors throughout the Bankruptcy Cases; b. assist the Debtors in carrying out their duties under the Bankruptcy Code, including advising the Debtors of such duties, obligations, and legal rights; c. consult with the United States Trustee, any statutory committee that may be formed, and all other creditors and parties-in-interest concerning administration of the Bankruptcy Cases; d. assist in potential sales of the Debtors' assets; e. prepare on behalf of the Debtors all motions, applications, answers, orders, reports, and other legal papers and documents to further the Estates' interests and objectives, and to assist the Debtors in the preparation of schedules, statements, and reports, and to represent the Debtors and the Estates at all related hearings and at all related meetings of creditors, US Trustee interviews, and the like; f. assist the Debtors in connection with formulating and confirming a Chapter 11 plan; g. assist the Debtors in analyzing and appropriately treating the claims of creditors; h. appear before this Court and any appellate courts or other courts having jurisdiction over any matter associated with the Bankruptcy Cases; and i. perform all other legal services and provide all other legal advice to the Debtors as may be required or deemed to be in the interests of the Estates in accordance with the Debtors' powers and duties as set forth in the Bankruptcy Code. Munsch Hardt's hourly rates for the attorneys who will most likely be working on the Bankruptcy Case are: Davor Rukavina, Shareholder $550 Julian Vasek, Associate $410 On March 16, 2020, ZPower Texas, LLC funded a retainer to Munsch Hardt in the amount of $35,000. Munsch Hardt is a "disinterested person," as that term is defined in section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Estates., according to court filings. The firm can be reached through: Davor Rukavina, Esq. Munsch Hardt Kopf & Harr, P.C. 500 N. Akard Street, Suite 3800 Dallas, TX 75201-6659 Tel: 214-855-7500 Fax: 214-855-7584 Email: drukavina@munsch.com 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. [*] Fitch Places 15 Hospital Ratings on Watch Neg. Amid Coronavirus ------------------------------------------------------------------- Fitch Ratings has taken rating action on 15 not-for-profit hospital and healthcare systems, placing all of them on Rating Watch Negative. These actions impact approximately $3.7 billion of total debt outstanding. SECURITY Security on the bonds varies among issuers. KEY RATING DRIVERS Coronavirus Pressures Operating Margins: The Rating Watch reflects those ratings with the greatest risk of transition under the current coronavirus pandemic as reimbursement and overall expenses are expected to be significantly disrupted over the short term. The margin pressure is primarily due to the loss of revenue from elective medical and surgical volumes, resulting in weaker operating EBITDA levels through the first half of calendar 2020 and negatively impacting full year results. Weaker Liquidity Levels: Given the recent dislocation of the equities market, resulting in double-digit reductions over a very short period of time, these providers have experienced unrealized losses in unrestricted liquidity commensurate with their specific asset allocation. With expected cash flow constraints, hospitals may need to draw on liquidity reserves to meet working capital needs. Weaker Operating Risk, Liquidity: The ratings now placed on Negative Watch are have comparatively light levels of liquidity, which is a heightened concern given revenue pressures during this time frame, or are smaller in terms of net patient revenue (most are single site facilities) reflecting greater vulnerability to the risks associated with added expenses and reduce elective revenue associated with the coronavirus pandemic. Federal Response Key: There may be some future relief from additional government funding, but the individual credit impact for the hospitals on this list is unknown as this time. The degree of support and the speed with which it is provided may greatly affect the near-term ratings impacts of the revenue losses on these credits. RATING SENSITIVITIES Rating Watches will be resolved and affected credits reviewed within six months as of the publication of this list. Fitch may place additional issuer ratings on Rating Watch in the future should additional information further inform its opinion. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A significant or sustained decline in operating income levels, such that current operating risk assessments transitions to a lower level; -- Declines in current liquidity positions that are viewed as non-temporary in nature or that weakens current financial risk assessments; -- Limited federal intervention which fails to adequately support impacted institutions. Factors that could, individually or collectively, lead to positive rating action/downgrade: -- The Rating Watch Negative could be removed and ratings affirmed if Fitch sees a lack of material impact from the coronavirus pandemic or a financial recovery that is viewed as sustainable. BEST/WORST CASE RATING SCENARIO Ratings of Public Finance issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT PROFILE Ratings Placed on Rating Watch Negative: -- Boone Hospital Center (MO) -- Care New England (RI) -- Ector County Hospital District (TX) -- Erlanger Health System (TN) -- Holy Redeemer Health System (PA) -- Jennie Stuart Medical Center (KY) -- John Fitzgibbon Memorial Hospital (MO) -- Lifespan Corporation (RI) -- Marietta Area Health Care Inc., dba Memorial Health System (OH) -- Pioneers Memorial Healthcare District (CA) -- Regional West Health Services and Affiliates (NE) -- South Nassau Communities Hospital (NY) -- Southeastern Regional Medical Center (NC) -- Wayne Healthcare (OH) -- Wise Regional Health System (TX) The coronavirus pandemic has created a highly uncertain and negative position for the entire sector. Downward rating actions may occur even on credits not placed on this specific Rating Watch list as either annual reviews take place, or as new information on the impact to a credit's operational profile or liquidity positioning become known and analyzed. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. South Nassau Communities Hospital (NY) - LT IDR BBB+; Rating Watch On South Nassau Communities Hospital (NY) /General Revenues/1 LT - LT BBB+; Rating Watch On Lifespan Corporation (RI) - LT IDR BBB+; Rating Watch On Lifespan Corporation (RI) /General Revenues/1 LT - LT BBB+; Rating Watch On Wayne Healthcare (OH) - LT IDR BB+; Rating Watch On Wayne Healthcare (OH) /General Revenues/1 LT - LT BB+; Rating Watch On Boone Hospital Center (MO) - LT IDR BBB; Rating Watch On Boone Hospital Center (MO) /General Revenues/1 LT - LT BBB; Rating Watch On Erlanger Health System (TN) - LT IDR BBB; Rating Watch On Erlanger Health System (TN) /General Revenues/1 LT - LT BBB; Rating Watch On Pioneers Memorial Healthcare District (CA) - LT IDR BBB-; Rating Watch On Pioneers Memorial Healthcare District (CA) /General Obligation - Unlimited Tax - Dedicated Tax/1 LT - LT BBB-; Rating Watch On Pioneers Memorial Healthcare District (CA) /General Revenues/1 LT - LT BBB-; Rating Watch On Marietta Area Health Care Inc. dba Memorial Health System (OH) - LT IDR BB-; Rating Watch On Marietta Area Health Care Inc. dba Memorial Health System (OH) /General Revenues/1 LT - LT BB-; Rating Watch On Care New England (RI) - LT IDR BB; Rating Watch On Care New England (RI) /General Revenues/1 LT - LT BB; Rating Watch OnB Holy Redeemer Health System (PA) - LT IDR BBB-; Rating Watch On Holy Redeemer Health System (PA) /General Revenues/1 LT - LT BBB-; Rating Watch OnBB- Southeastern Regional Medical Center (NC) - LT IDR BBB+; Rating Watch On Southeastern Regional Medical Center (NC) /General Revenues/1 LT - LT BBB+; Rating Watch On Regional West Health Services and Affiliates (NE) - LT IDR BB+; Rating Watch On Regional West Health Services and Affiliates (NE) /General Revenues/1 LT - LT BB+; Rating Watch On Ector County Hospital District (TX) - LT IDR BB+; Rating Watch On Ector County Hospital District (TX) /General Revenues/1 LT - LT BB+; Rating Watch On John Fitzgibbon Memorial Hospital (MO) - LT IDR B; Rating Watch On John Fitzgibbon Memorial Hospital (MO) /General Revenues/1 LT - LT B; Rating Watch On Jennie Stuart Medical Center (KY) - LT IDR BB+; Rating Watch On Jennie Stuart Medical Center (KY) /General Revenues/1 LT - LT BB+; Rating Watch On Wise Regional Health System (TX) - LT IDR BBB-; Rating Watch On Wise Regional Health System (TX) /General Revenues/1 LT - LT BBB-; Rating Watch On [^] BOND PRICING: For the Week from April 6 to 10, 2020 ------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 24 Hour Fitness Worldwide Inc HRFITW 8.000 5.084 6/1/2022 24 Hour Fitness Worldwide Inc HRFITW 8.000 7.585 6/1/2022 APL Ltd NOLSP 8.000 41.250 1/15/2024 Aleris International Inc ARS 10.750 99.931 7/15/2023 Ascent Resources Utica Holdings LLC / ARU Finance Corp ASCRES 10.000 56.908 4/1/2022 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bank of New York Mellon BK 4.950 84.999 N/A Beverages & More Inc BEVMO 11.500 55.320 6/15/2022 Beverages & More Inc BEVMO 11.500 51.408 6/15/2022 Bon-Ton Department Stores BONT 8.000 10.143 6/15/2021 Briggs & Stratton Corp BGG 6.875 72.110 12/15/2020 Bristow Group Inc BRS 6.250 5.733 10/15/2022 Bristow Group Inc BRS 4.500 5.750 6/1/2023 Bruin E&P Partners LLC BRUINE 8.875 4.481 8/1/2023 Bruin E&P Partners LLC BRUINE 8.875 3.908 8/1/2023 Buckeye Partners LP BPL 6.375 44.049 1/22/2078 Buffalo Thunder Development BUFLO 11.000 50.125 12/9/2022 CBL & Associates LP CBL 5.950 20.724 12/15/2026 CBL & Associates LP CBL 5.250 21.574 12/1/2023 CBL & Associates LP CBL 4.600 19.049 10/15/2024 CEC Entertainment Inc CEC 8.000 43.039 2/15/2022 CONSOL Energy Inc CEIX 11.000 35.601 11/15/2025 CSI Compressco LP / CSI Compressco Finance CCLP 7.250 89.000 8/15/2022 Calfrac Holdings LP CFWCN 8.500 7.086 6/15/2026 Calfrac Holdings LP CFWCN 8.500 7.807 6/15/2026 California Resources Corp CRC 8.000 2.813 12/15/2022 California Resources Corp CRC 5.500 4.832 9/15/2021 California Resources Corp CRC 6.000 4.131 11/15/2024 California Resources Corp CRC 8.000 2.924 12/15/2022 California Resources Corp CRC 6.000 3.252 11/15/2024 Callon Petroleum Co CPE 6.250 15.261 4/15/2023 Callon Petroleum Co CPE 6.125 16.164 10/1/2024 Callon Petroleum Co CPE 6.375 16.943 7/1/2026 Callon Petroleum Co CPE 8.250 10.641 7/15/2025 Callon Petroleum Co CPE 6.125 12.218 10/1/2024 Callon Petroleum Co CPE 6.125 12.218 10/1/2024 Capital One Financial Corp COF 5.550 84.500 N/A Chaparral Energy Inc CHAP 8.750 3.735 7/15/2023 Chaparral Energy Inc CHAP 8.750 3.918 7/15/2023 Chesapeake Energy Corp CHK 11.500 14.510 1/1/2025 Chesapeake Energy Corp CHK 5.500 1.000 9/15/2026 Chesapeake Energy Corp CHK 6.875 24.818 11/15/2020 Chesapeake Energy Corp CHK 6.125 18.023 2/15/2021 Chesapeake Energy Corp CHK 5.750 11.939 3/15/2023 Chesapeake Energy Corp CHK 8.000 8.558 6/15/2027 Chesapeake Energy Corp CHK 7.000 6.933 10/1/2024 Chesapeake Energy Corp CHK 4.875 12.928 4/15/2022 Chesapeake Energy Corp CHK 8.000 7.115 1/15/2025 Chesapeake Energy Corp CHK 5.375 15.290 6/15/2021 Chesapeake Energy Corp CHK 11.500 17.405 1/1/2025 Chesapeake Energy Corp CHK 7.500 7.526 10/1/2026 Chesapeake Energy Corp CHK 8.000 5.000 3/15/2026 Chesapeake Energy Corp CHK 8.000 5.000 3/15/2026 Chesapeake Energy Corp CHK 6.875 14.285 11/15/2020 Chesapeake Energy Corp CHK 8.000 6.524 1/15/2025 Chesapeake Energy Corp CHK 8.000 5.689 6/15/2027 Chesapeake Energy Corp CHK 8.000 5.000 3/15/2026 Chesapeake Energy Corp CHK 8.000 5.689 6/15/2027 Chesapeake Energy Corp CHK 8.000 6.524 1/15/2025 Chukchansi Economic Development Authority CHUKCH 9.750 49.545 5/30/2020 Chukchansi Economic Development Authority CHUKCH 10.250 49.500 5/30/2020 Citigroup Inc C 4.990 98.546 4/28/2020 CorEnergy Infrastructure Trust Inc CORR 7.000 80.000 6/15/2020 DCP Midstream LP DCP 7.375 33.750 N/A DFC Finance Corp DLLR 10.500 67.125 6/15/2020 DFC Finance Corp DLLR 10.500 67.125 6/15/2020 Dean Foods Co DF 6.500 4.250 3/15/2023 Dean Foods Co DF 6.500 17.750 3/15/2023 Denbury Resources Inc DNR 9.000 17.595 5/15/2021 Denbury Resources Inc DNR 7.750 15.852 2/15/2024 Denbury Resources Inc DNR 9.250 16.454 3/31/2022 Denbury Resources Inc DNR 5.500 4.505 5/1/2022 Denbury Resources Inc DNR 6.375 12.200 8/15/2021 Denbury Resources Inc DNR 6.375 7.500 12/31/2024 Denbury Resources Inc DNR 4.625 5.784 7/15/2023 Denbury Resources Inc DNR 9.000 21.057 5/15/2021 Denbury Resources Inc DNR 9.250 17.028 3/31/2022 Denbury Resources Inc DNR 7.500 14.746 2/15/2024 Denbury Resources Inc DNR 7.750 15.609 2/15/2024 Denbury Resources Inc DNR 7.500 14.746 2/15/2024 Diamond Offshore Drilling DO 7.875 27.668 8/15/2025 Diamond Offshore Drilling DO 3.450 30.432 11/1/2023 ENSCO International Inc VAL 7.200 13.873 11/15/2027 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 11.000 5/15/2026 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 47.000 11/29/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 9.375 2.750 5/1/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 1.522 2/15/2025 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 1.138 11/29/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 9.375 1.195 5/1/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 10.563 5/15/2026 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 1.522 2/15/2025 EnLink Midstream Partners ENLK 6.000 24.000 N/A Energy Conversion Devices ENER 3.000 7.875 6/15/2013 Envision Healthcare Corp EVHC 8.750 30.124 10/15/2026 Envision Healthcare Corp EVHC 8.750 24.575 10/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 25.918 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 25.291 7/15/2023 Extraction Oil & Gas Inc XOG 7.375 18.543 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 15.405 2/1/2026 Extraction Oil & Gas Inc XOG 7.375 16.812 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 15.970 2/1/2026 FTS International Inc FTSINT 6.250 30.207 5/1/2022 Federal Farm Credit Banks Funding Corp FFCB 1.560 99.098 7/26/2021 Federal Farm Credit Banks Funding Corp FFCB 1.850 99.444 8/23/2024 Federal Farm Credit Banks Funding Corp FFCB 1.500 99.563 7/28/2021 Federal Farm Credit Banks Funding Corp FFCB 1.600 98.759 8/15/2023 Federal Home Loan Banks FHLB 1.340 99.129 7/13/2021 Federal National Mortgage Association FNMA 2.125 97.646 10/19/2029 Ferrellgas Partners LP / Ferrellgas Partners Finance Corp FGP 8.625 49.394 6/15/2020 Ferrellgas Partners LP / Ferrellgas Partners Finance Corp FGP 8.625 50.250 6/15/2020 Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011 Foresight Energy LLC / Foresight Energy Finance FELP 11.500 2.658 4/1/2023 Foresight Energy LLC / Foresight Energy Finance FELP 11.500 2.658 4/1/2023 Forum Energy Technologies FET 6.250 32.529 10/1/2021 Fresh Market Inc/The TFM 9.750 44.171 5/1/2023 Fresh Market Inc/The TFM 9.750 43.768 5/1/2023 Frontier Communications FTR 10.500 30.013 9/15/2022 Frontier Communications FTR 11.000 30.814 9/15/2025 Frontier Communications FTR 7.125 26.706 1/15/2023 Frontier Communications FTR 6.250 23.268 9/15/2021 Frontier Communications FTR 8.750 25.356 4/15/2022 Frontier Communications FTR 7.625 23.746 4/15/2024 Frontier Communications FTR 6.875 23.305 1/15/2025 Frontier Communications FTR 7.875 23.007 1/15/2027 Frontier Communications FTR 9.250 22.516 7/1/2021 Frontier Communications FTR 7.000 23.315 11/1/2025 Frontier Communications FTR 8.875 22.787 9/15/2020 Frontier Communications FTR 11.000 30.975 9/15/2025 Frontier Communications FTR 10.500 30.910 9/15/2022 Frontier Communications FTR 6.800 15.686 8/15/2026 Frontier Communications FTR 10.500 30.910 9/15/2022 Frontier Communications FTR 11.000 30.975 9/15/2025 GameStop Corp GME 6.750 70.186 3/15/2021 GameStop Corp GME 6.750 70.715 3/15/2021 General Electric Co GE 2.631 99.849 4/15/2020 Global Eagle Entertainment ENT 2.750 7.625 2/15/2035 Goldman Sachs Group Inc/The GS 5.375 91.000 N/A Goodman Networks Inc GOODNT 8.000 48.500 5/11/2022 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 63.636 9/30/2021 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 66.139 9/30/2021 Grizzly Energy LLC VNR 9.000 6.000 2/15/2024 Grizzly Energy LLC VNR 9.000 6.000 2/15/2024 Gulfport Energy Corp GPOR 6.625 28.998 5/1/2023 Gulfport Energy Corp GPOR 6.000 27.836 10/15/2024 Gulfport Energy Corp GPOR 6.375 26.733 1/15/2026 Gulfport Energy Corp GPOR 6.375 26.115 5/15/2025 Gulfport Energy Corp GPOR 6.375 26.944 1/15/2026 Gulfport Energy Corp GPOR 6.375 25.376 5/15/2025 Gulfport Energy Corp GPOR 6.375 26.944 1/15/2026 Gulfport Energy Corp GPOR 6.375 25.376 5/15/2025 Hi-Crush Inc HCR 9.500 15.000 8/1/2026 Hi-Crush Inc HCR 9.500 15.000 8/1/2026 High Ridge Brands Co HIRIDG 8.875 2.250 3/15/2025 High Ridge Brands Co HIRIDG 8.875 1.750 3/15/2025 HighPoint Operating Corp HPR 7.000 44.113 10/15/2022 ION Geophysical Corp IO 9.125 59.525 12/15/2021 International Wire Group ITWG 10.750 84.000 8/1/2021 International Wire Group ITWG 10.750 84.077 8/1/2021 JC Penney Corp Inc JCP 5.650 55.715 6/1/2020 JC Penney Corp Inc JCP 5.875 40.768 7/1/2023 JC Penney Corp Inc JCP 8.625 13.891 3/15/2025 JC Penney Corp Inc JCP 7.400 10.543 4/1/2037 JC Penney Corp Inc JCP 6.375 8.888 10/15/2036 JC Penney Corp Inc JCP 7.625 7.803 3/1/2097 JC Penney Corp Inc JCP 5.875 39.338 7/1/2023 JC Penney Corp Inc JCP 7.125 17.500 11/15/2023 JC Penney Corp Inc JCP 8.625 14.544 3/15/2025 JC Penney Corp Inc JCP 6.900 17.500 8/15/2026 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 4.648 10/15/2025 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 4.735 10/15/2025 LSC Communications Inc LKSD 8.750 17.524 10/15/2023 LSC Communications Inc LKSD 8.750 19.372 10/15/2023 Liberty Media Corp LMCA 2.250 45.644 9/30/2046 LoanCore Capital Markets LLC / JLC Finance Corp JEFLCR 6.875 89.500 6/1/2020 Lonestar Resources America LONE 11.250 20.500 1/1/2023 Lonestar Resources America LONE 11.250 20.060 1/1/2023 MAI Holdings Inc MAIHLD 9.500 20.000 6/1/2023 MAI Holdings Inc MAIHLD 9.500 20.000 6/1/2023 MAI Holdings Inc MAIHLD 9.500 20.000 6/1/2023 MF Global Holdings Ltd MF 9.000 15.625 6/20/2038 MF Global Holdings Ltd MF 6.750 15.625 8/8/2016 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 43.834 2/15/2021 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 52.032 2/15/2021 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 52.032 2/15/2021 Mashantucket Western Pequot Tribe MASHTU 7.350 15.490 7/1/2026 McClatchy Co/The MNIQQ 6.875 2.000 3/15/2029 McClatchy Co/The MNIQQ 6.875 25.000 7/15/2031 McClatchy Co/The MNIQQ 7.150 2.000 11/1/2027 McDermott Technology Americas Inc / McDermott Technology US Inc MDR 10.625 4.250 5/1/2024 McDermott Technology Americas Inc / McDermott Technology US Inc MDR 10.625 8.000 5/1/2024 Men's Wearhouse Inc/The TLRD 7.000 27.256 7/1/2022 Men's Wearhouse Inc/The TLRD 7.000 28.072 7/1/2022 MetLife Inc MET 5.250 100.000 N/A Metropolitan Life Global Funding I MET 2.000 99.824 4/14/2020 Metropolitan Life Global Funding I MET 2.000 100.000 4/14/2020 Morgan Stanley MS 5.550 86.600 N/A Moss Creek Resources Holdings Inc MSSCRK 7.500 27.713 1/15/2026 Moss Creek Resources Holdings Inc MSSCRK 10.500 33.291 5/15/2027 Moss Creek Resources Holdings Inc MSSCRK 10.500 32.181 5/15/2027 Moss Creek Resources Holdings Inc MSSCRK 7.500 26.682 1/15/2026 NWH Escrow Corp HARDWD 7.500 52.377 8/1/2021 NWH Escrow Corp HARDWD 7.500 52.377 8/1/2021 Nabors Industries Inc NBR 5.750 28.731 2/1/2025 Nabors Industries Inc NBR 4.625 65.182 9/15/2021 Nabors Industries Inc NBR 5.100 22.871 9/15/2023 Nabors Industries Inc NBR 0.750 17.250 1/15/2024 Nabors Industries Inc NBR 5.500 41.714 1/15/2023 Nabors Industries Inc NBR 5.750 22.679 2/1/2025 Nabors Industries Inc NBR 5.750 22.579 2/1/2025 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 9.818 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 10.361 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 11.389 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 13.902 10/25/2024 New Gulf Resources LLC/ NGR Finance Corp NGREFN 12.250 3.857 5/15/2019 Nine Energy Service Inc NINE 8.750 24.630 11/1/2023 Nine Energy Service Inc NINE 8.750 24.514 11/1/2023 Nine Energy Service Inc NINE 8.750 25.078 11/1/2023 Northwest Hardwoods Inc HARDWD 7.500 35.000 8/1/2021 Northwest Hardwoods Inc HARDWD 7.500 35.000 8/1/2021 OMX Timber Finance Investments II LLC OMX 5.540 0.573 1/29/2020 Oasis Petroleum Inc OAS 6.875 14.143 3/15/2022 Oasis Petroleum Inc OAS 6.875 12.588 1/15/2023 Oasis Petroleum Inc OAS 6.250 12.268 5/1/2026 Oasis Petroleum Inc OAS 2.625 11.500 9/15/2023 Oasis Petroleum Inc OAS 6.500 31.243 11/1/2021 Oasis Petroleum Inc OAS 6.250 12.540 5/1/2026 Oil States International OIS 1.500 38.250 2/15/2023 Omnimax International Inc EURAMX 12.000 75.000 8/15/2020 Omnimax International Inc EURAMX 12.000 74.980 8/15/2020 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 57.968 6/1/2021 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 57.968 6/1/2021 PDC Energy Inc PDCE 6.250 62.125 12/1/2025 PHH Corp PHH 6.375 61.200 8/15/2021 Party City Holdings Inc PRTY 6.625 9.734 8/1/2026 Party City Holdings Inc PRTY 6.125 20.493 8/15/2023 Party City Holdings Inc PRTY 6.625 10.091 8/1/2026 Party City Holdings Inc PRTY 6.125 21.623 8/15/2023 PennyMac Corp PMT 5.375 98.250 5/1/2020 Phillips 66 PSX 2.581 99.753 4/15/2020 Phillips 66 PSX 2.581 99.794 4/15/2020 Pioneer Energy Services PESX 6.125 1.000 3/15/2022 Pride International LLC VAL 7.875 12.919 8/15/2040 Principal Financial Group PFG 4.700 85.229 5/15/2055 Prospect Capital Corp PSEC 4.750 99.300 4/15/2020 Pyxus International Inc PYX 9.875 18.536 7/15/2021 Pyxus International Inc PYX 9.875 54.000 7/15/2021 Pyxus International Inc PYX 9.875 18.846 7/15/2021 QEP Resources Inc QEP 5.250 35.839 5/1/2023 QEP Resources Inc QEP 6.875 49.486 3/1/2021 QEP Resources Inc QEP 5.375 41.210 10/1/2022 Quorum Health Corp QHC 11.625 36.021 4/15/2023 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Revlon Consumer Products REV 5.750 70.408 2/15/2021 Revlon Consumer Products REV 6.250 22.655 8/1/2024 Rolta LLC RLTAIN 10.750 8.341 5/16/2018 SESI LLC SPN 7.125 29.284 12/15/2021 SESI LLC SPN 7.125 40.273 12/15/2021 SESI LLC SPN 7.750 24.180 9/15/2024 SM Energy Co SM 6.125 37.154 11/15/2022 SM Energy Co SM 5.000 28.084 1/15/2024 SM Energy Co SM 5.625 27.479 6/1/2025 SM Energy Co SM 1.500 40.000 7/1/2021 Sanchez Energy Corp SNEC 7.250 30.000 2/15/2023 Sanchez Energy Corp SNEC 6.125 0.600 1/15/2023 Sanchez Energy Corp SNEC 7.250 30.000 2/15/2023 SandRidge Energy Inc SD 7.500 0.500 2/15/2023 Sears Holdings Corp SHLD 8.000 1.063 12/15/2019 Sears Holdings Corp SHLD 6.625 9.875 10/15/2018 Sears Holdings Corp SHLD 6.625 4.305 10/15/2018 Sears Roebuck Acceptance SHLD 7.500 1.000 10/15/2027 Sears Roebuck Acceptance SHLD 6.750 0.653 1/15/2028 Sears Roebuck Acceptance SHLD 7.000 0.720 6/1/2032 Sears Roebuck Acceptance SHLD 6.500 1.000 12/1/2028 Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014 Stearns Holdings LLC STELND 9.375 45.375 8/15/2020 Stearns Holdings LLC STELND 9.375 45.375 8/15/2020 Summit Midstream Holdings LLC / Summit Midstream Finance Corp SUMMPL 5.750 13.872 4/15/2025 Summit Midstream Holdings LLC / Summit Midstream Finance Corp SUMMPL 5.500 18.348 8/15/2022 Summit Midstream Partners SMLP 9.500 7.000 N/A Talos Production LLC / Talos Production Finance TAENLL 11.000 61.500 4/3/2022 Talos Production LLC / Talos Production Finance TAENLL 11.000 60.767 4/3/2022 Talos Production LLC / Talos Production Finance TAENLL 11.000 60.767 4/3/2022 Talos Production LLC / Talos Production Finance TAENLL 11.000 60.767 4/3/2022 Teligent Inc/NJ TLGT 4.750 37.841 5/1/2023 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 TerraVia Holdings Inc TVIA 6.000 4.644 2/1/2018 Tesla Energy Operations Inc/DE TSLAEN 3.600 98.667 4/23/2020 Tesla Energy Operations Inc/DE TSLAEN 3.600 88.925 5/29/2020 Tesla Energy Operations Inc/DE TSLAEN 3.600 88.925 5/14/2020 Tesla Energy Operations Inc/DE TSLAEN 3.600 88.925 5/21/2020 Tesla Energy Operations Inc/DE TSLAEN 3.600 88.925 6/11/2020 Tilray Inc TLRY 5.000 35.500 10/1/2023 Transworld Systems Inc TSIACQ 9.500 24.277 8/15/2021 Transworld Systems Inc TSIACQ 9.500 24.277 8/15/2021 Tupperware Brands Corp TUP 4.750 42.899 6/1/2021 Tupperware Brands Corp TUP 4.750 42.899 6/1/2021 Tupperware Brands Corp TUP 4.750 41.429 6/1/2021 UCI International LLC UCII 8.625 4.780 2/15/2019 Ultra Resources Inc/US UPL 6.875 10.750 4/15/2022 Ultra Resources Inc/US UPL 7.125 4.704 4/15/2025 Ultra Resources Inc/US UPL 6.875 5.250 4/15/2022 Ultra Resources Inc/US UPL 7.125 4.704 4/15/2025 Unit Corp UNTUS 6.625 10.461 5/15/2021 VIVUS Inc VVUS 4.500 96.889 5/1/2020 Vector Group Ltd VGR 1.750 99.000 4/15/2020 Vine Oil & Gas LP / Vine Oil & Gas Finance Corp VRI 9.750 26.199 4/15/2023 Vine Oil & Gas LP / Vine Oil & Gas Finance Corp VRI 8.750 22.148 4/15/2023 Vine Oil & Gas LP / Vine Oil & Gas Finance Corp VRI 9.750 25.075 4/15/2023 Vine Oil & Gas LP / Vine Oil & Gas Finance Corp VRI 8.750 21.793 4/15/2023 W&T Offshore Inc WTI 9.750 26.581 11/1/2023 W&T Offshore Inc WTI 9.750 24.556 11/1/2023 Western Alliance Bank WAL 5.000 91.912 7/15/2025 Whiting Petroleum Corp WLL 5.750 7.343 3/15/2021 Whiting Petroleum Corp WLL 6.625 11.500 1/15/2026 Whiting Petroleum Corp WLL 6.250 10.000 4/1/2023 Whiting Petroleum Corp WLL 6.625 6.260 1/15/2026 Whiting Petroleum Corp WLL 6.625 6.723 1/15/2026 Windstream Services LLC / Windstream Finance Corp WIN 10.500 3.250 6/30/2024 Windstream Services LLC / Windstream Finance Corp WIN 9.000 2.000 6/30/2025 Windstream Services LLC / Windstream Finance Corp WIN 9.000 1.979 6/30/2025 Windstream Services LLC / Windstream Finance Corp WIN 7.500 26.000 6/1/2022 Windstream Services LLC / Windstream Finance Corp WIN 6.375 2.099 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 6.375 2.500 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 8.750 6.250 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 10.500 1.735 6/30/2024 Windstream Services LLC / Windstream Finance Corp WIN 8.750 1.581 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 7.750 1.809 10/1/2021 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 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. Chapman at 215-945-7000. *** End of Transmission ***